AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 25, 1996
REGISTRATION NO. 33-91588
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM N-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 [ ]
PRE-EFFECTIVE AMENDMENT NO. [ ]
POST-EFFECTIVE AMENDMENT NO. 1 [X]
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 [ ]
AMENDMENT NO. [ ]
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
(EXACT NAME OF REGISTRANT)
----------------
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
(NAME OF INSURANCE COMPANY)
787 SEVENTH AVENUE, NEW YORK, NEW YORK 10019
(ADDRESS OF INSURANCE COMPANY'S PRINCIPAL EXECUTIVE OFFICES)
TELEPHONE NUMBER, INCLUDING AREA CODE: (201) 392-5279
----------------
ANTHONY A. DREYSPOOL
VICE PRESIDENT AND SENIOR COUNSEL
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
787 SEVENTH AVENUE,
NEW YORK, NEW YORK 10019
(NAME AND ADDRESS OF AGENT FOR SERVICE)
----------------
PLEASE SEND COPIES OF ALL COMMUNICATIONS TO:
PETER E. PANARITES
FREEDMAN, LEVY, KROLL & SIMONDS
1050 CONNECTICUT AVENUE, N.W.,
WASHINGTON, D.C. 20036
----------------
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: CONTINUOUS
IT IS PROPOSED THAT THE FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE BOX)
[ ] IMMEDIATELY UPON FILING PURSUANT TO PARAGRAPH (B) OF RULE 485
[X] ON MAY 1, 1996 PURSUANT TO PARAGRAPH (B) OF RULE 485
[ ] 60 DAYS AFTER FILING PURSUANT TO PARAGRAPH (A)(1) OF RULE 485
[ ] ON MAY 1, 1996 PURSUANT TO PARAGRAPH (A)(1) OF RULE 485
[ ] 75 DAYS AFTER FILING PURSUANT TO PARAGRAPH (A)(2)
[ ] ON (DATE) PURSUANT TO PARAGRAPH (A)(3) OF RULE 485.
IF APPROPRIATE, CHECK THE FOLLOWING BOX:
[ ] THIS POST-EFFECTIVE AMENDMENT DESIGNATES A NEW EFFECTIVE DATE FOR
PREVIOUSLY FILED POST-EFFECTIVE AMENDMENT.
<PAGE>
CROSS REFERENCE SHEET
SHOWING LOCATION OF INFORMATION IN PROSPECTUS
<TABLE>
<CAPTION>
FORM N-3 ITEM PROSPECTUS CAPTION
- ---------------------------------------------- -------------------------------------------------------
<S> <C>
1. Cover Page ................................ Cover Page
2. Definitions ............................... Not Applicable
3. Synopsis .................................. Summary
4. Condensed Financial Information ........... Condensed Financial Information
5. General Description of Registrant and Equitable Life and the Investment Managers, The
Insurance Company ......................... Separate Accounts; The Funds
6. Management ................................ Investment Management of the Funds
7. Deductions and Expenses ................... Deductions and Charges
8. General Description of Variable Annuity
Contracts ................................. Summary
9. Annuity Period ............................ Provisions of the Contract and Services We
Provide/-Distributions and Benefit Payment Options;
Variable Annuity Benefits Prospectus Supplement
10. Death Benefit ............................ Provisions of the Contract and Services We
Provide/-Distributions and Benefit Payment
Options/-Participant Death Benefits
11. Purchases and Contract Value ............. Provisions of the Contract and Services We
Provide/Contributions; Fund Performance/Investment of
Contributions in the Funds
12. Redemptions .............................. Provisions of the Contract and Services We
Provide/-Distributions and Benefit Payment Options
13. Taxes .................................... Federal Income Tax Considerations
14. Legal Proceedings ........................ Miscellaneous-Legal Proceedings
15. Table of Contents of the Statement of Table of Contents of the Statement of Additional
Additional Information ................... Information
</TABLE>
<PAGE>
CROSS REFERENCE SHEET
SHOWING LOCATION OF INFORMATION IN
STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
FORM N-3 ITEM STATEMENT OF ADDITIONAL INFORMATION CAPTION
- ---------------------------------------------- ----------------------------------------------------
<S> <C>
16. Cover Page ............................... Cover Page
17. Table of Contents ........................ Table of Contents
18. General Information and History .......... Equitable Life and the Investment Managers(1)
19. Investment Objectives and Policies ....... Investment Restrictions Applicable to the Growth
Equity, Aggressive Equity and Balanced Funds
20. Management ............................... Our Management
21. Investment Advisory and Other ............ Investment Management and Financial Accounting Fee;
Equitable and the Investment Managers/-Investment
Management of the Funds;(1) Investment Management
and Financial Accounting Fee
22. Brokerage Allocation ..................... Fund Transactions
23. Purchase and Pricing of Securities Being How We Value the Assets of the Funds
Offered ..................................
24. Underwriters ............................. Underwriter
25. Calculation of Yield Quotations of Money Not Applicable
Market Sub-Accounts ......................
26. Annuity Payments ......................... Provisions of the Members Retirement
Plans/-Contributions to Qualified Plans; Variable
Annuity Benefits Prospectus Supplement
27. Financial Statements ..................... Financial Statements
</TABLE>
- ------------
(1)Contained in the Prospectus of the Members Retirement Program.
<PAGE>
[LOGO]
---------------------------------------------------------------
MEMBERS
RETIREMENT PROGRAM
PROGRAM PROSPECTUS
DATED MAY 1, 1996
HUDSON RIVER TRUST PROSPECTUS
DATED MAY 1, 1996
<PAGE>
- -----------------------------------------------------------------------------
PROSPECTUS
- -----------------------------------------------------------------------------
MAY 1, 1996
MEMBERS RETIREMENT PROGRAM
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Separate Account Units of interest under a group annuity contract with THE
EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES, 787 Seventh Avenue,
New York, New York 10019, which funds the Members Retirement Program.
- -----------------------------------------------------------------------------
The contract currently provides for nine Investment Options:
SEPARATE ACCOUNTS
o Growth Equity Fund
o Aggressive Equity Fund
o Balanced Fund
o Global Fund
o Conservative Investors Fund
o Growth Investors Fund
GUARANTEED OPTIONS
o 3 year Guaranteed Rate Account
o 5 year Guaranteed Rate Account
o Money Market Guarantee Account
The Global Fund, Conservative Investors Fund, and the Growth Investors Fund
invest in shares of a corresponding portfolio (Portfolio) of The Hudson River
Trust, a mutual fund that invests the assets of separate accounts of
insurance companies. The prospectus for The Hudson River Trust, which is
attached to this prospectus, describes the investment objectives, policies
and risks of those Portfolios and should be read carefully and retained for
future reference. This prospectus is not valid unless it is attached to a
current prospectus for The Hudson River Trust.
- -----------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
- -----------------------------------------------------------------------------
ATTENTION NORTH CAROLINA INVESTORS: THE INFORMATION CONTAINED IN THIS
VARIABLE CONTRACT OFFERING HAS NOT BEEN APPROVED OR DISAPPROVED BY THE
COMMISSIONER OF INSURANCE OF THE STATE OF NORTH CAROLINA: NOR HAS THE
COMMISSIONER RULED UPON THE ADEQUACY OR ACCURACY OF THIS DOCUMENT. VARIABLE
CONTRACTS SOLD BY PROSPECTUS MIGHT NOT BE COVERED BY THE NORTH CAROLINA LIFE
AND HEALTH INSURANCE GUARANTY ASSOCIATION.
THIS PROSPECTUS CONTAINS INFORMATION YOU SHOULD KNOW BEFORE INVESTING.
IT SHOULD BE READ CAREFULLY AND RETAINED FOR FUTURE REFERENCE.
A Statement of Additional Information (the "SAI") dated May 1, 1996 has been
filed with the Securities and Exchange Commission. The SAI is available free
of charge and may be obtained by mailing the SAI request form located at the
back of this prospectus or by calling, for current participants,
1-800-526-2701; for all others, 1-800-523-1125. Parts of the SAI have been
incorporated by reference into this prospectus. A table of contents for the
SAI appears on page 34 of this prospectus. Additional copies of the
prospectus may be obtained by calling the above-listed number.
Copyright 1996 by The Equitable Life Assurance Society of the United States.
All rights reserved.
<PAGE>
PART I: SUMMARY
The Members Retirement Program of The Equitable Life Assurance Society of the
United States ("Equitable Life") consists of retirement plans and trusts
through which members of certain groups and other eligible persons can
accumulate retirement savings for themselves and their employees. The Program
is sponsored by Equitable Life. The Trustee under the trusts is the United
States Trust Company of New York. At December 31, 1995, the combined value of
the assets in the Investment Options under the Program was $133 million, and
there were 7,144 participants. The Program is funded through a group annuity
contract issued by Equitable Life.
Equitable Life provides this prospectus which describes the Separate Accounts
and their Units of interest registered under the Securities Act of 1933 and
the General Account Options and other elements of the Program which are not
so registered. Whenever words like "we" and "our" are used in the prospectus,
they refer to Equitable Life. The terms "you" and "your" refer to the
participant or to the employer, as appropriate.
THE MEMBERS RETIREMENT PROGRAM
As an employer, you can use the Program to adopt the Members Retirement Plan,
or the Pooled Trust for individually designed plans or the Self-Directed
Prototype Plan.
o THE MEMBERS RETIREMENT PLAN--Under the Members Retirement Plan, a master
plan, you will automatically receive a full range of services from Equitable
Life, including a variety of Investment Options, plan-level and
participant-level recordkeeping, benefit payments and tax withholding and
reporting.
o The Members Retirement Plan is a defined contribution master plan
which can be adopted as a profit sharing plan (including an optional 401(k)
feature), a defined contribution pension plan or both. The Plan is designed
to comply with the requirements of Section 404(c) of the Employee
Retirement Income Security Act of 1974 ("ERISA").
o THE POOLED TRUST FOR MEMBERS RETIREMENT PLANS--a funding vehicle to be
used by those who have an individually designed qualified retirement plan.
The Pooled Trust is for investment only and can be used for both defined
benefit and defined contribution plans. We provide participant-level or
plan-level recordkeeping services for plan assets held in the Pooled Trust.
o THE SELF-DIRECTED PROTOTYPE PLAN--a defined contribution prototype plan
which can be used to combine the Program Investment Options with individual
investments such as stocks and bonds. Employers must also adopt the Pooled
Trust and maintain a minimum of $25,000 in the Trust at all times. We provide
recordkeeping services for plan assets held in the Pooled Trust.
2
<PAGE>
THE INVESTMENT OPTIONS
SEPARATE ACCOUNTS
o Aggressive Equity Fund
(Separate Account No. 3 (Pooled))
o Growth Equity Fund
(Separate Account No. 4 (Pooled))
o Balanced Fund (Separate Account No. 10 (Pooled))
o Global Fund (Separate Account No. 51 (Pooled))
o Conservative Investors Fund (an Asset Allocation Option)
(Separate Account No. 51 (Pooled))
o Growth Investors Fund (an Asset Allocation Option)
(Separate Account No. 51 (Pooled))
GUARANTEED OPTIONS
o 3-Year Guaranteed Rate Account
o 5-Year Guaranteed Rate Account
o Money Market Guarantee Account
CONTRIBUTIONS
o Contributions can be allocated to any one Option or divided among them
o Contributions may be made by check or money order payable to Equitable
Life
o Contributions must be sent along with a Contribution Remittance Form to
the address shown in Corresponding With the Program
o Contributions are credited on the day of receipt if they are accompanied
by properly completed forms; otherwise delays may occur
TRANSFERS AMONG INVESTMENT OPTIONS
o Generally, amounts may be transferred among the Investment Options at any
time
o Transfers may be made by telephone (on our Account Investment Management
(AIM) System)
o There is no charge for transfers and no tax liability
o Transfers from the Guaranteed Rate Accounts may not be made prior to
maturity. See Transfers Among Investment Options in Part VI
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PLAN OR WHO SELECTS WHEN ARE YOU ELIGIBLE
TRUST INVESTMENTS? ARE LOANS AVAILABLE? FOR DISTRIBUTIONS?
- -------------------- ------------------- --------------------- ---------------------
Members Participant Yes, if permitted Upon retirement,
Retirement Plan under your Plan death, disability or
termination of
employment.
- -------------------- ------------------- --------------------- ---------------------
Pooled Trust for Participant or Yes, if permitted Benefits depend upon
Individually Trustee, as under your Plan the terms of your
Designed Plans specified under Plan.
your Plan.
- -------------------- ------------------- --------------------- ---------------------
Self-Directed Participant or Yes, if permitted Upon retirement,
Prototype Plan Trustee, as under your Plan death, disability or
specified under termination of
your Plan. employment.
- -------------------- ------------------- --------------------- ---------------------
</TABLE>
3
<PAGE>
CORRESPONDING WITH THE PROGRAM
EXISTING PARTICIPANTS
o For regular mail (except contributions):
The Members Retirement Program
Box 2468 G.P.O.
New York, New York 10116
o For registered, certified or overnight mail
(except contributions):
The Members Retirement Program
c/o Equitable Life
200 Plaza Drive, Second Floor
Secaucus, New Jersey 07094
o For contribution checks ONLY:
The Members Retirement Program
P.O. Box 1599
Newark, New Jersey 07101-9764
o To reach the AIM System (24 hours a day) or an
Equitable Life Account Executive
(9 a.m. to 5 p.m. Eastern Time, Monday through Friday):
1-800-526-2701
FUTURE PARTICIPANTS
o To reach a Retirement Program Specialist
(9 a.m. to 5 p.m. Eastern Time, Monday through Friday):
1-800-523-1125, ext. 5009
(From Alaska, call 0-201-392-5331, collect)
o For regular mail:
The Members Retirement Program
c/o Equitable Life
Box 2011
Secaucus, New Jersey 07094
o For registered, certified or overnight mail:
The Members Retirement Program
c/o Equitable Life
200 Plaza Drive, Second Floor
Secaucus, New Jersey 07094
SUMMARY OF ANNUAL FUND EXPENSES
The Program is subject to deductions and charges, including record
maintenance and report, enrollment, program expense, and investment
management and financial accounting fees. Certain expenses are also borne
directly by the Funds and by The Hudson River Trust, in which Separate
Account No. 51 (Pooled) invests. For more information, see Part VII:
Deductions and Charges and The Hudson River Trust prospectus which
accompanies this prospectus.
The purpose of the tables below is to assist employers and participants in
understanding the various costs and expenses they will bear directly or
indirectly. The expenses shown are based on the actual experience of the
Funds during the year ended December 31, 1995. Future expenses may be greater
or less than those shown below. Similarly, the annual rate of return assumed
in the example is not an estimate or guarantee of future performance. The
tables give effect to generally applicable charges. Other charges may also be
applicable, including enrollment, record maintenance and report fees. See
Part VII: Deductions and Charges.
4
<PAGE>
SUMMARY OF ANNUAL FUND EXPENSES
<TABLE>
<CAPTION>
GROWTH EQUITY AGGRESSIVE CONSERVATIVE GROWTH
PARTICIPANT TRANSACTION EXPENSES FUND EQUITY FUND BALANCED FUND GLOBAL FUND INVESTORS FUND INVESTORS FUND
- -------------------------------- ------------- ------------ ------------- ----------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Sales Load ------------------------------------------- None -------------------------------------------
Deferred Sales Load ------------------------------------------- None -------------------------------------------
Surrender Fees ------------------------------------------- None -------------------------------------------
Transfer (Exchange) Fee ------------------------------------------- None -------------------------------------------
SEPARATE ACCOUNT AND THE HUDSON RIVER
TRUST ANNUAL EXPENSES:
</TABLE>
<TABLE>
<CAPTION>
SEPARATE ACCOUNT ANNUAL EXPENSES
<S> <C> <C> <C> <C> <C> <C>
Management fees (including
financial accounting)(1) 0.50 0.65 0.50 0.20 0.20 0.20
Other Expenses
Program Expense Charge .. 1.00 1.00 1.00 1.00 1.00 1.00
Other(2) ................. 0.24 0.21 0.29 0.54 0.55 0.56
Total Separate
Account Annual Expenses . 1.74 1.86 1.79 1.74 1.75 1.76
HUDSON RIVER TRUST ANNUAL EXPENSES
Investment Advisory Fee ........................... 0.53 0.55 0.52
Other Expenses .................................... 0.08 0.04 0.04
TOTAL ANNUAL EXPENSES FOR THE HUDSON RIVER TRUST . 0.61 0.59 0.56
Total Separate Account and Trust Expenses ........ 2.35 2.34 2.32
</TABLE>
[/TABLE]
EXAMPLE
A $1,000 investment in each Fund listed below would be subject to the
expenses indicated, assuming a 5% annual return. Applicable expenses are the
same whether or not you withdraw all or part of your Account Balance at the
end of each time period shown(3).
<TABLE>
<CAPTION>
AGGREGATE EXPENSES
------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- --------- --------- ----------
<S> <C> <C> <C> <C>
Growth Equity Fund .......... $18.71 $57.87 $ 99.49 $215.28
Aggressive Equity Fund ..... 19.92 61.54 105.66 227.91
Balanced Fund ............... 19.21 59.40 102.07 220.56
Global Fund ................. 24.85 76.39 130.49 277.80
Conservative Investors Fund 24.74 76.08 129.97 276.77
Growth Investors Fund ....... 24.54 75.48 128.97 274.78
</TABLE>
- ------------
No annuity could be purchased under the assumptions in the example since the
minimum amount that can be used to purchase any type of annuity under the
Members Plans is $3,500. We normally charge a fee of $350 upon annuitization.
If you annuitize, a charge for applicable taxes such as state or local
premium taxes may also apply. See Part VII: Deductions and Charges.
(1) The Global, Conservative Investors and Growth Investors Funds invest
through Equitable's Separate Account No. 51 in corresponding Portfolios
of The Hudson River Trust. This charge represents only financial
accounting expenses for Separate Account No. 51.
(2) Reflects the amount deducted for the daily accrual of direct expenses.
See How We Determine the Unit Value in Part IV.
(3) These calculations include all asset based charges plus a component for
record maintenance and report fees and enrollment fees. The component is
computed by aggregating such fees and dividing by the average assets for
the same period. See Members Retirement Plan (Pension and Profit
Sharing), Prototype Self-Directed Plan and Investment Only Fees in Part
VII of this prospectus.
5
<PAGE>
PART II: CONDENSED FUND FINANCIAL INFORMATION
Your interest in the Funds under the Program is represented by Units. See How
We Determine the Unit Value in Part IV. The following tables give information
about income, expenses and capital changes in the Growth Equity Fund
(Separate Account No. 4 (Pooled)), the Aggressive Equity Fund (Separate
Account No. 3 (Pooled)), and the Balanced Fund (Separate Account No. 10
(Pooled)) attributable to a Unit outstanding under the Program for the
periods indicated, along with other supplementary data. For 1995 and 1994 the
tables have been audited by Price Waterhouse LLP, independent accountants, as
stated in their reports under Financial Statements in the SAI. For years
prior to 1993, such condensed financial information was audited by other
independent accountants. These tables should be read in conjunction with the
full Financial Statements. CONDENSED FINANCIAL INFORMATION FOR THE GLOBAL,
CONSERVATIVE INVESTORS, AND GROWTH INVESTORS PORTFOLIOS IS CONTAINED IN THE
HUDSON RIVER TRUST PROSPECTUS ACCOMPANYING THIS PROSPECTUS. ADDITIONAL COPIES
OF THE HUDSON RIVER TRUST PROSPECTUS AND ITS STATEMENT OF ADDITIONAL
INFORMATION (SAI) MAY BE OBTAINED BY CALLING AN ACCOUNT EXECUTIVE. THOSE
FINANCIAL STATEMENTS, HOWEVER, DO NOT REFLECT THE PROGRAM EXPENSE CHARGE AND
THE DAILY ACCRUAL OF DIRECT EXPENSES DEDUCTED FROM AMOUNTS HELD IN SEPARATE
ACCOUNT NO. 51 (POOLED). UNIT VALUES FOR THE GLOBAL, CONSERVATIVE INVESTORS,
AND GROWTH INVESTORS FUNDS OF SEPARATE ACCOUNT NO. 51 (POOLED) ARE SHOWN
BELOW AND DO REFLECT THE PROGRAM EXPENSE CHARGE AND DAILY ACCRUAL OF DIRECT
EXPENSES SO DEDUCTED.
FULL FINANCIAL STATEMENTS. The Financial Statements of the Growth Equity,
Aggressive Equity and the Balanced Funds and the Consolidated Financial
Statements of Equitable Life are contained in the SAI. The Financial
Statements of the Global, Conservative Investors and Growth Investors
Portfolios are contained in the SAI for The Hudson River Trust.
- -----------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED) of The Equitable Life Assurance Society of
the United States
GROWTH EQUITY FUND--INCOME, EXPENSES AND CAPITAL CHANGES PER UNIT OUTSTANDING
THROUGHOUT THE YEARS INDICATED AND OTHER SUPPLEMENTARY DATA
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- -------------------------------------- -------------------------------
1995 1994 1993*
- -------------------------------------- --------- --------- ---------
<S> <C> <C> <C>
Income ................................ $ 1.84 $ 1.79 $ 1.75
Expenses (Note A) ..................... (3.25) (2.76) (2.54)
- -------------------------------------- --------- --------- ---------
Net income (loss) ..................... (1.41) (.97) (.79)
Net realized and unrealized gain
(loss) on investments (Note B) ...... 50.16 (3.76) 26.16
- -------------------------------------- --------- --------- ---------
Net increase (decrease) in Growth
Equity Fund Unit Value ............... 48.75 (4.73) 25.37
Growth Equity Fund Unit Value
(Note C):
Beginning of year ................... 161.15 165.88 140.51
- -------------------------------------- --------- --------- ---------
End of year ......................... $209.90 $161.15 $165.88
====================================== ========= ========= =========
Ratio of expenses to average net
assets attributable to the Program .. 1.74% 1.72% 1.69%
Ratio of net income (loss) to average
net assets attributable to the
Program .............................. (0.76)% (0.60)% (0.52)%
Number of Growth Equity Fund
Units outstanding at end of year
(000's) .............................. 214 219 208
Portfolio turnover rate (Note D) ..... 108% 91% 82%
====================================== ========= ========= =========
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
1992 1991 1990 1989 1988 1987 1986
- -------------------------------------- --------- --------- --------- --------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Income ................................ $ 1.51 $ 1.37 $ 1.92 $ 1.70 $ 1.29 $ 1.25 $ 1.37
Expenses (Note A) ..................... (2.22) (2.00) (1.56) (1.59) (1.21) (1.54) (1.27)
- -------------------------------------- --------- --------- --------- --------- -------- --------- --------
Net income (loss) ..................... (.71) (.63) .36 .11 .08 (.29) .10
Net realized and unrealized gain
(loss) on investments (Note B) ...... .77 47.67 (13.52) 31.92 9.94 2.77 6.60
- -------------------------------------- --------- --------- --------- --------- -------- --------- --------
Net increase (decrease) in Growth
Equity Fund Unit Value ............... .06 47.04 (13.16) 32.03 10.02 2.48 6.70
Growth Equity Fund Unit Value
(Note C):
Beginning of year ................... 140.45 93.41 106.57 74.54 64.52 62.04 55.34
- -------------------------------------- --------- --------- --------- --------- -------- --------- --------
End of year ......................... $140.51 $140.45 $ 93.41 $106.57 $74.54 $64.52 $62.04
====================================== ========= ========= ========= ========= ======== ========= ========
Ratio of expenses to average net
assets attributable to the Program .. 1.65% 1.68% 1.64% 1.74% 1.73% 2.08% 2.02%
Ratio of net income (loss) to average
net assets attributable to the
Program .............................. (0.53)% (0.54)% 0.38% 0.11% 0.12% (0.40)% 0.16%
Number of Growth Equity Fund
Units outstanding at end of year
(000's) .............................. 212 189 47 48 63 69 78
Portfolio turnover rate (Note D) ..... 68% 66% 93% 113% 101% 121% 102%
====================================== ========= ========= ========= ========= ======== ========= ========
</TABLE>
See notes following these tables.
6
<PAGE>
SEPARATE ACCOUNT NO. 3 (POOLED)
of The Equitable Life Assurance Society of the United States
AGGRESSIVE EQUITY FUND--INCOME, EXPENSES AND CAPITAL CHANGES PER UNIT
OUTSTANDING THROUGHOUT THE YEARS INDICATED AND OTHER SUPPLEMENTARY DATA
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1995 1994 1993*
- ---------------------------------------- --------- --------- ---------
<S> <C> <C> <C>
Income .................................. $ .24 $ .18 $ .26
Expenses (Note A) ....................... (.69) (.60) (.57)
- ---------------------------------------- --------- --------- ---------
Net investment income (loss) ............ (.45) (.42) (.31)
Net realized and unrealized gain
(loss) on investments (Note B) ......... 9.98 (1.32) 4.25
- ---------------------------------------- --------- --------- ---------
Net increase (decrease) in Aggressive
Equity Fund Unit Value ................. 9.53 (1.74) 3.94
Aggressive Equity Fund Unit Value
(Note C):
Beginning of period ................... 32.21 33.95 30.01
- ---------------------------------------- --------- --------- ---------
End of period ......................... $41.74 $32.21 $33.95
======================================== ========= ========= =========
Ratio of expenses to average net assets
attributable to the Program ............ 1.86% 1.86% 1.84%
Ratio of net investment income (loss) to
average net assets attributable to
the Program ............................ (1.21)% (1.31)% (1.02)%
Number of Aggressive Equity
Fund Units outstanding at end
of period (000's) ...................... 328 283 249
Portfolio turnover rate (Note D) ....... 137% 94% 83%
======================================== ========= ========= =========
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
1992 1991 1990 1989 1988 1987 1986
- ---------------------------------------- --------- --------- -------- -------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Income .................................. $ .31 $ .29 $ .28 $ .29 $.17 $.17 $.15
Expenses (Note A) ....................... (.50) (.41) (.27) (.24) (.20) (.28) (.24)
- ---------------------------------------- --------- --------- -------- -------- --------- --------- ---------
Net investment income (loss) ............ (.19) (.12) .01 .05 (.03) (.11) (.09)
Net realized and unrealized gain
(loss) on investments (Note B) ......... (1.13) 14.52 1.17 4.85 .11 (.34) .13
- ---------------------------------------- --------- --------- -------- -------- --------- --------- ---------
Net increase (decrease) in Aggressive
Equity Fund Unit Value ................. (1.32) 14.40 1.18 4.90 .08 (.45) .04
Aggressive Equity Fund Unit Value
(Note C):
Beginning of period ................... 31.33 16.93 15.75 10.85 10.77 11.22 11.18
- ---------------------------------------- --------- --------- -------- -------- --------- --------- ---------
End of period ......................... $30.01 $31.33 $16.93 $15.75 $10.85 $10.77 $11.22
======================================== ========= ========= ======== ======== ========= ========= =========
Ratio of expenses to average net assets
attributable to the Program ............ 1.74% 1.59% 1.65% 1.74% 1.71% 2.19% 2.07%
Ratio of net investment income (loss) to
average net assets attributable to
the Program ............................ (0.66)% (0.48)% 0.07% 0.35% (0.23)% (0.84)% (0.78)%
Number of Aggressive Equity
Fund Units outstanding at end
of period (000's) ...................... 229 150 13 5 3 2 7
Portfolio turnover rate (Note D) ....... 71% 63% 48% 92% 103% 227% 162%
======================================== ========= ========= ======== ======== ========= ========= =========
</TABLE>
See notes following these tables.
7
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED)
of The Equitable Life Assurance Society of the United States
BALANCED FUND--INCOME, EXPENSES AND CAPITAL CHANGES PER UNIT OUTSTANDING
THROUGHOUT THE YEARS INDICATED AND OTHER SUPPLEMENTARY DATA
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------
1995 1994 1993*
- --------------------------------------- -------- -------- --------
<S> <C> <C> <C>
Income ................................. $ .89 $ .74 $ .77
Expenses (Note A) ...................... (.43) (.40) (.39)
- --------------------------------------- -------- -------- --------
Net investment income (loss) ........... .46 .34 .38
Net realized and unrealized gain
(loss) on investments (Note B) ........ 3.74 (2.60) 2.00
- --------------------------------------- -------- -------- --------
Net increase (decrease) in
Balanced Fund Unit Value .............. 4.20 (2.26) 2.38
Balanced Fund Unit Value (Note C):
Beginning of period .................. 22.19 24.45 22.07
- --------------------------------------- -------- -------- --------
End of period ........................ $26.39 $22.19 $24.45
======================================= ======== ======== ========
Ratio of expenses to average net assets
attributable to the Program ........... 1.79% 1.72% 1.70%
Ratio of net investment income to
average net assets attributable to
the Program ........................... 1.90% 1.51% 1.61%
Number of Balanced Fund Units
outstanding at end of period (000's) . 458 446 419
Portfolio turnover rate (Note D) ...... 170% 107% 102%
======================================= ======== ======== ========
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
1992 1991 1990 1989 1988 1987 1986
- --------------------------------------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Income ................................. $ .79 $ .80 $ .94 $ .93 $ .72 $ .53 $ .51
Expenses (Note A) ...................... (.35) (.32) (.27) (.25) (.21) (.30) (.26)
- --------------------------------------- -------- -------- -------- -------- -------- -------- --------
Net investment income (loss) ........... .44 .48 .67 .68 .51 .23 .25
Net realized and unrealized gain
(loss) on investments (Note B) ........ (1.34) 6.04 (.98) 2.66 1.07 (1.10) .89
- --------------------------------------- -------- -------- -------- -------- -------- -------- --------
Net increase (decrease) in
Balanced Fund Unit Value .............. (.90) 6.52 (.31) 3.34 1.58 (.87) 1.14
Balanced Fund Unit Value (Note C):
Beginning of period .................. 22.97 16.45 16.76 13.42 11.84 12.71 11.57
- --------------------------------------- -------- -------- -------- -------- -------- -------- --------
End of period ........................ $22.07 $22.97 $16.45 $16.76 $13.42 $11.84 $12.71
======================================= ======== ======== ======== ======== ======== ======== ========
Ratio of expenses to average net assets
attributable to the Program ........... 1.65% 1.67% 1.66% 1.73% 1.70% 2.12% 2.02%
Ratio of net investment income to
average net assets attributable to
the Program ........................... 2.03% 2.47% 4.12% 4.38% 4.00% 1.66% 1.95%
Number of Balanced Fund Units
outstanding at end of period (000's) . 364 284 27 16 12 10 8
Portfolio turnover rate (Note D) ...... 90% 114% 199% 175% 172% 238% 230%
======================================= ======== ======== ======== ======== ======== ======== ========
</TABLE>
See notes below.
NOTES:
* Prior to July 22, 1993, Equitable Capital Management Corporation
(Equitable Capital) served as the investment adviser to the Fund. On
July 22, 1993, Alliance Capital Management L.P. acquired the business
and substantially all of the assets of Equitable Capital and became the
investment adviser to the Fund.
A. Enrollment fees are not included above and did not affect Growth
Equity, Aggressive Equity or Balanced Fund Unit Values. Enrollment fees
were generally deducted from contributions to the Program.
B. See Note 2 to Financial Statements of Separate Account Nos. 3 (Pooled),
4 (Pooled) and 10 (Pooled), which may be found in the SAI.
C. The value for a Growth Equity Fund Unit was established at $10.00 on
January 1, 1968 under the National Association of Realtors Members
Retirement Program (NAR Program). The NAR Program was merged into the
Members Retirement Program on December 27, 1984. The values for an
Aggressive Equity and a Balanced Fund Unit were established at $10.00
on May 1, 1985, the date on which the Funds were first made available
under the Program.
D. The portfolio turnover rate includes all long-term U.S. Government
securities, but excludes all short-term U.S. Government securities and
all other securities whose maturities at the time of acquisition were
one year or less. Represents the annual portfolio turnover rate for the
entire Separate Account.
Income, expenses, gains and losses shown above pertain only to
participants' accumulations attributable to the Program.
Other plans also participate in the Growth Equity, Aggressive Equity and
Balanced Funds and may have operating results and other supplementary
data different from those shown above.
8
<PAGE>
SEPARATE ACCOUNT NO. 51 (POOLED) UNIT VALUES
<TABLE>
<CAPTION>
GROWTH
GLOBAL CONSERVATIVE INVESTORS
FUND INVESTORS FUND FUND
-------- -------------- -----------
<S> <C> <C> <C>
Unit Value as of:
December 31, 1993 .......... $11.05 $10.22 $10.49
December 31, 1994 .......... $11.45 $ 9.62 $ 9.98
December 31, 1995 .......... $13.38 $11.39 $12.40
Number of Units Outstanding
at December 31, 1995
(000's) .................... 399 224 242
</TABLE>
PART III: INVESTMENT OPTIONS
Nine INVESTMENT OPTIONS are available under the Program. Six Options are
Funds--the Growth Equity Fund, the Aggressive Equity Fund, the Balanced Fund,
the Global Fund and two Asset Allocation Options--the Conservative Investors
Fund and the Growth Investors Fund. Three Options are General Account
Options--two Guaranteed Rate Accounts and the Money Market Guarantee Account.
THE FUNDS
Each of the Funds has a different investment objective that it seeks to
achieve by following specific investment policies. We do not anticipate that
the investment objective of any of the Funds will change. We do, however,
have the right to change the investment objectives of the Growth Equity,
Aggressive Equity and Balanced Funds, subject to the approval of the New York
State Insurance Department. The investment objectives of the Global,
Conservative Investors and Growth Investors Funds can only be changed by a
majority vote of the shareholders of the corresponding Portfolios of The
Hudson River Trust. See Voting Rights under Part V: Equitable Life and the
Investment Managers below. THERE IS NO ASSURANCE THAT THE INVESTMENT
OBJECTIVES OF ANY OF THE FUNDS WILL BE MET OR THAT THE RISK TO PRINCIPAL OR
VOLATILITY OF RETURN WILL BE AS INDICATED. See Risks and Investment
Techniques below.
THE GROWTH EQUITY FUND
OBJECTIVE. The Growth Equity Fund seeks to achieve long-term growth of
capital by investing in the securities of carefully selected companies we
believe will share in the growth of our nation's economy--and those of other
leading industrialized countries--over a long period. The Growth Equity Fund
invests in securities of companies of any capitalization but is generally
invested primarily in securities of intermediate to large sized companies.
9
<PAGE>
INVESTMENT POLICIES. The Growth Equity Fund invests primarily in common
stocks. Smaller amounts may be invested in other equity-type securities, such
as convertible preferred stocks or convertible debt instruments. The Growth
Equity Fund may use its assets to make non-equity investments. These could
include non-participating and non-convertible preferred stocks, bonds and
debentures. Some non-equity investments may carry certain equity features
such as conversion or exchange rights or warrants for the acquisition of
stocks of the same or different issuers or participation based on revenues,
sales or profits. If, in light of economic conditions and the general level
of stock prices, it appears that the Fund's investment objective will not be
met by buying equities and equity type securities, non-equity investment may
be substantial. The Fund may invest up to 10% of its total assets in
restricted securities.
The Growth Equity Fund may make temporary investments in government
obligations, short-term commercial paper and other money market instruments,
either directly or through our Separate Account No. 2A. While equity
investments will be made primarily in securities of United States companies
or foreign companies doing substantial business in the United States, up to
15% of the value of the Fund's assets may be invested in the securities of
established foreign companies without substantial business in the United
States. See Risks and Investment Techniques below for more information on
restricted securities, Separate Account No. 2A, securities of medium and
smaller sized companies, foreign securities, investment concentration, money
market investments and convertible securities.
THE AGGRESSIVE EQUITY FUND
OBJECTIVE. The Aggressive Equity Fund seeks to achieve long-term capital
growth, consistent with investment quality. The Fund will attempt to achieve
this objective by investing primarily in securities of medium and smaller
sized companies (with capitalization generally between $50 million and $1.5
billion) which we believe have greater growth potential than larger
companies.
INVESTMENT POLICIES. Most of the time, the Aggressive Equity Fund will invest
primarily in common stocks of medium and smaller sized companies. The Fund
may also invest in securities not generally defined as growth stocks, but
with unusual value or earnings potential. For example, opportunities for
capital growth exist from time to time in what are believed to be cyclical
industries, companies whose securities are temporarily undervalued, special
situations, younger but not widely known companies and companies doing
business in countries whose economies are expanding. The Aggressive Equity
Fund may invest in foreign companies without substantial business in the
United States. Industry diversification is not an objective of the Aggressive
Equity Fund and it may at times be less diversified than a traditional equity
portfolio. Some other equity-type investments may also be made. The Fund may
also invest in short-term debt securities such as corporate notes, and
temporary money market investments, including our Separate Account No. 2A.
Additionally, the Fund may invest up to 10% of its total assets in restricted
securities.
See Risks and Investment Techniques below for more information on foreign
securities, restricted securities, securities of medium and smaller sized
companies and money market investments. This Fund may hold investments with
greater growth potential and greater risks than those investments held by the
Growth Equity and Balanced Funds. Due to this Fund's aggressive investment
policies and less diversified investments, you should consider limiting the
amount allocated to this Fund, particularly as you near retirement.
THE BALANCED FUND
OBJECTIVE. The Balanced Fund's investment objective is to achieve both
appreciation of capital and current income by investments in a diversified
portfolio of common stocks, other equity-type securities and longer-term
fixed
10
<PAGE>
income securities and current income by investments in publicly traded debt
securities and short-term money market instruments. The investment mix is
determined by the portfolio manager.
INVESTMENT POLICIES. It is anticipated that we will vary the portion of the
Balanced Fund's assets invested in each type of security in accordance with
our evaluation of economic conditions, the general level of common stock
prices, anticipated interest rates and other relevant considerations,
including our assessment of the risks associated with each investment medium.
The Fund is subject to the risk that we may incorrectly predict changes in
the relative values of the stock and bond markets. In general, equity
securities will comprise the greatest portion of the Balanced Fund's assets.
At the years ended December 31, 1986 through 1995, the percentage of the
Balanced Fund's assets invested in equity securities (including equity-type
securities such as convertible preferred stocks or convertible debt
instruments) has ranged from 43% to 86%. The Fund's non-money market debt
securities will consist primarily of publicly-traded securities issued or
guaranteed by the United States Government or its agencies or
instrumentalities and corporate fixed income securities, including, but not
limited to, bank obligations, notes, asset-backed securities, mortgage
pass-through obligations, collateralized mortgage obligations, zero coupon
bonds, and preferred stock. The Balanced Fund may also buy debt securities
with equity features such as conversion or exchange rights or warrants for
the acquisition of stock or participations based on revenues, sales or
profits. All non-money market debt securities will be investment grade, i.e.,
rated within the four highest credit categories by Standard & Poor's
Corporation (S&P) (AAA, AA, A, or BBB) or by Moody's Investors Services, Inc.
(Moody's) (Aaa, Aa, A or Baa) or, if unrated, will be of comparable
investment quality as determined by our credit analysis. Securities held by
the Fund that fail to continue to meet the foregoing quality criteria need
not be disposed of if we determine that it continues to be appropriate for
the Fund to hold them . The average maturity of the debt securities held by
the Balanced Fund will vary according to market conditions and the stage of
interest rate cycles. The Balanced Fund may also realize gains on debt
securities when such actions are considered advantageous in light of existing
market conditions. The Fund may invest up to 10% of its total assets in
restricted securities and may invest in foreign companies without substantial
business in the United States. The Balanced Fund may invest in money market
securities through our Separate Account No. 2A or directly. The Balanced Fund
may invest in put and call options and trade in stock index or interest rate
futures for hedging purposes only. In option transactions, the economic
benefit will be offset by the cost of the option, while any loss would be
limited to such cost. The Fund also enters into hedging transactions. These
transactions are undertaken only when any required regulatory procedures have
been completed and when economic and market conditions indicate that such
transactions would serve the best interests of the Fund.
See Risks and Investment Techniques below for more information on foreign
securities, restricted securities, securities of medium and smaller sized
companies, debt instruments issued by Schedule B Banks, hedging transactions,
money market investments and convertible securities.
Mortgage Pass-Through Securities--The Balanced Fund may invest in mortgage
pass-through securities, which are securities representing interests in pools
of mortgages. Principal and interest payments made on the mortgages in the
pools are passed through to the holder of such securities. Payment of
principal and interest on some mortgage pass-through securities (but not the
market value of the securities themselves) may be guaranteed by the full
faith and credit of the U.S. Government (in the case of securities guaranteed
by the Government National Mortgage Association or "GNMA"), or guaranteed by
agencies or instrumentalities of the U.S. Government (in the case of
securities guaranteed by the Federal National Mortgage Association ("FNMA")
or the Federal Home Loan Mortgage Corporation ("FHLMC") which are supported
only by the discretionary authority of the U.S. Government to purchase the
agency's obligations). Mortgage pass-through securities created by
non-governmental issuers (such as
11
<PAGE>
commercial banks, savings and loan institutions, private mortgage insurance
companies, mortgage bankers, and other secondary market issuers) may be
supported by various forms of insurance or guarantees, including individual
loan, title, pool, and hazard insurance, and letters of credit, which may be
issued by governmental entities, private insurers or the mortgage poolers.
Collateralized Mortgage Obligations--The Balanced Fund may invest in
collateralized mortgage obligations (CM0s). CMOs are debt securities
collateralized by underlying mortgage loans or pools of mortgage pass-through
securities guaranteed by GNMA, FHLMC or FNMA and are generally issued by
limited purpose finance subsidiaries of U.S. Government instrumentalities.
CMOs are not, however, mortgage pass-through securities. Rather, they are
pay-through securities, i.e., securities backed by the cash flow from the
underlying mortgages. Investors in CMOs are not owners of the underlying
mortgages, which serve as collateral for such debt securities, but are simply
owners of a debt security backed by such pledged assets. CMOs are typically
structured into multiple classes, with each class bearing a different stated
maturity and having different payment streams. Monthly payments of principal,
including prepayments, are first returned to investors holding the shortest
maturity class; investors holding longer maturity classes receive principal
payments only after the shorter class or classes have been retired.
Asset-Backed Securities--The Balanced Fund may purchase asset-backed
securities that represent either fractional interests or participation in
pools of leases, retail installment loans or revolving credit receivables
held by a trust or limited purpose finance subsidiary. Such asset-backed
securities may be secured by the underlying assets (such as Certificates for
Automobile Receivables) or may be unsecured (such as Credit Card Receivable
Securities). Depending on the structure of the asset-backed security, monthly
or quarterly payments of principal and interest or interest only are
passed-through (like mortgage pass-through securities) or paid through (like
CMOs) to certificate holders. Asset-backed securities may be guaranteed up to
certain amounts by guarantees, insurance or letters of credit issued by a
financial institution affiliated or unaffiliated with the originator of the
pool.
Underlying automobile sales contracts and credit card receivables are, of
course, subject to prepayment (although to a lesser degree than mortgage
pass-through securities), which may shorten the securities' weighted average
life and reduce their overall return to certificate holders. Certificate
holders may also experience delays in payment if the full amounts due on
underlying loans, leases or receivables are not realized because of
unanticipated legal or administrative costs of enforcing the contracts or
because of depreciation or damage to the collateral (usually automobiles)
securing certain contracts, or other factors. The value of these securities
also may change because of changes in the market's perception of the
creditworthiness of the servicing agent for the pool, the originator of the
pool, or the financial institution providing credit support enhancement for
the pool. If consistent with its investment objective and policies, the
Balanced Fund may invest in other asset-backed securities that may be
developed in the future.
Yankee Securities--The Balanced Fund may invest in yankee securities. Yankee
securities are non-U.S. issuers that issue debt securities that are
denominated in U.S. dollars.
Zero-Coupon Bonds--The Balanced Fund may invest in zero-coupon bonds. Such
bonds may be issued directly by agencies and instrumentalities of the U.S.
Government or by private corporations. Zero-coupon bonds may originate as
such or may be created by stripping an outstanding bond. Zero-coupon bonds do
not make regular interest payments. Instead, they are sold at a deep discount
from their face value. Because a zero-coupon bond does not pay current
income, its price can be very volatile when interest rates change.
Repurchase Agreements--In repurchase agreements, the Balanced Fund buys
securities from a seller, usually a bank or brokerage firm, with the
understanding that the seller will repurchase the securities at a higher
price at a
12
<PAGE>
future date. During the term of the repurchase agreement the Balanced Fund
retains the securities subject to the repurchase agreement as collateral
securing the seller's repurchase obligation, continually monitors on a daily
basis the market value of the securities subject to the agreement and
requires the seller to deposit with the Fund collateral equal to any amount
by which the market value of the securities subject to the repurchase
agreement falls below the resale amount provided under the repurchase
agreement. We evaluate the creditworthiness of sellers with whom we enter
into repurchase agreements. Such transactions afford an opportunity for the
Fund to earn a fixed rate or return on available cash at minimal market risk,
although the Fund may be subject to various delays and risks or loss if the
seller is unable to meet its obligation to repurchase. The Fund currently
treats repurchase agreements maturing in more than seven days as illiquid
securities.
THE GLOBAL, CONSERVATIVE INVESTORS AND GROWTH INVESTORS FUNDS
The Global, Conservative Investors and Growth Investors Funds invest in
corresponding Portfolios of The Hudson River Trust. The Hudson River Trust is
an open-end, diversified management investment company, more commonly called
a mutual fund. As a "series" type of mutual fund, it includes various
Portfolios, three of which are offered through this Program. The Hudson River
Trust commenced operations in January 1987. The Hudson River Trust does not
impose a sales charge or "load" for buying and selling its shares. All
dividend distributions from The Hudson River Trust are reinvested in the
Portfolio to which they relate.
The Hudson River Trust prospectus accompanying this prospectus contains
information about the objectives, investment policies and special risks of
the Global, Conservative Investors and Growth Investors Portfolios. You
should carefully read the Hudson River Trust Prospectus before you allocate
contributions or transfer amounts to the Global, Conservative Investors or
Growth Investors Funds.
GLOBAL FUND OBJECTIVE. The Global Fund seeks to achieve long-term growth of
capital by investing primarily in equity securities of non-United States as
well as United States companies.
CONSERVATIVE INVESTORS FUND OBJECTIVE. The Conservative Investors Fund seeks
to achieve high total return without, in the Fund adviser's opinion, undue
risk to principal. The Fund invests in a diversified mix of publicly-traded,
fixed income and equity securities. Asset mix and security selection are
primarily based upon factors expected to reduce risk.
GROWTH INVESTORS FUND OBJECTIVE. The objective of the Growth Investors Fund
is high total return consistent with the Fund adviser's determination of
reasonable risk. The Fund invests in a diversified mix of publicly-traded,
fixed income and equity securities. Asset mix and security selection are
based upon factors expected to increase the possibility of high long-term
return.
RISKS AND INVESTMENT TECHNIQUES
You should be aware that any investment in securities carries with it a risk
of loss. The different investment objectives and policies of each Fund may
affect the return of each Fund. Additionally, there are market and financial
risks inherent in any securities investment. By market risks, we mean factors
which do not necessarily relate to a particular issuer but which affect the
way markets, and securities within those markets, perform. We sometimes
describe market risk in terms of volatility, that is, the range and frequency
of market value changes. Market risks include such things as changes in
interest rates, general economic conditions and investor perceptions
regarding
13
<PAGE>
the value of debt and equity securities. By financial risks we mean factors
associated with a particular issuer which may affect the price of its
securities, such as its competitive posture, its earnings and its ability to
meet its debt obligations. The risk factors and investment techniques
associated with the Growth Equity, the Aggressive Equity and the Balanced
Funds are stated below. See The Hudson River Trust prospectus for risk
factors and investment techniques associated with an investment in the
Global, Conservative Investors and Growth Investors Funds.
Foreign Currency Forward Contracts--The Balanced Fund may enter into
contracts for the purchase or sale of a specific foreign currency at a future
date at a price set at the time of the contract. Generally, such forward
contracts will be for a period of less than three months. The Fund will enter
into such forward contracts for hedging purposes only. These transactions
will include forward purchases or sales of foreign currencies for the purpose
of protecting the dollar value of securities denominated in a foreign
currency or protecting the dollar equivalent of interest or dividends to be
paid on such securities. Forward contracts are traded in the inter-bank
market, and not on organized commodities or securities exchanges.
Accordingly, the Fund is dependent upon the good faith and creditworthiness
of the other party to the transaction, as evaluated by the Fund's manager. To
the extent inconsistent with any restrictions in the SAI concerning the
Fund's trading in foreign exchange, this paragraph will control.
Debt Securities Subject to Prepayment Risks--Mortgage pass-through securities
and certain collateralized mortgage obligations, asset-backed securities and
other debt instruments in which the Balanced Fund may invest are subject to
prepayments prior to their stated maturity. It is usually not possible to
accurately predict the rate at which prepayments will be made, which rate may
be affected, among other things, by changes in generally prevailing market
interest rates. If prepayments occur, the Fund suffers the risk that it will
not be able to reinvest the proceeds at as high a rate of interest as it had
previously been receiving. Also, the Fund will incur a loss to the extent
that prepayments are made for an amount that is less than the value at which
the security was then being carried by the fund. Moreover, securities that
may be prepaid tend to increase in value less during times of declining
interest rates, and to decrease in value more during times of increasing
interest rates, than do securities that are not subject to prepayment.
When-Issued and Delayed Delivery Securities--The Balanced Fund may purchase
and sell securities on a when-issued or delayed delivery basis. In these
transactions, securities are purchased or sold by a Fund with payment and
delivery taking place in the future in order to secure what is considered to
be an advantageous price or yield to the Fund at the time of entering into
the transaction. However, the market value of such securities at the time of
settlement may be more or less than the purchase price then payable. When a
Fund engages in forward commitments or when-issued or delayed delivery
transactions, the Fund relies on the other party to consummate the
transaction. Failure to consummate the transaction may result in the Fund
missing the opportunity of obtaining a price or yield considered to be
advantageous. When-issued and delayed delivery transactions are generally
expected to settle within three months from the date the transactions are
entered into, although the Fund may close out its position prior to the
settlement date. The Fund will sell on a forward settlement basis only
securities it owns or has the right to acquire.
Foreign Securities--The Growth Equity, Aggressive Equity and Balanced Funds
may make a limited portion of their investments in the securities of
established foreign companies which do not do substantial business in the
United States. For many foreign securities, there are dollar-denominated
American Depository Receipts (ADRs), which are traded in the United States on
exchanges or over-the-counter, and are issued by domestic banks. The Funds
may
14
<PAGE>
invest in foreign securities directly and through ADRs and may hold some
foreign securities outside of the U.S. ADRs do not lessen the foreign
exchange risk inherent in investing in the securities of foreign issuers.
However, by investing in ADRs rather than directly in foreign issuers' stock,
the Funds will avoid currency risks during the settlement period for either
purchases or sales. Foreign investments may involve risks not present in
domestic investments, such as changes in the political or economic climate of
countries in which companies do business. Foreign securities may be less
liquid or subject to greater price volatility than securities of domestic
issuers, and foreign accounting, auditing and disclosure standards may differ
from domestic standards. There may be less regulation in foreign countries of
stock exchanges, brokers, banks, and listed companies than in the United
States. The value of foreign investments may rise or fall because of changes
in currency exchange rates or exchange controls.
Restricted Securities--The Growth Equity, Aggressive Equity and Balanced
Funds may make investments in restricted securities. Restricted securities
are generally less liquid than registered securities and market quotations
for such securities may not be readily available. The Funds may not be able
to sell restricted securities except pursuant to registration under
applicable Federal and State securities laws or pursuant to Securities and
Exchange Commission rules which limit their sale to certain purchasers and
may require that they be held by the Funds for a specified period of time
prior to resale. Because of these restrictions, at times the Funds may not be
readily able to sell them at fair market value.
Securities of Medium and Smaller Sized Companies--The Aggressive Equity Fund
invests primarily in the securities of medium and smaller sized companies,
although the Growth Equity and Balanced Funds may also make these
investments. For this purpose the term medium and smaller sized companies
means companies with $500 million to $1.5 billion in capitalization. Medium
and smaller sized companies may be dependent on the performance of only one
or two products. Such companies may be vulnerable to competition from larger
companies with greater resources and to economic conditions affecting their
market sector. Therefore, consistent earnings may not be as likely in small
companies as in large companies. Such companies may also be more dependent on
access to equity markets to raise capital than larger companies with greater
ability to support debt. Small and intermediate sized companies may be new,
without long business or management histories, and perceived by the market as
unproven. Their securities may be held primarily by insiders or institutional
investors, which may have an impact on marketability. The price of these
stocks may rise and fall more frequently and to a greater extent than the
overall market.
Investment Concentration--From time to time, the equity holdings in the
Growth Equity Fund may be concentrated in the securities of a relatively
small number of issuers. In no event will an investment be made for the Fund
in the securities of one issuer if such investment would cause more than 10%
of the book value of the Growth Equity Fund to be invested in the securities
of such issuer, and no investment will be made for the Fund if such
investment would cause more than 40% of the book value of the Fund to be
invested in the securities of four or fewer issuers. This strategy of
investment concentration may increase an investor's risk of loss in the event
of a decline in the value of one of these securities. As of December 31,
1995, 28.5% (of market value) of the Growth Equity Fund was held in the
stocks of four issuers. See Separate Account No. 4 (Pooled) Statement of
Investments and Net Assets in the SAI.
Debt Instruments Issued by Schedule B Banks--The Balanced Fund may invest in
debt instruments issued by Schedule B Banks, which are foreign branches of
United States banks. Schedule B Banks are not required to maintain the same
financial reserves which are required of United States banks, but Schedule B
Bank certificates of deposit are fully guaranteed by the U.S. parent of the
issuing bank. Debt instruments issued by Schedule B Banks may
15
<PAGE>
include certificates of deposit and time deposits of London branches of
United States banks ("Eurodollars"). Eurodollar investments are subject to
the types of risks associated with foreign securities. London branches of the
United States banks have extensive government regulation which may limit both
the amount and the type of loans and interest rates. In addition, the banking
industry's profitability is closely linked to prevailing money market
conditions for financing lending operations. Both general economic conditions
and credit risks play an important part in the operations of the banking
industry. United States banks are required to maintain reserves, are limited
in how much they can loan to a single borrower and are subject to other
regulations to promote financial soundness. Not all of these laws and
regulations apply to foreign branches of United States banks.
Hedging Transactions--The Balanced Fund may engage in hedging transactions
which are designed to protect against anticipated adverse price movements in
securities owned or intended to be purchased by the Fund. When interest rates
go up, the market value of outstanding debt securities declines and vice
versa. In recent years the volatility of the market for debt securities has
increased significantly, and market prices of longer-term obligations have
been subject to wide fluctuations, particularly as contrasted with those of
short-term instruments. The Fund will take certain risks into consideration
when determining which, if any, options or financial futures contracts it
will use. If the price movements of hedged portfolio securities are in fact
favorable to the Fund, the hedging transactions will tend to reduce and may
eliminate the economic benefit to the Fund which otherwise would result.
Also, the price movements of options and futures used for hedging purposes
may not correlate as anticipated with price movements of the securities being
hedged. This can make a hedge transaction less effective than anticipated and
could result in a loss. The options and futures markets can sometimes become
illiquid and the exchanges on which such instruments are traded may impose
trading halts or delays on the exercise of options and liquidation of futures
positions in certain circumstances. This could in some cases operate to the
Fund's detriment.
Money Market Investments--The Growth Equity, the Aggressive Equity and the
Balanced Funds may make temporary investments in government obligations,
short-term commercial paper and other money market instruments. They may buy
these directly or acquire units in our Separate Account No. 2A. Separate
Account No. 2A provides an efficient means for certain of our other separate
accounts to invest cash positions on a pooled basis at no additional costs.
Separate Account No. 2A seeks to obtain a high level of current income,
preserve its assets and maintain liquidity. It invests only in short-term
securities which mature in 60 days or less from the date of purchase or which
are subject to repurchase agreements requiring repurchases in 60 days or
less. In repurchase agreements, Separate Account No. 2A buys securities from
a seller, usually a bank or brokerage firm, with the understanding that the
seller will repurchase the securities at a higher price at a future date.
Such transactions afford an opportunity for Separate Account No. 2A to earn a
fixed rate of return on available cash at minimal market risk, although the
account may be subject to various delays and risks of loss if the seller is
unable to meet its obligation to repurchase. Units in Separate Account No. 2A
are not registered under the Securities Act of 1933.
The kinds of direct investments the Funds make in money market instruments
will be payable only in United States dollars and will consist principally of
securities issued or guaranteed by the United States Government or one of its
agencies or instrumentalities, negotiable certificates of deposit, bankers'
acceptances or bank time deposits, repurchase agreements (covering securities
issued or guaranteed by the United States Government or one of its agencies
or instrumentalities, certificates of deposit or bankers' acceptances),
commercial paper that is rated Prime-1 by Moody's Investors Service
("Moody's") or A-1 or A-1 Plus by Standard & Poor's Corporation ("S&P"),
unrated commercial paper, master demand notes or variable amount floating
rate notes of any issuer that has an outstanding issue of unsecured debt that
is currently rated Aa or better by Moody's or AA or better by S&P, and any
debt securities issued or guaranteed by an issuer, which is currently rated
Aa or better by Moody's or AA or better by S&P, with less than one year to
maturity. Such investments may include Eurodollars, certificates of deposit
and commercial paper issued by Schedule B Banks.
16
<PAGE>
Convertible Securities--The Growth Equity, the Aggressive Equity and the
Balanced Funds may invest in convertible preferred stocks or convertible debt
instruments. Convertible securities contain both debt and equity features.
Because of their debt element, they may provide some protection when stock
prices decline. Nevertheless, convertible securities may lose significant
value in periods of extreme market volatility.
THE GENERAL ACCOUNT OPTIONS
Contributions to the General Account Options become part of our general
account, which supports all of our insurance and annuity guarantees as well
as our general obligations. The general account, as part of our insurance and
annuity operations, is subject to regulation and supervision by the Insurance
Department of the State of New York and to insurance laws and regulations of
all jurisdictions in which we are authorized to do business. Because of
applicable exemptive and exclusionary provisions, interests in the general
account have not been registered under the Securities Act of 1933, nor is the
general account an investment company under the Investment Company Act of
1940. Accordingly, neither the general account nor any interests therein are
subject to regulation under the 1933 Act or the 1940 Act, and we have been
advised that the staff of the Securities and Exchange Commission has not made
a review of the disclosures which are included in this prospectus for your
information and which relate to the general account and the General Account
Options. These disclosures, however, may be subject to certain generally
applicable provisions of the federal securities laws relating to the accuracy
and completeness of statements made in prospectuses.
