Registration No. 33-88456
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SECURITES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 7 TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
(Exact name of registrant as specified in its charter)
NEW YORK
(State or other jurisdiction of incorporation or organization)
13-5570651
(I.R.S. Employer Identification No.)
787 SEVENTH AVENUE, NEW YORK, NEW YORK 10019
(212) 554-1234
(Address, including zip code, and telephone number, including area code,
or registrant's principal executive offices)
JONATHAN E. GAINES, VICE PRESIDENT AND ASSOCIATE GENERAL COUNSEL
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
787 SEVENTH AVENUE, NEW YORK, NEW YORK 10019
(212) 554-1234
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Please send copies of all communications to:
PETER E. PANARITES
FREEDMAN, LEVY, KROLL & SIMONDS
1050 CONNECTICUT AVENUE, N.W., SUITE 825
WASHINGTON, D.C. 20036
(202) 457-5100
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NOTE
This Post-Effective Amendment No.7 to the Form S-3 Registration
Statement No. 33-88456 ("Registration Statement") of The Equitable Life
Assurance Society of the United States ("Equitable Life") is being filed for
the purpose of including in the Registration Statement two prospectuses of
Equitable Life, and related exhibits, contained in Post-Effective Amendment
No. 4 to the Form N-4 Registration Statement No. 33-83750 (filed by Equitable
Life on October 15, 1996) for units of interests in certain flexible premium
annuity contracts ("Contracts") the variable investment options of which are to
be funded through Equitable Life's Separate Account No. 45. The two prospectuses
describe Rollover IRA and Accumulator annuity products of Equitable Life, which
also include market value adjustment interests ("Interests") under the Contracts
that have been registered under the Securities Act of 1933 pursuant to the
Registration Statement. In addition, Rollover IRA and Accumulator annuity
products of Equitable Life, the variable investment options of which are funded
through Equitable Life's new Separate Account No. 49, the Form N-4 Registration
Statement of which was declared effective on October 16, 1996, and Equitable
Life's existing Assured Payment Plan and Assured Growth Plan products, also
include Interests registered under the Registration Statement. Separate
prospectuses, each dated May 1, 1996, for the last two existing products, are
contained in Post-Effective Amendment No. 3 to the Registration Statement. The
Interests described in the Rollover IRA and Accumulator prospectuses dated
October 16, 1996 and each of the May 1, 1996 prospectuses, and the Interests
described in the Rollover IRA and Accumulator prospectuses contained in this
Post-Effective Amendment No. 7, are identical. For purposes of the continued
effectiveness of the aforesaid two October 16, 1996 prospectuses and the two
May 1, 1996 prospectuses, this Post-Effective Amendment No. 7 shall not be
deemed to amend such prospectuses.
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INCOME MANAGER (SERVICE MARK)
PROSPECTUS FOR ROLLOVER IRA
AND CHOICE INCOME PLAN
DATED OCTOBER , 1996
COMBINATION VARIABLE AND FIXED DEFERRED ANNUITY CERTIFICATES
Issued By:
The Equitable Life Assurance Society of the United States
This prospectus describes individual retirement annuity (IRA) certificates
The Equitable Life Assurance Society of the United States (EQUITABLE LIFE,
WE, OUR and US) offers under a combination variable and fixed deferred
annuity contract (ROLLOVER IRA) issued on a group basis or as individual
contracts. Enrollment under a group contract will be evidenced by issuance of
a certificate. Certificates and individual contracts each will be referred to
as "Certificates." Under the Rollover IRA we will accept only initial
contributions that are rollover contributions or that are direct transfers
from other individual retirement arrangements, as described in this
prospectus. A minimum initial contribution of $10,000 is required to put a
Certificate into effect.
The Rollover IRA is designed to provide retirement income. Contributions
accumulate on a tax-deferred basis and can be distributed under a number of
different methods which are designed to be responsive to the owner's
(CERTIFICATE OWNER, YOU and YOUR) objectives. The distribution methods
include the Choice Income Plan featuring the IRA ASSURED PAYMENT OPTION, IRA
Assured Payment Option Plus (IRA APO PLUS), and a variety of payout options,
including variable annuities and fixed annuities. The IRA Assured Payment
Option and IRA APO Plus are also available for election in the application if
you are interested in receiving distributions rather than accumulating funds.
The Rollover IRA offers investment options (INVESTMENT OPTIONS) that permit
you to create your own strategies. These Investment Options include 9
variable investment funds (INVESTMENT FUNDS) and each GUARANTEE PERIOD in the
GUARANTEED PERIOD ACCOUNT.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
INVESTMENT FUNDS
- ------------------------------------------------------------------------------ Guarantee Periods
ASSET ALLOCATION SERIES: EQUITY SERIES: FIXED INCOME SERIES: EXPIRATION DATES:
- ---------------------------- ---------------------- ------------------------ ----------------------
O CONSERVATIVE INVESTORS O GROWTH & INCOME O MONEY MARKET FEBRUARY 15,
O GROWTH INVESTORS O COMMON STOCK O INTERMEDIATE O 1997 THROUGH 2007
O GLOBAL GOVERNMENT SECURITIES O 1997 THROUGH 2011
O INTERNATIONAL
O AGGRESSIVE STOCK
</TABLE>
We invest each Investment Fund in shares of a corresponding portfolio
(PORTFOLIO) of The Hudson River Trust (TRUST), a mutual fund whose shares are
purchased by separate accounts of insurance companies. The prospectus for the
Trust, which accompanies this prospectus, describes the investment
objectives, policies and risks of the Portfolios.
Amounts allocated to a Guarantee Period accumulate on a fixed basis and are
credited with interest at a rate we set (GUARANTEED RATE) for the entire
period. On each business day (BUSINESS DAY) we will determine the Guaranteed
Rates available for amounts newly allocated to Guarantee Periods. A market
value adjustment (positive or negative) will be made for withdrawals,
transfers, surrender and certain other transactions from a Guarantee Period
before its expiration date (EXPIRATION DATE). Each Guarantee Period has its
own Guaranteed Rates.
This prospectus provides information about the Rollover IRA that prospective
investors should know before investing. You should read it carefully and
retain it for future reference. The prospectus is not valid unless
accompanied by a current prospectus for the Trust, which you should also read
carefully.
Registration statements relating to Separate Account No. 45 (SEPARATE
ACCOUNT) and interests under the Guarantee Periods have been filed with the
Securities and Exchange Commission (SEC). The statement of additional
information (SAI), dated October , 1996, which is part of the registration
statement for the Separate Account, is available free of charge upon request
by writing to our Processing Office or calling 1-800-789-7771, our toll-free
number. The SAI has been incorporated by reference into this prospectus. The
Table of Contents for the SAI appears at the back of this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE CERTIFICATES ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY. THEY ARE
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NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE NOT BANK GUARANTEED.
THEY ARE SUBJECT TO INVESTMENT RISKS AND POSSIBLE LOSS OF PRINCIPAL INVESTED.
Copyright 1996
The Equitable Life Assurance Society of the United States, New York, New York
10019.
All rights reserved.
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<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Equitable Life's Annual Report on Form 10-K for the year ended December
31, 1995 is incorporated herein by reference.
All documents or reports filed by Equitable Life pursuant to Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 (EXCHANGE
ACT) after the date hereof and prior to the termination of the offering of
the securities offered hereby shall be deemed to be incorporated by reference
in this prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this prospectus to the extent that a statement contained
herein or in any other subsequently filed document which also is or is deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as
so modified and superseded, to constitute a part of this prospectus.
Equitable Life files its Exchange Act documents and reports, including its
annual and quarterly reports on Form 10-K and Form 10-Q, electronically
pursuant to EDGAR under CIK No. 0000727920.
Equitable Life will provide without charge to each person to whom this
prospectus is delivered, upon the written or oral request of such person, a
copy of any or all of the foregoing documents incorporated herein by
reference (other than exhibits not specifically incorporated by reference
into the text of such documents). Requests for such documents should be
directed to The Equitable Life Assurance Society of the United States, 787
Seventh Avenue, New York, New York 10019. Attention: Corporate Secretary
(telephone: (212) 554-1234).
2
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<PAGE>
PROSPECTUS TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
GENERAL TERMS PAGE 4
FEE TABLE PAGE 6
Condensed Financial Information 8
PART 1: SUMMARY PAGE 9
What is the Rollover IRA? 9
Investment Options 9
Contributions 9
Transfers 9
Free Look Period 9
Services We Provide 9
Death Benefits 10
Guaranteed Minimum Income Benefit (GMIB) 10
Surrendering the Certificates 10
Distribution Methods 10
Taxes 11
Deductions from Annuity
Account Value 11
Deductions from Investment Funds 11
Trust Charges to Portfolios 11
PART 2: EQUITABLE LIFE, THE SEPARATE
ACCOUNT AND THE INVESTMENT FUNDS PAGE 12
Equitable Life 12
Separate Account No. 45 12
The Trust 12
The Trust's Investment Adviser 13
Investment Policies and Objectives of
the Trust's Portfolios 14
PART 3: INVESTMENT PERFORMANCE PAGE 15
Performance Data for a Certificate 15
Rate of Return Data for Investment
Funds 16
Communicating Performance Data 19
Money Market Fund and Intermediate
Government Securities Fund Yield
Information 20
PART 4: THE GUARANTEED PERIOD ACCOUNT PAGE 21
Guarantee Periods 21
Market Value Adjustment for Transfers,
Withdrawals or Surrender Prior to the
Expiration Date 22
Modal Payment Portion 23
Death Benefit Amount 23
Investments 23
PART 5: PROVISIONS OF THE CERTIFICATES
AND SERVICES WE PROVIDE PAGE 25
Availability of the Certificates 25
Contributions Under the Certificates 25
Methods of Payment 25
Allocation of Contributions 26
Free Look Period 26
Annuity Account Value 27
Transfers Among Investment Options 27
Dollar Cost Averaging 28
Death Benefit 28
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<PAGE>
GMIB 29
Cash Value 31
Surrendering the Certificates to
Receive the Cash Value 31
When Payments are Made 31
Assignment 31
Distribution of the Certificates 31
PART 6: DISTRIBUTION METHODS UNDER THE
CERTIFICATES PAGE 32
IRA Assured Payment Option 32
IRA APO Plus 35
Withdrawal Options 37
Income Annuity Options 39
PART 7: DEDUCTIONS AND CHARGES PAGE 41
Charges Deducted from the Annuity
Account Value 41
Charges Deducted from the Investment
Funds 42
Trust Charges to Portfolios 43
Sponsored Arrangements 43
Other Distribution Arrangements 43
PART 8: VOTING RIGHTS PAGE 44
Trust Voting Rights 44
Voting Rights of Others 44
Separate Account Voting Rights 44
Changes in Applicable Law 44
PART 9: TAX ASPECTS OF THE CERTIFICATES PAGE 45
Tax-Qualified Individual Retirement
Annuities (IRAs) 45
Penalty Tax on Early Distributions 50
Tax Penalty for Insufficient
Distributions 50
Tax Penalty for Excess Distributions or
Accumulation 50
Federal and State Income Tax
Withholding 51
Other Withholding 51
Impact of Taxes to Equitable Life 51
Transfers Among Investment Options 51
Tax Changes 51
PART 10: INDEPENDENT ACCOUNTANTS PAGE 52
APPENDIX I: MARKET VALUE
ADJUSTMENT EXAMPLE PAGE 53
APPENDIX II: GUARANTEED MINIMUM
DEATH BENEFIT (GMDB) EXAMPLE PAGE 54
APPENDIX III: GMIB EXAMPLES PAGE 55
APPENDIX IV: EXAMPLE OF PAYMENTS
UNDER THE IRA ASSURED PAYMENT
OPTION AND IRA APO PLUS PAGE 56
APPENDIX V: IRS TAX DEDUCTION TABLE PAGE 57
STATEMENT OF ADDITIONAL
INFORMATION TABLE OF CONTENTS PAGE 58
</TABLE>
3
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<PAGE>
GENERAL TERMS
ACCUMULATION UNIT--Contributions that are invested in an Investment Fund
purchase Accumulation Units in that Investment Fund.
ACCUMULATION UNIT VALUE--The dollar value of each Accumulation Unit in an
Investment Fund on a given date.
ANNUITANT--The individual who is the measuring life for determining annuity
benefits.
ANNUITY ACCOUNT VALUE--The sum of the amounts in the Investment Options under
the Certificate. See "Annuity Account Value" in Part 5.
ANNUITY COMMENCEMENT DATE--The date on which amounts will be applied under an
income annuity option.
BUSINESS DAY--Generally, any day on which the New York Stock Exchange is open
for trading. For the purpose of determining the Transaction Date, our
Business Day ends at 4:00 p.m. Eastern Time or the closing of the New York
Stock Exchange, if earlier.
CASH VALUE--The Annuity Account Value minus any applicable charges.
CERTIFICATE--The Certificate issued under the terms of a group annuity
contract and any individual contract, including any endorsements.
CERTIFICATE OWNER--The person who owns a Rollover IRA Certificate and has the
right to exercise all rights under the Certificate. The Certificate Owner
must also be the Annuitant.
CODE--The Internal Revenue Code of 1986, as amended.
CONTRACT DATE--The date on which you are enrolled under the group annuity
contract, or the effective date of the individual contract. This is usually
the Business Day we receive the initial contribution at our Processing
Office.
CONTRACT YEAR--The 12-month period beginning on your Contract Date and each
anniversary of that date.
EXPIRATION DATE--The date on which a Guarantee Period ends.
GUARANTEE PERIOD--Any of the periods of time ending on an Expiration Date
that are available for investment under the Certificates.
GUARANTEED PERIOD ACCOUNT--The Account that contains the Guarantee Periods
and the Modal Payment Portion of such Account.
GUARANTEED RATE--The annual interest rate established for each allocation to
a Guarantee Period.
INVESTMENT FUNDS--The funds of the Separate Account that are available under
the Certificates.
INVESTMENT OPTIONS--The choices for investment: the Investment Funds and each
available Guarantee Period.
IRA--An individual retirement annuity, as defined in Section 408(b) of the
Code.
IRA ASSURED PAYMENT OPTION--A distribution option which provides guaranteed
lifetime income. The IRA Assured Payment Option may be elected in the
application or elected as a distribution option at a later date. Under this
option amounts are allocated to the Guaranteed Period Account and the Life
Contingent Annuity. No amounts may be allocated to the Investment Funds.
IRA APO PLUS--A distribution option which provides guaranteed lifetime
income. IRA APO Plus may be elected in the application or as a distribution
option at a later date. Under this option amounts are allocated to the
Guaranteed Period Account, the Life Contingent Annuity and to the Investment
Funds. The amount in the Investment Funds is then systematically converted to
increase the guaranteed lifetime income.
LIFE CONTINGENT ANNUITY--Provides guaranteed lifetime income beginning at a
future date. Amounts may only be applied under the Life Contingent Annuity
through election of the IRA Assured Payment Option and IRA APO Plus.
MATURITY VALUE--The amount in a Guarantee Period on its Expiration Date.
MODAL PAYMENT PORTION--Under the IRA Assured Payment Option and IRA APO Plus,
the portion of the Guaranteed Period Account from which payments, other than
payments due on an Expiration Date, are made.
PORTFOLIOS--The portfolios of the Trust that correspond to the Investment
Funds of the Separate Account.
PROCESSING DATE--The day when we deduct certain charges from the Annuity
Account Value. If the
4
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<PAGE>
Processing Date is not a Business Day, it will be on the next succeeding
Business Day. The Processing Date will be once each year on each anniversary
of the Contract Date.
PROCESSING OFFICE--The address to which all contributions, written requests
(e.g., transfers, withdrawals, etc.) or other written communications must be
sent. See "Services We Provide" in Part 1.
SAI--The statement of additional information for the Separate Account under
the Rollover IRA.
SEPARATE ACCOUNT--Equitable Life's Separate Account No. 45.
TRANSACTION DATE--The Business Day we receive a contribution or a transaction
request providing all the information we need at our Processing Office. If
your contribution or request reaches our Processing Office on a non-Business
Day, or after the close of the Business Day, the Transaction Date will be the
next following Business Day. Transaction requests must be made in a form
acceptable to us.
TRUST--The Hudson River Trust, a mutual fund in which the assets of separate
accounts of insurance companies are invested.
VALUATION PERIOD--Each Business Day together with any preceding non-business
days.
5
<PAGE>
<PAGE>
FEE TABLE
The purpose of this fee table is to assist you in understanding the various
costs and expenses you may bear directly or indirectly under the Certificate
so that you may compare them with other similar products. The table reflects
both the charges of the Separate Account and the expenses of the Trust.
Charges for applicable taxes such as state or local premium taxes may also
apply. For a complete description of the charges under the Certificate, see
"Part 7: Deductions and Charges." For a complete description of the Trust's
charges and expenses, see the prospectus for the Trust.
As explained in Part 4, the Guarantee Periods are not a part of the Separate
Account and are not covered by the fee table and examples. The only charge
shown in the Table which will be deducted from amounts allocated to the
Guarantee Periods is the withdrawal charge. However, if there is insufficient
value in the Investment Funds, all or a portion of the distribution fee and
the annual contract fee, if any, may be deducted from your Annuity Account
Value in the Guaranteed Period Account rather than from the Investment Funds.
See "Part 7: Deductions and Charges." A market value adjustment (either
positive or negative) also may be applicable as a result of a withdrawal,
transfer or surrender of amounts from a Guarantee Period. See "Part 4: The
Guaranteed Period Account."
OWNER TRANSACTION EXPENSES (DEDUCTED FROM ANNUITY ACCOUNT VALUE)
<TABLE>
<CAPTION>
<S> <C>
DISTRIBUTION FEE (SALES LOAD) AS A PERCENTAGE OF EACH CONTRIBUTION RECEIVED DURING THE FIRST
CONTRACT Year (deducted annually on each of the first seven Processing Dates)(1) .................... 0.20%
</TABLE>
WITHDRAWAL CHARGE AS A PERCENTAGE OF CONTRIBUTIONS (percentage deducted upon
surrender or for certain withdrawals. The applicable withdrawal charge
percentage is determined by the Contract Year in which the withdrawal is
made or the Certificate is surrendered beginning with "Contract Year 1"
with respect to each contribution withdrawn or surrendered. For each
contribution, the Contract Year in which we receive that contribution is
"Contract Year 1")(2)
<TABLE>
<CAPTION>
CONTRACT
YEAR
- ----------
<S> <C>
1 ... 7.00%
2 ... 6.00
3 ... 5.00
4 ... 4.00
5 ... 3.00
6 ... 2.00
7 ... 1.00
8+ .. 0.00
</TABLE>
<TABLE>
<CAPTION>
Combined
GMDB/GMIB GMDB Only
Benefit Benefit
(Plan A) (Plan B)
<S> <C>
GMDB/GMIB CHARGES (percentage deducted annually on each Processing Date
as a percentage of the guaranteed minimum death benefit then in
effect)(3) .............................................................. 0.45% 0.20%
</TABLE>
<TABLE>
<CAPTION>
ANNUAL CONTRACT FEE (DEDUCTED FROM ANNUITY ACCOUNT VALUE ON EACH PROCESSING
DATE)(4)
<S> <C>
If the initial contribution is less than $25,000 .................................. $30
If the initial contribution is $25,000 or more .................................... $0
SEPARATE ACCOUNT ANNUAL EXPENSES (AS A PERCENTAGE OF ASSETS IN EACH INVESTMENT
FUND)
Mortality and Expense Risk Charge .................................................. 0.90%
Asset Based Administrative Charge .................................................. 0.25%
-------
Total Separate Account Annual Expenses ............................................ 1.15%
=======
</TABLE>
TRUST ANNUAL EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS IN EACH
PORTFOLIO)
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT PORTFOLIOS
-----------------------------------------------------------
CONSERVATIVE GROWTH GROWTH & COMMON
INVESTORS INVESTORS INCOME STOCK GLOBAL
-------------- ----------- ---------- -------- --------
<S> <C> <C> <C> <C> <C>
Investment Advisory Fee 0.55% 0.52% 0.55% 0.35% 0.53%
Other Expenses 0.04% 0.04% 0.05% 0.03% 0.08%
-------------- ----------- ---------- -------- --------
TOTAL TRUST ANNUAL
EXPENSES(5) 0.59% 0.56% 0.60% 0.38% 0.61%
============== =========== ========== ======== ========
</TABLE>
<TABLE>
<CAPTION>
INTERMEDIATE
AGGRESSIVE MONEY GOVT.
INTERNATIONAL STOCK MARKET SECURITIES
--------------- ------------ -------- --------------
<S> <C> <C> <C> <C>
Investment Advisory Fee 0.90% 0.46% 0.40% 0.50%
Other Expenses 0.13% 0.03% 0.04% 0.07%
--------------- ------------ -------- --------------
TOTAL TRUST ANNUAL
EXPENSES(5) 1.03% 0.49% 0.44% 0.57%
=============== ============ ======== ==============
</TABLE>
6
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Notes:
(1) The amount deducted is based on contributions that have not been
withdrawn. The distribution fee will not apply while the IRA Assured
Payment Option or IRA APO Plus is in effect. See "Part 7: Deductions and
Charges," "Distribution Fee."
(2) Deducted upon a withdrawal with respect to amounts in excess of the 15%
(10% under the IRA Assured Payment Option and IRA APO Plus) free
corridor amount, and upon a surrender. See "Part 7: Deductions and
Charges," "Withdrawal Charge." We reserve the right to impose an
administrative charge of the lesser of $25 and 2.0% of the amount
withdrawn for each Lump Sum Withdrawal after the fifth in a Contract
Year. See "Withdrawal Processing Charge" also in Part 7.
(3) The 0.45% charge covers a 6% to 80 Benefit and GMIB or, if a combined 6%
to 70 Benefit and GMIB is elected, the charge is 0.30%. See "Part 7:
Deductions and Charges," "Charges for Combined GMDB/GMIB Benefit (Plan
A)" and "Charges for GMDB Only Benefit (Plan B)."
(4) This charge is incurred at the beginning of the Contract Year and
deducted on the Processing Date. See "Part 7: Deductions and Charges,"
"Annual Contract Fee."
(5) Expenses shown for all Portfolios are for the fiscal year ended December
31, 1995. The amount shown for the International Portfolio, which was
established on April 3, 1995, is annualized. The investment advisory fee
for each Portfolio may vary from year to year depending upon the average
daily net assets of the respective Portfolio of the Trust. The maximum
investment advisory fees, however, cannot be increased without a vote of
that Portfolio's shareholders. The other direct operating expenses will
also fluctuate from year to year depending on actual expenses. See
"Trust Charges to Portfolios" in Part 7.
EXAMPLES
The examples below show the expenses that a hypothetical Certificate Owner
would pay under the Combined GMDB/GMIB Benefit (Plan A) with a 6% to 80 Benefit
and GMIB and under the GMDB Only Benefit (Plan B) in the two situations noted
below assuming a $1,000 contribution invested in one of the Investment Funds
listed, and a 5% annual return on assets.(1) The annual contract fee was
computed based on an initial contribution of $10,000.
These examples should not be considered a representation of past or future
expenses for each Investment Fund or Portfolio. Actual expenses may be
greater or less than those shown. Similarly, the annual rate of return
assumed in the examples is not an estimate or guarantee of future investment
performance.
COMBINED GMDB/GMIB BENEFIT (PLAN A) ELECTION
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
IF YOU SURRENDER YOUR CERTIFICATE AT THE END OF EACH PERIOD SHOWN,
THE EXPENSES WOULD BE:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- --------- --------- ----------
<S> <C> <C> <C> <C>
ASSET ALLOCATION SERIES:
Conservative Investors $90.65 $126.98 $166.16 $294.09
Growth Investors 90.36 126.08 164.65 291.07
EQUITY SERIES:
Growth & Income 90.75 127.28 166.66 295.10
Common Stock 88.57 120.68 155.59 272.70
Global 90.85 127.58 167.16 296.11
International 95.03 140.10 188.01 337.54
Aggressive Stock 89.66 123.98 161.13 283.94
FIXED INCOME SERIES:
Money Market 89.16 122.48 158.61 278.85
Intermediate Govt.
Securities 90.46 126.38 165.15 292.07
</TABLE>
<PAGE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
IF YOU DO NOT SURRENDER YOUR CERTIFICATE
AT THE END OF EACH PERIOD SHOWN, THE
EXPENSES WOULD BE:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- --------- --------- ----------
<S> <C> <C> <C> <C>
ASSET ALLOCATION SERIES:
Conservative Investors $27.42 $84.33 $144.17 $302.14
Growth Investors 27.13 83.44 142.67 299.12
EQUITY SERIES:
Growth & Income 27.52 84.63 144.67 303.14
Common Stock 25.34 78.03 133.60 280.74
Global 27.62 84.93 145.17 304.15
International 31.80 97.46 166.03 345.61
Aggressive Stock 26.43 81.33 139.14 292.01
FIXED INCOME SERIES:
Money Market 25.93 79.83 136.62 286.89
Intermediate Govt.
Securities 27.23 83.74 143.18 300.13
</TABLE>
7
<PAGE>
<PAGE>
GMDB ONLY BENEFIT (PLAN B) ELECTION
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
IF YOU SURRENDER YOUR CERTIFICATE AT THE END OF EACH PERIOD SHOWN,
THE EXPENSES WOULD BE:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- --------- --------- ----------
<S> <C> <C> <C> <C>
ASSET ALLOCATION
SERIES:
Conservative Investors $90.65 $121.66 $155.07 $266.33
Growth Investors 90.36 120.76 153.56 263.26
EQUITY SERIES:
Growth & Income 90.75 121.96 155.58 267.36
Common Stock 88.57 115.35 144.45 244.62
Global 90.85 122.27 156.09 268.38
International 95.03 134.82 177.05 310.42
Aggressive Stock 89.66 118.65 150.02 256.04
FIXED INCOME SERIES:
Money Market 89.16 117.15 147.48 250.85
Intermediate Govt.
Securities 90.46 121.06 154.06 264.27
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
IF YOU DO NOT SURRENDER YOUR CERTIFICATE
AT THE END OF EACH PERIOD SHOWN, THE
EXPENSES WOULD BE:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- --------- --------- ----------
<S> <C> <C> <C> <C>
ASSET ALLOCATION
SERIES:
Conservative Investors $24.77 $76.04 $129.75 $269.91
Growth Investors 24.48 75.15 128.24 266.84
EQUITY SERIES:
Growth & Income 24.87 76.34 130.25 270.93
Common Stock 22.69 69.72 119.11 248.19
Global 24.97 76.64 130.75 271.94
International 29.15 89.21 151.74 314.02
Aggressive Stock 23.78 73.04 124.70 259.62
FIXED INCOME SERIES:
Money Market 23.28 71.53 122.16 254.45
Intermediate Govt.
Securities 24.58 75.45 128.74 267.85
</TABLE>
- ------------
Notes:
(1) The amount accumulated could not be paid in the form of an annuity at
the end of any of the periods shown in the examples. If the amount
applied to purchase an annuity is less than $2,000, or the initial
payment is less than $20 we may pay the amount to the payee in a single
sum instead of as payments under an annuity form. See "Income Annuity
Options" in Part 6. The examples do not reflect charges for applicable
taxes such as state or local premium taxes that may also be deducted in
certain jurisdictions.
CONDENSED FINANCIAL INFORMATION
ACCUMULATION UNIT VALUES
Equitable Life commenced the offering of the Certificates on May 1, 1995. The
following table shows the Accumulation Unit Values, as of May 1, 1995 and the
last Business Day for the periods shown.
<TABLE>
<CAPTION>
LAST BUSINESS DAY OF
--------------------------------
MAY 1, 1995 DECEMBER 1995 SEPTEMBER 1996
------------- --------------- ---------------
<S> <C> <C> <C>
ASSET ALLOCATION SERIES:
Conservative Investors $ 14.647383 $ 16.549050 $ 16.558882
Growth Investors 20.073331 23.593613 25.115630
EQUITY SERIES:
Growth & Income 10.376155 11.989601 13.060119
Common Stock 102.335691 124.519251 141.022624
<PAGE>
Global 19.478146 22.293921 24.080727
International 10.125278 11.033925 11.735219
Aggressive Stock 44.025496 54.591448 64.680156
FIXED INCOME SERIES:
Money Market 23.150932 23.830754 24.547344
Intermediate Govt.
Securities 12.498213 13.424767 13.535782
</TABLE>
8
<PAGE>
<PAGE>
PART 1: SUMMARY
The following Summary is qualified in its entirety by the terms of the
Certificate when issued and the more detailed information appearing elsewhere
in this prospectus (see "Prospectus Table of Contents").
WHAT IS THE ROLLOVER IRA?
The Rollover Individual Retirement Annuity (IRA) is designed to provide for
retirement income through the investment of rollover contributions, direct
transfers from other individual retirement arrangements and additional IRA
contributions. The Rollover IRA features a combination of Investment Options,
consisting of Investment Funds providing variable returns and Guarantee
Periods providing guaranteed interest. The Rollover IRA also makes available
distribution methods under the Choice Income Plan which includes the IRA
Assured Payment Option and IRA APO Plus (which can be applied for in the
application or at a later date). Withdrawal options and fixed and variable
income annuity options are also available.