GUARANTEED RATE ACCOUNTS
THE GUARANTEES. Contributions to the Guaranteed Rate Accounts (GRAs) are
credited until maturity with the interest rate in effect on the date of
receipt. The rate is expressed as an effective annual rate, reflecting daily
compounding and the deduction of asset-based fees. GRAs with maturities of
approximately three and approximately five years are available under the
Program. AMOUNTS ALLOCATED TO A GRA MAY GENERALLY NOT BE REMOVED PRIOR TO
MATURITY.
New guaranteed rates are offered each Wednesday and are available for a
seven-day period. Call the AIM System to obtain the current GRA rates.
Interest accrues from the day after your contribution or transfer is credited
through the maturity date of the GRA, which is either approximately three or
approximately five years from the end of the seven-day offering period. We
guarantee the amount of your contributions and the interest credited, subject
to any penalties applicable upon premature withdrawal. See Premature
Withdrawals and Transfers from a GRA in the SAI for a description of such
penalties and when they apply. For a discussion of maturing GRAs, see
Maturing GRAs in the SAI.
PREMATURE WITHDRAWALS AND TRANSFERS
o You may not transfer from one GRA to another or from a GRA to another
Investment Option except at maturity.
o You may transfer other amounts at any time to a GRA at the current
guaranteed rate.
o Withdrawals may be made from a GRA before maturity if: you are disabled;
you attain age 70 1/2 ; you die; or you are not self-employed and your
employment is terminated.
o You may not remove GRA funds before maturity to take a loan, hardship or
other in-service withdrawal, as a result of a trustee-to-trustee transfer, or
to receive benefits from a terminated plan.
17
<PAGE>
o Certain other withdrawals prior to maturity are permitted, but may be
subject to penalty. See Procedures for Withdrawals, Distributions and
Transfers from a GRA in the SAI.
MONEY MARKET GUARANTEE ACCOUNT
THE GUARANTEES. All amounts held in the Money Market Guarantee Account are
credited with the same rate of interest. The rate changes monthly and is
expressed as an effective annual rate, reflecting daily compounding and the
deduction of asset-based fees and charges. The rate will approximate current
market rates for money market mutual funds minus these fees. Call the AIM
System to obtain the current monthly rate. On January 1 each year we set an
annual minimum rate for this Account. The minimum guaranteed interest rate
for 1996 is 2.5% (before fees).
CONTRIBUTIONS. Contributions may be made at any time and will earn the
current rate from the day after the contribution is credited through the end
of the month or, if earlier, the day of withdrawal or transfer. Balances in
the Account at the end of the month automatically begin receiving interest at
the new rate until transferred or withdrawn. We guarantee the amount of your
contributions and the interest credited.
DISTRIBUTIONS AND TRANSFERS. Distributions, withdrawals and transfers may be
made at any time assuming your employer's plan permits.
PART IV: FUND PERFORMANCE
The following tables provide a historical view of investment performance. The
information presented includes performance results for each Fund, along with
data representing unmanaged market indices.
UNMANAGED MARKET INDICES
Benchmark indices, while providing a broader perspective on relative
performance, are only a tool for comparison. At any time, the composition of
a Fund will differ from the benchmarks presented. Also, performance data for
the unmanaged market indices do not reflect any deductions for investment
advisory, brokerage or other expenses of the type typically associated with
an actively managed fund. This effectively overstates the rate of return of
the market indices relative to that which would be available to a typical
investor, and limits the usefulness of these indices in assessing the
performance of the Funds. Since the Funds do not distribute dividends or
interest, the market indices have been adjusted to reflect reinvestment of
dividends and interest to provide comparability.
STANDARD AND POOR'S 500 INDEX (S&P 500)--an unmanaged weighted index of the
securities of 500 industrial, transportation, utility and financial companies
widely regarded by investors as representative of the stock market.
STANDARD & POOR'S MIDCAP 400 (TOTAL RETURN) INDEX (S&P MIDCAP TR)--a
market-weighted index with each stock affecting the index in proportion to
its market value. It consists of 400 domestic stocks chosen for market size
(median market capitalization of about $610 million), liquidity, and industry
group representation.
RUSSELL 2000 INDEX (RUSSELL 2000)--an unmanaged broadly diversified index
maintained by Frank Russell Company consisting of the approximately 2,000
smallest stocks within the Russell 3000 Index. The Russell 3000
18
<PAGE>
Index consists of the largest 3,000 publicly traded stocks of U.S. domiciled
corporations and includes large, medium and small capitalizations stocks. As
such, the Russell 3000 Index represents approximately 98 percent of the total
market capitalization of all U.S. stocks that trade on the New York and
American Stock Exchanges and in the NASDAQ over-the-counter market.
CONSUMER PRICE INDEX (URBAN CONSUMERS--NOT SEASONALLY ADJUSTED)(CPI)--an
index of inflation.
LEHMAN GOVERNMENT/CORPORATE BOND INDEX (LEHMAN)--an unmanaged index widely
regarded by investors as representative of the bond market.
LEHMAN TREASURY BOND INDEX (LEHMAN TREASURY)--an unmanaged bond index which
includes all public obligations of the U.S. Treasury (excluding foreign
targeted issues).
S&P MIDCAP TR/RUSSELL 2000--assumes a static mix of the two market indices.
MORGAN STANLEY CAPITAL INTERNATIONAL WORLD INDEX (MSCI)--an arithmetical
average weighted by market value of the performance of 1,520 companies listed
on the stock exchanges of the United States, Europe, Canada, Australia, New
Zealand and the Far East.
HOW PERFORMANCE DATA ARE PRESENTED
The following tables show Fund performance on several different bases:
percent changes in Fund Unit Values, average annual rates of return and the
total value as of December 31, 1995 of a $1,000 investment made on January 1,
1986. The Fund performance shown may not represent your actual experience;
nor does it reflect the effect of the record maintenance and report or
enrollment fees. The average annual rates of return are time-weighted, assume
an investment at the beginning of each period, and include the reinvestment
of investment income.
The Global, Conservative Investors and Growth Investors Funds became
available under the Program on July 1, 1993. The performance figures prior to
that date for these Funds reflect (1) hypothetical performance based on the
actual performance of the Global, Conservative Investors and Growth Investors
Portfolios, respectively, from the date each commenced operations and (2) the
deduction of the Program Expense Charge, the financial accounting fee and the
daily accrual of direct expenses attributable to the Growth Equity Fund.
After July 1, 1993, they reflect actual performance and, for 1993, annualized
actual expenses. See Part VII: Deductions and Charges.
19
<PAGE>
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENT CHANGES IN FUND UNIT VALUES
- -----------------------------------------------------
ANNUAL PERIOD ENDING
LAST BUSINESS DAY OF 1986 1987 1988
- --------------------------- ------- ------ -------
<S> <C> <C> <C>
Growth Equity Fund 12.1% 4.0% 15.5%
- --------------------------- ------- ------ -------
Aggressive Equity Fund 0.4 -4.0 0.7
- --------------------------- ------- ------ -------
Balanced Fund 9.9 -6.9 13.4
- --------------------------- ------- ------ -------
Global Fund -- -- 9.3
- --------------------------- ------- ------ -------
Conservative Investors Fund -- -- --
- --------------------------- ------- ------ -------
Growth Investors Fund -- -- --
- --------------------------- ------- ------ -------
S&P 500 18.7 5.3 16.6
- --------------------------- ------- ------ -------
CPI 1.1 4.4 4.4
- --------------------------- ------- ------ -------
S&P MidCap TR 16.2 -2.0 20.9
- --------------------------- ------- ------ -------
Russell 2000 5.7 -8.8 25.0
- --------------------------- ------- ------ -------
Lehman Treasury 15.6 2.0 7.0
- --------------------------- ------- ------ -------
Lehman 15.6 2.3 7.6
- --------------------------- ------- ------ -------
MSCI 41.9 16.2 23.3
- --------------------------- ------- ------ -------
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
PERCENT CHANGES IN FUND UNIT VALUES
- ------------------------------------------------------------------------------------------
ANNUAL PERIOD ENDING
LAST BUSINESS DAY OF 1989 1990 1991 1992 1993 1994 1995
- --------------------------- ------- -------- ------- ------ ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Growth Equity Fund 43.0% -12.3% 50.4% 0.1% 18.0% -2.8% 30.3%
- --------------------------- ------- -------- ------- ------ ------- ------- -------
Aggressive Equity Fund 45.2 7.5 85.1 -4.2 13.1 -5.1 29.6
- --------------------------- ------- -------- ------- ------ ------- ------- -------
Balanced Fund 24.9 -1.9 39.7 -3.9 10.8 -9.2 18.9
- --------------------------- ------- -------- ------- ------ ------- ------- -------
Global Fund 25.4 -7.4 29.1 -1.9 30.8 3.6 16.8
- --------------------------- ------- -------- ------- ------ ------- ------- -------
Conservative Investors Fund 1.7 5.0 18.4 4.3 9.4 -5.9 18.3
- --------------------------- ------- -------- ------- ------ ------- ------- -------
Growth Investors Fund 2.6 9.4 47.3 3.5 13.9 -4.8 24.2
- --------------------------- ------- -------- ------- ------ ------- ------- -------
S&P 500 31.7 -3.1 30.5 7.6 10.0 1.3 37.5
- --------------------------- ------- -------- ------- ------ ------- ------- -------
CPI 4.6 6.2 3.0 2.9 2.7 2.7 2.9
- --------------------------- ------- -------- ------- ------ ------- ------- -------
S&P MidCap TR 35.6 -5.1 50.1 11.9 13.9 -3.6 30.9
- --------------------------- ------- -------- ------- ------ ------- ------- -------
Russell 2000 16.3 -19.5 46.0 18.4 18.9 -1.8 28.4
- --------------------------- ------- -------- ------- ------ ------- ------- -------
Lehman Treasury 14.4 8.5 15.3 7.2 10.7 -3.4 18.4
- --------------------------- ------- -------- ------- ------ ------- ------- -------
Lehman 14.2 8.3 16.1 7.6 11.0 -3.5 19.2
- --------------------------- ------- -------- ------- ------ ------- ------- -------
MSCI 16.6 -17.0 18.3 -5.2 22.5 5.1 20.7
- --------------------------- ------- -------- ------- ------ ------- ------- -------
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL RATES OF RETURN--DECEMBER 31, 1995
- -----------------------------------------------------------------------------
FUND 10 YEARS 5 YEARS 3 YEARS 2 YEARS 1 YEAR
- ---------------------- ---------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
Growth Equity 14.3% 17.6% 14.3% 12.5% 30.3%
- ---------------------- ---------- --------- --------- --------- --------
Aggressive Equity 14.1 19.8 11.6 10.9 29.6
- ---------------------- ---------- --------- --------- --------- --------
Balanced 8.6 9.9 6.2 3.9 18.9
- ---------------------- ---------- --------- --------- --------- --------
Global -- 14.9 16.6 10.0 16.8
- ---------------------- ---------- --------- --------- --------- --------
Conservative Investors -- 8.5 6.7 5.5 18.3
- ---------------------- ---------- --------- --------- --------- --------
Growth Investors -- 15.5 10.4 8.7 24.2
- ---------------------- ---------- --------- --------- --------- --------
S&P 500 14.9 16.6 15.3 18.1 37.5
- ---------------------- ---------- --------- --------- --------- --------
CPI 3.5 2.9 2.8 2.8 2.9
- ---------------------- ---------- --------- --------- --------- --------
S&P MidCap TR 15.6 19.3 12.9 12.4 30.9
- ---------------------- ---------- --------- --------- --------- --------
Russell 2000 11.3 21.0 14.5 12.3 28.4
- ---------------------- ---------- --------- --------- --------- --------
Lehman Treasury 9.4 9.4 8.2 6.9 18.4
- ---------------------- ---------- --------- --------- --------- --------
Lehman 9.6 9.8 8.5 7.3 19.2
- ---------------------- ---------- --------- --------- --------- --------
MSCI 13.1 11.7 15.8 12.6 20.7
- ---------------------- ---------- --------- --------- --------- --------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TOTAL VALUE AS OF DECEMBER 31, 1995 OF $1,000 INVESTMENT JANUARY 1, 1986
- --------------------------------------------------------------------------------------------------------------
TOTAL VALUE
AS OF S&P MIDCAP
DECEMBER 31, TR RUSSELL S&P 500
FUND $1,000 INVESTED ON (A) 1995 S&P 500 2000 50/50 CPI LEHMAN 50/50
- ---------------------- -------------------- -------------- --------- ------------ -------- --------------
<S> <C> <C> <C> <C> <C> <C>
Growth Equity January 1, 1986 $3,806 $4,010 -- $1,411 --
- ---------------------- -------------------- -------------- --------- ------------ -------- --------------
Aggressive Equity January 1, 1986 3,707 -- $3,532 1,411 --
- ---------------------- -------------------- -------------- --------- ------------ -------- --------------
Balanced January 1, 1986 2,282 -- -- 1,411 $3,247
- ---------------------- -------------------- -------------- --------- ------------ -------- --------------
Global
- ---------------------- -------------------- -------------- --------- ------------ -------- --------------
Conservative Investors} These Funds were not in existence on January 1, 1986.
- ---------------------- --------------------------------------------------------------------------------------
Growth Investors
- ---------------------- -------------------- -------------- --------- ------------ -------- --------------
<FN>
(a) The Growth Equity Fund commenced operations under the NAR Program on January 1, 1968 at a Unit Value of
$10.00. The Aggressive Equity Fund commenced operations on May 1, 1969, on which date the hypothetical
Program Unit Value would have been $3.38. The Balanced Fund commenced operations on June 25, 1979, on which
date the hypothetical Program Unit Value would have been $3.68. The Global, Conservative Investors and Growth
Investors Funds became available under the Program on July 1, 1993, each at a Unit Value of $10.00. The
underlying Global Portfolio commenced operations on August 27, 1987. The underlying Conservative Investors
and Growth Investors Portfolios commenced operations on October 2, 1989.
</TABLE>
PAST PERFORMANCE IS NOT AN INDICATION OF FUTURE PERFORMANCE. NO PROVISIONS
HAVE BEEN MADE FOR THE EFFECT OF TAXES ON INCOME AND GAINS OR UPON DISTRIBUTION.
20
<PAGE>
INVESTMENT OF CONTRIBUTIONS IN THE FUNDS
PURCHASE OF FUND UNITS
Amounts allocated to a Fund are used to purchase Units. Your interest in each
Fund is represented by the value of your Units in that Fund. The number of
Units you purchase in a Fund is calculated by dividing the amount allocated
by the Unit Value calculated as of the close of business on the day your
purchase is made. The number of Units credited will not vary because of any
subsequent fluctuation in the Unit Value; however, the value of the Unit
fluctuates with the investment experience of the Fund. Such experience
reflects the investment income and realized and unrealized capital gains and
losses of that Fund, and the deductions and charges we make to the Fund.
BUSINESS DAY
A business day is any day both we and the New York Stock Exchange are open.
Contributions, transfers, and allocation changes are effective on the
business day they are received. Distribution requests are also effective on
the business day they are received unless, as in the Master Plans, there are
plan provisions to the contrary. However, we may have to delay the processing
of any transaction which is not accompanied by a properly completed form or
which is not mailed to the correct address. An Account Executive will
generally be available to speak with you each business day from 9 a.m. to 5
p.m. eastern time. We may, however, close due to emergency conditions.
HOW WE DETERMINE THE UNIT VALUE
We determine the Unit Value at the end of each business day. The Unit Value
for each Fund is determined by first calculating a gross unit value
reflecting only investment performance and then adjusting it for Program
expenses to obtain the Fund Unit Value. We calculate the gross unit value by
multiplying the gross unit value for the preceding business day by the net
investment factor for that subsequent business day and, for the Growth
Equity, Aggressive Equity and Balanced Funds, then deducting audit and
custodial fees. We calculate the net investment factor as follows:
o First, we take the value of the Fund's assets at the close of business on
the preceding business day.
o Next, we add the investment income and capital gains, realized and
unrealized, that are credited to the assets of the Fund during the business
day for which we are calculating the net investment factor.
o Then we subtract the capital losses, realized and unrealized, charged to
the Fund during that business day.
o Finally, we divide this amount by the value of the Fund's assets at the
close of the preceding business day.
The Fund Unit Value is calculated on every business day by multiplying the
Fund Unit Value for the last business day of the previous month by the net
change factor for that business day. The net change factor for each business
day is equal to (a) minus (b) where
(a) is the gross unit value for that business day divided by the gross unit
value for the last business day of the previous month; and
(b) is the charge to the Fund for that month for the daily accrual of fees
and expenses times the number of days since the end of the preceding month.
For information on the valuation of assets of the Funds, see How We Value
the Assets of the Funds in the SAI.
The value of the investments of the Global, Conservative Investors and Growth
Investors Funds in the corresponding Hudson River Trust Portfolios is
calculated by multiplying the number of shares held by Separate Account No.
51 in each Portfolio by the net asset value per share of that Portfolio
determined as of the close of business on the same day as the respective Unit
Values of the Global, Conservative Investors and Growth Investors Funds are
determined.
21
<PAGE>
PART V: EQUITABLE LIFE AND THE INVESTMENT MANAGERS
EQUITABLE LIFE
Equitable Life is a New York stock life insurance company with our Home
Office at 787 Seventh Avenue, New York, New York 10019. Founded in 1859, we
are one of the largest life insurance companies in the United States, with
total assets under management at December 31, 1995 of approximately $195.3
billion.
Equitable Life is a wholly-owned subsidiary of The Equitable Companies
Incorporated (the "Holding Company"). The largest stockholder of the Holding
Company is AXA 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.
THE SEPARATE ACCOUNTS
Separate accounts are used to fund benefits under group annuity contracts and
other agreements for tax-deferred retirement programs we administer. The
separate accounts which hold the Growth Equity, Aggressive Equity and
Balanced Funds were established pursuant to the Insurance Law of the State of
New York in 1968, 1969 and 1979, respectively. The separate account which
holds the Global, Conservative Investors and Growth Investors Funds was
established in 1993. The assets of the separate accounts are our property.
However, you have a claim under the group annuity contract equal to the value
of your accumulation in each Fund. Income, gains and losses, whether or not
realized, from assets allocated to the Funds are, in accordance with the
group annuity contract, credited to or charged against the Fund without
regard to our other income, gains or losses. The portion of each Fund's
assets we hold on your behalf may not be used to satisfy obligations that may
arise out of any other business we conduct. We may transfer amounts owed to
us, such as fees and expenses, to our general account at any time.
INVESTMENT MANAGEMENT OF THE FUNDS
We use the personnel and facilities of Alliance Capital Management L.P.
("Alliance") for portfolio management, securities selection and transaction
services in managing the assets of the Funds. Alliance is also the investment
adviser of The Hudson River Trust. The Global, Conservative Investors and
Growth Investors Funds are divisions of our Separate Account No. 51 and
invest in corresponding Portfolios of the Hudson River Trust.
Alliance is a publicly-traded limited partnership which is indirectly
majority-owned by Equitable Life. Equitable Life and Alliance are registered
investment advisers under the Investment Advisers Act of 1940. As of December
31, 1995, Alliance had total assets under management of over $146.5 billion.
Alliance acts as an investment adviser to various separate accounts and
general accounts of Equitable Life and other affiliated insurance companies.
Alliance also provides management and consulting services to mutual funds,
endowment funds, insurance companies, foreign entities, qualified and non-tax
qualified corporate funds, public and private pension and profit-sharing
plans, foundations and tax-exempt organizations. Alliance's main office is
located at 1345 Avenue of the Americas, New York, New York 10105.
22
<PAGE>
The securities held in the Growth Equity, Aggressive Equity and Balanced
Funds must be authorized or approved by the Investment Committee of our Board
of Directors. Subject to the Investment Committee's broad supervisory
authority, our investment officers and managers have complete discretion over
the assets of these Funds and have been given discretion as to sales and,
within specified limits, purchases of stocks, other equity securities and
certain debt securities. When an investment opportunity arises that is
consistent with the objectives of more than one account, investment
opportunities are allocated among accounts in an impartial manner based on
certain factors such as investment objective and current investment and cash
positions.
We, together with the Holding Company, own 80.2% of the outstanding common
stock of Donaldson, Lufkin & Jenrette, Inc. (DLJ). A DLJ subsidiary,
Donaldson, Lufkin & Jenrette Securities Corporation, is one of the nation's
largest investment banking and securities firms. Another DLJ subsidiary,
Autranet, Inc., is a securities broker that markets independently originated
research to institutions. Through the Pershing Division of Donaldson, Lufkin
& Jenrette Securities Corporation, DLJ supplies correspondent services,
including order execution, securities clearance and other centralized
financial services, to numerous independent regional securities firms and
banks.
To the extent permitted by law and consistent with the Fund transaction
practices discussed in this prospectus, and subject to the consent of Fund
contractholders, the Funds may engage in securities and other transactions
with the above entities or may invest in shares of the investment companies
with which those entities have affiliations. In 1995, there were no such
transactions through DLJ subsidiaries.
VOTING RIGHTS
No voting rights apply to any of the Separate Accounts or to the General
Account Options. As legal owner of the shares of the Hudson River Trust held
in Separate Account No. 51 which invests in units of the Global, Conservative
Investors and Growth Investors Funds, we do, however, have the right to vote
on certain matters. The Hudson River Trust is not required to hold annual
meetings of shareholders and may elect not to do so. If a meeting of
shareholders is held, they may vote on such matters as election of directors
and any other matters requiring a vote by shareholders under the 1940 Act.
Equitable Life will vote the shares of the Hudson River Trust allocated to
the Global, Conservative Investors and Growth Investors Funds in accordance
with instructions received from employers, participants or trustees, as the
case may be, in the respective Funds. Each participant for whom we maintain
records and, in other cases, the employer or trustee, will be allowed to
instruct us on how to vote shares of the Hudson River Trust in proportion to
their interest in the Global, Conservative Investors and Growth Investors
Funds as of the record date for the shareholder meeting. If we do not receive
instructions in time from all shareholders, we will vote the shares for which
no instructions have been received in the same proportion as we vote shares
for which we have received instructions. If you invest in the Hudson River
Trust, you will receive periodic reports relating to the Hudson River Trust
and proxy material, together with a voting instruction form, in connection
with shareholder meetings.
Currently, we control the Hudson River Trust. Trust shares are held by other
separate accounts of ours and by separate accounts of insurance companies
affiliated and unaffiliated with us. Shares held by these separate accounts
will generally be voted according to the instructions of the owners of
insurance policies and contracts funded through those separate accounts, thus
diluting the effect of your voting instructions.
PART VI: PROVISIONS OF THE CONTRACT AND SERVICES WE PROVIDE
ADOPTION OF THE PROGRAM BY EMPLOYERS
To adopt a Members Retirement Program, you as the employer or trustee must
complete the appropriate Participation Agreement. If you would like to
discuss enrollment in the Program, call our Retirement Program Specialists at
1-800-523-1125. They can help you complete the Participation Agreement for
review by your tax advisor.
23
<PAGE>
For our prototype self-directed plan, you as the employer must use the
prototype plan adoption agreement. You must also adopt the Pooled Trust and
arrange separately for plan level recordkeeping and brokerage services. We
will provide recordkeeping services only for assets held in the Pooled Trust.
You can use any plan recordkeeper of your choice or you can arrange through
us to hire Trust Consultants, Inc. at a special rate. In addition, you can
arrange through us brokerage services from our affiliate, Pershing Discount
Brokerage Services, at special rates or use any other broker of your choice.
EMPLOYER RESPONSIBILITIES
If you are an employer and you adopt our Members Retirement Plan, you as the
employer and plan administrator will have certain responsibilities relating
to the administration and qualification of your plan. See Your
Responsibilities as Employer in the SAI for a list of responsibilities which
you will have if you adopt the Members Retirement Plan. If you, as an
employer, have an individually designed plan, you already have these
responsibilities, which will not be increased in any way by your adoption of
the Pooled Trust for investment only. If you utilize our prototype
self-directed plan, you will have responsibilities as the plan administrator
and will also have to appoint a plan trustee; these responsibilities will be
greater than those under the Members Retirement Plan. (You should consult
your legal adviser for an understanding of your legal responsibilities under
the self-directed plan.) If you use an individually designed plan, it is your
responsibility to determine that the terms of your plan are consistent with
the provisions of the Pooled Trust and our practices described in this
prospectus and the SAI. We try in this prospectus to make it clear which
actions you are to take as employer and which you are to take as participant.
We will give you guidance and assistance in the performance of your
responsibilities. The ultimate responsibility, however, rests with you.
CONTRIBUTIONS
EMPLOYER RESPONSIBILITIES
Employers should send contribution checks or money orders payable to
Equitable Life to the address shown under Corresponding With the Program. All
contributions must be allocated by the participant and must be accompanied by
a properly completed Contribution Remittance form. Contributions are credited
on the day of receipt. Failure to use the proper form, or to complete the
form properly, however, may result in a delay in crediting contributions for
the entire business. Employers should not permit employees to send post-tax
contributions directly to the Program. See Your Responsibilities as Employer
in the SAI.
ALLOCATION OF CONTRIBUTIONS BY PARTICIPANTS
o You may allocate your contribution among as many Investment Options as you
wish.
o You may change your allocation instructions as often as you wish by
calling the AIM System. Your new instructions become effective on the
business day we receive them; provided that is before 4 p.m. eastern time,
and the remittance form is properly completed. Current participants should
refer to their AIM System brochures.
o You may allocate employer contributions in different percentages than your
employee contributions. The allocation percentages you elect for employer
contributions will automatically apply to 401(k) qualified non-elective
contributions, qualified matching contributions and matching contributions.
The allocation percentages you elect for employee contributions will
automatically apply to both your post-tax employee contributions and your
401(k) salary deferral contributions.
o If we have not received valid instructions, we will allocate your
contributions to the Money Market Guarantee Account.
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Under the Members Retirement Plan, participants make all investment
allocations. Under an individually designed plan or our self-directed
prototype plan, either the participant or the trustee makes investment
allocations, depending on the terms of the plan.
TRANSFERS AMONG INVESTMENT OPTIONS
GENERAL RULES
o Generally, amounts may be transferred to or from the Investment Options at
any time. However, no transfers from the Guaranteed Rate Accounts are
permitted prior to maturity.
o There is no charge for transfers and no tax liability.
o To make a transfer, give us instructions through the AIM System.
o All transfers are made as of the close of business on the day we receive
your instructions, provided we receive your request by 4:00 p.m. eastern
time. Transfers by phone must be made and confirmed by 4:00 p.m. eastern
time. Transfer requests completed after that time or on a non-business day
will be processed as of the close of business on the following business day.
To transfer by telephone, you must have a Personal Security Code (PSC)
number, which you obtain by completing a Telephone Transfer Authorization
form. You must have a touch-tone telephone to make transfers on the AIM
System. Procedures have been established by Equitable Life that are
considered to be reasonable and are designed to confirm that instructions
communicated by telephone are genuine. Such procedures include requiring
certain personal identification information prior to acting on telephone
instructions and providing written confirmation of instructions communicated
by telephone. If Equitable Life does not employ reasonable procedures to
confirm that instructions communicated by telephone are genuine, it may be
liable for any losses arising out of any action on its part or any failure or
omission to act as a result of its own negligence, lack of good faith, or
willful misconduct. In light of the procedures established, Equitable Life
will not be liable for following telephone instructions that it reasonably
believes to be genuine. We may discontinue the telephone transfer service at
any time without notice.
PAYMENTS OR WITHDRAWALS FROM THE FUNDS
Payments or withdrawals out of the Funds ordinarily will be made promptly
upon request in accordance with Plan provisions. However, we can defer
payments, applications and withdrawals from the Funds for any period during
which the New York Stock Exchange is closed for trading, sales of securities
are restricted or determination of the fair market value of assets of the
Funds is not reasonably practicable because of an emergency.
DISTRIBUTIONS AND BENEFIT PAYMENT OPTIONS
PARTICIPANT BENEFITS: RETIREMENT, DISABILITY AND TERMINATION OF EMPLOYMENT
Under the Members Retirement Plan or our self-directed prototype plan, you
are eligible for benefits upon retirement, death or disability, or upon
termination of employment with a vested benefit. ("Vested" refers to the
nonforfeitable portion of your benefits under the plan.) If you are a
participant in an individually designed plan, your eligibility for retirement
benefits depends on the terms of that plan. Generally, you must begin to
receive your benefits no later than April 1 of the year after you reach age
70 1/2 . There may be an exemption if you filed a special contrary election
with your employer before January 1, 1984.
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The Program is flexible as to how and when you can receive your benefits, but
you are also subject to extremely complicated legal requirements. Certain
plan distributions may result in penalty or excise taxes. A general
explanation of the federal income tax treatment of distributions and benefit
payment options is provided in Federal Income Tax Considerations in both this
prospectus and the SAI. If you retire, become disabled or terminate your
employment, you should discuss the available options with your financial
advisor. Our Account Executives can be of assistance.
PARTICIPANT WITHDRAWALS PRIOR TO RETIREMENT
o You may withdraw all or part of your Account Balance under the Members
Retirement Plan attributable to post-tax employee contributions at any time,
provided that you withdraw at least $300 at a time (or, if less, your entire
post-tax Account Balance). See Part VIII: Federal Income Tax Considerations.
o If you are married, your spouse must generally consent in writing before
you can make any type of withdrawal, except for the purchase of a Qualified
Joint and Survivor Annuity.
o Self-employed persons may generally not receive a distribution prior to
age 59 1/2 .
o Employees may generally not receive a distribution prior to separation
from service.
o Hardship withdrawals before age 59 1/2 may be permitted under 401(k) and
certain other profit sharing plans.
Under an individually designed plan and our self-directed plan, the
availability of pre-retirement withdrawals depends on the terms of the plan.
We suggest that you ask your employer what types of withdrawals are available
under your plan. See Procedures for Withdrawals, Distributions and Transfers
in the SAI for a more detailed discussion of these general rules.
Generally you may not make withdrawals from the Guaranteed Rate Accounts
prior to maturity. See The Guaranteed Rate Accounts in Part III.
PARTICIPANT DEATH BENEFITS
o If you die before the entire benefit due you has been paid, the remainder
of your benefits will be paid to your beneficiary.
o The law requires your entire benefit to be distributed no more than five
years after your death. There are two exceptions--(1) if your benefit is paid
to your spouse, your spouse may elect to receive benefits over his/her life
or a period certain which does not exceed his or her life expectancy
beginning any time up to the date you would have attained age 70 1/2 or, if
later, one year after your death, and (2) a beneficiary who is not your
spouse may elect payments over his/her life or a fixed period which does not
exceed the beneficiary's life expectancy, provided payments begin within one
year of your death.
o If at your death you were already receiving annuity benefits, your
beneficiary will receive the survivor benefits, if any, under the form of the
annuity selected. If an annuity benefit was not selected, your beneficiary
can continue to receive benefits based on the payment option you selected or
can select a different payment option so long as payments are made at least
as rapidly as with the payment option you originally selected.
o To designate a beneficiary or to change an earlier designation, have your
employer send us your completed beneficiary designation form. Your spouse
must consent in writing to a designation of any non-spouse beneficiary, as
explained in Procedures for Withdrawals, Distributions and Transfers--Spousal
Consent Requirements in the SAI.
If you are a participant in the Members Retirement Plan and you die without
designating a beneficiary, your vested benefit will automatically be paid to
your spouse or, if you are not married, to the first surviving class of (a)
your
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children, (b) your parents and (c) your brothers and sisters. If none of them
survive you, your vested benefit will be paid to your estate. If you are a
participant in our prototype self-directed plan and you die without
designating a beneficiary, your vested benefit will automatically be paid to
your spouse or, if you are not married, to the first surviving class of (a)
your children, (b) your grandchildren, (c) your parents, (d) your brothers
and sisters and (e) your nephews and nieces. If none of them survive you,
your vested benefit will be paid to your estate.
Under the Members Retirement Plan, on the day we receive proof of your death,
we automatically transfer your Account Balance in the Funds to the Money
Market Guarantee Account unless your beneficiary instructs otherwise. All
amounts are held until your beneficiary requests a distribution or transfer.
Our Account Executives can explain these and other requirements affecting
death benefits.
BENEFIT PAYMENT OPTIONS
Once you are eligible to receive benefits you may, if your plan permits,
select one or more of the following forms of distribution:
o Qualified Joint and Survivor Annuity
o Installment Payments
o Lump Sum Payment
o Life Annuity
o Life Annuity--Period Certain
o Joint and Survivor Annuity
o Joint and Survivor Annuity--Period Certain
o Cash Refund Annuity
See Types of Benefits in the SAI for detailed information regarding each of
the above options, and Procedures for Withdrawals, Distributions and
Transfers in the SAI.
If you are married and the value of your account balance or vested benefits
is greater than $3,500, federal law generally requires you to receive a
Qualified Joint and Survivor Annuity payable to you for life and then to your
surviving spouse for life, unless you and your spouse have properly waived
that form of payment in advance. Certain self-directed prototypes and
individually designed plans are not subject to this requirement.
Under the Members Retirement Plan and the self-directed prototype plan, you
may designate a non-spouse beneficiary any time after the earlier of the
first day of the plan year in which you attain age 35 or the date on which
you separate from service with your employer. If you designate a beneficiary
other than your spouse prior to your reaching age 35, your spouse must
consent to the designation and, upon your reaching age 35, must again give
his or her consent or the designation will lapse. In order for you to make a
withdrawal, elect a form of benefit other than a Qualified Joint and Survivor
Annuity or designate a non-spouse beneficiary, your spouse must consent to
your election in writing within the 90 day period before your annuity
starting date. To consent, your spouse must sign on the appropriate line on
your election of benefits or beneficiary designation form. Your spouse's
signature must be witnessed by a notary public or plan representative.
If you change your mind, you may revoke your election and elect a Qualified
Joint and Survivor Annuity or designate your spouse as beneficiary, simply by
filing the appropriate form. Your spouse's consent is not required for this
revocation.
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It is also possible for your spouse to sign a blanket consent form. By
signing this form, your spouse gives you the right to name any beneficiary
or, if applicable, form of distribution you want. Once you file such a form,
you may change your election whenever you want, even without spousal consent.
Spousal consent to a withdrawal or benefit in a form other than a Qualified
Joint and Survivor Annuity is not required under certain self-directed
prototype profit sharing plans that do not offer life annuity benefits.
The minimum amount that can be used to purchase any type of annuity is
$3,500. Usually, an annuity administrative charge of $350 will be deducted
from the amount used to purchase the annuity. If we give any group pension
client with a qualified plan a better annuity purchase rate than those
currently guaranteed under the Program, we will also make those rates
available to Program participants. The annuity administrative charge may be
greater than $350 in that case.
LOANS TO PARTICIPANTS
The Members Retirement Plan permits you to borrow a portion (not to exceed
$50,000) of your vested Account Balance in all your plans, if your employer
has elected this feature. Your employer can tell you whether loans are
available under your plan. If you are a sole proprietor, 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 (including family members of these
prohibited individuals), you presently may not borrow from your vested
Account Balance without first obtaining a prohibited transaction exemption
from the Department of Labor. Consult with your attorney or tax advisor
regarding the advisability and procedures for obtaining such an exemption.
Loans are also available under our self-directed prototype plan and under an
individually designed plan if the terms of your plan allow them.
You, the participant, must pay interest on your loan; the interest paid may
not be deductible. All interest that you pay will be added to your Account
Balance and will be taxable upon distribution. If you fail to repay the loan
when due, the amount of the unpaid balance may be taxable and subject to
additional penalty taxes. Loans are subject to restrictions under federal tax
laws, and all plans of the employer are aggregated for purposes of these
restrictions. You should apply for a loan through your employer. Loan kits
containing all necessary forms, along with an explanation of how to set
interest rates, are available from our Account Executives. YOU MAY NOT TAKE A
LOAN FROM THE GUARANTEED RATE ACCOUNTS PRIOR TO MATURITY. IF YOU ARE MARRIED,
YOUR SPOUSE MUST CONSENT IN WRITING BEFORE YOU CAN TAKE A LOAN.
PART VII: DEDUCTIONS AND CHARGES
No deductions are made from contributions or withdrawals for sales expenses.
Fees and charges apply to amounts held for each plan. Asset-based fees are
charged against the assets of each Fund. The Unit Values of the Funds are
reduced to reflect the deduction of those fees. Rates for Guaranteed Rate
Accounts and for the Money Market Guarantee Account reflect the deduction of
applicable asset-based fees. Unless otherwise noted, fees which are set in
fixed dollar amounts are deducted by reducing the number of Units in the
appropriate Funds and the number of dollars in each General Account Option.
The amount allocable to the three-year or five-year Guaranteed Rate Account
will be taken from your most recent GRA in that Account.
MEMBERS RETIREMENT PLAN (PENSION AND PROFIT SHARING),
PROTOTYPE SELF-DIRECTED PLAN AND INVESTMENT ONLY FEES
RECORD MAINTENANCE AND REPORT FEE. At the end of each calendar quarter, we
deduct a record maintenance and report fee of $3.75 from your Account
Balance. We reserve the right to charge additional fees if you request
special mailings, reports, and services.
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ENROLLMENT FEE. There is a non-refundable one-time enrollment fee of $25 for
each participant. If the enrollment fee is not paid by your employer, it may
be deducted from contributions or from your Account Balance. We may waive
this fee under certain circumstances. If we do not maintain individual
participant records under the Pooled Trust, the employer is instead charged
$25 for each plan or trust.
PROTOTYPE SELF-DIRECTED PLAN FEES. An employer who participates in our
prototype self-directed plan will incur additional fees not payable to us,
such as brokerage and administration fees.
PROGRAM EXPENSE CHARGE. A daily charge at an annual rate of 1.00% is made
against your account balance. All investment returns and interest rates
reflect the deduction of this charge.
This fee is applied toward the cost of maintenance of the Investment Options,
promotion of the Program, commissions, administrative costs, such as
enrollment and answering participant inquiries, and overhead expenses such as
salaries, rent, postage, telephone, travel, legal, actuarial and accounting
costs, office equipment and stationery. During 1995, we received $1,216,856
under the Program Expense Charge.
INVESTMENT MANAGEMENT AND ACCOUNTING FEES. These charges apply only to assets
in the Funds. These charges are reflected in the computation of the Unit
Values applicable for each Fund.
We receive fees for investment management services for the Growth Equity,
Aggressive Equity and Balanced Funds. The investment management and
accounting fee covers the investment management and financial accounting
services we provide for these Funds, as well as a portion of our related
administrative costs. This fee is charged daily at an effective annual rate
of .50% of the net assets of the Growth Equity and Balanced Funds and an
effective annual rate of .65% for the Aggressive Equity Fund.
We receive fees for financial accounting services for the Global,
Conservative Investors and Growth Investors Funds. This fee is charged daily
at an effective annual rate of .20% of the net assets of these Funds.
HUDSON RIVER TRUST ANNUAL EXPENSES. The Global, Conservative Investors and
Growth Investors Funds are indirectly subject to investment advisory and
other expenses charged against assets of the corresponding Portfolios of The
Hudson River Trust. These expenses are described in The Hudson River Trust
prospectus accompanying this prospectus.
OTHER EXPENSES. Certain costs and expenses are charged directly to the Funds.
These may include transfer taxes, Securities and Exchange Commission filing
fees and certain related expenses including printing of SEC filings,
prospectuses and reports, proxy mailings, other mailing costs, legal expenses
and (for the Global, Conservative Investors and Growth Investors Funds only)
custodians' fees and outside auditing expenses.
ANNUITY ADMINISTRATIVE CHARGE. If a participant elects an annuity option, a
$350 charge will usually be deducted from the amount used to purchase the
annuity to reimburse us for administrative expenses associated with
processing the application for the annuity and with issuing each month's
annuity payment. See Distributions and Benefit Payment Options in Part VI for
details.
PREMIUM TAXES. In certain jurisdictions, amounts used to purchase an annuity
are subject to charges for premium and other applicable taxes (rates
currently range up to 5%). Taxes depend, among other things, on your place of
residence, applicable laws and the retirement benefit you select. We will
deduct such charges based on your place of residence at the time the annuity
payments begin.
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FEES PAID TO ASSOCIATIONS. We may pay associations a fee for enabling the
Program to be made available to their memberships. The fee may be based on
the number of employers whom we solicit, the number who participate in the
Program, and/or the value of Program assets. We make these payments without
any additional deduction or charge under the Program.
GENERAL. We will give you written notice of any change in the fees and
charges. We may also establish a separate fee schedule for requested
non-routine administrative services. During 1995 we received total fees and
charges under the Program of $2,006,536.
PART VIII: FEDERAL INCOME TAX CONSIDERATIONS
Current federal income tax rules relating to adoption of the Program and
generally to distributions to participants under qualified retirement plans
are outlined briefly below. These rules relating to contributions are
outlined briefly in the SAI under Provisions of the Members Retirement Plan.
For purposes of this outline we have assumed that you are not a participant
in any other qualified retirement plan. We have not attempted to discuss
other current federal income tax rules that govern participation, vesting,
funding or prohibited transactions, although some information on these
subjects appears here and in the SAI; nor do we discuss the reporting and
disclosure or fiduciary requirements of the Employee Retirement Income
Security Act. In addition, we do not discuss the effect, if any, of state tax
laws that may apply. FOR INFORMATION ON THESE MATTERS, WE SUGGEST THAT YOU
CONSULT YOUR TAX ADVISOR.
The Internal Revenue Service does not have to approve your adoption of the
Pooled Trust. If you adopt the Members Retirement Plan, you will not need IRS
approval unless you adopt certain provisions. We will tell you whether it is
desirable for you to submit your plan to the Internal Revenue Service for
approval. If you make such a submission, you will have to pay an IRS user's
fee.
DISTRIBUTIONS: TAX CONSEQUENCES
In this section, the word "you" refers to the plan participant.
Amounts distributed to a participant from a qualified plan are generally
subject to federal income tax as ordinary income when benefits are
distributed to you or your beneficiary. Generally speaking, only your
post-tax contributions, if any, are not taxed when distributed.
LUMP SUM DISTRIBUTIONS. If your benefits are distributed to you in a lump sum
after you have participated in the plan for at least five taxable years, you
may be able to use five-year averaging. Under this method, the tax on the
lump sum distribution is calculated separately from taxes on any other income
you may have during the year. The tax is calculated at ordinary income tax
rates in the year of the distribution, but as if it were your only income in
each of five years. The tax payable is the sum of the five years'
calculations. To qualify for five-year averaging, the distribution must
consist of your entire balance in the plan and must be made in one taxable
year of the recipient after you have attained age 59 1/2 . Five-year
averaging is available only for one lump sum distribution.
If you were born before 1936, you may elect to have special rules apply to
one lump sum distribution. You may elect either ten-year averaging using 1986
rates or five-year averaging using then current rates. In addition, you may
elect separately to have the portion of your distribution attributable to
pre-1974 contributions taxed at a flat 20% rate.
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ELIGIBLE ROLLOVER DISTRIBUTIONS. Many types of distributions from qualified
plans are "eligible rollover distributions" that can be transferred directly
to another qualified plan or individual retirement arrangement ("IRA"), or
rolled over to another plan or IRA within 60 days of the receipt of the
distribution. If a distribution is an "eligible rollover distribution," 20%
mandatory federal income tax withholding will apply unless the distribution
is directly transferred to a qualified plan or IRA. See Eligible Rollover
Distributions and Federal Income Tax Withholding in the SAI for a more
detailed discussion.
ANNUITY OR INSTALLMENT PAYMENTS. Each payment you receive is treated as
ordinary income except where you have a "cost basis" in the benefit. Your
cost basis is equal to the amount of your post-tax employee contributions,
plus any employer contributions you were required to include in gross income
in prior years. A portion of each annuity or installment payment you receive
will be excluded from gross income. If you (and your survivor) continue to
receive payments after your cost basis has been paid out, all amounts will be
taxable.
IN-SERVICE WITHDRAWALS; HARDSHIP WITHDRAWALS. Some plans allow in-service
withdrawals of after-tax contributions. The portion of each in-service
withdrawal attributable to cost basis is received income tax-free. The
portion that is attributable to earnings will be included in your gross
income. Amounts contributed before January 1, 1987 to employer plans which on
May 5, 1986 permitted such withdrawals are taxable withdrawals only to the
extent that they exceed the amount of your cost basis. Other amounts are
treated as partly a return of cost basis with the remaining portion treated
as earnings. Amounts included in gross income under this rule may also be
subject to the additional 10% penalty tax on premature distributions
described below. In addition, 20% mandatory federal income tax withholding
may also apply.
PREMATURE DISTRIBUTIONS. You may be liable for an additional 10% penalty tax
on all taxable amounts distributed before age 59 1/2 unless the distribution
falls within a specified exception or is rolled over into an IRA or other
qualified plan.
The exceptions to the penalty tax include (a) distributions made on account
of your death or disability, (b) distributions in the form of a life annuity
or installments over your life expectancy (or the joint lives or life
expectancies of you and your beneficiary), (c) distributions due to
separation from active service after age 55 and (d) distributions used to pay
deductible medical expenses.
EXCESS DISTRIBUTIONS. You may be liable for a 15% excise tax on all
distributions in excess of a threshold amount. All distributions you receive
from qualified plans, IRAs and Section 403(b) tax deferred annuities are
aggregated for this purpose, even if those plans were maintained by unrelated
employers.
For installment and annuity payments, the threshold amount is $155,000 in
1996. If you elect special averaging for a lump sum distribution received in
1996, you will owe the excise tax only to the extent your distribution
exceeds five times the threshold for excess distributions ($775,000 in 1996).
WITHHOLDING. Under the Members Plans, 20% mandatory income tax withholding
will apply to all "eligible rollover distributions" that are not directly
rolled over to a qualified plan or IRA. If a distribution is not an eligible
rollover distribution, the recipient may elect out of withholding. See
Eligible Rollover Distributions and Federal Income Tax Withholding in the
SAI. Under an individually designed plan or our prototype self-directed plan
that uses the Pooled Trust for investment only, we will pay the full amount
of the distribution to the plan's trustee. The trustee is responsible for
withholding federal income tax upon distributions to you or your beneficiary.
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OTHER TAX CONSEQUENCES. Federal estate and gift and state and local estate,
inheritance, and other tax consequences of participation in the Program
depend on the residence and the circumstances of each participant or
beneficiary. For complete information on tax considerations, you should
consult a qualified tax advisor.
PART IX: MISCELLANEOUS
CHANGE OR DISCONTINUANCE OF THE PROGRAM. The group annuity contract has been
amended from time to time, and may be amended in the future. No future change
can affect annuity benefits in the course of payment. Provided certain
conditions are met, we may terminate the offer of any of the Investment
Options and offer new ones with different terms.
We may terminate the contract at any time. If the contract is terminated, we
will not accept any further contributions. We will continue to hold amounts
allocated to the Guaranteed Rate Accounts until maturity. Amounts already
invested in the Investment Options may remain in the Program and you may also
elect payment of benefits through us.
DISQUALIFICATION OF PLAN. If your plan is found not to qualify under the
Internal Revenue Code, we may return the plan's assets to the employer, as
the plan administrator, or we may disallow future investments in the separate
accounts.
REPORTS. We send reports annually to employers showing the aggregate Account
Balances of all participants and information necessary to complete annual IRS
filings.
TRUSTEE. The sole responsibility of The United States Trust Company of New
York is to serve as a party to the group annuity contract. It has no
responsibility for the administration of the Program or for any distributions
or duties under the group annuity contract.
REGULATION. We are subject to regulation and supervision by the Insurance
Department of the State of New York, which periodically examines our affairs.
We are also subject to the insurance laws and regulations of all
jurisdictions in which we are authorized to do business. This regulation does
not, however, involve any supervision of the investment policies of the Funds
or of the selection of any investments except to determine compliance with
the law of New York. We are required to submit annual statements of our
operations, including financial statements, to the insurance departments of
the various jurisdictions in which we do business for purposes of determining
solvency and compliance with local insurance laws and regulations.
LEGAL PROCEEDINGS. We are engaged in litigation of various kinds which in our
judgment is not of material importance in relation to our total assets. None
of the litigation now in progress is expected to affect any assets of the
Funds.
ADDITIONAL INFORMATION. A registration statement relating to the offering
described in this prospectus has been filed with the Securities and Exchange
Commission under the Securities Act of 1933. Certain portions of the
Registration Statement have been omitted from this prospectus and the SAI
pursuant to the rules and regulations of the Commission. The omitted
information may be obtained by requesting a copy of the registration
statement from the Commission's principal office in Washington, D.C., and
paying the Commission's prescribed fees or by accessing the Securities and
Exchange Commission's Electronic Data Gathering, Analysis, and Retrieval
(EDGAR) System.
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EXPERTS. The financial statements as of December 31, 1995 and for each of the
two years in the period then ended included in the SAI for Separate Account
Nos. 3, 4, 10, and 51 and the condensed financial information for each of the
two years in the period ended December 31, 1995 included in this prospectus
and the financial statements as of December 31, 1995 and 1994 and for each of
the two years in the period ended December 31, 1995 included in the SAI for
Equitable Life have been so included in reliance upon the report of Price
Waterhouse LLP, independent accountants, given on the authority of said firm
as experts in auditing and accounting.
ACCEPTANCE. The employer or plan sponsor, as the case may be, is solely
responsible for determining whether the Program is a suitable funding vehicle
and should, therefore, carefully read the prospectus and installation
materials before entering into a Participation Agreement.
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TABLE OF CONTENTS
OF STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
PAGE
----------
<S> <C>
The Contract .................................. SAI-2
Your Responsibilities as Employer ............. SAI-2
Procedures for Withdrawals, Distributions
and Transfers ................................ SAI-3
Types of Benefits ............................. SAI-6
Provisions of the Members Retirement Plan .... SAI-8
Investment Restrictions Applicable to the
Growth Equity, Aggressive Equity and
Balanced Funds ............................... SAI-11
How We Value the Assets of the Funds ......... SAI-12
Summary of Unit Values for the Funds ......... SAI-13
Fund Transactions ............................. SAI-13
Investment Management and Financial
Accounting Fee ............................... SAI-15
Underwriter ................................... SAI-15
Our Management ................................ SAI-16
Financial Statements .......................... SAI-18
</TABLE>
CLIP AND MAIL TO US TO RECEIVE A
STATEMENT OF ADDITIONAL INFORMATION
-----------------------------------------------------------------------------
To: The Equitable Life Assurance Society
of the United States
Box 2468 G.P.O.
New York, NY 10116
Please send me a copy of the Statement of Additional Information for
the Members Retirement Program Prospectus dated May 1, 1996.
Name:
-------------------------------------------------------------
Address:
-------------------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
-----------------------------------------------------------------------------
34
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
--------
<S> <C> <C>
I. Summary ............................................... 2
The Members Retirement Program ....................... 2
The Investment Options ............................... 3
Contributions ........................................ 3
Transfers Among Investment Options ................... 3
Corresponding with the Program ....................... 4
Summary of Annual Fund Expenses ...................... 4
II. Condensed Fund Financial Information .................. 6
III. Investment Options .................................... 9
The Funds ............................................ 9
The Growth Equity Fund .............................. 9
The Aggressive Equity Fund .......................... 10
The Balanced Fund ................................... 10
The Global, Conservative Investors and Growth Investors
Funds .............................................. 13
Risks and Investment Techniques ..................... 13
The General Account Options .......................... 17
Guaranteed Rate Accounts ............................ 17
Premature Withdrawals and Transfers ................. 17
Money Market Guarantee Account ...................... 18
IV. Fund Performance ...................................... 18
Unmanaged Market Indices ............................. 18
How Performance Data are Presented ................... 19
Percent Changes in Fund Unit Values .................. 20
Average Annual Rates of Return ....................... 20
Total Value of $1,000 Investment ..................... 20
Investment of Contributions in the Funds ............. 21
Purchase of Fund Units .............................. 21
Business Day ........................................ 21
How We Determine the Unit Value ..................... 21
V. Equitable Life and the Investment Managers ............ 22
Equitable Life ....................................... 22
The Separate Accounts ................................ 22
Investment Management of the Funds ................... 22
Voting Rights ........................................ 23
VI. Provisions of the Contract and Services We Provide ... 23
Adoption of the Program by Employers ................. 23
Employer Responsibilities ........................... 24
Contributions ........................................ 24
Employer Responsibilities ........................... 24
Allocation of Contributions by Participants ........ 24
Transfers Among Investment Options ................... 25
General Rules ....................................... 25
Payments or Withdrawals from the Funds ............... 25
Distributions and Benefit Payment Options ............ 25
Participant Benefits: Retirement, Disability and
Termination of Employment ............................. 25
Participant Withdrawals Prior to Retirement ........ 26
Participant Death Benefits .......................... 26
Benefit Payment Options ............................. 27
Loans to Participants ................................ 28
VII. Deductions and Charges ................................ 28
Members Retirement Plan (Pension and Profit Sharing),
Prototype Self-Directed Plan and Investment Only Fees 28
VIII. Federal Income Tax Considerations ..................... 30
Distributions: Tax Consequences ..................... 30
IX. Miscellaneous ......................................... 32
X. Table of Contents of Statement of Additional Information 34
</TABLE>
[LOGO]
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO PERSON IS AUTHORIZED TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED
IN THIS PROSPECTUS.
<PAGE>
INVESTMENT OPTION CHARACTERISTICS
<TABLE>
<CAPTION>
AGGRESSIVE EQUITY
GROWTH EQUITY FUND FUND BALANCED FUND GLOBAL FUND
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Designed for Long term growth of Long term growth of Competitive return Long term growth
(Objective) capital capital through a of capital
combination of
growth of capital
and current income
- --------------------------------------------------------------------------------------------------------
Invests Primarily in Common stocks and Common stocks and Common stocks and The Global
other equity- type other equity- type other equity- type Portfolio of the
securities securities issued by securities, Hudson River
generally issued by medium and smaller publicly traded Trust, which in
large and sized companies with debt securities and turn, primarily
intermediate-sized strong growth money market invests in equity
companies potential instruments--mix securities of non-
determined by United States as
portfolio manager well as United
States companies
- --------------------------------------------------------------------------------------------------------
Risk to Principal Average for a Greatest risk of all Somewhat lower than Just below average
growth fund Investment Options the Growth Equity for a growth fund
Fund
- --------------------------------------------------------------------------------------------------------
Primary Growth Capital Capital appreciation Capital Capital
Potential appreciation and appreciation, appreciation
Through reinvested reinvested
dividends dividends and
interest
- --------------------------------------------------------------------------------------------------------
Income Guarantee No No No No
- --------------------------------------------------------------------------------------------------------
Volatility of Return Somewhat more Highly volatile Generally lower Somewhat more
volatile than the than pure equity volatile than the
S&P 500 funds, but degree S&P 500
may vary depending
on market
conditions
- --------------------------------------------------------------------------------------------------------
Transfers to Other Permitted daily Permitted daily Permitted daily Permitted daily
Options
- --------------------------------------------------------------------------------------------------------
Withdrawal No No No No
Penalties
- --------------------------------------------------------------------------------------------------------
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
CONSERVATIVE INVESTORS GROWTH INVESTORS GUARANTEED RATE MONEY MARKET
FUND FUND ACCOUNTS GUARANTEE ACCOUNT
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------
Designed for High total return High total return Principal and Principal and
(Objective) without undue risk to consistent with interest guaranteed interest guaranteed
principal reasonable risk -- interest rates --short term rates
reflect maturities
- -----------------------------------------------------------------------------------------------------------
Invests Primarily in The Conservative The Growth Contributions Contributions
Investors Portfolio of Investors credited with fixed credited with
the Hudson River Portfolio of the rate of interest guaranteed current
Trust, which in turn, Hudson River until the maturity rate of interest
primarily invests in a Trust, which in date
diversified mix of turn, primarily
publicly-traded invests in a
securities. Asset mix diversified mix of
generally consists of publicly-traded
30% equity and 70% securities. Asset
fixed income mix generally
securities but will consists of 30%
vary depending on fixed income and
market conditions. 70% equity
securities but
will vary
depending on
market conditions.
- -----------------------------------------------------------------------------------------------------------
Risk to Principal Lowest risk of all Below average for Equitable Life Equitable Life
equity options a growth fund guarantees guarantees principal
principal and and interest
interest
- -----------------------------------------------------------------------------------------------------------
Primary Growth Capital appreciation, Capital Interest income Interest income
Potential reinvested dividends appreciation,
Through and interest reinvested
dividends and
interest
- -----------------------------------------------------------------------------------------------------------
Income Guarantee No No Yes--subject to Yes
withdrawal
penalties
- -----------------------------------------------------------------------------------------------------------
Volatility of Return Very low volatility Somewhat less Equitable Life Equitable Life
volatile than the guarantees interest guarantees monthly
S&P 500 rate until the interest rate
maturity date
- -----------------------------------------------------------------------------------------------------------
Transfers to Other Permitted daily Permitted daily Permitted only at Permitted daily
Options maturity
- -----------------------------------------------------------------------------------------------------------
Withdrawal No No Prior to maturity, No
Penalties withdrawals may not
be permitted or may
be subject to a
penalty
- -----------------------------------------------------------------------------------------------------------
</TABLE>
The Funds each have different investment objectives and policies that can
affect the returns of each Fund and the market and financial risks to which
each is subject. While we do not intend to change the investment objectives
of the pooled funds, we nevertheless have the right to do so, subject to the
approval of the New York State Insurance Department. The Funds involve a
greater potential for growth but involve risks that are not present with the
Guaranteed Options. There is no assurance that any of the investment
objectives of the Funds will be achieved or that the risk to principal or
volatility of return will be as indicated.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
MAY 1, 1996
MEMBERS RETIREMENT PROGRAM OF
THE EQUITABLE LIFE ASSURANCE SOCIETY OF
THE UNITED STATES
Separate Account Units of interest under a group annuity contract with THE
EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES, 787 Seventh Avenue,
New York, New York 10019, which funds the Members Retirement Program.
Toll-free telephone number 1-800-526-2701.
This Statement of Additional Information is not a prospectus. It should be
read in conjunction with the prospectus dated May 1, 1996 for the Members
Retirement Program of The Equitable Life Assurance Society of the United
States.
A copy of the prospectus to which this Statement of Additional Information
relates is available at no charge by writing to Equitable Life at Box 2468
G.P.O., New York, New York 10116 or by calling our toll-free telephone
number.
The following information is contained primarily in the prospectus:
Investment Objectives and Policies
Investment Advisory Services
Certain of the cross references in this Statement of Additional Information
are contained in the prospectus dated May 1, 1996 to which this Statement of
Additional Information relates.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----------
<S> <C>
The Contract ............................................... SAI-2
Your Responsibilities as Employer .......................... SAI-2
Procedures for Withdrawals, Distributions and
Transfers ................................................. SAI-3
Pre-Retirement Withdrawals ............................... SAI-3
Benefit Distributions .................................... SAI-3
Spousal Consent Requirements ............................. SAI-4
Eligible Rollover Distributions and Federal Income
Tax Withholding ......................................... SAI-4
Premature Withdrawals and Transfers from a
GRA ..................................................... SAI-5
Maturing GRAs ............................................ SAI-6
Types of Benefits .......................................... SAI-6
Provisions of the Members Retirement Plan .................. SAI-8
Plan Eligibility Requirements ............................ SAI-8
Contributions to Qualified Plans ......................... SAI-8
Contributions to the Members
Retirement Plan ......................................... SAI-8
The Members Retirement Plan and Section
404(c) of ERISA ......................................... SAI-10
Vesting .................................................. SAI-10
Investment Restrictions Applicable to the Growth Equity,
Aggressive Equity and Balanced Funds ...................... SAI-11
How We Value the Assets of the Funds ....................... SAI-12
Summary of Unit Values for the Funds ....................... SAI-13
Fund Transactions .......................................... SAI-13
Investment Management and Financial Accounting
Fee ....................................................... SAI-15
Underwriter ................................................ SAI-15
Our Management ............................................. SAI-16
Financial Statements ....................................... SAI-18
</TABLE>
- ------------
Copyright 1996 by The Equitable Life Assurance Society of The United
States. All rights reserved.
<PAGE>
ADDITIONAL INFORMATION ABOUT THE PROGRAM
THE CONTRACT
The Program is funded through a group annuity contract with The Equitable
Life Assurance Society of the United States (Equitable Life). The contract
governs the Investment Options that are offered under the Program. Equitable
Life has the right to terminate the contract. See Part IX:
Miscellaneous--Change or Discontinuance of the Program in the prospectus. The
Trustee holds the contract for the benefit of employers and participants in
the Program.
YOUR RESPONSIBILITIES AS EMPLOYER
If you adopt the Members Retirement Plan, you as the employer and plan
administrator will have certain responsibilities, including:
o sending us your contributions at the proper time and in the proper
form;
o maintaining all personnel records necessary for administering your
plan;
o determining who is eligible to receive benefits;
o forwarding to us all the forms your employees are required to submit;
o distributing summary plan descriptions and participant annual reports
to your employees and former employees;
o distributing our prospectuses and confirmation notices to your
employees and, in some cases, former employees, if under your plan they can
direct the investment of their account balances;
o filing an annual information return for your plan with the Internal
Revenue Service, if required;
o providing us the information with which to run special
non-discrimination tests, if you have a 401(k) plan or your plan accepts
post-tax employee or employer matching contributions;
o determining the amount of all contributions for each participant in the
plan;
o forwarding salary deferral and post-tax employee contributions to us;
and
o selecting interest rates and monitoring default procedures, if you
elect the loan provisions in the plan.
If you, as an employer, have an individually designed plan, your
responsibilities will not be increased in any way by your adoption of the
Pooled Trust. If you adopt our self-directed prototype plan, you will be
completely responsible for administering the plan and complying with all of
the reporting and disclosure requirements applicable to qualified plans, with
the assistance of the recordkeeper of your choice.
We will give you guidance and assistance in the performance of your
responsibilities. The ultimate responsibility, however, rests with you. If
you have questions about any of your obligations, you can contact our Account
Executives at 1-800-526-2701 or write to the Members Retirement Program at
Box 2468 G.P.O., New York, New York 10116.
SAI-2
<PAGE>
PROCEDURES FOR WITHDRAWALS, DISTRIBUTIONS AND TRANSFERS
PRE-RETIREMENT WITHDRAWALS. Under the Members Retirement Plan, self-employed
persons may generally not receive a distribution prior to age 59 1/2 , and
employees may generally not receive a distribution prior to separation from
service. However, if your employer maintains the Members Retirement Plan as a
profit sharing plan, you may request distribution of benefits after you reach
age 59 1/2 even if you are still working. In addition, if your employer has
elected to make hardship withdrawals available under your plan, you may
request distribution before age 59 1/2 in the case of financial hardship (as
defined in your plan). In a 401(k) plan, the plan's definition of hardship
applies to employer contributions but not to your 401(k)
contributions--including employee pre-tax contributions, employer qualified
non-elective contributions and qualified matching contributions. To withdraw
your own 401(k) contributions, plus interest earned on these amounts prior to
1989, you must demonstrate financial hardship within the meaning of
applicable Income Tax Regulations. Each withdrawal must be at least $1,000
(or, if less, your entire Account Balance or the amount of your hardship
withdrawal under a profit sharing or 401(k) plan). If your employer
terminates the plan, all amounts (subject to GRA restrictions) may be
distributed to participants at that time.
YOU MAY WITHDRAW ALL OR PART OF YOUR ACCOUNT BALANCE UNDER THE MEMBERS
RETIREMENT PLAN ATTRIBUTABLE TO POST-TAX EMPLOYEE CONTRIBUTIONS AT ANY TIME,
SUBJECT TO ANY WITHDRAWAL RESTRICTIONS APPLICABLE TO THE INVESTMENT OPTIONS,
provided that you withdraw at least $300 at a time (or, if less, your Account
Balance attributable to post-tax employee contributions). See Federal Income
Tax Considerations in the prospectus.
All benefit payments (including withdrawals due to plan terminations) will be
paid in accordance with the rules described below under Benefit
Distributions. All other withdrawals will be effected as of the close of
business on the day we receive the properly completed form.
If you are married, your spouse must consent in writing before you can make
any type of withdrawal, except for the purchase of a Qualified Joint and
Survivor Annuity. See Spousal Consent Requirements below.
Under the self-directed prototype plan you may receive a distribution upon
attaining normal retirement age as specified in the plan, or upon separation
from service. If your employer maintains the self-directed prototype plan as
a profit sharing plan, an earlier distribution of funds that have accumulated
after two years is available if you incur a financial hardship, as defined in
the plan. In addition, if you are married, your spouse may have to consent in
writing before you can make any type of withdrawal, except for the purchase
of a Qualified Joint and Survivor Annuity. See Spousal Consent Requirements
below.
Under an individually designed plan the availability of pre-retirement
withdrawals depends on the terms of the plan. We suggest that you ask your
employer what types of withdrawals are available under your plan.
PLEASE NOTE THAT GENERALLY YOU MAY NOT MAKE WITHDRAWALS FROM THE GUARANTEED
RATE ACCOUNTS PRIOR TO MATURITY EVEN IF THE EMPLOYER PLAN PERMITS WITHDRAWALS
PRIOR TO THAT TIME. (SEE PREMATURE WITHDRAWALS AND TRANSFERS FROM A GRA).
Benefit Distributions. In order for you to begin receiving benefits under the
Members Retirement Plan, your employer must send us your properly completed
Election of Benefits form and, if applicable, Beneficiary Designation form.
If we receive your properly completed forms on or before the 15th of the
month, your benefits will commence as of the close of business on the first
business day of the next month; if your forms arrive after the 15th, your
benefits will commence as of the close of business on the first business day
of the second following month.
Under an individually designed plan and our self-directed prototype plan,
your employer must send us a Request for Disbursement Form. We will send
single sum payments to your plan's trustee as of the close of business on the
day we receive a properly completed form. If you wish to receive annuity
payments, your plan's trustee may purchase an annuity contract from us.
Annuity payments will be paid directly to you and will commence as of the
close of business
SAI-3
<PAGE>
on the first business day of the next month if we receive your properly
completed forms on or before the 15th of the month. If we receive your
properly completed forms after the 15th, annuity payments will commence as of
the close of business on the first business day of the second following
month.
Please note that we use the value of your vested benefits at the close of
business on the day payment is due to determine the amount of benefits you
receive. We will not, therefore, begin processing your check until the
following business day. You should expect your check to be mailed within five
days after processing begins. Annuity checks can take longer. If you are
withdrawing more than $50,000 and you would like expedited delivery at your
expense, you may elect to do so on your Election of Benefits Form.
Distributions under a qualified retirement plan such as yours are subject to
extremely complicated legal requirements. When you are ready to retire, we
suggest that you discuss the available payment options with your employer.
Our Account Executives can provide you or your employer with information.
SPOUSAL CONSENT REQUIREMENTS. Under the Members Retirement Plan and the
self-directed prototype plan, you may designate a non-spouse beneficiary any
time after the earlier of the first day of the plan year in which you attain
age 35 or the date on which you separate from service with your employer. If
you designate a beneficiary other than your spouse prior to your reaching age
35, your spouse must consent to the designation and, upon reaching age 35,
must give his or her consent or the designation will lapse. In order for you
to make a withdrawal, elect a form of benefit other than a Qualified Joint
and Survivor Annuity or designate a non-spouse beneficiary, your spouse must
consent to your election in writing within the 90 day period before your
annuity starting date. To consent, your spouse must sign the appropriate line
on your election of benefits or beneficiary designation form. Your spouse's
signature must be witnessed by a notary public or plan representative.
If you change your mind, you may revoke your election and elect a Qualified
Joint and Survivor Annuity or designate your spouse as beneficiary, simply by
filing the appropriate form. Your spouse's consent is not required for this
revocation.
It is also possible for your spouse to sign a blanket consent form. By
signing this form, your spouse consents not just to a specific beneficiary or
form of distribution, but gives you the right to name any beneficiary or form
of distribution you want. Once you file such a form, you may change your
election whenever you want, even without spousal consent. No spousal consent
to a withdrawal or benefit in a form other than a Qualified Joint and
Survivor Annuity is required under certain self-directed and
individually-designed profit sharing plans that do not offer life annuity
benefits.
ELIGIBLE ROLLOVER DISTRIBUTIONS AND FEDERAL INCOME TAX WITHHOLDING. All
"eligible rollover distributions" are subject to mandatory federal income tax
withholding of 20% unless the Participant elects to have the distribution
directly rolled over to a qualified plan or individual retirement arrangement
(IRA). An "eligible rollover distribution" is generally any distribution that
is not one of a series of substantially equal periodic payments made (not
less frequently than annually) (1) for the life (or life expectancy) of the
plan participant or the joint lives (or joint life expectancies) of the
participant and his or her designated beneficiary, or (2) for a specified
period of 10 years or more. In addition, the following are not subject to
mandatory 20% withholding:
o certain corrective distributions under Internal Revenue Code (Code)
Section 401(k) plans;
o certain defaulted loans that are treated as distributions; and
o a distribution to a beneficiary other than to a surviving spouse or a
current or former spouse under a qualified domestic relations order.
If a distribution is made to a Participant's surviving spouse, or to a
current or former spouse under a qualified domestic relations order, the
distribution may be an eligible rollover distribution, subject to mandatory
20% withholding, unless one of the exceptions described above applies.
SAI-4
<PAGE>
If a distribution is not an "eligible rollover distribution" income tax will
be withheld from all taxable payments unless the recipient elects not to have
income tax withheld.
PREMATURE WITHDRAWALS AND TRANSFERS FROM A GRA. You may transfer amounts from
other Investment Options to a GRA at any time. Transfers may not be made from
one GRA to another or from a GRA to one of the other Investment Options until
the maturity date of the GRA. Likewise, you may not remove amounts from a GRA
prior to maturity in order to obtain a plan loan or make a hardship or
in-service withdrawal. If your plan's assets are transferred to another
funding vehicle from the Program or if your plan is terminated, we will
continue to hold your money in GRAs until maturity. All such GRAs will be
held in the Pooled Trust under the investment-only arrangement. See Transfers
Among Investment Options in Part VI of the Prospectus.
Withdrawals are not permitted prior to maturity unless they are permitted
under your plan and are Exempt or Qualified, as explained below. Exempt
Withdrawals may be made without penalty at any time. Qualified Withdrawals
are subject to a penalty. No Qualified Withdrawals are permitted from a
five-year GRA during the first two years after the end of its offering
period; this rule does not apply if the amount of the applicable penalty is
less than the interest you have accrued. If you have more than one GRA and
you are taking a partial withdrawal or installments, amounts held in your
most recently purchased three-year or five-year GRA will be used first to
make withdrawal or installment payments.
Exempt Withdrawal. Amounts may be withdrawn without penalty from a GRA prior
to its maturity if:
o you are a professional age 59 1/2 or older and you elect an installment
payout of at least three years or an annuity benefit;
o you are not a professional and you attain age 59 1/2 ;
o you are not a professional and you terminate employment (including
retirement);
o you are disabled;
o you attain age 70 1/2 ; or
o you die.
If you are a participant under a plan which was adopted by an employer which
is not a member of a professional association which makes the Program
available as a benefit of membership, the above rules will be applied
substituting the term "highly compensated" for "professional" and "non-highly
compensated" for "not a professional." For this purpose, "highly compensated"
shall have the meaning set forth under Provisions of the Members
Plans--Contributions to the Members Retirement Plan below.
Qualified Withdrawal. You may withdraw amounts with a penalty from a GRA
prior to its maturity if you are a professional and you take a payment upon
retirement after age 59 1/2 under a distribution option of less than three
years duration. The interest paid to you upon withdrawal will be reduced by
an amount calculated as follows:
(i) the amount by which the three-year GRA rate being offered on the
date of withdrawal exceeds the GRA rate from which the withdrawal is made,
times
(ii) the years and/or fraction of a year until maturity, times
(iii) the amount withdrawn from the GRA.
We will make this calculation based on GRA rates without regard to deductions
for the applicable Program expense charge. If the three-year GRA is not being
offered at the time of withdrawal, the adjustment will be based on then
current rates on U.S. Treasury notes or for a comparable option under the
Program.
Your original contributions will never be reduced by this adjustment. No
adjustment is made if the current three-year GRA rate is equal to or less
than the rate for the GRA from which the Qualified Withdrawal is being made.
A separate
SAI-5
<PAGE>
adjustment is calculated for each GRA. If the interest accumulated in one GRA
is insufficient to recover the amount calculated under the formula, the
excess may be deducted as necessary from interest accumulated in other same
duration GRAs in the same Guaranteed Rate Account.
EXAMPLE: You contribute $1,000 to a three-year GRA on January 1 with a rate
of 4%. Two years later you make a Qualified Withdrawal. Your GRA balance is
$1,082. The current GRA rate is 6%; (i) 6%-4%=2%, (ii) 2% x 1 year = 2%,
(iii) 2% x $1,082 = $21.64. The withdrawal proceeds would be $1,082-$21.64 =
$1,060.36.
MATURING GRAS
o Your confirmation notice lists the maturity date for each GRA you hold.
o You may arrange in advance for the reinvestment of your maturing GRAs by
filing a GRA maturity form or by using the Account Investment Management
(AIM) System. (Instructions must be received at least four days before
the GRA matures.)
o The instructions you give us remain in effect until you change them
(again, at least four days before you want the change to go into
effect).
o You may have different instructions for your GRAs attributable to
employer contributions than for your GRAs attributable to employee
contributions.
o If you have not provided GRA maturity instructions, your maturing GRAs
will be allocated to the Money Market Guarantee Account.
TYPES OF BENEFITS
Under the Members Retirement Plan, and under most self-directed prototype
plans, except as provided below, you may select one or more of the following
forms of distribution once you are eligible to receive benefits. Please see
Benefit Distributions under Procedures for Withdrawals, Distributions and
Transfers. Not all of these distribution forms may be available to you, if
your employer has adopted an individually designed plan or a self-directed
prototype profit sharing plan that does not offer annuity benefits. We
suggest you ask your employer what types of benefits are available under your
plan.
QUALIFIED JOINT AND SURVIVOR ANNUITY. An annuity providing equal monthly
payments for your life and, after your death, for your surviving spouse's
life. No payments will be made after you and your spouse die, even if you
have received only one payment. THE LAW GENERALLY REQUIRES THAT IF THE VALUE
OF YOUR VESTED BENEFITS EXCEEDS $3,500, YOU MUST RECEIVE A QUALIFIED JOINT
AND SURVIVOR ANNUITY UNLESS YOUR SPOUSE CONSENTS IN WRITING TO A CONTRARY
ELECTION. Please see Spousal Consent Requirements under Procedures for
Withdrawals, Distributions and Transfers for an explanation of the procedures
for electing not to receive a Qualified Joint and Survivor Annuity.
LUMP SUM PAYMENT. A single payment of all or part of your vested benefits. If
you take a lump sum payment of only part of your balance, it must be at least
$1,000. If you have more than one GRA, amounts held in your most recent GRA
will first be used to make payment. IF YOUR VESTED BENEFIT IS $3,500 OR LESS,
YOU WILL RECEIVE A LUMP SUM PAYMENT OF THE ENTIRE AMOUNT.
Periodic Installments. Monthly, quarterly, semi-annual or annual payments
over a period of at least three years, where the initial payment on a monthly
basis is at least $300. You can choose either a time-certain payout, which
provides variable payments over a specified period of time, or a
dollar-certain payout, which provides level payments over a variable period
of time. During the installment period, your remaining Account Balance will
be invested in whatever Options you designate; each payment will be drawn pro
rata from all the Options you have selected. If you
SAI-6
<PAGE>
have more than one GRA, amounts held in your most recently purchased
three-year or five-year GRA will first be used to make installment payments.
If you die before receiving all the installments, we will make the remaining
payments to your beneficiary. We do not offer installments for benefits under
individually designed plans or under our self-directed prototype plan.
LIFE ANNUITY. An annuity providing monthly payments for your life. No
payments will be made after your death, even if you have received only one
payment.
LIFE ANNUITY--PERIOD CERTAIN. An annuity providing monthly payments for your
life or, if longer, a specified period of time. If you die before the end of
that specified period, payments will continue to your beneficiary until the
end of the period. Subject to legal limitations, you may specify a minimum
payment period of 5, 10, 15 or 20 years; the longer the specified period, the
smaller the monthly payments will be.
JOINT AND SURVIVOR ANNUITY. An annuity providing monthly payments for your
life and that of your beneficiary. You may specify the percentage of the
annuity payment to be made to your beneficiary. Subject to legal limitations,
that percentage may be 100%, 75%, 50%, or any percentage you specify.
JOINT AND SURVIVOR ANNUITY--PERIOD CERTAIN. An annuity providing monthly
payments for your life and that of your beneficiary or, if longer, a
specified period of time. If you and your beneficiary both die before the end
of the specified period, payments will continue to your contingent
beneficiary until the end of the period. Subject to legal limitations, you
may specify a minimum payment period of 5, 10, 15 or 20 years and the
percentage of the annuity payment to be made to your beneficiary (as noted
above under Joint and Survivor Annuity); the longer the specified period, the
smaller the monthly payments will be.
CASH REFUND ANNUITY. An annuity providing equal monthly payments for your
life with a guarantee that the sum of those payments will be at least equal
to the portion of your vested benefits used to purchase the annuity. If upon
your death the sum of the monthly payments to you is less than that amount,
your beneficiary will receive a lump sum payment of the remaining guaranteed
amount.
The cost of the fixed annuity is determined from tables in the group annuity
contract which show the amounts necessary to purchase each $1 of monthly
payment (after deduction of any applicable taxes and the annuity
administrative charge described below). Payments depend on the annuity
selected, your age, and the age of your beneficiary if you select a joint and
survivor annuity. We may change the tables in the contract no more than once
every five years.
The minimum amount that can be used to purchase any type of annuity is
$3,500. Usually, an annuity administrative charge of $350 will be deducted
from the amount used to purchase the annuity. If we give any group pension
client with a qualified profit sharing plan a better annuity purchase rate
than those currently available for the Program, we will also make those rates
available to Program participants. The annuity administrative charge may be
greater than $350 in that case.
Under a Qualified Joint and Survivor Annuity or a Cash Refund Annuity, the
amount of the monthly payments is fixed at retirement and remains level
throughout the distribution period. Under the Life Annuity, Life
Annuity--Period Certain, Joint and Survivor Annuity and Joint and Survivor
Annuity--Period Certain, you may select either fixed or variable payments.
The variable payments reflect the investment performance of the Growth Equity
Fund. If you are interested in a variable annuity, when you are ready to
select your benefit please ask our Account Executives for our variable
annuity prospectus supplement.
The chart below shows the relative financial value of the different annuity
options, based on our current rates for fixed annuities. This chart is
provided as a sample. The numbers provided in the Rate per $1.00 of Annuity
column, which are used to calculate the monthly annuity provided, are subject
to change. The example assumes the annuitant's age
SAI-7
<PAGE>
is 65 1/2 years, the joint annuitant's age is the same and the amount used to
purchase the annuity is $100,000. The annuity administrative charge of $350
is deducted from the purchase price of $100,000, leaving a total of $99,650
to be applied to purchase the annuity. Certain legal requirements may limit
the forms of annuity available to you.
<TABLE>
<CAPTION>
AMOUNT TO BE
APPLIED ON RATE PER MONTHLY
ANNUITY FORM $1.00 OF ANNUITY
ANNUITY FORM ELECTED ANNUITY PROVIDED
- -------------------------------------------- -------------- ---------- ----------
<S> <C> <C> <C>
Life ........................................ $99,650 $143.06 $ 696.56
Cash Refund ................................. 99,650 150.82 660.72
5 Year Certain Life ......................... 99,650 144.62 689.05
10 Year Certain Life ........................ 99,650 148.55 670.82
15 Year Certain Life ........................ 99,650 153.87 647.62
100% Joint & Survivor Life .................. 99,650 168.01 593.12
75% Joint & Survivor Life ................... 99,650 161.16 618.33*
50% Joint & Survivor Life ................... 99,650 155.13 642.36*
100% Joint & Survivor--5 Year Certain Life** 99,650 168.04 593.01
100% Joint & Survivor--10 Year Certain
Life** ..................................... 99,650 168.27 592.20
100% Joint & Survivor--15 Year Certain
Life** ..................................... 99,650 168.91 589.96
100% Joint & Survivor--20 Year Certain
Life** ..................................... 99,650 170.10 585.83
</TABLE>
* Represents the amount payable to the primary annuitant. A surviving
joint annuitant would receive the applicable percentage of the amount
paid to the primary annuitant.
** You may also elect a Joint and Survivor Annuity--Period Certain with a
monthly benefit payable to the surviving joint annuitant in any
percentage you specify.
PROVISIONS OF THE MEMBERS RETIREMENT PLAN
PLAN ELIGIBILITY REQUIREMENTS. Under the Members Retirement Plan, the
employer specifies the eligibility requirements for its plan in the
Participation Agreement. The employer may exclude any employee who has not
attained a specified age (not to exceed 21) and completed a specified number
of years (not to exceed two) in each of which he completed 1,000 hours of
service. No more than one year of eligibility service may be required for a
401(k) arrangement.
The Members Retirement Plan provides that a sole proprietor, partner or
shareholder may, upon commencement of employment or upon first becoming
eligible to participate in any qualified plan of the employer, make a
one-time irrevocable election not to participate in the plan or to make a
reduced contribution. This election applies to all plans of the employer, now
and in the future, and should be discussed with your tax advisor.
CONTRIBUTIONS TO QUALIFIED PLANS. Current federal income tax rules relating
to contributions under qualified retirement plans are outlined briefly below.
For purposes of this outline we have assumed that you are not a participant
in any other qualified retirement plan.
The employer's contributions to the plan are deductible in the year for which
they are made. As a general rule, employer contributions must be made for any
year by the due date (including extensions) for filing the employer's federal
income tax return for that year. However, participants' salary deferrals
under a 401(k) plan must be contributed by the employer as soon as
practicable after the payroll period for which the deferral is made, and
regulations have been proposed for shortening the maximum time period for
remitting contributions to the plan.
If the employer contributes more to the plan than is deductible under the
rules described below, the employer may be liable for a 10% penalty tax on
that nondeductible amount and may risk disqualifying the plan.
CONTRIBUTIONS TO THE MEMBERS RETIREMENT PLAN. The employer makes annual
contributions to its plan based on the plan's provisions.
SAI-8
<PAGE>
An employer that adopts the Members Retirement Plan as a profit sharing plan
makes contributions in discretionary amounts to be determined annually. The
aggregate employer contribution to the plan, including participants' salary
deferrals under a 401(k) arrangement, is limited to 15% of all participants'
compensation for the plan year. For plan purposes, compensation for
self-employed persons does not include deductible plan contributions made on
behalf of the self-employed person.
A 401(k) arrangement is available as part of the profit sharing plan. Under a
401(k) arrangement, employees are permitted to make contributions to the plan
on a pre-tax basis. The maximum amount that may be contributed by
highly-compensated employees is limited depending upon the amount that is
contributed by non-highly compensated employees and the amount the employer
designates as a nonforfeitable 401(k) contribution. In 1996, a "highly
compensated" employee for this purpose is (a) an owner of more than 5% of the
business, or (b) anyone with earnings of more than $100,000 from the
business, or (c) anyone with earnings of more than $66,000 from the business
who is among the highest-paid 20% of employees, or (d) an officer of the
business with earnings of more than $60,000. Participants who have
"highly-compensated employee" status during the previous year are also
treated as highly-compensated employees for the current year. In any event,
the maximum amount each employee may defer is limited to $9,500 for 1996
reduced by that employee's salary reduction contributions to simplified
employee pensions (SEPs) and employee contributions to tax deferred (Section
403(b)) annuities, and contributions deductible by the employee under a trust
described under Section 501(c)(18) of the Code.
If the employer adopts the Members Retirement Plan as a defined contribution
pension plan, its contribution is equal to the percentage of each
participant's compensation that is specified in the Participation Agreement.
Under either type of plan, compensation in excess of $150,000 must be
disregarded in making contributions. Contributions may be integrated with
Social Security which means that contributions with respect to each
participant's compensation in excess of the integration level may exceed
contributions made with respect to compensation below the integration level,
within limits imposed by the Code. Your Account Executive can help you
determine the legally permissible contribution.
Except in the case of certain non-top heavy plans, contributions on behalf of
non-key employees must be at least 3% of compensation (or, under the profit
sharing plan, the percentage contributed on behalf of key employees, if less
than 3%). In 1996, a "key employee" means (a) an owner of one of the ten
largest (but more than 1/2 %) interests in the business with earnings of more
than $30,000, or (b) an officer of the business with earnings of more than
$60,000 or (c) an owner of more than 5% of the business, or (d) an owner of
more than 1% of the business with earnings of more than $150,000. For
purposes of (b), no more than 50 employees (or, if less, the greater of three
or 10% of the employees) shall be treated as officers.
Certain plans may also permit participants to make post-tax contributions. We
will maintain a separate account to reflect each participant's post-tax
contributions and the earnings (or losses) thereon. Post-tax contributions
are now subject to complex rules under which the maximum amount that may be
contributed by highly compensated employees is limited, depending on the
amount contributed by non-highly compensated employees. IF THE EMPLOYER
PERMITS HIGHLY-COMPENSATED EMPLOYEES TO MAKE POST-TAX CONTRIBUTIONS, THE
EMPLOYER SHOULD MAKE SURE THAT ALL NON-DISCRIMINATION TESTS ARE PASSED. If an
employer employs only "highly compensated" employees (as defined above),
post-tax contributions may not be made to the plan. In addition, the employer
may make matching contributions to certain plans, i.e., contributions which
are based upon the amount of post-tax or pre-tax 401(k) contributions made by
plan participants. Special non-discrimination rules also apply to matching
contributions and may limit the amount of matching contributions that may be
made on behalf of highly compensated employees.
Contributions on behalf of each participant are limited to the lesser of
$30,000 and 25% of his earnings (excluding, in the case of self-employed
persons, all deductible plan contributions). The participant's post-tax
contributions are taken into account for purposes of applying this
limitation.
SAI-9
<PAGE>
Each participant's Account Balance equals the sum of the amounts accumulated
in each Investment Option. We will maintain separate records of each
participant's interest in each of the Investment Options attributable to
employer contributions, 401(k) non-elective contributions, 401(k) elective
contributions, post-tax employee contributions and employer matching
contributions. Any amounts rolled over from the plan of a previous employer
will also be accounted for separately. Our records will also reflect each
participant's degree of vesting (see below) in his Account Balance
attributable to employer contributions and employer matching contributions.
The participant will receive an individual confirmation of each transaction
(including the deduction of record maintenance and report fees). The
participant will also receive an annual statement showing his Account Balance
in each Investment Option attributable to each type of contribution. Based on
information supplied by you, we will run the required special
non-discrimination tests (Actual Deferral Percentage and Actual Contribution
Percentage) applicable to 401(k) plans and plans that accept post-tax
employee contributions or employer matching contributions.
Elective deferrals to a 401(k) plan are subject to applicable FICA (Social
Security) and FUTA (unemployment) taxes.
THE MEMBERS RETIREMENT PLAN AND SECTION 404(C) OF ERISA. The Members
Retirement Plan is a participant directed individual account plan designed to
comply with the requirements of Section 404(c) of ERISA. Section 404(c) of
ERISA, and the related Department of Labor (DOL) regulation, provide that if
a participant or beneficiary exercises control over the assets in his or her
plan account, plan fiduciaries will not be liable for any loss that is the
direct and necessary result of the participant's or beneficiary's exercise of
control. This means that if the employer plan complies with Section 404(c),
participants can make and are responsible for the results of their own
investment decisions.
Section 404(c) plans must, among other things, make a broad range of
investment choices available to participants and beneficiaries and must
provide them with enough information to make informed investment decisions.
The Members Retirement Plan provides the broad range of investment choices
and information that are needed in order to meet the requirements of Section
404(c). Our suggested summary plan descriptions, annual reports,
prospectuses, and confirmation notices provide the required investment
information; it is the employer's responsibility, however, to see that this
information is distributed in a timely manner to participants and
beneficiaries. You should read this information carefully before making your
investment decisions.
VESTING. Vesting refers to the nonforfeitable portion of a participant's
Account Balance attributable to employer contributions under the Members
Retirement Plan. The participant's Account Balance attributable to 401(k)
contributions, post-tax employee contributions and rollover contributions is
nonforfeitable at all times.
A participant will become fully vested in all benefits if still employed at
death, disability, attainment of normal retirement age or upon termination of
the plan. If the participant terminates employment before that time, any
benefits that have not yet become vested under the plan's vesting schedule
will be forfeited. The normal retirement age is 65 under the Members
Retirement Plan.
Except as described below in the case of certain non-top heavy plans,
benefits must vest in accordance with any of the schedules below or one at
least as favorable to participants:
<TABLE>
<CAPTION>
SCHEDULE A SCHEDULE B SCHEDULE C
YEARS OF VESTED VESTED VESTED
SERVICE PERCENTAGE PERCENTAGE PERCENTAGE
- ---------- ------------ ------------ ------------
<S> <C> <C> <C>
1 0% 0% 0%
2 100 20 0
3 100 40 100
4 100 60 100
5 100 80 100
6 100 100 100
</TABLE>
SAI-10
<PAGE>
If the plan requires more than one year of service for participation, it must
use Schedule A or one at least as favorable to participants.
Provided the employer plan is not "top-heavy," within the meaning of Section
416 of the Code, and provided that the plan does not require more than one
year of service for participation, an employer may, in accordance with
provisions of the Members Retirement Plan, instead elect one of the following
vesting schedules or one at least as favorable to participants:
<TABLE>
<CAPTION>
SCHEDULE F SCHEDULE G
YEARS OF VESTED VESTED
SERVICE PERCENTAGE PERCENTAGE
- ------------- ------------ ------------
<S> <C> <C>
less than 3 0% 0%
3 20 0
4 40 0
5 60 100
6 80 100
7 100 100
</TABLE>
INVESTMENT RESTRICTIONS APPLICABLE TO THE GROWTH EQUITY, AGGRESSIVE EQUITY
AND
BALANCED FUNDS
For an explanation of the investment restrictions applicable to the Global,
Conservative Investors and Growth Investors Funds, see Investment
Restrictions in the Hudson River Trust prospectus which appears behind the
Members Retirement Program prospectus.
None of the Growth Equity, Aggressive Equity and Balanced Funds will:
o trade in foreign exchange (except transactions incidental to the
settlement of purchases or sales of securities for a Fund);
o make an investment in order to exercise control or management over a
company;
o underwrite the securities of other companies, including purchasing
securities that are restricted under the 1933 Act or rules or regulations
thereunder (restricted securities cannot be sold publicly until they are
registered under the 1933 Act), except as stated below;
o make short sales, except when the Fund has, by reason of ownership of
other securities, the right to obtain securities of equivalent kind and
amount that will be held so long as they are in a short position;
o trade in commodities or commodity contracts (except the Balanced Fund
is not prohibited from entering into hedging transactions through the use of
stock index or interest rate future contracts, as described in the
prospectus);
o purchase real estate or mortgages, except as stated below. The Funds
may buy shares of real estate investment trusts listed on stock exchanges or
reported on the National Association of Securities Dealers, Inc. automated
quotation system ("NASDAQ");
o have more than 5% of its assets invested in the securities of any one
registered investment company. A Fund may not own more than 3% of an
investment company's outstanding voting securities. Finally, total holdings
of investment company securities may not exceed 10% of the value of the
Fund's assets;
o purchase any security on margin or borrow money except for short-term
credits necessary for clearance of securities transactions;
o make loans, except loans through the purchase of debt obligations or
through entry into repurchase agreements; or
SAI-11
<PAGE>
o invest more than 10% of its total assets in restricted securities, real
estate investments, or portfolio securities not readily marketable.
The Growth Equity and Balanced Funds will not make an investment in an
industry if that investment would make the Fund's holding in that industry
exceed 25% of its assets. The United States government, and its agencies and
instrumentalities, are not considered members of any industry.
The Growth Equity and Aggressive Equity Funds will not purchase or write puts
and calls (options).
HOW WE VALUE THE ASSETS OF THE FUNDS
The assets of the Funds are valued as follows:
o STOCKS listed on national securities exchanges or traded on the NASDAQ
national market system are valued at the last sale price. If on a particular
day there is no sale, they are valued at the latest available bid price
reported on a composite tape. Other unlisted securities reported on the
NASDAQ system are valued at inside (highest) quoted bid prices.
o FOREIGN SECURITIES not traded directly, or in American Depository
Receipt (ADR) form, in the United States, are valued at the last sale price
in the local currency or an exchange in the country of origin. Foreign
currency is converted into dollars at current exchange rates.
o UNITED STATES TREASURY SECURITIES and other obligations issued or
guaranteed by the United States Government, its agencies or instrumentalities
are valued at representative quoted prices.
o LONG-TERM PUBLICLY TRADED CORPORATE BONDS (i.e., maturing in more than
a year) are valued at prices obtained from a bond pricing service of a major
dealer in bonds when such prices are available; however, in circumstances
where it is deemed appropriate to do so, an over-the-counter or exchange
quotation may be used.
o CONVERTIBLE PREFERRED STOCKS listed on national securities exchanges
are valued at their last sale price or, if there is no sale, at the latest
available bid price.
o CONVERTIBLE BONDS and UNLISTED CONVERTIBLE PREFERRED STOCKS are valued
at bid prices obtained from one or more major dealers in such securities;
where there is a discrepancy between dealers, values may be adjusted based on
recent premium spreads to the underlying common stock.
o SHORT-TERM DEBT SECURITIES that mature in more than 60 days are valued
at representative quoted prices. Short-term securities that mature in 60 days
or less are valued at amortized cost, which approximates market value. The
Funds may also acquire short-term debt securities through units in our
Separate Account No. 2A. These unit values are calculated in the same way as
Fund Units. The assets of Separate Account No. 2A are valued as described
above.
o OPTION CONTRACTS listed on organized exchanges are valued at last sale
prices or closing asked prices, in the case of calls, and at quoted bid
prices, in the case of puts. The market value of a put or call will usually
reflect, among other factors, the market price of the underlying security.
When a Fund writes a call option, an amount equal to the premium received by
the Fund is included in the Fund's financial statements as an asset and an
equivalent liability. The amount of the liability is subsequently
marked-to-market to reflect the current market value of the option written.
The current market value of a traded option is the last sale price or, in the
absence of a sale, the last offering price. When an option expires on its
stipulated expiration date or a Fund enters into a closing purchase or sales
transaction, the Fund realizes a gain or loss without regard to any
unrealized gain or loss on the underlying security, and the liability related
to such option is extinguished. When
SAI-12
<PAGE>
an option is exercised, the Fund realizes a gain or loss from the sale of the
underlying security, and the proceeds of the sale are increased by the
premium originally received, or reduced by the price paid for the option.
Our investment officers determine in good faith the fair market value of
securities and other assets that do not have a readily available market price
in accordance with accepted accounting practices and applicable laws and
regulations.
SUMMARY OF UNIT VALUES FOR THE FUNDS
Set forth below are Unit Values for the Funds, computed to the nearest cent
on the last business day of the periods specified. The value of a Growth
Equity Fund Unit was established at $10.00 on January 1, 1968, for the
National Association of Realtors Members Retirement Program (NAR Program),
which was merged into the Members Retirement Program on December 27, 1984.
The Aggressive Equity Fund and Balanced Fund Unit Values under the Program
were established at $10.00 on May 1, 1985, the date on which the Funds were
first made available under the Program. The Global, Conservative Investors
and Growth Investors Unit Values under the Program were established at $10.00
on July 1, 1993, the date on which these Funds were first made available
under the Program.
The Global, Conservative Investors and Growth Investors Fund Unit Values
before July 1, 1993 reflect hypothetical performance based on (1) the actual
performance of the Global Portfolio since August 27, 1987 and the
Conservative Investors and Growth Investors Portfolios since October 2, 1989,
respectively, the dates each commenced operations, and (2) the deduction of
the Program Expense Charge, the financial accounting fee and the daily
accrual of direct expenses attributable to the Growth Equity Fund. Since July
1, 1993, they reflect actual performance. See Deductions and Charges in the
prospectus for a description of the charges which will apply.
UNIT VALUES OF THE FUNDS
<TABLE>
<CAPTION>
CONSERVATIVE GROWTH
LAST BUSINESS GROWTH EQUITY AGGRESSIVE BALANCED GLOBAL INVESTORS INVESTORS
DAY OF FUND EQUITY FUND FUND FUND1 FUND1 FUND1
- --------------- ------------- ------------- ---------- -------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
1986 ........... 62.04 11.22 12.71 -- -- --
1987 ........... 64.52 10.77 11.84 5.25 -- --
1988 ........... 74.54 10.85 13.42 5.74 -- --
1989 ........... 106.57 15.75 16.76 7.20 7.23 5.52
1990 ........... 93.41 16.93 16.45 6.67 7.59 6.04
1991 ........... 140.45 31.33 22.97 8.61 8.99 8.90
1992 ........... 140.51 30.01 22.07 8.45 9.38 9.21
1993 ........... 165.88 33.95 24.45 11.05 10.22 10.49
1994 ........... 161.15 32.21 22.19 11.45 9.62 9.98
1995 ........... 209.90 41.74 26.39 13.38 11.39 12.40
March 1996 ..... 222.59 46.56 26.90 13.82 11.12 12.55
</TABLE>
(1) Unit Values reflect hypothetical performance through July 1, 1993 and
actual performance thereafter.
FUND TRANSACTIONS
The Growth Equity, Aggressive Equity and Balanced Funds are charged for
securities brokers' commission, transfer taxes and other fees relating to
securities transactions. Transactions in equity securities for each of these
Funds are executed primarily through brokers that receive a commission paid
by the Fund. The brokers are selected by Alliance Capital Management L.P.
("Alliance") and Equitable Life. For 1995, 1994 and 1993, the Growth Equity
Fund paid $6,044,623, $4,738,796 and $3,407,006, respectively, in brokerage
commissions; the Aggressive Equity Fund paid
SAI-13
<PAGE>
$1,547,073, $908,990 and $616,015, respectively, in brokerage commissions;
and the Balanced Fund paid $1,016,342, $801,704 and $820,212, respectively,
in brokerage commissions. Similar fees are paid by the corresponding Hudson
River Trust Portfolios in which the Global, Conservative Investors and Growth
Investors Funds invest.
Alliance and Equitable Life seek to obtain the best price and execution of
all orders placed for the portfolios of the Funds, considering all the
circumstances. If transactions are executed in the over-the-counter market,
they will deal with the principal market makers, unless more favorable prices
or better execution is otherwise obtainable. There are occasions on which
portfolio transactions for the Funds may be executed as part of concurrent
authorizations to purchase or sell the same security for certain other
accounts or clients advised by Alliance and Equitable Life. These concurrent
authorizations potentially can be either advantageous or disadvantageous to
the Funds. When these concurrent authorizations occur, the objective is to
allocate the executions among the Funds and the other accounts in a fair
manner.
We also consider the amount and quality of securities research services
provided by a broker. Typical research services include general economic
information and analyses and specific information on and analyses of
companies, industries and markets. Factors in evaluating research services
include the diversity of sources used by the broker and the broker's
experience, analytical ability, and professional stature. The receipt of
research services from brokers tends to reduce our expenses in managing the
Funds. This is taken into account when setting the expense charges.
Brokers who provide research services may charge somewhat higher commissions
than those who do not. However, we will select only brokers whose commissions
we believe are reasonable in all the circumstances. Of the brokerage
commissions paid by the Growth Equity, Aggressive Equity and Balanced Funds
during 1995, $5,731,568, $1,501,282 and $979,372, respectively, were paid to
brokers providing research services on transactions of $3,120,414,654,
$606,654,623 and $511,780,144, respectively.
We periodically evaluate the services provided by brokers and prepare
internal proposals for allocating among those various brokers business for
all the accounts we manage or advise. That evaluation involves consideration
of the overall capacity of the broker to execute transactions, its financial
condition, its past performance and the value of research services provided
by the broker in servicing the various accounts advised or managed by us. We
have no binding agreements with any firm as to the amount of brokerage
business which the firm may expect to receive for research services or
otherwise. There may, however, be understandings with certain firms that we
will continue to receive services from such firms only if such firms are
allocated a certain amount of brokerage business. We may try to allocate such
amounts of business to such firms to the extent possible in accordance with
the policies described above.
Research information obtained by us may be used in servicing all accounts
under our management, including our general account. Similarly, not all
research provided by a broker or dealer with which the Funds transact
business will necessarily be used in connection with those Funds.
Transactions for the Funds in the over-the-counter market are normally
executed as principal transactions with a dealer that is a principal
market-maker in the security, unless a better price or better execution can
be obtained from another source. Under these circumstances, the Funds pay no
commission. Similarly, portfolio transactions in money market and debt
securities will normally be executed through dealers or underwriters under
circumstances where the Fund pays no commission.
When making securities transactions for Funds that do not involve paying a
brokerage commission (such as the purchase of short-term debt securities), we
seek to obtain prompt execution in an effective manner at the best price.
Subject to this general objective, we may give orders to dealers or
underwriters who provide investment research. None of the Funds will pay a
higher price, however, and the fact that we may benefit from such research is
not considered in setting the expense charges.
SAI-14
<PAGE>
In addition to using brokers and dealers to execute portfolio securities
transactions for accounts we manage, we may enter into other types of
business transactions with brokers or dealers. These other transactions will
be unrelated to allocation of the Funds' portfolio transactions.
INVESTMENT MANAGEMENT AND FINANCIAL ACCOUNTING FEE
The table below shows the amount we received under the investment management
and financial accounting fee under the Program during each of the last three
years. See Part VII: Deductions and Charges in the prospectus.
<TABLE>
<CAPTION>
FUND 1995 1994 1993
- ---------------------- ---------- ---------- ----------
<S> <C> <C> <C>
Growth Equity ......... $199,240 $171,628 $155,398
Aggressive Equity .... 73,380 56,470 48,194
Balanced .............. 54,768 50,964 46,319
Global ................ 8,833 5,753 880(1)
Conservative Investors 4,253 3,816 1,227(1)
Growth Investors ...... 4,880 3,901 772(1)
</TABLE>
- ------------
(1) Represents financial accounting fees only, from July 1, 1993, when
these Funds were first offered under the Program, to December 31, 1993.
UNDERWRITER
Equico Securities, Inc. (Equico), a wholly-owned subsidiary of Equitable
Life, may be deemed to be the principal underwriter of separate account units
under the group annuity contract. On or about May 1, 1996, Equico Securities
will change its name to EQ Financial Consultants, Inc. Equico is registered
with the SEC as a broker-dealer under the 1934 Act and is a member of the
National Association of Securities Dealers, Inc. Equico's principal business
address is 1755 Broadway, New York, NY 10019. The offering of the units under
the contract is continuous. No underwriting commissions have been paid during
any of the last three fiscal years with respect to units of interest under
the contract. See Part VII: Deductions and Charges in the prospectus.
SAI-15
<PAGE>
OUR MANAGEMENT
Equitable Life is managed by a Board of Directors which is elected by its
shareholders. Its directors and certain of its executive officers and their
principal occupations are as follows:
<TABLE>
<CAPTION>
DIRECTORS
NAME PRINCIPAL OCCUPATION
- ----------------------------- -------------------------------------------------------------------------------
<S> <C>
Claude Bebear Chairman and Chief Executive Officer, AXA, Chairman, The Equitable
Companies Incorporated
Christopher Brocksom Chief Executive Officer, AXA Equity & Law Life Assurance Society
Francoise Colloc'h Executive Vice President--Culture--Management--Communications, AXA
*Henri de Castries Executive Vice President, Finance, AXA, Vice Chairman, The Equitable
Companies Incorporated
Joseph L. Dionne Chairman and Chief Executive Officer, The McGraw-Hill Companies
*William T. Esrey Chairman and Chief Executive Officer, Sprint Corporation
Jean-Rene Fourtou Chairman and Chief Executive Officer, Rhone Paulenc, S.A.
Norman C. Francis President, Xavier University of Louisiana
Donald J. Greene Counselor-at-Law, Partner, Le Boeuf, Lamb, Greene & MacRae
Anthony J. Hamilton Chairman and Chief Executive Officer, Fox-Pitt, Kelton Limited.
John T. Hartley Director, Retired Chairman and Chief Executive Officer, Harris Corporation
*John H. F. Haskell, Jr. Director and Managing Director, Dillon, Read & Co., Inc.
*W. Edwin Jarmain President, Jarmain Group Inc.
G. Donald Johnston, Jr. Retired Chairman and Chief Executive Officer, JWT Group, Inc.
*Winthrop Knowlton Chairman, Knowlton Brothers, Inc.
Arthur L. Liman Counselor-at-Law, Partner, Paul, Weiss, Rifkind, Wharton & Garrison
George T. Lowy Counselor-at-Law, Partner, Cravath, Swaine & Moore
Didier Pineau-Valencienne Chairman and Chief Executive Officer, Schneider, S.A.
*George J. Sella, Jr. Retired Chairman of the Board and Chief Executive Officer, American Cyanamid
Company
*Dave H. Williams Chairman and Chief Executive Officer, Alliance Capital Management, L.P.
</TABLE>
- ------------
* Member of Equitable Life's Investment Committee.
SAI-16
<PAGE>
Unless otherwise indicated, the following persons have been involved in the
management of Equitable Life in various executive positions during the last
five years.
<TABLE>
<CAPTION>
OFFICER-DIRECTORS
NAME PRINCIPAL OCCUPATION
- ------------------------- ------------------------------------------------------------------------------------
<S> <C>
*Joseph J. Melone Director, President and Chief Executive Officer, The Equitable Companies
Incorporated; prior thereto, President and Chief Operating Officer, Chairman of the
Board, Equitable Life; prior thereto, Chairman and Chief Executive Officer
James M. Benson Director, Senior Executive Vice President and Chief Operating Officer, The Equitable
Companies Incorporated; prior thereto, Senior Executive Vice President; Director,
President and Chief Executive Officer, Equitable Life; prior thereto, President and
Chief Operating Officer; prior thereto, President, Management Compensation Group
Jerry M. de St. Paer Senior Executive Vice President and Chief Financial Officer; prior thereto,
Executive Vice President and Chief Financial Officer
Robert E. Garber Executive Vice President and General Counsel
William T. McCaffrey Director, Senior Executive Vice President and Chief Operating Officer; prior
thereto, Executive Vice President and Chief Administrative Officer
Peter D. Noris Executive Vice President and Chief Investment Officer
Jose Suquet Executive Vice President and Chief Agency Officer
Gordon G. Dinsmore Senior Vice President
Alvin H. Fenichel Senior Vice President and Controller
J. Thomas Liddle, Jr. Senior Vice President and Chief Valuation Actuary
Kevin R. Byrne Vice President and Treasurer
Paul J. Flora Vice President and Auditor
Pauline Sherman Vice President, Secretary and Associate General Counsel
</TABLE>
- ------------
* Member of Equitable Life's Investment Committee.
SAI-17
<PAGE>
FINANCIAL STATEMENTS
The financial statements of Equitable Life included in this Statement of
Additional Information should be considered only as bearing upon the ability
of Equitable Life to meet its obligations under the group annuity contract.
They should not be considered as bearing upon the investment experience of
the Funds. The financial statements of Separate Account Nos. 3 (Pooled), 4
(Pooled), 10 (Pooled) and 51 (Pooled) reflect applicable fees, charges and
other expenses under the Program as in effect during the periods covered, as
well as the charges against the accounts made in accordance with the terms of
all other contracts participating in the respective separate accounts, if
applicable.
<TABLE>
<CAPTION>
<S> <C>
Separate Account Nos. 3 (Pooled), 4 (Pooled), 10 (Pooled) and 51 (Pooled):
Report of Independent Accountants--Price Waterhouse LLP ........................................... SAI-19
Separate Account No. 3 (Pooled) (The Aggressive Equity Fund):
Statement of Assets and Liabilities, December 31, 1995 ............................................ SAI-20
Statements of Operations and Changes in Net Assets for the Years Ended
December 31, 1995 and 1994 ....................................................................... SAI-21
Portfolio of Investments, December 31, 1995 ....................................................... SAI-22
Separate Account No. 4 (Pooled) (The Growth Equity Fund):
Statement of Assets and Liabilities, December 31, 1995 ............................................ SAI-26
Statements of Operations and Changes in Net Assets for the Years Ended
December 31, 1995 and 1994 ....................................................................... SAI-27
Portfolio of Investments, December 31, 1995 ....................................................... SAI-28
Separate Account No. 10 (Pooled) (The Balanced Fund):
Statement of Assets and Liabilities, December 31, 1995 ............................................ SAI-32
Statements of Operations and Changes in Net Assets for the Years Ended
December 31, 1995 and 1994 ....................................................................... SAI-33
Portfolio of Investments, December 31, 1995 ....................................................... SAI-34
Separate Account No. 51 (Pooled) (The Global, Conservative Investors and Growth Investors Funds):
Statements of Assets and Liabilities, December 31, 1995 ........................................... SAI-42
Statements of Operations and Changes in Net Assets for the year ended December 31, 1995 and 1994 .. SAI-43
Separate Account Nos. 3 (Pooled), 4 (Pooled), 10 (Pooled) and 51 (Pooled):
Notes to Financial Statements ..................................................................... SAI-44
The Equitable Life Assurance Society of the United States:
Report of Independent Accountants--Price Waterhouse LLP ........................................... SAI-47
Consolidated Balance Sheets, December 31, 1995 and 1994 ........................................... SAI-48
Consolidated Statements of Earnings Years Ended
December 31, 1995, 1994 and 1993 ................................................................. SAI-49
Consolidated Statement of Shareholder's Equity Years Ended
December 31, 1995, 1994 and 1993 ................................................................. SAI-50
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1995, 1994 and 1993 ................................................................. SAI-51
Notes to Consolidated Financial Statements ........................................................ SAI-52
</TABLE>
SAI-18
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- -----------------------------------------------------------------------------
To The Board of Directors of
The Equitable Life Assurance Society of the United States
and the Participants in the
Association Members Retirements Program
In our opinion, the accompanying statements of assets and liabilities,
including the portfolios of investments, and the related statements of
operations and changes in net assets present fairly, in all material
respects, the financial position of Separate Account Nos. 3, 4, and 10, and
Global Fund, Conservative Investors Fund and Growth Investors Fund
(constituting Separate Account No. 51, hereafter referred to as "Separate
Account No. 51") of The Equitable Life Assurance Society of the United States
("Equitable Life") at December 31, 1995, and each of their results of
operations and changes in net assets for each of the two years in the period
then ended for Separate Account Nos. 3, 4, and 10, and for the periods
indicated for Separate Account No. 51, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of
Equitable Life's management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our audits of
these financial statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at December 31, 1995 by
correspondence with the custodian and brokers, the application of alternative
auditing procedures where confirmations from brokers were not received and
confirmation of shares owned in The Hudson River Trust, provide a reasonable
basis for the opinion expressed above.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The selected per unit information
(appearing under "Condensed Fund Financial Information" in the prospectus) is
presented for the purpose of satisfying regulatory reporting requirements and
is not a required part of the basic financial statements. Such selected per
unit information has been subjected to auditing procedures applied during the
audit of the basic financial statements and, in our opinion, is fairly stated
in all material respects in relation to the basic financial statements taken
as a whole.
PRICE WATERHOUSE LLP
New York, New York
February 7, 1996
SAI-19
<PAGE>
SEPARATE ACCOUNT NO. 3 (POOLED) (THE AGGRESSIVE EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statement of Assets and Liabilities
December 31, 1995
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments (Notes 2 and 3):
Common stocks--at value (cost: $274,102,539) ................. $336,946,517
Participation in Separate Account No. 2A--at amortized cost,
which
approximates market value, equivalent to 17,601 units at
$241.89 .................................................... 4,257,425
Cash ........................................................... 891,904
Receivables:
Securities sold .............................................. 2,490,920
Dividends .................................................... 8,919
-------------------------------------------------------------- --------------
Total assets ............................................... 344,595,685
-------------------------------------------------------------- --------------
LIABILITIES:
Payables:
Securities purchased ......................................... 1,122,353
Due to Equitable Life's General Account ...................... 1,587,720
Investment management fees payable ........................... 3,146
Accrued expenses ............................................... 179,212
-------------------------------------------------------------- --------------
Total liabilities .......................................... 2,892,431
--------------
NET ASSETS ..................................................... $341,703,254
============================================================== ==============
</TABLE>
See Notes to Financial Statements.
SAI-20
<PAGE>
SEPARATE ACCOUNT NO. 3 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statements of Operations and Changes in Net Assets
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1995 1994
- ------------------------------------------------------------------------------- --------------- ---------------
<S> <C> <C>
FROM OPERATIONS:
INVESTMENT INCOME (NOTE 2):
Dividends (net of foreign taxes withheld -- 1995: $21,522 and 1994: $19,204) .. $ 1,552,241 $ 1,382,831
Interest ....................................................................... 729,465 262,574
- ------------------------------------------------------------------------------- --------------- ---------------
Total .......................................................................... 2,281,706 1,645,405
EXPENSES -- (NOTE 4) ........................................................... (4,967,053) (4,244,367)
- ------------------------------------------------------------------------------- --------------- ---------------
NET INVESTMENT LOSS ............................................................ (2,685,347) (2,598,962)
- ------------------------------------------------------------------------------- --------------- ---------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 2):
Realized gain (loss) from security and foreign currency transactions .......... 75,694,748 (7,572,930)
- ------------------------------------------------------------------------------- --------------- ---------------
Unrealized appreciation (depreciation) of investments:
Beginning of year ............................................................. 42,542,366 46,444,593
End of year ................................................................... 62,843,978 42,542,366
- ------------------------------------------------------------------------------- --------------- ---------------
Change in unrealized appreciation/depreciation ................................. 20,301,612 (3,902,227)
- ------------------------------------------------------------------------------- --------------- ---------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ......................... 95,996,360 (11,475,157)
- ------------------------------------------------------------------------------- --------------- ---------------
Increase (decrease) in net assets attributable to operations ................... 93,311,013 (14,074,119)
- ------------------------------------------------------------------------------- --------------- ---------------
FROM CONTRIBUTIONS AND WITHDRAWALS:
Contributions .................................................................. 205,540,949 213,517,834
Withdrawals .................................................................... (266,542,005) (179,711,235)
- ------------------------------------------------------------------------------- --------------- ---------------
Increase (decrease) in net assets attributable to contributions and withdrawals (61,001,056) 33,806,599
- ------------------------------------------------------------------------------- --------------- ---------------
INCREASE IN NET ASSETS ......................................................... 32,309,957 19,732,480
NET ASSETS -- BEGINNING OF YEAR ................................................ 309,393,297 289,660,817
- ------------------------------------------------------------------------------- --------------- ---------------
NET ASSETS -- END OF YEAR ...................................................... $ 341,703,254 $ 309,393,297
=============================================================================== =============== ===============
</TABLE>
See Notes to Financial Statements.