The Rollover IRA and/or the IRA Assured Payment Option and IRA APO Plus may
not be available in all states. These Certificates are not available in
Puerto Rico.
INVESTMENT OPTIONS
The Rollover IRA offers the following Investment Options which permit you to
create your own strategy for retirement savings. All available Investment
Options may be selected under a Certificate.
INVESTMENT FUNDS
o Asset Allocation Series: the Conservative Investors and Growth Investors
Funds
o Equity Series: the Growth & Income, Common Stock, Global, International
and Aggressive Stock Funds
o Fixed Income Series: the Money Market and Intermediate Government
Securities Funds
GUARANTEE PERIODS
o Guarantee Periods (may not be available in all states) maturing in each
of calendar years 1997 through 2007.
o Guarantee Periods maturing in 1997 through 2011 under the IRA Assured
Payment Option and IRA APO Plus.
CONTRIBUTIONS
o To put a Certificate into effect, you must contribute at least $10,000
in the form of either a rollover contribution or a direct
custodian-to-custodian transfer from one or more other individual
retirement arrangements.
o Subsequent contributions may be made in an amount of at least $1,000.
Subsequent contributions must not exceed $2,000 for any taxable year,
except for additional rollover contributions or direct transfers, both
of which are unlimited.
TRANSFERS
Under the Rollover IRA, you may make an unlimited number of transfers among
the Investment Funds. However, there are restrictions for transfers to and
from the Guaranteed Period Account and among the Guarantee Periods. Transfers
from a Guarantee Period may result in a market value adjustment. Transfers
among Investment Options are currently free of charge. Transfers among the
Investment Options are not taxable.
FREE LOOK PERIOD
You have the right to examine the Rollover IRA Certificate for a period of 10
days after you receive it, and to return it to us for a refund. You may
cancel it by sending it to our Processing Office. Your refund will equal the
Annuity Account Value, reflecting any investment gain or loss, and any
positive or negative market value adjustment, through the date we receive
your Certificate at our Processing Office.
SERVICES WE PROVIDE
O REGULAR REPORTS
o Statement of your Certificate values as of the last day of the
calendar year;
o Three additional reports of your Certificate values each year;
o Annual and semi-annual statements of the Trust; and
o Written confirmation of financial transactions.
<PAGE>
O TOLL-FREE TELEPHONE SERVICES
o Call 1-800-789-7771 for a recording of daily Accumulation Unit Values
and Guaranteed Rates applicable to the Guarantee Periods. Also call
during our regular business hours to speak to one of our customer
service representatives.
O PROCESSING OFFICE
o FOR CONTRIBUTIONS SENT BY REGULAR MAIL:
Equitable Life
Income Management Group
Post Office Box 13014
Newark, NJ 07188-0014
9
<PAGE>
<PAGE>
o FOR CONTRIBUTIONS SENT BY EXPRESS MAIL:
Equitable Life
c/o First Chicago National Processing Center
300 Harmon Meadow Boulevard, 3rd Floor
Attn: Box 13014
Secaucus, NJ 07094
o FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANSFERS,
WITHDRAWALS) SENT BY REGULAR MAIL:
Equitable Life
Income Management Group
P.O. Box 1547
Secaucus, NJ 07096-1547
o FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANSFERS,
WITHDRAWALS) SENT BY EXPRESS MAIL:
Equitable Life
Income Management Group
200 Plaza Drive
Secaucus, NJ 07096
DEATH BENEFITS
If you die before the Annuity Commencement Date, the Rollover IRA provides a
death benefit. The beneficiary will be paid the greater of the Annuity
Account Value in the Investment Funds and the guaranteed minimum death
benefit (GMDB), plus any death benefit provided with respect to the
Guaranteed Period Account.
There are two plans available under the Certificates for providing guaranteed
benefits, Plan A and Plan B. Plan A provides both a GMDB and a guaranteed
minimum income benefit (described below). Plan B provides a GMDB only.
GUARANTEED MINIMUM INCOME BENEFIT (GMIB)
The GMIB, available under the Combined GMDB/ GMIB Benefit (Plan A), may not
currently be available in all states.
When you elect the IRA Assured Payment Option, the GMIB provides a minimum
guaranteed lifetime income under such option with respect to amounts applied
from the Investment Funds. Any amounts in the Guaranteed Period Account will
be applied to increase the payments provided under the GMIB. A market value
adjustment may apply.
SURRENDERING THE CERTIFICATES
You may surrender a Certificate and receive the Cash Value at any time before
the Annuity Commencement Date while the Annuitant is living. Withdrawal
charges and a market value adjustment may apply. A surrender may also be
subject to income tax and tax penalty.
DISTRIBUTION METHODS
IRA ASSURED PAYMENT OPTION
The IRA Assured Payment Option (which requires a minimum amount applied of
$10,000) provides guaranteed lifetime income. You may elect to receive
payments on a monthly, quarterly or annual basis during a fixed period.
Payments during the fixed period represent distributions of the Maturity
Values of serially maturing Guarantee Periods on their Expiration Dates or,
distributions from amounts in the Modal Payment Portion of the Guaranteed
Period Account. During the fixed period you can take withdrawals from your
Annuity Account Value. After the fixed period ends, payments are made out of
the Life Contingent Annuity.
The Life Contingent Annuity does not have a Cash Value or an Annuity Account
Value. There is no death benefit under the Life Contingent Annuity and income
is paid only if you (or a joint Annuitant) are living at the date annuity
benefits begin.
A $2.50 charge will be deducted from each payment made on a monthly or
quarterly basis.
IRA APO PLUS
IRA APO Plus is a variation of the IRA Assured Payment Option. IRA APO Plus
enables you to keep a portion of your Annuity Account Value in the Investment
Funds while periodically converting such Annuity Account Value to increase
the guaranteed lifetime income under the IRA Assured Payment Option. When you
elect IRA APO Plus, a portion of your initial contribution or Annuity Account
Value, as applicable, is allocated to the IRA Assured Payment Option to
provide a minimum guaranteed lifetime income, and the remaining contribution
or Annuity Account Value is allocated to the Investment Funds. Every three
years during the fixed period, a portion of the remaining Annuity Account
Value in the Investment Funds is applied to increase the guaranteed payments
under the IRA Assured Payment Option.
<PAGE>
WITHDRAWAL OPTIONS
o Lump Sum Withdrawals--Before the Annuity Commencement Date while the
Certificate is in effect, you may take Lump Sum Withdrawals from your
Certificate at any time. The minimum withdrawal amount is $1,000.
o Substantially Equal Payment Withdrawals--If you are below age 59 1/2,
this withdrawal option is designed to allow you to withdraw funds
annually and not have a 10% penalty tax apply. This is accomplished by
distribution of substantially equal periodic payments over your life
expectancy or over the joint life expectancies of you and your spouse.
If you change or stop such distributions before the later of age 59 1/2
or five years from the date of the first distribution, the 10% penalty
tax may apply on all prior distributions.
o Systematic Withdrawals--You may also withdraw funds under our Systematic
Withdrawal option, where the minimum withdrawal amount is $250. These
withdrawals are available if you are age 59 1/2 to 70 1/2.
10
<PAGE>
<PAGE>
o Minimum Distribution Withdrawals--You may also withdraw funds annually
under our Minimum Distribution Withdrawals option, which is designed to
meet the minimum distribution requirements set forth in the Code. The
minimum withdrawal amount is $250.
Withdrawals may be subject to a withdrawal charge and withdrawals from
Guarantee Periods prior to their Expiration Date will result in a market
value adjustment. Withdrawals may be subject to income tax and tax penalty.
INCOME ANNUITY OPTIONS
The Certificates also provide income annuity options to which amounts may be
applied at the Annuity Commencement Date. The income annuity options are
offered on a fixed and variable basis.
TAXES
Generally, any earnings on contributions made to the Certificate will not be
included in your taxable income until distributions are made from the
Certificate. Distributions prior to your attaining age 59 1/2 may be subject
to tax penalty.
DEDUCTIONS FROM ANNUITY
ACCOUNT VALUE
Distribution Fee
We deduct a sales load annually in an amount of 0.20% of each contribution
received during the first Contract Year. This sales load is deducted on each
of the first seven Processing Dates. The amount deducted is based on
contributions that have not been withdrawn. The distribution fee will not be
deducted while the IRA Assured Payment Option or IRA APO Plus is in effect.
Withdrawal Charge
A withdrawal charge will be imposed as a percentage of the initial and each
subsequent contribution if (i) a Lump Sum Withdrawal or cumulative
withdrawals during a Contract Year exceed the free corridor amount, or (ii)
the Certificate is surrendered. The free corridor amount is 15% under the
Rollover IRA and 10% under the IRA Assured Payment Option and IRA APO Plus.
We determine the withdrawal charge separately for each contribution in
accordance with the table below.
<TABLE>
<CAPTION>
CONTRACT YEAR
1 2 3 4 5 6 7 8+
------ ------ ------ ------ ------ ------ ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Percentage of
Contribution 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0%
</TABLE>
The applicable withdrawal charge percentage is determined by the Contract
Year in which the withdrawal is made or the Certificate is surrendered,
beginning with "Contract Year 1" with respect to each contribution withdrawn
or surrendered. For purposes of the table, for each contribution the Contract
Year in which we receive that contribution is "Contract Year 1."
Withdrawal Processing Charge
We reserve the right to impose an administrative charge of the lesser of $25
and 2.0% of the amount withdrawn for each Lump Sum Withdrawal after the fifth
in a Contract Year.
Charges for Combined GMDB/GMIB Benefit (Plan A)
We deduct a charge annually on each Processing Date for providing the
Combined GMDB/GMIB Benefit (Plan A). The charge is equal to a percentage of
the GMDB in effect on the Processing Date. The percentage is equal to 0.45%
for a 6% to 80 Benefit and GMIB and 0.30% for a 6% to 70 Benefit and GMIB.
Charges for GMDB Only Benefit (Plan B)
We deduct a charge annually on each Processing Date for providing the GMDB
Only Benefit (Plan B). The charge is equal to a percentage of the GMDB in
effect on the Processing Date. The percentage is equal to 0.20%.
Annual Contract Fee
The charge will be $30 per Contract Year if your initial contribution is less
than $25,000, and zero if your initial contribution is $25,000 or more. This
charge will not apply while the IRA Assured Payment Option or IRA APO Plus is
in effect.
Charges for State Premium and Other
Applicable Taxes
<PAGE>
Generally, we deduct a charge for premium and other applicable taxes from the
Annuity Account Value on the Annuity Commencement Date. The current tax
charge that might be imposed varies by state and ranges from 0 to 2.25%.
DEDUCTIONS FROM INVESTMENT FUNDS
Mortality and Expense Risk Charge
We charge each Investment Fund a daily asset based charge for mortality and
expense risks equivalent to an annual rate of 0.90%.
Asset Based Administrative Charge
We charge each Investment Fund a daily asset based charge to cover a portion
of the administrative expenses under the Certificate equivalent to an annual
rate of 0.25%.
TRUST CHARGES TO PORTFOLIOS
Investment advisory fees and other expenses of the Trust are charged daily
against the Trust's assets. These are reflected in the Portfolio's daily
share price and in the daily Accumulation Unit Value for the Investment
Funds.
11
<PAGE>
<PAGE>
PART 2: EQUITABLE LIFE, THE SEPARATE ACCOUNT
AND THE INVESTMENT FUNDS
EQUITABLE LIFE
Equitable Life is a New York stock life insurance company that has been in
business since 1859. For more than 100 years we have been among the largest
life insurance companies in the United States. Equitable Life has been
selling annuities since the turn of the century. Our home office is located
at 787 Seventh Avenue, New York, New York 10019. We are authorized to sell
life insurance and annuities in all fifty states, the District of Columbia,
Puerto Rico and the Virgin Islands. We maintain local offices throughout the
United States.
Equitable Life is a wholly owned subsidiary of The Equitable Companies
Incorporated (the Holding Company). The largest stockholder of the Holding
Company is AXA S.A. AXA beneficially owns 60.6% of the outstanding common
stock of the Holding Company plus convertible preferred stock. Under its
investment arrangements with Equitable Life and the Holding Company, AXA is
able to exercise significant influence over the operations and capital
structure of the Holding Company and its subsidiaries, including Equitable
Life. AXA, a French company, is the holding company for an international
group of insurance and related financial service companies.
Equitable Life, the Holding Company and their subsidiaries managed
approximately $217.6 billion of assets as of June 30, 1996.
SEPARATE ACCOUNT NO. 45
Separate Account No. 45 is organized as a unit investment trust, a type of
investment company, and is registered with the SEC under the Investment
Company Act of 1940 (1940 Act). This registration does not involve any
supervision by the SEC of the management or investment policies of the
Separate Account. The Separate Account has several Investment Funds, each of
which invests in shares of a corresponding Portfolio of the Trust. Because
amounts allocated to the Investment Funds are invested in a mutual fund,
investment return and principal will fluctuate and the Certificate Owner's
Accumulation Units may be worth more or less than the original cost when
redeemed.
Under the New York Insurance Law, the portion of the Separate Account's
assets equal to the reserves and other liabilities relating to the
Certificates are not chargeable with liabilities arising out of any other
business we may conduct. Income, gains or losses, whether or not realized,
from assets of the Separate Account are credited to or charged against the
Separate Account without regard to our other income gains or losses. We are
the issuer of the Certificates, and the obligations set forth in the
Certificates (other than those of Annuitants or Certificate Owners) are our
obligations.
In addition to contributions made under the Rollover IRA Certificates, we may
allocate to the Separate Account monies received under other contracts,
certificates, or agreements. Owners of all such contracts, certificates or
agreements will participate in the Separate Account in proportion to the
amounts they have in the Investment Funds that relate to their contracts,
certificates or agreements. We may retain in the Separate Account assets that
are in excess of the reserves and other liabilities relating to the Rollover
IRA Certificates or to other contracts, certificates or agreements, or we may
transfer the excess to our General Account.
We reserve the right, subject to compliance with applicable law; (1) to add
Investment Funds (or sub-funds of Investment Funds) to, or to remove
Investment Funds (or sub-funds) from, the Separate Account, or to add other
separate accounts; (2) to combine any two or more Investment Funds or
sub-funds thereof; (3) to transfer the assets we determine to be the share of
the class of contracts to which the Certificate belongs from any Investment
Fund to another Investment Fund; (4) to operate the Separate Account or any
Investment Fund as a management investment company under the 1940 Act, in
which case charges and expenses that otherwise would be assessed against an
underlying mutual fund would be assessed against the Separate Account; (5) to
deregister the Separate Account under the 1940 Act, provided that such action
conforms with the requirements of applicable law; (6) to restrict or
eliminate any voting rights as to the Separate Account; and (7) to cause one
or more Investment Funds to invest some or all of their assets in one or more
other trusts or investment companies. If any changes are made that result in
a material change in the underlying investment policy of an Investment Fund,
you will be notified as required by law.
THE TRUST
The Trust is an open-end diversified management investment company, more
commonly called a mu-
12
<PAGE>
<PAGE>
tual fund. As a "series" type of mutual fund, it issues several different
series of stock, each of which relates to a different Portfolio of the Trust.
The Trust commenced operations in January 1976 with a predecessor of its
Common Stock Portfolio. The Trust does not impose a sales charge or "load"
for buying and selling its shares. All dividend distributions to the Trust
are reinvested in full and fractional shares of the Portfolio to which they
relate. More detailed information about the Trust, its investment objectives,
policies, restrictions, risks, expenses and all other aspects of its
operations appears in its prospectus which accompanies this prospectus or in
its statement of additional information.
THE TRUST'S INVESTMENT ADVISER
The Trust is advised by Alliance Capital Management L.P. (Alliance), which is
registered with the SEC as an investment adviser under the Investment
Advisers Act of 1940. Alliance, a publicly-traded limited partnership, is
indirectly majority-owned by Equitable Life. On June 30, 1996, Alliance was
managing over $168 billion in assets. 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 record as an investment manager is based, in part, on its ability
to provide a diversity of investment services to domestic, international and
global markets. Alliance prides itself on its ability to attract and retain a
quality, professional work force. Alliance employs more than 188 investment
professionals, including 74 research analysts. Portfolio managers have an
average investment experience of more than 14 years.
Alliance's main office is located at 1345 Avenue of the Americas, New York,
New York 10105.
13
<PAGE>
<PAGE>
INVESTMENT POLICIES AND OBJECTIVES OF THE TRUST'S PORTFOLIOS
Each Portfolio has a different investment objective which it tries to achieve
by following separate investment policies. The policies and objectives of
each Portfolio will affect its return and its risks. There is no guarantee
that these objectives will be achieved.
The policies and objectives of the Trust's Portfolios are as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Portfolio Investment Policy Objective
- --------------------------- ---------------------------------------------------- -----------------------------
ASSET ALLOCATION SERIES:
Conservative Investors Diversified mix of publicly-traded, fixed-income and High total return without, in
equity securities; asset mix and security selection the adviser's opinion, undue
are primarily based upon factors expected to reduce risk to principal
risk. The Portfolio is generally expected to hold
approximately 70% of its assets in fixed income
securities and 30% in equity securities.
Growth Investors Diversified mix of publicly-traded, fixed-income and High total return consistent
equity securities; asset mix and security selection with the adviser's
based upon factors expected to increase possibility determination of reasonable
of high long-term return. The Portfolio is generally risk
expected to hold approximately 70% of its assets in
equity securities and 30% in fixed income
securities.
EQUITY SERIES:
Growth & Income Primarily income producing common stocks and High total return through a
securities convertible into common stocks. combination of current income
and capital appreciation
Common Stock Primarily common stock and other equity-type Long-term growth of capital
instruments. and increasing income
Global Primarily equity securities of non-United States as Long-term growth of capital
well as United States companies.
International Primarily equity securities selected principally to Long-term growth of capital
permit participation in non-United States companies
with prospects for growth.
Aggressive Stock Primarily common stocks and other equity-type Long-term growth of capital
securities issued by medium and other smaller sized
companies with strong growth potential.
FIXED INCOME SERIES:
Money Market Primarily high quality short-term money market High level of current income
instruments. while preserving assets and
maintaining liquidity
Intermediate Government Primarily debt securities issued or guaranteed by High current income
Securities the U.S. government, its agencies and consistent with relative
instrumentalities. Each investment will have a final stability of principal
maturity of not more than 10 years or a duration not
exceeding that of a 10-year Treasury note.
</TABLE>
14
<PAGE>
<PAGE>
PART 3: INVESTMENT PERFORMANCE
This Part presents performance data for each of the Investment Funds
calculated by two methods. The first method, used in calculating values for
the two tables in "Performance Data for a Certificate," reflects all
applicable fees and charges other than the charge for tax such as premium
taxes. The second method, used in preparing rates of return for the three
tables in "Rate of Return Data for Investment Funds," reflects all fees and
charges other than the distribution fee, the withdrawal charge, the GMDB/
GMIB charge, the annual contract fee and the charge for tax such as premium
taxes. These additional charges would effectively reduce the rates of return
credited to a particular Certificate.
The Separate Account commenced operations in May 1995 and no Certificates
were issued prior to that date. The calculations of investment performance
shown below are based on the actual investment results of the Portfolios of
the Trust, from which certain fees and charges applicable under the Rollover
IRA have been deducted. The results shown are not an estimate or guarantee of
future investment performance, and do not reflect the actual experience of
amounts invested under a particular Certificate.
See "Part 4: The Guaranteed Period Account" for information on the Guaranteed
Period Account.
PERFORMANCE DATA FOR A CERTIFICATE
The standardized performance data in the following tables illustrate the
average annual total return of the Investment Funds over the periods shown,
assuming a single initial contribution of $1,000 and the surrender of the
Certificate at the end of each period. These tables (which reflect the first
calculation method described above) are prepared in a manner prescribed by
the SEC for use when we advertise the performance of the Separate Account. An
Investment Fund's average annual total return is the annual rate of growth of
the Investment Fund that would be necessary to achieve the ending value of a
contribution kept in the Investment Fund for the period specified.
Each calculation assumes that the $1,000 contribution was allocated to only
one Investment Fund, no transfers or subsequent contributions were made and
no amounts were allocated to any other Investment Option under the
Certificate.
In order to calculate annualized rates of return, we divide the Cash Value of
a Certificate which is surrendered on December 31, 1995 by the $1,000
contribution made at the beginning of each period illustrated. The annual
contract fee is computed based on an initial contribution of $10,000. The
result of that calculation is the total growth rate for the period. Then we
annualize that growth rate to obtain the average annual percentage increase
(decrease) during the period shown. When we "annualize," we assume that a
single rate of return applied each year during the period will produce the
ending value, taking into account the effect of compounding.
GROWTH OF $1,000 UNDER A CERTIFICATE SURRENDERED ON DECEMBER 31, 1995*
<TABLE>
<CAPTION>
LENGTH OF INVESTMENT PERIOD
-----------------------------------------------------
INVESTMENT THREE FIVE TEN SINCE
FUND ONE YEAR YEARS YEARS YEARS INCEPTION**
- ---------------------- -------- -------- -------- -------- -------------
<S> <C> <C> <C> <C> <C>
ASSET ALLOCATION SERIES:
Conservative Investors $1,117 $1,160 $1,448 -- $ 1,558
Growth Investors 1,176 1,285 1,994 -- 2,243
EQUITY SERIES:
Growth & Income 1,154 -- -- -- 1,122
Common Stock 1,236 1,484 2,082 $3,458 11,394
Global 1,102 1,519 1,936 -- 2,076
International -- -- -- -- 1,030
Aggressive Stock 1,228 1,350 2,438 -- 5,198
</TABLE>
15
<PAGE>
<PAGE>
GROWTH OF $1,000 UNDER A CERTIFICATE SURRENDERED ON DECEMBER 31, 1995*
(CONTINUED)
<TABLE>
<CAPTION>
LENGTH OF INVESTMENT PERIOD
----------------------------------------------------
INVESTMENT ONE THREE FIVE TEN SINCE
FUND YEAR YEARS YEARS YEARS INCEPTION**
- ----------------------------- ------- -------- -------- -------- -------------
<S> <C> <C> <C> <C> <C>
FIXED INCOME SERIES:
Money Market $ 972 $1,020 $1,098 $1,479 $2,156
Intermediate Govt. Securities 1,047 1,083 -- -- 1,265
</TABLE>
[FN]
- ------------
* See footnotes below.
AVERAGE ANNUAL TOTAL RETURN UNDER A CERTIFICATE SURRENDERED ON
DECEMBER 31, 1995*
<TABLE>
<CAPTION>
LENGTH OF INVESTMENT PERIOD
---------------------------------------------------
INVESTMENT THREE FIVE TEN SINCE
FUND ONE YEAR YEARS YEARS YEARS INCEPTION**
- ----------------------------- -------- ------- ------- -------- -------------
<S> <C> <C> <C> <C> <C>
ASSET ALLOCATION SERIES:
Conservative Investors 11.72% 5.07% 7.69% -- 6.53%
Growth Investors 17.62 8.73 14.80 -- 12.23
EQUITY SERIES:
Growth & Income 15.35 -- -- -- 3.90
Common Stock 23.63 14.07 15.80 13.21% 12.94
Global 10.15 14.95 14.12 -- 8.45
International -- -- -- -- 3.04
Aggressive Stock 22.83 10.51 19.51 -- 17.92
FIXED INCOME SERIES:
Money Market (2.77) 0.66 1.89 3.99 5.25
Intermediate Govt. Securities 4.73 2.68 -- -- 4.81
</TABLE>
[FN]
- ------------
* The tables reflect charges under a Certificate with the 0.45% GMDB/GMIB
charge.
**The "Since Inception" dates are as follows: Conservative Investors (October
2, 1989); Growth Investors (October 2, 1989); Growth & Income (October 1,
1993); Common Stock (January 13, 1976); Global (August 27, 1987);
International (April 3, 1995); Aggressive Stock (January 27, 1986); Money
Market (July 13, 1981); and Intermediate Govt. Securities (April 1, 1991).
The "Since Inception" numbers for the International Fund are unannualized.
RATE OF RETURN DATA FOR INVESTMENT FUNDS
The following tables (which reflect the second calculation method described
above) provide you with information on rates of return on an annualized,
cumulative and year-by-year basis.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends. Cumulative rates of
return reflect performance over a stated period of time. Annualized rates of
return represent the annual rate of growth that would have produced the same
cumulative return, if performance had been constant over the entire period.
Performance data of the Money Market and Common Stock Funds for the periods
prior to March 22, 1985, reflect the investment results of two open-end
management separate accounts (the "predecessor separate accounts") which were
reorganized in unit investment trust form. The "Since Inception" figures for
these Funds are based on the date of inception of the predecessor separate
accounts. This performance data has been adjusted to reflect the maximum
investment advisory fee payable for the corresponding Portfolio of the Trust
as well as an assumed charge of 0.06% for direct operating expenses.
Performance data for the remaining Investment Funds reflect (i) the
investment results of the corre-
16
<PAGE>
<PAGE>
sponding Portfolios of the Trust from the date of inception of those
Portfolios and (ii) the actual investment advisory fee and direct operating
expenses of the relevant Portfolio.
The performance data for all periods has also been adjusted to reflect the
Separate Account mortality and expense risk charge, and the asset based
administrative charge equal to a total of 1.15% relating to the Certificates,
as well as the Trust's expenses.
BENCHMARKS
Market indices are not subject to any charges for investment advisory fees,
brokerage commission or other operating expenses typically associated with a
managed portfolio. Nor do they reflect other charges such as the mortality
and expense risk charge and the asset based administrative charge under the
Certificates. Comparisons with these benchmarks, therefore, are of limited
use. We include them because they are widely known and may help you to
understand the universe of securities from which each Portfolio is likely to
select its holdings. Benchmark data reflect the reinvestment of dividend
income.
PORTFOLIO INCEPTION DATES AND COMPARATIVE BENCHMARKS:
Asset Allocation Series:
CONSERVATIVE INVESTORS: October 2, 1989; 70% Lehman Treasury Bond Composite
Index and 30% Standard & Poor's 500 Index.
GROWTH INVESTORS: October 2, 1989; 30% Lehman Government/Corporate Bond Index
and 70% Standard & Poor's 500 Index.
Equity Series:
GROWTH & INCOME: October 1, 1993; 75% Standard & Poor's 500 Index and 25%
Value Line Convertible Index.
COMMON STOCK: January 13, 1976; Standard & Poor's 500 Index.
GLOBAL: August 27, 1987; Morgan Stanley Capital International World Index.
INTERNATIONAL: April 3, 1995; Morgan Stanley Capital International Europe,
Australia, Far East Index.
AGGRESSIVE STOCK: January 27, 1986; 50% Stan dard & Poor's Mid-Cap Total
Return Index and 50% Russell 2000 Small Stock Index.
Fixed Income Series:
MONEY MARKET: July 13, 1981; Salomon Brothers Three-Month T-Bill Index.
INTERMEDIATE GOVERNMENT SECURITIES: April 1, 1991; Lehman Intermediate
Government Bond Index.
The Lipper Variable Insurance Products Performance Analysis Survey (Lipper)
records the performance of a large group of variable annuity products,
including managed separate accounts of insurance companies. According to
Lipper Analytical Services, Inc., the data are presented net of investment
management fees, direct operating expenses and asset-based charges applicable
under annuity contracts. Lipper data provide a more accurate picture than
market benchmarks of the Rollover IRA performance relative to other variable
annuity products.
ANNUALIZED RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1995:*
<TABLE>
<CAPTION>
SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS INCEPTION
-------- --------- --------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSET ALLOCATION SERIES:
CONSERVATIVE INVESTORS 19.02% 7.32% 8.89% -- -- 8.39%
Lipper Income 21.25 9.65 11.99 -- -- 9.79
Benchmark 24.11 10.41 11.73 -- -- 10.55
GROWTH INVESTORS 24.92 10.87 15.77 -- -- 14.70
Lipper Flexible Portfolio 21.58 9.32 11.43 -- -- 9.44
Benchmark 32.05 13.35 14.70 -- -- 11.97
EQUITY SERIES:
GROWTH & INCOME 22.65 -- -- -- -- 8.40
Lipper Growth & Income 31.18 -- -- -- -- 12.76
Benchmark 34.93 -- -- -- -- 15.45
</TABLE>
17
<PAGE>
<PAGE>
ANNUALIZED RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1995:* (CONTINUED)
<TABLE>
<CAPTION>
SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS INCEPTION
-------- --------- --------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
COMMON STOCK 30.93% 16.05% 16.80% 13.84% 13.06% 13.47%
Lipper Growth 31.08 12.09 15.53 12.05 12.26 12.25
Benchmark 37.54 15.30 16.57 14.87 14.79 14.24
GLOBAL 17.45 16.86 15.16 -- -- 10.09
Lipper Global 13.87 13.45 9.10 -- -- 2.52
Benchmark 20.72 15.83 11.74 -- -- 6.75
INTERNATIONAL -- -- -- -- -- 10.34**
Lipper International -- -- -- -- -- 12.21**
Benchmark -- -- -- -- -- 9.17**
AGGRESSIVE STOCK 30.13 12.61 20.35 -- -- 18.59
Lipper Small Company Growth 28.19 15.26 25.72 -- -- 16.06
Benchmark 29.69 13.67 20.16 -- -- 13.58
FIXED INCOME SERIES:
MONEY MARKET 4.53 3.04 3.29 4.81 -- 6.19
Lipper Money Market 4.35 2.88 3.10 4.71 -- 6.27
Benchmark 5.74 4.34 4.47 5.77 -- 7.09
INTERMEDIATE GOVERNMENT
SECURITIES 12.03 4.99 -- -- -- 6.43
Lipper Gen. U.S. Government 15.47 6.27 -- -- -- 7.87
Benchmark 14.41 6.74 -- -- -- 8.17
</TABLE>
- ------------
* See footnotes on next page.
** Unannualized.
CUMULATIVE RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1995:*
<TABLE>
<CAPTION>
SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS INCEPTION
-------- --------- --------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSET ALLOCATION SERIES:
CONSERVATIVE INVESTORS 19.02% 23.60% 53.06% -- -- 65.42%
Lipper Income 21.25 31.95 76.42 -- -- 79.42
Benchmark 24.11 34.58 74.09 -- -- 87.24
GROWTH INVESTORS 24.92 36.28 108.00 -- -- 135.55
Lipper Flexible Portfolio 21.58 30.92 72.73 -- -- 76.92
Benchmark 32.05 45.64 98.56 -- -- 102.72
EQUITY SERIES:
GROWTH & INCOME 22.65 -- -- -- -- 19.89
Lipper Growth & Income 31.18 -- -- -- -- 31.42
Benchmark 34.93 -- -- -- -- 38.14
COMMON STOCK 30.93 56.29 117.35 265.55% 530.07% 1,146.22
Lipper Growth 31.08 41.29 107.30 215.49 483.45 920.87
Benchmark 37.54 53.30 115.25 300.11 692.18 1,327.94
GLOBAL 17.45 59.57 102.53 -- -- 123.08
Lipper Global 13.87 46.36 55.44 -- -- 23.09
Benchmark 20.72 55.39 74.20 -- -- 72.38
INTERNATIONAL -- -- -- -- -- 10.34**
Lipper International -- -- -- -- -- 12.21**
Benchmark -- -- -- -- -- 9.17**
AGGRESSIVE STOCK 30.13 42.79 152.49 -- -- 443.46
Lipper Small Company
Growth 28.19 55.24 268.67 -- -- 337.96
Benchmark 29.69 46.89 150.49 -- -- 254.09
</TABLE>
- ------------
* See footnotes on next page.
** Unannualized.
18
<PAGE>
<PAGE>
CUMULATIVE RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1995:* (CONTINUED)
<TABLE>
<CAPTION>
SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS INCEPTION
-------- --------- --------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
FIXED INCOME SERIES:
MONEY MARKET 4.53% 9.40% 17.55% 59.97% -- 138.38%
Lipper Money Market 4.35 8.87 16.48 58.55 -- 140.42
Benchmark 5.74 13.58 24.45 75.23 -- 170.07
INTERMEDIATE GOVERNMENT
SECURITIES 12.03 15.72 -- -- -- 34.43
Lipper Gen. U.S.
Government 15.47 20.05 -- -- -- 43.43
Benchmark 14.41 21.60 -- -- -- 45.17
</TABLE>
YEAR-BY-YEAR RATES OF RETURN*
<TABLE>
<CAPTION>
1983 1984 1985 1986 1987 1988
<S> <C> <C> <C> <C> <C> <C>
ASSET ALLOCATION
SERIES:
CONSERVATIVE
INVESTORS -- -- -- -- -- --
GROWTH INVESTORS -- -- -- -- -- --
EQUITY SERIES:
GROWTH & INCOME -- -- -- -- -- --
COMMON STOCK*** 24.67% (3.09)% 31.91% 16.02% 6.21% 21.03%
GLOBAL -- -- -- -- (13.62) 9.61
INTERNATIONAL -- -- -- -- -- --
AGGRESSIVE STOCK -- -- -- 33.83 6.06 (0.03)
FIXED INCOME SERIES:
MONEY MARKET*** 7.70 9.59 6.91 5.39 5.41 6.09
INTERMEDIATE
GOVERNMENT
SECURITIES -- -- -- -- -- --
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C> <C>
ASSET ALLOCATION
SERIES:
CONSERVATIVE
INVESTORS 2.79% 5.14% 18.51% 4.50% 9.54% (5.20)% 19.02%
GROWTH INVESTORS 3.53 9.39 47.19 3.69 13.95 (4.27) 24.92
EQUITY SERIES:
GROWTH & INCOME -- -- -- -- (0.55) (1.72) 22.65
COMMON STOCK*** 24.16 (9.17) 36.30 2.03 23.39 (3.26) 30.93
GLOBAL 25.29 (7.15) 29.06 (1.65) 30.60 4.02 17.45
INTERNATIONAL -- -- -- -- -- -- 10.34
AGGRESSIVE STOCK 41.86 6.92 84.73 (4.28) 15.41 (4.92) 30.13
FIXED INCOME SERIES:
MONEY MARKET*** 7.93 6.99 4.97 2.37 1.78 2.82 4.53
INTERMEDIATE
GOVERNMENT
SECURITIES -- -- 11.30 4.38 9.27 (5.47) 12.03
</TABLE>
- ------------
* Returns do not reflect the distribution fee, the withdrawal charge, the
GMDB/GMIB charge, the annual contract fee and any charges for state
premium and other applicable taxes.
** Unannualized.
***Prior to 1982 the Year-by-Year Rates of Return were:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
1976 1977 1978 1979 1980 1981 1982
------ ------ ------ ------ ------ ------ ------
COMMON STOCK 8.20% (10.28)% 6.99% 28.35% 48.39% (6.94)% 16.22%
MONEY MARKET - - - - - 5.71 11.72
</TABLE>
COMMUNICATING PERFORMANCE DATA
In reports or other communications or in advertising material, we may
describe general economic and market conditions affecting the Separate
Account and the Trust and may compare the performance of the Investment Funds
with (1) that of other insurance company separate accounts or mutual funds
<PAGE>
included in the rankings prepared by Lipper Analytical Services, Inc.,
Morningstar, Inc., VARDS or similar investment services that monitor the
performance of insurance company separate accounts or mutual funds, (2) other
appropriate indices of investment securities and averages for peer universes
of funds which are shown under "Benchmarks" and "Fund Inception Dates and
Comparative Benchmarks" in this Part 3, or (3) data developed by us derived
from such indices or averages. The Morningstar Variable Annuity/Life Report
consists of nearly 700 variable life and annuity funds, all of which report
their data net of investment management fees, direct operating expenses and
separate account charges. VARDS is a monthly reporting service that monitors
approximately 760 variable life and variable annuity funds on performance and
account information. Advertisements or other communications furnished to
present or prospective Certificate Owners may also include evaluations of an
Investment Fund or Portfolio by financial publications that are nationally
recognized such as Barron's, Morningstar's Variable Annuity Sourcebook,
Business Week, Chicago Tribune, Forbes, Fortune, Institutional Investor,
Investment Adviser, Investment Dealer's Digest, Investment Management Weekly,
Los
19
<PAGE>
<PAGE>
Angeles Times, Money, Money Management Letter, Kiplinger's Personal Finance,
Financial Planning, National Underwriter, Pension & Investments, USA Today,
Investor's Daily, The New York Times, and The Wall Street Journal.
MONEY MARKET FUND AND INTERMEDIATE GOVERNMENT SECURITIES FUND YIELD
INFORMATION
The current yield and effective yield of the Money Market Fund and
Intermediate Government Securities Fund may appear in reports and promotional
material to current or prospective Certificate Owners.
Money Market Fund
Current yield for the Money Market Fund will be based on net changes in a
hypothetical investment over a given seven-day period, exclusive of capital
changes, and then "annualized" (assuming that the same seven-day result would
occur each week for 52 weeks). "Effective yield" is calculated in a manner
similar to that used to calculate current yield, but when annualized, any
income earned by the investment is assumed to be reinvested. The "effective
yield" will be slightly higher than the "current yield" because any earnings
are compounded weekly. Money Market Fund yields and effective yields assume
the deduction of all Certificate charges and expenses other than the
distribution fee, withdrawal charge, GMDB/GMIB charge and any charge for tax
such as premium tax. See "Part 5: Money Market Fund and Intermediate
Government Securities Fund Yield Information" in the SAI.
Intermediate Government Securities Fund
Current yield for the Intermediate Government Securities Fund will be based
on net changes in a hypothetical investment over a given 30-day period,
exclusive of capital changes, and then "annualized" (assuming that the 30-day
result would occur each month for 12 months). "Effective yield" is calculated
in a manner similar to that used to calculate current yield, but when
annualized, any income earned by the investment is assumed to be reinvested.
The "effective yield" will be higher than the "current yield" because any
earnings are compounded monthly.
Intermediate Government Securities Fund yields and effective yields assume
the deduction of all Certificate charges and expenses other than the
distribution fee, withdrawal charge, GMDB/GMIB charge and any charge for tax
such as premium tax. See "Part 5: Money Market Fund and Intermediate
Government Securities Fund Yield Information" in the SAI.
20
<PAGE>
<PAGE>
PART 4: THE GUARANTEED PERIOD ACCOUNT
GUARANTEE PERIODS
Each amount allocated to a Guarantee Period and held to the Period's
Expiration Date accumulates interest at a Guaranteed Rate. The Guaranteed
Rate for each allocation is the annual interest rate applicable to new
allocations to that Guarantee Period, which was in effect on the Transaction
Date for the allocation. We may establish different Guaranteed Rates under
different classes of Certificates. We use the term GUARANTEED PERIOD AMOUNT
to refer to the amount allocated to and accumulated in each Guarantee Period.
The Guaranteed Period Amount is reduced or increased by any market value
adjustment as a result of withdrawals, transfers or charges (see below).
Your Guaranteed Period Account contains the Guarantee Periods to which you
have allocated Annuity Account Value. On the Expiration Date of a Guarantee
Period, its Guaranteed Period Amount and its value in the Guaranteed Period
Account are equal. We call the Guaranteed Period Amount on an Expiration Date
the Guarantee Period's Maturity Value. We report the Annuity Account Value in
your Guaranteed Period Account to reflect any market value adjustment that
would apply if all Guaranteed Period Amounts were withdrawn as of the
calculation date. The Annuity Account Value in the Guaranteed Period Account
with respect to the Guarantee Periods on any Business Day, therefore, will be
the sum of the present value of the Maturity Value in each Guarantee Period,
using the Guaranteed Rate in effect for new allocations to such Guarantee
Period on such date.
Guarantee Periods and Expiration Dates
We currently offer Guarantee Periods ending on February 15th for each of the
maturity years 1997 through 2007.
Not all of these Guarantee Periods will be available for ages 76 and above.
See "Allocation of Contributions" in Part 5. Also, the Guarantee Periods may
not be available for investment in all states. As Guarantee Periods expire we
expect to add maturity years so that generally 10 are available at any time.
Under the IRA Assured Payment Option and IRA APO Plus, in addition to the
Guarantee Periods above, Guarantee Periods ending on February 15th for each
of the maturity years 2008 through 2011 are also available.
We will not accept allocations to a Guarantee Period if, on the Transaction
Date:
o Such Transaction Date and the Expiration Date for such Guarantee Period
fall within the same calendar year.
o The Guaranteed Rate is 3%.
o The Guarantee Period has an Expiration Date beyond the February 15th
immediately following the Annuity Commencement Date.
Guaranteed Rates and Price Per $100 of Maturity Value
Because the Maturity Value of a contribution allocated to a Guarantee Period
can be determined at the time it is made, you can determine the amount
required to be allocated to a Guarantee Period in order to produce a target
Maturity Value (assuming no transfers or withdrawals are made and no charges
are allocated to the Guarantee Period). The required amount is the present
value of that Maturity Value at the Guaranteed Rate on the Transaction Date
for the contribution, which may also be expressed as the price per $100 of
Maturity Value on such Transaction Date.
Guaranteed Rates for new allocations as of October 1, 1996 and the related
price per $100 of Maturity Value for each currently available Guarantee
Period were as follows:
<TABLE>
<CAPTION>
GUARANTEE
PERIODS WITH GUARANTEED
EXPIRATION DATE RATE AS OF PRICE PER $100
FEBRUARY 15TH OF OCTOBER 1, OF MATURITY
MATURITY YEAR 1996 VALUE
- ---------------- ------------ --------------
<S> <C> <C>
1997 4.21% $98.46
1998 4.80 93.76
1999 5.10 88.86
2000 5.29 84.03
2001 5.41 79.40
2002 5.52 74.90
2003 5.65 70.43
2004 5.66 66.62
2005 5.80 62.34
2006 5.92 58.30
2007 6.03 54.45
</TABLE>
<PAGE>
Available under the IRA Assured Payment Option and IRA APO Plus
<TABLE>
<CAPTION>
<S> <C> <C>
2008 5.95% $51.80
2009 5.95 48.88
2010 5.95 46.14
2011 5.95 43.55
</TABLE>
21
<PAGE>
<PAGE>
Allocation Among Guarantee Periods
The same approach as described above may also be used to determine the amount
which you would need to allocate to each Guarantee Period in order to create
a series of constant Maturity Values for two or more years.
For example, if you wish to have $100 mature on February 15th of each of
years 1997 through 2001, then according to the above table the lump sum
contribution you would have to make as of October 1, 1996 would be $444.51
(i.e., the sum of the price per $100 of Maturity Value for each maturity year
from 1997 through 2001).
The above table is provided to illustrate the use of present value
calculations. It does not take into account the potential for charges to be
deducted or withdrawals or transfers from Guarantee Periods. Actual
calculations will also be based on Guaranteed Rates on each actual
Transaction Date, which may differ.
Options at Expiration Date
Under the Rollover IRA, we will notify you on or before December 31st prior
to the Expiration Date of each Guarantee Period in which you have any
Guaranteed Period Amount. You may elect one of the following options to be
effective at the Expiration Date, subject to the restrictions set forth on
the prior page and under "Allocation of Contributions" in Part 5:
(a) to transfer the Maturity Value into any Guarantee Period we are then
offering, or into any of our Investment Funds; or
(b) to withdraw the Maturity Value (subject to any withdrawal charges
which may apply).
If we have not received your election as of the Expiration Date, the Maturity
Value in the expired Guarantee Period will be transferred into the Guarantee
Period with the earliest Expiration Date.
MARKET VALUE ADJUSTMENT FOR TRANSFERS, WITHDRAWALS OR SURRENDER PRIOR TO THE
EXPIRATION DATE
Any withdrawal (including transfers, surrender and deductions) from a
Guarantee Period prior to its Expiration Date will cause any remaining
Guaranteed Period Amount for that Guarantee Period to be increased or
decreased by a market value adjustment. The amount of the adjustment will
depend on two factors: (a) the difference between the Guaranteed Rate
applicable to the amount being withdrawn and the Guaranteed Rate on the
Transaction Date for new allocations to a Guarantee Period with the same
Expiration Date, and (b) the length of time remaining until the Expiration
Date. In general, if interest rates have risen between the time when an
amount was originally allocated to a Guarantee Period and the time it is
withdrawn, the market value adjustment will be negative, and vice versa; and
the longer the period of time remaining until the Expiration Date, the
greater the impact of the interest rate difference. Therefore, it is possible
that a significant rise in interest rates could result in a substantial
reduction in your Annuity Account Value in the Guaranteed Period Account
related to longer term Guarantee Periods.
The market value adjustment (positive or negative) resulting from a
withdrawal of all funds from a Guarantee Period will be determined for each
contribution allocated to that Period as follows:
(1) We determine the present value of the Maturity Value on the Transaction
Date as follows:
(a) We determine the Guaranteed Period Amount that would be payable on
the Expiration Date, using the applicable Guaranteed Rate.
(b) We determine the period remaining in your Guarantee Period (based on
the Transaction Date) and convert it to fractional years based on a
365 day year. For example three years and 12 days becomes 3.0329.
(c) We determine the current Guaranteed Rate which applies on the
Transaction Date to new allocations to the same Guarantee Period.
(d) We determine the present value of the Guaranteed Period Amount
payable at the Expiration Date, using the period determined in (b)
and the rate determined in (c).
(2) We determine the Guaranteed Period Amount as of the current date.
(3) We subtract (2) from the result in (1)(d). The result is the market
value adjustment applicable to such Guarantee Period, which may be
positive or negative.
<PAGE>
The market value adjustment (positive or negative) resulting from a
withdrawal of a portion of the amount in a Guarantee Period will be a
percentage of the market value adjustment that would be applicable upon a
withdrawal of all funds from a Guarantee Period. This percentage is
determined by (i) dividing the amount of the withdrawal or transfer from the
Guarantee Period by (ii) the Annuity Account Value in such Guarantee Period
prior to the withdrawal or transfer. See Appendix I for an example.
22
<PAGE>
<PAGE>
The Guaranteed Rate for new allocations to a Guarantee Period is the rate we
have in effect for this purpose even if new allocations to that Guarantee
Period would not be accepted at the time. This rate will not be less than 3%.
If we do not have a Guaranteed Rate in effect for a Guarantee Period to which
the "current Guaranteed Rate" in (1)(c) would apply, we will use the rate at
the next closest Expiration Date. If we are no longer offering new Guarantee
Periods, the "current Guaranteed Rate" will be determined in accordance with
our procedures then in effect. For purposes of calculating the market value
adjustment only, we reserve the right to add up to 0.25% to the current rate
in (1)(c) above.
MODAL PAYMENT PORTION
Under the IRA Assured Payment Option and IRA APO Plus, a portion of your
contributions or Annuity Account Value is allocated to the Modal Payment
Portion of the Guaranteed Period Account for payments to be made prior to the
Expiration Date of the earliest Guarantee Period we then offer. Such amount
will accumulate interest beginning on the Transaction Date at an interest
rate we set. Interest will be credited daily. Such rate will not be less than
3%.
Upon the expiration of a Guarantee Period, the Guaranteed Period Amount will
be held in the Modal Payment Portion of the Guaranteed Period Account.
Amounts from an expired Guarantee Period held in the Modal Payment Portion of
the Guaranteed Period Account will be credited with interest at a rate equal
to the Guaranteed Rate applicable to the expired Guarantee Period, beginning
on the Expiration Date of such Guarantee Period.
There is no market value adjustment with respect to amounts held in the Modal
Payment Portion of the Guaranteed Period Account.
DEATH BENEFIT AMOUNT
The death benefit provided with respect to the Guaranteed Period Account is
equal to the Annuity Account Value in the Guaranteed Period Account or, if
greater, the sum of the Guaranteed Period Amounts in each Guarantee Period,
plus any amounts in the Modal Payment Portion of the Guaranteed Period
Account. See "Annuity Account Value" in Part 5.
INVESTMENTS
Amounts allocated to Guarantee Periods or the Modal Payment Portion of the
Guaranteed Period Account will be held in a "nonunitized" separate account
established by Equitable Life under the laws of New York. This separate
account provides an additional measure of assurance that full payment of
amounts due under the Guarantee Periods and the Modal Payment Portion of the
Guaranteed Period Account will be made. Under the New York Insurance Law, the
portion of the separate account's assets equal to the reserves and other
contract liabilities relating to the Certificates are not chargeable with
liabilities arising out of any other business we may conduct.
Investments purchased with amounts allocated to the Guaranteed Period Account
are the property of Equitable Life. Any favorable investment performance on
the assets held in the separate account accrues solely to Equitable Life's
benefit. Certificate Owners do not participate in the performance of the
assets held in this separate account. Equitable Life may, subject to
applicable state law, transfer all assets allocated to the separate account
to its general account. Regardless of whether assets supporting Guaranteed
Period Accounts are held in a separate account or our general account, all
benefits relating to the Annuity Account Value in the Guaranteed Period
Account are guaranteed by Equitable Life.
Equitable Life has no specific formula for establishing the Guaranteed Rates
for the Guarantee Periods. Equitable Life expects the rates to be influenced
by, but not necessarily correspond to, among other things, the yields on the
fixed income securities to be acquired with amounts that are allocated to the
Guarantee Periods at the time that the Guaranteed Rates are established. Our
current plans are to invest such amounts in fixed income obligations,
including corporate bonds, mortgage backed and asset backed securities and
government and agency issues having durations in the aggregate consistent
with those of the Guarantee Periods.
Although the foregoing generally describes Equitable Life's plans for
investing the assets supporting Equitable Life's obligations under the fixed
portion of the Certificates, Equitable Life is not obligated to invest those
assets according to any particular plan except as may be required by state
insurance laws, nor will the Guaranteed Rates Equitable Life establishes be
determined by the performance of the nonunitized separate account.
General Account
Our general account supports all of our policy and contract guarantees,
including those applicable to the Guaranteed Period Account, as well as our
general obligations. Amounts applied under the Life Contingent Annuity become
part of the general account. See "IRA Assured Payment Option," "Life
Contingent Annuity," in Part 6.
23
<PAGE>
<PAGE>
The general account is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations
of all jurisdictions where we are authorized to do business. Because of
applicable exemptions and exclusionary provisions, interests in the general
account have not been registered under the Securities Act of 1933 (1933 Act),
nor is the general account an investment company under the 1940 Act.
Accordingly, neither the general account nor the Life Contingent Annuity is
subject to regulation under the 1933 Act or the 1940 Act. However, the market
value adjustment interests under the Certificates are registered under the
1933 Act.
We have been advised that the staff of the SEC has not made a review of the
disclosure that is included in the prospectus for your information that
relates to the general account (other than market value adjustment interests)
and the Life Contingent Annuity. The disclosure, 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.
24
<PAGE>
<PAGE>
PART 5: PROVISIONS OF THE CERTIFICATES AND SERVICES
WE PROVIDE
THE PROVISIONS DISCUSSED IN THIS PART 5 APPLY WHEN YOUR CERTIFICATE IS
OPERATING PRIMARILY TO ACCUMULATE ANNUITY ACCOUNT VALUE. DIFFERENT RULES MAY
APPLY WHEN YOU ELECT THE IRA ASSURED PAYMENT OPTION OR IRA APO PLUS IN THE
APPLICATION OR AS LATER ELECTED AS A DISTRIBUTION OPTION UNDER YOUR ROLLOVER
IRA AS DISCUSSED IN PART 6. THE PROVISIONS OF YOUR CERTIFICATE MAY BE
RESTRICTED BY APPLICABLE LAWS OR REGULATIONS.
AVAILABILITY OF THE CERTIFICATES
The Rollover IRA Certificates are available for issue ages 20 through 78.
These Certificates may not be available in all states. These Certificates are
not available in Puerto Rico.
CONTRIBUTIONS UNDER THE CERTIFICATES
Your initial contribution must be at least $10,000. We will only accept
initial contributions which are either rollover contributions under Sections
402(c), 403(a)(4), 403(b)(8), or 408(d)(3) of the Code, or direct
custodian-to-custodian transfers from other individual retirement
arrangements. See "Part 9: Tax Aspects of the Certificates."
You may make subsequent contributions in an amount of at least $1,000.
Subsequent contributions may be "regular" IRA contributions (limited to a
maximum of $2,000 a year), rollover contributions as described above, or
direct transfers as described above. Rollover contributions and direct
transfers are not subject to the $2,000 annual limit.
We may refuse to accept any contribution if the sum of all contributions
under all INCOME MANAGER accumulation Certificates that you own would then
total more than $1,000,000. We reserve the right to limit aggregate
contributions made after the first Contract Year to 150% of first year
contributions. We may also refuse to accept any contribution if the sum of
all contributions under all Equitable annuity accumulation
certificates/contracts you own would then total more than $2,500,000.
"Regular" IRA contributions may no longer be made for the taxable year in
which you attain age 70 1/2 and thereafter. Rollover and direct transfer
contributions may be made until you attain age 84. However, any amount
contributed after you attain age 70 1/2 must be net of your required minimum
distribution for the year in which the rollover or direct transfer
contribution is made. See "Part 9: Tax Aspects of the Certificates." For the
consequences of making a "regular" IRA contribution to your Certificate, also
see Part 9.
Contributions are credited as of the Transaction Date.
METHODS OF PAYMENT
Except as indicated below, all contributions must be made by check. All
contributions made by check must be drawn on a bank or credit union in the
U.S., in U.S. dollars and made payable to Equitable Life. All checks are
accepted subject to collection. All contributions should be sent to Equitable
Life at our Processing Office address designated for contributions.
Wire Transmittals
We will accept, by agreement with broker-dealers who use wire transmittals,
transmittal of initial contributions by wire order from the broker-dealer to
the Processing Office. Such transmittals must be accompanied by essential
information we require to allocate the contribution.
Contributions accepted by wire order will be invested at the value next
determined following receipt for contributions allocated to the Investment
Funds. Contributions allocated to the Guaranteed Period Account will receive
the Guaranteed Rate(s) in effect for the applicable Guarantee Period(s) on
the date contributions are received. Wire orders not accompanied by complete
information, may be retained for a period not exceeding five Business Days
while an attempt is made to obtain the required information. If the required
information cannot be obtained within those five Business Days, the
Processing Office will inform the broker-dealer, on behalf of the applicant,
of the reasons for the delay and return the contribution immediately to the
applicant, unless the applicant specifically consents to our retaining the
contribution until the required information is received by the Processing
Office.
Notwithstanding the acceptance by us of the wire order and the essential
information, however, a Certificate will not be issued until the receipt and
acceptance of a properly completed application. During the time from receipt
of the initial contribution
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until a signed application is received from the Certificate Owner, no other
financial transactions may be requested.
If an application is not received within ten days of receipt of the initial
contribution via wire order, or if an incomplete application is received and
cannot be completed within ten days of receipt of the initial contribution,
the amount of the initial contribution will be returned to the applicant with
immediate notification to the broker-dealer. In no event will less than the
full amount of the initial contribution be returned to the applicant.
After your Certificate has been issued, subsequent contributions may be
transmitted by wire.
ALLOCATION OF CONTRIBUTIONS
You have two options from which to choose for allocation of your
contributions: Self-Directed Allocation and Principal Assurance.
Self-Directed Allocation
You design your own investment program by allocating your contributions among
the Investment Options in any way you choose. Your contributions may be
allocated to one or up to all of the available Investment Options at any
time. We allocate contributions among the Investment Options according to
your allocation percentages. Allocations must be in whole percentages.
Allocation percentages can be changed at any time by writing to our
Processing Office, or by telephone. The change will be effective on the
Transaction Date and will remain in effect for future contributions unless
another change is requested. Allocation of the initial contribution is
subject to the provisions for the free look period. See "Free Look Period"
below. Allocation of any contribution to the Guaranteed Period Account is
subject to the following restrictions:
o No more than 60% of any contribution may be allocated to the
Guaranteed Period Account.
o At ages 76 and above, allocations may be made only to Guarantee
Periods with maturities of five years or less; however, in no event
may allocations be made to Guarantee Periods with maturities beyond
the February 15th immediately following the Annuity Commencement
Date.
Principal Assurance
This option (available at issue ages 20 through 75) is designed to assure
that your Maturity Value in a specified Guarantee Period equals your initial
contribution while at the same time allowing you to invest in the Investment
Funds. The maturity year you select for such specified Guarantee Period
generally may not be later than 10 years nor earlier than seven years. Before
you select a year that would extend beyond the year in which you will attain
age 70 1/2 you should consider your ability to take minimum distributions
from other IRA funds that you may have or from the Investment Funds to the
extent possible. See "Required Minimum Distributions" in Part 9.
In order to accomplish this strategy, we will allocate a portion (equal to
the present value) of your initial contribution to a Guarantee Period based
on the year you select. See "Guaranteed Rates and Price Per $100 of Maturity
Value" in Part 4. You may allocate the balance of your contribution to the
Investment Funds in any way you choose. Such allocations to the Investment
Funds must be in whole percentages. Allocation of the portion of your initial
contribution to the Investment Funds is subject to the provisions for the
free look period. See "Free Look Period" below.
Principal Assurance may only be elected at issue of your Certificate and
assumes no withdrawals or transfers of the amount allocated to the specified
Guarantee Period.
Subsequent contributions must be allocated under "Self-Directed Allocation"
described above.
Allocations to the Investment Funds
A contribution allocated to an Investment Fund purchases Accumulation Units
in that Investment Fund based on the Accumulation Unit Value for that
Investment Fund computed on the Transaction Date.
Allocations to the Guaranteed Period Account
Contributions allocated to the Guaranteed Period Account will have the
Guaranteed Rate for the specified Guarantee Period offered on the Transaction
Date.