SAI-21
<PAGE>
SEPARATE ACCOUNT NO. 3 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments
December 31, 1995
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE (NOTE 3)
- --------------------------------------------------- ----------- --------------
<S> <C> <C>
COMMON STOCKS:
BASIC MATERIALS
CHEMICALS -- SPECIALTY (1.4%)
Cytec Industries, Inc.* ............................ 31,000 $ 1,933,625
UCAR International, Inc.* .......................... 89,800 3,030,750
-------------
4,964,375
-------------
METALS & MINING (0.8%)
Newmont Mining Corp. ............................... 60,000 2,715,000
-------------
TOTAL BASIC MATERIALS (2.2%) ....................... 7,679,375
-------------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (1.8%)
USA Waste Services, Inc.* .......................... 320,300 6,045,663
-------------
PRINTING, PUBLISHING & BROADCASTING (2.5%)
Infinity Broadcasting Corp. (Class A)* ............. 196,200 7,308,450
Playboy Enterprises, Inc.* ......................... 127,900 1,071,163
-------------
8,379,613
-------------
PROFESSIONAL SERVICES (0.5%)
Loewen Group, Inc. ................................. 71,600 1,812,375
-------------
TRUCKING, SHIPPING (2.2%)
TNT Freightways Corp. .............................. 61,300 1,233,662
Xtra Corp. ......................................... 152,300 6,472,750
-------------
7,706,412
-------------
TOTAL BUSINESS SERVICES (7.0%) ..................... 23,944,063
-------------
CONSUMER CYCLICALS
AIRLINES (5.1%)
America West Airlines, Inc. (Class B)* ............. 197,400 3,355,800
Delta Air Lines, Inc. .............................. 33,000 2,437,875
Northwest Airlines Corp. (Class A)* ................ 79,900 4,074,900
Southwest Airlines Co. ............................. 108,900 2,531,925
USAir Group, Inc.* ................................. 379,300 5,025,725
-------------
17,426,225
-------------
APPAREL, TEXTILE (3.8%)
Jones Apparel Group, Inc.* ......................... 48,200 1,897,875
Nine West Group, Inc.* ............................. 299,100 11,216,250
-------------
13,114,125
-------------
FOOD SERVICES, LODGING (3.9%)
Extended Stay America, Inc.* ....................... 62,300 1,713,250
HFS, Inc.* ......................................... 83,100 6,793,425
Host Marriott Corp.* ............................... 358,800 4,754,100
-------------
13,260,775
-------------
HOUSEHOLD FURNITURE, APPLIANCES (1.8%)
Industrie Natuzzi (ADR) ............................ 138,600 6,288,975
-------------
SAI-22
<PAGE>
SEPARATE ACCOUNT NO. 3 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1995
NUMBER OF
SHARES VALUE (NOTE 3)
- --------------------------------------------------- ----------- --------------
LEISURE-RELATED (4.9%)
Ascent Entertainment Group, Inc.* .................. 51,000 $ 803,250
Heritage Media Corp. (Class A)* .................... 88,875 2,277,422
ITT Corp. .......................................... 134,400 7,123,200
Mirage Resorts, Inc.* .............................. 100,900 3,481,050
Sierra On-line, Inc.* .............................. 100,800 2,898,000
-------------
16,582,922
-------------
PHOTO & OPTICAL (0.2%)
Luxottica Group (ADR) .............................. 11,700 684,450
-------------
RETAIL -- GENERAL (10.8%)
Bed Bath & Beyond, Inc.* ........................... 171,400 6,652,462
Federated Department Stores, Inc.* ................. 478,300 13,153,250
Office Depot, Inc.* ................................ 362,450 7,158,387
Office Max, Inc.* .................................. 390,400 8,735,200
Staples, Inc.* ..................................... 48,650 1,185,844
-------------
36,885,143
-------------
TOTAL CONSUMER CYCLICALS (30.5%) ................... 104,242,615
-------------
CONSUMER NONCYCLICALS
DRUGS (3.9%)
Amgen, Inc.* ....................................... 53,800 3,194,375
Biogen, Inc.* ...................................... 46,000 2,829,000
Centocor, Inc.* .................................... 141,200 4,359,550
Cephalon, Inc.* .................................... 59,550 2,426,662
Pharmacyclics, Inc.* ............................... 27,000 378,000
-------------
13,187,587
-------------
HOSPITAL SUPPLIES & SERVICES (14.5%)
Apria Healthcare Group, Inc.* ...................... 154,960 4,377,620
Boston Scientific Corp.* ........................... 108,900 5,336,100
Healthsouth Corp.* ................................. 457,200 13,315,950
Healthwise of America, Inc.* ....................... 121,445 4,736,355
Manor Care, Inc. ................................... 89,400 3,129,000
Saint Jude Medical, Inc.* .......................... 98,050 4,216,150
Summit Technology, Inc.* ........................... 69,550 2,347,313
Sun Healthcare Group, Inc.* ........................ 316,920 4,278,420
Surgical Care Affiliates, Inc. ..................... 230,100 7,823,400
-------------
49,560,308
-------------
TOTAL CONSUMER NONCYCLICALS (18.4%) ................ 62,747,895
-------------
CREDIT-SENSITIVE
INSURANCE (6.6%)
CNA Financial Corp.* ............................... 141,600 16,071,600
ITT Hartford Group, Inc. ........................... 134,400 6,501,600
-------------
22,573,200
-------------
UTILITY -- TELEPHONE (4.4%)
Telephone & Data Systems, Inc. ..................... 382,200 15,096,900
-------------
TOTAL CREDIT-SENSITIVE (11.0%) ..................... 37,670,100
-------------
SAI-23
<PAGE>
SEPARATE ACCOUNT NO. 3 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1995
NUMBER OF
SHARES VALUE (NOTE 3)
- --------------------------------------------------- ----------- --------------
ENERGY
OIL -- DOMESTIC (1.0%)
Diamond Shamrock, Inc. ............................. 54,900 $ 1,420,537
Snyder Oil Corp. ................................... 157,600 1,910,900
-------------
3,331,437
-------------
OIL -- SUPPLIES & CONSTRUCTION (10.1%)
Arethusa (Off-Shore) Ltd. .......................... 96,600 2,704,800
Diamond Offshore Drilling, Inc.* ................... 251,600 8,491,500
Global Marine, Inc.* ............................... 806,500 7,056,875
Noble Drilling Corp.* .............................. 496,900 4,472,100
Reading & Bates Corp.* ............................. 319,000 4,785,000
Rowan Cos., Inc.* .................................. 528,400 5,217,950
Sonat Offshore Drilling, Inc. ...................... 45,500 2,036,125
-------------
34,764,350
-------------
TOTAL ENERGY (11.1%) ............................... 38,095,787
-------------
TECHNOLOGY
ELECTRONICS (3.3%)
Applied Materials, Inc.* ........................... 35,400 1,393,875
Bay Networks, Inc.* ................................ 45,604 1,875,465
ITT Industries, Inc. ............................... 134,400 3,225,600
Parametric Technology Corp.* ....................... 72,800 4,841,200
-------------
11,336,140
-------------
OFFICE EQUIPMENT (0.9%)
Dell Computer Corp.* ............................... 40,900 1,416,163
Storage Technology Corp.* .......................... 74,000 1,766,750
-------------
3,182,913
-------------
OFFICE EQUIPMENT SERVICES (2.7%)
Hummingbird Communications Ltd.* ................... 14,100 571,050
Informix Corp.* .................................... 221,500 6,645,000
Sybase, Inc.* ...................................... 57,700 2,077,200
-------------
9,293,250
-------------
TELECOMMUNICATIONS (10.3%)
American Satellite Network -- Rights* .............. 9,550 0
Andrew Corp.* ...................................... 74,000 2,830,500
Ascend Communications, Inc.* ....................... 23,800 1,930,775
Cellular Communications, Inc. (Class A)* .......... 77,654 3,863,286
DSC Communications Corp.* .......................... 66,800 2,463,250
Mannesmann AG (ADR) ................................ 31,200 9,921,600
Millicom International Cellular S.A.* .............. 149,360 4,555,480
Tellabs, Inc.* ..................................... 64,900 2,401,300
U.S. Cellular Corp.* ............................... 133,700 4,512,375
Vanguard Cellular Systems, Inc. (Class A)* ........ 125,850 2,548,463
-------------
35,027,029
-------------
TOTAL TECHNOLOGY (17.2%) ........................... 58,839,332
-------------
SAI-24
<PAGE>
SEPARATE ACCOUNT NO. 3 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Concluded)
December 31, 1995
NUMBER OF
SHARES VALUE (NOTE 3)
- --------------------------------------------------- ----------- --------------
DIVERSIFIED (1.2%)
MISCELLANEOUS
Pittston Services Group ............................ 118,800 $ 3,727,350
-------------
TOTAL COMMON STOCKS (98.6%)
(Cost $274,102,539) ............................... 336,946,517
-------------
PARTICIPATION IN SEPARATE ACCOUNT NO. 2A,
at amortized cost, which approximates market
value,
equivalent to 17,601 units at $241.89 each (1.3%) 4,257,425
-------------
TOTAL INVESTMENTS (99.9%)
(Cost/Amortized Cost $278,359,964) ................ 341,203,942
CASH AND RECEIVABLES LESS LIABILITIES (0.1%) ...... 499,312
-------------
NET ASSETS (100.0%) ................................ $341,703,254
=============
</TABLE>
* Non-income producing.
See Notes to Financial Statements.
SAI-25
<PAGE>
SEPARATE ACCOUNT NO. 4 (POOLED) (THE GROWTH EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statement of Assets and Liabilities
December 31, 1995
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments (Notes 2 and 3):
Common stocks--at value (cost: $1,772,607,539) ....................... $2,071,380,232
Long-term debt securities--at value (amortized cost: $43,389,734) .... 35,481,250
Participation in Separate Account No. 2A--at amortized cost,
which approximates market value, equivalent to 62,384 units at
$241.89 ............................................................ 15,090,212
Cash ................................................................... 3,285,960
Receivables:
Securities sold ...................................................... 15,481,889
Dividends ............................................................ 1,693,035
Interest ............................................................. 59,583
---------------------------------------------------------------------- --------------
Total assets ....................................................... 2,142,472,161
---------------------------------------------------------------------- --------------
LIABILITIES:
Payables:
Securities purchased ................................................. 10,088,399
Due to Equitable Life's General Account .............................. 5,686,050
Investment management fees payable ................................... 7,255
Accrued expenses ....................................................... 521,041
Amount retained by Equitable Life in Separate Account No. 4 (Note 1) .. 1,044,875
---------------------------------------------------------------------- --------------
Total liabilities .................................................. 17,347,620
--------------
Net Assets (Note 1):
Net assets attributable to participants' accumulations ................. 2,102,751,745
Reserves and other contract liabilities attributable to annuity
benefits ............................................................... 22,372,796
---------------------------------------------------------------------- --------------
NET ASSETS ............................................................. $2,125,124,541
====================================================================== ==============
</TABLE>
See Notes to Financial Statements.
SAI-26
<PAGE>
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statements of Operations and Changes in Net Assets
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1995 1994
- -------------------------------------------------------------------------- -------------- ---------------
<S> <C> <C>
FROM OPERATIONS:
INVESTMENT INCOME (NOTE 2):
Dividends (net of foreign taxes withheld--1995: $239,657 and 1994:
$280,079) ................................................................ $ 19,610,344 $ 18,981,135
Interest and amortization of premium ...................................... (852,218) 120,286
- -------------------------------------------------------------------------- -------------- ---------------
Total ..................................................................... 18,758,126 19,101,421
EXPENSES -- (NOTE 4) ...................................................... (16,007,109) (14,943,802)
- -------------------------------------------------------------------------- -------------- ---------------
NET INCOME ................................................................ 2,751,017 4,157,619
- -------------------------------------------------------------------------- -------------- ---------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 2):
Realized gain from security and foreign currency transactions ............ 260,870,246 121,640,003
- -------------------------------------------------------------------------- -------------- ---------------
Unrealized appreciation (depreciation) of investments and foreign currency
transactions: ............................................................
Beginning of year ........................................................ 41,831,973 211,185,607
End of year .............................................................. 290,870,386 41,831,973
- -------------------------------------------------------------------------- -------------- ---------------
Change in unrealized appreciation/depreciation ............................ 249,038,413 (169,353,634)
- -------------------------------------------------------------------------- -------------- ---------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS .................... 509,908,659 (47,713,631)
- -------------------------------------------------------------------------- -------------- ---------------
Increase (decrease) in net assets attributable to operations ............. 512,659,676 (43,556,012)
- -------------------------------------------------------------------------- -------------- ---------------
FROM CONTRIBUTIONS AND WITHDRAWALS:
Contributions ............................................................. 422,289,107 435,940,867
Withdrawals ............................................................... (474,530,080) (528,069,361)
- -------------------------------------------------------------------------- -------------- ---------------
Decrease in net assets attributable to contributions and withdrawals ..... (52,240,973) (92,128,494)
- -------------------------------------------------------------------------- -------------- ---------------
Decrease in accumulated amount retained by
Equitable Life in Separate Account No. 4 (Note 1) ........................ 113,489 449,257
- -------------------------------------------------------------------------- -------------- ---------------
INCREASE (DECREASE) IN NET ASSETS ......................................... 460,532,192 (135,235,249)
NET ASSETS -- BEGINNING OF YEAR ........................................... 1,664,592,349 1,799,827,598
- -------------------------------------------------------------------------- -------------- ---------------
NET ASSETS -- END OF YEAR ................................................. $2,125,124,541 $1,664,592,349
========================================================================== ============== ===============
</TABLE>
See Notes to Financial Statements.
SAI-27
<PAGE>
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments
December 31, 1995
<TABLE>
<CAPTION>
NUMBER OF VALUE
SHARES (NOTE 3)
- ---------------------------------------------------------- ------------ -------------
<S> <C> <C>
COMMON STOCKS:
BASIC MATERIALS (0.3%)
CHEMICALS--SPECIALTY
UCAR International, Inc.* ................................. 175,000 $ 5,906,250
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (0.2%)
Rollins Environmental Services, Inc.* ..................... 1,054,700 3,032,263
USA Waste Services, Inc.* ................................. 120,000 2,265,000
-------------
5,297,263
-------------
PRINTING, PUBLISHING & BROADCASTING (1.2%)
Australis Media Ltd. ...................................... 4,500,250 3,846,532
Australis Media Ltd.
Conv. Note* .............................................. 22,000,000 18,804,225
IVI Publishing, Inc.* ..................................... 121,700 1,597,313
-------------
24,248,070
-------------
PROFESSIONAL SERVICES (0.1%)
Loewen Group, Inc. ........................................ 50,000 1,265,625
-------------
TOTAL BUSINESS SERVICES (1.5%) ............................ 30,810,958
-------------
CAPITAL GOODS (2.3%)
AEROSPACE
General Motors Corp. (Class H) ............................ 1,000,000 49,125,000
-------------
CONSUMER CYCLICALS
AIRLINES (1.9%)
America West Airlines, Inc. (Class B)* .................... 750,000 12,750,000
Delta Air Lines, Inc. ..................................... 160,000 11,820,000
USAir Group, Inc.* ........................................ 1,000,000 13,250,000
Worldcorp, Inc.* .......................................... 339,300 3,393,000
-------------
41,213,000
-------------
APPAREL, TEXTILE (0.5%)
Cone Mills Corp.* ......................................... 371,000 4,173,750
Nine West Group, Inc.* .................................... 200,000 7,500,000
-------------
11,673,750
-------------
FOOD SERVICES, LODGING (0.3%)
La Quinta Motor Inns, Inc. ................................ 200,000 5,475,000
-------------
HOUSEHOLD FURNITURE, APPLIANCES (1.0%)
Industrie Natuzzi (ADR) ................................... 480,000 21,780,000
-------------
LEISURE-RELATED (2.0%)
ITT Corp. ................................................. 800,000 42,400,000
-------------
RETAIL-GENERAL (2.6%)
Federated Department Stores, Inc.* ........................ 750,000 20,625,000
Lowes Cos., Inc. .......................................... 450,000 15,075,000
Office Depot, Inc.* ....................................... 300,000 5,925,000
Office Max, Inc.* ......................................... 100,000 2,237,500
Tandy Corp. ............................................... 260,000 10,790,000
-------------
54,652,500
-------------
TOTAL CONSUMER CYCLICALS (8.3%) ........................... 177,194,250
-------------
SAI-28
<PAGE>
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1995
NUMBER OF VALUE
SHARES (NOTE 3)
- ---------------------------------------------------------- ------------ -------------
CONSUMER NONCYCLICALS
DRUGS (1.0%)
Biogen, Inc.* ............................................. 45,000 $ 2,767,500
Centocor, Inc.* ........................................... 325,000 10,034,375
MedImmune, Inc.* .......................................... 145,400 2,908,000
Merck & Co., Inc. ......................................... 70,000 4,602,500
-------------
20,312,375
-------------
HOSPITAL SUPPLIES & SERVICES (6.3%)
Amsco International, Inc.* ................................ 150,000 2,231,250
Columbia/HCA Healthcare Corp. ............................. 800,000 40,600,000
Sun Healthcare Group, Inc.* ............................... 1,191,000 16,078,500
Surgical Care Affiliates, Inc. ............................ 2,188,300 74,402,200
-------------
133,311,950
-------------
TOBACCO (10.4%)
Loews Corp. ............................................... 2,250,000 176,343,750
Philip Morris Cos., Inc. .................................. 500,000 45,250,000
-------------
221,593,750
-------------
TOTAL CONSUMER NONCYCLICALS (17.7%) ....................... 375,218,075
-------------
CREDIT-SENSITIVE
FINANCIAL SERVICES (3.1%)
Dean Witter Discover & Co. ................................ 50,000 2,350,000
A.G. Edwards, Inc. ........................................ 220,000 5,252,500
Household International, Inc. ............................. 130,000 7,686,250
Legg Mason, Inc. .......................................... 850,000 23,375,000
Merrill Lynch & Co., Inc. ................................. 550,000 28,050,000
-------------
66,713,750
-------------
INSURANCE (12.5%)
CNA Financial Corp.* ...................................... 1,552,500 176,208,750
ITT Hartford Group, Inc. .................................. 800,000 38,700,000
Life Re Corp. ............................................. 700,000 17,500,000
NAC Re Corp. .............................................. 575,000 20,700,000
Travelers Group, Inc. ..................................... 200,000 12,575,000
-------------
265,683,750
-------------
REAL ESTATE (0.3%)
Walden Residential Properties, Inc. ....................... 308,000 6,429,500
-------------
UTILITY -- TELEPHONE (7.7%)
Century Telephone Enterprises, Inc. ....................... 397,800 12,630,150
Telephone & Data Systems, Inc. ............................ 3,825,000 151,087,500
-------------
163,717,650
-------------
TOTAL CREDIT-SENSITIVE (23.6%) ............................ 502,544,650
-------------
ENERGY
COAL & GAS PIPELINES (0.0%)
Abraxas Petroleum Corp.* .................................. 100,000 625,000
-------------
OIL -- DOMESTIC (0.7%)
Louisiana Land & Exploration Corp. ........................ 200,000 8,575,000
Snyder Oil Corp. .......................................... 500,000 6,062,500
-------------
14,637,500
-------------
SAI-29
<PAGE>
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1995
NUMBER OF VALUE
SHARES (NOTE 3)
- ---------------------------------------------------------- ------------ -------------
OIL -- INTERNATIONAL (1.6%)
Gulf Canada Resources Ltd. ORD* ........................... 530,000 $ 2,186,250
Imperial Oil Ltd. ......................................... 859,000 31,031,375
-------------
33,217,625
-------------
OIL -- SUPPLIES & CONSTRUCTION (4.5%)
ENSCO International, Inc.* ................................ 500,000 11,500,000
Noble Drilling Corp.* ..................................... 1,000,000 9,000,000
Parker Drilling Co.* ...................................... 6,000,000 36,750,000
Rowan Cos., Inc.* ......................................... 3,300,000 32,587,500
Seagull Energy Corp.* ..................................... 250,000 5,562,500
-------------
95,400,000
-------------
RAILROADS (0.3%)
Union Pacific Corp. ....................................... 100,000 6,600,000
-------------
TOTAL ENERGY (7.1%) ....................................... 150,480,125
-------------
TECHNOLOGY
ELECTRONICS (13.5%)
American Superconductor Corp.* ............................ 149,000 2,160,500
Bay Networks, Inc.* ....................................... 300,000 12,337,500
Cisco Systems, Inc.* ...................................... 1,315,000 98,131,875
General Instrument Corp.* ................................. 3,260,000 76,202,500
ITT Industries, Inc. ...................................... 800,000 19,200,000
National Semiconductor Corp.* ............................. 2,000,000 44,500,000
Texas Instruments, Inc. ................................... 200,000 10,350,000
3Com Corp.* ............................................... 500,000 23,312,500
-------------
286,194,875
-------------
OFFICE EQUIPMENT (1.8%)
Compaq Computer Corp.* .................................... 500,000 24,000,000
Sun Microsystems, Inc.* ................................... 300,000 13,687,500
-------------
37,687,500
-------------
OFFICE EQUIPMENT SERVICES (0.2%)
Informix Corp.* ........................................... 55,000 1,650,000
Oracle Corp.* ............................................. 80,000 3,390,000
-------------
5,040,000
-------------
TELECOMMUNICATIONS (21.2%)
AirTouch Communications, Inc.* ............................ 40,000 1,130,000
American Satellite Network -- Rights* ..................... 70,000 0
Cellular Communications, Inc. (Class A)* .................. 869,268 43,246,083
Cellular Communications Puerto Rico, Inc.* ................ 322,500 8,949,375
DSC Communications Corp.* ................................. 650,000 23,968,750
Mannesmann AG ............................................. 120,000 38,196,841
Mannesmann AG (ADR) ....................................... 200,000 63,600,000
Millicom International Cellular S.A.* ..................... 1,700,000 51,850,000
Nokia Corp. (ADR) ......................................... 600,000 23,325,000
Rogers Cantel Mobile Communications, Inc. (Class B) (ADR)* 900,000 23,850,000
Scientific Atlanta, Inc. .................................. 2,035,000 30,525,000
Tellabs, Inc.* ............................................ 450,000 16,650,000
U.S. Cellular Corp.* ...................................... 2,650,000 89,437,500
Vanguard Cellular Systems, Inc. (Class A)* ................ 1,800,000 36,450,000
-------------
451,178,549
-------------
TOTAL TECHNOLOGY (36.7%) .................................. 780,100,924
-------------
</TABLE>
SAI-30
<PAGE>
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Concluded)
December 31, 1995
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE (NOTE 3)
- --------------------------------------------------------------------------- ------------ --------------
<S> <C> <C>
TOTAL COMMON STOCKS (97.5%)
(Cost $1,772,607,539) ..................................................... $2,071,380,232
--------------
LONG-TERM DEBT SECURITIES:
BUSINESS SERVICES (0.2%)
PROFESSIONAL SERVICES
First Financial Management Corp.
5.0% Conv., 1999 .......................................................... $ 2,000,000 3,245,000
--------------
TECHNOLOGY
ELECTRONICS (1.4%)
General Instrument Corp.
5.0% Conv., 2000 .......................................................... 26,600,000 29,592,500
--------------
TELECOMMUNICATIONS (0.1%)
U.S. Cellular Corp.
Zero Coupon Conv., 2015 ................................................... 7,500,000 2,643,750
--------------
TOTAL TECHNOLOGY (1.5%) .................................................... 32,236,250
--------------
TOTAL LONG-TERM DEBT SECURITIES (1.7%)
(Amortized Cost $43,389,734) .............................................. 35,481,250
--------------
PARTICIPATION IN SEPARATE ACCOUNT NO. 2A,
at amortized cost, which approximates
market value, equivalent to 62,384 units
at $241.89 each (0.7%) .................................................... 15,090,212
--------------
TOTAL INVESTMENTS (99.9%)
(Cost /Amortized Cost $1,831,087,485) ..................................... 2,121,951,694
CASH AND RECEIVABLES LESS LIABILITIES (0.1%) ............................... 4,217,722
AMOUNT RETAINED BY EQUITABLE LIFE IN SEPARATE ACCOUNT NO. 4 (0.0%) (NOTE
1). ....................................................................... (1,044,875)
--------------
NET ASSETS (100.0%) (NOTE 1) ............................................... $2,125,124,541
==============
Reserves attributable to participants' accumulations ....................... $2,102,751,745
Reserves and other contract liabilities attributable to annuity benefits .. 22,372,796
--------------
NET ASSETS (100.0%) ........................................................ $2,125,124,541
==============
* Non-income producing.
</TABLE>
See Notes to Financial Statements.
SAI-31
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED) (THE BALANCED FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statement of Assets and Liabilities
December 31, 1995
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments (Notes 2 and 3):
Common stocks--at value (cost: $169,295,717) ................... $ 194,746,029
Preferred stocks--at value (cost: $3,966,336) .................. 4,441,963
Long-term debt securities--at value (amortized cost:
$150,540,283) ................................................ 158,739,835
Participation in Separate Account No. 2A--at amortized cost,
which
approximates market value, equivalent to 59,604 units at
$241.89 ...................................................... 14,417,728
Cash ............................................................. 256,781
Receivables:
Interest ....................................................... 3,239,084
Securities sold ................................................ 1,028,693
Dividends ...................................................... 260,201
---------------------------------------------------------------- ---------------
Total assets ................................................. 377,130,314
---------------------------------------------------------------- ---------------
LIABILITIES:
Payables:
Securities purchased ........................................... 1,048,475
Due to Equitable Life's General Account ........................ 1,666,465
Investment management fees payable ............................. 3,933
Accrued expenses ................................................. 227,291
---------------------------------------------------------------- ---------------
Total liabilities ............................................ 2,946,164
---------------
NET ASSETS ....................................................... $374,184,150
================================================================ ===============
</TABLE>
See Notes to Financial Statements.
SAI-32
<PAGE>
THE BALANCED FUND SEPARATE ACCOUNT NO. 10 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statements of Operations and Changes in Net Assets
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1995 1994
- -------------------------------------------------------------------- --------------- ---------------
<S> <C> <C>
FROM OPERATIONS:
INVESTMENT INCOME (NOTE 2):
Interest ............................................................ $ 11,113,819 $ 10,445,862
Dividends ........................................................... 3,014,441 3,797,850
- -------------------------------------------------------------------- --------------- ---------------
Total ............................................................... 14,128,260 14,243,712
EXPENSES -- (NOTE 4) ................................................ (5,349,200) (6,108,541)
- -------------------------------------------------------------------- --------------- ---------------
NET INVESTMENT INCOME ............................................... 8,779,060 8,135,171
- -------------------------------------------------------------------- --------------- ---------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 2):
Realized gain (loss) from security transactions ..................... 16,986,767 (2,337,066)
- -------------------------------------------------------------------- --------------- ---------------
Unrealized appreciation (depreciation) of investments:
Beginning of year .................................................. (8,178,659) 41,745,407
End of year ........................................................ 34,125,491 (8,178,659)
- -------------------------------------------------------------------- --------------- ---------------
Change in unrealized appreciation/depreciation ...................... 42,304,150 (49,924,066)
- -------------------------------------------------------------------- --------------- ---------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ............. 59,290,917 (52,261,132)
- -------------------------------------------------------------------- --------------- ---------------
Increase (decrease) in net assets attributable to operations ....... 68,069,977 (44,125,961)
- -------------------------------------------------------------------- --------------- ---------------
FROM CONTRIBUTIONS AND WITHDRAWALS:
Contributions ....................................................... 65,614,609 104,824,794
Withdrawals ......................................................... (153,764,130) (138,822,093)
- -------------------------------------------------------------------- --------------- ---------------
Decrease in net assets attributable to contributions and withdrawals (88,149,521) (33,997,299)
- -------------------------------------------------------------------- --------------- ---------------
DECREASE IN NET ASSETS .............................................. (20,079,544) (78,123,260)
NET ASSETS -- BEGINNING OF YEAR ..................................... 394,263,694 472,386,954
- -------------------------------------------------------------------- --------------- ---------------
NET ASSETS -- END OF YEAR ........................................... $ 374,184,150 $ 394,263,694
==================================================================== =============== ===============
</TABLE>
See Notes to Financial Statements.
SAI-33
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
NUMBER OF VALUE
SHARES (NOTE 3)
- ------------------------------------------ ----------- -------------
<S> <C> <C>
COMMON STOCKS:
BASIC MATERIALS
CHEMICALS (3.4%)
Freeport-McMoRan, Inc. .................... 24,000 $ 888,000
Hercules, Inc. ............................ 44,000 2,480,500
IMC Global, Inc. .......................... 72,000 2,943,000
Monsanto Co. .............................. 51,200 6,272,000
-------------
12,583,500
-------------
CHEMICALS-SPECIALTY (1.0%)
Morton International, Inc. ................ 40,000 1,435,000
UCAR International, Inc.* ................. 42,000 1,417,500
Wellman, Inc. ............................. 48,500 1,103,375
-------------
3,955,875
-------------
METALS & MINING (0.2%)
Alumax, Inc.* ............................. 25,300 774,813
-------------
PAPER (0.2%)
Champion International Corp. .............. 16,000 672,000
-------------
TOTAL BASIC MATERIALS (4.8%) .............. 17,986,188
-------------
BUSINESS SERVICES
Environmental Control (0.4%)
WMX Technologies, Inc. .................... 44,000 1,314,500
-------------
PRINTING, PUBLISHING & BROADCASTING (3.2%)
Cablevision Systems Corp. (Class A)* ..... 35,500 1,925,875
Clear Channel Communications, Inc.* ...... 67,600 2,982,850
Comcast Corp. (Class A) SPL ............... 82,500 1,500,469
Infinity Broadcasting Corp. (Class A)* ... 35,650 1,327,962
Liberty Media Group (Class A)* ............ 85,000 2,284,375
Tele-Communications, Inc. (Class A)* ..... 60,000 1,192,500
Tele-Communications International, Inc.* . 5,000 113,750
Time Warner, Inc. ......................... 19,000 719,625
-------------
12,047,406
-------------
PROFESSIONAL SERVICES (0.2%)
Ideon Group, Inc. ......................... 82,000 830,250
-------------
TRUCKING, SHIPPING (0.1%)
Sea Containers Ltd. ....................... 30,000 521,250
-------------
TOTAL BUSINESS SERVICES (3.9%) ............ 14,713,406
-------------
CAPITAL GOODS
AEROSPACE (0.4%)
Boeing Co. ................................ 10,000 783,750
Coltec Industries, Inc.* .................. 55,000 639,375
-------------
1,423,125
-------------
BUILDING MATERIALS & FOREST PRODUCTS
(0.3%)
Martin Marietta Materials, Inc. ........... 50,000 1,031,250
-------------
BUILDING & CONSTRUCTION (0.2%)
American Standard Companies, Inc.* ....... 30,000 840,000
-------------
SAI-34
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1995
NUMBER OF VALUE
SHARES (NOTE 3)
- ------------------------------------------ ----------- -------------
MACHINERY (0.4%)
Solectron Corp.* .......................... 34,100 $ 1,504,663
-------------
TOTAL CAPITAL GOODS (1.3%) ................ 4,799,038
-------------
CONSUMER CYCLICALS
AIRLINES (0.2%)
Northwest Airlines Corp. (Class A)* ...... 18,000 918,000
-------------
AUTOS & TRUCKS (0.4%)
Autozone, Inc.* ........................... 55,000 1,588,125
-------------
FOOD SERVICES, LODGING (0.7%)
La Quinta Motor Inns, Inc. ................ 28,000 766,500
McDonald's Corp. .......................... 40,000 1,805,000
-------------
2,571,500
-------------
HOUSEHOLD FURNITURE, APPLIANCES (0.2%)
First Brands Corporation .................. 12,100 576,263
-------------
LEISURE-RELATED (2.0%)
Carnival Corp. ............................ 80,000 1,950,000
Cyrk, Inc.* ............................... 56,500 550,875
Disney (Walt) Co. ......................... 30,000 1,770,000
ITT Corp. ................................. 58,800 3,116,400
-------------
7,387,275
-------------
PHOTO & OPTICAL (0.3%)
Eastman Kodak Co. ......................... 17,000 1,139,000
-------------
RETAIL-GENERAL (0.8%)
Fingerhut Co., Inc. ....................... 127,500 1,769,062
Payless Cashways, Inc.* ................... 125,000 531,250
Tandy Corp. ............................... 15,000 622,500
-------------
2,922,812
-------------
TOTAL CONSUMER CYCLICALS (4.6%) ........... 17,102,975
-------------
CONSUMER NONCYCLICALS
BEVERAGES (1.9%)
Coca-Cola Co. ............................. 20,000 1,485,000
Pepsico, Inc. ............................. 100,000 5,587,500
-------------
7,072,500
-------------
DRUGS (4.0%)
Biogen, Inc.* ............................. 10,000 615,000
Centocor, Inc. ............................ 33,700 1,040,488
Lilly (Eli) & Co. ......................... 25,000 1,406,250
Merck & Co., Inc. ......................... 45,000 2,958,750
Pfizer, Inc. .............................. 35,000 2,205,000
Pharmacia & Upjohn, Inc. .................. 43,595 1,689,306
Schering Plough Corp. ..................... 40,000 2,190,000
Warner-Lambert Co. ........................ 31,300 3,040,012
-------------
15,144,806
-------------
SAI-35
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1995
NUMBER OF VALUE
SHARES (NOTE 3)
- ------------------------------------------ ----------- -------------
HOSPITAL SUPPLIES & SERVICES (2.8%)
Amsco International, Inc.* ................ 54,400 $ 809,200
Columbia/HCA Healthcare Corp. ............. 70,000 3,552,500
Guidant Corp. ............................. 15,000 633,750
Healthsource, Inc.* ....................... 54,000 1,944,000
Summit Technology, Inc.* .................. 18,000 607,500
United Healthcare Corp. ................... 30,000 1,965,000
U.S. Healthcare, Inc. ..................... 24,000 1,116,000
-------------
10,627,950
-------------
RETAIL-FOOD (0.1%)
Kroger Co.* ............................... 8,410 315,375
-------------
SOAPS & TOILETRIES (0.9%)
Gillette Corp. ............................ 65,000 3,388,125
-------------
TOBACCO (3.6%)
Loews Corp. ............................... 40,000 3,135,000
Philip Morris Cos., Inc. .................. 112,500 10,181,250
-------------
13,316,250
-------------
TOTAL CONSUMER NONCYCLICALS (13.3%) ...... 49,865,006
-------------
CREDIT-SENSITIVE
BANKS (0.6%)
NationsBank Corp. ......................... 30,000 2,088,750
-------------
FINANCIAL SERVICES (1.2%)
Household International, Inc. ............. 15,000 886,875
MBNA Corp. ................................ 50,000 1,843,750
Merrill Lynch & Co., Inc. ................. 37,000 1,887,000
-------------
4,617,625
-------------
INSURANCE (6.2%)
Aetna Life & Casualty Co. ................. 24,000 1,662,000
American International Group, Inc. ....... 30,000 2,775,000
CNA Financial Corp.* ...................... 4,500 510,750
General Re Corp. .......................... 7,000 1,085,000
ITT Hartford Group, Inc. .................. 46,100 2,230,088
Life Re Corp. ............................. 57,500 1,437,500
MGIC Investment Corp. ..................... 25,000 1,356,250
NAC Re Corp. .............................. 30,000 1,080,000
PMI Group, Inc. ........................... 27,000 1,221,750
TIG Holdings, Inc. ........................ 55,500 1,581,750
Transatlantic Holdings, Inc. .............. 25,000 1,834,375
Travelers Group, Inc. ..................... 102,500 6,444,687
-------------
23,219,150
-------------
UTILITY-GAS (0.7%)
ENRON Corp. ............................... 70,000 2,668,750
-------------
UTILITY-TELEPHONE (1.4%)
AT&T Corp. ................................ 62,000 4,014,500
Telephone & Data Systems, Inc. ............ 33,000 1,303,500
-------------
5,318,000
-------------
TOTAL CREDIT-SENSITIVE (10.1%) ............ 37,912,275
-------------
SAI-36
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1995
NUMBER OF VALUE
SHARES (NOTE 3)
- ------------------------------------------ ----------- -------------
ENERGY
OIL-DOMESTIC (1.5%)
Atlantic Richfield Co. .................... 17,000 $ 1,882,750
Tom Brown, Inc.* .......................... 40,000 585,000
Louis Dreyfus Natural Gas Corp.* .......... 62,900 951,363
Louisiana Land & Exploration Corp. ....... 25,900 1,110,462
Occidental Petroleum Corp. ................ 45,000 961,875
-------------
5,491,450
-------------
RAILROADS (0.3%)
Union Pacific Corp. ....................... 17,000 1,122,000
-------------
TOTAL ENERGY (1.8%) ....................... 6,613,450
-------------
TECHNOLOGY
ELECTRONICS (4.7%)
Altera Corp.* ............................. 20,500 1,019,875
Applied Materials, Inc. ................... 70,000 2,756,250
Arrow Electronics, Inc.* .................. 6,549 282,426
Bay Networks, Inc.* ....................... 43,200 1,776,600
Cisco Systems, Inc.* ...................... 28,000 2,089,500
General Instrument Corp.* ................. 55,000 1,285,625
Intel Corp. ............................... 50,000 2,837,500
ITT Industries, Inc. ...................... 58,800 1,411,200
Lam Research Corp.* ....................... 13,000 594,750
Motorola, Inc. ............................ 10,000 570,000
National Semiconductor Corp.* ............. 66,985 1,490,415
3Com Corp.* ............................... 32,000 1,492,000
-------------
17,606,141
-------------
OFFICE EQUIPMENT (1.9%)
Ceridian Corp.* ........................... 82,400 3,399,000
Compaq Computer Corp.* .................... 55,000 2,640,000
Compuware Corp.* .......................... 54,700 1,011,950
-------------
7,050,950
-------------
OFFICE EQUIPMENT SERVICES (1.7%)
First Data Corp. .......................... 23,000 1,538,125
General Motors Corp. (Class E) ............ 30,000 1,560,000
Informix Corp.* ........................... 12,000 360,000
Microsoft Corp.* .......................... 12,000 1,053,000
Oracle Corp.* ............................. 45,000 1,906,875
-------------
6,418,000
-------------
TELECOMMUNICATIONS (2.9%)
AirTouch Communications, Inc.* ............ 86,400 2,440,800
Cox Communications, Inc. (Class A)* ...... 99,800 1,946,100
Glenayre Technologies, Inc.* .............. 10,000 622,500
MCI Communications Corp. .................. 134,000 3,500,750
Millicom International Cellular S.A.* .... 5,900 179,950
Scientific Atlanta, Inc. .................. 80,800 1,212,000
Tellabs, Inc.* ............................ 22,000 814,000
-------------
10,716,100
-------------
TOTAL TECHNOLOGY (11.2%) .................. 41,791,191
-------------
SAI-37
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1995
NUMBER OF VALUE
SHARES (NOTE 3)
- ------------------------------------------ ----------- -------------
DIVERSIFIED
MISCELLANEOUS (1.0%)
Alco Standard Corp. ....................... 40,000 $ 1,825,000
Allied Signal, Inc. ....................... 45,000 2,137,500
-------------
TOTAL DIVERSIFIED (1.0%) .................. 3,962,500
-------------
TOTAL COMMON STOCKS (52.0%)
(Cost $169,295,717) ...................... 194,746,029
-------------
PREFERRED STOCKS:
BASIC MATERIALS (0.1%)
PAPER
James River Corp.
9.0% Conv. ............................... 5,100 119,213
-------------
CAPITAL GOODS (0.1%)
ELECTRICAL EQUIPMENT
Westinghouse Electric Corp.
$1.30 Conv.* ............................. 32,400 514,350
-------------
CONSUMER CYCLICALS (0.1%)
AIRLINES
Continental Air Finance Trust
8.5% Conv.* .............................. 8,800 470,800
-------------
CONSUMER NONCYCLICALS (0.1%)
HOSPITAL SUPPLIES & SERVICES
FHP International Corp.
5.0% Conv., Series A ..................... 12,300 327,488
-------------
CREDIT-SENSITIVE
BANKS (0.1%)
First Chicago NBD Corp.
5.75% Conv., Series B .................... 8,000 536,000
-------------
FINANCIAL SERVICES (0.2%)
Allstate Corp.
$2.30 Conv. .............................. 6,200 254,200
First USA, Inc.
6.25% Conv. .............................. 9,300 367,350
-------------
621,550
-------------
INSURANCE (0.1%)
Travelers Group, Inc.
5.5% Conv., Series B ..................... 4,200 366,450
-------------
UTILITY-TELEPHONE (0.2%)
LCI International, Inc.
5.0% Conv. ............................... 15,700 839,950
-------------
TOTAL CREDIT-SENSITIVE (0.6%) ............. 2,363,950
-------------
ENERGY (0.1%)
OIL-DOMESTIC
ENRON Corp.
6.25% Conv.* ............................. 11,100 266,400
-------------
SAI-38
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1995
NUMBER OF VALUE
SHARES (NOTE 3)
- ------------------------------------------ ----------- -------------
TECHNOLOGY (0.1%)
TELECOMMUNICATIONS
MFS Communications Co., Inc.
8.0% Conv.* .............................. 7,800 $ 379,762
-------------
TOTAL PREFERRED STOCKS (1.2%)
(Cost $3,966,336) ........................ 4,441,963
-------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
-----------
<S> <C> <C>
LONG-TERM DEBT SECURITIES:
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (0.3%)
Thermo Electron Corp.
5.0% Euro Conv., 2001 .................... $ 570,000 964,725
------------
PRINTING, PUBLISHING & BROADCASTING (2.5%)
Tele-Communications, Inc.
10.125%, 2022 ............................ 4,000,000 5,011,520
Time Warner Entertainment Co.
8.375%, 2023 ............................. 3,900,000 4,198,389
------------
9,209,909
------------
PROFESSIONAL SERVICES (0.4%)
Career Horizons, Inc.
7.0% Conv., 2002 ......................... 210,000 238,875
Danka Business Systems PLC
6.75% Conv., 2002 ........................ 450,000 637,313
First Financial Management Corp.
5.0% Conv., 1999 ......................... 480,000 778,800
------------
1,654,988
------------
TOTAL BUSINESS SERVICES (3.2%) ............ 11,829,622
------------
CAPITAL GOODS
MACHINERY (0.4%)
Solectron Corp.
Zero Coupon Sub. Note, 2012 .............. 1,070,000 981,725
Titan Wheel International, Inc.
4.75% Conv., 2000 ........................ 310,000 409,587
------------
TOTAL CAPITAL GOODS (0.4%) ................ 1,391,312
------------
CONSUMER CYCLICALS
FOOD SERVICES, LODGING (0.1%)
HFS, Inc.
4.5% Conv., 1999 ......................... 270,000 623,700
------------
RETAIL-GENERAL (0.2%)
Federated Department Stores, Inc.
5.0% Conv., 2003 ......................... 295,000 295,000
Lowes Cos., Inc.
3.0% Conv., 2003 ......................... 310,000 404,163
------------
699,163
------------
TOTAL CONSUMER CYCLICALS (0.3%) ........... 1,322,863
------------
</TABLE>
SAI-39
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1995
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 3)
- ------------------------------------------- ------------ -------------
<S> <C> <C>
CONSUMER NONCYCLICALS
DRUGS (0.1%)
Genzyme Corp.
6.75% Conv., 2001 ......................... $ 240,000 $ 298,500
-------------
HOSPITAL SUPPLIES & SERVICES (0.3%)
Healthsouth Corp.
5.0% Conv., 2001 .......................... 300,000 484,500
Integrated Health Services, Inc.
5.75% Conv., 2001 ......................... 590,000 593,687
-------------
1,078,187
-------------
TOTAL CONSUMER NONCYCLICALS (0.4%) ........ 1,376,687
-------------
CREDIT-SENSITIVE
BANKS (2.0%)
Abbey National PLC
6.69%, 2005 ............................... 2,250,000 2,335,118
St. George Bank Ltd.
7.15%, 2005 ............................... 4,850,000 5,020,041
-------------
7,355,159
-------------
FINANCIAL SERVICES (3.4%)
Commercial Credit Co.
6.125%, 2005 .............................. 2,400,000 2,376,958
Lehman Brothers Holdings, Inc.
8.75%, 2005 ............................... 4,525,000 5,145,378
Liberty Mutual Insurance Co.
8.5%, 2025 ................................ 4,050,000 4,507,488
Medaphis Corp.
6.5% Conv., 2000 .......................... 221,000 587,584
-------------
12,617,408
-------------
FOREIGN GOVERNMENT (1.3%)
Italy Global Bond
6.875%, 2023 .............................. 5,000,000 4,882,750
-------------
U.S. GOVERNMENT (30.0%)
U.S. Treasury:
5.5% Note, 1998 ........................... 10,000,000 10,071,870
7.25% Note, 1998 .......................... 27,000,000 28,071,549
7.75% Note, 1999 .......................... 10,000,000 10,856,250
5.75% Note, 2000 .......................... 14,000,000 14,214,368
7.75% Note, 2000 .......................... 22,250,000 24,176,004
6.5% Note, 2005 ........................... 11,770,000 12,538,722
6.875% Bond, 2025 ......................... 5,575,000 6,289,296
7.625% Bond, 2025 ......................... 5,250,000 6,414,843
-------------
112,632,902
-------------
UTILITY-TELEPHONE (0.2%)
Worldcom, Inc.
5.0% Conv., 2003 .......................... 770,000 816,200
-------------
TOTAL CREDIT-SENSITIVE (36.9%) ............. 138,304,419
-------------
SAI-40
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Concluded)
December 31, 1995
PRINCIPAL VALUE
AMOUNT (NOTE 3)
- ------------------------------------------- ------------ -------------
TECHNOLOGY
ELECTRONICS (0.8%)
Altera Corp.
5.75% Conv. Sub. Note, 2002 ............... $ 310,000 $ 361,150
Cypress Semiconductor Corp.
3.15% Conv., 2001 ......................... 220,000 223,850
Integrated Device Technology, Inc.
5.5% Conv., 2002 .......................... 430,000 351,525
LSI Logic Corp.
5.5% Conv., 2001 .......................... 150,000 407,063
Lam Research Corp.
6.0% Conv. Sub. Deb., 2003 ................ 260,000 482,950
Motorola, Inc.
Zero Coupon Conv., 2013 ................... 115,000 87,688
Sanmina Corp.
5.5% Conv., 2002 .......................... 475,000 519,531
3Com Corp.
10.25% Conv., 2001 ........................ 375,000 599,063
-------------
3,032,820
-------------
OFFICE EQUIPMENT (0.1%)
Telxon Corp.
5.75% Conv., 2003 ......................... 220,000 236,500
-------------
TELECOMMUNICATIONS (0.3%)
Bay Networks, Inc.
5.25% Conv., 2003 ......................... 545,000 589,962
U.S. Cellular Corp.
Zero Coupon Conv., 2015 ................... 1,860,000 655,650
-------------
1,245,612
-------------
TOTAL TECHNOLOGY (1.2%) .................... 4,514,932
-------------
TOTAL LONG-TERM DEBT SECURITIES (42.4%)
(Amortized Cost $150,540,283) ............. 158,739,835
-------------
PARTICIPATION IN SEPARATE ACCOUNT NO. 2A,
at amortized cost, which approximates
market value, equivalent to 59,604 units
at $241.89 each (3.9%) .................... 14,417,728
-------------
TOTAL INVESTMENTS (99.5%)
(Cost/Amortized Cost $338,220,064) ....... 372,345,555
CASH AND RECEIVABLES LESS LIABILITIES
(0.5%) .................................... 1,838,595
-------------
NET ASSETS (100.0%) ........................ $374,184,150
=============
</TABLE>
* Non-income producing.
See Notes to Financial Statements.
SAI-41
<PAGE>
SEPARATE ACCOUNT NO. 51 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statements of Assets and Liabilities
December 31, 1995
<TABLE>
<CAPTION>
GROWTH
CONSERVATIVE INVESTORS
GLOBAL FUND INVESTORS FUND FUND
- --------------------------------------------------- ------------- -------------- -------------
<S> <C> <C> <C>
ASSETS:
Investments in shares of The Hudson River
Trust, at value (Cost:
Global Portfolio-$26,282,287;
Conservative Investors Portfolio-$4,895,468; ....
Growth Investors Portfolio-$24,944,438 (Note 1) . $28,593,444 $5,200,407 $27,425,238
Receivable for The Hudson River Trust shares sold . -- 3,225 --
Due from Equitable Life's General Account ......... 55,852 1,335 231,872
------------- -------------- -------------
Total assets ................................... 28,649,296 5,204,967 27,657,110
------------- -------------- -------------
LIABILITIES:
Payable for The Hudson River Trust shares purchased 38,154 -- 218,551
Accrued expenses ................................... 23,058 7,688 16,800
------------- -------------- -------------
Total liabilities .............................. 61,212 7,688 235,351
------------- -------------- -------------
NET ASSETS ......................................... $28,588,084 $5,197,279 $27,421,759
============= ============== =============
</TABLE>
See Notes to Financial Statements.
SAI-42
<PAGE>
SEPARATE ACCOUNT NO. 51 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statements of Operations and Changes in Net Assets
<TABLE>
<CAPTION>
CONSERVATIVE GROWTH
GLOBAL FUND INVESTORS FUND INVESTORS FUND
- ------------------------- ---------------------------- -------------------------- --------------------------
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1995 1994 1995 1994 1995 1994
- ------------------------- ------------- ------------- ------------ ------------ ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
INVESTMENT
INCOME-Dividends from
The Hudson River Trust
(Note 2) ............... $ 400,157 $ 84,653 $ 224,858 $ 105,562 $ 602,858 $ 113,283
EXPENSE (NOTE 4) ........ (224,839) (68,052) (56,285) (37,272) (136,295) (41,929)
------------- ------------- ------------ ------------ ------------- -----------
NET INVESTMENT INCOME ... 175,318 16,601 168,573 68,290 466,563 71,354
------------- ------------- ------------ ------------ ------------- -----------
REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS (NOTE 2):
Realized gain (loss) from
share transactions ..... 55,631 2,308 (21,293) (66,443) (5,408) (14,850)
Realized gain
distribution from The
Hudson River Trust ..... 788,817 238,966 32,181 -- 362,984 --
------------- ------------- ------------ ------------ ------------- -----------
NET REALIZED GAIN (LOSS) 844,448 241,274 10,888 (66,443) 357,576 (14,850)
------------- ------------- ------------ ------------ ------------- -----------
Unrealized appreciation
(depreciation) of
investments:
Beginning of year ...... (467,857) (72,115) (216,587) (98,372) (263,697) (56,176)
End of year ............ 2,311,157 (467,857) 304,939 (216,587) 2,480,800 (263,697)
------------- ------------- ------------ ------------ ------------- -----------
Change in unrealized
appreciation/depreciation 2,779,014 (395,742) 521,526 (118,215) 2,744,497 (207,521)
------------- ------------- ------------ ------------ ------------- -----------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS ......... 3,623,462 (154,468) 532,414 (184,658) 3,102,073 (222,371)
------------- ------------- ------------ ------------ ------------- -----------
Increase (decrease) in
net assets attributable
to operations .......... 3,798,780 (137,867) 700,987 (116,368) 3,568,636 (151,017)
------------- ------------- ------------ ------------ ------------- -----------
FROM CONTRIBUTIONS AND
WITHDRAWALS:
Contributions ........... 19,143,847 12,404,705 2,281,637 1,652,385 20,374,439 5,339,146
Withdrawals ............. (6,358,047) (1,857,754) (508,945) (920,352) (2,640,877) (622,957)
------------- ------------- ------------ ------------ ------------- -----------
Increases in net assets
attributable to
contributions and
withdrawals ............ 12,785,800 10,546,951 1,772,692 732,033 17,733,562 4,716,189
------------- ------------- ------------ ------------ ------------- -----------
INCREASE IN NET ASSETS .. 16,584,580 10,409,084 2,473,679 615,665 21,302,198 4,565,172
NET ASSETS-BEGINNING OF
YEAR ................... 12,003,504 1,594,420 2,723,600 2,107,935 6,119,561 1,554,389
------------- ------------- ------------ ------------ ------------- -----------
NET ASSETS-END OF YEAR .. $28,588,084 $12,003,504 $5,197,279 $2,723,600 $27,421,759 $6,119,561
============= ============= ============ ============ ============= ===========
</TABLE>
See Notes to Financial Statements.
SAI-43
<PAGE>
SEPARATE ACCOUNT NOS. 3 (POOLED), 4 (POOLED), 10 (POOLED) AND 51 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Notes to Financial Statements
1. Separate Account Nos. 3 (Pooled) (the Aggressive Equity Fund), 4
(Pooled) (the Growth Equity Fund), 10 (Pooled) (the Balanced Fund), and 51
(Pooled) (the Global, Conservative Investors and Growth Investors Funds) (the
Funds) of The Equitable Life Assurance Society of the United States
(Equitable Life), a wholly-owned subsidiary of The Equitable Companies
Incorporated, were established in conformity with the New York State
Insurance Law. Pursuant to such law, to the extent provided in the applicable
contracts, the net assets in the Funds are not chargeable with liabilities
arising out of any other business of Equitable Life. The excess of assets
over reserves and other contract liabilities amounting to $1,044,875 as shown
in the Statement of Assets and Liabilities in Separate Account No. 4 may be
transferred to Equitable Life's general account.
Separate Account No. 51 was established as of the opening of business on
July 1, 1993, to fund the Association Members Retirement Plan and Trusts.
Interests of retirement and investment plans for Equitable Life employees,
managers, and agents in Separate Account Nos. 3 (Pooled), 4 (Pooled) and 10
(Pooled) aggregated $68,328,503 (20.0%), $246,531,777 (11.6%) and $22,742,258
(6.1%), respectively, at December 31, 1995 and $48,123,292 (15.6%),
$184,086,304 (11.1%) and $20,002,961 (5.1%), respectively, at December 31,
1994, of the net assets in these Funds.
Equitable Life is the investment manager for the Funds. Alliance Capital
Management L.P. (Alliance) serves as the investment adviser to Equitable Life
with respect to the management of Separate Account Nos. 3, 4 and 10 (the
Equitable Funds). Alliance is a publicly-traded limited partnership which is
indirectly majority-owned by Equitable Life.
Separate Account No. 51 has ten investment funds which invest in shares of
corresponding portfolios of The Hudson River Trust (Trust). The Association
Members Retirement Plan and Trusts invest in the following funds of the
account: Global, Conservative Investors and Growth Investors. The Trust is an
open-end, diversified management investment company that invests the assets
of separate accounts of insurance companies. Alliance is the investment
adviser to the Trust.
Equitable Life and Alliance seek to obtain the best price and execution of
all orders placed for the portfolios of the Equitable Funds considering all
circumstances. In addition to using brokers and dealers to execute portfolio
security transactions for accounts under their management, Equitable Life and
Alliance may also enter into other types of business and securities
transactions with brokers and dealers, which will be unrelated to allocation
of the Equitable Funds' portfolio transactions.
2. Security transactions are recorded on the trade date. Amortized cost of
debt securities consists of cost adjusted, where applicable, for amortization
of premium or accretion of discount. Dividend income is recorded on the
ex-dividend date; interest income (including amortization of premium and
discount on securities using the effective yield method) is accrued daily.
Realized gains and losses on the sale of investments are computed on the
basis of the identified cost of the related investments sold. For Separate
Account No. 51, realized gains and losses on investments include gains and
losses on redemptions of the Trust's shares (determined on the identified
cost basis) and capital gain distribution from the Trust. Dividends and
realized gain distributions from The Hudson River Trust are recorded on
ex-date.
Transactions denominated in foreign currencies are recorded at the rate
prevailing at the date of such transactions. Asset and liability accounts
that are denominated in a foreign currency are adjusted to reflect the
current
SAI-44
<PAGE>
SEPARATE ACCOUNT NOS. 3 (POOLED), 4 (POOLED), 10 (POOLED) AND 51 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Notes to Financial Statements (Continued)
exchange rate at the end of period. Transaction gains or losses resulting
from changes in the exchange rate during the reporting period or upon
settlement of the foreign currency transactions are reflected under "Realized
and Unrealized Gain (Loss) on Investments" in the Statements of Operations
and Changes in Net Assets.
Equitable Life's internal short-term investment account, Separate Account
No. 2A, was established to provide a more flexible and efficient vehicle to
combine and invest temporary cash positions of certain eligible accounts
(Participating Funds) under Equitable Life's management. Separate Account No.
2A invests in debt securities maturing in sixty days or less from the date of
acquisition. At December 31, 1995, the amortized cost of investments held in
Separate Account No. 2A consists of the following:
<TABLE>
<CAPTION>
AMORTIZED COST %
- -------------------------------------------------------- -------------- --------
<S> <C> <C>
Certificates of Deposit, 5.80% due 1/31/96 .............. $ 20,000,000 6.7%
Commercial Paper, 5.53%-5.87% due 1/12/96 through
2/23/96 ................................................ 262,329,329 88.0
Time Deposits, 5.875% due 1/2/96 ........................ 800,000 0.3
Variable Rate LIBOR, 5.968% due 1/8/96 .................. 15,000,000 5.0
- -------------------------------------------------------- -------------- --------
Total Investments ....................................... 298,129,329 100.0
Cash and Receivables Less Liabilities ................... 63,333 0.0
- -------------------------------------------------------- -------------- --------
Net Assets of Separate Account No. 2A ................... $298,192,662 100.0%
======================================================== ============== ========
Units Outstanding ....................................... 1,232,756
Unit Value .............................................. $241.89
- -------------------------------------------------------- --------------
</TABLE>
Participating Funds purchase or redeem units depending on each
participating account's excess cash availability or cash needs to meet its
liabilities. Separate Account No. 2A is not subject to investment management
fees. Short-term debt securities may also be purchased directly by the
Equitable Funds.
For 1995 and 1994, investment security transactions, excluding short-term
debt securities, were as follows:
<TABLE>
<CAPTION>
SEPARATE
SEPARATE ACCOUNT NO. 3 ACCOUNT NO. 4
------------------------------ ---------------
COST OF NET PROCEEDS COST OF
PURCHASES OF SALES PURCHASES
- ---------------------------- -------------- -------------- ---------------
<S> <C> <C> <C>
Stocks and long-term
corporate debt securities:
1995 ...................... $460,486,634 $525,937,180 $2,037,876,834
1994 ...................... 314,667,935 272,832,266 1,556,068,225
U.S. Government obligations:
1995 ...................... -- -- --
1994 ...................... -- -- --
- ---------------------------- -------------- -------------- --------------
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
SEPARATE
ACCOUNT NO. 4 SEPARATE ACCOUNT NO. 10
--------------- ------------------------------
NET PROCEEDS COST OF NET PROCEEDS
OF SALES PURCHASES OF SALES
--------------- -------------- --------------
Stocks and long-term
corporate debt securities:
<S> <C> <C> <C>
1995 $2,082,648,235 $374,948,659 $389,169,100
1994 ...................... 1,644,508,525 205,954,001 260,871,268
U.S. Government obligations:
1995 ...................... -- 219,815,471 172,433,013
1994 ...................... -- 153,502,598 195,600,942
- ---------------------------- -------------- -------------- --------------
</TABLE>
No activity is shown for Separate Account No. 51 since it trades
exclusively in shares of corresponding portfolios of The Hudson River Trust.
SAI-45
<PAGE>
SEPARATE ACCOUNT NOS. 3 (POOLED), 4 (POOLED), 10 (POOLED) AND 51 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Notes to Financial Statements (Concluded)
3. Investment securities for the Equitable Funds are valued as follows:
Stocks listed on national securities exchanges and certain
over-the-counter issues traded on the National Association of Securities
Dealers, Inc. Automated Quotation (NASDAQ) national market system are valued
at the last sale price, or, if no sale, at the latest available bid price.
Foreign securities not traded directly, or in American Depository Receipt
(ADR) form in the United States are valued at the last sale price in the
local currency on an exchange in the country of origin. Foreign currency is
converted into its U.S. dollar equivalent at current exchange rates.
United States Treasury securities and other obligations issued or
guaranteed by the United States Government, its agencies or instrumentalities
are valued at representative quoted prices.
Long-term publicly traded corporate bonds are valued at prices obtained
from a bond pricing service of a major dealer in bonds when such prices are
available; however, in circumstances where Equitable Life and Alliance deem
it appropriate to do so, an over-the-counter or exchange quotation may be
used.
Convertible preferred stocks listed on national securities exchanges are
valued at their last sale price or, if there is no sale, at the latest
available bid price.
Convertible bonds and unlisted convertible preferred stocks are valued at
bid prices obtained from one or more major dealers in such securities; where
there is a discrepancy between dealers, values may be adjusted based on
recent premium spreads to the underlying common stock.
Other assets that do not have a readily available market price, are valued
at fair value as determined in good faith by Equitable Life's investment
officers.
The value of the investments of the Global, Conservative Investors and
Growth Investors Funds in the corresponding Hudson River Trust Portfolios is
calculated by multiplying the number of shares held by Separate Account No.
51 in each Portfolio by the net asset value per share of that Portfolio
determined as of the close of business on the same day as the respective unit
values of the Global, Conservative Investors and Growth Investors Funds are
determined.
Separate Account No. 2A is valued daily at amortized cost, which
approximates market value. Short-term debt securities purchased directly by
the Equitable Funds which mature in 60 days or less are valued at amortized
cost. Short-term debt securities which mature in more than 60 days are valued
at representative quoted prices.
4. Charges and fees relating to the Funds are deducted in accordance with
the terms of the various contracts which participate in the Funds. With
respect to the Members Retirement Plan and Trust, these expenses consist of
investment management and accounting fees, program expense charge, direct
expenses and record maintenance and report fees. These charges and fees are
paid to Equitable Life and are recorded as expenses in the accompanying
Statements of Operations and Changes in Net Assets.
5. No Federal income tax based on net income or realized and unrealized
capital gains was applicable to contracts participating in the Funds by
reason of applicable provisions of the Internal Revenue Code and no Federal
income tax payable by Equitable Life will affect such contracts. Accordingly,
no provision for Federal income tax is required.
SAI-46
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholder of
The Equitable Life Assurance Society of the United States
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of earnings, of shareholder's equity and of cash flows
present fairly, in all material respects, the financial position of The
Equitable Life Assurance Society of the United States and its subsidiaries
("Equitable Life") at December 31, 1995 and 1994, and the results of their
operations and their cash flows for each of the three years in the period
ended December 31, 1995, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of Equitable
Life's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
As discussed in Note 2 to the consolidated financial statements, Equitable Life
changed its methods of accounting for loan impairments in 1995, for
postemployment benefits in 1994 and for investment securities in 1993.
PRICE WATERHOUSE LLP
New York, New York
February 7, 1996
SAI-47
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
----------------- -----------------
(IN MILLIONS)
<S> <C> <C>
ASSETS
Investments:
Fixed maturities:
Available for sale, at estimated fair value............................. $ 15,899.9 $ 7,586.0
Held to maturity, at amortized cost..................................... - 5,223.0
Mortgage loans on real estate............................................. 3,638.3 4,018.0
Equity real estate........................................................ 3,916.2 4,446.4
Policy loans.............................................................. 1,976.4 1,731.2
Other equity investments.................................................. 621.1 678.5
Investment in and loans to affiliates..................................... 636.6 560.2
Other invested assets..................................................... 706.1 489.3
----------------- -----------------
Total investments..................................................... 27,394.6 24,732.6
Cash and cash equivalents................................................... 774.7 693.6
Deferred policy acquisition costs........................................... 3,083.3 3,221.1
Amounts due from discontinued GIC Segment................................... 2,097.1 2,108.6
Other assets................................................................ 2,713.1 2,078.6
Closed Block assets......................................................... 8,612.8 8,105.5
Separate Accounts assets.................................................... 24,566.6 20,469.5
----------------- -----------------
TOTAL ASSETS................................................................ $ 69,242.2 $ 61,409.5
================= =================
LIABILITIES
Policyholders' account balances............................................. $ 21,752.6 $ 21,238.0
Future policy benefits and other policyholders' liabilities................. 4,171.8 3,840.8
Short-term and long-term debt............................................... 1,899.3 1,337.4
Other liabilities........................................................... 3,379.5 2,300.1
Closed Block liabilities.................................................... 9,507.2 9,069.5
Separate Accounts liabilities............................................... 24,531.0 20,429.3
----------------- -----------------
Total liabilities..................................................... 65,241.4 58,215.1
----------------- -----------------
Commitments and contingencies (Notes 10, 12, 13, 14 and 15)
SHAREHOLDER'S EQUITY
Common stock, $1.25 par value 2.0 million shares authorized, issued
and outstanding........................................................... 2.5 2.5
Capital in excess of par value.............................................. 2,913.6 2,913.6
Retained earnings........................................................... 781.6 484.0
Net unrealized investment gains (losses).................................... 338.2 (203.0)
Minimum pension liability................................................... (35.1) (2.7)
----------------- -----------------
Total shareholder's equity............................................ 4,000.8 3,194.4
----------------- -----------------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY.................................. $ 69,242.2 $ 61,409.5
================= =================
</TABLE>
See Notes to Consolidated Financial Statements.
SAI-48
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF EARNINGS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
----------------- ----------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
REVENUES
Universal life and investment-type product policy fee
income...................................................... $ 771.0 $ 715.0 $ 644.5
Premiums...................................................... 606.8 625.6 599.1
Net investment income......................................... 2,127.7 2,030.9 2,599.3
Investment gains, net......................................... 5.3 91.8 533.4
Commissions, fees and other income............................ 886.8 845.4 1,717.2
Contribution from the Closed Block............................ 124.4 151.0 128.3
----------------- ----------------- -----------------
Total revenues.......................................... 4,522.0 4,459.7 6,221.8
----------------- ----------------- -----------------
BENEFITS AND OTHER DEDUCTIONS
Interest credited to policyholders' account balances.......... 1,244.2 1,201.3 1,330.0
Policyholders' benefits....................................... 1,011.3 920.6 1,003.9
Other operating costs and expenses............................ 1,856.5 1,943.1 3,584.2
----------------- ----------------- -----------------
Total benefits and other deductions..................... 4,112.0 4,065.0 5,918.1
----------------- ----------------- -----------------
Earnings before Federal income taxes and cumulative
effect of accounting change................................. 410.0 394.7 303.7
Federal income taxes.......................................... 112.4 101.2 91.3
----------------- ----------------- -----------------
Earnings before cumulative effect of accounting change........ 297.6 293.5 212.4
Cumulative effect of accounting change, net of Federal
income taxes................................................ - (27.1) -
----------------- ----------------- -----------------
Net Earnings.................................................. $ 297.6 $ 266.4 $ 212.4
================= ================= =================
</TABLE>
See Notes to Consolidated Financial Statements.
SAI-49
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
----------------- ----------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Common stock, at par value, beginning of year................. $ 2.5 $ 2.5 $ 2.0
Increase in par value......................................... - - .5
----------------- ----------------- -----------------
Common stock, at par value, end of year....................... 2.5 2.5 2.5
----------------- ----------------- -----------------
Capital in excess of par value, beginning of year............. 2,913.6 2,613.6 2,273.9
Additional capital in excess of par value..................... - 300.0 340.2
Increase in par value......................................... - - (.5)
----------------- ----------------- -----------------
Capital in excess of par value, end of year................... 2,913.6 2,913.6 2,613.6
----------------- ----------------- -----------------
Retained earnings, beginning of year.......................... 484.0 217.6 5.2
Net earnings.................................................. 297.6 266.4 212.4
----------------- ----------------- -----------------
Retained earnings, end of year................................ 781.6 484.0 217.6
----------------- ----------------- -----------------
Net unrealized investment (losses) gains, beginning of year... (203.0) 131.9 78.8
Change in unrealized investment gains (losses)................ 541.2 (334.9) (9.5)
Effect of adopting new accounting standard.................... - - 62.6
----------------- ----------------- -----------------
Net unrealized investment gains (losses), end of year......... 338.2 (203.0) 131.9
----------------- ----------------- -----------------
Minimum pension liability, beginning of year.................. (2.7) (15.0) -
Change in minimum pension liability........................... (32.4) 12.3 (15.0)
----------------- ----------------- -----------------
Minimum pension liability, end of year........................ (35.1) (2.7) (15.0)
----------------- ----------------- -----------------
TOTAL SHAREHOLDER'S EQUITY, END OF YEAR....................... $ 4,000.8 $ 3,194.4 $ 2,950.6
================= ================= =================
</TABLE>
See Notes to Consolidated Financial Statements.
SAI-50
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
----------------- ----------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Net earnings.................................................. $ 297.6 $ 266.4 $ 212.4
Adjustments to reconcile net earnings to net cash
provided (used) by operating activities:
Net change in trading activities and broker-dealer
related receivables/payables.............................. - - (4,177.8)
Increase in matched resale agreements....................... - - (2,900.5)
Increase in matched repurchase agreements................... - - 2,900.5
Investment gains, net of dealer and trading gains........... (5.3) (91.8) (160.8)
Change in amounts due from discontinued GIC Segment......... - 57.3 47.8
General Account policy charges.............................. (769.7) (711.9) (623.4)
Interest credited to policyholders' account balances........ 1,244.2 1,201.3 1,330.0
Changes in Closed Block assets and liabilities, net......... (69.6) (95.1) (73.3)
Other, net.................................................. 627.1 7.8 (416.1)
----------------- ----------------- -----------------
Net cash provided (used) by operating activities.............. 1,324.3 634.0 (3,861.2)
----------------- ----------------- -----------------
Cash flows from investing activities:
Maturities and repayments................................... 1,863.1 2,319.7 3,479.6
Sales....................................................... 8,901.4 5,661.9 7,399.2
Return of capital from joint ventures and limited
partnerships.............................................. 65.2 39.0 119.5
Purchases................................................... (11,675.5) (7,417.6) (11,184.2)
Decrease (increase) in loans to discontinued GIC Segment.... 1,226.9 (40.0) (880.0)
Cash received on sale of 61% interest in DLJ................ - - 346.7
Other, net.................................................. (625.5) (371.1) (317.0)
----------------- ----------------- -----------------
Net cash (used) provided by investing activities.............. (244.4) 191.9 (1,036.2)
----------------- ----------------- -----------------
Cash flows from financing activities:
Policyholders' account balances:
Deposits.................................................. 2,414.9 2,082.7 2,410.7
Withdrawals............................................... (2,692.7) (2,887.4) (2,433.5)
Net (decrease) increase in short-term financings............ (16.4) (173.0) 4,717.2
Additions to long-term debt................................. 599.7 51.8 97.7
Repayments of long-term debt................................ (40.7) (199.8) (64.4)
Proceeds from issuance of Alliance units.................... - 100.0 -
Payment of obligation to fund accumulated deficit of
discontinued GIC Segment.................................. (1,215.4) - -
Capital contribution from the Holding Company............... - 300.0 -
Other, net.................................................. (48.2) - -
----------------- ----------------- -----------------
Net cash (used) provided by financing activities.............. (998.8) (725.7) 4,727.7
----------------- ----------------- -----------------
Change in cash and cash equivalents........................... 81.1 100.2 (169.7)
Cash and cash equivalents, beginning of year.................. 693.6 593.4 763.1
----------------- ----------------- -----------------
Cash and Cash Equivalents, End of Year........................ $ 774.7 $ 693.6 $ 593.4
================= ================= =================
Supplemental cash flow information
Interest Paid............................................... $ 89.6 $ 34.9 $ 1,437.2
================= ================= =================
Income Taxes (Refunded) Paid................................ $ (82.7) $ 49.2 $ 41.0
================= ================= =================
</TABLE>
See Notes to Consolidated Financial Statements.
SAI-51
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1) ORGANIZATION
The Equitable Life Assurance Society of the United States ("Equitable
Life") converted to a stock life insurance company on July 22, 1992
and became a wholly owned subsidiary of The Equitable Companies
Incorporated (the "Holding Company"). Equitable Life's insurance
business, which is comprised of an Individual Insurance and Annuities
segment and a Group Pension segment is conducted principally by
Equitable Life and its wholly owned life insurance subsidiary,
Equitable Variable Life Insurance Company ("EVLICO"). Equitable Life's
investment management business, which comprises the Investment
Services segment, is conducted principally by Alliance Capital
Management L.P. ("Alliance"), Equitable Real Estate Investment
Management, Inc. ("EREIM") and Donaldson, Lufkin and Jenrette, Inc.
("DLJ"), an investment banking and brokerage affiliate. AXA, a French
holding company for an international group of insurance and related
financial services companies is the Holding Company's largest
shareholder, owning approximately 60.6% at December 31, 1995 (63.5%
assuming conversion of Series E Convertible Preferred Stock held by
AXA and 54.2% if all securities convertible into, or options on,
common stock were to be converted or exercised).
2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
-----------------------------------------------------
The accompanying consolidated financial statements are prepared in
conformity with generally accepted accounting principles ("GAAP").
The accompanying consolidated financial statements include the accounts
of Equitable Life and its wholly owned life insurance subsidiaries
(collectively, the "Insurance Group"); non-insurance subsidiaries,
principally Alliance, an investment advisory subsidiary and EREIM, a
real estate investment management subsidiary; and those partnerships
and joint ventures in which the Company has control and a majority
economic interest (collectively, including its consolidated
subsidiaries, the "Company"). The consolidated statement of earnings
and cash flow for the year ended December 31, 1993 include the results
of operations and cash flow of DLJ, an investment banking and
brokerage affiliate, on a consolidated basis through December 15, 1993
(see Note 20). Subsequent to that date, DLJ is accounted for on the
equity basis. The Closed Block assets and liabilities and results of
operations are presented in the consolidated financial statements as
single line items (see Note 6). Unless specifically stated, all
disclosures contained herein supporting the consolidated financial
statements exclude the Closed Block related amounts.
The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those
estimates.
All significant intercompany transactions and balances have been
eliminated in consolidation other than intercompany transactions and
balances with the Closed Block and the discontinued Guaranteed
Interest Contract ("GIC") Segment (see Note 7).
Certain reclassifications have been made in the amounts presented for
prior periods to conform these periods with the 1995 presentation.
SAI-52
<PAGE>
Closed Block
------------
As of July 22, 1992, Equitable Life established the Closed Block for
the benefit of certain classes of individual participating policies
for which Equitable Life had a dividend scale payable in 1991 and
which were in force on that date. Assets were allocated to the Closed
Block in an amount which, together with anticipated revenues from
policies included in the Closed Block, was reasonably expected to be
sufficient to support such business, including provision for payment
of claims, certain expenses and taxes, and for continuation of
dividend scales payable in 1991, assuming the experience underlying
such scales continues.
Assets allocated to the Closed Block inure solely to the benefit of
the holders of policies included in the Closed Block and will not
revert to the benefit of the Holding Company. The plan of
demutualization prohibits the reallocation, transfer, borrowing or
lending of assets between the Closed Block and other portions of
Equitable Life's General Account, any of its Separate Accounts or to
any affiliate of Equitable Life without the approval of the New York
Superintendent of Insurance. Closed Block assets and liabilities are
carried on the same basis as similar assets and liabilities held in
the General Account.
The excess of Closed Block liabilities over Closed Block assets
represents the expected future post-tax contribution from the Closed
Block which would be recognized in income over the period the policies
and contracts in the Closed Block remain in force. If the actual
contribution from the Closed Block in any given period equals or
exceeds the expected contribution for such period as determined at the
establishment of the Closed Block, the expected contribution would be
recognized in income for that period. Any excess of the actual
contribution over the expected contribution would also be recognized
in income to the extent that the aggregate expected contribution for
all prior periods exceeded the aggregate actual contribution. Any
remaining excess of actual contribution over expected contributions
would be accrued in the Closed Block as a liability for future
dividends to be paid to the Closed Block policyholders. If, over the
period the policies and contracts in the Closed Block remain in force,
the actual contribution from the Closed Block is less than the
expected contribution from the Closed Block, only such actual
contribution would be recognized in income.
Discontinued Operations
-----------------------
In 1991, the Company's management adopted a plan to discontinue the
business operations of the GIC Segment, consisting of the Guaranteed
Interest Contract and Group Non-Participating Wind-Up Annuities lines
of business. The Company established a pre-tax provision for the
estimated future losses of the GIC line of business and a premium
deficiency reserve for the Group Non-Participating Wind-Up Annuities.
Subsequent losses incurred have been charged to the allowance for
future losses and the premium deficiency reserve. Total allowances are
based upon management's best judgment and there is no assurance that
the ultimate losses will not differ.
Accounting Changes
------------------
In the first quarter of 1995, the Company adopted Statement of
Financial Accounting Standards ("SFAS") No. 114, "Accounting by
Creditors for Impairment of a Loan". This statement applies to all
loans, including loans restructured in a troubled debt restructuring
involving a modification of terms. This statement addresses the
accounting for impairment of a loan by specifying how allowances for
credit losses should be determined. Impaired loans within the scope of
this statement are measured based on the present value of expected
future cash flows discounted at the loan's effective interest rate, at
the loan's observable market price or the fair value of the collateral
if the loan is collateral dependent. The Company provides for
impairment of loans through an allowance for possible losses. The
adoption of this statement did not have a material effect on the level
of these allowances or on the Company's consolidated statements of
earnings and shareholder's equity.
SAI-53
<PAGE>
In the fourth quarter of 1994 (effective as of January 1, 1994), the
Company adopted SFAS No. 112, "Employers' Accounting for
Postemployment Benefits," which required employers to recognize the
obligation to provide postemployment benefits. Implementation of this
statement resulted in a charge for the cumulative effect of accounting
change of $27.1 million, net of a Federal income tax benefit of $14.6
million.
At December 31, 1993, the Company adopted SFAS No. 115, "Accounting
for Certain Investments in Debt and Equity Securities," which expanded
the use of fair value accounting for those securities that a company
does not have positive intent and ability to hold to maturity.
Implementation of this statement increased consolidated shareholder's
equity by $62.6 million, net of deferred policy acquisition costs,
amounts attributable to participating group annuity contracts and
deferred Federal income tax. Beginning coincident with issuance of
SFAS No. 115 implementation guidance in November 1995, the Financial
Accounting Standards Board ("FASB") permitted companies a one-time
opportunity, through December 31, 1995, to reassess the
appropriateness of the classification of all securities held at that
time. On December 1, 1995, the Company transferred $4,794.9 million of
securities classified as held to maturity to the available for sale
portfolio. As a result consolidated shareholder's equity increased by
$126.2 million, net of deferred policy acquisition costs, amounts
attributable to participating group annuity contracts and deferred
Federal income tax.
New Accounting Pronouncements
-----------------------------
In January 1995, the FASB issued SFAS No. 120, "Accounting and
Reporting by Mutual Life Insurance Enterprises and by Insurance
Enterprises for Certain Long-Duration Participating Contracts," which
permits, but does not require, stock life insurance companies with
participating life contracts to account for those contracts in
accordance with Statement of Position No. 95-1, "Accounting for
Certain Insurance Activities of Mutual Life Insurance Enterprises".
The Company has decided to retain the existing methodology to account
for traditional participating policies and, therefore, will not adopt
this statement.
In March 1995, the FASB issued SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed Of," which requires that long-lived assets and certain
identifiable intangibles be reviewed for impairment whenever events or
changes in circumstances indicate the carrying amount of such assets
may not be recoverable. The Company will implement this statement as
of January 1, 1996. The cumulative effect of this accounting change
will be a charge of $23.4 million, net of a Federal income tax benefit
of $12.1 million, due to the writedown to fair value of building
improvements relating to facilities being vacated beginning in 1996.
The Company currently provides allowances for possible losses for
other assets under the scope of this statement. Management has not yet
determined the impact of this statement on assets to be held and used.
In May 1995, the FASB issued SFAS No. 122, "Accounting for Mortgage
Servicing Rights," which requires a mortgage banking enterprise to
recognize rights to service mortgage loans for others as separate
assets however those servicing rights are acquired. It further
requires capitalized mortgage servicing rights be assessed for
impairment based on the fair value of those rights. The Company will
implement this statement as of January 1, 1996. Implementation of this
statement will not have a material effect on the Company's
consolidated financial statements.
In October 1995, the FASB issued SFAS No. 123, "Accounting for
Stock-Based Compensation". This statement defines a fair value based
method of accounting for stock-based employee compensation plans while
continuing to allow an entity to measure compensation cost for such
plans using the intrinsic value based method of accounting. Management
has decided to retain the current compensation cost methodology
prescribed by Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees".
SAI-54
<PAGE>
Valuation of Investments
------------------------
Fixed maturities, which the Company has both the ability and the
intent to hold to maturity, are stated principally at amortized cost.
Fixed maturities identified as available for sale are reported at
estimated fair value. The amortized cost of fixed maturities is
adjusted for impairments in value deemed to be other than temporary.
Mortgage loans on real estate are stated at unpaid principal balances,
net of unamortized discounts and valuation allowances. Effective with
the adoption of SFAS No. 114 on January 1, 1995, the valuation
allowances are based on the present value of expected future cash
flows discounted at the loan's original effective interest rate or the
collateral value if the loan is collateral dependent. However, if
foreclosure is or becomes probable, the measurement method used is
collateral value. Prior to the adoption of SFAS No. 114, the valuation
allowances were based on losses expected by management to be realized
on transfers of mortgage loans to real estate (upon foreclosure or
in-substance foreclosure), on the disposition or settlement of
mortgage loans and on mortgage loans management believed may not be
collectible in full. In establishing valuation allowances, management
previously considered, among other things the estimated fair value of
the underlying collateral.
Real estate, including real estate acquired in satisfaction of debt,
is stated at depreciated cost less valuation allowances. At the date
of foreclosure (including in-substance foreclosure), real estate
acquired in satisfaction of debt is valued at estimated fair value.
Valuation allowances on real estate held for the production of income
are computed using the forecasted cash flows of the respective
properties discounted at a rate equal to the Company's cost of funds;
valuation allowances on real estate available for sale are computed
using the lower of current estimated fair value, net of disposition
costs, or depreciated cost.
Policy loans are stated at unpaid principal balances.
Partnerships and joint venture interests in which the Company does not
have control and a majority economic interest are reported on the
equity basis of accounting and are included either with equity real
estate or other equity investments, as appropriate.
Common stocks are carried at estimated fair value and are included in
other equity investments.
Short-term investments are stated at amortized cost which approximates
fair value and are included with other invested assets.
Cash and cash equivalents includes cash on hand, amounts due from
banks and highly liquid debt instruments purchased with an original
maturity of three months or less.
All securities are recorded in the consolidated financial statements
on a trade date basis.
Investment Results and Unrealized Investment Gains (Losses)
-----------------------------------------------------------
Net investment income and realized investment gains and losses
(collectively, "investment results") related to certain participating
group annuity contracts are passed through to the contractholders as
interest credited to policyholders' account balances.
Realized investment gains and losses are determined by specific
identification and are presented as a component of revenue. Valuation
allowances are netted against the asset categories to which they apply
and changes in the valuation allowances are included in investment
gains or losses.
Unrealized investment gains and losses on fixed maturities available
for sale and equity securities held by the Company are accounted for
as a separate component of shareholder's equity, net of related
deferred Federal income taxes, amounts attributable to the
discontinued GIC Segment, Closed Block, participating group annuity
contracts and deferred policy acquisition costs related to universal
life and investment-type products.
SAI-55
<PAGE>
Recognition of Insurance Income and Related Expenses
----------------------------------------------------
Premiums from universal life and investment-type contracts are
reported as deposits to policyholders' account balances. Revenues from
these contracts consist of amounts assessed during the period against
policyholders' account balances for mortality charges, policy
administration charges and surrender charges. Policy benefits and
claims that are charged to expense include benefit claims incurred in
the period in excess of related policyholders' account balances.
Premiums from traditional life and annuity policies with life
contingencies generally are recognized as income when due. Benefits
and expenses are matched with such income so as to result in the
recognition of profits over the life of the contracts. This match is
accomplished by means of the provision for liabilities for future
policy benefits and the deferral and subsequent amortization of policy
acquisition costs.
For contracts with a single premium or a limited number of premium
payments due over a significantly shorter period than the total period
over which benefits are provided, premiums are recorded as income when
due with any excess profit deferred and recognized in income in a
constant relationship to insurance in force or, for annuities, the
amount of expected future benefit payments.
Premiums from individual health contracts are recognized as income
over the period to which the premiums relate in proportion to the
amount of insurance protection provided.
Deferred Policy Acquisition Costs
---------------------------------
The costs of acquiring new business, principally commissions,
underwriting, agency and policy issue expenses, all of which vary with
and are primarily related to the production of new business, are
deferred. Deferred policy acquisition costs are subject to
recoverability testing at the time of policy issue and loss
recognition testing at the end of each accounting period.
For universal life products and investment-type products, deferred
policy acquisition costs are amortized over the expected average life
of the contracts (periods ranging from 15 to 35 years and 5 to 17
years, respectively) as a constant percentage of estimated gross
profits arising principally from investment results, mortality and
expense margins and surrender charges based on historical and
anticipated future experience, updated at the end of each accounting
period. The effect on the amortization of deferred policy acquisition
costs of revisions to estimated gross profits is reflected in earnings
in the period such estimated gross profits are revised. The effect on
the deferred policy acquisition cost asset that would result from
realization of unrealized gains (losses) is recognized with an offset
to unrealized gains (losses) in consolidated shareholder's equity as
of the balance sheet date.
For traditional life and annuity policies with life contingencies,
deferred policy acquisition costs are amortized in proportion to
anticipated premiums. Assumptions as to anticipated premiums are
estimated at the date of policy issue and are consistently applied
during the life of the contracts. Deviations from estimated experience
are reflected in earnings in the period such deviations occur. For
these contracts, the amortization periods generally are for the
estimated life of the policy.
For individual health benefit insurance, deferred policy acquisition
costs are amortized over the expected average life of the contracts
(10 years for major medical policies and 20 years for disability
income products) in proportion to anticipated premium revenue at time
of issue.
Policyholders' Account Balances and Future Policy Benefits
----------------------------------------------------------
Policyholders' account balances for universal life and investment-type
contracts are equal to the policy account values. The policy account
values represent an accumulation of gross premium payments plus
credited interest less expense and mortality charges and withdrawals.
SAI-56
<PAGE>
For traditional life insurance policies, future policy benefit and
dividend liabilities are estimated using a net level premium method on
the basis of actuarial assumptions as to mortality, persistency and
interest established at policy issue. Assumptions established at
policy issue as to mortality and persistency are based on the
Insurance Group's experience which, together with interest and expense
assumptions, provide a margin for adverse deviation. When the
liabilities for future policy benefits plus the present value of
expected future gross premiums for a product are insufficient to
provide for expected future policy benefits and expenses for that
product, deferred policy acquisition costs are written off and
thereafter, if required, a premium deficiency reserve is established
by a charge to earnings. Benefit liabilities for traditional annuities
during the accumulation period are equal to accumulated
contractholders' fund balances and after annuitization are equal to
the present value of expected future payments. Interest rates used in
establishing such liabilities range from 2.25% to 11.5% for life
insurance liabilities and from 2.25% to 13.5% for annuity liabilities.
Individual health benefit liabilities for active lives are estimated
using the net level premium method, and assumptions as to future
morbidity, withdrawals and interest which provide a margin for adverse
deviation. Benefit liabilities for disabled lives are estimated using
the present value of benefits method and experience assumptions as to
claim terminations, expenses and interest.
Claim reserves and associated liabilities for individual disability
income and major medical policies were $639.6 million, $570.6 million
at December 31, 1995 and 1994, respectively. Incurred benefits
(benefits paid plus changes in claim reserves) and benefits paid for
individual disability income and major medical policies are summarized
as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Incurred benefits related to current year.......... $ 176.0 $ 188.6 $ 193.1
Incurred benefits related to prior years........... 67.8 28.7 106.1
----------------- ---------------- -----------------
Total Incurred Benefits............................ $ 243.8 $ 217.3 $ 299.2
================= ================ =================
Benefits paid related to current year.............. $ 37.0 $ 43.7 $ 48.9
Benefits paid related to prior years............... 137.8 132.3 123.1
----------------- ---------------- -----------------
Total Benefits Paid................................ $ 174.8 $ 176.0 $ 172.0
================= ================ =================
</TABLE>
The amount of policyholders' dividends to be paid (including those on
policies included in the Closed Block) is determined annually by
Equitable Life's Board of Directors. The aggregate amount of
policyholders' dividends is related to actual interest, mortality,
morbidity and expense experience for the year and judgment as to the
appropriate level of statutory surplus to be retained by Equitable
Life.
Equitable Life is subject to limitations on the amount of statutory
profits which can be retained with respect to certain classes of
individual participating policies that were in force on July 22, 1992
which are not included in the Closed Block and with respect to
participating policies issued subsequent to July 22, 1992. Excess
statutory profits, if any, will be distributed over time to such
policyholders and will not be available to Equitable Life's
shareholder. Earnings in excess of limitations are accrued as
policyholders' dividends.
At December 31, 1995, participating policies including those in the
Closed Block represent approximately 27.2% ($58.4 billion) of directly
written life insurance in force, net of amounts ceded. Participating
policies represent primarily all of the premium income as reflected in
the consolidated statements of earnings and in the results of the
Closed Block.
SAI-57
<PAGE>
Federal Income Taxes
--------------------
Equitable Life and its life insurance and non-life insurance
subsidiaries file a consolidated Federal income tax return with the
Holding Company and its non-life insurance subsidiaries. Current
Federal income taxes are charged or credited to operations based upon
amounts estimated to be payable or recoverable as a result of taxable
operations for the current year. Deferred income tax assets and
liabilities are recognized based on the difference between financial
statement carrying amounts and income tax bases of assets and
liabilities using enacted income tax rates and laws.
Separate Accounts
-----------------
Separate Accounts are established in conformity with the New York
State Insurance Law and generally are not chargeable with liabilities
that arise from any other business of the Insurance Group. Separate
Accounts assets are subject to General Account claims only to the
extent the value of such assets exceeds the Separate Accounts
liabilities.
Assets and liabilities of the Separate Accounts, representing net
deposits and accumulated net investment earnings less fees, held
primarily for the benefit of contractholders, and for which the
Insurance Group does not bear the investment risk, are shown as
separate captions in the consolidated balance sheets. The Insurance
Group bears the investment risk on assets held in one Separate
Account, therefore, such assets are carried on the same basis as
similar assets held in the General Account portfolio. Assets held in
the other Separate Accounts are carried at quoted market values or,
where quoted values are not available, at estimated fair values as
determined by the Insurance Group.
The investment results of Separate Accounts on which the Insurance
Group does not bear the investment risk are reflected directly in
Separate Accounts liabilities. For the years ended December 31, 1995,
1994 and 1993, investment results of such Separate Accounts were
$1,956.3 million, $676.3 million and $1,676.5 million, respectively.
Deposits to all Separate Accounts are reported as increases in
Separate Accounts liabilities and are not reported in revenues.
Mortality, policy administration and surrender charges on all Separate
Accounts are included in revenues.
SAI-58
<PAGE>
3) INVESTMENTS
The following tables provide additional information relating to fixed
maturities and equity securities:
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED ESTIMATED
COST GAINS LOSSES FAIR VALUE
----------------- ----------------- ---------------- ---------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
DECEMBER 31, 1995
Fixed Maturities:
Available for Sale:
Corporate.......................... $ 10,910.7 $ 617.6 $ 118.1 $ 11,410.2
Mortgage-backed.................... 1,838.0 31.2 1.2 1,868.0
U.S. Treasury securities and
U.S. government and
agency securities................ 2,257.0 77.8 4.1 2,330.7
States and political subdivisions.. 45.7 5.2 - 50.9
Foreign governments................ 124.5 11.0 .2 135.3
Redeemable preferred stock......... 108.1 5.3 8.6 104.8
----------------- ----------------- ---------------- ---------------
Total Available for Sale............... $ 15,284.0 $ 748.1 $ 132.2 $ 15,899.9
================= ================= ================ ===============
Equity Securities:
Common stock......................... $ 97.3 $ 49.1 $ 18.0 $ 128.4
================= ================= ================ ===============
December 31, 1994
Fixed Maturities:
Available for Sale:
Corporate.......................... $ 5,663.4 $ 34.6 $ 368.0 $ 5,330.0
Mortgage-backed.................... 686.0 2.9 44.8 644.1
U.S. Treasury securities and
U.S. government and
agency securities................ 1,519.3 6.7 71.9 1,454.1
States and political subdivisions.. 23.4 .1 .7 22.8
Foreign governments................ 43.8 .3 4.2 39.9
Redeemable preferred stock......... 108.4 .4 13.7 95.1
----------------- ----------------- ---------------- ---------------
Total Available for Sale............... $ 8,044.3 $ 45.0 $ 503.3 $ 7,586.0
================= ================= ================ ===============
Held to Maturity:
Corporate.......................... $ 4,661.0 $ 67.9 $ 233.8 $ 4,495.1
U.S. Treasury securities and
U.S. government and
agency securities................ 428.9 4.6 44.2 389.3
States and political subdivisions.. 63.4 .9 3.7 60.6
Foreign governments................ 69.7 4.2 2.0 71.9
================= ================= ================ ===============
Total Held to Maturity................. $ 5,223.0 $ 77.6 $ 283.7 $ 5,016.9
================= ================= ================ ===============
Equity Securities:
Common stock......................... $ 126.4 $ 31.2 $ 23.5 $ 134.1
================= ================= ================ ===============
</TABLE>
SAI-59
<PAGE>
For publicly traded fixed maturities and equity securities, estimated
fair value is determined using quoted market prices. For fixed
maturities without a readily ascertainable market value, the Company
has determined an estimated fair value using a discounted cash flow
approach, including provisions for credit risk, generally based upon
the assumption that such securities will be held to maturity.
Estimated fair value for equity securities, substantially all of which
do not have a readily ascertainable market value, has been determined
by the Company. Such estimated fair values do not necessarily
represent the values for which these securities could have been sold
at the dates of the consolidated balance sheets. At December 31, 1995
and 1994, securities without a readily ascertainable market value
having an amortized cost of $3,748.9 million and $3,980.4 million,
respectively, had estimated fair values of $3,981.8 million and
$3,858.7 million, respectively.
The contractual maturity of bonds at December 31, 1995 is shown below:
<TABLE>
<CAPTION>
AVAILABLE FOR SALE
------------------------------------
AMORTIZED ESTIMATED
COST FAIR VALUE
---------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Due in one year or less................................................ $ 357.9 $ 360.0
Due in years two through five.......................................... 3,773.1 3,847.1
Due in years six through ten........................................... 4,709.8 4,821.8
Due after ten years.................................................... 4,497.1 4,898.2
Mortgage-backed securities............................................. 1,838.0 1,868.0
---------------- -----------------
Total.................................................................. $ 15,175.9 $ 15,795.1
================ =================
</TABLE>
Bonds not due at a single maturity date have been included in the
above table in the year of final maturity. Actual maturities will
differ from contractual maturities because borrowers may have the
right to call or prepay obligations with or without call or prepayment
penalties.
Investment valuation allowances and changes thereto are shown below:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Balances, beginning of year........................ $ 284.9 $ 355.6 $ 512.0
Additions charged to income........................ 136.0 51.0 92.8
Deductions for writedowns and asset dispositions... (95.6) (121.7) (249.2)
----------------- ---------------- -----------------
Balances, End of Year.............................. $ 325.3 $ 284.9 $ 355.6
================= ================ =================
Balances, end of year comprise:
Mortgage loans on real estate.................... $ 65.5 $ 64.2 $ 144.4
Equity real estate............................... 259.8 220.7 211.2
----------------- ---------------- -----------------
Total.............................................. $ 325.3 $ 284.9 $ 355.6
================= ================ =================
</TABLE>
Deductions for writedowns and asset dispositions for 1993 include an
$87.1 million writedown of fixed maturity investments at December 31,
1993 as a result of adopting a new accounting statement for the
valuation of these investments that requires specific writedowns
instead of valuation allowances.
At December 31, 1995, the carrying values of investments held for the
production of income which were non-income producing for the twelve
months preceding the consolidated balance sheet date were $37.2
million of fixed maturities and $84.7 million of mortgage loans on
real estate.
SAI-60
<PAGE>
The Insurance Group's fixed maturity investment portfolio includes
corporate high yield securities consisting of public high yield bonds,
redeemable preferred stocks and directly negotiated debt in leveraged
buyout transactions. The Insurance Group seeks to minimize the higher
than normal credit risks associated with such securities by monitoring
the total investments in any single issuer or total investment in a
particular industry group. Certain of these corporate high yield
securities are classified as other than investment grade by the
various rating agencies, i.e., a rating below Baa or National
Association of Insurance Commissioners ("NAIC") designation of 3
(medium grade), 4 or 5 (below investment grade) or 6 (in or near
default). At December 31, 1995, approximately 15.57% of the $15,139.9
million aggregate amortized cost of bonds held by the Insurance Group
were considered to be other than investment grade.
In addition to its holdings of corporate high yield securities, the
Insurance Group is an equity investor in limited partnership interests
which primarily invest in securities considered to be other than
investment grade.
The Company has restructured or modified the terms of certain fixed
maturity investments. The fixed maturity portfolio, based on amortized
cost, includes $15.9 million and $30.5 million at December 31, 1995
and 1994, respectively, of such restructured securities. These amounts
include fixed maturities which are in default as to principal and/or
interest payments, are to be restructured pursuant to commenced
negotiations or where the borrowers went into bankruptcy subsequent to
acquisition (collectively, "problem fixed maturities") of $1.6 million
and $9.7 million as of December 31, 1995 and 1994, respectively. Gross
interest income that would have been recorded in accordance with the
original terms of restructured fixed maturities amounted to $3.0
million, $7.5 million and $11.7 million in 1995, 1994 and 1993,
respectively. Gross interest income on these fixed maturities included
in net investment income aggregated $2.9 million, $6.8 million and
$9.7 million in 1995, 1994 and 1993, respectively.
At December 31, 1995 and 1994, mortgage loans on real estate with
scheduled payments 60 days (90 days for agricultural mortgages) or
more past due or in foreclosure (collectively, "problem mortgage loans
on real estate") had an amortized cost of $87.7 million (2.4% of total
mortgage loans on real estate) and $96.9 million (2.3% of total
mortgage loans on real estate), respectively.
The payment terms of mortgage loans on real estate may from time to
time be restructured or modified. The investment in restructured
mortgage loans on real estate, based on amortized cost, amounted to
$531.5 million and $447.9 million at December 31, 1995 and 1994,
respectively. These amounts include $3.8 million and $1.0 million of
problem mortgage loans on real estate at December 31, 1995 and 1994,
respectively. Gross interest income on restructured mortgage loans on
real estate that would have been recorded in accordance with the
original terms of such loans amounted to $52.1 million, $44.9 million
and $51.8 million in 1995, 1994 and 1993, respectively. Gross interest
income on these loans included in net investment income aggregated
$37.4 million, $32.8 million and $46.0 million in 1995, 1994 and 1993,
respectively.
Impaired mortgage loans (as defined under SFAS No. 114) along with the
related provision for losses were as follows:
<TABLE>
<CAPTION>
December 31, 1995
-------------------
(IN MILLIONS)
<S> <C>
Impaired mortgage loans with provision for losses....................................... $ 310.1
Impaired mortgage loans with no provision for losses.................................... 160.8
-------------------
Recorded investment in impaired mortgage loans.......................................... 470.9
Provision for losses.................................................................... 62.7
-------------------
Net Impaired Mortgage Loans............................................................. $ 408.2
===================
</TABLE>
SAI-61
<PAGE>
Impaired mortgage loans with no provision for losses are loans where
the fair value of the collateral or the net present value of the loan
equals or exceeds the recorded investment. Interest income earned on
loans where the collateral value is used to measure impairment is
recorded on a cash basis. Interest income on loans where the present
value method is used to measure impairment is accrued on the net
carrying value amount of the loan at the interest rate used to
discount the cash flows. Changes in the present value attributable to
changes in the amount or timing of expected cash flows are reported as
investment gains or losses.
During the year ended December 31, 1995, the Company's average
recorded investment in impaired mortgage loans was $429.0 million.
Interest income recognized on these impaired mortgage loans totaled
$27.9 million for the year ended December 31, 1995, including $13.4
million recognized on a cash basis.
At December 31, 1995, investments owned of any one issuer, including
its affiliates, for which the aggregate carrying values are 10% or
more of total shareholders' equity, were $508.3 million relating to
Trammell Crow and affiliates (including holdings of the Closed Block
and the discontinued GIC Segment). The amount includes restructured
mortgage loans on real estate with an amortized cost of $152.4
million. A $294.0 million commercial loan package which was in
bankruptcy at the beginning of the year was resolved in 1995, with
part of the package reclassified as restructured and the remainder
reclassified as equity real estate.
The Insurance Group's investment in equity real estate is through
direct ownership and through investments in real estate joint
ventures. At December 31, 1995 and 1994, the carrying value of equity
real estate available for sale amounted to $255.5 million and $447.8
million, respectively. For the years ended December 31, 1995, 1994 and
1993, respectively, real estate of $35.3 million, $189.8 million and
$261.8 million was acquired in satisfaction of debt. At December 31,
1995 and 1994, the Company owned $862.7 million and $1,086.9 million,
respectively, of real estate acquired in satisfaction of debt.
Depreciation of real estate is computed using the straight-line method
over the estimated useful lives of the properties, which generally
range from 40 to 50 years. Accumulated depreciation on real estate was
$662.4 million and $703.1 million at December 31, 1995 and 1994,
respectively. Depreciation expense on real estate totaled $121.7
million, $117.0 million and $115.3 million for the years ended
December 31, 1995, 1994 and 1993, respectively.
SAI-62
<PAGE>
4) JOINT VENTURES AND PARTNERSHIPS
Summarized combined financial information of real estate joint
ventures (38 and 47 individual ventures as of December 31, 1995 and
1994, respectively) and of limited partnership interests accounted for
under the equity method, in which the Company has an investment of
$10.0 million or greater and an equity interest of 10% or greater is
as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------
1995 1994
---------------- -----------------
(IN MILLIONS)
<S> <C> <C>
FINANCIAL POSITION
Investments in real estate, at depreciated cost........................ $ 2,684.1 $ 2,786.7
Investments in securities, generally at estimated fair value........... 2,459.8 3,071.2
Cash and cash equivalents.............................................. 489.1 359.8
Other assets........................................................... 270.8 398.7
---------------- -----------------
Total assets........................................................... 5,903.8 6,616.4
---------------- -----------------
Borrowed funds - third party........................................... 1,782.3 1,759.6
Borrowed funds - the Company........................................... 220.5 238.0
Other liabilities...................................................... 593.9 987.7
---------------- -----------------
Total liabilities...................................................... 2,596.7 2,985.3
---------------- -----------------
Partners' Capital...................................................... $ 3,307.1 $ 3,631.1
================ =================
Equity in partners' capital included above............................. $ 902.2 $ 964.2
Equity in limited partnership interests not included above............. 212.8 224.6
Excess (deficit) of equity in partners' capital over investment cost
and equity earnings.................................................. 3.6 (1.8)
Notes receivable from joint venture.................................... 5.3 6.1
---------------- -----------------
Carrying Value......................................................... $ 1,123.9 $ 1,193.1
================ =================
</TABLE>
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
STATEMENTS OF EARNINGS
Revenues of real estate joint ventures............. $ 463.5 $ 537.7 $ 602.7
Revenues of other limited partnership interests.... 242.3 103.4 319.1
Interest expense - third party..................... (135.3) (114.9) (118.8)
Interest expense - the Company..................... (41.0) (36.9) (52.1)
Other expenses..................................... (397.7) (430.9) (531.7)
----------------- ---------------- -----------------
Net Earnings....................................... $ 131.8 $ 58.4 $ 219.2
================= ================ =================
Equity in net earnings included above.............. $ 49.1 $ 18.9 $ 71.6
Equity in net earnings of limited partnerships
interests not included above..................... 44.8 25.3 46.3
Excess of earnings in joint ventures over equity
ownership percentage and amortization of
differences in bases............................. .9 1.8 9.2
Interest on notes receivable....................... .1 - .5
----------------- ---------------- -----------------
Total Equity in Net Earnings....................... $ 94.9 $ 46.0 $ 127.6
================= ================ =================
</TABLE>
SAI-63
<PAGE>
5) NET INVESTMENT INCOME AND INVESTMENT GAINS (LOSSES)
The sources of net investment income are summarized as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Fixed maturities................................... $ 1,151.0 $ 1,024.5 $ 981.7
Trading account securities......................... - - 709.3
Securities purchased under resale agreements....... - - 533.8
Mortgage loans on real estate...................... 329.0 384.3 457.4
Equity real estate................................. 560.4 561.8 539.1
Other equity investments........................... 76.9 35.7 110.4
Policy loans....................................... 144.4 122.7 117.0
Broker-dealer related receivables.................. - - 292.2
Other investment income............................ 279.7 336.3 304.9
----------------- ---------------- -----------------
Gross investment income.......................... 2,541.4 2,465.3 4,045.8
----------------- ---------------- -----------------
Interest expense to finance short-term trading
instruments...................................... - - 983.4
Other investment expenses.......................... 413.7 434.4 463.1
----------------- ---------------- -----------------
Investment expenses.............................. 413.7 434.4 1,446.5
----------------- ---------------- -----------------
Net Investment Income.............................. $ 2,127.7 $ 2,030.9 $ 2,599.3
================= ================ =================
</TABLE>
Investment gains (losses), net, including changes in the valuation
allowances, are summarized as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Fixed maturities................................... $ 119.9 $ (14.1) $ 123.1
Mortgage loans on real estate...................... (40.2) (43.1) (65.1)
Equity real estate................................. (86.6) 20.6 (18.5)
Other equity investments........................... 12.8 76.0 119.5
Dealer and trading gains........................... - - 372.5
Sales of newly issued Alliance Units............... - 52.4 -
Other.............................................. (.6) - 1.9
----------------- ---------------- -----------------
Investment Gains, Net.............................. $ 5.3 $ 91.8 $ 533.4
================= ================ =================
</TABLE>
Writedowns of fixed maturities amounted to $46.7 million, $30.8
million and $5.4 million for the years ended December 31, 1995, 1994
and 1993, respectively.
For the years ended December 31, 1995 and 1994, respectively, proceeds
received on sales of fixed maturities classified as available for sale
amounted to $8,206.0 million and $5,253.9 million. Gross gains of
$211.4 million and $65.2 million and gross losses of $64.2 million and
$50.8 million, respectively, were realized on these sales. The change
in unrealized investment gains (losses) related to fixed maturities
classified as available for sale for the years ended December 31, 1995
and 1994 amounted to $1,077.2 million and $(742.2) million,
respectively.
Gross gains of $188.5 million and gross losses of $145.0 million were
realized on sales of investments in fixed maturities held for
investment and available for sale for the year ended December 31,
1993.
SAI-64
<PAGE>
During each of the years ended December 31, 1995 and 1994, one
security classified as held to maturity was sold and during the eleven
months ended November 30, 1995 and the year ended December 31, 1994,
respectively, twelve and six securities so classified were transferred
to the available for sale portfolio. All actions were taken as a
result of a significant deterioration in creditworthiness. The
aggregate amortized cost of the securities sold were $1.0 million and
$19.9 million with a related investment gain of $-0- million and $.8
million recognized in 1995 and 1994, respectively; the aggregate
amortized cost of the securities transferred was $116.0 million and
$42.8 million with gross unrealized investment losses of $3.2 million
and $3.1 million charged to consolidated shareholders' equity for the
eleven months ended November 30, 1995 and the year ended December 31,
1994, respectively. On December 1, 1995, the Company transferred
$4,794.9 million of securities classified as held to maturity to the
available for sale portfolio. As a result, unrealized gains on fixed
maturities increased $307.0 million, offset by deferred policy
acquisition costs of $73.7 million, amounts attributable to
participating group annuity contracts of $39.2 million and deferred
Federal income tax of $67.9 million.
Investment gains from other equity investments for the year ended
December 31, 1993, included $79.9 million generated by DLJ's
involvement in long-term corporate development investments.
For the years ended December 31, 1995, 1994 and 1993, investment
results passed through to certain participating group annuity
contracts as interest credited to policyholders' account balances
amounted to $131.2 million, $175.8 million and $243.2 million,
respectively.
During 1995, Alliance entered into an agreement to acquire the
business of Cursitor-Eaton Asset Management Company and Cursitor
Holdings Limited (collectively, "Cursitor") for approximately $141.5
million consisting of $84.9 million in cash, 1,764,115 of Alliance's
publicly traded units ("Alliance Units"), 6% notes aggregating $21.5
million payable ratably over four years, and substantial additional
consideration which will be determined at a later date. The
transaction, which is expected to be completed during the first
quarter of 1996, is subject to the receipt of consents, regulatory
approvals, and certain other closing conditions, including client
approval of the transfer of Cursitor accounts. Upon completion of this
transaction, the Company's ownership percentage of Alliance will be
reduced.
In 1994, Alliance sold 4.96 million newly issued Alliance Units to
third parties at prevailing market prices. The sales decreased the
Company's ownership of Alliance's Units from 63.2% to 59.2%. In
addition, the Company continues to hold its 1% general partnership
interest in Alliance. The Company recognized an investment gain of
$52.4 million as a result of these transactions.
The Company's ownership interest in Alliance will be further reduced
upon the exercise of options granted to certain Alliance employees. At
December 31, 1995, Alliance had options outstanding to purchase an
aggregate of 4.8 million Alliance Units at a price ranging from
$6.0625 to $22.25 per unit. Options are exercisable at a rate of 20%
on each of the first five anniversary dates from the date of grant.
Net unrealized investment gains (losses), included in the consolidated
balance sheets as a component of equity and the changes for the
corresponding years, are summarized as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Balance, beginning of year......................... $ (203.0) $ 131.9 $ 78.8
Changes in unrealized investment (losses) gains.... 1,117.7 (823.8) (14.1)
Effect of adopting SFAS No. 115.................... - - 283.9
Changes in unrealized investment (gains)
losses attributable to:
Participating group annuity contracts.......... (78.1) 40.8 (36.2)
Deferred policy acquisition costs.............. (208.4) 269.5 (150.5)
Deferred Federal income taxes.................. (290.0) 178.6 (30.0)
----------------- ---------------- -----------------
Balance, End of Year............................... $ 338.2 $ (203.0) $ 131.9
================= ================ =================
</TABLE>
SAI-65
<PAGE>
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Balance, end of year comprises:
Unrealized investment (losses) gains on:
Fixed maturities............................... $ 615.9 $ (461.3) $ 283.9
Other equity investments....................... 31.1 7.7 75.8
Other.......................................... 31.6 14.5 25.0
----------------- ---------------- -----------------
Total........................................ 678.6 (439.1) 384.7
Amounts of unrealized investment (gains)
losses attributable to:
Participating group annuity contracts........ (72.2) 5.9 (34.9)
Deferred policy acquisition costs............ (89.4) 119.0 (150.5)
Deferred Federal income taxes................ (178.8) 111.2 (67.4)
----------------- ---------------- -----------------
Total.............................................. $ 338.2 $ (203.0) $ 131.9
================= ================ =================
</TABLE>
6) CLOSED BLOCK
Summarized financial information of the Closed Block follows:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------
1995 1994
----------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Assets
Fixed Maturities:
Available for sale, at estimated fair value (amortized cost,
$3,662.8 and $1,270.3)........................................... $ 3,896.2 $ 1,197.0
Held to maturity, at amortized cost (estimated fair value of
$1,785.0 in 1994)................................................ - 1,927.8
Mortgage loans on real estate........................................ 1,368.8 1,543.7
Policy loans......................................................... 1,797.2 1,827.9
Cash and other invested assets....................................... 440.9 442.5
Deferred policy acquisition costs.................................... 823.6 878.1
Other assets......................................................... 286.1 288.5
----------------- -----------------
Total Assets......................................................... $ 8,612.8 $ 8,105.5
================= =================
Liabilities
Future policy benefits and policyholders' account balances........... $ 9,346.7 $ 8,965.3
Other liabilities.................................................... 160.5 104.2
----------------- -----------------
Total Liabilities.................................................... $ 9,507.2 $ 9,069.5
================= =================
</TABLE>
SAI-66
<PAGE>
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Revenues
Premiums and other revenue......................... $ 753.4 $ 798.1 $ 860.2
Investment income (net of investment
expenses of $26.7, $19.0 and $17.3).............. 538.9 523.0 526.5
Investment losses, net............................. (20.2) (24.0) (15.0)
----------------- ---------------- -----------------
Total revenues............................... 1,272.1 1,297.1 1,371.7
----------------- ---------------- -----------------
Benefits and Other Deductions
Policyholders' benefits and dividends.............. 1,085.1 1,075.6 1,141.4
Other operating costs and expenses................. 62.6 70.5 102.0
----------------- ---------------- -----------------
Total benefits and other deductions.......... 1,147.7 1,146.1 1,243.4
----------------- ---------------- -----------------
Contribution from the Closed Block................. $ 124.4 $ 151.0 $ 128.3
================= ================ =================
</TABLE>
The fixed maturity portfolio, based on amortized cost, includes $4.3
million and $23.8 million at December 31, 1995 and 1994, respectively,
of restructured securities which includes problem fixed maturities of
$1.9 million and $6.4 million, respectively.
During the eleven months ended November 30, 1995, one security
classified as held to maturity was sold and ten securities classified
as held to maturity were transferred to the available for sale
portfolio. All actions resulted from a significant deterioration in
creditworthiness. The amortized cost of the security sold was $4.2
million. The aggregate amortized cost of the securities transferred
was $81.3 million with gross unrealized investment losses of $.1
million transferred to equity. At December 1, 1995, $1,750.7 million
of securities classified as held to maturity were transferred to the
available for sale portfolio. As a result, unrealized gains of $88.5
million on fixed maturities were recognized and offset by an increase
to the deferred dividend liability. Implementation of SFAS No. 115 for
the valuation of fixed maturities at December 31, 1993 resulted in the
recognition of a deferred dividend liability of $49.6 million.
At December 31, 1995 and 1994, problem mortgage loans on real estate
had an amortized cost of $36.5 million and $27.6 million,
respectively, and mortgage loans on real estate for which the payment
terms have been restructured had an amortized cost of $137.7 million
and $179.2 million, respectively. At December 31, 1995 and 1994, the
restructured mortgage loans on real estate amount included $8.8
million and $.7 million, respectively, of problem mortgage loans on
real estate.
Valuation allowances amounted to $18.4 million and $46.2 million on
mortgage loans on real estate and $4.3 million and $2.6 million on
equity real estate at December 31, 1995 and 1994, respectively.
Writedowns of fixed maturities amounted to $16.8 million and $15.9
million and $1.7 million for the years ended December 31, 1995, 1994
and 1993, respectively.
Many expenses related to Closed Block operations are charged to
operations outside of the Closed Block; accordingly, the contribution
from the Closed Block does not represent the actual profitability of
the Closed Block operations. Operating costs and expenses outside of
the Closed Block are, therefore, disproportionate to the business
outside of the Closed Block.
SAI-67
<PAGE>
7) DISCONTINUED OPERATIONS
Summarized financial information of the GIC Segment follows:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------
1995 1994
----------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Assets
Mortgage loans on real estate........................................ $ 1,485.8 $ 1,730.5
Equity real estate................................................... 1,122.1 1,194.8
Other invested assets................................................ 665.2 978.8
Other assets......................................................... 579.3 529.5
----------------- -----------------
Total Assets......................................................... $ 3,852.4 $ 4,433.6
================= =================
Liabilities
Policyholders' liabilities........................................... $ 1,399.8 $ 1,924.0
Allowance for future losses.......................................... 164.2 185.6
Amounts due to continuing operations................................. 2,097.1 2,108.6
Other liabilities.................................................... 191.3 215.4
----------------- -----------------
Total Liabilities.................................................... $ 3,852.4 $ 4,433.6
================= =================
</TABLE>
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Revenues
Investment income (net of investment expenses
of $143.8, $174.0 and $175.8).................... $ 325.1 $ 395.0 $ 535.1
Investment (losses) gains, net..................... (22.9) 26.8 (22.6)
Policy fees, premiums and other income............. .7 .3 8.7
----------------- ---------------- -----------------
Total revenues..................................... 302.9 422.1 521.2
Benefits and other deductions...................... 328.0 443.8 545.9
----------------- ---------------- -----------------
Losses Charged to Allowance for Future Losses...... $ (25.1) $ (21.7) $ (24.7)
================= ================ =================
</TABLE>
In 1991, the Company established a pre-tax provision of $396.7 million
for the estimated future losses of the GIC Segment. At December 31,
1993, implementation of SFAS No. 115 for the valuation of fixed
maturities resulted in a benefit of $13.1 million, offset by a
corresponding addition to the allowance for future losses.
The amounts due to continuing operations at December 31, 1994
consisted of $3,324.0 million borrowed by the GIC Segment from
continuing operations, offset by $1,215.4 million representing an
obligation of continuing operations to provide assets to fund the
accumulated deficit of the GIC Segment. In January 1995, continuing
operations transferred $1,215.4 million in cash to the GIC Segment in
settlement of its obligation. Subsequently, the GIC Segment remitted
$1,155.4 million in cash to continuing operations in partial repayment
of borrowings by the GIC Segment. No gains or losses were recognized
on these transactions. Amounts due to continuing operations at
December 31, 1995, consisted of $2,097.1 million borrowed by the
discontinued GIC Segment.