FREE LOOK PERIOD
You have the right to examine the Rollover IRA Certificate for a period of 10
days after you receive it, and to return it to us for a refund. You cancel it
by sending it to our Processing Office. The free look is extended if your
state requires a refund period of longer than 10 days.
<PAGE>
Your refund will equal the Annuity Account Value reflecting any investment
gain or loss, and any positive or negative market value adjustment, through
the date we receive your Certificate at our Processing Office. Some states or
Federal income tax regulations may require that we calculate the refund
differently. In those states that require that we
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calculate the refund differently, we may require that any portion of your
initial contribution that you request to have allocated to the Investment
Funds, be allocated to the Money Market Fund until the end of the free look
period.
If the IRA Assured Payment Option or IRA APO Plus is elected in the
application for the Certificate, your refund will include any amount applied
under the Life Contingent Annuity. See "IRA Assured Payment Option," "Life
Contingent Annuity" in Part 6.
We follow these same procedures if you change your mind before a Certificate
has been issued, but after a contribution has been made. See "Part 9: Tax
Aspects of the Certificates" for possible consequences of canceling your
Certificate during the free look period.
If you cancel your Certificate during the free look period, we may require
that you wait six months before you may apply for a Certificate with us
again.
ANNUITY ACCOUNT VALUE
The Annuity Account Value is the sum of the Annuity Account Values in the
Investment Funds and the Guaranteed Period Account.
Annuity Account Value in Investment Funds
The Annuity Account Value in an Investment Fund on any Business Day is equal
to the number of Accumulation Units in that Investment Fund times the
Accumulation Unit Value for the Investment Fund for that date. The number of
Accumulation Units in an Investment Fund at any time is equal to the sum of
Accumulation Units purchased by contributions and transfers less the sum of
Accumulation Units redeemed for withdrawals, transfers or deductions for
charges.
The number of Accumulation Units purchased or sold in any Investment Fund
equals the dollar amount of the transaction divided by the Accumulation Unit
Value for that Investment Fund for the applicable Transaction Date.
The number of Accumulation Units will not vary because of any later change in
the Accumulation Unit Value. The Accumulation Unit Value varies with the
investment performance of the correspond-ing Portfolios of the Trust, which
in turn reflects the investment income and realized and unrealized capital
gains and losses of the Portfolios, as well as the Trust fees and expenses.
The Accumulation Unit Value is also stated after deduction of the Separate
Account asset charges relating to the Certificates. A description of the
computation of the Accumulation Unit Value is found in the SAI.
Annuity Account Value in Guaranteed Period
Account
The Annuity Account Value in the Guaranteed Period Account on any Business
Day will be the sum of the present value of the Maturity Value in each
Guarantee Period, using the Guaranteed Rate in effect for new allocations to
such Guarantee Period on such date. (This is equivalent to the Guaranteed
Period Amount increased or decreased by the full market value adjustment.)
The Annuity Account Value, therefore, may be higher or lower than the
contributions (less withdrawals) accumulated at the Guaranteed Rate. At the
Expiration Date the Annuity Account Value in the Guaranteed Period Account
will equal the Maturity Value. While the IRA Assured Payment Option or IRA
APO Plus is in effect, the Annuity Account Value will include any amount in
the Modal Payment Portion of the Guaranteed Period Account. However, amounts
held in the Modal Payment Portion of the Guaranteed Period Account are not
subject to a market value adjustment. See "Part 4: The Guaranteed Period
Account."
TRANSFERS AMONG INVESTMENT OPTIONS
At any time prior to the Annuity Commencement Date, you may transfer all or
portions of your Annuity Account Value among the Investment Options, subject
to the following restrictions.
o Transfers are permitted to or from a Guarantee Period once per
quarter during each Contract Year. Such transfers may be made at any
time during each quarter.
o Transfers out of a Guarantee Period other than at the Expiration Date
will result in a market value adjustment. See "Part 4: The Guaranteed
Period Account."
o Transfers to Guarantee Periods are subject to the restrictions set
forth under "Guarantee Periods and Expiration Dates" in Part 4 and
are limited based on your age. See "Allocation of Contributions"
above.
Transfer requests must be made directly to our Processing Office. Your
request for a transfer should specify your Certificate number, the amounts or
percentages to be transferred and the Investment Options to and from which
the amounts are to be transferred. Your transfer request may be in writing or
by telephone.
For telephone transfer requests, procedures have been established by
Equitable Life that are considered to be reasonable and are designed to
<PAGE>
confirm that instructions communicated by telephone are genuine. Such
procedures include requiring certain
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personal identification information prior to acting on telephone instructions
and providing written confirmation. 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 restrict, in our sole discretion, the use of an agent acting under a
power of attorney, such as a market timer, on behalf of more than one
Certificate Owner to effect transfers. Any agreements to use market timing
services to effect transfers are subject to our rules then in effect and must
be on a form satisfactory to us.
A transfer request will be effective on the Transaction Date and the transfer
to or from Investment Funds will be made at the Accumulation Unit Value next
computed after the Transaction Date. All transfers will be confirmed in
writing.
DOLLAR COST AVERAGING
If you have at least $10,000 of Annuity Account Value in the Money Market
Fund, you may choose to have a specified dollar amount transferred from the
Money Market Fund to other Investment Funds on a monthly basis. The main
objective of dollar cost averaging is to attempt to shield your investment
from short term price fluctuations. Since the same dollar amount is
transferred to other Investment Funds each month, more Accumulation Units are
purchased in an Investment Fund if the value per Accumulation Unit is low and
fewer Accumulation Units are purchased if the value per Accumulation Unit is
high. Therefore, a lower average value per Accumulation Unit may be achieved
over the long term. This plan of investing allows you to take advantage of
market fluctuations but does not assure a profit or protect against a loss in
declining markets.
The dollar cost averaging option may be elected at the time you apply for the
Certificate or at a later date. The minimum amount that may be transferred
each month is $250. The maximum amount which may be transferred is equal to
the Annuity Account Value in the Money Market Fund at the time the option is
elected, divided by 12.
The transfer date will be the same calendar day each month as the Contract
Date. If, on any transfer date, the Annuity Account Value in the Money Market
Fund is equal to or less than the amount you have elected to have
transferred, the entire amount will be transferred and the dollar cost
averaging option will end. You may change the transfer amount once each
Contract Year, or cancel this option by sending us satisfactory notice to our
Processing Office at least seven calendar days before the next transfer date.
DEATH BENEFIT
Generally, upon receipt of proof satisfactory to us of your death prior to
the Annuity Commencement Date, we will pay the death benefit to the
beneficiary named in your Certificate. You designate the beneficiary at the
time you apply for the Certificate. While the Certificate is in effect, you
may change your beneficiary by writing to our Processing Office. The change
will be effective on the date the written submission was signed. The death
benefit payable will be determined as of the date we receive such proof of
death and any required instructions as to the method of payment.
The death benefit is equal to the sum of:
(1) the Annuity Account Value in the Investment Funds, or, if greater,
the GMDB defined below; and
(2) the death benefit provided with respect to the Guaranteed Period
Account. See "Part 4: The Guaranteed Period Account."
There are two plans available under the Certificates for providing guaranteed
benefits, Plan A and Plan B. Plan A (available for Annuitant issue ages 20
through 75) provides a combined GMDB/GMIB Benefit. Plan B provides a GMDB
Only Benefit, and has a lower charge. The GMDB and the GMIB are discussed
below.
For Annuitant issue ages 20 through 75, you must select the Combined
GMDB/GMIB Benefit (Plan A) or the GMDB Only Benefit (Plan B) in the
application. Once selected, the plan may not be changed. For Annuitant issue
ages 76 through 78, for Certificates issued in New York and in states where
the GMIB is not currently available, the GMDB Only Benefit (Plan B) will
apply.
For the specific charges, see "Part 7: Deductions and Charges."
GMDB
Applicable to Certificates issued in all states except
New York
The GMDB is determined daily. On the Contract Date, the GMDB is equal to the
portion of the initial contribution allocated to the Investment Funds.
Thereafter, the GMDB is equal to (a) the GMDB determined on the immediately
preceding Business Day, plus (b) any subsequent contributions and transfers
into the Investment Funds, less (c) any transfers and withdrawals from such
<PAGE>
Funds. In addition, interest (see below) is credited to and becomes part of
the GMDB on each Processing Date.
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o 6% to 80 Benefit--interest will be credited at the effective annual GMDB
interest rate of 6% (3% for amounts in the Fixed Income Series) through
age 80, and 0% thereafter. Contributions, transfers and withdrawals
during the Contract Year will be taken into account.
Applicable to Certificates issued in New York for Annuitant issue ages 20
through 78
The GMDB is determined daily. On the Contract Date, the GMDB is equal to the
portion of the initial contribution allocated to the Investment Funds.
Thereafter, the GMDB is equal to (a) the GMDB calculated on the immediately
preceding Business Day, plus (b) any subsequent contributions and transfers
into the Investment Funds, less (c) any transfers and withdrawals from such
Funds. Additionally, on each Processing Date the GMDB is reset at the greater
of the current GMDB and the current Annuity Account Value in the Investment
Funds, not to exceed a cap as described below. The cap does not apply on the
seventh Processing Date. The cap is equal to (a) the portion of the initial
contribution allocated to the Investment Funds, plus (b) any subsequent
contributions and transfers into the Investment Funds, less (c) any transfers
and withdrawals from such Funds, plus (d) interest (see below) that is
credited on each Processing Date, plus (e) any amount by which the GMDB is
increased because the cap did not apply on the seventh Processing Date.
o 6% to 80 Cap--interest will be credited at the effective annual GMDB
interest rate of 6% (3% for amounts in the Fixed Income Series) through
age 80, and 0% thereafter.
See Appendix II for an example of the calculation of the GMDB.
How Withdrawals and Transfers Affect the GMDB
Withdrawals and transfers out of the Investment Funds will generally cause a
reduction in the GMDB on a dollar-for-dollar basis. However, if on any
Transaction Date, (i) the GMDB exceeds the Annuity Account Value and (ii) the
sum of withdrawals and transfers out of the Investment Funds is greater than
6% of the beginning of the year GMDB, the current GMDB will be reduced on a
pro rata basis on the Transaction Date. The amount of the reduction will be
determined by dividing the amount of the withdrawal by the Annuity Account
Value on the Transaction Date and multiplying this percentage by the current
GMDB.
The timing of your withdrawals and whether they exceed the 6% threshold
described above can have a significant impact on your GMDB.
For example, assuming a beginning of year GMDB of $100,000 and a withdrawal
of $5,000, which represents 5% of the beginning of year GMDB
($5,000/$100,000), such withdrawal would cause the current GMDB to be reduced
by $5,000. If a withdrawal in the amount of $10,000, which represents 10% of
the beginning of year GMDB ($10,000/ $100,000) were to be made, assuming a
current Annuity Account Value of $50,000 the current GMDB would be reduced by
20% ($10,000/$50,000), or $20,000 ($100,000 x .20).
How Payment is Made
We will pay the death benefit to the beneficiary in the form of the income
annuity option you have chosen under your Certificate. If no income annuity
option has been chosen at the time of your death, the beneficiary will
receive the death benefit in a lump sum. However, subject to Equitable Life's
rules then in effect and any other applicable requirements under the Code,
the beneficiary may elect to apply the death benefit amount to one or more
income annuity options offered by Equitable Life. See "Income Annuity
Options" in Part 6.
If you elect to have your spouse be both the sole primary beneficiary and the
successor Annuitant/ Certificate Owner, then no death benefit is payable
until your surviving spouse's death.
<PAGE>
On the Processing Date following your death, if the successor
Annuitant/Certificate Owner election was elected at issue of the Certificate
and is in effect at your death, the GMDB will be reset at the greater of the
current GMDB and the current Annuity Account Value in the Investment Funds.
The GMDB interest rate will subsequently be credited based on the age (as of
the Processing Date) of the successor Annuitant/Certificate Owner. For such
Certificates, if the Combined GMDB/GMIB Benefit (Plan A) was elected, the
GMIB (discussed below) will continue to be available on Contract Date
anniversaries seven and later based on the Contract Date, provided the GMIB
is exercised as specified under GMIB below, based on the age of the successor
Annuitant/ Certificate Owner.
GMIB
The GMIB, available under the Combined GMDB/ GMIB Benefit (Plan A), may not
currently be available in your state. When it becomes available it will be
added to your Certificate if you then elect the Combined GMDB/GMIB Benefit
(Plan A). State availability information may be obtained from your registered
representative.
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When you elect the IRA Assured Payment Option (discussed in Part 6), the GMIB
provides a minimum amount of guaranteed lifetime income under such option. On
the Transaction Date the amount of the periodic lifetime income to be
provided will be based on the greater of (i) the Annuity Account Value in the
Investment Funds and (ii) an amount equal to the GMDB described above,
reduced by any remaining withdrawal charges; each divided by "guaranteed
maximum annuity purchase rates" under the Certificate. The guaranteed maximum
annuity purchase rates are based on (i) interest at 2.5% if the GMIB is
exercised within 30 days following a Contract Date anniversary in years 7
through 9 and at 3.0% if exercised within 30 days following the 10th or later
Contract Date anniversary and (ii) mortality based on the 1983 Individual
Annuity Mortality Table "a" projected with modified Scale G. The mortality
table used in determining such annuity purchase rates assumes that mortality
will improve in the future and is more conservative than the basis underlying
current annuity purchase rates. Your Annuity Account Value in the Investment
Funds will depend on the performance of such Funds. The amount equal to the
GMDB (as discussed above) does not have an Annuity Account Value or a Cash
Value and is used solely for purposes of calculating the GMIB.
If you have any Annuity Account Value in the Guaranteed Period Account as of
the Transaction Date that you exercise the GMIB, such Annuity Account Value
will also be applied (at current annuity purchase rates) toward providing
payments under the IRA Assured Payment Option. Such Annuity Account Value
will increase the payments provided by the GMIB.
When you exercise the GMIB, we automatically determine whether the
application of your Annuity Account Value in the Investment Funds at current
purchase rates under the IRA Assured Payment Option (with a fixed period as
specified below) would produce higher lifetime income, and if so, the higher
income will be provided.
In addition, you can elect any of our income annuity options. See "Income
Annuity Options" in Part 6.
The GMIB applies only if your election of the IRA Assured Payment Option
meets the following conditions:
o The IRA Assured Payment Option is elected within 30 days following
the 7th or later Contract Date anniversary; provided it is not
elected earlier than your age 60, nor later than age 83.
o The fixed period you select is as indicated below, based on your age at
the time of election and the type of payments selected:
<TABLE>
<CAPTION>
LEVEL PAYMENTS
- --------------------------------------------
AGE FIXED PERIOD
- ---------------------- --------------------
<S> <C>
60 through 75 10 years
76 through 78 85 less your age
79 through 83 7 years
INCREASING PAYMENTS
AGE FIXED PERIOD
- ---------------------- --------------------
60 through 70 15 years
71 through 75 12 years
76 through 80 9 years
81 through 83 6 years
</TABLE>
o Payments start one payment mode after the IRA Assured Payment Option
goes into effect.
Each year on your Contract Date anniversary, if you are eligible to exercise
the GMIB, we will send you a notice of how much income could be provided
under such option on the Contract Date anniversary. You may then notify us
within 30 days following the Contract Date anniversary if you want to
exercise the GMIB by submitting the proper form. The income to be provided
under the IRA Assured Payment Option will be determined on the Transaction
Date that we receive your request and, therefore, may differ from the notice.
It will be based on the GMIB as of such Transaction Date.
The GMDB, which relates to the Investment Funds, will no longer be in effect
if you elect the IRA Assured Payment Option. If you subsequently terminate
the IRA Assured Payment Option and have your Certificate operate under the
Rollover IRA rules, then the GMDB will go back into effect based on your
Annuity Account Value in the Investment Funds as of the Transaction Date that
the Rollover IRA goes into effect.
See Appendix III for examples on the GMIB.
Alternate Combined GMDB/GMIB Benefit (Plan A) Available for issue ages 20
through 65
In addition to a Combined GMDB/GMIB benefit where GMDB interest is credited
<PAGE>
through age 80 (6% to 80 Benefit), there is a lower cost benefit where GMDB
interest is credited through age 70 (6% to 70 Benefit). If you wish to elect
this alternate benefit, you must do so in the application; otherwise the 6%
to 80 Benefit will apply. Once elected, the benefit may not be changed. This
alternate benefit is not available for election if you elect IRA APO Plus
(discussed in Part 6) in the application.
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CASH VALUE
The Cash Value under the Certificate fluctuates daily with the investment
performance of the Investment Funds you have selected and reflects any upward
or downward market value adjustment. See "Part 4: The Guaranteed Period
Account." We do not guarantee any minimum Cash Value except for amounts in a
Guarantee Period held to the Expiration Date. On any date before the Annuity
Commencement Date while the Certificate is in effect, the Cash Value is equal
to: (1) the Annuity Account Value; (2) less any withdrawal charge; and (3)
less any annual contract fee incurred but not yet deducted. The free corridor
amount will not apply when calculating the withdrawal charge applicable upon
a surrender. See "Part 7: Deductions and Charges."
SURRENDERING THE CERTIFICATES TO
RECEIVE THE CASH VALUE
You may surrender a Certificate to receive the Cash Value at any time while
you are living and before the Annuity Commencement Date.
For a surrender to be effective, we must receive your written request and the
Certificate at our Processing Office. The Cash Value will be determined on
the Transaction Date. All benefits under the Certificate will be terminated
as of that date.
You may receive the Cash Value in a single sum payment or apply it under one
or more of the income annuity options. See "Income Annuity Options" in Part
6. We will usually pay the Cash Value within seven calendar days, but we may
delay payment as described in "When Payments are Made" below.
For the tax consequences of surrenders, see "Part 9: Tax Aspects of the
Certificates."
WHEN PAYMENTS ARE MADE
Under applicable law, application of proceeds from the Investment Funds to a
variable annuity, payment of a death benefit from the Investment Funds,
payment of any portion of the Annuity Account Value (less any applicable
withdrawal charge) from the Investment Funds, and, upon surrender, payment of
the Cash Value from the Investment Funds will be made within seven calendar
days after the Transaction Date. Payments or application of proceeds from the
Investment Funds can be deferred for any period during which (1) the New York
Stock Exchange is closed or trading on it is restricted, (2) sales of
securities or determination of the fair value of an Investment Fund's assets
is not reasonably practicable because of an emergency, or (3) the SEC, by
order, permits us to defer payment in order to protect persons with interest
in the Investment Funds.
We can defer payment of any portion of the Annuity Account Value in the
Guaranteed Period Account for up to six months while you are living. We may
also defer payments for any amount attributable to a contribution made in the
form of a check for a reasonable amount of time (not to exceed 15 days) to
permit the check to clear.
ASSIGNMENT
The Certificates are not assignable or transferrable except through surrender
to us. They may not be borrowed against or used as collateral for a loan or
other obligation.
DISTRIBUTION OF THE CERTIFICATES
As the distributor of the Certificates, Equitable Distributors, Inc. (EDI),
an indirect wholly owned subsidiary of Equitable Life, has responsibility for
sales and marketing functions for the Certificates. EDI also serves as the
principal underwriter of the Separate Account under the 1940 Act. EDI is
registered with the SEC as a broker-dealer under the Exchange Act and is a
member of the National Association of Securities Dealers, Inc. EDI's
principal business address is 787 Seventh Avenue, New York, New York 10019.
For 1995, EDI was paid a fee of $126,914 for its services under its
"Distribution Agreement" with Equitable Life and the Separate Account.
The Certificates will be sold by registered representatives of EDI and its
affiliates, who are also our licensed insurance agents, as well as by
unaffiliated broker-dealers with which EDI has entered into selling
agreements. Broker-dealer sales compensation (including for EDI and its
affiliates) will not exceed six percent of total contributions made under a
Certificate. EDI may also receive compensation and reimbursement for its
marketing services under the terms of its distribution agreement with
Equitable Life. Broker-dealers receiving sales compensation will generally
pay a portion thereof to their registered representatives as commissions
related to sales of the Certificates. The offering of the Certificates is
intended to be continuous.
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PART 6: DISTRIBUTION METHODS UNDER THE CERTIFICATES
THE PROVISIONS DISCUSSED IN THIS PART 6 APPLY WHEN YOU ELECT THE IRA ASSURED
PAYMENT OPTION OR IRA APO PLUS IN THE APPLICATION OR AS A DISTRIBUTION OPTION
AT A LATER DATE, AS WELL AS TO OTHER DISTRIBUTION METHODS UNDER YOUR
CERTIFICATE.
The Rollover IRA Certificates offer several distribution methods specifically
designed to provide retirement income. The Choice Income Plan which includes
the IRA Assured Payment Option and IRA APO Plus, may be elected in the
application or as a distribution option at a later date. In addition, the
Certificates provide for Lump Sum Withdrawals, Substantially Equal Payment
Withdrawals, Systematic Withdrawals and Minimum Distribution Withdrawals.
Fixed and variable income annuity options are also available for amounts to
be applied at the Annuity Commencement Date. The IRA Assured Payment Option
and IRA APO Plus may not be available in all states.
The Certificates are subject to the Code's minimum distribution requirements.
Generally, distributions from these Certificates must commence by April 1 of
the calendar year following the calendar year in which you attain age 70 1/2.
Subsequent distributions must be made by December 31st of each calendar year.
If you do not commence minimum distributions in the calendar year in which
you attain age 70 1/2, and wait until the three month period (January 1 to
April 1) in the next calendar year to commence minimum distributions, then
you must take two required minimum distributions in that calendar year. If
the required minimum distribution is not made, a penalty tax in an amount
equal to 50% of the difference between the amount required to be withdrawn
and the amount actually withdrawn may apply. See "Part 9: Tax Aspects of the
Certificates" for a discussion of various special rules concerning the
minimum distribution requirements.
For IRA retirement benefits subject to minimum distribution requirements, we
will send a form outlining the distribution options available before you
reach age 70 1/2 (if you have not annuitized before that time).
IRA ASSURED PAYMENT OPTION
The IRA Assured Payment Option is designed to provide you with guaranteed
payments for your life (SINGLE LIFE) or for the lifetime of you and a joint
Annuitant you designate (JOINT AND SURVIVOR) through a series of
distributions from the Annuity Account Value that are followed by Life
Contingent Annuity payments. Payments you receive during the fixed period are
designed to pay out the entire Annuity Account Value by the end of the fixed
period and to meet or exceed minimum distribution requirements, if
applicable. See "Minimum Distribution Withdrawals" below. The fixed period
ends with the distribution of the Maturity Value of the last Guarantee
Period, or distribution of the final amount in the Modal Payment Portion of
the Guaranteed Period Account. The fixed period may also be referred to as
the "liquidity period" as during this period, you have access to the Cash
Value through Lump Sum Withdrawals or surrender of the Certificate, with
lifetime income continuing in reduced amounts.
After the fixed period, the payments are made under the Life Contingent
Annuity described below.
You may elect the IRA Assured Payment Option at any time if your initial
contribution or Annuity Account Value is at least $10,000 at the time of
election, by submitting a written request satisfactory to us. The IRA Assured
Payment Option may be elected at ages 59 1/2 through 83. If you are over age
70 1/2, the availability of this option may be restricted under certain
limited circumstances. See "Tax Considerations for the IRA Assured Payment
Option and IRA APO Plus" in Part 9. The IRA Assured Payment Option with level
payments (described below) may be elected at ages as young as 45. However,
there are tax considerations that should be taken into account before
electing level payments under the IRA Assured Payment Option if you are under
age 59 1/2. See "Penalty Tax on Early Distributions" in Part 9. The IRA
Assured Payment Option with increasing payments (described below) may be
elected at ages as young 53 1/2 provided payments do not start before you
attain age 59 1/2.
Once the IRA Assured Payment Option is elected, all amounts currently held
under your Rollover IRA must be allocated to the Guarantee Periods, the Modal
Payment Portion of the Guaranteed Period Account, if applicable, and the Life
Contingent Annuity. See "Allocation of Contributions or Annuity Account
Value" below. Subsequent contributions may be made according to the rules set
forth below and in "Tax-Free Transfers and Rollovers" in Part 9.
<PAGE>
Subsequent Contributions under the IRA Assured
Payment Option
Subsequent "regular" IRA contributions may no longer be made for the taxable
year in which you attain age 70 1/2 and thereafter. Subsequent rollover and
direct transfer contributions may be made at any time until the earlier of
(i) when you attain age 84 and (ii) when the Certificate is within seven
years of the end of the fixed period while the IRA Assured Payment Option is
in effect. However, any amount
32
<PAGE>
<PAGE>
contributed after you attain age 70 1/2 must be net of your required minimum
distribution for the year in which the rollover or direct transfer
contribution is made.
Payments
You may elect to receive monthly, quarterly or annual payments. However, all
payments are made on the 15th of the month. Payments to be made on an
Expiration Date during the fixed period represent distributions of the
Maturity Values of serially maturing Guarantee Periods on their Expiration
Dates. Payments to be made monthly, quarterly or annually on dates other than
an Expiration Date represent distributions from amounts in the Modal Payment
Portion of the Guaranteed Period Account. See "Part 4: The Guaranteed Period
Account."
A $2.50 charge will be deducted from each payment made on a monthly or
quarterly basis under the IRA Assured Payment Option.
You have a choice of receiving level payments during the fixed period and
then under the Life Contingent Annuity. Or, you may elect to receive payments
that increase. During the fixed period, payments are designed to increase by
10% every three years on each third anniversary of the payment start date.
After the end of the fixed period, your first payment under the Life
Contingent Annuity will be 10% greater than the final payment made under the
fixed period. Thereafter, payments will increase annually on each anniversary
of the payment start date under the Life Contingent Annuity based on the
annual increase, if any, in the Consumer Price Index, but in no event greater
than 3% per year.
Payments will generally start one payment mode from the date the IRA Assured
Payment Option goes into effect. Or you may choose to defer the date payments
will start generally for a period of up to 60 months. Deferral of the payment
start date permits you to lock in rates at a time when you may consider
current rates to be high, while permitting you to delay receiving payments if
you have no immediate need to receive income under your Certificate. In
making this decision, you should consider that the amount of income you
purchase is based on the rates applicable on the Transaction Date, so if
rates rise during the interim, your payments may be less than they would have
been if you had elected the IRA Assured Payment Option at a later date.
Deferral of the payment start date is not available above age 80. Before you
elect to defer the date your payments will start, you should consider the
consequences of this decision on the requirement under the Code that you take
minimum distributions each calendar year with respect to the value of your
IRA. See "Required Minimum Distributions" in Part 9. The ability to defer the
payment start date may not be available in all states. Also, if amounts are
applied to the IRA Assured Payment Option as a result of the GMIB (discussed
in Part 5), deferral of the payment start date is not permitted.
Required minimum distributions will be calculated based on the Annuity
Account Value in each Guarantee Period and the deemed value of the Life
Contingent Annuity for tax purposes. If at any time your payment under the
IRA Assured Payment Option would be less than the minimum amount required to
be distributed under minimum distribution rules, we will notify you of the
difference. You will have the option to have an additional amount withdrawn
under your Certificate and such withdrawal will be treated as a Lump Sum
Withdrawal; however, no withdrawal charge will apply. An adjustment will be
made to future scheduled payments. Or, you may take the amount from other IRA
funds you may have. See "Lump Sum Withdrawals" below and "Required Minimum
Distributions" in Part 9.
See Appendix IV for an example of payments purchased under an IRA Assured
Payment Option.
Fixed Period
If you elect level payments, you may select a fixed period of not less than
seven years nor more than 15 years. The maximum fixed period available based
on your age at issue of the Certificate (or age at the time of election if
the IRA Assured Payment Option is elected after issue) is as follows:
<TABLE>
<CAPTION>
MAXIMUM FIXED
AGE* PERIOD
- ----------------- -------------------
<S> <C>
45 through 70 15 years
71 through 78 85 less your age
79 through 83 7 years
</TABLE>
The minimum and maximum fixed period will be reduced by each year you defer
the date payments will start.
If you elect increasing payments, you do not have a choice as to the fixed
period. Based on your age at issue of the Certificate (or age at the time of
election if the IRA Assured Payment Option is elected after issue), your
<PAGE>
fixed period will be as follows:
<TABLE>
<CAPTION>
AGE* FIXED PERIOD
- ----------------- ----------------
<S> <C>
59 1/2 through 70 15 years
71 through 75 12 years
76 through 80 9 years
81 through 83 6 years
</TABLE>
If you elect increasing payments and defer the date payments will start, your
fixed period will be as follows:
<TABLE>
<CAPTION>
FIXED PERIOD BASED ON
DEFERRAL PERIOD
---------------------------
AGE* 1-36 MONTHS 37-60 MONTHS
- ----------------- ------------- ------------
<S> <C> <C>
53 1/2 through 70 12 years 9 years
71 through 75 9 years 9 years
76 through 80 6 years 6 years
81 through 83 N/A N/A
</TABLE>
* For joint and survivor, the fixed period is based on the age of the younger
Annuitant.