SAI-68
<PAGE>
Investment income included $88.2 million and $97.7 million of interest
income for the years ended December 31, 1994 and 1993, respectively,
on amounts due from continuing operations. Benefits and other
deductions includes $154.6 million, $219.7 million and $197.1 million
of interest expense related to amounts borrowed from continuing
operations in 1995, 1994 and 1993, respectively.
Valuation allowances amounted to $19.2 million and $50.2 million on
mortgage loans on real estate and $77.9 million and $74.7 million on
equity real estate at December 31, 1995 and 1994, respectively.
Writedowns of fixed maturities amounted to $8.1 million, $17.8 million
and $1.1 million for the years ended December 31, 1995, 1994 and 1993,
respectively.
The fixed maturity portfolio, based on amortized cost, includes $15.1
million and $43.3 million at December 31, 1995 and 1994, respectively,
of restructured securities. These amounts include problem fixed
maturities of $6.1 million and $9.7 million at December 31, 1995 and
1994, respectively.
At December 31, 1995 and 1994, problem mortgage loans on real estate
had amortized costs of $35.4 million and $14.9 million, respectively,
and mortgage loans on real estate for which the payment terms have
been restructured had amortized costs of $289.3 million and $371.2
million, respectively.
At December 31, 1995 and 1994, the GIC Segment had $310.9 million and
$312.2 million, respectively, of real estate acquired in satisfaction
of debt.
8) SHORT-TERM AND LONG-TERM DEBT
Short-term and long-term debt consists of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------
1995 1994
----------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Short-term debt...................................................... $ - $ 20.0
----------------- -----------------
Long-term debt:
Equitable Life:
Surplus notes, 6.95%, scheduled to mature 2005..................... 399.3 -
Surplus notes, 7.70%, scheduled to mature 2015..................... 199.6 -
Eurodollar notes, 10.375% due 1995................................. - 34.6
Eurodollar notes, 10.5% due 1997................................... 76.2 76.2
Zero coupon note, 11.25% due 1997.................................. 120.1 107.8
Other.............................................................. 16.3 14.3
----------------- -----------------
Total Equitable Life........................................... 811.5 232.9
----------------- -----------------
Wholly Owned and Joint Venture Real Estate:
Mortgage notes, 4.98% - 12.75% due through 2019.................... 1,084.4 1,080.6
----------------- -----------------
Alliance:
Other.............................................................. 3.4 3.9
----------------- -----------------
Total long-term debt................................................. 1,899.3 1,317.4
----------------- -----------------
Total Short-term and Long-term Debt.................................. $ 1,899.3 $ 1,337.4
================= =================
</TABLE>
Short-term Debt
---------------
Equitable Life has a $350.0 million bank credit facility available to
fund short-term working capital needs and to facilitate the securities
settlement process. The credit facility consists of two types of
borrowing options with varying interest rates. The interest rates are
based on external indices dependent on the type of borrowing and at
December 31, 1995 range from 5.8% (the London Interbank Offering Rate
plus 22.5 basis points) to 8.5% (the prime rate). There were no
borrowings outstanding under this bank credit facility at December 31,
1995.
SAI-69
<PAGE>
Equitable Life has a commercial paper program with an issue limit of
$500.0 million. This program is available for general corporate
purposes used to support Equitable Life's liquidity needs and is
supported by Equitable Life's existing $350.0 million five-year bank
credit facility. There were no borrowings outstanding under this
program at December 31, 1995.
In 1994, Alliance established a $100.0 million revolving credit
facility with several banks. On March 31, 1997, the revolving credit
facility converts into a term loan payable in quarterly installments
through March 31, 1999. Outstanding borrowings generally bear interest
at the Eurodollar rate plus .875% per annum through March 31, 1997 and
at the Eurodollar rate plus 1.125% per annum after conversion through
March 31, 1999. In addition, a quarterly commitment fee of .25% per
annum is paid on the average daily unused amount. At December 31,
1995, there were no amounts outstanding under the facility.
In 1994, Alliance also established a $100.0 million commercial paper
program and entered into a three-year $100.0 million revolving credit
facility with a group of commercial banks to support commercial paper
to be issued under the program and for general corporate purposes.
Amounts outstanding under the facility bear interest at an annual rate
ranging from the Eurodollar rate plus .225% to the Eurodollar rate
plus .2875%. A fee of .125% per annum is paid quarterly on the entire
facility. At December 31, 1995, Alliance had not issued any commercial
paper and there were no amounts outstanding under the revolving credit
facility.
During 1994, EREIM established two bank lines of credit totaling $30.0
million of which $20.0 million was outstanding at December 31, 1994.
Long-term Debt
--------------
Several of the long-term debt agreements have restrictive covenants
related to the total amount of debt, net tangible assets and other
matters. The Company is in compliance with all debt covenants.
On December 18, 1995, Equitable Life issued, in accordance with
Section 1307 of the New York Insurance Law, $400.0 million of surplus
notes having an interest rate of 6.95% scheduled to mature in 2005 and
$200.0 million of surplus notes having an interest rate of 7.70%
scheduled to mature in 2015. Proceeds from the issuance of the surplus
notes were $596.6 million, net of related issuance costs. The
unamortized discount on the surplus notes was $1.1 million at December
31, 1995. Payments of interest on or principal of the surplus notes
are subject to prior approval by the New York Insurance Department.
The Company has pledged real estate, mortgage loans, cash and
securities amounting to $1,629.7 million and $1,744.4 million at
December 31, 1995 and 1994, respectively, as collateral for certain
long-term debt.
At December 31, 1995, aggregate maturities of the long-term debt based
on required principal payments at maturity for 1996 and the succeeding
four years are $124.0 million, $466.6 million, $309.5 million, $15.8
million, respectively, and $1,015.0 million thereafter.
9) FEDERAL INCOME TAXES
A summary of the Federal income tax expense (benefit) in the
consolidated statements of earnings is shown below:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Federal income tax expense (benefit):
Current.......................................... $ (11.7) $ 4.0 $ 115.8
Deferred......................................... 124.1 97.2 (24.5)
----------------- ---------------- -----------------
Total.............................................. $ 112.4 $ 101.2 $ 91.3
================= ================ =================
</TABLE>
SAI-70
<PAGE>
The Federal income taxes attributable to consolidated operations are
different from the amounts determined by multiplying the earnings
before Federal income taxes and cumulative effect of accounting change
by the expected Federal income tax rate of 35%. The sources of the
difference and the tax effects of each are as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Expected Federal income tax expense................ $ 143.5 $ 138.1 $ 106.3
Differential earnings amount....................... - (16.8) (23.2)
Adjustment of tax audit reserves................... 4.1 (4.6) 22.9
Tax rate adjustment................................ - - (5.0)
Other.............................................. (35.2) (15.5) (9.7)
----------------- --------------- -----------------
Federal Income Tax Expense......................... $ 112.4 $ 101.2 $ 91.3
================= ================ =================
</TABLE>
Prior to the date of demutualization, Equitable Life reduced its
deduction for policyholder dividends by the differential earnings
amount. This amount was computed, for each tax year, by multiplying
Equitable Life's average equity base, as determined for tax purposes,
by an estimate of the excess of an imputed earnings rate for stock
life insurance companies over the average mutual life insurance
companies' earnings rate. The differential earnings amount for each
tax year was subsequently recomputed when actual earnings rates were
published by the Internal Revenue Service. As a stock life insurance
company, Equitable Life is no longer required to reduce its
policyholder dividend deduction by the differential earnings amount,
but differential earnings amounts for pre-demutualization years were
still being recomputed in 1994 and 1993.
The components of the net deferred Federal income tax asset are as
follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1995 December 31, 1994
--------------------------------- ---------------------------------
ASSETS LIABILITIES Assets Liabilities
--------------- ---------------- --------------- ---------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Deferred policy acquisition costs,
reserves and reinsurance............. $ - $ 303.2 $ - $ 220.3
Investments............................ - 326.9 - 18.7
Compensation and related benefits...... 293.0 - 307.3 -
Other.................................. - 32.3 - 5.8
--------------- ---------------- --------------- ---------------
Total.................................. $ 293.0 $ 662.4 $ 307.3 $ 244.8
=============== ================ =============== ===============
</TABLE>
The deferred Federal income tax expense (benefit) impacting operations
reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. The sources of
these temporary differences and the tax effects of each are as
follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Deferred policy acquisition costs, reserves
and reinsurance.................................. $ 55.1 $ 13.0 $ (46.7)
Investments........................................ 13.0 89.3 60.4
Compensation and related benefits.................. 30.8 10.0 (50.1)
Other.............................................. 25.2 (15.1) 11.9
----------------- ---------------- -----------------
Deferred Federal Income Tax Expense (Benefit)...... $ 124.1 $ 97.2 $ (24.5)
================= ================ =================
</TABLE>
SAI-71
<PAGE>
The Internal Revenue Service completed its audit of the Company's
Federal income tax returns for the years 1984 through 1988. There was
no material effect on the Company's consolidated results of
operations.
10) REINSURANCE AGREEMENTS
The Insurance Group assumes and cedes reinsurance with other insurance
companies. The Insurance Group evaluates the financial condition of
its reinsurers to minimize its exposure to significant losses from
reinsurer insolvencies. The effect of reinsurance (excluding group
life and health) is summarized as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Direct premiums.................................... $ 474.2 $ 476.7 $ 458.8
Reinsurance assumed................................ 171.3 180.5 169.9
Reinsurance ceded.................................. (38.7) (31.6) (29.6)
----------------- ---------------- -----------------
Premiums........................................... $ 606.8 $ 625.6 $ 599.1
================= ================ =================
Universal Life and Investment-type Product
Policy Fee Income Ceded.......................... $ 38.9 $ 27.5 $ 33.7
================= ================ =================
Policyholders' Benefits Ceded...................... $ 48.2 $ 20.7 $ 72.3
================= ================ =================
Interest Credited to Policyholders' Account
Balances Ceded................................... $ 28.5 $ 25.4 $ 24.1
================= ================ =================
</TABLE>
In February 1993, management established a practice limiting the risk
retention on new policies issued by the Insurance Group to a maximum
of $5.0 million. In addition, effective January 1, 1994, all in force
business above $5.0 million was reinsured. The Insurance Group also
reinsures the entire risk on certain substandard underwriting risks as
well as in certain other cases.
The Insurance Group cedes 100% of its group life and health business
to a third party insurance company. Premiums ceded totaled $260.6
million, $241.0 million and $895.1 million for the years ended
December 31, 1995, 1994 and 1993, respectively. Ceded death and
disability benefits totaled $188.1 million, $235.5 million and $787.8
million for the years ended December 31, 1995, 1994 and 1993,
respectively. Insurance liabilities ceded totaled $724.2 million and
$833.4 million at December 31, 1995 and 1994, respectively.
11) EMPLOYEE BENEFIT PLANS
The Company sponsors qualified and non-qualified defined benefit plans
covering substantially all employees (including certain qualified
part-time employees), managers and certain agents. The pension plans
are non-contributory and benefits are based on a cash balance formula
or years of service and final average earnings, if greater, under
certain grandfathering rules in the plans. The Company's funding
policy is to make the minimum contribution required by the Employee
Retirement Income Security Act of 1974.
Components of net periodic pension (credit) cost for the qualified and
non-qualified plans are as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Service cost....................................... $ 30.0 $ 30.3 $ 29.8
Interest cost on projected benefit obligations..... 122.0 111.0 108.0
Actual return on assets............................ (309.2) 24.4 (178.6)
Net amortization and deferrals..................... 155.6 (142.5) 55.3
----------------- ---------------- -----------------
Net Periodic Pension (Credit) Cost................. $ (1.6) $ 23.2 $ 14.5
================= ================ =================
</TABLE>
SAI-72
<PAGE>
The funded status of the qualified and non-qualified pension plans is as
follows:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------
1995 1994
---------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Actuarial present value of obligations:
Vested............................................................... $ 1,642.4 $ 1,295.5
Non-vested........................................................... 10.9 8.7
--------------- -----------------
Accumulated Benefit Obligation......................................... $ 1,653.3 $ 1,304.2
================ =================
Plan assets at fair value.............................................. $ 1,503.8 $ 1,193.5
Projected benefit obligation........................................... 1,743.0 1,403.4
---------------- -----------------
Projected benefit obligation in excess of plan assets.................. (239.2) (209.9)
Unrecognized prior service cost........................................ (25.5) (33.2)
Unrecognized net loss from past experience different from that
assumed.............................................................. 368.2 298.9
Unrecognized net asset at transition................................... (7.3) (20.8)
Additional minimum liability........................................... (51.9) (37.8)
---------------- -----------------
Prepaid (Accrued) Pension Cost......................................... $ 44.3 $ (2.8)
================ =================
</TABLE>
The discount rate and rate of increase in future compensation levels
used in determining the actuarial present value of projected benefit
obligations were 7.25% and 4.50%, respectively, at December 31, 1995
and 8.75% and 4.88%, respectively, at December 31, 1994. As of January
1, 1995 and 1994, the expected long-term rate of return on assets for
the retirement plan was 11% and 10%, respectively.
The Company recorded, as a reduction of shareholder's equity, an
additional minimum pension liability of $35.1 million and $2.7
million, net of Federal income taxes, at December 31, 1995 and 1994,
respectively, representing the excess of the accumulated benefit
obligation over the fair value of plan assets and accrued pension
liability.
The pension plan's assets include corporate and government debt
securities, equity securities, equity real estate and shares of Group
Trusts managed by Alliance.
As of December 31, 1993, the Company changed the method of determining
the market-related value of plan assets from fair value to a
calculated value. This change in estimate had no material effect on
the Company's consolidated statements of earnings.
Prior to 1987, the qualified plan funded participants' benefits
through the purchase of non-participating annuity contracts from
Equitable Life. Benefit payments under these contracts were
approximately $36.4 million, $38.1 million and $39.9 million for the
years ended December 31, 1995, 1994 and 1993, respectively.
The Company provides certain medical and life insurance benefits
(collectively, "postretirement benefits") for qualifying employees,
managers and agents retiring from the Company on or after attaining
age 55 who have at least 10 years of service. The life insurance
benefits are related to age and salary at retirement. The costs of
postretirement benefits are recognized in accordance with the
provisions of SFAS No. 106. The Company continues to fund
postretirement benefits costs on a pay-as-you-go basis and, for the
years ended December 31, 1995, 1994 and 1993, the Company made
estimated postretirement benefits payments of $31.1 million, $29.8
million and $29.7 million, respectively.
SAI-73
<PAGE>
The following table sets forth the postretirement benefits plan's
status, reconciled to amounts recognized in the Company's consolidated
financial statements:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Service cost....................................... $ 4.0 $ 3.9 $ 5.3
Interest cost on accumulated postretirement
benefits obligation.............................. 34.7 28.6 29.2
Unrecognized prior service cost.................... (2.3) (3.9) (6.9)
Net amortization and deferrals..................... - - 1.5
----------------- ---------------- -----------------
Net Periodic Postretirement Benefits Costs......... $ 36.4 $ 28.6 $ 29.1
================= ================ =================
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------
1995 1994
---------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Accumulated postretirement benefits obligation:
Retirees............................................................. $ 391.8 $ 300.4
Fully eligible active plan participants.............................. 50.4 33.0
Other active plan participants....................................... 64.2 44.0
---------------- -----------------
506.4 377.4
Unrecognized benefit of plan amendments................................ - 3.2
Unrecognized prior service cost........................................ 56.3 61.9
Unrecognized net loss from past experience different from that
assumed and from changes in assumptions.............................. (181.3) (64.7)
---------------- -----------------
Accrued Postretirement Benefits Cost................................... $ 381.4 $ 377.8
================ =================
</TABLE>
In 1993, the Company amended the cost sharing provisions of
postretirement medical benefits. At January 1, 1994, medical benefits
available to retirees under age 65 are the same as those offered to
active employees and medical benefits will be limited to 200% of 1993
costs for all participants.
The assumed health care cost trend rate used in measuring the
accumulated postretirement benefits obligation was 10% in 1995,
gradually declining to 3.5% in the year 2008 and in 1994 was 10%,
gradually declining to 5% in the year 2004. The discount rate used in
determining the accumulated postretirement benefits obligation was
7.25% and 8.75% at December 31, 1995 and 1994, respectively.
If the health care cost trend rate assumptions were increased by 1%,
the accumulated postretirement benefits obligation as of December 31,
1995 would be increased 6.5%. The effect of this change on the sum of
the service cost and interest cost would be an increase of 6.7%.
12) DERIVATIVES AND FAIR VALUE OF FINANCIAL INSTRUMENTS
Derivatives
-----------
The Insurance Group primarily uses derivatives for asset/liability
risk management and for hedging individual securities. Derivatives
mainly are utilized to reduce the Insurance Group's exposure to
interest rate fluctuations. Accounting for interest rate swap
transactions is on an accrual basis. Gains and losses related to
interest rate swap transactions are amortized as yield adjustments
over the remaining life of the underlying hedged security. Income and
expense resulting from interest rate swap activities are reflected in
net investment income except for hedging transactions related to
insurance liabilities. The notional amount of matched interest rate
swaps outstanding at December 31, 1995 was $1,120.8 million. The
average unexpired terms at December 31, 1995 range from 2.5 to 3.0
years. At December 31, 1995, the cost of terminating outstanding
matched swaps in a loss position was $15.9 million and the unrealized
gain on
SAI-74
<PAGE>
outstanding matched swaps in a gain position was $19.0 million. The
Company has no intention of terminating these contracts prior to
maturity. During 1995, 1994 and 1993, net gains (losses) of $1.4
million, $(.2) million and $-0- million, respectively, were recorded
in connection with interest rate swap activity. Equitable Life has
implemented an interest rate cap program designed to hedge crediting
rates on interest-sensitive individual annuities contracts. The
outstanding notional amounts at December 31, 1995 of contracts
purchased and sold were $2,625.0 million and $300.0 million,
respectively. The net premium paid by Equitable Life on these
contracts was $12.5 million and is being amortized ratably over the
contract periods ranging from 3 to 5 years. Income and expense
resulting from this program are reflected as an adjustment to interest
credited to policyholders' account balances.
Substantially all of DLJ's business related derivatives is by its
nature trading activities which are primarily for the purpose of
customer accommodations. DLJ's derivative activities consist of option
writing and trading in forward and futures contracts. Derivative
financial instruments have both on-and-off balance sheet implications
depending on the nature of the contracts. DLJ's involvement in swap
contracts is not significant.
Fair Value of Financial Instruments
-----------------------------------
The Company defines fair value as the quoted market prices for those
instruments that are actively traded in financial markets. In cases
where quoted market prices are not available, fair values are
estimated using present value or other valuation techniques. The fair
value estimates are made at a specific point in time, based on
available market information and judgments about the financial
instrument, including estimates of timing, amount of expected future
cash flows and the credit standing of counterparties. Such estimates
do not reflect any premium or discount that could result from offering
for sale at one time the Company's entire holdings of a particular
financial instrument, nor do they consider the tax impact of the
realization of unrealized gains or losses. In many cases, the fair
value estimates cannot be substantiated by comparison to independent
markets, nor can the disclosed value be realized in immediate
settlement of the instrument.
Certain financial instruments are excluded, particularly insurance
liabilities other than financial guarantees and investment contracts.
Fair market value of off-balance-sheet financial instruments of the
Insurance Group was not material at December 31, 1995 and 1994.
Fair value for mortgage loans on real estate are estimated by
discounting future contractual cash flows using interest rates at
which loans with similar characteristics and credit quality would be
made. Fair values for foreclosed mortgage loans and problem mortgage
loans are limited to the estimated fair value of the underlying
collateral if lower.
The estimated fair values for the Company's liabilities under GIC and
association plan contracts are estimated using contractual cash flows
discounted based on the T. Rowe Price GIC Index Rate for the
appropriate duration. For durations in excess of the published index
rate, the appropriate Treasury rate is used plus a spread equal to the
longest duration GIC rate spread published.
The estimated fair values for those group annuity contracts which are
classified as investment contracts are measured at the estimated fair
value of the underlying assets. Deposit administration contracts
(included with group annuity contracts) classified as insurance
contracts are measured at estimated fair value of the underlying
assets. The estimated fair values for single premium deferred
annuities ("SPDA") are estimated using projected cash flows discounted
at current offering rates. The estimated fair values for supplementary
contracts not involving life contingencies ("SCNILC") and annuities
certain are derived using discounted cash flows based upon the
estimated current offering rate.
Fair value for long-term debt is determined using published market
values, where available, or contractual cash flows discounted at
market interest rates. The estimated fair values for non-recourse
mortgage debt are determined by discounting contractual cash flows at
a rate which takes into account the level of current market interest
rates and collateral risk. The estimated fair values for recourse
mortgage debt are determined by discounting contractual cash flows at
a rate based upon current interest rates of other companies with
credit ratings similar to the Company. The Company's fair value of
short-term borrowings approximates their carrying value.
SAI-75
<PAGE>
The following table discloses carrying value and estimated fair value
for financial instruments not otherwise disclosed in Notes 3, 6 and 7:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------------------------------------
1995 1994
--------------------------------- ---------------------------------
CARRYING ESTIMATED Carrying Estimated
VALUE FAIR VALUE Value Fair Value
--------------- ---------------- --------------- ---------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Consolidated Financial Instruments:
-----------------------------------
Mortgage loans on real estate.......... $ 3,638.3 $ 3,973.6 $ 4,018.0 $ 3,919.4
Other joint ventures................... 492.7 492.7 544.4 544.4
Policy loans........................... 1,976.4 2,057.5 1,731.2 1,676.6
Policyholders' account balances:
Association plans.................... 101.0 100.0 141.0 141.0
Group annuity contracts.............. 2,335.0 2,395.0 2,450.0 2,469.0
SPDA................................. 1,265.8 1,272.0 1,744.3 1,732.7
Annuities certain and SCNILC......... 649.1 680.7 599.1 624.7
Long-term debt......................... 1,899.3 1,962.9 1,317.4 1,249.2
Closed Block Financial Instruments:
-----------------------------------
Mortgage loans on real estate.......... 1,368.8 1,461.4 1,543.7 1,477.8
Other equity investments............... 151.6 151.6 179.5 179.5
Policy loans........................... 1,797.2 1,891.4 1,827.9 1,721.9
SCNILC liability....................... 34.8 34.5 39.5 37.0
GIC Segment Financial Instruments:
----------------------------------
Mortgage loans on real estate.......... 1,485.8 1,666.1 1,730.5 1,743.7
Fixed maturities....................... 107.4 107.4 219.3 219.3
Other equity investments............... 455.9 455.9 591.8 591.8
Guaranteed interest contracts.......... 329.0 352.0 835.0 855.0
Long-term debt......................... 135.1 136.0 134.8 127.9
</TABLE>
13) COMMITMENTS AND CONTINGENT LIABILITIES
The Company has provided, from time to time, certain guarantees or
commitments to affiliates, investors and others. These arrangements
include commitments by the Company, under certain conditions: to make
liquidity advances to cover delinquent principal and interest and
property protection expenses with respect to loan servicing agreements
for securitized mortgage loans which at December 31, 1995 totaled $2.8
billion (as of December 31, 1995, $4.0 million have been advanced
under these commitments); to make capital contributions of up to
$246.7 million to affiliated real estate joint ventures; to provide
equity financing to certain limited partnerships of $129.4 million at
December 31, 1995, under existing loan or loan commitment agreements;
and to provide short-term financing loans which at December 31, 1995
totaled $45.8 million. Management believes the Company will not incur
any material losses as a result of these commitments.
Equitable Life is the obligor under certain structured settlement
agreements which it had entered into with unaffiliated insurance
companies and beneficiaries. To satisfy its obligations under these
agreements, Equitable Life owns single premium annuities issued by
previously wholly owned life insurance subsidiaries. Equitable Life
has directed payment under these annuities to be made directly to the
beneficiaries under the structured settlement agreements. A contingent
liability exists with respect to these agreements should the
previously wholly owned subsidiaries be unable to meet their
obligations. Management believes the satisfaction of those obligations
by Equitable Life is remote.
At December 31, 1995, the Insurance Group had $29.0 million of letters
of credit outstanding.
SAI-76
<PAGE>
14) LITIGATION
A number of lawsuits have been filed against life and health insurers
in the jurisdictions in which Equitable Life and its subsidiaries do
business involving insurers' sales practices, alleged agent
misconduct, failure to properly supervise agents, and other matters.
Some of the lawsuits have resulted in the award of substantial
judgments against other insurers, including material amounts of
punitive damages, or in substantial settlements. In some states juries
have substantial discretion in awarding punitive damages. Equitable
Life and its insurance subsidiaries, like other life and health
insurers, from time to time are involved in such litigation. To date,
no such lawsuit has resulted in an award or settlement of any material
amount against the Company. Among litigations pending against
Equitable Life and its insurance subsidiaries of the type referred to
in this paragraph are the litigations described in the following two
paragraphs.
An action entitled Golomb et al. v. The Equitable Life Assurance
Society of the United States was filed on January 20, 1995 in New York
County Supreme Court. The action purports to be brought on behalf of a
class of persons insured after 1983 under Lifetime Guaranteed
Renewable Major Medical Insurance Policies issued by Equitable Life
(the "policies"). The complaint alleges that premium increases for
these policies after 1983, all of which were filed with and approved
by the New York State Insurance Department and certain other state
insurance departments, breached the terms of the insurance policies,
and that statements in the policies and elsewhere concerning premium
increases constituted fraudulent concealment, misrepresentations in
violation of New York Insurance Law Section 4226 and deceptive
practices under New York General Business Law Section 349. The
complaint seeks a declaratory judgment, injunctive relief restricting
the methods by which Equitable Life increases premiums on the policies
in the future, a refund of premiums, and punitive damages. Plaintiffs
also have indicated that they will seek damages in an unspecified
amount. Equitable Life has moved to dismiss the complaint in its
entirety on the grounds that it fails to state a claim and that
uncontroverted documentary evidence establishes a complete defense to
the claims. That motion is awaiting decision by the court. In January
1996, separate actions were filed in Pennsylvania and Texas state
courts (entitled, respectively, Malvin et al. v. The Equitable Life
Assurance Society of the United States and Bowler et al. v. The
Equitable Life Assurance Society of the United States), making claims
similar to those in the New York action described above. These new
actions are asserted on behalf of proposed classes of Pennsylvania
issued or renewed policyholders and Texas issued or renewed
policyholders, insured under the policies. The Pennsylvania and Texas
actions seek compensatory and punitive damages and injunctive relief
restricting the methods by which Equitable Life increases premiums in
the future based on the common law and statutes of those states.
Although the outcome of any litigation cannot be predicted with
certainty, particularly in the early stages of an action, Equitable
Life's management believes that the ultimate resolution of those
litigations should not have a material adverse effect on the financial
position of the Company. Due to the early stage of such litigation,
Equitable Life's management cannot make an estimate of loss, if any,
or predict whether or not such litigation will have a material adverse
effect on the Company's results of operations in any particular
period.
An action was instituted on April 6, 1995 against Equitable Life and
its wholly owned subsidiary, The Equitable of Colorado, Inc. ("EOC"),
in New York State Court, entitled Sidney C. Cole et al. v. The
Equitable Life Assurance Society of the United States and The
Equitable of Colorado, Inc., No. 95/108611 (N.Y. County). The action
is brought by the holders of a joint survivorship whole life policy
issued by EOC. The action purports to be on behalf of a class
consisting of all persons who from January 1, 1984 purchased life
insurance policies sold by Equitable Life and EOC based upon their
allegedly uniform sales presentations and policy illustrations. The
complaint puts in issue various alleged sales practices that
plaintiffs assert, among other things, misrepresented the stated
number of years that the annual premium would need to be paid.
Plaintiffs seek damages in an unspecified amount, imposition of a
constructive trust, and seek to enjoin Equitable Life and EOC from
engaging in the challenged sales practices. Equitable Life and EOC
intend to defend vigorously and believe that they have meritorious
defenses which, if successful, would dispose of the action completely.
Equitable Life and EOC further do not believe that this case is an
appropriate class action. Although the outcome of any litigation
cannot be predicted with certainty, particularly in the early stages
of an action, Equitable Life's management believes that the ultimate
SAI-77
<PAGE>
resolution of this litigation should not have a material adverse
effect on the financial position of the Company. Due to the early
stage of such litigation, the Company's management cannot make an
estimate of loss, if any, or predict whether or not such litigation
will have a material adverse effect on the Company's results of
operations in any particular period.
Equitable Casualty Insurance Company ("Casualty"), a captive property
and casualty insurance company organized under the laws of Vermont,
which is an indirect wholly owned subsidiary of Equitable Life, is a
party to an arbitration proceeding that commenced in August 1995 with
the selection of three arbitrators. The arbitration will resolve a
dispute among Casualty, Houston General Insurance Company ("Houston
General"), and GEICO General Insurance Company ("GEICO General")
regarding the interpretation of a reinsurance agreement that was
entered into as part of a 1980 transaction whereby Equitable General
Insurance Company ("Equitable General"), formerly an indirect
subsidiary of Equitable Life and the predecessor of GEICO General,
sold its commercial lines business along with the stock of Houston
General to subsidiaries of Tokio Marine & Fire Insurance Company, Ltd.
("Tokio Marine"). Casualty and GEICO General maintain that, under the
reinsurance agreement, Houston General assumed liability for all
losses insured under commercial lines policies written by Equitable
General and its predecessors in order to effect the transfer of that
business to Tokio Marine's subsidiaries. Houston General contends that
it did not assume reinsurance liability for losses insured under
certain of those commercial lines policies. The arbitration panel
determined to begin hearing evidence in the arbitration in June 1996.
The result of the arbitration is expected to resolve two litigations
that were commenced by Houston General and that have been stayed by
the presiding courts pending the completion of the arbitration (in one
case, Houston General named as a defendant only GEICO General but
Casualty intervened as a defendant with GEICO General, and in the
other case, Houston General named GEICO General and Equitable Life).
The arbitration is expected to be completed during the second half of
1996. While the ultimate outcome of the arbitration cannot be
predicted with certainty, the Company's management believes that the
arbitrators will recognize that Houston General's position is without
merit and contrary to the way in which the reinsurance industry
operates and therefore the ultimate resolution of this matter should
not have a material adverse effect on the Company's financial position
or results of operations.
On July 25, 1995, a Consolidated and Supplemental Class Action
Complaint ("Complaint") was filed against the Alliance North American
Government Income Trust, Inc. (the "Fund"), Alliance and certain other
defendants affiliated with Alliance, including the Holding Company,
alleging violations of Federal securities laws, fraud and breach of
fiduciary duty in connection with the Fund's investments in Mexican
and Argentine securities. A similar complaint was filed on November 7,
1995 and was subsequently consolidated with the Complaint. The
Complaint, which seeks certification of a plaintiff class of persons
who purchased or owned Class A, B or C shares of the Fund from March
27, 1992 through December 23, 1994, seeks an unspecified amount of
damages, costs, attorneys' fees and punitive damages. The principal
allegations of the Complaint are that the Fund purchased debt
securities issued by the Mexican and Argentine governments in amounts
that were not permitted by the Funds' investment objective, and that
there was no shareholder vote to change the investment objective to
permit purchases in such amounts. The Complaint further alleges that
the decline in the value of the Mexican and Argentine securities held
by the Fund caused the Fund's net asset value to decline to the
detriment of the Fund's shareholders. On September 26, 1995, the
defendants jointly filed a motion to dismiss the Complaint which has
not yet been decided by the Court. Alliance believes that the
allegations in the Complaint are without merit and intends to
vigorously defend against these claims. While the ultimate results of
this action cannot be determined, management of Alliance does not
expect that this action will have a material adverse effect on
Alliance's business.
On January 26, 1996, a purported purchaser of certain notes and
warrants to purchase shares of common stock of Rickel Home Centers,
Inc. ("Rickel") filed a class action complaint against Donaldson,
Lufkin & Jenrette Securities Corporation ("DLJSC"), a wholly owned
subsidiary of DLJ, and certain other defendants for unspecified
compensatory and punitive damages in the United States District Court
for the Southern District of New York. The suit was brought on behalf
of the purchasers of 126,457 units consisting of $126,457,000
aggregate principal amount of 13 1/2% senior notes due 2001 and
126,457 warrants to purchase shares of common stock of Rickel (the
"Units") issued by Rickel in October 1994. The complaint alleges
violations of Federal securities laws and common law fraud against
DLJSC, as the underwriter of
SAI-78
<PAGE>
the Units and as an owner of 7.3% of the common stock of Rickel, Eos
Partners, L.P., and General Electric Capital Corporation, each as
owners of 44.2% of the common stock of Rickel, and members of the
Board of Directors of Rickel, including a DLJSC Managing Director. The
complaint seeks to hold DLJSC liable for alleged misstatements and
omissions contained in the prospectus and registration statement filed
in connection with the offering of the Units, alleging that the
defendants knew of financial losses and a decline in value of Rickel
in the months prior to the offering and did not disclose such
information. The complaint also alleges that Rickel failed to pay its
semi-annual interest payment due on the Units on December 15, 1995 and
that Rickel filed a voluntary petition for reorganization pursuant to
Chapter 11 of the United States Bankruptcy Code on January 10, 1996.
DLJSC intends to defend itself vigorously against all of the
allegations contained in the complaint. Although there can be no
assurance, DLJ does not believe the outcome of this litigation will
have a material adverse effect on its financial condition. Due to the
early stage of this litigation, based on the information currently
available to it, DLJ's management cannot make an estimate of loss or
predict whether or not such litigation will have a material adverse
effect on DLJ's results of operations in any particular period.
On June 12, 1995, a purported purchaser of certain securities issued
by Spectravision, Inc. ("Spectravision") filed a class action
complaint against DLJSC and certain other defendants for unspecified
damages in the U.S. District Court for the Northern District of Texas.
The suit was brought on behalf of the purchasers of $260,795,000 of
securities issued by Spectravision in November 1992, and alleges
violations of the Federal securities laws and the Texas Securities
Act, common law fraud and negligent misrepresentation. The securities
were issued by Spectravision pursuant to a prepackaged bankruptcy
reorganization plan. DLJSC served as financial advisor to
Spectravision in its reorganization and as Dealer Manager for
Spectravision's 1992 issuance of the securities. DLJSC is also being
sued as a seller of certain notes of Spectravision acquired and resold
by DLJSC. The complaint seeks to hold DLJSC liable for various alleged
misstatements and omissions contained in prospectuses and other
materials issued between July 1992 and June 1994. DLJSC intends to
defend itself vigorously against all of the allegations contained in
the complaint. On June 8, 1995, Spectravision filed a Chapter 11
petition in the United States Bankruptcy Court for the District of
Delaware. On January 5, 1996, the district court in the litigation
involving DLJSC ordered a partial stay of discovery until
Spectravision has emerged from bankruptcy or six months from the date
of the stipulated stay (whichever comes first). Accordingly, discovery
of DLJSC has not yet occurred. Although there can be no assurance, DLJ
does not believe that the ultimate outcome of this litigation will
have a material adverse effect on its financial condition. Due to the
early stage of such litigation, based upon information currently
available to it, DLJ's management cannot make an estimate of loss or
predict whether or not such litigation will have a material adverse
effect on DLJ's results of operations in any particular period.
Plaintiff's counsel in the class action against DLJSC described above
has also filed another securities class action based on similar
factual allegations. Such suit names as defendants Spectravision and
its directors, and was brought on behalf of a class of purchasers of
$209.0 million of stock and $77.0 million of notes issued by
Spectravision in October 1993. DLJSC served as the managing
underwriter for both of these issuances. DLJSC has not been named as a
defendant in this suit, although it has been reported to DLJSC that
plaintiff's counsel is contemplating seeking to amend the complaint to
add DLJSC as a defendant in that action.
In October 1995, DLJSC was named as a defendant in a purported class
action filed in a Texas State Court on behalf of the holders of $550.0
million principal amount of subordinated redeemable discount
debentures of National Gypsum Corporation ("NGC") canceled in
connection with a Chapter 11 plan of reorganization for NGC
consummated in July 1993. The named plaintiff in the State Court
action also filed an adversary proceeding in the Bankruptcy Court for
the Northern District of Texas seeking a declaratory judgment that the
confirmed NGC plan of reorganization does not bar the class action
claims. Subsequent to the consummation of NGC's plan of
reorganization, NGC's shares traded for values substantially in excess
of, and in 1995 NGC was acquired for a value substantially in excess
of, the values upon which NGC's plan of reorganization was based. The
two actions arise out of DLJSC's activities as financial advisor to
NGC in the course of NGC's Chapter 11 reorganization proceedings. The
class action complaint alleges that the plan of reorganization
submitted by NGC was based upon projections by NGC and DLJSC which
intentionally understated forecasts, and provided misleading and
incorrect information in order to hide NGC's true value and that
defendants breached their fiduciary duties by, among other things,
providing false, misleading or incomplete information to deliberately
understate the value of NGC. The class action complaint seeks
compensatory and punitive damages purportedly sustained by the class.
The Texas State
SAI-79
<PAGE>
Court action has subsequently been removed to the Bankruptcy Court,
which removal is being opposed by the plaintiff. DLJSC intends to
defend itself vigorously against all of the allegations contained in
the complaint. Although there can be no assurance, DLJ does not
believe that the ultimate outcome of this litigation will have a
material adverse effect on its financial condition. Due to the early
stage of such litigation, based upon the information currently
available to it, DLJ's management cannot make an estimate of loss or
predict whether or not such litigation will have a material adverse
effect on DLJ's results of operations in any particular period.
In November and December 1995, DLJSC, along with various other
parties, was named as a defendant in a number of purported class
actions filed in the U.S. District Court for the Eastern District of
Louisiana. The complaints allege violations of the Federal securities
laws arising out of a public offering in 1994 of $435.0 million of
first mortgage notes of Harrah's Jazz Company and Harrah's Jazz
Finance Corp. The complaints seek to hold DLJSC liable for various
alleged misstatements and omissions contained in the prospectus dated
November 9, 1994. DLJSC intends to defend itself vigorously against
all of the allegations contained in the complaints. Although there can
be no assurance, DLJ does not believe that the ultimate outcome of
this litigation will have a material adverse effect on its financial
condition. Due to the early stage of this litigation, based upon the
information currently available to it, DLJ's management cannot make an
estimate of loss or predict whether or not such litigation will have a
material adverse effect on DLJ's results of operations in any
particular period.
In addition to the matters described above, Equitable Life and its
subsidiaries and DLJ and its subsidiaries are involved in various
legal actions and proceedings in connection with their businesses.
Some of the actions and proceedings have been brought on behalf of
various alleged classes of claimants and certain of these claimants
seek damages of unspecified amounts. While the ultimate outcome of
such matters cannot be predicted with certainty, in the opinion of
management no such matter is likely to have a material adverse effect
on the Company's consolidated financial position or results of
operations.
15) LEASES
The Company has entered into operating leases for office space and
certain other assets, principally data processing equipment and office
furniture and equipment. Future minimum payments under noncancelable
leases for 1996 and the succeeding four years are $114.8 million,
$101.8 million, $90.0 million, $73.6 million, $57.7 million and $487.0
million thereafter. Minimum future sublease rental income on these
noncancelable leases for 1996 and the succeeding four years are $11.0
million, $8.7 million, $6.9 million, $4.6 million, $2.9 million and
$1.1 million thereafter.
At December 31, 1995, the minimum future rental income on
noncancelable operating leases for wholly owned investments in real
estate for 1996 and the succeeding four years are $292.9 million,
$271.2 million, $248.1 million, $226.4 million, $195.5 million and
$1,018.8 million thereafter.
SAI-80
<PAGE>
16) OTHER OPERATING COSTS AND EXPENSES
Other operating costs and expenses consisted of the following:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Compensation costs................................. $ 595.9 $ 690.0 $ 1,452.3
Commissions........................................ 314.3 313.0 551.1
Short-term debt interest expense................... 11.4 19.0 317.1
Long-term debt interest expense.................... 108.1 98.3 86.0
Amortization of policy acquisition costs........... 320.4 318.1 275.9
Capitalization of policy acquisition costs......... (391.0) (410.9) (397.8)
Rent expense, net of sub-lease income.............. 124.8 128.9 159.5
Other.............................................. 772.6 786.7 1,140.1
----------------- ---------------- -----------------
Total.............................................. $ 1,856.5 $ 1,943.1 $ 3,584.2
================= ================ =================
</TABLE>
During the years ended December 31, 1995, 1994 and 1993, the Company
restructured certain operations in connection with cost reduction
programs and recorded pre-tax provisions of $32.0 million, $20.4
million and $96.4 million, respectively. The amounts paid during 1995,
associated with the 1995 and 1994 cost reduction programs, totaled
$24.0 million. At December 31, 1995, the liabilities associated with
the 1995 and 1994 cost reduction programs amounted to $37.8 million.
The 1995 cost reduction program included relocation expenses,
including the accelerated amortization of building improvements
associated with the relocation of the home office. The 1994 cost
reduction program included costs associated with the termination of
operating leases and employee severance benefits in connection with
the consolidation of 16 insurance agencies. The 1993 cost reduction
program primarily reflected severance benefits of terminated employees
in connection with the combination of a wholly owned subsidiary of the
Company with Alliance.
17) INSURANCE GROUP STATUTORY FINANCIAL INFORMATION
Equitable Life is restricted as to the amounts it may pay as dividends
to the Holding Company. Under the New York Insurance Law, the New York
Superintendent has broad discretion to determine whether the financia1
condition of a stock life insurance company would support the payment
of dividends to its shareholders. For the years ended December 31,
1995, 1994 and 1993, statutory (loss) earnings totaled $(352.4)
million, $67.5 million and $324.0 million, respectively. No amounts
are expected to be available for dividends from Equitable Life to the
Holding Company in 1996.
At December 31, 1995, the Insurance Group, in accordance with various
government and state regulations, had $18.9 million of securities
deposited with such government or state agencies.
SAI-81
<PAGE>
Accounting practices used to prepare statutory financial statements
for regulatory filings of stock life insurance companies differ in
certain instances from GAAP. The following reconciles the Company's
statutory change in surplus and capital stock and statutory surplus
and capital stock determined in accordance with accounting practices
prescribed by the New York Insurance Department with net earnings and
equity on a GAAP basis.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Net change in statutory surplus and capital stock.. $ 78.1 $ 292.4 $ 190.8
Change in asset valuation reserves................. 365.7 (285.2) 639.1
----------------- ---------------- -----------------
Net change in statutory surplus, capital stock
and asset valuation reserves..................... 443.8 7.2 829.9
Adjustments:
Future policy benefits and policyholders'
account balances............................... (67.9) (11.0) (171.0)
Deferred policy acquisition costs................ 70.6 92.8 121.8
Deferred Federal income taxes.................... (150.0) (59.7) (57.5)
Valuation of investments......................... 189.1 45.2 202.3
Valuation of investment subsidiary............... (188.6) 396.6 (464.9)
Limited risk reinsurance......................... 416.9 74.9 85.2
Issuance of surplus notes........................ (538.9) - -
Sale of subsidiary and joint venture............. - - (366.5)
Contribution from the Holding Company............ - (300.0) -
Postretirement benefits.......................... (26.7) 17.1 23.8
Other, net....................................... 115.1 (44.0) 60.3
GAAP adjustments of Closed Block................. (3.1) 4.5 (16.0)
GAAP adjustments of discontinued GIC
Segment........................................ 37.3 42.8 (35.0)
----------------- ---------------- -----------------
Net Earnings....................................... $ 297.6 $ 266.4 $ 212.4
================= ================ =================
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Statutory surplus and capital stock................ $ 2,202.9 $ 2,124.8 $ 1,832.4
Asset valuation reserves........................... 1,345.9 980.2 1,265.4
----------------- ---------------- -----------------
Statutory surplus, capital stock and asset
valuation reserves............................... 3,548.8 3,105.0 3,097.8
Adjustments:
Future policy benefits and policyholders'
account balances............................... (1,017.4) (949.5) (938.5)
Deferred policy acquisition costs................ 3,083.3 3,221.1 2,858.8
Deferred Federal income taxes.................... (450.8) (26.8) (137.8)
Valuation of investments......................... 417.7 (794.1) (29.8)
Valuation of investment subsidiary............... (665.1) (476.5) (873.1)
Limited risk reinsurance......................... (429.0) (845.9) (920.8)
Issuance of surplus notes........................ (538.9) - -
Postretirement benefits.......................... (343.3) (316.6) (333.7)
Other, net....................................... 4.4 (79.2) (81.9)
GAAP adjustments of Closed Block................. 575.7 578.8 574.2
GAAP adjustments of discontinued GIC
Segment........................................ (184.6) (221.9) (264.6)
----------------- ---------------- -----------------
Total Shareholder's Equity......................... $ 4,000.8 $ 3,194.4 $ 2,950.6
================= ================ =================
</TABLE>
SAI-82
<PAGE>
18) BUSINESS SEGMENT INFORMATION
The Company has three major business segments: Individual Insurance
and Annuities; Investment Services and Group Pension.
Consolidation/elimination principally includes debt not specific to
any business segment. Attributed Insurance Capital represents net
assets and related revenues and earnings of the Insurance Group not
assigned to the insurance segments. Interest expense related to debt
not specific to any business segment is presented within Corporate
interest expense. Information for all periods is presented on a
comparable basis.
The Individual Insurance and Annuities segment offers a variety of
traditional, variable and interest-sensitive life insurance products,
disability income, annuity products and mutual fund and other
investment products to individuals and small groups. This segment
includes Separate Accounts for certain individual insurance and
annuity products.
The Investment Services segment provides investment fund management,
primarily to institutional clients. This segment includes Separate
Accounts which provide various investment options for group clients
through pooled or single group accounts.
Intersegment investment advisory and other fees of approximately
$124.1 million, $135.3 million and $128.6 million for 1995, 1994 and
1993, respectively, are included in total revenues of the Investment
Services segment. These fees, excluding amounts related to the
discontinued GIC Segment of $14.7 million, $27.4 million and $17.0
million for 1995, 1994 and 1993, respectively, are eliminated in
consolidation.
The Group Pension segment administers traditional participating group
annuity contracts with conversion features, generally for corporate
qualified pension plans, and association plans which provide full
service retirement programs for individuals affiliated with
professional and trade associations.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Revenues
Individual insurance and annuities................. $ 3,254.6 $ 3,110.7 $ 2,981.5
Group pension...................................... 292.0 359.1 426.6
Attributed insurance capital....................... 61.2 79.4 61.6
----------------- ---------------- -----------------
Insurance operations............................. 3,607.8 3,549.2 3,469.7
Investment services................................ 949.1 935.2 2,792.6
Consolidation/elimination.......................... (34.9) (24.7) (40.5)
----------------- ---------------- -----------------
Total.............................................. $ 4,522.0 $ 4,459.7 $ 6,221.8
================= ================ =================
Earnings (loss) before Federal income taxes
and cumulative effect of accounting change
Individual insurance and annuities................. $ 274.4 $ 245.5 $ 76.2
Group pension...................................... (13.3) 15.8 2.0
Attributed insurance capital....................... 18.7 69.8 49.0
----------------- ---------------- -----------------
Insurance operations............................. 279.8 331.1 127.2
Investment services................................ 161.2 177.5 302.1
Consolidation/elimination.......................... (3.1) .3 .5
----------------- ---------------- -----------------
Subtotal..................................... 437.9 508.9 429.8
Corporate interest expense......................... (27.9) (114.2) (126.1)
----------------- ---------------- -----------------
Total.............................................. $ 410.0 $ 394.7 $ 303.7
================= ================ =================
</TABLE>
SAI-83
<PAGE>
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------
1995 1994
---------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Assets
Individual insurance and annuities..................................... $ 50,328.8 $ 44,063.4
Group pension.......................................................... 4,033.3 4,222.8
Attributed insurance capital........................................... 2,391.6 2,609.8
---------------- -----------------
Insurance operations................................................. 56,753.7 50,896.0
Investment services.................................................... 12,842.9 12,127.9
Consolidation/elimination.............................................. (354.4) (1,614.4)
---------------- -----------------
Total.................................................................. $ 69,242.2 $ 61,409.5
================ =================
</TABLE>
19) QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The quarterly results of operations for the years ended December 31,
1995, 1994 and 1993, are summarized below:
<TABLE>
<CAPTION>
THREE MONTHS ENDED,
------------------------------------------------------------------------------
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
----------------- ----------------- ------------------ ------------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
1995
----
Total Revenues................ $ 1,074.7 $ 1,158.4 $ 1,127.1 $ 1,161.8
================= ================= ================== ==================
Net Earnings.................. $ 59.0 $ 94.3 $ 91.2 $ 53.1
================= ================= ================== ==================
1994
----
Total Revenues................ $ 1,107.4 $ 1,075.0 $ 1,153.8 $ 1,123.5
================= ================= ================== ==================
Earnings before Cumulative
Effect of Accounting
Change...................... $ 64.0 $ 68.4 $ 89.1 $ 72.0
================= ================= ================== ==================
Net Earnings.................. $ 36.9 $ 68.4 $ 89.1 $ 72.0
================= ================= ================== ==================
1993
----
Total Revenues................ $ 1,502.2 $ 1,539.7 $ 1,679.4 $ 1,500.5
================= ================= ================== ==================
Net Earnings.................. $ 32.3 $ 47.1 $ 68.8 $ 64.2
================= ================= ================== ==================
</TABLE>
20) INVESTMENT IN DLJ
On December 15, 1993, the Company sold a 61% interest in DLJ to the
Holding Company for $800.0 million in cash and securities. The excess
of the proceeds over the book value in DLJ at the date of sale of
$340.2 million has been reflected as a capital contribution. In 1995,
DLJ completed the initial public offering ("IPO") of 10.58 million
shares of its common stock, which included 7.28 million of the Holding
Company's shares in DLJ, priced at $27 per share. Concurrent with the
IPO, the Company contributed equity securities to DLJ having a market
value of $21.2 million. Upon completion of the IPO, the Company's
ownership percentage was reduced to 36.1%. The Company's ownership
interest will be further reduced upon the issuance of common stock
after the vesting of forfeitable restricted stock units acquired by
and/or the exercise of options granted to certain DLJ employees. At
December 31, 1995, DLJ had options
SAI-84
<PAGE>
outstanding to purchase approximately 9.2 million shares of DLJ common
stock at $27.00 per share. Options are exercisable over a period of up
to ten years. DLJ restricted stock units represents forfeitable rights
to receive approximately 5.2 million shares of DLJ common stock
through February 2000.
The results of operations and cash flows of DLJ through the date of
sale are included in the consolidated statements of earnings and cash
flow for the year ended December 31, 1993. For the period subsequent
to the date of sale, the results of operations of DLJ are accounted
for on the equity basis and are included in commissions, fees and
other income in the consolidated statements of earnings. The Company's
carrying value of DLJ is included in investment in and loans to
affiliates in the consolidated balance sheets.
Summarized balance sheets information for DLJ, reconciled to the
Company's carrying value of DLJ, are as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------
1995 1994
---------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Assets:
Trading account securities, at market value............................ $ 10,911.4 $ 8,970.0
Securities purchased under resale agreements........................... 18,748.2 10,476.4
Broker-dealer related receivables...................................... 13,023.7 11,784.8
Other assets........................................................... 1,893.2 2,030.4
---------------- -----------------
Total Assets........................................................... $ 44,576.5 $ 33,261.6
================ =================
Liabilities:
Securities sold under repurchase agreements............................ $ 26,744.8 $ 18,356.7
Broker-dealer related payables......................................... 12,915.5 10,618.0
Short-term and long-term debt.......................................... 1,717.5 1,956.5
Other liabilities...................................................... 1,775.0 1,285.1
---------------- -----------------
Total liabilities...................................................... 43,152.8 32,216.3
Cumulative exchangeable preferred stock................................ 225.0 225.0
Total shareholders' equity............................................. 1,198.7 820.3
---------------- -----------------
Total Liabilities, Cumulative Exchangeable Preferred Stock and
Shareholders' Equity................................................. $ 44,576.5 $ 33,261.6
================ =================
DLJ's equity as reported............................................... $ 1,198.7 $ 820.3
Unamortized cost in excess of net assets acquired in 1985
and other adjustments................................................ 40.5 50.8
The Holding Company's equity ownership in DLJ.......................... (499.0) (532.1)
Minority interest in DLJ............................................... (324.3) -
---------------- -----------------
The Company's Carrying Value of DLJ.................................... $ 415.9 $ 339.0
================ =================
</TABLE>
SAI-85
<PAGE>
Summarized statements of earnings information for DLJ reconciled to
the Company's equity in earnings of DLJ is as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------
1995 1994
---------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Commission, fees and other income...................................... $ 1,325.9 $ 953.5
Net investment income.................................................. 904.1 791.9
Dealer, trading and investment gains, net.............................. 528.6 263.3
---------------- -----------------
Total Revenues......................................................... 2,758.6 2,008.7
Total expenses including income taxes.................................. 2,579.5 1,885.7
---------------- -----------------
Net earnings........................................................... 179.1 123.0
Dividends on preferred stock........................................... 19.9 20.9
---------------- -----------------
Earnings Applicable to Common Shares................................... $ 159.2 $ 102.1
================ =================
DLJ's earnings applicable to common shares as reported................. $ 159.2 $ 102.1
Amortization of cost in excess of net assets acquired in 1985.......... (3.9) (3.1)
The Holding Company's equity in DLJ's earnings......................... (90.4) (60.9)
Minority interest in DLJ............................................... (6.5) -
---------------- -----------------
The Company's Equity in DLJ's Earnings................................. $ 58.4 $ 38.1
================ =================
</TABLE>
21) RELATED PARTY TRANSACTIONS
On August 31, 1993, the Company sold $661.0 million of primarily
privately placed below investment grade fixed maturities to EQ Asset
Trust 1993, a limited purpose business trust, wholly owned by the
Holding Company. The Company recognized a $4.1 million gain net of
related deferred policy acquisition costs, deferred Federal income tax
and amounts attributable to participating group annuity contracts. In
conjunction with this transaction, the Company received $200.0 million
of Class B Notes issued by EQ Asset Trust 1993. These notes have
interest rates ranging from 6.85% to 9.45%. The Class B Notes are
reflected in investments in and loans to affiliates on the
consolidated balance sheets.
SAI-86
<PAGE>
Supplement dated May 1, 1996 to Prospectus dated May 1, 1996
MEMBERS RETIREMENT PROGRAMS
funded under contracts with
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
787 Seventh Avenue, New York, New York 10019
Toll-Free Telephone 800-223-5790
-------------------------------
VARIABLE ANNUITY BENEFITS
-------------------------------
This Prospectus Supplement should be read and retained for
future reference by Participants in the Members Retirement
Programs who are considering variable
annuity payment benefits after retirement.
This Prospectus Supplement is not authorized for
distribution unless accompanied or preceded by
the Prospectus dated May 1, 1996 for the
appropriate Members Retirement Program.
- ------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS: ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
- ------------------------------------------------------------------------------
<PAGE>
RETIREMENT BENEFITS
When you become eligible to receive benefits under a Members Retirement
Program, you may select one or more of the following forms of distribution,
which are available in variable or fixed form. The law requires that if the
value of your Account Balance is more than $3,500, you must receive a
Qualified Joint and Survivor Annuity unless your Spouse consents to a
different election.
Life Annuity - an annuity providing monthly payments for your life. No
payments will be made after your death, even if you have received only one
payment.
Life Annuity - Period Certain - an annuity providing monthly payments
for your life or, if longer, a specified period of time. If you die before the
end of that specified period, payments will continue to your beneficiary until
the end of the period. Subject to legal limitations, you may specify a minimum
payment period of 5, 10, 15 or 20 years; the longer the specified period, the
smaller the monthly payments will be.
Joint and Survivor Annuity - Period Certain - an annuity providing
monthly payments for your life and that of your beneficiary or, if longer, a
specified period of time. If you and your beneficiary both die before the end
of the specified period, payments will continue to your contingent beneficiary
until the end of the period. Subject to legal limitations, you may specify a
minimum payment period of 5, 10, 15 or 20 years; the longer the specified
period, the smaller the monthly payments will be.
How Annuity Payments are Made
When your distribution of benefits under an annuity begins, your Units
in the Funds are redeemed. Part or all of the proceeds, plus part or all of
your Account Balance in the General Account Options, may be used to purchase
an annuity. The minimum amount that can be used to purchase any type of
annuity is $3,500. Usually, a $350 charge will be deducted from the amount
used to purchase the annuity to reimburse us for administrative expenses
associated with processing the application and with issuing each month's
annuity payment. Applicable premium taxes will also be deducted.
Annuity payments may be fixed or variable.
FIXED ANNUITY PAYMENTS. Fixed annuity payments are determined from our
annuity rate tables in effect at the time the first annuity payment is
made. The minimum amount of the fixed payments is determined from tables
in our contract with the Trustees, which show the amount of proceeds
necessary to purchase each $1 of monthly annuity payments (after
deduction of any applicable taxes and the annuity administrative
charge). These tables are
-2-
<PAGE>
designed to determine the amounts required to pay for the annuity
selected, taking into account our administrative and investment expenses
and mortality and expense risks. The size of your payment will depend
upon the form of annuity chosen, your age and the age of your
beneficiary if you select a joint and survivor annuity. If our current
group annuity rates for payment of proceeds would produce a larger
payment, those rates will apply instead of the minimums in the contract
tables. If we give any group pension client with a qualified plan a
better annuity rate than those currently available for the Program, we
will also make those rates available to Program participants. The
annuity administrative charge may be greater than $350 in that case.
Under our contract with the Trustees, we may change the tables but not
more frequently than once every five years. Fixed annuity payments will
not fluctuate during the payment period.
VARIABLE ANNUITY PAYMENTS. Variable annuity payments are funded through
our Separate Account No. 4 (Pooled) (the "Fund"), through the purchase
of Annuity Units. The number of Annuity Units purchased is equal to the
amount of the first annuity payment divided by the Annuity Unit Value
for the due date of the first annuity payment. The amount of the first
annuity payment is determined in the same manner for a variable annuity
as it is for a fixed annuity. The number of Annuity Units stays the same
throughout the payment period for the variable annuity but the Annuity
Unit Value changes to reflect the investment income and the realized and
unrealized capital gains and losses of the Fund, after adjustment for an
assumed base rate of return of 5-3/4%, described below.
The amounts of variable annuity payments are determined as follows:
Payments normally start as of the first day of the second calendar month
following our receipt of the proper forms. The first two monthly payments are
the same.
Payments after the first two will vary according to the investment
performance of the Fund. Each monthly payment will be calculated by
multiplying the number of Annuity Units credited to you by the Annuity Unit
Value for the first business day of the calendar month before the due date of
the payment.
The Annuity Unit Value was set at $1.1553 as of July 1, 1969, the first
day that Separate Account No. 4 (Pooled) was operational. For any month after
that date, it is the Annuity Unit Value for the preceding month multiplied by
the change factor for the current month. The change factor gives effect to the
assumed annual base rate of return of 5-3/4% and to the actual investment
experience of the Fund.
-3-
<PAGE>
Because of the adjustment for the assumed base rate of return, the
Annuity Unit Value rises and falls depending on whether the actual rate of
investment return is higher or lower than 5-3/4%.
Illustration of Changes in Annuity Payments. To show how we determine
variable annuity payments from month to month, assume that the amount you
applied to purchase an annuity is enough to fund an annuity with a monthly
payment of $363 and that the Annuity Unit Value for the due date of the first
annuity payment is $1.05. The number of annuity units credited under your
certificate would be 345.71 (363 / 1.05 = 345.71). If the third monthly
payment is due on March 1, and the Annuity Unit Value for February was $1.10,
the annuity payment for March would be the number of units (345.71) times the
Annuity Unit Value ($1.10), or $380.28. If the Annuity Unit Value was $1.00 on
March 1, the annuity payment for April would be 345.71 times $1.00 or $345.71.
Summary of Annuity Unit Values for the Fund
This table shows the Annuity Unit Values with an assumed based rate of
return of 5-3/4%.
<TABLE>
<CAPTION>
First Business Day of Annuity Unit Value
--------------------- ------------------
<S> <C>
October 1986 $3.4330
October 1987 $4.3934
October 1988 $3.5444
October 1989 $4.8357
October 1990 $3.8569
October 1991 $5.4677
October 1992 $5.1818
October 1993 $6.3886
October 1994 $6.1563
October 1995 $7.4970
</TABLE>
THE FUND
The Fund (Separate Account No. 4 (Pooled)) was established pursuant to
the Insurance Law of the State of New York in 1969. It is an investment
account used to fund benefits under group annuity contracts and other
agreements for tax-deferred retirement programs administered by us.
-4-
<PAGE>
For a full description of the Fund, its investment policies, the risks
of an investment in the Fund and information relating to the valuation of Fund
assets, see the description of the Fund in our May 1, 1996 prospectus and the
Statement of Additional Information.
INVESTMENT MANAGER
The Manager
We, Equitable Life, act as Investment Manager to the Fund. As such, we
have complete discretion over Fund assets and we invest and reinvest these
assets in accordance with the investment policies described in our May 1, 1996
prospectus and Statement of Additional Information.
We are a New York stock life insurance company with our Home Office at
787 Seventh Avenue, New York, New York 10019. Founded in 1859, we are one of
the largest insurance companies in the United States. Equitable Life, the
Holding Co. and their subsidiaries managed assets of approximately $195.3
billion as of December 31, 1995.
Investment Management
In providing investment management to the Funds, we currently use the
personnel and facilities of Alliance Capital Management L.P. ("Alliance"), for
portfolio selection and transaction services. For a description of Alliance,
see our May 1, 1996 prospectus.
Fund Transactions
The Fund is charged for securities brokers commissions, transfer taxes
and other fees relating to securities transactions. Transactions in equity
securities for the Fund are executed primarily through brokers which are
selected by Alliance/Equitable Life and receive commissions paid by the Fund.
For 1995 and 1994, the Fund paid $6,044,623 and $4,738,796, respectively, in
brokerage commissions. For a full description of our policies relating to the
selection of brokers, see the description of the Fund in our May 1, 1996
Statement of Additional Information.
-5-
<PAGE>
FINANCIAL STATEMENTS
The financial statements of the Fund reflect applicable fees, charges
and other expenses under the Members Programs as in effect during the periods
covered, as well as the charges against the account made in accordance with
the terms of all other contracts participating in the account.
Separate Account No. 4 (Pooled): Page
Report of Independent Accountants - Price Waterhouse LLP 7
Statement of Assets and Liabilities,
December 31, 1995 8
Statement of Operations and Changes in Net Assets
for the Years Ended December 31, 1995 and 1994 9
Portfolio of Investments
December 31, 1995 10
Notes to Financial Statements 14
-6-
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
The Equitable Life Assurance Society of the United States
and the Participants in the
Association Members Retirement Program
In our opinion, the accompanying statement of assets and liabilities, including
the portfolios of investments, and the related statements of operations and
changes in net assets present fairly, in all material respects, the financial
position of Separate Account No. 4 of The Equitable Life Assurance Society of
the United States ("Equitable Life") at December 31, 1995, and its results of
operations and changes in net assets for each of the two years in the period
then ended, in conformity with generally accepted accounting principles. These
financial statements are the responsibility of Equitable Life's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
December 31, 1995 by correspondence with the custodian and brokers, the
application of alternative auditing procedures where confirmations from brokers
were not received, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
New York, NY
February 7, 1996
-7-
<PAGE>
SEPARATE ACCOUNT NO. 4 (POOLED) (THE GROWTH EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statement of Assets and Liabilities
December 31, 1995
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments (Notes 2 and 3):
Common stocks--at value (cost: $1,772,607,539) ....................... $2,071,380,232
Long-term debt securities--at value (amortized cost: $43,389,734) .... 35,481,250
Participation in Separate Account No. 2A--at amortized cost,
which approximates market value, equivalent to 62,384 units at
$241.89 ............................................................ 15,090,212
Cash ................................................................... 3,285,960
Receivables:
Securities sold ...................................................... 15,481,889
Dividends ............................................................ 1,693,035
Interest ............................................................. 59,583
---------------------------------------------------------------------- --------------
Total assets ....................................................... 2,142,472,161
---------------------------------------------------------------------- --------------
LIABILITIES:
Payables:
Securities purchased ................................................. 10,088,399
Due to Equitable Life's General Account .............................. 5,686,050
Investment management fees payable ................................... 7,255
Accrued expenses ....................................................... 521,041
Amount retained by Equitable Life in Separate Account No. 4 (Note 1) .. 1,044,875
---------------------------------------------------------------------- --------------
Total liabilities .................................................. 17,347,620
--------------
Net Assets (Note 1):
Net assets attributable to participants' accumulations ................. 2,102,751,745
Reserves and other contract liabilities attributable to annuity
benefits ............................................................... 22,372,796
---------------------------------------------------------------------- --------------
NET ASSETS ............................................................. $2,125,124,541
====================================================================== ==============
</TABLE>
See Notes to Financial Statements.
-8-
<PAGE>
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statements of Operations and Changes in Net Assets
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1995 1994
- -------------------------------------------------------------------------- -------------- ---------------
<S> <C> <C>
FROM OPERATIONS:
INVESTMENT INCOME (NOTE 2):
Dividends (net of foreign taxes withheld--1995: $239,657 and 1994:
$280,079) ................................................................ $ 19,610,344 $ 18,981,135
Interest and amortization of premium ...................................... (852,218) 120,286
- -------------------------------------------------------------------------- -------------- ---------------
Total ..................................................................... 18,758,126 19,101,421
EXPENSES -- (NOTE 4) ...................................................... (16,007,109) (14,943,802)
- -------------------------------------------------------------------------- -------------- ---------------
NET INCOME ................................................................ 2,751,017 4,157,619
- -------------------------------------------------------------------------- -------------- ---------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 2):
Realized gain from security and foreign currency transactions ............ 260,870,246 121,640,003
- -------------------------------------------------------------------------- -------------- ---------------
Unrealized appreciation (depreciation) of investments and foreign currency
transactions: ............................................................
Beginning of year ........................................................ 41,831,973 211,185,607
End of year .............................................................. 290,870,386 41,831,973
- -------------------------------------------------------------------------- -------------- ---------------
Change in unrealized appreciation/depreciation ............................ 249,038,413 (169,353,634)
- -------------------------------------------------------------------------- -------------- ---------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS .................... 509,908,659 (47,713,631)
- -------------------------------------------------------------------------- -------------- ---------------
Increase (decrease) in net assets attributable to operations ............. 512,659,676 (43,556,012)
- -------------------------------------------------------------------------- -------------- ---------------
FROM CONTRIBUTIONS AND WITHDRAWALS:
Contributions ............................................................. 422,289,107 435,940,867
Withdrawals ............................................................... (474,530,080) (528,069,361)
- -------------------------------------------------------------------------- -------------- ---------------
Decrease in net assets attributable to contributions and withdrawals ..... (52,240,973) (92,128,494)
- -------------------------------------------------------------------------- -------------- ---------------
Decrease in accumulated amount retained by
Equitable Life in Separate Account No. 4 (Note 1) ........................ 113,489 449,257
- -------------------------------------------------------------------------- -------------- ---------------
INCREASE (DECREASE) IN NET ASSETS ......................................... 460,532,192 (135,235,249)
NET ASSETS -- BEGINNING OF YEAR ........................................... 1,664,592,349 1,799,827,598
- -------------------------------------------------------------------------- -------------- ---------------
NET ASSETS -- END OF YEAR ................................................. $2,125,124,541 $1,664,592,349
========================================================================== ============== ===============
</TABLE>
See Notes to Financial Statements.
-9-
<PAGE>
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments
December 31, 1995
<TABLE>
<CAPTION>
NUMBER OF VALUE
SHARES (NOTE 3)
- ---------------------------------------------------------- ------------ -------------
<S> <C> <C>
COMMON STOCKS:
BASIC MATERIALS (0.3%)
CHEMICALS--SPECIALTY
UCAR International, Inc.* ................................. 175,000 $ 5,906,250
-------------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (0.2%)
Rollins Environmental Services, Inc.* ..................... 1,054,700 3,032,263
USA Waste Services, Inc.* ................................. 120,000 2,265,000
-------------
5,297,263
-------------
PRINTING, PUBLISHING & BROADCASTING (1.2%)
Australis Media Ltd. ...................................... 4,500,250 3,846,532
Australis Media Ltd.
Conv. Note* .............................................. 22,000,000 18,804,225
IVI Publishing, Inc.* ..................................... 121,700 1,597,313
-------------
24,248,070
-------------
PROFESSIONAL SERVICES (0.1%)
Loewen Group, Inc. ........................................ 50,000 1,265,625
-------------
TOTAL BUSINESS SERVICES (1.5%) ............................ 30,810,958
-------------
CAPITAL GOODS (2.3%)
AEROSPACE
General Motors Corp. (Class H) ............................ 1,000,000 49,125,000
-------------
CONSUMER CYCLICALS
AIRLINES (1.9%)
America West Airlines, Inc. (Class B)* .................... 750,000 12,750,000
Delta Air Lines, Inc. ..................................... 160,000 11,820,000
USAir Group, Inc.* ........................................ 1,000,000 13,250,000
Worldcorp, Inc.* .......................................... 339,300 3,393,000
-------------
41,213,000
-------------
APPAREL, TEXTILE (0.5%)
Cone Mills Corp.* ......................................... 371,000 4,173,750
Nine West Group, Inc.* .................................... 200,000 7,500,000
-------------
11,673,750
-------------
FOOD SERVICES, LODGING (0.3%)
La Quinta Motor Inns, Inc. ................................ 200,000 5,475,000
-------------
HOUSEHOLD FURNITURE, APPLIANCES (1.0%)
Industrie Natuzzi (ADR) ................................... 480,000 21,780,000
-------------
LEISURE-RELATED (2.0%)
ITT Corp. ................................................. 800,000 42,400,000
-------------
RETAIL-GENERAL (2.6%)
Federated Department Stores, Inc.* ........................ 750,000 20,625,000
Lowes Cos., Inc. .......................................... 450,000 15,075,000
Office Depot, Inc.* ....................................... 300,000 5,925,000
Office Max, Inc.* ......................................... 100,000 2,237,500
Tandy Corp. ............................................... 260,000 10,790,000
-------------
54,652,500
-------------
TOTAL CONSUMER CYCLICALS (8.3%) ........................... 177,194,250
-------------
-10-
<PAGE>
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1995
NUMBER OF VALUE
SHARES (NOTE 3)
- ---------------------------------------------------------- ------------ -------------
CONSUMER NONCYCLICALS
DRUGS (1.0%)
Biogen, Inc.* ............................................. 45,000 $ 2,767,500
Centocor, Inc.* ........................................... 325,000 10,034,375
MedImmune, Inc.* .......................................... 145,400 2,908,000
Merck & Co., Inc. ......................................... 70,000 4,602,500
-------------
20,312,375
-------------
HOSPITAL SUPPLIES & SERVICES (6.3%)
Amsco International, Inc.* ................................ 150,000 2,231,250
Columbia/HCA Healthcare Corp. ............................. 800,000 40,600,000
Sun Healthcare Group, Inc.* ............................... 1,191,000 16,078,500
Surgical Care Affiliates, Inc. ............................ 2,188,300 74,402,200
-------------
133,311,950
-------------
TOBACCO (10.4%)
Loews Corp. ............................................... 2,250,000 176,343,750
Philip Morris Cos., Inc. .................................. 500,000 45,250,000
-------------
221,593,750
-------------
TOTAL CONSUMER NONCYCLICALS (17.7%) ....................... 375,218,075
-------------
CREDIT-SENSITIVE
FINANCIAL SERVICES (3.1%)
Dean Witter Discover & Co. ................................ 50,000 2,350,000
A.G. Edwards, Inc. ........................................ 220,000 5,252,500
Household International, Inc. ............................. 130,000 7,686,250
Legg Mason, Inc. .......................................... 850,000 23,375,000
Merrill Lynch & Co., Inc. ................................. 550,000 28,050,000
-------------
66,713,750
-------------
INSURANCE (12.5%)
CNA Financial Corp.* ...................................... 1,552,500 176,208,750
ITT Hartford Group, Inc. .................................. 800,000 38,700,000
Life Re Corp. ............................................. 700,000 17,500,000
NAC Re Corp. .............................................. 575,000 20,700,000
Travelers Group, Inc. ..................................... 200,000 12,575,000
-------------
265,683,750
-------------
REAL ESTATE (0.3%)
Walden Residential Properties, Inc. ....................... 308,000 6,429,500
-------------
UTILITY -- TELEPHONE (7.7%)
Century Telephone Enterprises, Inc. ....................... 397,800 12,630,150
Telephone & Data Systems, Inc. ............................ 3,825,000 151,087,500
-------------
163,717,650
-------------
TOTAL CREDIT-SENSITIVE (23.6%) ............................ 502,544,650
-------------
ENERGY
COAL & GAS PIPELINES (0.0%)
Abraxas Petroleum Corp.* .................................. 100,000 625,000
-------------
OIL -- DOMESTIC (0.7%)
Louisiana Land & Exploration Corp. ........................ 200,000 8,575,000
Snyder Oil Corp. .......................................... 500,000 6,062,500
-------------
14,637,500
-------------
-11-
<PAGE>
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1995
NUMBER OF VALUE
SHARES (NOTE 3)
- ---------------------------------------------------------- ------------ -------------
OIL -- INTERNATIONAL (1.6%)
Gulf Canada Resources Ltd. ORD* ........................... 530,000 $ 2,186,250
Imperial Oil Ltd. ......................................... 859,000 31,031,375
-------------
33,217,625
-------------
OIL -- SUPPLIES & CONSTRUCTION (4.5%)
ENSCO International, Inc.* ................................ 500,000 11,500,000
Noble Drilling Corp.* ..................................... 1,000,000 9,000,000
Parker Drilling Co.* ...................................... 6,000,000 36,750,000
Rowan Cos., Inc.* ......................................... 3,300,000 32,587,500
Seagull Energy Corp.* ..................................... 250,000 5,562,500
-------------
95,400,000
-------------
RAILROADS (0.3%)
Union Pacific Corp. ....................................... 100,000 6,600,000
-------------
TOTAL ENERGY (7.1%) ....................................... 150,480,125
-------------
TECHNOLOGY
ELECTRONICS (13.5%)
American Superconductor Corp.* ............................ 149,000 2,160,500
Bay Networks, Inc.* ....................................... 300,000 12,337,500
Cisco Systems, Inc.* ...................................... 1,315,000 98,131,875
General Instrument Corp.* ................................. 3,260,000 76,202,500
ITT Industries, Inc. ...................................... 800,000 19,200,000
National Semiconductor Corp.* ............................. 2,000,000 44,500,000
Texas Instruments, Inc. ................................... 200,000 10,350,000
3Com Corp.* ............................................... 500,000 23,312,500
-------------
286,194,875
-------------
OFFICE EQUIPMENT (1.8%)
Compaq Computer Corp.* .................................... 500,000 24,000,000
Sun Microsystems, Inc.* ................................... 300,000 13,687,500
-------------
37,687,500
-------------
OFFICE EQUIPMENT SERVICES (0.2%)
Informix Corp.* ........................................... 55,000 1,650,000
Oracle Corp.* ............................................. 80,000 3,390,000
-------------
5,040,000
-------------
TELECOMMUNICATIONS (21.2%)
AirTouch Communications, Inc.* ............................ 40,000 1,130,000
American Satellite Network -- Rights* ..................... 70,000 0
Cellular Communications, Inc. (Class A)* .................. 869,268 43,246,083
Cellular Communications Puerto Rico, Inc.* ................ 322,500 8,949,375
DSC Communications Corp.* ................................. 650,000 23,968,750
Mannesmann AG ............................................. 120,000 38,196,841
Mannesmann AG (ADR) ....................................... 200,000 63,600,000
Millicom International Cellular S.A.* ..................... 1,700,000 51,850,000
Nokia Corp. (ADR) ......................................... 600,000 23,325,000
Rogers Cantel Mobile Communications, Inc. (Class B) (ADR)* 900,000 23,850,000
Scientific Atlanta, Inc. .................................. 2,035,000 30,525,000
Tellabs, Inc.* ............................................ 450,000 16,650,000
U.S. Cellular Corp.* ...................................... 2,650,000 89,437,500
Vanguard Cellular Systems, Inc. (Class A)* ................ 1,800,000 36,450,000
-------------
451,178,549
-------------
TOTAL TECHNOLOGY (36.7%) .................................. 780,100,924
-------------
</TABLE>
-12-
<PAGE>
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Concluded)
December 31, 1995
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE (NOTE 3)
- --------------------------------------------------------------------------- ------------ --------------
<S> <C> <C>
TOTAL COMMON STOCKS (97.5%)
(Cost $1,772,607,539) ..................................................... $2,071,380,232
--------------
LONG-TERM DEBT SECURITIES:
BUSINESS SERVICES (0.2%)
PROFESSIONAL SERVICES
First Financial Management Corp.
5.0% Conv., 1999 .......................................................... $ 2,000,000 3,245,000
--------------
TECHNOLOGY
ELECTRONICS (1.4%)
General Instrument Corp.
5.0% Conv., 2000 .......................................................... 26,600,000 29,592,500
--------------
TELECOMMUNICATIONS (0.1%)
U.S. Cellular Corp.
Zero Coupon Conv., 2015 ................................................... 7,500,000 2,643,750
--------------
TOTAL TECHNOLOGY (1.5%) .................................................... 32,236,250
--------------
TOTAL LONG-TERM DEBT SECURITIES (1.7%)
(Amortized Cost $43,389,734) .............................................. 35,481,250
--------------
PARTICIPATION IN SEPARATE ACCOUNT NO. 2A,
at amortized cost, which approximates
market value, equivalent to 62,384 units
at $241.89 each (0.7%) .................................................... 15,090,212
--------------
TOTAL INVESTMENTS (99.9%)
(Cost /Amortized Cost $1,831,087,485) ..................................... 2,121,951,694
CASH AND RECEIVABLES LESS LIABILITIES (0.1%) ............................... 4,217,722
AMOUNT RETAINED BY EQUITABLE LIFE IN SEPARATE ACCOUNT NO. 4 (0.0%) (NOTE
1). ....................................................................... (1,044,875)
--------------
NET ASSETS (100.0%) (NOTE 1) ............................................... $2,125,124,541
==============
Reserves attributable to participants' accumulations ....................... $2,102,751,745
Reserves and other contract liabilities attributable to annuity benefits .. 22,372,796
--------------
NET ASSETS (100.0%) ........................................................ $2,125,124,541
==============
* Non-income producing.
</TABLE>
See Notes to Financial Statements.
-13-
<PAGE>
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Notes to Financial Statements
1. Separate Account No. 4 (Pooled) (the Growth Equity Fund) (the Fund) of
The Equitable Life Assurance Society of the United States (Equitable Life), a
wholly-owned subsidiary of The Equitable Companies Incorporated, was
established in conformity with the New York State Insurance Law. Pursuant to
such law, to the extent provided in the applicable contracts, the net assets
in the Fund is not chargeable with liabilities arising out of any other
business of Equitable Life. The excess of assets over reserves and other
contract liabilities amounting to $1,044,875 as shown in the Statements of
Assets and Liabilities in Separate Account No. 4 may be transferred to
Equitable Life's General Account.
At December 31, 1995 and 1994, interests of retirement and investment
plans for Equitable Life employees, managers, and agents in Separate Account
No. 4 aggregated $246,531,777 (11.6%) and $184,086,304 (11.1%), respectively,
of the net assets in the Fund.
Equitable Life is the investment manager for the Fund. Alliance Capital
Management L.P. (Alliance) serves as the investment adviser to Equitable Life
with respect to the management of the Fund. Alliance is a publicly-traded
limited partnership which is indirectly majority-owned by Equitable Life.
Equitable Life and Alliance seek to obtain the best price and execution of
all orders placed for the Fund considering all circumstances. In addition to
using brokers and dealers to execute portfolio security transactions for
accounts under their management, Equitable Life and Alliance may also enter
into other types of business and securities transactions with brokers and
dealers, which will be unrelated to allocation of the Funds' portfolio
transactions.
2. Security transactions are recorded on the trade date. Amortized cost of
debt securities consists of cost adjusted, where applicable, for amortization
of premium or accretion of discount. Dividend income is recorded on the
ex-dividend date; interest income (including amortization of premium and
discount on securities using the effective yield method) is accrued daily.
Realized gains and losses on the sale of investments are computed on the
basis of the identified cost of the related investments sold.
Transactions denominated in foreign currencies are recorded at the rate
prevailing at the date of such transactions. Asset and liability accounts
that are denominated in a foreign currency are adjusted to reflect the
current exchange rate at the end of the period. Transaction gains or losses
resulting from changes in the exchange rate during the reporting period or
upon settlement of the foreign currency transactions are reflected under
"Realized and Unrealized Gain (Loss) on Investments" in the Statements of
Operations and Changes in Net Assets.
-14-
<PAGE>
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Notes to Financial Statements (Continued)
Equitable Life's internal short-term investment account, Separate Account
No. 2A, was established to provide a more flexible and efficient vehicle to
combine and invest temporary cash positions of certain eligible accounts
(Participating Funds) under Equitable Life's management. Separate Account No.
2A invests in debt securities maturing in sixty days or less from the date of
acquisition. At December 31, 1995, the amortized cost of investments held in
Separate Account No. 2A consists of the following:
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMORTIZED COST %
- -------------------------------------------------------- -------------- --------
<S> <C> <C>
Certificates of Deposit, 5.80% due 01/31/96 ............. $ 20,000,000 6.7%
Commercial Paper, 5.53%-5.87% due 1/12/96 through
2/23/96 ................................................ 262,329,329 88.0
Time Deposits, 5.875% due 01/02/96 ...................... 800,000 0.3
Variable Rate LIBOR, 5.968% due 01/08/96 ................ 15,000,000 5.0
- -------------------------------------------------------- -------------- --------
Total Investments ....................................... 298,129,329 100.0
Cash and Receivables Less Liabilities ................... 63,333 0.0
- -------------------------------------------------------- -------------- --------
Net Assets of Separate Account No. 2A ................... $298,192,662 100.0%
======================================================== ============== ========
Units Outstanding ....................................... 1,232,756
Unit Value .............................................. $ 241.89
</TABLE>
Participating Funds purchase or redeem units depending on each
participating account's excess cash availability or cash needs to meet its
liabilities. Separate Account No. 2A is not subject to investment management
fees. Separate Account No. 2A is valued daily at amortized cost, which
approximates market value.
For 1995 and 1994, investment security transactions, excluding short-term
debt securities, were as follows:
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
SEPARATE ACCOUNT NO. 4
COST OF NET PROCEEDS
PURCHASES OF SALES
- ----------------------------------------------- -------------- --------------
<S> <C> <C>
Stocks and long-term corporate debt securities:
1995 ......................................... $2,037,876,834 $2,082,648,235
1994 ......................................... 1,556,068,225 1,644,508,525
U.S. Government obligations:
1995 ......................................... -- --
1994 ......................................... -- --
</TABLE>
----------------------------------------------------------------------------
3. Investment securities are valued as follows:
Stocks listed on national securities exchanges and certain
over-the-counter issues traded on the National Association of Securities
Dealers, Inc. Automated Quotation (NASDAQ) national market system are valued
at the last sale price, or, if no sale, at the latest available bid price.
Foreign securities not traded directly, or in American Depository Receipt
(ADR) form in the United States, are valued at the last sale price in the
local currency on an exchange in the country of origin. Foreign currency is
converted into its U.S. dollar equivalent at current exchange rates.
United States Treasury securities and other obligations issued or
guaranteed by the United States Government, its agencies or instrumentalities
are valued at representative quoted prices.
-15-
<PAGE>
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Notes to Financial Statements (Concluded)
Long-term publicly traded corporate bonds are valued at prices obtained
from a bond pricing service of a major dealer in bonds when such prices are
available; however, in circumstances where Equitable Life and Alliance deem
it appropriate to do so, an over-the-counter or exchange quotation may be
used.
Convertible preferred stocks listed on national securities exchanges are
valued at their last sale price or, if there is no sale, at the latest
available bid price.
Convertible bonds and unlisted convertible preferred stocks are valued at
bid prices obtained from one or more major dealers in such securities; where
there is a discrepancy between dealers, values may be adjusted based on
recent premium spreads to the underlying common stock.
Other assets that do not have a readily available market price are valued
at fair value as determined in good faith by Equitable Life's investment
officers.
Separate Account No. 2A is valued daily at amortized cost, which
approximates market value. Short-term debt securities purchased directly by
the Fund which mature in 60 days or less are valued at amortized cost.
Short-term debt securities which mature in more than 60 days are valued at
representative quoted prices.
4. Charges and fees are deducted in accordance with the terms of the
various contracts which participate in the Fund. With respect to the Members
Retirement Plan and Trust, these expenses consist of investment management
and accounting fees, program expense charge, direct expenses and record
maintenance and report fee. These charges and fees are paid to Equitable Life
by the Fund and are recorded as expenses in the accompanying Statements of
Operations and Changes in Net Assets.
5. No Federal income tax based on net income or realized and unrealized
capital gains was applicable to contracts participating in the Fund for the
two years ended December 31, 1995, by reason of applicable provisions of the
Internal Revenue Code and no Federal income tax payable by Equitable Life for
such years will affect such contracts. Accordingly, no Federal income tax
provision is required.
-16-
<PAGE>
Part C
OTHER INFORMATION
Item 28. Financial Statements and Exhibits
(a) Financial Statements included in Part B.
The following are included in the Statement of Additional Information:
1. Separate Account Nos. 3 (Pooled), 4 (Pooled), 10 (Pooled)
and 51 (Pooled) (The Aggressive Stock, Common Stock,
Balanced and Global, Conservative Investors and Growth
Investors Accounts): - Report of Independent Accountants
- Price Waterhouse LLP
2. Separate Account No. 3 (Pooled):
- Statements of Assets and Liabilities, December 31, 1995
- Statements of Operations and Changes in Net Assets for
the Years Ended December 31, 1995, and 1994
- Portfolio of Investments, December 31, 1995
3. Separate Account No. 4 (Pooled):
- Statement of Assets and Liabilities, December 31, 1995
- Statements of Operation and Changes in Net Assets for
the Years Ended December 31, 1995 and 1994
- Portfolio of Investments, December 3l, 1995
4 Separate Account No. 10 (Pooled):
- Statements of Assets and Liabilities, December 31, 1995
- Statements of Operations and Changes in Net Assets for
the Years Ended December 31, 1995, and 1994
- Portfolio of Investments, December 31, 1995
5. Separate Account No. 51 (Pooled:
- Statement of Assets and Liabilities, December 31, l995
- Statements of Operations and Changes in Net Assets for
the Years Ended December 31, 1995 and 1994.
6. Separate Account Nos. 3 (Pooled), 4 (Pooled), 10 (Pooled)
and 51 (Pooled):
- Notes to Financial Statements
7. The Equitable Life Assurance Society of the United States:
- Report of Independent Accountants - Price Waterhouse LLP
- Consolidated Balance Sheets, December 31, 1995 and 1994
-Consolidated Statements of Earnings for the Years
Ended December 31, 1995, 1994 and 1993
-Consolidated Statements of Equity for the Years Ended
December 31, 1995 and 1994 and 1993
-Consolidated Statements of Cash Flows for the Years
Ended December 31, 1995, 1994 and 1993
-Notes to Consolidated Financial Statements
b) Exhibits.
The following Exhibits are filed herewith:
1. Resolutions of the Board of Directors of The Equitable Life
Assurance Society of the United States ("Equitable")
authorizing the establishment of the Registrant, incorporated
by reference to Post-Effective Amendment No. 1 on Form N-3 to
Registration Statement 33-46995, filed July 22, 1992.
C-1
<PAGE>
2. Not Applicable.
3. Not Applicable.
4. (a) Distribution Agreement dated as of January 1, 1995 by
and between The Hudson River Trust and Equico
Securities, Inc., incorporated by reference to
Registration Statement No. 33-91588 on Form N-3 of
Registrant, filed on April 26, 1995.
(b) Sales Agreement dated as of January 1, 1995 by and
among Equico Securities, Inc., Equitable, and
Separate Account A, Separate Account No. 301 and
Separate Account No. 51, incorporated by reference to
Registration Statement No. 33-91588 on Form N-3 of
Registrant, filed on April 26, 1995.
5. Form of Sales Agreement between Equitable Variable Life
Insurance Company and The Equitable Life Assurance
Society of the United States for itself and on behalf of
its Separate Account No. 51, incorporated by reference to
Post-Effective Amendment No. 2 to Registration No.
33-46995 on Form N-3 of Registrant, filed March 2, 1993.
6. (a) Exhibit 6(e) (Copy of Group Annuity Contract AC 6059,
effective August 30, 1984, among the United States Trust
Company of New York and The Equitable Life Assurance
Society of the United States), incorporated by reference
to Registration No. 33-21417 on Form N-3 of Registrant,
filed April 26, 1988.
(b) Exhibit 6(f) (Form of Rider No. 1 to Group Annuity
Contract AC 6059 between the United States Trust
Company of New York and The Equitable Life Assurance
Society of the United States), incorporated by
reference to Registration No. 33-34554 on Form N-3 of
Registrant, filed April 26, 1990.
(c) Exhibit 6(g) (Form of Rider No. 2 to Group Annuity
Contract AC 6059 between the United States Trust
Company of New York and The Equitable Life Assurance
Society of the United States), incorporated by
reference to Registration No. 33-34554 on Form N-3 of
Registrant, filed April 26, 1990.
(d) Form of Rider No. 3 to Group Annuity Contract AC 6059
between the United States Trust Company of New York
and The Equitable Life Assurance Society of the
United States, incorporated by reference to
Registration No. 33-46995 on Form N-3 of Registrant,
filed April 8, 1992.
(e) Form of Rider No. 4 to Group Annuity Contract AC 6059
between the United States Trust Company of New York
and The Equitable Life Assurance Society of the
United States, incorporated by reference to
Post-Effective Amendment No. 2 to Registration No.
33-46995 on Form N-3 of Registrant, filed March 2,
1993.
(f) Exhibit 7(k) (Form of Participation Agreement for the
standardized profit-sharing Plan under the Association
Members Program), incorporated by reference to
Post-Effective Amendment No. 1 on Form N-3 to Registration
C-2
<PAGE>
Statement on Form S-1 of Registrant, filed April 16, 1986.
(g) Exhibit 7(l) (Form of Participation Agreement for the
non-standardized Profit-Sharing Plan under the Association
Members Program), incorporated by reference to
Post-Effective Amendment No. 1 on Form N-3 to Registration
Statement on Form S-1 of Registrant, filed April 16, 1986.
(h) Exhibit 7(m) (Form of Participation Agreement for the
standardized Defined Contribution Pension Plan under the
Association Members Program), incorporated by reference to
Post-Effective Amendment No. 1 on Form N-3 to Registration
Statement on Form S-1 of Registrant, filed April 16, 1986.
(i) Exhibit 7(n) (Form of Participation Agreement for the
non-standardized Defined Contribution Pension Plan under
the Association Members Program), incorporated by
reference to Post-Effective Amendment No. 1 on Form N-3 to
Registration Statement on Form S-1 of Registrant, filed
April 16, 1986.
(j) Exhibit 7(r) (Copy of Attachment to Profit Sharing
Participation Agreement under the Association Members
Retirement Plan of the Equitable Life Assurance Society of
the United States), incorporated by reference to
Registration No. 33-21417 on Form N-3 of Registrant, filed
April 26, 1988.
(k) Exhibit 7(0)(2) (Form of Participant Enrollment Form under
the Association Members Program), incorporated by
reference to Post-Effective Amendment No. 2 in Form N-3 to
Registration Statement on Form S-1 of Registrant, filed
April 21, 1987.
(l) Exhibit 7(t) (Form of Standardized Participation
Agreement under the Association Members Defined
Benefit Pension Plan), incorporated by reference to
Registration No. 33-21417 on Form N-3 of Registrant,
filed April 26, 1988.
(m) Exhibit 7(ee) (Form of Standardized Participation
Agreement for the Defined Contribution Pension Plan under
the Association Members Program, as filed with the
Internal Revenue Service on April 18, 1989), incorporated
by reference to Post-Effective Amendment No. 2 to
Registration No. 33-21417 on Form N-3 of Registrant, filed
April 26, 1989.
(n) Exhibit 7(ff) (Form of Non-Standardized Participation
Agreement for the Defined Contribution Pension Plan under
the Association Members Program, as filed with the
Internal Revenue Service on April 18, 1989), incorporated
by reference to Post-Effective Amendment No. 2 to
Registration No. 33-21417 on Form N-3 of Registrant, filed
April 26, 1989.
(o) Exhibit 7(gg) (Form of Standardized Participation
Agreement for the Profit-Sharing Plan under the
Association Members Program, as filed with the Internal
Revenue Service on April 18, 1989), incorporated by
reference to Post-Effective Amendment
C-3
<PAGE>
No. 2 to Registration No. 33-21417 on Form N-3 of
Registrant, filed April 26, 1989.
(p) Exhibit 7(hh) (Form of Non-Standardized Participation
Agreement for the Profit-Sharing Plan under the
Association Members Program, as filed with the Internal
Revenue Service on April 18, 1989), incorporated by
reference to Post-Effective Amendment No. 2 to
Registration No. 33-21417 on Form N-3 of Registrant, filed
April 26, 1989.
(q) Exhibit 7 (ii) (Form of Simplified Participation Agreement
for the Defined Contribution Pension Plan under the
Association Members Program, as filed with the Internal
Revenue Service on April 18, 1989), incorporated by
reference to Post-Effective Amendment No. 2 to
Registration No. 33-21417 on Form N-3 of Registrant, filed
April 26, 1989.
(r) Exhibit 7(jj) (Form of Simplified Participation Agreement
for the Profit-Sharing Plan under the Association Members
Program, as filed with the Internal Revenue Service on
April 18, 1989), incorporated by reference to Post
Effective Amendment No. 2 to Registration No. 33-21417 on
Form N-3 of Registrant, filed April 26, 1989.
(s) Exhibit 7(kk) (Form of Standardized (and
non-integrated) Participation Agreement for the
Defined Benefit Pension Plan under the Association
Members Program, as filed with the Internal Revenue
Service on April 18, 1989), incorporated by reference
to Post-Effective Amendment No. 2 to Registration No.
33-21417 on Form N-3 of Registrant, filed April 26,
1989.
(t) Exhibit 7(11) (Form of Standardized (and integrated)
Participation Agreement for the Defined Benefit
Pension Plan under the Association Members Program,
as filed with the Internal Revenue Service on April
18, 1989), incorporated by reference to
Post-Effective Amendment No. 2 to Registration No.
33-21417 on Form N-3 of Registrant, filed April 26,
1989.
(u) Exhibit 7 (mm) (Form of Non-Standardized (and
nonintegrated) Participation Agreement for the
Defined Benefit Pension Plan under the Association
Members Program, as filed with the Internal Revenue
Service on April 18, 1989), incorporated by reference
to PostEffective Amendment No. 2 to Registration No.
33-21417 on Form N-3 of Registrant, filed April 26,
1989.
(v) Exhibit 7(nn) (Form of Non-Standardized (and
integrated) Participation Agreement for the Defined
Benefit Pension Plan under the Association Members
Program, as filed with the Internal Revenue Service
on April 18, 1989), incorporated by reference to
Post-Effective Amendment No. 2 to Registration No.
33-21417 on Form N-3 of Registrant, filed April 26,
1989.
(w) Form of First Amendment to the Members Retirement Plan of
m e Equitable Life Assurance Society of the United States
Participation Agreement, as filed with the
C-4
<PAGE>
Internal Revenue Service on December 23, 1991, incorporated
by reference to Registration No. 33-46995 on Form N-3 of
Registrant, filed April 8, 1992.
8. (a) Copy of the Restated Charter of The Equitable Life
Assurance Society of the United States, adopted
August 6, 1992, incorporated by reference to
Post-Effective Amendment No. 2 to Registrant No.
33-46995 on Form N-3 of Registrant, filed March 2,
1993.
(b) By-Laws of The Equitable Life Assurance Society of
the United States, as amended through July 22, 1992,
incorporated by reference to Post-Effective Amendment
No. 2 to Registration No. 33-46995 on Form N-3 of
Registrant, filed March 2, 1993.
(c) Copy of the Restated Charter of The Equitable Life
Assurance Society of the United States, adopted
November 18, 1993.
9. Not Applicable.
10. Not Applicable.
11. (a) Exhibit 11(e)(2) (Form of Association Members
Retirement Plan, as filed with the Internal Revenue
Service on April 18, 1989), incorporated by reference
to Post-Effective Amendment No. 2 to Registration No.
33-21417 on Form N-3 of Registrant, filed April 26,
1989.
(b) Exhibit 11(j)(2) (Form of Association Members Retirement
Trust, as filed with the Internal Revenue Service on April
18, 1989), incorporated by reference to Post-Effective
Amendment No. 2 to Registration No. 33-21417 on Form N-3
of Registrant, filed April 26, 1989.
(c) Exhibit 11(k) (Copy of the Association Members Pooled
Trust for Retirement Plans, as submitted to the Internal
Revenue Service on March 3, 1987), incorporated by
reference to Post-Effective Amendment No. 2 to
Registration on Form S-1 of Registrant, filed April 21,
1987.
(d) Exhibit 11(o) (Form of Association Members Defined
Benefit Pension Plan, as filed with the Internal
Revenue Service on April 18, 1989), incorporated by
reference to Post-Effective Amendment No. 2 to
Registration No. 3321417 on Form N-3 of Registrant,
filed April 26, 1989.
(e) Form of First Amendment to the Pooled Trust for
Association Members Retirement Plans of The Equitable Life
Assurance Society of the United States, as filed with the
Internal Revenue Service on December 23, 1991,
incorporated by reference to Registration No. 33-46995 on
Form N-3 of Registrant, filed April 8, 1992.
(f) Form of First Amendment to the Association Members
Retirement Plan of The Equitable Life Assurance Society of
the United States, as filed with the Internal Revenue
Service on December 23, 1991,
C-5
<PAGE>
incorporated by reference to Registration No. 33-46995 on
Form N-3 of Registrant, filed April 8, 1992.
(g) Form of First Amendment to the Association Members
Retirement Trust of me Equitable Life Assurance Society of
the United States, as filed with the Internal Revenue
Service on December 23, 1991, incorporated by reference to
Registration No. 33-46995 on Form N-3 of Registrant, filed
April 8, 1992.
12. (a) Opinion and Consent of Melvin S. Altman, Esq., Vice
President and Associate General Counsel of The
Equitable Life Assurance Society of the United
States, incorporated by reference to Registration No.
33-46995 on Form N-3 of Registrant, filed April 8,
1992.
(b) Opinion and Consent of Anthony A. Dreyspool, Vice
President and Senior Counsel of The Equitable Life
Assurance Society of the United States, incorporated
by reference to Post-Effective Amendment No. 3 to
Registration No. 33-46995 on Form N-3 of Registrant,
filed April 21, 1993.
(c) Opinion and Consent of Anthony A. Dreyspool, Vice
President and Senior Counsel of m e Equitable Life
Assurance Society of the United States incorporated
by reference to Registration No. 33-61978 on Form N-3
of Registrant, filed May 3, 1993.
(d) Opinion and Consent of Anthony A. Dreyspool, Vice
President and Senior Counsel of The Equitable Life
Assurance Society of the United States, incorporated
by reference to Registration No. 33-61978 on Form N-3
of Registrant, filed November 16, 1993.
(e) Opinion and Consent of Anthony A. Dreyspool, Vice
President and Senior Counsel of m e Equitable Life
Assurance Society of the United States, incorporated
by reference to Registration No. 33-91588 on Form N-3
of Registrant, filed April 26, 1995.
13. (a) Consent of Melvin S. Altman (included within Exhibit
12(a)), incorporated by reference to Registration No.
3346995 on Form N-3 of Registrant, filed April 8,
1992.
(b) Consent of Anthony A. Dreyspool (included within
Exhibit 12(b)), incorporated by reference to
Post-Effective Amendment No. 3 to Registration No.
33-46995 on Form N-3 of Registrant, filed April 21,
1993.
(c) Consent of Anthony A. Dreyspool (included within
Exhibit 12(c)) incorporated by reference to
Registration No. 3361978 on Form N-3 of Registrant,
filed May 3, 1993.
(d) Consent of Anthony A. Dreyspool (included within
Exhibit 12(d)), incorporated by reference to
Registration No. 33 61978 on Form N-3 of Registrant,
filed November 16, 1993.
(e) Consent of Anthony A. Dreyspool (included within
Exhibit 12(e)), incorporated by reference
C-6
<PAGE>
to Registration Statement No. 33-91588 on Form N-3 of
Registrant, filed April 26, 1995.
(f) Consent of Price Waterhouse LLP.
(g) Powers of Attorney.
27. Financial Data Schedule.
C-7
<PAGE>
Item 29: Directors and Officers of Equitable.
Set forth below is information regarding the directors and
principal officers of Equitable. Equitable's address is 787 Seventh Avenue,
New York, New York 10019. The business address of the persons whose names are
preceded by an asterisk is that of Equitable.
<TABLE>
<CAPTION>
Principal Occupation
Name and Principal Positions and Offices (and Other Positions)
Business Address With Equitable Within Past 2 Years
---------------- -------------- -------------------
Directors
---------
<S> <C> <C>
Claude Bebear Director Chairman and Chief
AXA S.A. Executive Officer,
23, Avenue Matignon AXA, and various
75008 Paris, France positions with AXA
affiliated
companies;
Director, The
Equitable
Companies
Incorporated
("EQ") and
Chairman
(February 1996 to
present);
Director,
Alliance Capital
Management
Corporation
("Alliance")
(February 1996 to
present,
Donaldson, Lufkin
& Jenrette
("DLJ") (February
1996 to present),
and Equitable
Real Estate
Investment
Management, Inc.
("Equitable Real
Estate") (March
1996 to present);
(Director of the
following non-AXA
affiliated
companies:
Schneider S.A.,
Societe Generale,
SOVAC and
Rhone-Poulenc,
S.A.; Member of
Supervisory
Board, Compagnie
Financiere de
Paribas and
Member of the
General Counsel
of Assicurazioni
Generali S.p.A.).
</TABLE>
C-8
<PAGE>
<TABLE>
<CAPTION>
Principal Occupation
Name and Principal Positions and Offices (and Other Positions)
Business Address With Equitable Within Past 2 Years
- ---------------- -------------- -------------------
<S> <C> <C>
Christopher J. Brocksom Director Chief Executive
AXA Equity & Law Officer, AXA Equity &
Amersham Road Law Life Assurance
High Wycombe Society ("AXA Equity &
Bucks HP 13 5 AL, England Law") and various
directorships and
officerships with AXA
Equity & Law affiliated
companies.
Francoise Colloc'h Director Executive Vice
AXA S.A. President, Culture -
23, Avenue Matignon Management -
75008 Paris, France Communications, AXA,
and various positions
with AXA affiliated
companies.
Henri de Castries Director Executive Vice
AXA S.A. President - Financial
23, Avenue Matignon Services and Life
75008 Paris, France Insurance Activities,
AXA (1993 to
present) and
various positions
with AXA
affiliated
companies;
Director EQ (May
1994 to present)
and Vice Chairman
(February 1996 to
present);
Equitable Real
Estate, DLJ, and
Alliance;
(Director, France
Telecom).
Joseph L. Dionne Director Chairman and Chief
The McGraw-Hill Companies Executive Officer, The
1221 Avenue of the Americas McGraw-Hill Companies;
New York, NY 10020 Director, EQ (Director,
Harris Corporation,
Alexander & Alexander
Services, Inc. (1995 to
present), and Ryder
System, Inc. (1995 to
present)).
William T. Esrey Director Chairman and Chief
Sprint Corporation Executive Officer,
P.O. Box 11315 Sprint Corporation;
Kansas City, MO 64112 Director, EQ;
(Director,
Panhandle Eastern
Corporation,
Everen Capital
Corporation
(November 1995 to
present), and
General Mills,
Inc.).
</TABLE>
C-9
<PAGE>
<TABLE>
<CAPTION>
Principal Occupation
Name and Principal Positions and Offices (and Other Positions)
Business Address With Equitable Within Past 2 Years
- ---------------- -------------- -------------------
<S> <C> <C>
Jean-Rene Fourtou Director Chairman and Chief
Rhone-Poulenc, S.A. Executive Officer
25, Quai Paul Doumer Rhone-Poulenc, S.A.;
92408 Courvbevoie Cedex, Director, EQ;
France (Director, Societe
Generale, Societe
Eurosia, Schneider S.A.
and AXA).
Norman C. Francis Director President, Xavier
Xavier University of Louisiana University of Louisiana
7325 Palmetto Street (Chairman, Liberty Bank
New Orleans, LA 70125 and Trust, New Orleans,
LA; Director,
First National
Bank of Commerce,
New Orleans, LA,
Piccadilly
Cafeteria (1995
to present), and
Entergy
Corporation (1994
to present)).
Donald J. Greene Director Counselor-at-Law;
LeBoeuf, Lamb, Greene & Partner, LeBoeuf, Lamb,
MacRae Greene & MacRae;
125 West 55th Street Director, EQ.
New York, NY 10019-4513
Anthony J. Hamilton Director Chairman and Chief
Fox-Pitt, Kelton Limited Executive Officer,
35 Wilson Street Fox-Pitt, Kelton
London EC2M 2SJ, England Limited; Chairman, AXA
Equity & Law
(October 1995 to
present) and Byas
Mosley Group
Ltd.; Director,
EQ and AXA.
John T. Hartley Director Retired Chairman and
Harris Corporation Chief Executive
1025 NASA Boulevard Officer, Harris
Melbourne, FL 32919 Corporation (until July
1995); Director, EQ;
(Director, Harris
Corporation and The
McGraw-Hill Companies).
</TABLE>
C-10
<PAGE>
<TABLE>
<CAPTION>
Principal Occupation
Name and Principal Positions and Offices (and Other Positions)
Business Address With Equitable Within Past 2 Years
- ---------------- -------------- -------------------
<S> <C> <C>
John H.F. Haskell, Jr. Director Director and Managing
Dillon, Read & Co., Inc. Director, Dillon, Read
535 Madison Avenue & Co., Inc.; Director,
New York, NY 10028 EQ; Chairman
Supervisory Board,
Dillon Read (France)
Gestion; Director,
Dillon Read Limited;
(Director, Kaydon
Corporation).
W. Edwin Jarmain Director President, Jarmain
Jarmain Group, Inc. Group, Inc.; also an
95 Wellington Street West officer or director of
Suite 805 several affiliated
Toronto, Ontario M5J 2N7, companies; Chairman,
Canada FCA International,
Ltd.; Director,
EQ, DLJ, Anglo
Canada General
Insurance
Company, AXA
Insurance
(Canada), AXA
Pacific Insurance
Company (formerly
Boreal Property
and Casualty
Insurance
Company)
(December 1994 to
present), and
several other AXA
affiliated
companies.
G. Donald Johnston, Jr. Director Retired Chairman and
184-400 Ocean Road Chief Executive Officer
John's Island JWT Group, Inc. and J.
Vero Beach, FL 32963 Walter Thompson
Company; (Director, The
McGraw-Hill Companies).
Winthrop Knowlton Director Chairman, Knowlton
Knowlton Brothers, Inc. Brothers, Inc.;
530 Fifth Avenue President and Chief
New York, NY 10036 Executive Officer,
Knowlton Associates,
Inc.; Director, EQ
(Managing Director,
Family Partners & Co.
and Frontier Partners,
Inc.; Director,
Bethlehem Steel
Corporation; and
Chairman of the Board,
The Jackson Laboratory).
</TABLE>
C-11
<PAGE>
<TABLE>
<CAPTION>
Principal Occupation
Name and Principal Positions and Offices (and Other Positions)
Business Address With Equitable Within Past 2 Years
- ---------------- -------------- -------------------
<S> <C> <C>
Arthur L. Liman Director Counselor-at-Law;
Paul, Weiss, Rifkind, Partner, Paul, Weiss,
Wharton & Garrison Rifkind, Wharton &
1285 Avenue of the Americas Garrison; Director, EQ
New York, NY 10019 (Director, Continental
Grain Company).
George T. Lowy Director Counselor-at-Law;
Cravath, Swaine & Moore Partner, Cravath,
825 Eighth Avenue Swaine & Moore.
New York, NY 10019 (Director, Eramet (June
1995 to present)).
Didier Pineau-Valencienne Director Chairman and Chief
Schneider S.A. Executive Officer,
64/70 Avenue Jean-Baptiste Schneider S.A. and
Clement various positions with
92646 Boulogne-Billancourt Schneider affiliated
Cedex companies; Director, EQ
France (February 1996 to
present);
(Director, AXA,
CGIP, Compagnie
Industrielle de
Paris, Sema Group
plc, and
S.I.S.E.; member
of Supervisory
Board of Banque
Paribas and
European Advisory
Board of Bankers
Trust Company).
George J. Sella, Jr. Director Retired Chairman,
P.O. Box 397 President and Chief
Newton, NJ 07860 Executive Officer,
American Cyanamid
Company;
Director, EQ
(Director, Bush,
Boake, Allen,
Inc., and Union
Camp Corporation).
Dave H. Williams Director Chairman and Chief
Alliance Capital Management Executive Officer,
Corporation Alliance and various
1345 Avenue of the Americas positions with Alliance
New York, NY 10105 affiliated companies;
Director, EQ.
</TABLE>
C-12
<PAGE>
<TABLE>
<CAPTION>
Principal Occupation
Name and Principal Positions and Offices (and Other Positions)
Business Address With Equitable Within Past 2 Years
- ---------------- -------------- -------------------
Officers and Directors
----------------------
<S> <C> <C>
*James M. Benson Director, President and See Column 2; Prior
Chief Executive Officer thereto, Director,
President, and
Chief Operating
Officer (until
February 1996);
Director and
Senior Executive
Vice President,
EQ; Director,
President, and
Chief Operating
Officer, EVLICO;
Director,
Alliance, AXA Re
Life Insurance
Company (January
1995 to present),
National Mutual
Holdings Limited
(September 1995
to present), and
The National
Mutual Life
Association of
Australasia
(September 1995
to present),
(Director, Health
Plans, Inc.).
*William T. McCaffrey Senior Executive Vice See Column 2; Prior
President and Chief thereto, Executive Vice
Operating Officer and President and Chief
Director Administrative Officer
(until Febryary
1996); Executive
Vice President
and Chief
Administrative
Officer, EQ;
Director, EVLICO
and The Equitable
Foundation
(Director,
Lutheran Cemetery
and Innovir
Laboratories).
</TABLE>
C-13
<PAGE>
<TABLE>
<CAPTION>
Principal Occupation
Name and Principal Positions and Offices (and Other Positions)
Business Address With Equitable Within Past 2 Years
- ---------------- -------------- -------------------
<S> <C> <C>
*Joseph J. Melone Chairman of the Board and See Column 2; Prior
Director thereto, Chief
Executive Officer
(until February
1996); Director
and President,
and Chief
Executive Officer
(February 1996 to
present), EQ,
prior thereto,
Chief Operating
Officer (until
February 1996);
Chairman,
President, and
Chief Executive
Officer,
Equitable
Investment
Corporation
("EIC")
(September 1994
to present);
Chairman and
Chief Executive
Officer and
Director, EVLICO;
Director,
Equitable Capital
Management
Corporation
("ECMC"), DLJ,
Alliance,
Equitable Real
Estate and AXA
Equity & Law
(Director,
Foster-Wheeler
Corporation and
AT&T Capital
Corporation).
Other Officers
--------------
*Harvey Blitz Senior Vice President and See Column 2; Senior
Deputy Chief Financial Vice President, EQ;
Officer Director, The Equitable
of Colorado, Inc.
("Colorado"); Director
and Chairman (September
1995 to present),
Frontier Trust Company
("Frontier"); Director,
Equitable Distributors,
Inc. ("EDI") (February
1995 to present) and
Equico Securities, Inc.
("Equico"); Director
and Senior Vice
President, EquiSource,
Inc. and its
subsidiaries
("EquiSource");
Director and Vice
President (April 1995
to present), EVLICO.
</TABLE>
C-14
<PAGE>
<TABLE>
<CAPTION>
Principal Occupation
Name and Principal Positions and Offices (and Other Positions)
Business Address With Equitable Within Past 2 Years
- ---------------- -------------- -------------------
<S> <C> <C>
*Kevin R. Byrne Vice President and See Column 2; Vice
Treasurer President and
Treasurer, EQ;
Treasurer, EVLICO and
Frontier; Director,
Equitable Reality
Assets Corporation
("ERAC"); Vice
President and
Treasurer, Equitable
Casualty Insurance
Company and EquiSource.
*Jerry M. de St. Paer Senior Executive Vice See Column 2; Prior
President and Chief thereto, Executive Vice
Financial Officer President and Chief
Financial Officer
(until February
1996); Executive
Vice President
and Chief
Financial
Officer, EQ;
Director, EVLICO,
DLJ, Equitable
Real Estate,
Alliance (June
1994 to present),
National Mutual
Asia Limited
(December 1995 to
present), and AXA
Re Life Insurance
Company (June
1995 to present);
Chairman,
President, and
Chief Executive
Officer, ECMC and
ACMC, Inc.;
Director,
Executive Vice
President, and
Chief Operating
Officer, EIC;
Vice President,
Equitable JV
Holding Corp.;
Senior Investment
Officer, EVLICO;
Member, Advisory
Board, Peter
Wodtke (U.K.) and
Peter Wodtke
(U.S.) (Director,
Economic Sciences
Corporation and
Nicos Seimei
Hoken (formerly
Equitable Seimei
Hoken)).
*Gordon G. Dinsmore Senior Vice President See Column 2; Executive
Vice President, Equico;
Director and Senior
Vice President, EVLICO
and Colorado; Director,
FHJV Holdings, Inc.
("FHJV"), and The
Equitable Foundation.
</TABLE>
C-15
<PAGE>
<TABLE>
<CAPTION>
Principal Occupation
Name and Principal Positions and Offices (and Other Positions)
Business Address With Equitable Within Past 2 Years
- ---------------- -------------- -------------------
<S> <C> <C>
*Alvin H. Fenichel Senior Vice President and See Column 2; Senior
Controller Vice President and
Controller, EQ; Vice
President, EVLICO and
Colorado.
*Paul J. Flora Vice President and Auditor Prior thereto, Vice
President and Deputy
Auditor (February 1994
to September 1994);
Vice President and
Auditor, EQ (September
1994 to present); Vice
President/Auditor,
National Westminster
Bank (November 1984 to
June 1994).
*Robert E. Garber Executive Vice President See Column 2; prior
and General Counsel thereto, Senior Vice
President and
General Counsel
(September 1993
to September
1994); Executive
Vice President
and General
Counsel, EQ
(September 1994
to present),
Senior Vice
President and
General Counsel
(September 1993
to September
1994).
*J. Thomas Liddle, Jr. Senior Vice President and See Column 2; Senior
Chief Valuation Actuary Vice President and
Chief Financial
Officer, EVLICO;
Director, Vice
President and
Chief Financial
Officer,
Colorado; Vice
President and
Controller,
Frontier.
</TABLE>
C-16
<PAGE>
<TABLE>
<CAPTION>
Principal Occupation
Name and Principal Positions and Offices (and Other Positions)
Business Address With Equitable Within Past 2 Years
- ---------------- -------------- -------------------
<S> <C> <C>
*Michael S. Martin Senior Vice President See Column 2; Chairman,
Equico; Chairman and
Chief Executive
Officer, EquiSource
(January 1992 to
October 1994) and
Frontier (April 1992 to
October 1994); Vice
President, Hudson River
Trust ("HRT") (February
1993 to February 1995);
Director, Vice
President and
Treasurer, EDI (August
1993 to February 1995),
also Chairman,
President, and Chief
Executive Officer
(December 1993 to
February 1995);
Director, Colorado
(January 1995 to
present).
*Peter D. Noris Executive Vice President See Column 2; prior
and Chief Investment thereto, Vice
Officer President/Manager,
Insurance Company
Investment
Strategies Group,
Salomon Brothers,
Inc. (until May
1995); Executive
Vice President
(May 1995 to
present) and
Chief Investment
Officer (July
1995 to present),
EQ; Director and
Senior Vice
President, EVLICO
(June 1995 to
present);
Director,
Alliance (July
1995 to present)
and Equitable
Real Estate (July
1995 to present).