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<PAGE>
<PAGE>
If amounts are applied to the IRA Assured Payment Option as a result of the
GMIB, the fixed periods will be as discussed under "GMIB" in Part 5.
Allocation of Contributions or Annuity Account Value
If the IRA Assured Payment Option is elected in the application, then based
on the amount of your initial contribution, your age and sex (and the age and
sex of the joint Annuitant, if applicable), the mode of payment, the form of
payments and the fixed period you select, your entire contribution will be
allocated by us. A portion of the initial contribution will be allocated
among the Guarantee Periods and the Modal Payment Portion of the Guaranteed
Period Account, if applicable, to provide fixed period payments and a portion
will be applied under the Life Contingent Annuity in order to provide the
payments for life. For initial contributions of $500,000 or more, amounts
allocated to the Life Contingent Annuity may also be based on your
underwriting classification. In general, underwriting classification is based
on your medical history and smoker status and may result in a smaller
allocation of amounts to the Life Contingent Annuity if your classification
is lower than our standard class. If the IRA Assured Payment Option is
elected any time after issue of the Rollover IRA Certificate or if you cancel
IRA APO Plus (discussed below) and elect the IRA Assured Payment Option, then
based on your Annuity Account Value and the information you provide as
described above, your entire Annuity Account Value, including any amounts
currently invested in the Investment Funds, will be allocated by us among the
Guarantee Periods, the Modal Payment Portion of the Guaranteed Period
Account, if applicable, and applied under the Life Contingent Annuity. While
the IRA Assured Payment Option is in effect, no amounts may be allocated to
the Investment Funds. If amounts in the Guarantee Periods are transferred, a
market value adjustment may apply.
If you elect the IRA Assured Payment Option in the application and your
initial contribution will come from multiple sources, your application must
also indicate that contributions are to be allocated to the Money Market Fund
under the Rollover IRA described in Part 5. Election of the IRA Assured
Payment Option must include your instructions to apply your Annuity Account
Value, on the date the last such contribution is received, under the IRA
Assured Payment Option as described above.
Any subsequent contributions made while the IRA Assured Payment Option is in
effect must be allocated to the Guarantee Periods and applied to the Life
Contingent Annuity. We will determine the allocation of such contributions,
such that your payments will be increased and the fixed period and date that
payments are to start under the Life Contingent Annuity will remain the same.
Life Contingent Annuity
The Life Contingent Annuity provides lifetime payments starting after the end
of the fixed period. The portion of your contributions or Annuity Account
Value applied under the Life Contingent Annuity does not have a Cash Value or
an Annuity Account Value and, therefore, does not provide for transfers or
withdrawals. Once the fixed period has ended and payments have begun under
the Life Contingent Annuity, subsequent amounts may no longer be applied
under the Life Contingent Annuity.
THERE IS NO DEATH BENEFIT PROVIDED UNDER THE LIFE CONTINGENT ANNUITY AND
ANNUITY INCOME IS PAID ONLY IF YOU (OR A JOINT ANNUITANT) ARE LIVING AT THE
DATE ANNUITY BENEFITS BEGIN. BENEFITS ARE ONLY PAID DURING YOUR LIFETIME AND,
IF APPLICABLE, THE LIFETIME OF A JOINT ANNUITANT. CONSEQUENTLY, YOU SHOULD
CONSIDER THE POSSIBILITY THAT NO AMOUNTS WILL BE PAID UNDER THE LIFE
CONTINGENT ANNUITY IF YOU (OR A JOINT ANNUITANT) DO NOT SURVIVE TO THE DATE
PAYMENTS ARE TO START UNDER SUCH ANNUITY.
You may elect to have the Life Contingent Annuity provide level or increasing
payments on a Single Life or a Joint and 100% to Survivor basis. If you elect
increasing payments, the payments will increase annually based on the
increase, if any, in the Consumer Price Index, but in no event greater than
3% per year. The Life Contingent Annuity may also provide payments on a Joint
and one-half to Survivor or a Joint and two-thirds to Survivor basis.
Payments under the Life Contingent Annuity will be made to you during your
lifetime (and the lifetime of the joint Annuitant, if applicable) on the same
payment mode and date as the payments that were made during the fixed period.
Election Restrictions under Joint and
Survivor
Election of the IRA Assured Payment Option with a Joint and Survivor form of
the Life Contingent Annuity is subject to the following restrictions: (i) the
joint Annuitant must be your spouse; (ii) neither you nor the joint Annuitant
can be over age 83; (iii) under level payments if you elect the Joint and
100% to Survivor form, only the longest fixed period is permitted; and (iv)
the fixed period may be limited by the minimum distribution rules. See
"Required Minimum Distributions" in Part 9.
34
<PAGE>
<PAGE>
Withdrawals under the IRA Assured
Payment Option
While the IRA Assured Payment Option is in effect, if you take a Lump Sum
Withdrawal as described under "Lump Sum Withdrawals" below (or if a Lump Sum
Withdrawal is made to satisfy minimum distribution requirements under the
Certificate), such withdrawals will be taken from all remaining Guarantee
Periods to which your Annuity Account Value is allocated and the Modal
Payment Portion of the Guaranteed Period Account, if applicable, such that
the amount of the payments and the length of the fixed period will be
reduced, and the date payments are to start under the Life Contingent Annuity
will be accelerated. Additional amounts above the amount of the requested
withdrawal will be withdrawn from the Guaranteed Period Account and applied
to the Life Contingent Annuity to the extent necessary to achieve this
result. As a result, the same pattern of payments will continue in reduced
amounts for your life, and if applicable, the life of your joint Annuitant.
If you have elected increasing payments, the first reduction in your payments
will take place no later than the date of the next planned increase.
Substantially Equal Payment Withdrawals, Systematic Withdrawals and Minimum
Distribution Withdrawals may not be elected while the IRA Assured Payment
Option is in effect. See "Substantially Equal Payment Withdrawals,"
"Systematic Withdrawals" and "Minimum Distribution Withdrawals," below.
Death Benefit
Once you have elected the IRA Assured Payment Option, if a death benefit
becomes payable during the fixed period we will pay the death benefit amount,
as described under "Death Benefit" in Part 5, to the designated beneficiary.
Unless you have elected a Joint and Survivor form under the Life Contingent
Annuity, no payment will be made under the Life Contingent Annuity. The death
benefit payable relates only to the Guarantee Periods under the Certificate;
a death benefit is never payable under the Life Contingent Annuity.
If you have elected a Joint and Survivor form of annuity under the Life
Contingent Annuity, payments will be made to you or the joint Annuitant, if
living on the date payments are to start. The designated beneficiary and the
joint Annuitant must be your spouse.
Termination of the IRA Assured
Payment Option
The IRA Assured Payment Option will be terminated if: (i) you cancel such
option at any time by sending a written request satisfactory to us; (ii) you
submit a subsequent contribution and you do not want it applied under the IRA
Assured Payment Option; (iii) you request a transfer of your Annuity Account
Value as described under "Transfers Among Investment Options" in Part 5,
while the IRA Assured Payment Option is in effect; or (iv) you request a
change in the date the payments are to start under the Life Contingent
Annuity. Once the IRA Assured Payment Option is terminated, in order to
receive distributions from your Annuity Account Value you must utilize the
withdrawal options described under "Withdrawals" below. Although the Life
Contingent Annuity will continue in effect and payments will be made if you
or your joint Annuitant, if applicable, are living on the date payments are
to start, additional Life Contingent Annuity payments may not be purchased.
You may elect to start the IRA Assured Payment Option again by submitting a
written request satisfactory to us, but no sooner than three years after the
Option was terminated. If you elected the IRA Assured Payment Option at age
70 1/2 or older and subsequently terminate this Option, required minimum
distributions must continue to be made with respect to your Certificate.
Before terminating the IRA Assured Payment Option, you should consider the
implications this may have under the minimum distribution requirements. See
"Tax Considerations for the IRA Assured Payment Option and IRA APO Plus" in
Part 9.
Income Annuity Options and Surrendering
the Certificates
If you elect an annuity benefit as described under "Income Annuity Options"
below, or surrender the Certificate for its Cash Value as described under
"Surrendering the Certificates to Receive the Cash Value" in Part 5, once we
receive your returned Certificate, your Certificate will be returned to you
with a notation that the Life Contingent Annuity is still in effect.
Thereafter, no subsequent contributions will be accepted under the
Certificate and no amounts may be applied under the Life Contingent Annuity.
Withdrawal Charge
While the IRA Assured Payment Option is in effect, withdrawal charges will
not apply to the level or increasing payments made during the fixed period.
Except as necessary to meet minimum distribution requirements under the
Certificate, Lump Sum Withdrawals will be subject to a withdrawal charge and
will have a 10% free corridor available. Upon termination of the IRA Assured
Payment Option, the free corridor will apply as described under "Withdrawal
Charge" in Part 7.
IRA APO PLUS
IRA APO Plus is a variation of the IRA Assured Payment Option. IRA APO Plus
<PAGE>
is available at ages 59 1/2 through 83. It may also be elected at ages as
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<PAGE>
<PAGE>
young as 53 1/2 provided payments under IRA APO Plus do not start before you
attain age 59 1/2. Except as indicated below, all provisions of the IRA
Assured Payment Option apply to IRA APO Plus. IRA APO Plus enables you to
keep a portion of your Annuity Account Value in the Investment Funds while
periodically converting such Annuity Account Value to increase the guaranteed
lifetime income under the IRA Assured Payment Option. When you elect IRA APO
Plus, a portion of your initial contribution or Annuity Account Value as
applicable is allocated by us to the IRA Assured Payment Option to provide a
minimum guaranteed lifetime income through allocation of amounts to the
Guarantee Periods and the Modal Payment Portion of the Guaranteed Period
Account, if applicable, and application of amounts to the Life Contingent
Annuity. The remaining Annuity Account Value remains in the Investment Funds.
Periodically during the fixed period (as described below), a portion of the
remaining Annuity Account Value in the Investment Funds is applied to
increase the guaranteed level payments under the IRA Assured Payment Option.
IRA APO Plus allows you to remain invested in the Investment Funds for longer
than would be possible if you applied your entire Annuity Account Value all
at once to the IRA Assured Payment Option or to an income annuity option,
while utilizing an "exit strategy" to provide retirement income.
If IRA APO Plus is elected in the application, we may require that the
portion of the initial contribution to be allocated to the Investment Funds,
be allocated to the Money Market Fund until the end of the free look period.
See "Free Look Period" in Part 5.
The fixed period under IRA APO Plus will be based on your age (or the age of
the younger Annuitant if Joint and Survivor is elected) at issue of the
Certificate (or age at the time of election if IRA APO Plus is elected after
issue) and will be the same as the periods indicated for increasing payments
under "IRA Assured Payment Option" above.
You may elect to defer the payment start date as described in "Payments"
under "IRA Assured Payment Option," above. The fixed period will also be as
indicated for deferral of the payment start date for increasing payments
under the IRA Assured Payment Option.
You elect IRA APO Plus in the application or at a later date by submitting
the proper form. IRA APO Plus may not be elected if the IRA Assured Payment
Option is already in effect.
The amount applied under IRA APO Plus is either the initial contribution if
IRA APO Plus is elected at issue of the Certificate, or the Annuity Account
Value if IRA APO Plus is elected after issue of the Certificate. Out of a
portion of the amount applied, level payments are provided under the IRA
Assured Payment Option equal to the initial payment that would have been
provided on the Transaction Date by the allocation of the entire amount to
increasing payments as described in "Payments" under "IRA Assured Payment
Option," above. The difference between the amount required for level payments
and the amount required for increasing payments is allocated to the
Investment Funds in accordance with your instructions. If you have Annuity
Account Value in the Guaranteed Period Account at the time this option is
elected, a market value adjustment may apply as a result of such amounts
being transferred to effect the IRA Assured Payment Option.
On the third February 15th following the date the first payment is made (if
payments are to be made on February 15th, the date of the first payment will
be counted as the first February 15th) during the fixed period while you are
living, a portion of the Annuity Account Value in the Investment Funds is
taken pro rata from the Annuity Account Value in each Investment Fund and is
applied to increase the level payments under the IRA Assured Payment Option.
If a deferral period of three years or more is elected, a portion of the
Annuity Account Value in the Investment Funds will be applied on the February
15th prior to the date the first payment is made, to increase the initial
level payments. If payments are to be made on February 15th, the date of the
first payment will be counted as the first February 15th.
The amount applied is the amount which provides for level payments equal to
the initial payment that would have been provided by the allocation of the
entire Annuity Account Value to increasing payments, as described in the
preceding paragraph. This process is repeated each third year during the
fixed period. The first increased payment will be reflected in the payment
made following three full years of payments and then every three years
thereafter. On the Transaction Date immediately following the last payment
during the fixed period, the remaining Annuity Account Value in the
Investment Funds is first applied to the Life Contingent Annuity to change
the level payments previously purchased to increasing payments. If there is
any Annuity Account Value remaining after the increasing payments are
purchased, this balance is applied to the Life Contingent Annuity to further
increase such increasing payments. If the Annuity Account Value in the
Investment Funds is insufficient to purchase the increasing payments, then
the level payments previously purchased will be increased to the extent
possible.
36
<PAGE>
<PAGE>
While IRA APO Plus provides a minimum guaranteed lifetime payment under the
IRA Assured Payment Option, the total amount of income that can be provided
over time will depend on the investment performance of the Investment Funds
in which you have Annuity Account Value, as well as the current Guaranteed
Rates and the cost of the Life Contingent Annuity, which may vary.
Consequently, the aggregate amount of guaranteed lifetime income under IRA
APO Plus may be more or less than the amount that could have been purchased
by application at the outset of the entire initial contribution or Annuity
Account Value to the IRA Assured Payment Option.
See Appendix IV for an example of the payments purchased under IRA Assured
Payment Option and IRA APO Plus.
In calculating your required minimum distributions your Annuity Account Value
in the Investment Funds, the Annuity Account Value in each Guarantee Period,
any amount in the Modal Payment Portion of the Guaranteed Period Account, and
the deemed value of the Life Contingent Annuity for tax purposes will be
taken into account as described in "Payments" under "IRA Assured Payment
Option," above. Also see "Required Minimum Distributions" in Part 9.
Allocation of Subsequent Contributions under IRA APO Plus
Any subsequent contributions you make may only be allocated to the Investment
Funds, where it is later applied by us under the IRA Assured Payment Option.
Subsequent contributions will be allocated among the Investment Funds
according to your allocation percentages. Allocation percentages can be
changed at any time by writing to our Processing Office. Subsequent
contributions may no longer be made after the end of the fixed period.
Transfers Among Investment Options under IRA APO Plus
While IRA APO Plus is in effect, you may transfer all or a portion of your
Annuity Account Value in the Investment Funds, among the Investment Funds in
any way you choose. However, you may not transfer Annuity Account Value from
the Investment Funds to the Guaranteed Period Account.
Withdrawals under IRA APO Plus
While IRA APO Plus is in effect, if you take a Lump Sum Withdrawal as
described under "Lump Sum Withdrawals" below (or if a Lump Sum Withdrawal is
made to satisfy minimum distribution requirements under the Certificate),
such withdrawals will be taken on a pro rata basis from your Annuity Account
Value in the Investment Funds unless you specify otherwise. If there is
insufficient value in the Investment Funds the excess will be taken from the
Guarantee Periods and the Modal Payment Portion of the Guaranteed Period
Account, if applicable, as described under "Withdrawals under the IRA Assured
Payment Option" above.
A Lump Sum Withdrawal taken to satisfy minimum distribution requirements
under the Certificate will not be subject to a withdrawal charge.
Death Benefit
Once you have elected IRA APO Plus, if a death benefit becomes payable during
the fixed period we will pay the death benefit amount as described under
"Death Benefit" in Part 5, to the designated beneficiary. Unless you have
elected Joint and Survivor under the Life Contingent Annuity, no payment will
be made under the Life Contingent Annuity. The death benefit relates only to
the Investment Funds and the Guarantee Periods under the Certificate; a death
benefit is never payable under the Life Contingent Annuity.
Termination of IRA APO Plus
You may terminate IRA APO Plus at any time by submitting a request
satisfactory to us. In connection with the termination, you may either (i)
elect to terminate IRA APO Plus at any time and have your Certificate operate
under the Rollover IRA rules (see "Part 5: Provisions of the Certificates and
Services We Provide") or (ii) elect the IRA Assured Payment Option with level
or increasing payments. In the latter case your remaining Annuity Account
Value in the Investment Funds will be allocated to the Guaranteed Period
Account and applied under the Life Contingent Annuity. A market value
adjustment may apply for any amounts allocated from a Guarantee Period. At
least 45 days prior to the end of each three year period, we will send you a
quote indicating how much future income could be provided under the IRA
Assured Payment Option. The quote would be based on your current Annuity
Account Value, current Guaranteed Rates for the Guarantee Periods and current
purchase rates under the Life Contingent Annuity as of the date of the quote.
The actual amount of future income would depend on the rates in effect on the
Transaction Date.
<PAGE>
WITHDRAWAL OPTIONS
The Rollover IRA is an annuity contract, even though you may elect to receive
your benefits in a non-annuity form. You may take withdrawals from your
Certificate before the Annuity Commencement Date and while you are alive.
Four withdrawal options are available: Lump Sum Withdrawals, Substantially
Equal Payment Withdrawals, Systematic Withdrawals and Minimum Distribution
Withdrawals. Withdrawals may result in withdrawal charges. See
37
<PAGE>
<PAGE>
"Part 7: Deductions and Charges." Special withdrawal rules may apply under
the IRA Assured Payment Option and IRA APO Plus.
Amounts withdrawn from the Guaranteed Period Account, other than at the
Expiration Date, will result in a market value adjustment. See "Market Value
Adjustment for Transfers, Withdrawals or Surrender Prior to the Expiration
Date" in Part 4. Withdrawals may be taxable and subject to tax penalty. See
"Part 9: Tax Aspects of the Certificates."
As a deterrent to early withdrawal (generally prior to age 59 1/2) the Code
provides certain penalties. We may also be required to withhold income taxes
from the amount distributed. These rules are outlined in "Part 9: Tax Aspects
of the Certificates."
LUMP SUM WITHDRAWALS
You may take a Lump Sum Withdrawal at any time subject to a minimum
withdrawal amount of $1,000. A request to withdraw more than 90% of the Cash
Value as of the Transaction Date will result in the termination of the
Certificate and will be treated as a surrender of the Certificate for its
Cash Value. See "Surrendering the Certificates to Receive the Cash Value," in
Part 5.
To make a Lump Sum Withdrawal, you must submit a request satisfactory to us
which specifies the Investment Options from which the Lump Sum Withdrawal
will be taken. If we have received the information we require, the requested
withdrawal will become effective on the Transaction Date and proceeds will
usually be mailed within seven calendar days thereafter, but we may delay
payment as described in "When Payments Are Made" in Part 5. If we receive
only partially completed information, our Processing Office will contact you
for specific instructions before your request can be processed.
Lump Sum Withdrawals in excess of the 15% free corridor amount may be subject
to a withdrawal charge. While either the IRA Assured Payment Option or IRA
APO Plus is in effect, Lump Sum Withdrawals that exceed the 10% free corridor
amount may be subject to a withdrawal charge. See "Withdrawal Charge" in Part
7.
SUBSTANTIALLY EQUAL PAYMENT WITHDRAWALS
Substantially Equal Payment Withdrawals provide distributions from the
Annuity Account Value of the amounts necessary so that the 10% penalty tax,
normally applicable to distributions made prior to age 59 1/2, does not
apply. See "Penalty Tax on Early Distributions," in Part 9. Once
distributions begin, they should not be changed or stopped until the later of
age 59 1/2 or five years from the date of the first distribution. If you
change or stop the distributions or take a Lump Sum Withdrawal, you may be
liable for the 10% penalty tax that would have otherwise been due on all
prior distributions made under this option and for any interest thereon.
Substantially Equal Payment Withdrawals may be elected at any time if you are
below age 59 1/2. You can elect this option by submitting the proper form.
You select the day and the month when the first withdrawal will be made, but
it may not be sooner than 28 days after the issue of the Certificate. In no
event may you elect to receive the first payment in the same Contract Year in
which a Lump Sum Withdrawal was taken. We will calculate the amount of the
distribution under a method we select and payments will be made monthly,
quarterly or annually as you select. These payments will continue to be made
until we receive written notice from you to cancel this option. Such notice
must be received at our Processing Office at least seven calendar days prior
to the next scheduled withdrawal date. A Lump Sum Withdrawal taken while
Substantially Equal Payment Withdrawals are in effect will cancel such
withdrawals. You may elect to start receiving Substantially Equal Payment
Withdrawals again, but in no event can the payments start in the same
Contract Year in which a Lump Sum Withdrawal was taken. We will calculate a
new distribution amount.
Unless you specify otherwise, Substantially Equal Payment Withdrawals will be
withdrawn on a pro rata basis from your Annuity Account Value in the
Investment Funds. If there is insufficient value or no value in the
Investment Funds, any additional amount of the withdrawal or the total amount
of the withdrawal, as applicable, will be withdrawn from the Guarantee
Periods in order of the earliest Expiration Date(s) first.
Substantially Equal Payment Withdrawals are not subject to a withdrawal
charge.
<PAGE>
SYSTEMATIC WITHDRAWALS
This option may be elected if you are age 59 1/2 to 70 1/2. Systematic
Withdrawals provide level percentage or level amount payouts. You may choose
to receive Systematic Withdrawals on a monthly, quarterly or annual
frequency. You select a dollar amount or percentage of the Annuity Account
Value to be withdrawn, subject to a maximum of 1.2% monthly, 3.6% quarterly
and 15.0% annually, but in no event may any payment be less than $250. If at
the time a Systematic Withdrawal is to be made, the withdrawal amount would
be less than $250, no payment will be made and your Systematic Withdrawal
election will terminate.
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<PAGE>
<PAGE>
You select the date of the month when the withdrawals will be made, but you
may not choose a date later than the 28th day of the month. If no date is
selected, withdrawals will be made on the same calendar day of the month as
the Contract Date. The commencement of payments under the Systematic
Withdrawal option may not be elected to start sooner than 28 days after issue
of the Certificate.
You may elect Systematic Withdrawals at any time by completing the proper
form and sending it to our Processing Office. You may change the payment
frequency of your Systematic Withdrawals once each Contract Year or cancel
this withdrawal option at any time by sending notice in a form satisfactory
to us. The notice must be received at our Processing Office at least seven
calendar days prior to the next scheduled withdrawal date. You may also
change the amount or percentage of your Systematic Withdrawals once in each
Contract Year. However, you may not change the amount or percentage in any
Contract Year where you have previously taken another withdrawal under the
Lump Sum Withdrawal option described above.
Unless you specify otherwise, Systematic Withdrawals will be withdrawn on a
pro rata basis from your Annuity Account Value in the Investment Funds. If
there is insufficient value or no value in the Investment Funds, any
additional amount of the withdrawal required or the total amount of the
withdrawal, as applicable, will be withdrawn from the Guarantee Periods in
order of the earliest Expiration Date(s) first.
Systematic Withdrawals are not subject to a withdrawal charge, except to the
extent that, when added to a Lump Sum Withdrawal previously taken in the same
Contract Year, the Systematic Withdrawal exceeds the 15% free corridor
amount. See "Withdrawal Charge" in Part 7.
MINIMUM DISTRIBUTION WITHDRAWALS
Minimum Distribution Withdrawals provide distributions from the Annuity
Account Value of the amounts necessary to meet minimum distribution
requirements set forth in the Code.
This option may be elected in the year in which you attain age 70 1/2. You
can elect Minimum Distribution Withdrawals by submitting the proper election
form. The minimum amount we will pay out is $250.
You may elect Minimum Distribution Withdrawals for each Certificate you own,
subject to our rules then in effect. Currently, Minimum Distribution
Withdrawal payments will be made annually.
Unless you specify otherwise, Minimum Distributions Withdrawals will be
withdrawn on a pro rata basis from your Annuity Account Value in the
Investment Funds. If there is insufficient value or no value in the
Investment Funds, any additional amount of the withdrawal required or the
total amount of the withdrawal, as applicable, will be withdrawn from the
Guarantee Periods in order of the earliest Expiration Date(s) first.
Minimum Distribution Withdrawals are not subject to a withdrawal charge,
except to the extent that, when added to a Lump Sum Withdrawal previously
taken in the same Contract Year, the Minimum Distribution Withdrawal exceeds
the 15% free corridor amount. See "Withdrawal Charge" in Part 7.
Example
- -------
The chart below illustrates the pattern of payments, under Minimum
Distribution Withdrawals for a male who purchases the Rollover IRA at age 70
with a single contribution of $100,000, with payments commencing at the end
of the first Contract Year.
PATTERN OF MINIMUM DISTRIBUTION WITHDRAWALS
$100,000 SINGLE CONTRIBUTION FOR A
SINGLE LIFE-MALE AGE 70
[THE FOLLOWING TABLE WAS REPRESENTED
AS AN AREA GRAPH IN THE PROSPECTUS]
ASSUMES 6.0% RATE OF RETURN
Amount
Age Withdrawn
- --- ---------
70 $6,250
75 7,653
80 8,667
85 8,770
90 6,931
95 3,727
100 1,179
[END OF GRAPHICALLY REPRESENTED DATA]
Payments are calculated each year based on the Annuity Account Value at the
end of each year, using the recalculation method of determining payments.
(See "Part 1--Minimum Distribution Withdrawals" in the SAI.) Payments are
made annually, and it is further assumed that no Lump Sum Withdrawals are
<PAGE>
taken.
This example assumes an annual rate of return of 6.0% compounded annually for
both the Investment Funds and the Guaranteed Period Account. This rate of
return is for illustrative purposes only and is not intended to represent an
expected or guaranteed rate of return. Your investment results will vary. In
addition, this example does not reflect any charges that may be applicable
under the Rollover IRA. Such charges would effectively reduce the actual
return.
INCOME ANNUITY OPTIONS
Income annuity options provide periodic payments over a specified period of
time which may be fixed or may be based on your life. Annuity forms of
payment are calculated as of the Annuity Commencement Date, which is on file
with our Processing Office. You
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<PAGE>
can change the Annuity Commencement Date by writing to our Processing Office
any time before the Annuity Commencement Date. However, you may not choose a
date later than the 28th day of any month. Also, no Annuity Commencement Date
will be later than the Processing Date which follows your 85th birthday
unless the IRA Assured Payment Option or IRA APO Plus is in effect. Also, if
the IRA Assured Payment Option or IRA APO Plus was elected after age 78 (may
apply beginning at older ages in some states) and you subsequently terminate
the option, the Annuity Commencement Date must commence no later than the
calendar year in which you attain age 90.
Before the Annuity Commencement Date, we will send you a letter advising that
annuity benefits are available. Unless you otherwise elect, we will pay you a
fixed annuity benefit on the "normal form" indicated for your Certificate as
of your Annuity Commencement Date. The amount applied to provide the annuity
benefit will be (1) the Annuity Account Value for any life annuity form or
(2) the Cash Value for any period certain only annuity form except that if
the period certain is more than five years, the amount applied will be no
less than 95% of the Annuity Account Value.
Amounts in the Guarantee Periods that are applied to an income annuity option
prior to an Expiration Date will result in a market value adjustment. See
"Market Value Adjustment for Transfers, Withdrawals or Surrender Prior to the
Expiration Date" in Part 4.
ANNUITY FORMS
o Life Annuity: An annuity which guarantees payments for the rest of your
life. Payments end with the last monthly payment before your death.
Because there is no death benefit associated with this annuity form, it
provides the highest monthly payment of any of the life income annuity
options, so long as you are living.
o Life Annuity-Period Certain: This annuity form also guarantees payments
for the rest of your life. In addition, if you die before a specific
period of time (the "certain period") has ended, payments will continue
to your beneficiary for the balance of the certain period. Certain
periods may be 5, 10, 15 or 20 years. A life annuity with a certain
period of 10 years is the normal form of annuity under the Certificates.
o Life Annuity-Refund Certain: This annuity form guarantees payments to
you for the rest of your life. In addition, if you die before the amount
applied to purchase this annuity option has been recovered, payments
will continue to your beneficiary until that amount has been recovered.
This option is available only as a fixed annuity.
o Period Certain Annuity: This annuity form guarantees payments for a
specific period of time, usually 5, 10, 15 or 20 years, and does not
involve life contingencies.
o Joint and Survivor Life Annuity: This annuity form guarantees life
income to you and, after your death, continuation of income to the
survivor.
The life annuity-period certain and the life annuity-refund certain are
available on either a single life or joint and survivor life basis.
The income annuity options outlined above are available in both fixed and
variable form, unless otherwise indicated. Fixed annuity payments are
guaranteed by us and will be based either on the tables of guaranteed annuity
payments in your Certificate or on our then current annuity rates, whichever
is more favorable for you. Variable income annuities may be funded through
the Common Stock Fund through the purchase of annuity units. The amount of
each variable annuity payment may fluctuate, depending upon the performance
of the Common Stock Fund. That is because the annuity unit value rises and
falls depending on whether the actual rate of net investment return (after
deduction of charges) is higher or lower than the assumed base rate. See
"Annuity Unit Values" in the SAI. Variable income annuities may also be
available by separate prospectus through the Common Stock or other Funds of
other separate accounts we offer.
For all Annuitants, the normal form of annuity provides for fixed payments.
We may offer other forms not outlined here. Your registered representative
can provide details.
For each income annuity option, we will issue a separate written agreement
putting the option into effect. Before we pay any annuity benefit, we require
the return of the Certificate.
The amount of the annuity payments will depend on the amount applied to
purchase the annuity, the type of annuity chosen and, in the case of a life
income annuity option, your age (or your and the joint Annuitant's ages) and
in certain instances, the sex of the Annuitant(s). Once an income annuity
option is chosen and payments have commenced, no change can be made.
If, at the time you elect an income annuity option, the amount to be applied
is less than $2,000 or the initial payment under the option elected is less
than $20 monthly, we reserve the right to pay the Annuity Account Value in a
single sum rather than as payments under the annuity form chosen.
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<PAGE>
PART 7: DEDUCTIONS AND CHARGES
CHARGES DEDUCTED FROM THE
ANNUITY ACCOUNT VALUE
We allocate the entire amount of each contribution to the Investment Options
you select, subject to certain restrictions. We then periodically deduct
certain amounts from your Annuity Account Value. The charges described below
and under "Charges Deducted from the Investment Funds" below will not be
increased by us for the life of the Certificates. We may reduce certain
charges under sponsored arrangements. See "Sponsored Arrangements" below.
Charges are deducted proportionately from all the Investment Funds in which
your Annuity Account Value is invested on a pro rata basis, except as noted
below.
Distribution Fee
We deduct a sales load annually in an amount of 0.20% of each contribution
received during the first Contract Year. This sales load is deducted on each
of the first seven Processing Dates (so long as the Certificate is in force).
See "Example" below.
The distribution fee will not be deducted while the IRA Assured Payment
Option or IRA APO Plus is in effect.
Withdrawal Charge
A withdrawal charge will be imposed as a percentage of each contribution made
to the extent that (i) a Lump Sum Withdrawal or cumulative withdrawals during
a Contract Year exceed the free corridor amount, or (ii) if the Certificate
is surrendered to receive its Cash Value. We determine the withdrawal charge
separately for each contribution in accordance with the table below.
<TABLE>
<CAPTION>
CONTRACT YEAR
1 2 3 4 5 6 7 8+
------ ------ ------ ------ ------ ------ ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Percentage of
Contribution 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0%
</TABLE>
If the IRA Assured Payment Option or IRA APO Plus is in effect, the
withdrawal charge will be imposed as a percentage of contributions (less
withdrawals), less the amount applied under the Life Contingent Annuity.
The applicable withdrawal charge percentage is determined by the Contract
Year in which the excess withdrawal is made or the Certificate is
surrendered, beginning with "Contract Year 1" with respect to each
contribution withdrawn or surrendered. For purposes of the table, for each
contribution, the Contract Year in which we receive that contribution is
"Contract Year 1."
The withdrawal charge is deducted from the Investment Options from which each
such withdrawal is made in proportion to the amount being withdrawn from each
Investment Option.
Free Corridor Amount
The free corridor amount is 15% of the Annuity Account Value at the
beginning of the Contract Year, minus any amount previously withdrawn
during that Contract Year.
While either the IRA Assured Payment Option or IRA APO Plus is in effect,
the free corridor amount is 10% of the Annuity Account Value at the
beginning of the Contract Year.
There is no withdrawal charge if a Lump Sum Withdrawal is taken to satisfy
minimum distribution requirements under the Certificate. A free corridor
amount is not applicable to a surrender.
For purposes of calculating the withdrawal charge, (1) we treat contributions
as being withdrawn on a first-in first-out basis, and (2) amounts withdrawn
up to the free corridor amount are not considered a withdrawal of any
contributions.
The withdrawal charge is to help cover sales expenses. Because of the way the
distribution fee is calculated the distribution fee and the withdrawal charge
combined will never exceed the 7.0% maximum withdrawal charge.
Example--The example below illustrates how the withdrawal charge and the
distribution fee would be calculated upon a withdrawal under the Rollover
IRA. This example assumes an initial contribution of $12,000 and subsequent
contributions of $12,000 each in the second and third Contract Years for
total contributions under the Certificate of $36,000. It also assumes a
withdrawal from the Investment Funds at the beginning of the fourth Contract
Year of 25% of an Annuity Account Value of $40,000.
The total withdrawal amount would be $10,000 ($40,000 x .25). In this case,
$6,000 ($40,000 x .15) would be the free corridor amount and could be
withdrawn without imposition of a withdrawal charge. The balance of $4,000
<PAGE>
($10,000-$6,000) would be considered a withdrawal of a part of the initial
contribution of $12,000. This contribution would be subject to a 4.0%
withdrawal charge of $160 ($4,000 x .04) as indicated in the chart above.
The distribution fee deducted on the Processing Date following the withdrawal
would be based on the remaining initial contribution of $8,000
($12,000-$4,000).
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<PAGE>
Withdrawal Processing Charge
We reserve the right to impose a charge of the lesser of $25 and 2.0% of the
amount withdrawn for each Lump Sum Withdrawal after the fifth in a Contract
Year. This charge, if made, is to cover our administrative expenses in
processing Lump Sum Withdrawals. See "Asset Based Administrative Charge"
below.
Charges for Combined GMDB/GMIB Benefit (Plan A)
We deduct a charge annually on each Processing Date for providing the
Combined GMDB/GMIB Benefit (Plan A). The charge is equal to a percentage of
the GMDB in effect on the Processing Date. The percentage is equal to 0.45%
for the 6% to 80 Benefit and GMIB and 0.30% for the 6% to 70 Benefit and
GMIB.
Charges for GMDB Only Benefit (Plan B)
We deduct a charge annually on each Processing Date for providing the GMDB
Only Benefit (Plan B). The charge is equal to a percentage of the GMDB in
effect on the Processing Date. The percentage is equal to 0.20%.
If the amount collected from this charge exceeds the cost of providing the
benefits, it will be to our profit, and may be used to pay distribution
expenses not recovered from sales charges under the Certificates.
Annual Contract Fee
The annual contract fee is incurred at the beginning of the Contract Year and
deducted at the end of each Contract Year on the Processing Date. We deduct
this charge when determining the Cash Value payable if you surrender the
Certificate prior to the end of a Contract Year. The amount deducted is
determined by the amount of your initial contribution. The charge will be $30
per Contract Year if your initial contribution is less than $25,000, and zero
if your initial contribution equals $25,000 or more. This charge is to cover
a portion of our administrative expenses. See "Asset Based Administrative
Charge," below under "Charges Deducted from the Investment Funds."
Charges for State Premium and Other
Applicable Taxes
We deduct a charge for applicable taxes, such as state or local premium
taxes, that might be imposed in your state. Generally we deduct this charge
from the amount applied to provide an income annuity option. In certain
states, however, we may deduct the charge for taxes from contributions. The
current tax charge that might be imposed varies by state and ranges from 0%
to 2.25%.
Allocation of Certain Charges to the
Guaranteed Period Account
No portion of the distribution fee or the annual contract fee will be
deducted from the Guaranteed Period Account unless there is insufficient
value in the Investment Funds. If charges are deducted from the Guaranteed
Period Account, they will be deducted from the Annuity Account Value with
respect to the Guarantee Periods in order of the earliest Expiration Date(s)
first. If charges are deducted from the Guaranteed Period Account, you will
not receive the full Guaranteed Rate if held to the Expiration Date. See
"Market Value Adjustment for Transfers, Withdrawals or Surrender Prior to the
Expiration Date" in Part 4.
CHARGES DEDUCTED FROM THE
INVESTMENT FUNDS
Mortality and Expense Risk Charge
We will deduct a daily charge from the assets in each Investment Fund to
compensate us for mortality and expense risks. The daily charge is at the
rate of 0.002477%, which is equivalent to an annual rate of 0.90%, on the
assets in each Investment Fund. Approximately 0.60% of this annual charge is
allocated to the mortality risk and 0.30% is allocated to the expense risk.
We will realize a gain from this charge to the extent it is not needed to
provide for benefits and expenses under the Certificate. We will use any gain
for any lawful purpose including payment of distribution expenses not
recovered from sales charges under the Certificate.
The mortality risk assumed is the risk that Annuitants as a group will live
for a longer time than our actuarial tables predict. As a result, we would be
paying more in annuity income than we planned. We also assume a risk that the
mortality assumptions reflected in our guaranteed annuity payment tables,
shown in each Certificate, will differ from actual mortality experience.
Lastly, we assume a mortality risk to the extent that the guaranteed minimum
death benefit charge is insufficient to pay any amount by which such death
benefit exceeds the Cash Value of the Certificate.
The expense risk assumed is the risk that it will cost us more to issue and
administer the Certificates than we expect.
Asset Based Administrative Charge
<PAGE>
We will deduct a daily charge from the assets in each Investment Fund, to
compensate us for administrative expenses under the Certificates. The daily
charge is at a rate of 0.000692% (equivalent to an annual rate of 0.25%) on
the assets in each Investment Fund. The withdrawal processing charge, the an-
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<PAGE>
<PAGE>
nual contract fee and the asset based administrative charge are not designed
to produce a profit for Equitable Life.
TRUST CHARGES TO PORTFOLIOS
Investment advisory fees charged daily against the Trust's assets, direct
operating expenses of the Trust (such as trustees' fees, expenses of
independent auditors and legal counsel, bank and custodian charges and
liability insurance), and certain investment-related expenses of the Trust
(such as brokerage commissions and other expenses related to the purchase and
sale of securities), are reflected in each Portfolio's daily share price. The
maximum investment advisory fees paid annually by the Portfolios cannot be
changed without a vote by shareholders. They are as follows:
<TABLE>
<CAPTION>
DAILY AVERAGE NET ASSETS
-------------------------------------
FIRST NEXT OVER
$350 $400 $750
MILLION MILLION MILLION
----------- ----------- -----------
<S> <C> <C> <C>
ASSET ALLOCATION SERIES:
Conservative Investors ... .550% .525% .500%
Growth Investors .......... .550% .525% .500%
EQUITY SERIES:
Common Stock .............. .400% .375% .350%
Global .................... .550% .525% .500%
Aggressive Stock .......... .500% .475% .450%
FIXED INCOME SERIES:
Money Market .............. .400% .375% .350%
Intermediate Govt.
Securities ................ .500% .475% .450%
FIRST NEXT OVER
$500 MILLION $500 MILLION $1 BILLION
----------- ----------- -----------
EQUITY SERIES:
Growth & Income ........... .550% .525% .500%
FIRST NEXT OVER
$500 $1 $1.5
MILLION BILLION BILLION
----------- ----------- -----------
EQUITY SERIES:
International ............. .900% .850% .800%
</TABLE>
Investment advisory fees are established under the Trust's investment
advisory agreements between the Trust and its investment adviser, Alliance.
All of these fees and expenses are described more fully in the Trust
prospectus.
SPONSORED ARRANGEMENTS
For certain sponsored arrangements, we may reduce the distribution fee, the
annual contract fee and the withdrawal charge or change the minimum initial
contribution requirements. Under the IRA Assured Payment Option and IRA APO
Plus, we may increase Guaranteed Rates and reduce purchase rates under the
Life Contingent Annuity. We may also change the guaranteed minimum death
benefit and the guaranteed minimum income benefit. Sponsored arrangements
include those in which an employer allows us to sell Certificates to its
employees or retirees on an individual basis.
Our costs for sales, administration, and mortality generally vary with the
size and stability of the sponsoring organization among other factors. We
take all these factors into account when reducing charges. To qualify for
reduced charges, a sponsored arrangement must meet certain requirements,
including our requirements for size and number of years in existence.
Sponsored arrangements that have been set up solely to buy Certificates or
that have been in existence less than six months will not qualify for reduced
charges.
We will make these and any similar reductions according to our rules in
effect when a Certificate is approved for issue. We may change these rules
from time to time. Any variation in the distribution fee, withdrawal charge
or annual contract fee will reflect differences in costs or services and will
not be unfairly discriminatory.
Sponsored arrangements may be governed by the Code, the Employee Retirement
Income Security Act of 1974 (ERISA), or both. We make no representations as
to the impact of those and other applicable laws on such programs. WE
RECOMMEND THAT EMPLOYERS PURCHASING OR MAKING CERTIFICATES AVAILABLE FOR
PURCHASE UNDER A SPONSORED ARRANGEMENT SEEK THE ADVICE OF THEIR OWN LEGAL AND
BENEFITS ADVISERS.
OTHER DISTRIBUTION ARRANGEMENTS
The distribution fee, the withdrawal charge and the annual contract fee may
be reduced or eliminated when sales are made in a manner that results in
savings of sales and administrative expenses, such as sales through persons
<PAGE>
who are compensated by clients for recommending investments and receive no
commission or reduced commissions in connection with the sale of the
Certificates. In no event will a reduction or elimination of a fee or charge
be permitted where it would be unfairly discriminatory.
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<PAGE>
PART 8: VOTING RIGHTS
TRUST VOTING RIGHTS
As explained previously, contributions allocated to the Investment Funds are
invested in shares of the corresponding Portfolios of the Trust. Since we own
the assets of the Separate Account, we are the legal owner of the shares and,
as such, have the right to vote on certain matters. Among other things, we
may vote:
o to elect the Trust's Board of Trustees,
o to ratify the selection of independent auditors for the Trust, and
o on any other matters described in the Trust's current prospectus or
requiring a vote by shareholders under the 1940 Act.
Because the Trust is a Massachusetts business trust, annual meetings are not
required. Whenever a shareholder vote is taken, we will give Certificate
Owners the opportunity to instruct us how to vote the number of shares
attributable to their Certificates. If we do not receive instructions in time
from all Certificate Owners, we will vote the shares of a Portfolio for which
no instructions have been received in the same proportion as we vote shares
of that Portfolio for which we have received instructions. We will also vote
any shares that we are entitled to vote directly because of amounts we have
in an Investment Fund in the same proportions that Certificate Owners vote.
Each Trust share is entitled to one vote. Fractional shares will be counted.
Voting generally is on a Portfolio-by-Portfolio basis except that shares will
be voted on an aggregate basis when universal matters, such as election of
Trustees and ratification of independent auditors, are voted upon. However,
if the Trustees determine that shareholders in a Portfolio are not affected
by a particular matter, then such shareholders generally would not be
entitled to vote on that matter.
VOTING RIGHTS OF OTHERS
Currently, we control the Trust. Trust shares are held by other separate
accounts of ours and by separate accounts of insurance companies affiliated
and unaffiliated with us. Shares held by these separate accounts will
probably be voted according to the instructions of the owners of insurance
policies and contracts issued by those insurance companies. While this will
dilute the effect of the voting instructions of the Rollover IRA Certificate
Owners, we currently do not foresee any disadvantages arising out of this.
The Trust's Board of Trustees intends to monitor events in order to identify
any material irreconcilable conflicts that possibly may arise and to
determine what action, if any, should be taken in response. If we believe
that the Trust's response to any of those events insufficiently protects our
Certificate Owners, we will see to it that appropriate action is taken to
protect our Certificate Owners.
SEPARATE ACCOUNT VOTING RIGHTS
If actions relating to the Separate Account require Certificate Owner
approval, Certificate Owners will be entitled to one vote for each
Accumulation Unit they have in the Investment Funds. Each Certificate Owner
who has elected a variable annuity payout may cast the number of votes equal
to the dollar amount of reserves we are holding for that annuity in the
Common Stock Fund divided by the Accumulation Unit Value for the Common Stock
Fund. We will cast votes attributable to any amounts we have in the
Investment Funds in the same proportion as votes cast by Certificate Owners.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under applicable
Federal securities laws. To the extent that those laws or the regulations
promulgated under those laws eliminate the necessity to submit matters for
approval by persons having voting rights in separate accounts of insurance
companies, we reserve the right to proceed in accordance with those laws or
regulations.
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<PAGE>
PART 9: TAX ASPECTS OF THE CERTIFICATES
TAX-QUALIFIED INDIVIDUAL RETIREMENT ANNUITIES (IRAS)
Introduction
The Rollover IRA Certificate is designed to qualify as an IRA under Section
408(b) of the Code. Your rights under the Rollover IRA cannot be forfeited.
This prospectus contains the information which the Internal Revenue Service
(IRS) requires to be disclosed to an individual before he or she purchases an
IRA.
This Part covers some of the special tax rules that apply to individual
retirement arrangements. You should be aware that an IRA is subject to
certain restrictions in order to qualify for its special treatment under the
Federal tax law.
This prospectus provides our general understanding of applicable Federal
income tax rules, but does not provide detailed tax information and does not
address issues such as state income and other taxes or Federal gift and
estate taxes. Please consult a tax adviser when considering the tax aspects
of the Rollover IRA Certificates.
Further information on IRA tax matters can be obtained from any IRS district
office. Additional information regarding IRAs, including a discussion of
required distributions, can be found in IRS Publication 590, entitled
"Individual Retirement Arrangements (IRAs)," which is generally updated
annually.
The Rollover IRA Certificate has been approved by the IRS as to form for use
as an IRA. This IRS approval is a determination only as to the form of the
annuity and does not represent a determination of the merits of the annuity
as an investment.
Cancellation
You can cancel a Certificate issued as an IRA by following the directions in
Part 5 under "Free Look Period." Since there may be adverse tax consequences
if a Certificate is canceled (and because we are required to report to the
IRS certain distributions from canceled IRAs), you should consult with a tax
adviser before making any such decision. If you cancel this Certificate, you
may establish a new individual retirement arrangement if at the time you meet
the requirements for establishing an individual retirement arrangement.
Contributions to IRAs
Individuals may make three different types of contributions to purchase an
IRA, or as later additions to an existing IRA: "regular" contributions out of
earnings, tax-free "rollover" contributions from tax-qualified plans, or
direct custodian-to-custodian transfers from other individual retirement
arrangements ("direct transfers").
The initial contribution to the Certificate must be either a rollover or a
direct custodian-to-custodian transfer. See "Tax-Free Transfers and
Rollovers," discussed below. Any subsequent contributions you make may be any
of rollovers, direct transfers or "regular" IRA contributions. See
"Contributions Under the Certificates" in Part 5. The immediately following
discussion relates to "regular" IRA contributions. For the reasons noted in
"Tax-Free Transfers and Rollovers" below, you should consult with your tax
adviser before making any subsequent contributions to an IRA which is
intended to serve as a "conduit" IRA.
Generally, $2,000 is the maximum amount of deductible and nondeductible
contributions which may be made to all IRAs by an individual in any taxable
year. The above limit may be less when the individual's earnings are below
$2,000. This limit does not apply to rollover contributions or direct
custodian-to-custodian transfers into an IRA.
The amount of IRA contributions for a tax year that an individual can deduct
depends on whether the individual (or the individual's spouse, if a joint
return is filed) is covered by an employer-sponsored tax-favored retirement
plan. If the individual's spouse does not work or elects to be treated as
having no compensation, the individual and the individual's spouse may
contribute up to $2,250 to individual retirement arrangements (but no more
than $2,000 to any one individual retirement arrangement). The non-working
spouse owns his or her individual retirement arrangements, even if the
working spouse makes contributions to purchase the spousal individual
retirement arrangements.
<PAGE>
If neither the individual nor the individual's spouse is covered during any
part of the taxable year by an employer-sponsored tax-favored retirement plan
(including a qualified plan, a tax sheltered account or annuity under Section
403(b) of the Code (TSA) or a simplified employee pension plan), then
regardless of adjusted gross income (AGI), each working spouse may make
deductible contributions to an IRA for each tax year (MAXIMUM PERMISSIBLE
DOLLAR DEDUCTION) up to the lesser of $2,000 or 100% of compensation. In
certain cases, individuals covered by a tax-favored retirement plan include
persons eligible to participate in the plan although not actually
participating. Whether or not a person is covered by a retirement plan will
be reported on an employee's Form W-2.
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<PAGE>
If the individual is single and covered by a retirement plan during any part
of the taxable year, the deduction for IRA contributions phases out with AGI
between $25,000 and $35,000. If the individual is married and files a joint
return, and either the individual or the spouse is covered by a tax-favored
retirement plan during any part of the taxable year, the deduction for IRA
contributions phases out with AGI between $40,000 and $50,000. If the
individual is married, files a separate return and is covered by a
tax-favored retirement plan during any part of the taxable year, the
deduction for IRA contributions phases out with AGI between $0 and $10,000.
Married individuals filing separate returns must take into account the
retirement plan coverage of the other spouse, unless the couple has lived
apart for the entire taxable year. If AGI is below the phase-out range, an
individual is entitled to the Maximum Permissible Dollar Deduction. In
computing the partial deduction for IRA contributions the individual must
round the amount of the deduction to the nearest $10. The permissible
deduction for IRA contributions is a minimum of $200 if AGI is less than the
amount at which the deduction entirely phases out.
If the individual (or the individual's spouse, unless the couple has lived
apart the entire taxable year and their filing status is married, filing
separately) is covered by a tax-favored retirement plan, the deduction for
IRA contributions must be computed using one of two methods. Under the first
method, the individual determines AGI and subtracts $25,000 if the individual
is a single person, $40,000 if the individual is married and files a joint
return with the spouse, or $0 if the individual is married and files a
separate return. The resulting amount is the individual's Excess AGI. The
individual then determines the limit on the deduction for IRA contributions
using the following formula:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Maximum Adjusted
$10,000-Excess AGI Permissible Dollar
--------------------- X Dollar = Deduction
$10,000 Deduction Limit
</TABLE>
Under the second method, the individual determines his or her Excess AGI and
then refers to the table in Appendix V originally prepared by the IRS to
determine the deduction.
Contributions may be made for a tax year until the deadline for filing a
Federal income tax return for that tax year (without extensions). No
contributions are allowed for the tax year in which an individual attains age
70 1/2 or any tax year after that. A working spouse age 70 1/2 or over,
however, can contribute up to the lesser of $2,000 or 100% of "earned income"
to a spousal individual retirement arrangement for a non-working spouse until
the year in which the non-working spouse reaches age 70 1/2.
An individual not eligible to deduct part or all of the IRA contribution may
still make nondeductible contributions on which earnings will accumulate on a
tax-deferred basis. The deductible and nondeductible contributions may not,
however, together exceed the lesser of the $2,000 limit (or $2,250 spousal
limit) or 100% of compensation for each tax year. See "Excess Contributions"
below. Individuals must keep their own records of deductible and
nondeductible contributions in order to prevent double taxation on the
distribution of previously taxed amounts. See "Distributions from IRA
Certificates" below.
An individual making nondeductible contributions in any taxable year, or
receiving amounts from any IRA to which he or she has made nondeductible
contributions, must file the required information with the IRS. Moreover,
individuals making nondeductible IRA contributions must retain all income tax
returns and records pertaining to such contributions until interest in such
IRAs are fully distributed.
Excess Contributions
Excess contributions to an IRA are subject to a 6% excise tax for the year in
which made and for each year thereafter until withdrawn. In the case of
"regular" IRA contributions any contribution in excess of the lesser of
$2,000 or 100% of compensation or earned income is an "excess contribution,"
(without regard to the deductibility or nondeductibility of IRA contributions
under this limit). Also, any "regular" contributions made after you reach age
70 1/2 are excess contributions. In the case of rollover IRA contributions,
excess contributions are amounts which are not eligible to be rolled over
(for example, after tax contributions to a qualified plan or minimum
distributions required to be made after age 70 1/2). An excess contribution
(rollover or "regular") which is withdrawn, however, before the time for
filing the individual's Federal income tax return for the tax year (including
extensions) is not includable in income and therefore is not subject to the
10% penalty tax on early distributions (discussed below under "Penalty Tax on
Early Distributions"), provided any earnings attributable to the excess
contribution are also withdrawn and no tax deduction is taken for the excess
contribution. The withdrawn earnings on the excess contribution, however,
would be includable in the individual's gross income and would be subject to
the 10% penalty tax. If excess contributions are not withdrawn before the
time for filing the individual's Federal income tax return for
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<PAGE>
the year (including extensions), "regular" contributions may still be
withdrawn after that time if the IRA contribution for the tax year did not
exceed $2,250 and no tax deduction was taken for the excess contribution; in
that event, the excess contribution would not be includable in gross income
and would not be subject to the 10% penalty tax. Lastly, excess "regular"
contributions may also be removed by underutilizing the allowable
contribution limits for a later year.
If excess rollover contributions are not withdrawn before the time for filing
the individual's Federal tax return for the year (including extensions) and
the excess contribution occurred as a result of incorrect information
provided by the plan, any such excess amount can be withdrawn if no tax
deduction was taken for the excess contribution. As above, excess rollover
contributions withdrawn under those circumstances would not be includable in
gross income and would not be subject to the 10% penalty tax.
Tax-Free Transfers and Rollovers
Rollover contributions may be made to an IRA from these sources: (i)
qualified plans, (ii) TSAs (including 403(b)(7) custodial accounts) and (iii)
other individual retirement arrangements.
The rollover amount must be transferred to the Certificate either as a direct
rollover of an "eligible rollover distribution" (described below) or as a
rollover by the individual plan participant or owner of the individual
retirement arrangement. In the latter cases, the rollover must be made within
60 days of the date the proceeds from another individual retirement
arrangement or an eligible rollover distribution from a qualified plan or TSA
were received. Generally the taxable portion of any distribution from a
qualified plan or TSA is an eligible rollover distribution and may be rolled
over tax-free to an IRA unless the distribution is (i) a required minimum
distribution under Section 401(a)(9) of the Code; or (ii) one of a series of
substantially equal periodic payments made (not less frequently than
annually) (a) for the life (or life expectancy) of the plan participant or
the joint lives (or joint life expectancies) of the plan participant and his
or her designated beneficiary, or (b) for a specified period of ten years or
more.
Under some circumstances, amounts from a Certificate may be rolled over on a
tax-free basis to a qualified plan. To get this "conduit" IRA treatment, the
source of funds used to establish the IRA must be a rollover contribution
from the qualified plan and the entire amount received from the IRA
(including any earnings on the rollover contribution) must be rolled over
into another qualified plan within 60 days of the date received. Similar
rules apply in the case of a TSA. If you make a contribution to the
Certificate which is from an eligible rollover distribution and you commingle
such contribution with other contributions, you may not be able to roll over
these eligible rollover distribution contributions and earnings to another
qualified plan (or TSA, as the case may be) at a future date, unless the Code
permits.
Under the conditions and limitations of the Code, an individual may elect for
each IRA to make a tax-free rollover once every 12-month period among
individual retirement arrangements (including rollovers from retirement bonds
purchased before 1983). Custodian-to-custodian transfers are not rollovers
and can be made more frequently than once a year.
The same tax-free treatment applies to amounts withdrawn from the Certificate
and rolled over into other individual retirement arrangements unless the
distribution was received under an inherited IRA. Tax-free rollovers are also
available to the surviving spouse beneficiary of a deceased individual, or a
spousal alternate payee of a qualified domestic relations order applicable to
a qualified plan. In some cases, IRAs can be transferred on a tax-free basis
between spouses or former spouses incidental to a judicial decree of divorce
or separation.
Distributions from IRA Certificates
Income or gains on contributions under IRAs are not subject to Federal income
tax until benefits are distributed to the individual. Distributions include
withdrawals from your Certificate, surrender of your Certificate and annuity
payments from your Certificate. Death benefits are also distributions. Except
as discussed below, the amount of any distribution from an IRA is fully
includable as ordinary income by the individual in gross income.
If the individual makes non-deductible IRA contributions, those contributions
are recovered tax-free when distributions are received. The individual must
keep records of all nondeductible contributions. At the end of each tax year
in which the individual has received a distribution, the individual
determines a ratio of the total nondeductible IRA contributions (less any
amounts previously withdrawn tax-free) to the total account balances of all
IRAs held by the individual at the end of the tax year (including rollover
IRAs) plus all IRA distributions made during such tax year. The resulting
ratio is then multiplied by all distributions from the IRA during that tax
year to determine the nontaxable portion of each distribution.
In addition, a distribution (other than a required minimum distribution
received after age 70 1/2) is not
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taxable if (1) the amount received is a return of excess contributions which
are withdrawn, as described under "Excess Contributions" above, (2) the
entire amount received is rolled over to another individual retirement
arrangement (see "Tax-Free Transfers and Rollovers" above) or (3) in certain
limited circumstances, where the IRA acts as a "conduit," the entire amount
is paid into a qualified plan or TSA that permits rollover contributions.
Distributions from an IRA are not entitled to the special favorable five-year
averaging method (or, in certain cases, favorable ten-year averaging and
long-term capital gain treatment) available in certain cases to distributions
from qualified plans.