*Anthony C. Pasquale Senior Vice President See Column 2; Director,
ERAC, FHJV (May
1995 to present)
and Equitable
Agri-Business,
Inc.
</TABLE>
C-17
<PAGE>
<TABLE>
<CAPTION>
Principal Occupation
Name and Principal Positions and Offices (and Other Positions)
Business Address With Equitable Within Past 2 Years
- ---------------- -------------- -------------------
<S> <C> <C>
*Pauline Sherman Vice President, Secretary Prior thereto, Vice
and Associate General President and Associate
Counsel General Counsel (until
September 1995);
Vice President,
Secretary and
Associate General
Counsel, EQ
(September 1995
to present).
Richard V. Silver Senior Vice President and Vice President and
1755 Broadway, 3rd Floor Chief Compliance Officer Chief Compliance
New York, NY 10019 Officer (January 1995
to February 1995);
prior thereto, Vice
President; Director,
President, and Chief
Operating Officer
(until January 1995),
Equico.
*Jose Suquet Executive Vice President Prior thereto,
and Chief Agency Officer Agency/Sales Manager
(until August 1994);
Director, EVLICO
(January 1995 to
present).
</TABLE>
C-18
<PAGE>
Item 30.Persons Controlled by or Under Common Control
with the Insurance Company or Registrant
Separate Account Nos. 3, 4, 10 and 51, of The Equitable Life
Assurance Society of the United States (the "Separate Accounts") are separate
accounts of Equitable. Equitable, a New York stock life insurance company is a
wholly owned subsidiary of The Equitable Companies Incorporated (the "Holding
Company"), a publicly traded company.
The largest stockholder of the Holding Company is AXA S.A. At
12/31/95 AXA S.A. beneficially owned 60.6% of the Holding Company's
outstanding common stock plus convertible preferred stock. AXA S.A. is able to
exercise significant influence over the operations and capital structure of
the Holding Company and its subsidiaries, including Equitable. AXA , a French
company, is the holding company for an international group of insurance and
related financial services companies.
C-19
<PAGE>
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
The Equitable Companies Incorporated (1991) (Delaware)
Donaldson, Lufkin & Jenrette, Inc. (1993) (Delaware) (44.1%) (See
Addendum for subsidiaries)
The Equitable Life Assurance Society of the United States (l859)
(New York) (a)(b)
The Equitable of Colorado, Inc. (l983) (Colorado)
Equitable Variable Life Insurance Company (l972) (New York) (a)
FHJV Holdings, Inc. (1990) (Delaware)
EVLICO ,INC. (1995) (Delaware)
EVLICO East Ridge, Inc. (1995) (Delaware)
GP/EQ Southeast, Inc. (1995) Texas) (5.86%)
Franconom, Inc. (1985) (Pennsylvania)
Frontier Trust Company (1987) (North Dakota)
Gateway Center Buildings, Garage and Apartment Hotel, Inc.
(inactive) (pre-l970) (Pennsylvania)
Equitable Deal Flow Fund, L.P.
Equitable Managed Assets (Delaware)
EREIM LP Associates (99%)
EML Associates, L.P. (19.8%)
ACMC, Inc. (1991) (Delaware)
Alliance Capital Management L.P. (1988) (Delaware)
(46.7% limited partnership interests)
EVCO, Inc. (1991) (New Jersey)
EVSA, Inc. (1992) (Pennsylvania)
Prime Property Funding, Inc. (1993) (Delaware)
Wil Gro, Inc. (1992) (Pennsylvania)
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-20
<PAGE>
The Equitable Companies Incorporated (1991) (Delaware) (cont.)
The Equitable Life Assurance Society of the United States (cont.)
Equitable BJVS, Inc. (1992) (California)
Equitable Rowes Wharf, Inc. (1995) (Massachusetts)
GE/EQ Southwest, Inc. (1994) (Massachusetts) (94.132%)
Fox Run, Inc. (1994)(Massachusetts)
Equitable Underwriting and Sales Agency (Bahamas) Limited (1993)
(Bahamas)
CCMI Corporation (1994) (Maryland)
FTM Corporation (1994) (Maryland)
HVM Corporation (1994) (Maryland)
STCS, Inc. (1992) (Delaware)
Equitable Holding Corporation (1985) (Delaware)
Equico Securities, Inc. (l97l) (Delaware) (a) (b)
ELAS Securities Acquisition Corp. (l980) (Delaware)
Equitable Realty Assets Corporation (l983) (Delaware)
100 Federal Street Funding Corporation (Massachusetts)
100 Federal Street Realty Corporation (Massachusetts)
EquiSource, of New York Inc. (formerly Traditional Equinet
Business Corporation of New York) (1986) (New York) (See Addendum
for subsidiaries.)
Equitable Casualty Insurance Company (l986) (Vermont)
EREIM LP Corp. (1986) (Delaware)
EREIM LP Associates (1%)
EML Associates (.02%)
Six-Pac G.P., Inc. (1990) (Georgia)
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-21
<PAGE>
The Equitable Companies Incorporated (1991) (Delaware) (cont.)
The Equitable Life Assurance Society of the United States (cont.)
Equitable Holding Corporation (cont.)
Equitable JVS, Inc. (cont.)
Equitable Distributors, Inc. (1988) (Delaware) (a)
Equitable JVS, Inc. (1988) (Delaware)
Astor/Broadway Acquisition Corp. (1990) (New York)
Astor Times Square Corp. (1990) (New York)
PC Landmark, Inc. (1990) (Texas)
Equitable JVS II, Inc. (1994) (Maryland)
EJSVS, Inc. (1995) (New Jersey)
Donaldson, Lufkin & Jenrette, Inc. (1985 by EIC; 1993 by EHC)
(Delaware) (36.1%) (See Addendum for subsidiaries)
JMR Realty Services, Inc. (1994) (Delaware)
Equitable Investment Corporation (l97l) (New York)
Stelas North Carolina Limited Partnership
(50% limited partnership interest) (l984)
EQ Services, Inc. (1992) (Delaware)
Equitable Agri-Business, Inc. (1984) (Delaware)
Alliance Capital Management Corporation (l991) (Delaware) (b)
(See Addendum for subsidiaries)
Equitable Capital Management Corporation (l985) (Delaware)
(limited partnership interests) (b)
Alliance Capital Management L.P. (1988) (Delaware)
Equitable JV Holding Corporation (1989) (Delaware)
Equitable Real Estate Investment Management, Inc. (l984)
(Delaware) (b)
Equitable Realty Portfolio Management, Inc. (1984)
(Delaware)
EQK Partners (100% general partnership interest)
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-22
<PAGE>
The Equitable Companies Incorporated (1991) (Delaware) (cont.)
The Equitable Life Assurance Society of the United States (cont.)
Equitable Holding Corporation (cont.)
Equitable Investment Corporation (cont.)
Equitable Real Estate Investment Management, Inc. (cont.)
Compass Management and Leasing (formerly known as
EREIM, Inc.) (l984) (Colorado)
Equitable Real Estate Capital Markets, Inc. (1987)
(Delaware) (a)
Equitable Investment Corporation (1971( (New York)
Equitable Real Estate Investment Management, Inc. (1984)
(Delaware ) (b)
EQ Realty Associates-V, Inc. (1987) (Delaware)
EPPNLP Corp. (1987) (Delaware)
Equitable Pacific Partners Corp. (1987) (Delaware)
Equitable Pacific Partners Limited Partnership
EREIM Managers Corp. (1986) (Delaware)
ML/EQ Real Estate Portfolio, L.P.
EML Associates, L.P. (80%)
Compass Retail, Inc. (1990) (Delaware)
Compass Management and Leasing, Inc. (1991) (Delaware)
Compass Cayman (1996) (Cayman Islands)
Column Security Associates, Inc. (1993) (Delaware)
Column Financial, Inc. (1993) (Delaware) (50%)
Buckhead Strategic Corp. (1994) (Delaware)
Buckhead Strategic Fund, L.P.
BH Strategic Co. I, L.P.
BH Strategic Co. II, L.P.
BH Strategic Co. III, L.P.
BH Strategic Co. IV, L.P.
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-23
<PAGE>
The Equitable Companies Incorporated (1991) (Delaware) (cont.)
The Equitable Life Assurance Society of the United States (cont.)
Equitable Holding Corporation (cont.)
Equitable Investment Corporation (cont.)
Equitable Real Estate Investment Management, Inc. (cont.)
CJVS, Inc. (1994) (California
ERE European Corp. I, L.P. (1994) (Delaware)
A/E European Associates I Limited Partnership
Community Funding, Inc. (1994) (Delaware)
Community Mortgage Fund, L.P. (1994) (Delaware)
Buckhead Strategic Corp. II (1995) (Delaware)
Buckhead Strategic Fund L.P. II
Buckhead Co. III, L.P.
HYDOC, L.L.C.
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-24
<PAGE>
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
ADDENDUM - NON-REAL ESTATE SUBSIDIARY
OF EQUITABLE HOLDING CORPORATION
HAVING MORE THAN FIVE SUBSIDIARIES
EquiSource of New York, Inc. (formerly Traditional Equinet Business
Corporation of New York) has the following subsidiaries that are brokerage
companies to make available to Equitable Agents within each state traditional
(non-equity) products and services not produced by Equitable:
EquiSource of Delaware, Inc. (1986) (Delaware)
EquiSource of Alabama, Inc. (1986) (Alabama)
EquiSource of Arizona, Inc. (1986) (Arizona)
EquiSource of Arkansas, Inc. (1987) (Arkansas)
EquiSource Insurance Agency of California, Inc. (1987) (California)
EquiSource of Colorado, Inc. (1986) (Colorado)
EquiSource of Hawaii, Inc. (1987) (Hawaii)
EquiSource of Maine, Inc. (1987) (Maine)
EquiSource Insurance Agency of Massachusetts, Inc. (1988) (Massachusetts)
EquiSource of Montana, Inc. (1986) (Montana)
EquiSource of Nevada, Inc. (1986) (Nevada)
EquiSource of New Mexico, Inc. (1987) (New Mexico)
EquiSource of Pennsylvania, Inc. (1986) (Pennsylvania)
EquiSource Insurance Agency of Utah, Inc. (1986) (Utah)
EquiSource of Washington, Inc. (1987) (Washington)
EquiSource of Wyoming, Inc. (1986) (Wyoming)
C-25
<PAGE>
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
ADDENDUM - OTHER NON-REAL ESTATE SUBSIDIARIES
HAVING MORE THAN FIVE SUBSIDIARIES
Donaldson, Lufkin & Jenrette, Inc. has the following subsidiaries, and
approximately 60 other subsidiaries, most of which are special purpose
subsidiaries (the number fluctuates according to business needs):
Donaldson, Lufkin & Jenrette, Inc. (1985) (Delaware)
Donaldson, Lufkin & Jenrette Securities Corporation (1985)
(Delaware) (a) (b)
Wood, Struthers & Winthrop Management Corporation (1985)
(Delaware) (b)
Autranet, Inc. (1985) (Delaware) (a)
DLJ Real Estate, Inc.
DLJ Capital Corporation (b)
DLJ Mortgage Capital, Inc. (1988) (Delaware)
Column Financial, Inc. (1993) (Delaware) (50%)
Alliance Capital Management Corporation has the following subsidiaries:
Alliance Capital Management Corporation (1991) (Delaware) (b)
Alliance Capital Management L.P. (1988) (Delaware) (b)
Alliance Capital Management Corporation of Delaware, Inc.
(Delaware)
Alliance Fund Services, Inc. (Delaware)
Alliance Capital Management (Japan), Inc. (formerly
Alliance Capital Mgmt. Intl.)
Alliance Fund Distributors, Inc. (Delaware) (a)
Alliance Oceanic Corp. (Delaware) (formerly Alliance
Capital, Ltd.)
Alliance Capital Management Australia Pty. Ltd.
(Australia)
Meiji - Alliance Capital Corp. (Delaware) (50%)
Alliance Capital (Luxembourg) S.A. (99.98%)
Alliance Southern Europe Corp. (Delaware) (inactive)
Alliance Barra Research Institute, Inc. (Delaware) (50%)
Alliance Capital Management Canada, Inc. (Canada) (99.99%)
Alliance Capital Management Limited (United Kingdom)
Pastor Alliance Gestora de Fondas de Pensiones, S.A.
(Spain) (50%)
Dementional Asset Management, Ltd. (U.K.)
Dementional Trust Management, Ltd. (U.K.)
Alliance Capital Global Derivatives Corp. (Delaware)
Alliance Corporate Finance Group, Inc. (Delaware)
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-26
<PAGE>
AXA GROUP CHART
The information listed below is dated as of January 1, 1996; percentages shown
represent voting power. The name of the owner is noted when AXA indirectly
controls the company.
AXA INSURANCE AND REINSURANCE BUSINESS HOLDING
<TABLE>
<CAPTION>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
<S> <S> <C>
Axa Assurances Iard France 96.9%
Axa Assurances Vie France 100% by Axa and Uni Europe Vie
Uni Europe Assurance France 100% by Axa and Axa
Assurances Iard
Uni Europe Vie France 99.3% by Axa and Axa
Assurances Iard
Alpha Assurances Vie France 100%
Axa Direct France 100%
Direct Assurances Iard France 100% by Axa Direct
Direct Assurance Vie France 100% by Axa Direct
Axa Direkt Versicherung A.G. Germany 100% owned by Axa Direct
Axiva France 90.3%
Defense Civile France 95%
Societe Francaise d'Assistance France 51.2% by Axa Assurances Iard
Monvoisin Assurances France 99.92% by different companies
and Mutuals
Societe Beaujon France 100%
Lor Finance France 99.9%
Jour Finance France 100% by different companies
Compagnie Auxiliaire pour le France 100% by Societe Beaujon
Commerce et l'Industrie
C.F.G.A. France 99.96% owned by the mutuals
and Finaxa
Saint Bernard Diffusion France 89.9%
Sogarep France 95%, (100% with the mutuals)
Argovie France 100% by Axiva and SCA Argos
Finargos France 66.4% owned by Axiva
Astral France 100% by Uni Europe Assurance
Argos France N.S.
Finaxa Belgium Belgium 100%
</TABLE>
C-27
<PAGE>
<TABLE>
<CAPTION>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
<S> <C> <C>
Axa Belgium Belgium 18.5% by Axa(SA) and 72.5% by
Finaxa Belgium
De Kortrijske Verzekering Belgium 99.8%
Juris Belgium 100%
Finaxa Luxembourg Luxembourg 100%
Axa Assurance IARD Luxembourg Luxembourg 99.4%
Axa Assurance Vie Luxembourg Luxembourg 99.4%
Axa Aurora Spain 50%
Aurora Polar SA de Seguros y Spain 99.8% owned by Axa Aurora
Reaseguros
Axa Vida SA de Seguros y Spain 99.8% owned by Axa Aurora
Reaseguros
Axa Gestion de Seguros y Spain 100% owned by Axa Aurora
Reaseguros
Axa Assicurazioni Italy 100%
Eurovita Italy 30% owned by Axa Assicurazioni
Axa Equity & Law plc U.K. 99.9%
Axa Equity & Law Life U.K. 100% by Axa Equity & Law plc
Assurance Society
Axa Equity & Law International U.K. 100% owned by Axa Equity &
Law plc
Axa Equity & Law Netherlands 100% by Axa Equity & Law plc
Levensverzekeringen
Axa Insurance U.K. 100%
Axa Global Risks U.K. 100% by Axa and Uni Europe
Assurance
Axa U.K. U.K. 100%
Axa Canada Canada 100%
Boreal Insurance Canada 100% owned by AXA Canada
Axa Assurances Inc. Canada 100% owned by Axa Canada
Axa Insurance Inc. Canada 100% owned by Axa Canada
Anglo Canada General Canada 100% owned by Axa Canada
Insurance Cy
Axa Pacific Insurance Canada 100% by Boreal Insurance
Boreal Assurances Agricoles Canada 100% by Boreal Insurance
</TABLE>
C-28
<PAGE>
<TABLE>
<CAPTION>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
<S> <C> <C>
Sime Axa Berhad Malaysia 30%
Axa Sime Investment Holdings Singapore 50%
Pte Ltd
Axa Sime Assurance Hong Kong 100% owned by Axa Sime Invt.
Holdings Pte Ltd
Axa Sime Assurance Singapore 100% owned by Axa Sime Invt
Holdings Pte Ltd
Axa Life Insurance Hong Kong 100%
PT Asuransi Axa Indonesia Indonesia 80%
Equitable Cies Incorp. U.S.A. 60.6% owned by Axa, 44.4%
Financiere 45, 3.8%,
Lorfinance 7.6% and Axa
Equity & Law Life Association
Society 4.8%
Equitable Life Assurance of U.S.A. 100% owned by Equitable Cies
the USA Inc.
National Mutual Holdings Ltd Australia 51%
The National Mutual Life Australia 100% owned by National Mutual
Association of Australasia Ltd Holdings Ltd
National Mutual International 74% owned by National Mutual
Pty Ltd Holdings Ltd and 26% by The
National Mutual Life
Association of Australasia
National Mutual (Bermuda) Ltd Australia 100% owned by National Mutual
International Pty Ltd
National Mutual Asia Ltd Bermudas 54% owned by National Mutual
(Bermuda) Ltd and 20% by
Delta Ltd
National Mutual Funds Australia 100% owned by National Mutual
Management (Global) Ltd Holdings Ltd
National Mutual Funds USA 100% owned by National Mutual
Management North America Funds Management (Global) Ltd
Holdings Inc.
Australian Casualty & Life Ltd Australia 100% owned by National Mutual
Holdings Ltd
National Mutual Health Australia 100% owned by National Mutual
Insurance Pty Ltd Holdings Ltd
Axa Reassurance France 100%
Axa Re Finance France 100% owned by Axa Reassurance
Axa Re Vie France 100% owned by Axa Reassurance
Axa Cessions France 100%
</TABLE>
C-29
<PAGE>
<TABLE>
<CAPTION>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
<S> <C> <C>
Abeille Reassurances France 100% owned by Axa Reassurance
Axa Re Mexico Mexico 100% owned by Axa Reassurance
Axa Re Asia Singapore 100% owned by Axa Reassurance
Axa Re U.K. Plc U.K. 100% owned by Axa Re U.K.
Holding
Axa Re U.K. Holding U.K. 100% owned by Axa Reassurance
Axa Re U.S.A. U.S.A. 100% owned by Axa America
Axa America U.S.A. 100% owned by Axa Reassurance
International Technology U.S.A. 80% owned by Axa America
Underwriters Inc. (INTEC)
Axa Re Life U.S.A. 100% owned by Axa Re Vie
C.G.R.M. Monaco 100% by Axa Reassurance
Axa Life Insurance Japan 100% owned by Axa
Dongbu Axa Life Insurance Co Korea 50%
Ltd
Axa Oyak Hayat Sigota Turkey 60%
Oyak Hayat Sigorta Turkey 11%
</TABLE>
C-30
<PAGE>
AXA FINANCIAL BUSINESS
<TABLE>
<CAPTION>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
<S> <C> <C>
Compagnie Financiere de Paris France 96.9%, (100% with the Mutuals)
(C.F.P.)
Axa Banque France 98.7% owned by C.F.P.
Financiere 78 France 100% owned by C.F.P.
Axa Credit France 65% owned by C.F.P.
Axa Gestion Interessement France 100% owned by C.F.P.
Compagnie Europeenne de France 100% owned by C.F.P.
Credit (C.E.C.)
Fidei France 20.7% owned by C.F.P. and
10.8% by Axamur
Meeschaert Rousselle France 100% owned by Financiere 78
M R Futures SNC France 59% by Meeschaert Rousselle
Opale Derivee Bourse France 89.4% by M.R. Futures and
Meeschaert Rousselle
Anjou Courtage France 70% owned by Meeschaert
Rousselle
Axiva Gestion France 100% owned by Axiva
Juri Creances France 100% by different companies
Societe de Placements France 99.3% with the Mutuals
Selectionnes S.P.S.
Presence et Initiative France 73% with the Mutuals
Vamopar France 100% owned by Societe Beaujon
Financiere Mermoz France 100%
Axa Asset Management Europe France 100%
Axa Asset Management France 100% owned by Axa Asset
Partenaires Management Europe
Axa Asset Management Conseils France 100% owned by Axa Asset
Management Europe
Axa Asset Management France 100% owned by Axa Asset
Distribution Management Europe
Axa Equity & Law Home Loans U.K. 100% owned by Axa Equity & Law
Axa Equity & Law Commercial U.K. 100% owned by Axa Equity & Law
Loans
</TABLE>
C-31
<PAGE>
<TABLE>
<CAPTION>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
<S> <C> <C>
Alliance Capital Management U.S.A. 59% held by ELAS
Donaldson Lufkin & Jenrette U.S.A. 36.1% owned by ELAS and 44.1%
by Equitable Cies Inc.
Cogefin Luxembourg 100% owned by Axa Belgium
Soflinter Belgium 100% owned by Axa Belgium
Financiere 45 France 99.6%
Mofipar France 99.76% owned by Societe
Beaujon
ORIA France 100% owned by Axa Millesimes
Axa Oeuvres d'Art France 100% by the Mutuals
Axa Cantenac Brown France 100%
Colisee Acti Finance 1 France 100% owned by Societe Beaujon
Colisee Acti Finance 2 France 100% owned by Axa Assurances
Iard Mutuelle
Participations 2001 France 100% owned by Societe Beaujon
Finalor France 100% owned by Societe Beaujon
</TABLE>
C-32
<PAGE>
AXA REAL ESTATE BUSINESS
<TABLE>
<CAPTION>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
<S> <C> <C>
C.I.P.M. France 97.6% with the Mutuals
Fincosa France 100% owned by C.I.P.M.
Prebail France 100% owned by Societe Beaujon
and C.F.P.
Axamur France 100% by different companies
and mutuals
Parigest France 100% by the Mutuals, C.I.P.M.
and Fincosa
Parimmo France 100% by the insurance
companies and the mutuals
S.G.C.I. France 100% with the Mutuals
Transaxim France 99.4% owned by S.G.C.I.
Compagnie Parisienne de France 100% owned by S.G.C.I.
Participations
Monte Scopeto France 100% owned by C.P.P.
Matipierre France 100% by different companies
Securimmo France 87% by different companies
and mutuals
Paris Orleans France 99.9% by different companies
Colisee Bureaux France 99.4% by different companies
Colisee Premiere France 99.9% by different companies
Colisee Laffitte France 99.8% by Colisee Bureaux
Carnot Laforge France 100% by Colisee Premiere
Parc Camoin France 100% by Colisee Premiere
Delta Point du Jour France 100% owned by Matipierre
Paroi Nord de l'Arche France 100% owned by Matipierre
Falival France 100% owned by Axa Reassurance
Compagnie du Gaz d'Avignon France 99% owned by Axa Assurances
Iard
Ahorro Familiar France 40.1% owned by Axa Assurances
Iard
Fonciere du Val d'Oise France 100% owned by C.P.P.
Sodarec France 99.9% owned by C.P.P.
Centrexpo France 99.9% owned by C.P.P.
</TABLE>
C-33
<PAGE>
<TABLE>
<CAPTION>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
<S> <C> <C>
Fonciere de la Vule du Bois France 99.6% owned by Centrexpo
Colisee Seine France 97.4% by different companies
Translot France 99.9% by SGCI
S.N.C. Dumont d'Urville France 100% owned by Colisee Premiere
Colisee Participations France 100% by SGCI
Colisee Federation France 100% by SGCI
Colisee Saint Georges France 100% by SGCI
Drouot Industrie France 50% by SGCI
Colisee Vauban France 99.7% by Matipierre
Fonciere Colisee France 98.9% by Matipierre
Axa Pierre S.C.I. France 97.6% owned by different
companies and Mutuals
Axa Millesimes France 77.8% owned by AXA and the
Mutuals
Chateau Suduirault France 100% owned by Axa Millesimes
Diznoko Hongrie 100% owned by Axa Millesimes
Compagnie Fonciere Matignon France 100% by different companies
and Mutuals
Equitable Real Estate U.S.A. 100% owned by ELAS
Investment
Quinta do Noval Vinhos S.A. Portugal 99.9% owned by Axa Millesimes
</TABLE>
C-34
<PAGE>
OTHER AXA BUSINESS
<TABLE>
<CAPTION>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
<S> <C> <C>
A.N.F. France 95.4% owned by Finaxa
SCOR France 10.1% owned by Axa Reassurance
Campagnie du Cambodge France 23% owned by A.N.F.
Lucia France 20.6% owned by Axa Assurance
Iard and 8.6% by the mutuals
Rubis et Cie France 12.7% owned by Uni Europe
Assurance
Schneider S.A. France 10%
Eurofin France 31.6% owned by Compangie
Financiere de Paris
</TABLE>
C-35
<PAGE>
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
NOTES
1. The year of formation or acquisition and state or country of
incorporation of each affiliate is shown.
2. The chart omits certain relatively inactive special purpose real estate
subsidiaries, partnerships, and joint ventures formed to operate or
develop a single real estate property or a group of related properties,
and certain inactive name-holding corporations.
3. All ownership interests on the chart are 100% common stock ownership
except for (a) as noted for certain partnership interests, (b) ACMC,
Inc.'s and Equitable Capital's limited partnership interests in
Alliance Capital Management L.P., (c) as noted for certain subsidiaries
of Alliance Capital Management Corp. of Delaware, Inc., (d) Treasurer
Robert L. Bennett's 20% interest in EREIM, Inc., (e) as noted for
certain subsidiaries of AXA, (f) The Equitable Companies Incorporated's
44.1% interest in DLJ and Equitable Holding Corp's 36.1% interest in
same, and (g) DLJ Mortgage Capital, Inc.'s and Equitable Real Estate
Investment Management, Inc.'s ownership (50% each) in Column Financial,
Inc.
4. The operational status of the entities shown as having been formed or
authorized but "not yet fully operational" should be checked with the
appropriate operating areas, especially for those that are start-up
situations.
5. The following entities are not included in this chart because, while
they have an affiliation with The Equitable, their relationship is not
the ongoing equity-based form of control and ownership that is
characteristic of the affiliations on the chart, and, in the case of the
first two entities, they are under the direction of at least a majority
of "outside" trustees:
The Equitable Funds
The Hudson River Trust
Separate Accounts
6. This chart was last revised on March 25, 1996.
C-36
<PAGE>
Item 31. Number of Contractowners
As of March 31, 1996, the number of participants in the Association
Members Program offered by the Registrant was 7,198.
Item 32. Indemnification of Directors and Officers
To the extent permitted by the laws of the State of New York and
subject to all applicable requirements thereof, Equico Securities, Inc.
("Equico") undertook by resolution to indemnify each Director and Officer of
Equitable who is made or threatened to be made a party to any action or
proceeding, whether civil or criminal, by reason of the fact that he or she,
is or was a Director or Officer of Equico.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to Directors and Officers pursuant to
the undertaking described above, or otherwise, Equitable has been advised that
in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in that Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by Equitable of expenses incurred or paid
by a Director or Officer in the successful defense of any action, suit or
proceeding) is asserted by such Director or Officer in connection with the
interests, Equitable will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in that Act and will be governed by the final adjudication
of such issue.
Item 33. Business and Other Connections of Investment Adviser
The Equitable Life Assurance Society of the United States
("Equitable") acts as the investment manager for Separate Account Nos. 3, 4,
10, 190 and 191. With respect to Separate Account No. 191, Equitable acts as
investment manager within guidelines established by the Trustees of the
American Dental Association Members Retirement Trusts. Alliance Capital
Management L.P. ("Alliance"), a publicly-traded limited partnership, is
indirectly majority-owned by Equitable, provides personnel and facilities for
portfolio selection and transaction services. Alliance recommends the
securities investments to be purchased and sold for Separate Account Nos. 3,
4, 10 and 190 and the portion of Separate Account No. 191 which is invested in
its Separate Account No. 2A, and arranges for the execution of portfolio
transactions. Alliance coordinates related accounting and bookkeeping
functions with Equitable. Both Equitable and Alliance are registered
investment advisers under the Investment Advisers Act of 1940.
Information regarding the directors and principal officers of
Equitable is provided in Item 29 of this Part C and is incorporated herein by
reference.
C-37
<PAGE>
Set forth below is certain information regarding the directors and
principal officers of Alliance Capital Management Corporation. The business
address of the Alliance persons whose names are preceded by an asterisk is
1345 Avenue of the Americas, New York, New York 10105.
<TABLE>
<CAPTION>
Positions and Principal Occupation
Name and Principal Offices With (and Other Positions)
Business Address Alliance Within Past 2 Years
- ---------------- -------- -------------------
Directors
- ---------
<S> <C> <C>
*Dave H. Willams Director, Chairman of See Column 2. Director
the Board and Chief - The Equitable Life
Executive Officer Assurance Society of the
United States
("Equitable") and The
Equitable Companies
Incorporated ("EQ").
Luis Javier Bastida Director Chief Financial Officer
Banco Bilbao Vizcaya and a member of the
Gran Via 1 Executive Committee of
Planta 16 48001 Banco Bilbao Vizcaya.
Bilbao, Spain
Claude Bebear Director Chairman and Chief
AXA S.A. Executive Office, AXA,
23, Avenue Matignon and various positions
75008 Paris, France with AXA affiliated
companies; Director,
EQ and Chairman
(February 1996 to
present); Director,
Donaldson, Lufkin &
Jenrette ("DLJ")
(February 1996 to
present), Equitable,
and Equitable Real
Estate Investment
Management, Inc.
("Equitable Real
Estate") (March 1996
to present); (Director
of the following
non-AXA affiliated
companies: Schneider
S.A., Societe
Generale, SOVAC and
Rhone-Poulence, S.A.;
</TABLE>
C-38
<PAGE>
<TABLE>
<CAPTION>
Positions and Principal Occupation
Name and Principal Offices With (and Other Positions)
Business Address Alliance Within Past 2 Years
- ---------------- -------- -------------------
<S> <C> <C>
Bebear cont. Member of Supervisory
Board, Compagnie
Financiere de Paribas
and Member of the
General Counsel of
Assicurazioni Generali
S.p.A.).
James M. Benson Director Director, President and
The Equitable Life Chief Executive Officer,
Assurance Society Equitable; Prior
of the U.S. thereto, President,
787 Seventh Avenue Chief Operating Officer
New York, NY 10019 and Director, (until
February 1996);
Director and Senior
Vice President, EQ;
Director, President
and Chief Operating
Officer, Equitable
Variable Life
Insurance Company
("EVLICO"), Director,
AXA Re Life Insurance
Company (January 1995
to present), and The
National Mutual Life
Association of
Australasia (September
1995 to present),
(Director, Health
Plans, Inc.).
*Bruce W. Calvert Director, Vice Chairman, See Column 2.
and Chief Investment
Officer
</TABLE>
C-39
<PAGE>
<TABLE>
<CAPTION>
Positions and Principal Occupation
Name and Principal Offices With (and Other Positions)
Business Address Alliance Within Past 2 Years
- ---------------- -------- -------------------
<S> <C> <C>
*John D. Carifa Director, President and See Column 2. Chief
Chief Operating Officer Financial Officer until
December, 1994.
Henri de Castries Director Executive Vice President
AXA - Financial Services and
23, Avenue Matignon Life Insurance
75008, Paris, France Activities, AXA and
various positions with
AXA affiliated
companies; Director,
EQ (May 1994 to
present) and Vice
Chairman (February
1996 to present);
Director, Equitable
Real Estate, DLJ, and
Equitable; (Director,
France Telecom).
Kevin C. Dolan Director Senior Vice President -
AXA AXA
23, Avenue Matignon
75008, Paris, France
Dennis Duverne Director Senior Vice President,
AXA International Life of
23, Avenue Matignon AXA.
75008, Paris, France
Alfred Harrison Director, Vice Chairman See Column 2.
Alliance Capital
Management L.P.
3600 Piper Jaffray Tower
Minneapolis, MN 55402
</TABLE>
C-40
<PAGE>
<TABLE>
<CAPTION>
Positions and Principal Occupation
Name and Principal Offices With (and Other Positions)
Business Address Alliance Within Past 2 Years
- ---------------- -------- -------------------
<S> <C> <C>
Jean-Pierre Hellebuyck Director Chief Investment Officer
AXA - Gestion des Actifs - AXA; Director - AXA
40, rue de Colisee Reassurance France, AXA
Paris, France 75008 Reinsurance UK Plc, AXA
Reinsurance Company,
Equity & Law Plc,
Equity & Law
Investment Managers
Ltd., Equity & Law
Fondsmanagement GmbH,
Europhenix Management
Company and Societe
Des Bourses
Francaises.
Benjamin D. Holloway Director Consultant to
Continental Companies Tishman/Speyer, Edward
3250 Mary Street Debartolo and The
Miami, Florida 33133 Continental Companies.
Director - Rockefeller
Center Properties, Inc.;
Chairman - Duke
University Management
Corporation.
Henri Hottinguer Director Partner Hottinguer &
Banque Hottinguer Company.
38 Rue de Provence President/General
Paris, France 75008 Director - Banque
Hottinguer (French
bank); Director -
Helvetia Fund, Inc. and
DLJ.
</TABLE>
C-41
<PAGE>
<TABLE>
<CAPTION>
Positions and Principal Occupation
Name and Principal Offices With (and Other Positions)
Business Address Alliance Within Past 2 Years
- ---------------- -------- -------------------
<S> <C> <C>
Joseph J. Melone Director Director, President and
The Equitable Life Chief Executive Officer,
Assurance Society EQ (February 1996 to
of the U.S. present); prior thereto
787 Seventh Avenue Chief Operating Officer
New York, NY 10019 (until February 1996);
Chairman of the Board
and Director -
Equitable prior
thereto, Chief
Executive Officer
(until February 1996);
Chairman, President,
and Chief Executive
Officer, Equitable
Investment Corporation
(September 1994 to
present), Chairman and
Chief Executive
Officer and Director,
EVLICO; Director,
Equitable Capital
Management Corporation
("ECMC"), DLJ, and
Equitable Real Estate,
AXA Equity & Law
(Director,
Foster-Wheeler
Corporation and AT&T
Capital Corporation).
*Frank Savage Director Chairman of ACFG;
Chairman of ECMC (April
1992 to July 1993);
Director - Lockheed
Corporation, and ARCO
Chemical Corporation.
</TABLE>
C-42
<PAGE>
<TABLE>
<CAPTION>
Positions and Principal Occupation
Name and Principal Offices With (and Other Positions)
Business Address Alliance Within Past 2 Years
- ---------------- -------- -------------------
<S> <C> <C>
Jerry M. de St. Paer Director Senior Executive Vice
The Equitable Life President and Chief
Assurance Society Financial Officer,
of the U.S. Equitable; prior
787 Seventh Avenue thereto, Executive Vice
New York, N.Y. 10019 President (until
February 1996)
Executive Vice
President and Chief
Financial Officer, EQ;
Director, EVLICO, DLJ,
and Equitable Real
Estate; National
Mutual Asia Limited
(December 1995 to
present), and AXA RE
Life Insurance Company
(June 1995 to
present); Director,
Chairman, President,
and Chief Executive
Officer, ECMC;
Director, and
Executive Vice
President, and Chief
Operating Officer,
Equitable Investment
Corporation; Vice
President, Equitable
JV Holding Corp.;
Senior Investment
Officer, EVLICO (April
1995 to present);
Member, Advisory
Board, Peter Wodtke
(U.K.) and Peter
Wodtke (U.S.)
(Director, Economic
Services Corporation
and Nicos Seimei Hoken
(formerly Equitable
Seimei Hoken)).
Madelon DeVoe Talley Director Investment Consultant,
876 Park Avenue Governor, National
New York, NY 10021 Association of
Securities Dealers; Vice
Chairman, W.P. Carey &
Co.; Director, Corporate
Property Associates.
*Reba White Williams Director Director of Special
Projects for ACMC
</TABLE>
C-43
<PAGE>
<TABLE>
<CAPTION>
Positions and Principal Occupation
Name and Principal Offices With (and Other Positions)
Business Address Alliance Within Past 2 Years
- ---------------- -------- -------------------
Officers
- --------
<S> <C> <C>
*David R. Brewer Senior Vice President See Column 2.
and General Counsel
*Robert H. Joseph, Jr. Senior Vice President & See Column 2. prior
Chief Financial Officer thereto; Senior Vice
President - Finance
(January 1994 to
December 1994); Senior
Vice President and
Controller (until
January 1994)
</TABLE>
Item 34. Principal Underwriters
(a) Equico Securities, Inc. ("Equico"), a wholly-owned subsidiary
of Equitable, is the principal underwriter and depositor for
its Separate Account A and Separate Account No. 301, and may be
deemed to be a principal underwriter for Separate Account I and
Separate Account FP of Equitable Variable Life Insurance
Company. On or about May 1, 1996 Equico will change its name to
EQ Financial Consultants, Inc. Equico's principal business
address is 1755 Broadway, New York, NY 10019.
(b) See Item 29 of this Part C, which is incorporated herein by
reference.
Item 35. Location of Accounts and Records
The Equitable Life Assurance Society of the United States
135 West 50th Street
New York, New York 10020
Item 36. Management Services
Not applicable.
Item 37. Undertakings
The Registrant hereby undertakes the following:
C-44
<PAGE>
(a) to file a post-effective amendment to this registration
statement as frequently as is necessary to ensure that the
audited financial statements in the registration statement are
never more than sixteen months old for so long as payments
under the variable annuity contracts may be accepted;
(b) to include (1) as part of its applications to purchase any
contract offered by the prospectus, a space that an applicant
can check to request a Statement of Additional Information, or
(2) a postcard or similar written communication affixed to or
included in the prospectus that the applicant can remove to
send for a Statement of Additional Information; and
(c) to deliver any Statement of Additional Information and any
financial statements required to be made available under this
form promptly upon written or oral request.
C-45
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, the Registrant certifies that
it meets the requirements of Securities Act Rule 485(b) for effectiveness of
this amended Registration Statement and has caused this amended Registration
Statement to be signed on its behalf, in the City and State of New York, on
the 25th day of April, 1996.
THE EQUITABLE LIFE ASSURANCE SOCIETY OF
THE UNITED STATES
(Registrant)
By: /s/ Naomi J. Weinstein
----------------------
Naomi J. Weinstein
Vice President
As required by the Securities Act of 1933, this amendment to the
registration statement has been signed by the following persons in the
capacities and on the date indicated:
PRINCIPAL EXECUTIVE OFFICERS:
Joseph J. Melone Chairman of the Board and Director
James M. Benson President, Chief Executive Officer and
Director
William T. McCaffrey Senior Executive Vice President, Chief
Financial Officer and Director
PRINCIPAL FINANCIAL OFFICER
Jerry M. de St. Paer Senior Executive Vice President and Chief
Financial Officer
PRINCIPAL ACCOUNTING OFFICER:
/s/ Alvin H. Fenichel
- ---------------------
Alvin H. Fenichel Senior Vice President and
April 25, 1996 Controller
DIRECTORS:
Claude Bebear Jean-Rene Fourtou Winthrop Knowlton
James M. Benson Norman C. Francis Arthur L. Liman
Christopher Brocksom Donald J. Greene George T. Lowy
Francoise Colloc'h Anthony J. Hamilton William T. McCaffrey
Henri de Castries John T. Hartley Joseph J. Melone
Joseph L. Dionne John H.F. Haskell, Jr. Didier Pineau-Valencinne
William T. Esrey W. Edwin Jarmain George J. Sella, Jr.
G. Donald Johnston, Jr. Dave H. Williams
By:/s/ Naomi J. Weinstein
- -------------------------
Naomi J. Weinstein
Attorney-in-Fact
April 25, 1996
C-46
<PAGE>
EXHIBIT INDEX
Exhibit No. Page No.
8 (c) Copy of Certificate of Amendment to Restated Charter
of The Equitable Life Assurance Society of the United
States.
13(f) Consent of Price Waterhouse LLP.
13(g) Powers of Attorney.
27. Financial Data Schedule.
C-47
CERTIFICATE OF AMENDMENT OF THE RESTATED CHARTER OF
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Under Section 1206 of the Insurance Law and
Section 805 of the Business Corporation Law of the State of New York
We, the undersigned, Joseph J. Melone, President and Chief Executive
Officer and Molly K. Heines, Vice President and Secretary, hereby certify:
(1). The name of the corporation is The Equitable Life Assurance
Society of the United States (the "Corporation").
(2). The Corporation's Charter was filed in the office of the Insurance
Department of the State of New York on May 10, 1859.
(3). The Charter of the Corporation, as amended and restated by the
Restated Charter effective July 22, 1993, is hereby further amended to
increase the capital of the Corporation from $2,000,000 to $2,500,000 by
increasing the par value of a share of the Common Shares of the
Corporation from $1.00 to $1.25. Article VIII of the Charter which
contains the statement with respect to the capital of the Corporation, is
hereby amended in its entirety to read as follows:
ARTICLE VIII
The amount of the capital of the corporation shall be
$2,500,000, and shall consist of 2,000,000 Common Shares, par value $1.25
per share.
(4) The aforesaid amendment of the Charter of the Corporation was
duly approved by a majority vote of the Board of Directors of the
Corporation at a meeting duly called and held on November 18, 1993 and
was duly consented to in writing by the holder of all of the outstanding
shares of the Corporation on the same date.
IN WITNESS WHEREOF, the undersigned have signed this certificate the
18th day of November 1993, and affirm that the statements made herein are true
under the penalties of perjury.
/s/ Joseph J. Melone
------------------------------------
Joseph J. Melone
President & Chief Executive Officer
/s/ Molly K. Heines
------------------------------------
Molly K. Heines
Vice President & Secretary
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 1 to the Registration
Statement No. 33-91588 on Form N-3 (the "Registration Statement") of our report
dated February 7, 1996, relating to the financial statements of Separate Account
Nos. 3, 4, 10, and 51 of The Equitable Life Assurance Society of the United
States, and our report dated February 7, 1996, relating to the consolidated
financial statements of The Equitable Life Assurance Society of the United
States, which reports appear in such Statement of Additional Information, and to
the incorporation by reference of our reports into the Prospectus which
constitutes part of this Registration Statement. We also consent to the use in
the Prospectus Supplement constituting part of this Registration Statement of
our report dated February 7, 1996, relating to the financial statements of
Separate Account No. 4 of The Equitable Life Assurance Society of the United
States, which report appears in such Prospectus Supplement. We also consent to
the references to us under the headings "Condensed Fund Financial Information"
and "Experts" in such Prospectus.
PRICE WATERHOUSE LLP
New York, New York
April 24, 1996
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, James D. Goodwin, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Charles Wilder, Mildred Oliver
and each of them (with full power to each of them to act alone), his or her true
and lawful attorney-in-fact and agent, with full power of substitution to each,
for him or her and on his or her behalf and in his or her name, place and stead,
to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933, the Securities Exchange Act of
1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others or other, and to have full power and authority to do or cause to be done
in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 15th day of February, 1996.
/s/ Claude Bebear
-------------------------
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, James D. Goodwin, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Charles Wilder, Mildred Oliver
and each of them (with full power to each of them to act alone), his or her true
and lawful attorney-in-fact and agent, with full power of substitution to each,
for him or her and on his or her behalf and in his or her name, place and stead,
to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933, the Securities Exchange Act of
1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others or other, and to have full power and authority to do or cause to be done
in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 15th day of February, 1996.
/s/ James M. Benson
-------------------------
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, James D. Goodwin, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Charles Wilder, Mildred Oliver
and each of them (with full power to each of them to act alone), his or her true
and lawful attorney-in-fact and agent, with full power of substitution to each,
for him or her and on his or her behalf and in his or her name, place and stead,
to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933, the Securities Exchange Act of
1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others or other, and to have full power and authority to do or cause to be done
in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 15th day of February, 1996.
/s/ Christopher Brockson
-------------------------
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, James D. Goodwin, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Charles Wilder, Mildred Oliver
and each of them (with full power to each of them to act alone), his or her true
and lawful attorney-in-fact and agent, with full power of substitution to each,
for him or her and on his or her behalf and in his or her name, place and stead,
to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933, the Securities Exchange Act of
1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others or other, and to have full power and authority to do or cause to be done
in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 15th day of February, 1996.
/s/ Francoise Colloc'h
-------------------------
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, James D. Goodwin, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Charles Wilder, Mildred Oliver
and each of them (with full power to each of them to act alone), his or her true
and lawful attorney-in-fact and agent, with full power of substitution to each,
for him or her and on his or her behalf and in his or her name, place and stead,
to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933, the Securities Exchange Act of
1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others or other, and to have full power and authority to do or cause to be done
in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 15th day of February, 1996.
/s/ Henri de Castries
-------------------------
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, James D. Goodwin, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Charles Wilder, Mildred Oliver
and each of them (with full power to each of them to act alone), his or her true
and lawful attorney-in-fact and agent, with full power of substitution to each,
for him or her and on his or her behalf and in his or her name, place and stead,
to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933, the Securities Exchange Act of
1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others or other, and to have full power and authority to do or cause to be done
in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 15th day of February, 1996.
/s/ Joseph L. Dionne
-------------------------
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, James D. Goodwin, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Charles Wilder, Mildred Oliver
and each of them (with full power to each of them to act alone), his or her true
and lawful attorney-in-fact and agent, with full power of substitution to each,
for him or her and on his or her behalf and in his or her name, place and stead,
to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933, the Securities Exchange Act of
1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others or other, and to have full power and authority to do or cause to be done
in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 15th day of February, 1996.
/s/ William T. Esrey
-------------------------
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, James D. Goodwin, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Charles Wilder, Mildred Oliver
and each of them (with full power to each of them to act alone), his or her true
and lawful attorney-in-fact and agent, with full power of substitution to each,
for him or her and on his or her behalf and in his or her name, place and stead,
to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933, the Securities Exchange Act of
1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others or other, and to have full power and authority to do or cause to be done
in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 15th day of February, 1996.
/s/ Jean-Rene Fourtou
-------------------------
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, James D. Goodwin, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Charles Wilder, Mildred Oliver
and each of them (with full power to each of them to act alone), his or her true
and lawful attorney-in-fact and agent, with full power of substitution to each,
for him or her and on his or her behalf and in his or her name, place and stead,
to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933, the Securities Exchange Act of
1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others or other, and to have full power and authority to do or cause to be done
in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 15th day of February, 1996.
/s/ Norman C. Francis
-------------------------
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, James D. Goodwin, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Charles Wilder, Mildred Oliver
and each of them (with full power to each of them to act alone), his or her true
and lawful attorney-in-fact and agent, with full power of substitution to each,
for him or her and on his or her behalf and in his or her name, place and stead,
to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933, the Securities Exchange Act of
1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others or other, and to have full power and authority to do or cause to be done
in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 15th day of February, 1996.
/s/ Donald J. Greene
-------------------------
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, James D. Goodwin, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Charles Wilder, Mildred Oliver
and each of them (with full power to each of them to act alone), his or her true
and lawful attorney-in-fact and agent, with full power of substitution to each,
for him or her and on his or her behalf and in his or her name, place and stead,
to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933, the Securities Exchange Act of
1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others or other, and to have full power and authority to do or cause to be done
in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 15th day of February, 1996.
/s/ Anthony J. Hamilton
-------------------------
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, James D. Goodwin, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Charles Wilder, Mildred Oliver
and each of them (with full power to each of them to act alone), his or her true
and lawful attorney-in-fact and agent, with full power of substitution to each,
for him or her and on his or her behalf and in his or her name, place and stead,
to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933, the Securities Exchange Act of
1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others or other, and to have full power and authority to do or cause to be done
in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 15th day of February, 1996.
/s/ John T. Hartley
-------------------------
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, James D. Goodwin, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Charles Wilder, Mildred Oliver
and each of them (with full power to each of them to act alone), his or her true
and lawful attorney-in-fact and agent, with full power of substitution to each,
for him or her and on his or her behalf and in his or her name, place and stead,
to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933, the Securities Exchange Act of
1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others or other, and to have full power and authority to do or cause to be done
in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 15th day of February, 1996.
/s/ John H.F. Haskell, Jr.
-------------------------
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, James D. Goodwin, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Charles Wilder, Mildred Oliver
and each of them (with full power to each of them to act alone), his or her true
and lawful attorney-in-fact and agent, with full power of substitution to each,
for him or her and on his or her behalf and in his or her name, place and stead,
to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933, the Securities Exchange Act of
1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others or other, and to have full power and authority to do or cause to be done
in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 15th day of February, 1996.
/s/ W. Edwin Jarmain
-------------------------
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, James D. Goodwin, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Charles Wilder, Mildred Oliver
and each of them (with full power to each of them to act alone), his or her true
and lawful attorney-in-fact and agent, with full power of substitution to each,
for him or her and on his or her behalf and in his or her name, place and stead,
to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933, the Securities Exchange Act of
1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others or other, and to have full power and authority to do or cause to be done
in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 15th day of February, 1996.
/s/ G. Donald Johnston, Jr.
-------------------------
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, James D. Goodwin, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Charles Wilder, Mildred Oliver
and each of them (with full power to each of them to act alone), his or her true
and lawful attorney-in-fact and agent, with full power of substitution to each,
for him or her and on his or her behalf and in his or her name, place and stead,
to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933, the Securities Exchange Act of
1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others or other, and to have full power and authority to do or cause to be done
in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 15th day of February, 1996
/s/ Winthrop Knowlton
-------------------------
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, James D. Goodwin, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Charles Wilder, Mildred Oliver
and each of them (with full power to each of them to act alone), his or her true
and lawful attorney-in-fact and agent, with full power of substitution to each,
for him or her and on his or her behalf and in his or her name, place and stead,
to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933, the Securities Exchange Act of
1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others or other, and to have full power and authority to do or cause to be done
in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 15th day of February, 1996.
/s/ George T. Lowy
-------------------------
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, James D. Goodwin, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Charles Wilder, Mildred Oliver
and each of them (with full power to each of them to act alone), his or her true
and lawful attorney-in-fact and agent, with full power of substitution to each,
for him or her and on his or her behalf and in his or her name, place and stead,
to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933, the Securities Exchange Act of
1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others or other, and to have full power and authority to do or cause to be done
in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 15th day of February, 1996.
/s/ William T. McCaffrey
-------------------------
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, James D. Goodwin, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Charles Wilder, Mildred Oliver
and each of them (with full power to each of them to act alone), his or her true
and lawful attorney-in-fact and agent, with full power of substitution to each,
for him or her and on his or her behalf and in his or her name, place and stead,
to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933, the Securities Exchange Act of
1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others or other, and to have full power and authority to do or cause to be done
in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 15th day of February, 1996.
/s/ Joseph J. Melone
-------------------------
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, James D. Goodwin, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Charles Wilder, Mildred Oliver
and each of them (with full power to each of them to act alone), his or her true
and lawful attorney-in-fact and agent, with full power of substitution to each,
for him or her and on his or her behalf and in his or her name, place and stead,
to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933, the Securities Exchange Act of
1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others or other, and to have full power and authority to do or cause to be done
in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 15th day of February, 1996.
/s/ Didier Pineau-Valencienne
-------------------------
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, James D. Goodwin, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Charles Wilder, Mildred Oliver
and each of them (with full power to each of them to act alone), his or her true
and lawful attorney-in-fact and agent, with full power of substitution to each,
for him or her and on his or her behalf and in his or her name, place and stead,
to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933, the Securities Exchange Act of
1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others or other, and to have full power and authority to do or cause to be done
in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 15th day of February, 1996.
/s/ George J. Sella, Jr.
-------------------------
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, James D. Goodwin, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Charles Wilder, Mildred Oliver
and each of them (with full power to each of them to act alone), his or her true
and lawful attorney-in-fact and agent, with full power of substitution to each,
for him or her and on his or her behalf and in his or her name, place and stead,
to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933, the Securities Exchange Act of
1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others or other, and to have full power and authority to do or cause to be done
in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 15th day of February, 1996.
/s/ Dave H. Williams
-------------------------
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000727920
<NAME> Sep Acct. No. 3 (MRP)
<SERIES>
<NUMBER> 01
<NAME> The Aggressive Equity Fund
<MULTIPLIER> 1
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<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-START> Jan-01-1995
<PERIOD-END> Dec-31-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 278,359,964
<INVESTMENTS-AT-VALUE> 341,203,942
<RECEIVABLES> 2,499,839
<ASSETS-OTHER> 891,904
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 344,595,685
<PAYABLE-FOR-SECURITIES> 1,122,353
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,770,078
<TOTAL-LIABILITIES> 2,892,431
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<SHARES-COMMON-STOCK> 0
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<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 341,703,254
<DIVIDEND-INCOME> 1,552,241
<INTEREST-INCOME> 729,465
<OTHER-INCOME> 0
<EXPENSES-NET> 4,967,053
<NET-INVESTMENT-INCOME> (2,685,347)
<REALIZED-GAINS-CURRENT> 75,694,748
<APPREC-INCREASE-CURRENT> 20,301,612
<NET-CHANGE-FROM-OPS> 93,311,013
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<NET-CHANGE-IN-ASSETS> 32,309,957
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 32.21
<PER-SHARE-NII> (0.45)
<PER-SHARE-GAIN-APPREC> 9.98
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 41.74
<EXPENSE-RATIO> 1.86
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000727920
<NAME> Sep Acct. No. 4 (MRP)
<SERIES>
<NUMBER> 01
<NAME> The Growth Equity Fund
<MULTIPLIER> 1
<CURRENCY> U. S. Dollars
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-START> Jan-01-1995
<PERIOD-END> Dec-31-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 1,831,087,485
<INVESTMENTS-AT-VALUE> 2,121,951,694
<RECEIVABLES> 17,234,507
<ASSETS-OTHER> 3,285,960
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,142,472,161
<PAYABLE-FOR-SECURITIES> 10,088,399
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 7,259,221
<TOTAL-LIABILITIES> 17,347,620
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 2,125,124,541
<DIVIDEND-INCOME> 19,610,344
<INTEREST-INCOME> (852,218)
<OTHER-INCOME> 0
<EXPENSES-NET> 16,007,109
<NET-INVESTMENT-INCOME> 2,751,017
<REALIZED-GAINS-CURRENT> 260,870,246
<APPREC-INCREASE-CURRENT> 249,038,413
<NET-CHANGE-FROM-OPS> 512,659,676
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 460,532,192
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 161.15
<PER-SHARE-NII> (1.41)
<PER-SHARE-GAIN-APPREC> 50.16
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 209.90
<EXPENSE-RATIO> 1.74
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000727920
<NAME> Sep Acct. No. 10 (MRP)
<SERIES>
<NUMBER> 01
<NAME> The Balanced Fund
<MULTIPLIER> 1
<CURRENCY> U. S. Dollars
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-START> Jan-01-1995
<PERIOD-END> Dec-31-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 338,220,064
<INVESTMENTS-AT-VALUE> 372,345,555
<RECEIVABLES> 4,527,978
<ASSETS-OTHER> 256,781
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 377,130,314
<PAYABLE-FOR-SECURITIES> 1,048,475
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,897,689
<TOTAL-LIABILITIES> 2,946,164
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 374,184,150
<DIVIDEND-INCOME> 3,014,441
<INTEREST-INCOME> 11,113,819
<OTHER-INCOME> 0
<EXPENSES-NET> 5,349,200
<NET-INVESTMENT-INCOME> 8,779,060
<REALIZED-GAINS-CURRENT> 16,986,767
<APPREC-INCREASE-CURRENT> 42,304,150
<NET-CHANGE-FROM-OPS> 68,069,977
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (20,079,544)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 22.19
<PER-SHARE-NII> 0.46
<PER-SHARE-GAIN-APPREC> 3.74
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 26.39
<EXPENSE-RATIO> 1.79
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000727920
<NAME> Sep Acct. No. 51 (MRP)
<SERIES>
<NUMBER> 01
<NAME> Global Fund
<MULTIPLIER> 1
<CURRENCY> U. S. Dollars
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-START> Jan-01-1995
<PERIOD-END> Dec-31-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 26,282,287
<INVESTMENTS-AT-VALUE> 28,593,444
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 55,852
<TOTAL-ASSETS> 28,649,296
<PAYABLE-FOR-SECURITIES> 38,154
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 23,058
<TOTAL-LIABILITIES> 61,212
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 28,588,084
<DIVIDEND-INCOME> 400,157
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 224,839
<NET-INVESTMENT-INCOME> 175,318
<REALIZED-GAINS-CURRENT> 844,448
<APPREC-INCREASE-CURRENT> 2,779,014
<NET-CHANGE-FROM-OPS> 3,798,780
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
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<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 16,584,580
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
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<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
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<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000727920
<NAME> Sep Acct. No. 51 (MRP)
<SERIES>
<NUMBER> 02
<NAME> Conservative Investors Fun
<MULTIPLIER> 1
<CURRENCY> U. S. Dollars
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-START> Jan-01-1995
<PERIOD-END> Dec-31-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 4,895,468
<INVESTMENTS-AT-VALUE> 5,200,407
<RECEIVABLES> 3,225
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 1,335
<TOTAL-ASSETS> 5,204,967
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 7,688
<TOTAL-LIABILITIES> 7,688
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 5,197,279
<DIVIDEND-INCOME> 224,858
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 56,285
<NET-INVESTMENT-INCOME> 168,573
<REALIZED-GAINS-CURRENT> 10,888
<APPREC-INCREASE-CURRENT> 521,526
<NET-CHANGE-FROM-OPS> 700,987
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 2,473,679
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000727920
<NAME> Sep Acct. No. 51 (MRP)
<SERIES>
<NUMBER> 03
<NAME> Growth Investors Fund
<MULTIPLIER> 1
<CURRENCY> U. S. Dollars
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-START> Jan-01-1995
<PERIOD-END> Dec-31-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 24,944,438
<INVESTMENTS-AT-VALUE> 27,425,238
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 231,872
<TOTAL-ASSETS> 27,657,110
<PAYABLE-FOR-SECURITIES> 218,551
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 16,800
<TOTAL-LIABILITIES> 235,351
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 27,421,759
<DIVIDEND-INCOME> 602,858
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 136,295
<NET-INVESTMENT-INCOME> 466,563
<REALIZED-GAINS-CURRENT> 357,576
<APPREC-INCREASE-CURRENT> 2,744,497
<NET-CHANGE-FROM-OPS> 3,568,636
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 21,302,198
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