Required Minimum Distributions
The minimum distribution rules require IRA owners to start taking annual
distributions from their retirement plans by age 70 1/2. The distribution
requirements are designed to provide for distribution of the owner's interest
in the IRA over the owner's life expectancy. Whether the correct amount has
been distributed is calculated on a year by year basis; there are no
provisions in the Code to allow amounts taken in excess of the required
amount to be carried over or carried back and credited to other years.
Generally, an individual must take the first required minimum distribution
with respect to the calendar year in which the individual turns age 70 1/2.
The individual has the choice to take the first required minimum distribution
during the calendar year he or she turns age 70 1/2, or to delay taking it
until the three month (January 1-April 1) period in the next calendar year.
(Distributions must commence no later than the "Required Beginning Date,"
which is the April 1st of the calendar year following the calendar year in
which the individual turns age 70 1/2.) If the individual chooses to delay
taking the first annual minimum distribution, then the individual will have
to take two minimum distributions in that year--the delayed one for the first
year and the one actually for that year. Once minimum distributions begin,
they must be made at some time every year.
There are two approaches to taking minimum distributions--"account based" or
"annuity based"--and there are a number of distribution options in both of
these categories. These choices are intended to give individuals a great deal
of flexibility to provide for themselves and their families.
An account based minimum distribution approach may be a lump sum payment, or
periodic withdrawals made over a period which does not extend beyond the
individual's life expectancy or the joint life expectancies of the individual
and a designated beneficiary. An annuity based approach involves application
of the Annuity Account Value to an annuity for the life of the individual or
the joint lives of the individual and a designated beneficiary, or for a
period certain not extending beyond applicable life expectancies.
You should discuss with your tax adviser which minimum distribution options
are best for your own personal situation. Individuals who are participants in
more than one tax-favored retirement plan may be able to choose different
distribution options for each plan.
Your required minimum distribution for any taxable year is calculated by
taking into account the required minimum distribution from each of your
individual retirement arrangements. The IRS, however, does not require that
you make the required distribution from each individual retirement
arrangement that you maintain. As long as the total amount distributed
annually satisfies your overall minimum distribution requirement, you may
choose to take your annual required distribution from any one or more
individual retirement arrangements that you maintain.
An individual may recompute his or her minimum distribution amount each year
based on the individual's current life expectancy as well as that of the
spouse. No recomputation is permitted, however, for a beneficiary other than
a spouse. If there is an insufficient distribution in any year, a 50% tax may
be imposed on the amount by which the minimum required to be distributed
exceeds the amount actually distributed. The penalty tax may be waived by the
Secretary of the Treasury in certain limited circumstances. Failure to have
distributions made as the Code and Treasury regulations require may result in
disqualification of your IRA. See "Tax Penalty for Insufficient
Distributions" below.
Except as described in the next sentence, if the individual dies after
distribution in the form of an annuity has begun, or after the Required
Beginning Date, payment of the remaining interest must be made at least as
rapidly as under the method used prior to the individual's death. (The IRS
has indicated that an exception to the rule that payment of the remaining
interest must be made at least as rapidly as under the method used prior to
the individual's death applies if the beneficiary of the IRA is the surviving
spouse. In some circumstances, the surviving spouse may elect to "make the
IRA his or her own" and halt distributions until he or she reaches age 70
1/2).
If an individual dies before the Required Beginning Date and before
distributions in the form of an
48
<PAGE>
<PAGE>
annuity begin, distributions of the individual's entire interest under the
Certificate must be completed within five years after death, unless payments
to a designated beneficiary begin within one year of the individual's death
and are made over the beneficiary's life or over a period certain which does
not extend beyond the beneficiary's life expectancy.
If the surviving spouse is the designated beneficiary, the spouse may delay
the commencement of such payments up until the individual would have attained
70 1/2. In the alternative, a surviving spouse may elect to roll over the
inherited IRA into the surviving spouse's own IRA.
Taxation of Death Benefits
Distributions received by a beneficiary are generally given the same tax
treatment the individual would have received if distribution had been made to
the individual.
If you elect to have your spouse be the sole primary beneficiary and to be
the successor Annuitant and Certificate Owner, then your surviving spouse
automatically becomes both the successor Certificate Owner and Annuitant, and
no death benefit is payable until the surviving spouse's death.
Guaranteed Minimum Death Benefit
The Code provides that no part of an individual retirement account may be
invested in life insurance contracts. Treasury Regulations provide that an
individual retirement account may be invested in an annuity contract which
provides a death benefit of the greater of premiums paid or the contract's
cash value. Your Certificate provides a minimum death benefit guarantee that
in certain circumstances may be greater than either of contributions made or
the Annuity Account Value. Although there is no ruling regarding the type of
minimum death benefit guarantee provided by the Certificate, Equitable Life
believes that the Certificate's minimum death benefit guarantee should not
adversely affect the qualification of the Certificate as an IRA.
Nevertheless, it is possible that the IRS could disagree, or take the
position that some portion of the charge in the Certificate for the minimum
death benefit guarantee should be treated for Federal income tax purposes as
a taxable partial withdrawal from the Certificate. If this were so, such a
deemed withdrawal would also be subject to tax penalty for Certificate Owners
under age 59 1/2.
Tax Considerations for the IRA Assured Payment Option and IRA APO Plus
Although the Life Contingent Annuity does not have a Cash Value, it will be
assigned a value for tax purposes which will generally change each year. This
value must be taken into account when determining the amount of required
minimum distributions from your IRA even though the Life Contingent Annuity
may not be providing a source of funds to satisfy such required minimum
distribution. Accordingly, before you apply any IRA funds under the IRA
Assured Payment Option or IRA APO Plus or terminate such Options, you should
be aware of the tax considerations discussed below. Consult with your tax
adviser to determine the impact of electing the IRA Assured Payment Option
and IRA APO Plus in view of your own particular situation.
When funds have been allocated to the Life Contingent Annuity, you will
generally be required to determine your required minimum distribution by
annually recalculating your life expectancy. The IRA Assured Payment Option
and IRA APO Plus will not be available if you have previously made a
different election. Recalculation is no longer required once the only
payments you or your spouse receive are under the Life Contingent Annuity.
If prior to the date payments are to start under the Life Contingent Annuity,
you surrender your Certificate, or withdraw any remaining Annuity Account
Value, it may be necessary for you to satisfy your required minimum
distribution by accelerating the start date of payments for your Life
Contingent Annuity, or to the extent available, take distributions from other
IRA funds you may have. Alternatively you may convert your IRA Life
Contingent Annuity under the IRA Rollover to a non-qualifed Life Contingent
Annuity. This would be viewed as a distribution of the value of the Life
Contingent Annuity from the IRA, and therefore, would be a taxable event.
However, since the Life Contingent Annuity would no longer be part of an IRA,
its value would not have to be taken into account in determining future
required minimum distributions.
If you have elected a Joint and Survivor form of the Life Contingent Annuity,
the joint Annuitant must be your spouse. You must determine your required
minimum distribution by annually recalculating both your life expectancy and
your spouse's life expectancy. The IRA Assured Payment Option and IRA APO
Plus will not be available if you have previously made a different election.
Recalculation is no longer required once the only payments you or your spouse
receive are under the Life Contingent Annuity. The value of such an annuity
will change in the event of your death or the death of your spouse. For this
reason, it is important that we be informed if you or your spouse dies before
the Life Contingent Annuity has started payments so that a lower valuation
can
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be made. Otherwise a higher tax value may result in an overstatement of the
amount that would be necessary to satisfy your required minimum distribution
amount.
Allocations of funds to the Life Contingent Annuity may prevent the
Certificate from later receiving "conduit" IRA treatment. See "Tax-Free
Transfers and Rollovers" above.
Prohibited Transaction
An IRA may not be borrowed against or used as collateral for a loan or other
obligation. If the IRA is borrowed against or used as collateral, its
tax-favored status will be lost as of the first day of the tax year in which
the event occurred. If this happens, the individual must include in Federal
gross income for that year an amount equal to the fair market value of the
IRA Certificate as of the first day of that tax year, less the amount of any
nondeductible contributions not previously withdrawn. Also, the early
distribution penalty tax of 10% will apply if the individual has not reached
age 59 1/2 before the first day of that tax year. See "Penalty Tax on Early
Distributions" below.
PENALTY TAX ON EARLY DISTRIBUTIONS
The taxable portion of IRA distributions will be subject to a 10% penalty tax
unless the distribution is made (1) on or after your death, (2) because you
have become disabled, (3) on or after the date when you reach age 59 1/2, or
(4) in accordance with the exception outlined below if you are under 59 1/2.
A payout over your life or life expectancy (or joint and survivor lives or
life expectancies), which is part of a series of substantially equal periodic
payments made at least annually, is also not subject to penalty tax. To
permit you to meet this exception, Equitable Life has two options:
Substantially Equal Payment Withdrawals and the IRA Assured Payment Option
with level payments, both of which are described in Part 6. If you are a
Rollover IRA Certificate Owner who will be under age 59 1/2 as of the date
the first payment is expected to be received and you choose either option,
Equitable Life will calculate the substantially equal annual payments under a
method we will select based on guidelines issued by the IRS (currently
contained in IRS Notice 89-25, Question and Answer 12). Although
Substantially Equal Payment Withdrawals and IRA Assured Payment Option level
payments are not subject to the 10% penalty tax, they are taxable as
discussed in "Distributions from IRA Certificates," above. Once Substantially
Equal Payment Withdrawals or IRA Assured Payment Option level payments begin,
the distributions should not be stopped or changed until the later of your
attaining age 59 1/2 or five years after the date of the first distribution,
or the penalty tax, including an interest charge for the prior penalty
avoidance, may apply to all withdrawals. Also, it is possible that the IRS
could view any additional withdrawal or payment you take from your
Certificate as changing your pattern of Substantially Equal Payment
Withdrawals or IRA Assured Payment Option payments for purposes of
determining whether the penalty applies.
Where a taxpayer under age 59 1/2 purchases an individual retirement annuity
contract calling for substantially equal periodic payments during a fixed
period, continuing afterwards under a joint life contingent annuity with a
reduced payment to the survivor (e.g., a joint and 50% to survivor), the
question might be raised whether payments will not be substantially equal for
the joint lives of the taxpayer and survivor, as the payments will be reduced
at some point. In issuing our information returns, we code the substantially
equal periodic payments from such a contract as eligible for an exception
from the early distribution penalty. We believe that any change in payments
to the survivor would come within the statutory provision covering change of
payments on account of death. As there is no direct authority on this point,
however, if you are under age 59 1/2, you should discuss this item with your
own tax adviser when electing a reduced survivorship option.
TAX PENALTY FOR INSUFFICIENT
DISTRIBUTIONS
Failure to make required distributions discussed above in "Required Minimum
Distributions" may cause the disqualification of the IRA. Disqualification
may result in current taxation of your entire benefit. In addition a 50%
penalty tax may be imposed on the difference between the required
distribution amount and the amount actually distributed, if any.
We do not automatically make distributions from a Certificate before the
Annuity Commencement Date unless a request has been made. It is your
responsibility to comply with the minimum distribution rules. We will notify
you when our records show that your age 70 1/2 is approaching. If you do not
select a method, we will assume you are taking your minimum distribution from
another IRA that you maintain. You should consult with your tax adviser
concerning these rules and their proper application to your situation.
TAX PENALTY FOR EXCESS DISTRIBUTIONS OR ACCUMULATION
A 15% excise tax applies to an individual's aggregate excess distributions
from all tax-favored retirement plans (including IRAs). The excise tax is in
addition to the ordinary income tax due but is reduced by the amount (if any)
of the early distribution penalty tax imposed by the Code. The aggregate
distributions in any year will be subject to excise tax if they exceed an
<PAGE>
indexed amount ($155,000 in 1996).
In addition, in certain cases the estate tax imposed on a deceased
individual's estate will be increased if
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the accumulated value of the individual's interest in qualified annuities and
tax favored retirement plans is excessive.
FEDERAL AND STATE INCOME TAX
WITHHOLDING
Equitable Life is required to withhold Federal income tax from IRA
distributions, unless the recipient elects not to be subject to income tax
withholding. The rate of withholding will depend on the type of distribution
and, in certain cases, the amount of the distribution. Special withholding
rules apply to foreign recipients and United States citizens residing outside
the United States. If a recipient does not have sufficient income tax
withheld or does not make sufficient estimated income tax payments, however,
the recipient may incur penalties under the estimated income tax rules.
Recipients should consult their tax advisers to determine whether they should
elect out of withholding. Requests not to withhold Federal income tax must be
made in writing prior to receiving benefits under the Certificate. Our
Processing Office will provide forms for this purpose. No election out of
withholding is valid unless the recipient provides us with the correct
taxpayer identification number and a United States residence address.
Certain states have indicated that income tax withholding will apply to
payments made from the Certificate to residents. In some states, a recipient
may elect out of state withholding. Generally, an election out of Federal
withholding will also be considered an election out of state withholding. If
you need more information concerning a particular state or any required
forms, call our Processing Office at the toll-free number and consult your
tax adviser.
Periodic payments are generally subject to wage-bracket type withholding (as
if such payments were payments of wages by an employer to an employee) unless
the recipient elects no withholding. If a recipient does not elect out of
withholding or does not specify the number of withholding exemptions,
withholding will generally be made as if the recipient is married and
claiming three withholding exemptions. There is an annual threshold of
taxable income from periodic annuity payments which is exempt from
withholding based on this assumption. For 1996, a recipient of periodic
payments (e.g., monthly or annual payments) which total less than a $14,075
taxable amount will generally be exempt from Federal income tax withholding,
unless the recipient specifies a different choice of withholding exemptions.
A withholding election may be revoked at any time and remains effective until
revoked. If a recipient fails to provide a correct taxpayer identification
number, withholding is made as if the recipient is single with no exemptions.
A recipient of a non-periodic distribution (total or partial) will generally
be subject to withholding at a flat 10% rate. A recipient who provides a
United States residence address and a correct taxpayer identification number
will generally be permitted to elect not to have tax withheld.
All recipients receiving periodic and non-periodic payments will be further
notified of the withholding requirements and of their right to make
withholding elections.
OTHER WITHHOLDING
As a general rule, if death benefits are payable to a person two or more
generations younger than the Certificate Owner, a Federal generation skipping
tax may be payable with respect to the benefit at rates similar to the
maximum estate tax rate in effect at the time. The generation skipping tax
provisions generally apply to transfers which would also be subject to the
gift and estate tax rules. Individuals are generally allowed an aggregate
generation skipping tax exemption of $1 million. Because these rules are
complex, you should consult with your tax adviser for specific information,
especially where benefits are passing to younger generations, as opposed to a
spouse or child.
If we believe a benefit may be subject to generation skipping tax we may be
required to withhold for such tax unless we receive acceptable written
confirmation that no such tax is payable.
IMPACT OF TAXES TO EQUITABLE LIFE
The Certificates provide that Equitable Life may charge the Separate Account
for taxes. Equitable Life can set up reserves for such taxes.
TRANSFERS AMONG INVESTMENT OPTIONS
Transfers among the Investment Funds or between the Guaranteed Period Account
and one or more Investment Funds are not taxable.
TAX CHANGES
The United States Congress has in the past considered and may in the future
consider proposals for legislation that, if enacted, could change the tax
treatment of annuities and individual retirement arrangements. In addition,
the Treasury Department may amend existing regulations, issue new
regulations, or adopt new interpretations of existing laws. State tax laws
or, if you are not a United States resident, foreign tax laws, may affect the
tax consequences to you or the beneficiary. These laws may change from time
to time without notice and, as a result, the tax consequences may be altered.
There is no way of predicting whether, when or in what form any such change
would be adopted.
Any such change could have retroactive effects regardless of the date of
<PAGE>
enactment. We suggest you consult your legal or tax adviser.
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PART 10: INDEPENDENT ACCOUNTANTS
The consolidated financial statements and consolidated financial statement
schedules of Equitable Life for the years ended December 31, 1995 and 1994
included in Equitable Life's Annual Report on Form 10-K, incorporated by
reference in the prospectus, have been examined by Price Waterhouse LLP,
independent accountants, whose reports thereon are incorporated herein by
reference. Such consolidated financial statements and consolidated financial
statement schedules have been incorporated herein by reference in reliance
upon the reports of Price Waterhouse LLP given upon their authority as
experts in accounting and auditing.
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APPENDIX I: MARKET VALUE ADJUSTMENT EXAMPLE
- -----------------------------------------------------------------------------
The example below shows how the market value adjustment would be determined
and how it would be applied to a withdrawal, assuming that $100,000 were
allocated on February 15, 1997 to a Guarantee Period with an Expiration Date
of February 15, 2006 at a Guaranteed Rate of 7.00% resulting in a Maturity
Value at the Expiration Date of $183,846, and further assuming that a
withdrawal of $50,000 were made on February 15, 2001.
<TABLE>
<CAPTION>
ASSUMED
GUARANTEED RATE ON
FEBRUARY 15, 2001
----------------------
5.00% 9.00%
---------- ----------
<S> <C> <C>
As of February 15, 2001 (Before Withdrawal)
- -------------------------------------------
(1) Present Value of Maturity Value, also
Annuity Account Value .................. $144,048 $119,487
(2) Guaranteed Period Amount ............... 131,080 131,080
(3) Market Value Adjustment: (1)-(2) ...... 12,968 (11,593)
On February 15, 2001 (After Withdrawal)
- -------------------------------------------
(4) Portion of (3) Associated
with Withdrawal: (3) x [$50,000 / (1)] $ 4,501 $ (4,851)
(5) Reduction in Guaranteed
Period Amount: [$50,000-(4)] ........... 45,499 54,851
(6) Guaranteed Period Amount: (2)-(5) ..... 85,581 76,229
(7) Maturity Value ......................... 120,032 106,915
(8) Present Value of (7), also
Annuity Account Value .................. 94,048 69,487
</TABLE>
You should note that under this example if a withdrawal is made when rates
have increased (from 7.00% to 9.00% in the example), a portion of a negative
market value adjustment is realized. On the other hand, if a withdrawal is
made when rates have decreased (from 7.00% to 5.00% in the example), a
portion of a positive market value adjustment is realized.
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APPENDIX II: GUARANTEED MINIMUM DEATH BENEFIT (GMDB) EXAMPLE
- -----------------------------------------------------------------------------
Under the Certificates the death benefit is equal to the sum of:
(1) the Annuity Account Value in the Investment Funds, or, if greater,
the GMDB (see "GMDB" in Part 5); and
(2) the death benefit provided with respect to the Guaranteed Period
Account (see "Death Benefit Amount" in Part 4).
The following is an example illustrating the calculation of the GMDB.
Assuming $100,000 is allocated to the Investment Funds (with no allocation to
the Fixed Income Series), no subsequent contributions, no transfers and no
withdrawals, the GMDB for an Annuitant age 45 would be calculated as follows:
<TABLE>
<CAPTION>
END OF
CONTRACT ANNUITY ACCOUNT NON-NEW YORK
YEAR VALUE GMDB(1) NEW YORK GMDB
- ---------- --------------- -------------- -------------
<S> <C> <C> <C>
1 $105,000 $106,000 $105,000(2)
2 $108,675 $112,360 $108,675(2)
3 $124,976 $119,102 $119,102(3)
4 $135,912 $126,248 $126,248(3)
5 $149,503 $133,823 $133,823(3)
6 $149,503 $141,852 $141,852(3)
7 $161,463 $150,363 $161,463(3)
8 $161,463 $159,385 $161,463(2)
</TABLE>
The Annuity Account Values for Contract Years 1 through 8 are determined
based on hypothetical rates of return of 5.00%, 3.50%, 15.00%, 8.75%, 10.00%,
0.00%, 8.00% and 0.00%, respectively.
NON-NEW YORK
(1) For Contract Years 1 through 8, the GMDB equals the initial contribution
increased by 6%.
NEW YORK
(2) At the end of Contract Years 1 and 2, and again at the end of Contract
Year 8, the GMDB is equal to the Annuity Account Value.
(3) At the end of Contract Years 3 through 6, the GMDB is equal to the
contribution increased by 6% instead of the Annuity Account Value, since
the GMDB cannot be greater than this amount. However, at the end of the
seventh Contract Year the GMDB is equal to the Annuity Account Value of
$161,463 even though it is greater than the contribution increased at 6%
($150,363) because the cap does not apply on the seventh Processing
Date.
54
<PAGE>
<PAGE>
APPENDIX III: GMIB EXAMPLES
- -----------------------------------------------------------------------------
The GMIB is equal to:
(A) the greater of
(i) the Annuity Account Value in the Investment Funds, and
(ii) an amount equal to the GMDB (reduced by any remaining withdrawal
charges);
divided by
(B) the guaranteed maximum annuity purchase rates.
The examples below assume a male age 60 has purchased the Rollover IRA with
an initial contribution of $100,000 that is allocated 100% to the Investment
Funds (excluding the Fixed Income Series). The GMDB in the 10th Contract Year
is $179,085 at 6% interest. Assuming hypothetical rates of return (after
deduction of charges) in the Investment Funds of 0% in Example 1 and 8% in
Example 2 during the 10 Contract Years, the GMIB in the 10th Contract Year
(assuming level payment under the IRA Assured Payment Option) would be as
follows:
<TABLE>
<CAPTION>
EXAMPLE 1 EXAMPLE 2
----------- -----------
<S> <C> <C>
(1) Hypothetical Rate of Return ... 0% 8%
(2) Annuity Account Value as of the
Contract Date .................. $100,000 $100,000
(3) The greater of (i) the GMDB and
(ii) the Annuity Account Value
as of the 10th Contract Date
anniversary .................... $179,085 $215,892
(4) Guaranteed Maximum Annuity
Purchase Rates for level
payments under the IRA Assured
Payment Option ................. $ 14.73 $ 14.73
(5) GMIB as of 10th Contract Date
anniversary ((3) / (4)) ....... $ 12,160 $ 14,659
</TABLE>
In Example 1, the GMDB which is higher than the Annuity Account Value would
provide a GMIB of $12,160. In Example 2, the Annuity Account Value, which at
this point is higher than the GMDB, would provide a GMIB of $14,659.
The rates of return discussed above are for illustrative purposes only and
are not intended to represent an expected or guaranteed rate of return. Your
investment results will vary. The level of GMIB under the IRA Assured Payment
Option will also depend on the guaranteed maximum annuity purchase rates as
of the Transaction Date and the type of payments selected. The examples
assume no transfers or withdrawals, which would affect the GMDB and, thus,
the GMIB.
55
<PAGE>
<PAGE>
APPENDIX IV: EXAMPLE OF PAYMENTS UNDER THE IRA ASSURED PAYMENT
OPTION AND IRA APO PLUS
- -----------------------------------------------------------------------------
The second column in the chart below illustrates the payments for a male age
70 who purchased the IRA Assured Payment Option on October 1, 1996 with a
single contribution of $100,000, with increasing annual payments. The
payments are to commence on February 15, 1997. It assumes that the fixed
period is 15 years and that the Life Contingent Annuity will provide payments
on a Single Life basis. Based on Guaranteed Rates for the Guarantee Periods
and the current purchase rate for the Life Contingent Annuity, on October 1,
1996, the initial payment would be $7,048.32 and would increase in each three
year period to a final payment of $10,319.45. The first payment under the
Life Contingent Annuity would be $11,351.39.
Alternatively as shown in the third and fourth columns, this individual could
purchase IRA APO Plus with the same $100,000 contribution, with the same
fixed period and the Life Contingent Annuity on a Single Life basis. Based on
Guaranteed Rates for the Guarantee Periods and the current purchase rate for
the Life Contingent Annuity, on October 1, 1996, the same initial payment of
$7,048.32 would be purchased under IRA APO Plus. However, unlike the payment
under the IRA Assured Payment Option that will increase every three years,
this initial payment under IRA APO Plus is not guaranteed to increase.
Therefore, only $79,640.09 is needed to purchase the initial payment stream,
and the remaining $20,359.91 is invested in the Investment Funds according to
the Certificate Owner's instructions. Any future increase in payments under
IRA APO Plus will depend on the investment performance in the Investment
Funds.
Assuming hypothetical average annual rates of return of 0% and 8% (after
deduction of charges) for the Investment Funds, the Annuity Account Value in
the Investment Funds would grow to $20,359.91 and $25,647.63 respectively
after three years. A portion of this amount is used to purchase the increase
in the payments at the beginning of the fourth year. The remainder will stay
in the Investment Funds to be drawn upon for the purchase of increases in
payments at the end of each third year thereafter during the fixed period and
at the end of the fixed period under the Life Contingent Annuity. Based on
Guaranteed Rates for the Guarantee Periods and purchase rates for the Life
Contingent Annuity as of October 1, 1996, the third and fourth columns
illustrate the increasing payments that would be purchased under IRA APO Plus
assuming 0% and 8% rates of return respectively.
Under both options, while the Certificate Owner is living payments increase
annually after the 16th year under the Life Contingent Annuity based on the
increase, if any, in the Consumer Price Index, but in no event greater than
3% per year.
ANNUAL PAYMENTS
<TABLE>
<CAPTION>
GUARANTEED INCREASING PAYMENTS ILLUSTRATIVE ILLUSTRATIVE
UNDER THE IRA ASSURED PAYMENT PAYMENTS UNDER IRA PAYMENTS UNDER IRA
YEARS OPTION APO PLUS AT 0% APO PLUS AT 8%
- ------- ------------------------------ ------------------ ------------------
<S> <C> <C> <C>
1-3 $ 7,048.32 $7,048.32 $ 7,048.32
4-6 7,753.15 8,336.74 8,800.85
7-9 8,528.47 8,336.74 8,817.96
10-12 9,381.31 8,529.34 9,791.83
13-15 10,319.45 8,529.34 9,791.83
16 11,351.39 8,723.31 10,919.35
</TABLE>
As described above, a portion of the illustrated contribution is applied to
the Life Contingent Annuity. This amount will generally be larger under the
IRA Assured Payment Option than under IRA APO Plus, and conversely a smaller
portion of the contribution will be allocated to Guarantee Periods under the
former than the latter. In this illustration, $82,069.88 is allocated under
the IRA Assured Payment Option to the Guarantee Periods and under IRA APO
Plus, $89,906.43 is allocated to the Guarantee Periods and the Investment
Funds. The balance of the $100,000 ($17,930.12 and $10,093.57, respectively)
is applied to the Life Contingent Annuity.
The rates of return of 0% and 8% are for illustrative purposes only and are
not intended to represent an expected or guaranteed rate of return. Your
investment results will vary. Payments will also depend on the Guaranteed
Rates and Life Contingent Annuity purchase rates in effect as of the
Transaction Date. It is assumed that no Lump Sum Withdrawals are taken.
56
<PAGE>
<PAGE>
APPENDIX V: IRS TAX DEDUCTION TABLE
- -----------------------------------------------------------------------------
If your Maximum Permissible Dollar Deduction is $2,000, use this table to
estimate the amount of your contribution which will be deductible.
<TABLE>
<CAPTION>
EXCESS AGI DEDUCTION EXCESS AGI DEDUCTION EXCESS AGI DEDUCTION EXCESS AGI DEDUCTION
- ------------ ----------- ------------ ----------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 0 $2,000 $2,550 $1,490 $5,050 $990 $ 7,550 $490
50 1,990 2,600 1,480 5,100 980 7,600 480
100 1,980 2,650 1,470 5,150 970 7,650 470
150 1,970 2,700 1,460 5,200 960 7,700 460
200 1,960 2,750 1,450 5,250 950 7,750 450
250 1,950 2,800 1,440 5,300 940 7,800 440
300 1,940 2,850 1,430 5,350 930 7,850 430
350 1,930 2,900 1,420 5,400 920 7,900 420
400 1,920 2,950 1,410 5,450 910 7,950 410
450 1,910 3,000 1,400 5,500 900 8,000 400
500 1,900 3,050 1,390 5,550 890 8,050 390
550 1,890 3,100 1,380 5,600 880 8,100 380
600 1,880 3,150 1,370 5,650 870 8,150 370
650 1,870 3,200 1,360 5,700 860 8,200 360
700 1,860 3,250 1,350 5,750 850 8,250 350
750 1,850 3,300 1,340 5,800 840 8,300 340
800 1,840 3,350 1,330 5,850 830 8,350 330
850 1,830 3,400 1,320 5,900 820 8,400 320
900 1,820 3,450 1,310 5,950 810 8,450 310
950 1,810 3,500 1,300 6,000 800 8,500 300
1,000 1,800 3,550 1,290 6,050 790 8,550 290
1,050 1,790 3,600 1,280 6,100 780 8,600 280
1,100 1,780 3,650 1,270 6,150 770 8,650 270
1,150 1,770 3,700 1,260 6,200 760 8,700 260
1,200 1,760 3,750 1,250 6,250 750 8,750 250
1,250 1,750 3,800 1,240 6,300 740 8,800 240
1,300 1,740 3,850 1,230 6,350 730 8,850 230
1,350 1,730 3,900 1,220 6,400 720 8,900 220
1,400 1,720 3,950 1,210 6,450 710 8,950 210
1,450 1,710 4,000 1,200 6,500 700 9,000 200
1,500 1,700 4,050 1,190 6,550 690 9,050 200
1,550 1,690 4,100 1,180 6,600 680 9,100 200
1,600 1,680 4,150 1,170 6,650 670 9,150 200
1,650 1,670 4,200 1,160 6,700 660 9,200 200
1,700 1,660 4,250 1,150 6,750 650 9,250 200
1,750 1,650 4,300 1,140 6,800 640 9,300 200
1,800 1,640 4,350 1,130 6,850 630 9,350 200
1,850 1,630 4,400 1,120 6,900 620 9,400 200
1,900 1,620 4,450 1,110 6,950 610 9,450 200
1,950 1,610 4,500 1,100 7,000 600 9,500 200
2,000 1,600 4,550 1,090 7,050 590 9,550 200
2,050 1,590 4,600 1,080 7,100 580 9,600 200
2,100 1,580 4,650 1,070 7,150 570 9,650 200
2,150 1,570 4,700 1,060 7,200 560 9,700 200
2,200 1,560 4,750 1,050 7,250 550 9,750 200
2,250 1,550 4,800 1,040 7,300 540 9,800 200
2,300 1,540 4,850 1,030 7,350 530 9,850 200
2,350 1,530 4,900 1,020 7,400 520 9,900 200
2,400 1,520 4,950 1,010 7,450 510 9,950 200
2,450 1,510 5,000 1,000 7,500 500 10,000 0
2,500 1,500
<FN>
- ------------
Excess AGI = Your AGI minus your THRESHOLD LEVEL:
If you are single, your Threshold Level is $25,000.
If you are married, your Threshold Level is $40,000.
If you are married and file a separate tax return, your
Excess AGI = your AGI.
</TABLE>
57
<PAGE>
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
PAGE
--------
Part 1: Minimum Distribution Withdrawals 2
Part 2: Accumulation Unit Values 2
Part 3: Annuity Unit Values 2
Part 4: Custodian and Independent Accountants 3
Part 5: Money Market Fund and Intermediate Government
Securities Fund Yield Information 3
Part 6: Long-Term Market Trends 5
Part 7: Financial Statements 7
</TABLE>
HOW TO OBTAIN A ROLLOVER IRA STATEMENT OF ADDITIONAL
INFORMATION
Send this request form to:
Equitable Life
Income Management Group
P.O. Box 1547
Secaucus, NJ 07096-1547
Please send me an INCOME MANAGER Rollover IRA SAI:
---------------------------------------------------------
Name
---------------------------------------------------------
Address
---------------------------------------------------------
City State Zip
58
<PAGE>
<PAGE>
INCOME MANAGER(SM)
ACCUMULATOR PROSPECTUS
DATED OCTOBER , 1996,
COMBINATION VARIABLE AND FIXED DEFERRED ANNUITY CERTIFICATES
Issued By:
The Equitable Life Assurance Society of the United States
This prospectus describes certificates The Equitable Life Assurance Society
of the United States (EQUITABLE LIFE, WE, OUR and US) offers under a
combination variable and fixed deferred annuity contract (ACCUMULATOR) issued
on a group basis or as individual contracts. Enrollment under a group
contract will be evidenced by issuance of a certificate. Certificates and
individual contracts each will be referred to as "Certificates." Accumulator
Certificates are used for after-tax contributions to a non-qualified annuity.
A minimum initial contribution of $10,000 is required to put the Certificate
into effect.
The Accumulator is designed to provide retirement income at a future date.
Contributions accumulate on a tax-deferred basis and can be later distributed
under a number of different methods which are designed to be responsive to
the owner's (CERTIFICATE OWNER, YOU and YOUR) objectives.
The Accumulator offers investment options (INVESTMENT OPTIONS) that permit
you to create your own strategies. These Investment Options include 9
variable investment funds (INVESTMENT FUNDS) and each GUARANTEE PERIOD in the
GUARANTEED PERIOD ACCOUNT.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
INVESTMENT FUNDS
GUARANTEE PERIODS
- ------------------------------------------------------------------------------ EXPIRATION DATES:
ASSET ALLOCATION SERIES: EQUITY SERIES: FIXED INCOME SERIES:
- ---------------------------- ---------------------- ------------------------
O CONSERVATIVE INVESTORS O GROWTH & INCOME O MONEY MARKET FEBRUARY 15,
O GROWTH INVESTORS O COMMON STOCK O INTERMEDIATE O 1997 THROUGH 2007
O GLOBAL GOVERNMENT SECURITIES
O INTERNATIONAL
O AGGRESSIVE STOCK
</TABLE>
We invest each Investment Fund in shares of a corresponding portfolio
(PORTFOLIO) of The Hudson River Trust (TRUST), a mutual fund whose shares are
purchased by separate accounts of insurance companies. The prospectus for the
Trust, which accompanies this prospectus, describes the investment
objectives, policies and risks of the Portfolios.
Amounts allocated to a Guarantee Period accumulate on a fixed basis and are
credited with interest at a rate we set (GUARANTEED RATE) for the entire
period. On each business day (BUSINESS DAY) we will determine the Guaranteed
Rates available for amounts newly allocated to Guarantee Periods. A market
value adjustment (positive or negative) will be made for withdrawals,
transfers, surrender and certain other transactions from a Guarantee Period
before its expiration date (EXPIRATION DATE). Each Guarantee Period has its
own Guaranteed Rates.
You may choose from a variety of payout options, including variable annuities
and fixed annuities.
This prospectus provides information about the Accumulator that prospective
investors should know before investing. You should read it carefully and
retain it for future reference. The prospectus is not valid unless
accompanied by a current prospectus for the Trust, which you should also read
carefully.
Registration statements relating to Separate Account No. 45 (SEPARATE
ACCOUNT) and interests under the Guarantee Periods have been filed with the
Securities and Exchange Commission (SEC). The statement of additional
information (SAI), dated October , 1996, which is part of the registration
statement for the Separate Account, is available free of charge upon request
by writing to our Processing Office or calling 1-800-789-7771, our toll-free
number. The SAI has been incorporated by reference into this prospectus. The
Table of Contents for the SAI appears at the back of this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE CERTIFICATES ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY. THEY ARE
NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE NOT BANK GUARANTEED.
THEY ARE SUBJECT TO INVESTMENT RISKS AND POSSIBLE LOSS OF PRINCIPAL INVESTED.
Copyright 1996
<PAGE>
The Equitable Life Assurance Society of the United States, New York, New York
10019.
All rights reserved.
<PAGE>
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Equitable Life's Annual Report on Form 10-K for the year ended December
31, 1995 is incorporated herein by reference.
All documents or reports filed by Equitable Life pursuant to Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 (EXCHANGE
ACT) after the date hereof and prior to the termination of the offering of
the securities offered hereby shall be deemed to be incorporated by reference
in this prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this prospectus to the extent that a statement contained
herein or in any other subsequently filed document which also is or is deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as
so modified and superseded, to constitute a part of this prospectus.
Equitable Life files its Exchange Act documents and reports, including its
annual and quarterly reports on Form 10-K and Form 10-Q, electronically
pursuant to EDGAR under CIK No. 0000727920.
Equitable Life will provide without charge to each person to whom this
prospectus is delivered, upon the written or oral request of such person, a
copy of any or all of the foregoing documents incorporated herein by
reference (other than exhibits not specifically incorporated by reference
into the text of such documents). Requests for such documents should be
directed to The Equitable Life Assurance Society of the United States, 787
Seventh Avenue, New York, New York 10019. Attention: Corporate Secretary
(telephone: (212) 554-1234).
2
<PAGE>
<PAGE>
PROSPECTUS TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
GENERAL TERMS PAGE 4
FEE TABLE PAGE 5
Condensed Financial Information 7
PART 1: SUMMARY PAGE 8
What is the INCOME MANAGER? 8
Investment Options 8
Contributions 8
Transfers 8
Free Look Period 8
Services We Provide 8
Withdrawal Options 9
Death Benefits 9
Guaranteed Minimum Income
Benefit (GMIB) 9
Surrendering the Certificates 9
Income Annuity Options 9
Taxes 9
Deductions from Annuity
Account Value 9
Deductions from Investment
Funds 10
Trust Charges to Portfolios 10
PART 2: EQUITABLE LIFE, THE SEPARATE
ACCOUNT AND THE INVESTMENT FUNDS PAGE 11
Equitable Life 11
Separate Account No. 45 11
The Trust 11
The Trust's Investment Adviser 12
Investment Policies and Objectives of the
Trust's Portfolios 13
PART 3: INVESTMENT PERFORMANCE PAGE 14
Performance Data for a Certificate 14
Rate of Return Data for Investment
Funds 15
Communicating Performance Data 18
Money Market Fund and Intermediate Government
Securities Fund
Yield Information 19
PART 4: THE GUARANTEED PERIOD ACCOUNT PAGE 20
Guarantee Periods 20
Market Value Adjustment for Transfers,
Withdrawals or Surrender Prior to the
Expiration Date 21
Death Benefit Amount 22
Investments 22
PART 5: PROVISIONS OF THE CERTIFICATES
AND SERVICES WE PROVIDE PAGE 23
Availability of the Certificates 23
Contributions Under the Certificates 23
Methods of Payment 23
Allocation of Contributions 23
Free Look Period 24
<PAGE>
<PAGE>
Annuity Account Value 24
Transfers Among Investment Options 25
Dollar Cost Averaging 25
Withdrawal Options 26
Death Benefit 28
When the Certificate Owner Dies
Before the Annuitant 30
GMIB 30
Cash Value 31
Surrendering the Certificates to
Receive the Cash Value 31
Income Annuity Options 31
Assured Payment Plan 32
When Payments are Made 33
Assignment 33
Distribution of the Certificates 33
PART 6: DEDUCTIONS AND CHARGES PAGE 34
Charges Deducted from the Annuity
Account Value 34
Charges Deducted from the Investment
Funds 35
Trust Charges to Portfolios 36
Group or Sponsored Arrangements 36
Other Distribution Arrangements 36
PART 7: VOTING RIGHTS PAGE 37
Trust Voting Rights 37
Voting Rights of Others 37
Separate Account Voting Rights 37
Changes in Applicable Law 37
PART 8: TAX ASPECTS OF THE CERTIFICATES PAGE 38
Tax Changes 38
Taxation of Non-Qualified Annuities 38
Federal and State Income Tax
Withholding 39
Other Withholding 39
Special Rules for Certificates Issued in
Puerto Rico 40
Impact of Taxes to Equitable Life 40
Transfers Among Investment Options 40
PART 9: KEY FACTORS IN RETIREMENT PLANNING PAGE 41
Introduction 41
Inflation 41
Starting Early 42
Tax-Deferral 42
Investment Options 43
The Benefit of Annuitization 44
PART 10: INDEPENDENT ACCOUNTANTS PAGE 45
APPENDIX I: MARKET VALUE ADJUSTMENT EXAMPLE PAGE 46
APPENDIX II: GUARANTEED MINIMUM DEATH
BENEFIT (GMDB) EXAMPLE PAGE 47
APPENDIX III: GMIB EXAMPLES PAGE 48
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS PAGE 49
</TABLE>
3
<PAGE>
<PAGE>
GENERAL TERMS
ACCUMULATION UNIT--Contributions that are invested in an Investment Fund
purchase Accumulation Units in that Investment Fund.
ACCUMULATION UNIT VALUE--The dollar value of each Accumulation Unit in an
Investment Fund on a given date.
ANNUITANT--The individual who is the measuring life for determining annuity
benefits.
ANNUITY ACCOUNT VALUE--The sum of the amounts in the Investment Options under
the Accumulator Certificate. See "Annuity Account Value" in Part 5.
ANNUITY COMMENCEMENT DATE--The date on which amounts are applied to provide
an annuity benefit.
BUSINESS DAY--Generally, any day on which the New York Stock Exchange is open
for trading. For the purpose of determining the Transaction Date, our
Business Day ends at 4:00 p.m. Eastern Time or the closing of the New York
Stock Exchange, if earlier.
CASH VALUE--The Annuity Account Value minus any applicable charges.
CERTIFICATE--The Certificate issued under the terms of a group annuity
contract and any individual contract, including any endorsements.
CERTIFICATE OWNER--The person who owns an Accumulator Certificate and has the
right to exercise all rights under the Certificate.
CODE--The Internal Revenue Code of 1986, as amended.
CONTRACT DATE--The date on which the Annuitant is enrolled under the group
annuity contract, or the effective date of the individual contract. This is
usually the Business Day we receive the initial contribution at our
Processing Office.
CONTRACT YEAR--The 12-month period beginning on your Contract Date and each
anniversary of that date.
EXPIRATION DATE--The date on which a Guarantee Period ends.
GUARANTEE PERIOD--Any of the periods of time ending on an Expiration Date
that are available for investment under the Certificates.
GUARANTEED PERIOD ACCOUNT--The Account that contains the Guarantee Periods.
GUARANTEED RATE--The annual interest rate established for each allocation to
a Guarantee Period.
INVESTMENT FUNDS--The funds of the Separate Account that are available under
the Certificates.
INVESTMENT OPTIONS--The choices for investment: the Investment Funds and each
available Guarantee Period.
MATURITY VALUE--The amount in a Guarantee Period on its Expiration Date.
PORTFOLIOS--The portfolios of the Trust that correspond to the Investment
Funds of the Separate Account.
PROCESSING DATE--The day when we deduct certain charges from the Annuity
Account Value. If the Processing Date is not a Business Day, it will be on
the next succeeding Business Day. The Processing Date will be once each year
on each anniversary of the Contract Date.
PROCESSING OFFICE--The address to which all contributions, written requests
(e.g., transfers, withdrawals, etc.) or other written communications must be
sent. See "Services We Provide" in Part 1.
SAI--The statement of additional information for the Separate Account under
the Accumulator.
SEPARATE ACCOUNT--Equitable Life's Separate Account No. 45.
TRANSACTION DATE--The Business Day we receive a contribution or a transaction
request providing all the information we need at our Processing Office. If
your contribution or request reaches our Processing Office on a non-Business
Day, or after the close of the Business Day, the Transaction Date will be the
next following Business Day. Transaction requests must be made in a form
acceptable to us.
TRUST--The Hudson River Trust, a mutual fund in which the assets of separate
accounts of insurance companies are invested.
VALUATION PERIOD--Each Business Day together with any preceding non-business
days.
4
<PAGE>
<PAGE>
FEE TABLE
The purpose of this fee table is to assist you in understanding the various
costs and expenses you may bear directly or indirectly under the Certificate
so that you may compare them on the same basis with other similar products.
The table reflects both the charges of the Separate Account and the expenses
of the Trust. Charges for applicable taxes such as state or local premium
taxes may also apply. For a complete description of the charges under the
Certificate, see "Part 6: Deductions and Charges." For a complete description
of the Trust's charges and expenses, see the prospectus for the Trust.
As explained in Part 4, the Guarantee Periods are not a part of the Separate
Account and are not covered by the fee table and examples. The only charge
shown in the Table which will be deducted from amounts allocated to the
Guarantee Periods is the withdrawal charge. However, if there is insufficient
value in the Investment Funds all or a portion of the distribution fee and
the annual contract fee, if any, will be deducted from your Annuity Account
Value in the Guaranteed Period Account rather than from the Investment Funds.
See "Part 6: Deductions and Charges." A market value adjustment (either
positive or negative) also may be applicable as a result of a withdrawal,
transfer or surrender of amounts from a Guarantee Period. See "Part 4: The
Guaranteed Period Account."
OWNER TRANSACTION EXPENSES (DEDUCTED FROM ANNUITY ACCOUNT VALUE)
DISTRIBUTION FEE (SALES LOAD) AS A PERCENTAGE OF EACH CONTRIBUTION RECEIVED
DURING THE FIRST CONTRACT YEAR (deducted annually on each of the first seven
Processing Dates)(1) .................................................. 0.20%
WITHDRAWAL CHARGE AS A PERCENTAGE OF CONTRIBUTIONS (deducted upon surrender
or for certain withdrawals. The applicable withdrawal charge percentage is
determined by the Contract Year in which the withdrawal is made or the
Certificate is surrendered beginning with "Contract Year 1" with respect to
each contribution withdrawn or surrendered. For each contribution, the
Contract Year in which we receive that contribution is "Contract Year
1")(2)
<TABLE>
<CAPTION>
CONTRACT
YEAR
- ----------
<S> <C>
1 ... 7.00%
2 ... 6.00
3 ... 5.00
4 ... 4.00
5 ... 3.00
6 ... 2.00
7 ... 1.00
8+ .. 0.00
</TABLE>
<TABLE>
<CAPTION>
COMBINED GMDB
GMDB/GMIB ONLY
BENEFIT BENEFIT
(PLAN A) (PLAN B)
----------- ---------
<S> <C> <C>
GMDB/GMIB CHARGES (percentage deducted annually on each Processing Date
as a percentage of the guaranteed minimum death benefit then in effect)(3) ....... 0.45% 0.20%
ANNUAL CONTRACT FEE (DEDUCTED FROM ANNUITY ACCOUNT VALUE ON EACH PROCESSING
DATE)(4)
If the initial contribution is less than $25,000 .................................. $30
If the initial contribution is $25,000 or more .................................... $0
SEPARATE ACCOUNT ANNUAL EXPENSES (AS A PERCENTAGE OF ASSETS IN EACH INVESTMENT
FUND)
MORTALITY AND EXPENSE RISK CHARGE .................................................. 0.90%
ASSET BASED ADMINISTRATIVE CHARGE .................................................. 0.25%
----------------------
TOTAL SEPARATE ACCOUNT ANNUAL EXPENSES ............................................ 1.15%
======================
</TABLE>
TRUST ANNUAL EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS IN EACH
PORTFOLIO)
<TABLE>
<CAPTION>
INVESTMENT PORTFOLIOS
-----------------------------------------------------------
CONSERVATIVE GROWTH GROWTH & COMMON
INVESTORS INVESTORS INCOME STOCK GLOBAL
-------------- ----------- ---------- -------- --------
<S> <C> <C> <C> <C> <C>
Investment Advisory Fee 0.55% 0.52% 0.55% 0.35% 0.53%
<PAGE>
Other Expenses 0.04% 0.04% 0.05% 0.03% 0.08%
-------------- ----------- ---------- -------- --------
TOTAL TRUST ANNUAL
EXPENSES(5) 0.59% 0.56% 0.60% 0.38% 0.61%
============== =========== ========== ======== ========
</TABLE>
<TABLE>
<CAPTION>
INTERMEDIATE
AGGRESSIVE MONEY GOVT.
INTERNATIONAL STOCK MARKET SECURITIES
--------------- ------------ -------- --------------
<S> <C> <C> <C> <C>
Investment Advisory Fee 0.90% 0.46% 0.40% 0.50%
Other Expenses 0.13% 0.03% 0.04% 0.07%
--------------- ------------ -------- --------------
TOTAL TRUST ANNUAL
EXPENSES(5) 1.03% 0.49% 0.44% 0.57%
=============== ============ ======== ==============
</TABLE>
5
<PAGE>
<PAGE>
- ------------
Notes:
(1)The amount deducted is based on contributions that have not been
withdrawn. See "Part 6: Deductions and Charges," "Distribution Fee."
(2)Deducted upon a withdrawal with respect to amounts in excess of the 15%
free corridor amount, and upon a surrender. See "Part 6: Deductions and
Charges," "Withdrawal Charge." We reserve the right to impose an
administrative charge of the lesser of $25 and 2.0% of the amount
withdrawn for each Lump Sum Withdrawal after the fifth in a Contract
Year. See "Withdrawal Processing Charge" also in Part 6.
(3)Plan A provides a combined guaranteed minimum death benefit (GMDB) and
guaranteed minimum income benefit (GMIB). Plan B provides a GMDB Only
Benefit. See "Part 6: Deductions and Charges," "Charges for Combined
GMDB/GMIB Benefit (Plan A) and Charges for GMDB Only Benefit (Plan B)."
(4)This charge is incurred at the beginning of the Contract Year and
deducted on the Processing Date. See "Part 6: Deductions and Charges,"
"Annual Contract Fee."
(5)Expenses shown for all Portfolios are for the fiscal year ended December
31, 1995. The amount shown for the International Portfolio, which was
established on April 3, 1995, is annualized. The investment advisory fee
for each Portfolio may vary from year to year depending upon the average
daily net assets of the respective Portfolio of the Trust. The maximum
investment advisory fees, however, cannot be increased without a vote of
that Portfolio's shareholders. The other direct operating expenses will
also fluctuate from year to year depending on actual expenses. See
"Trust Charges to Portfolios" in Part 6.
EXAMPLES
The examples below show the expenses that a hypothetical Certificate Owner
would pay under the Combined GMDB/GMIB Benefit (Plan A) and under the GMDB
Only Benefit (Plan B) in the two situations noted below assuming a $1,000
contribution invested in one of the Investment Funds listed, and a 5% annual
return on assets.(1) The annual contract fee was computed based on an initial
contribution of $10,000.
These examples should not be considered a representation of past or future
expenses for each Investment Fund or Portfolio. Actual expenses may be
greater or less than those shown. Similarly, the annual rate of return
assumed in the examples is not an estimate or guarantee of future investment
performance.
COMBINED GMDB/GMIB BENEFIT (PLAN A) ELECTION
<TABLE>
<CAPTION>
IF YOU SURRENDER YOUR CERTIFICATE AT THE END OF EACH PERIOD SHOWN,
THE EXPENSES WOULD BE:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- --------- --------- ----------
<S> <C> <C> <C> <C>
ASSET ALLOCATION
SERIES:
Conservative Investors $90.65 $126.98 $166.16 $294.09
Growth Investors 90.36 126.08 164.65 291.07
EQUITY SERIES:
Growth & Income 90.75 127.28 166.66 295.10
Common Stock 88.57 120.68 155.59 272.70
Global 90.85 127.58 167.16 296.11
International 95.03 140.10 188.01 337.54
Aggressive Stock 89.66 123.98 161.13 283.94
FIXED INCOME SERIES:
Money Market 89.16 122.48 158.61 278.85
Intermediate Govt.
Securities 90.46 126.38 165.15 292.07
</TABLE>
<PAGE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
IF YOU DO NOT SURRENDER YOUR CERTIFICATE
AT THE END OF EACH PERIOD SHOWN, THE
EXPENSES WOULD BE:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- --------- --------- ----------
<S> <C> <C> <C> <C>
ASSET ALLOCATION
SERIES:
Conservative Investors $27.42 $84.33 $144.17 $302.14
Growth Investors 27.13 83.44 142.67 299.12
EQUITY SERIES:
Growth & Income 27.52 84.63 144.67 303.14
Common Stock 25.34 78.03 133.60 280.74
Global 27.62 84.93 145.17 304.15
International 31.80 97.46 166.03 345.61
Aggressive Stock 26.43 81.33 139.14 292.01
FIXED INCOME SERIES:
Money Market 25.93 79.83 136.62 286.89
Intermediate Govt.
Securities 27.23 83.74 143.18 300.13
</TABLE>
6
<PAGE>
<PAGE>
GMDB ONLY BENEFIT (PLAN B) ELECTION
<TABLE>
<CAPTION>
IF YOU SURRENDER YOUR CERTIFICATE AT THE END OF EACH PERIOD SHOWN,
THE EXPENSES WOULD BE:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- --------- --------- ----------
<S> <C> <C> <C> <C>
ASSET ALLOCATION SERIES:
Conservative Investors $90.65 $121.66 $155.07 $266.33
Growth Investors 90.36 120.76 153.56 263.26
EQUITY SERIES:
Growth & Income 90.75 121.96 155.58 267.36
Common Stock 88.57 115.35 144.45 244.62
Global 90.85 122.27 156.09 268.38
International 95.03 134.82 177.05 310.42
Aggressive Stock 89.66 118.65 150.02 256.04
FIXED INCOME SERIES:
Money Market 89.16 117.15 147.48 250.85
Intermediate Govt.
Securities 90.46 121.06 154.06 264.27
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
IF YOU DO NOT SURRENDER YOUR CERTIFICATE
AT THE END OF EACH PERIOD SHOWN, THE
EXPENSES WOULD BE:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- --------- --------- ----------
<S> <C> <C> <C> <C>
ASSET ALLOCATION SERIES:
Conservative Investors $24.77 $76.04 $129.75 $269.91
Growth Investors 24.48 75.15 128.24 266.84
EQUITY SERIES:
Growth & Income 24.87 76.34 130.25 270.93
Common Stock 22.69 69.72 119.11 248.19
Global 24.97 76.64 130.75 271.94
International 29.15 89.21 151.74 314.02
Aggressive Stock 23.78 73.04 124.70 259.62
FIXED INCOME SERIES:
Money Market 23.28 71.53 122.16 254.45
Intermediate Govt.
Securities 24.58 75.45 128.74 267.85
</TABLE>
- ------------
Notes:
(1) The amount accumulated could not be paid in the form of an annuity at
the end of any of the periods shown in the examples. If the amount
applied to purchase an annuity is less than $2,000, or the initial
payment is less than $20 we may pay the amount to the payee in a single
sum instead of as payments under an annuity form. See "Income Annuity
Options" in Part 5. The examples do not reflect charges for applicable
taxes such as state or local premium taxes that may also be deducted in
certain jurisdictions.
CONDENSED FINANCIAL INFORMATION
ACCUMULATION UNIT VALUES
Equitable Life commenced the offering of the Certificates on May 1, 1995. The
following table shows the Accumulation Unit Values, as of May 1, 1995 and the
last Business Day for the periods shown.
<TABLE>
<CAPTION>
LAST BUSINESS DAY OF
--------------------------------
MAY 1, 1995 DECEMBER 1995 SEPTEMBER 1996
------------- --------------- ---------------
<S> <C> <C> <C>
ASSET ALLOCATION SERIES:
Conservative Investors $ 14.647383 $ 16.549050 $ 16.558882
Growth Investors 20.073331 23.593613 25.115630
EQUITY SERIES:
Growth & Income 10.376155 11.989601 13.060119
<PAGE>
Common Stock 102.335691 124.519251 141.022624
Global 19.478146 22.293921 24.080727
International 10.125278 11.033925 11.735219
Aggressive Stock 44.025496 54.591448 64.680156
FIXED INCOME SERIES:
Money Market 23.150932 23.830754 24.547344
Intermediate Govt.
Securities 12.498213 13.424767 13.535782
</TABLE>
7
<PAGE>
<PAGE>
PART 1: SUMMARY
The following Summary is qualified in its entirety by the terms of the
Certificate when issued and the more detailed information appearing elsewhere
in this prospectus (see "Prospectus Table of Contents").
WHAT IS THE INCOME MANAGER?
The INCOME MANAGER is a family of annuities designed to provide for
retirement income. The Accumulator is a non-qualified deferred annuity
designed to provide retirement income at a future date through the investment
of funds on an after-tax basis. Generally, earnings will accumulate without
being subject to annual income tax, until withdrawn. The Accumulator features
a combination of Investment Options, consisting of Investment Funds providing
variable returns and Guarantee Periods providing guaranteed interest. Fixed
and variable income annuities are also available. The Accumulator may not be
available in all states.
INVESTMENT OPTIONS
The Accumulator offers the following Investment Options which permit you to
create your own strategy for retirement savings. All available Investment
Options may be selected under a Certificate.
INVESTMENT FUNDS
o Asset Allocation Series: the Conservative Investors and Growth Investors
Funds
o Equity Series: the Growth & Income, Common Stock, Global, International
and Aggressive Stock Funds
o Fixed Income Series: the Money Market and Intermediate Government
Securities Funds
GUARANTEE PERIODS
o Guarantee Periods (may not be available in all states) maturing in each
of calendar years 1997 through 2007.
CONTRIBUTIONS
o To put a Certificate into effect, you must make an initial contribution
of at least $10,000.
o Subsequent contributions may be made in an amount of at least $1,000.
TRANSFERS
You may make an unlimited number of transfers among the Investment Funds.
However, there are restrictions for transfers to and from the Guarantee
Periods. Transfers from a Guarantee Period may result in a market value
adjustment. Transfers among Investment Options are currently free of charge.
Transfers among the Investment Options are not taxable.
FREE LOOK PERIOD
You have the right to examine the Accumulator Certificate for a period of 10
days after you receive it, and to return it to us for a refund. You may
cancel it by sending it to our Processing Office. Your refund will equal the
Annuity Account Value, reflecting any investment gain or loss, and any
positive or negative market value adjustment, through the date we receive
your Certificate at our Processing Office.
SERVICES WE PROVIDE
O REGULAR REPORTS
o Statement of your Certificate values as of the last day of the calendar
year;
o Three additional reports of your Certificate values each year;
o Annual and semi-annual statements of the Trust; and
o Written confirmation of financial transactions.
O TOLL-FREE TELEPHONE SERVICES
o Call 1-800-789-7771 for a recording of daily Accumulation Unit Values and
Guaranteed Rates applicable to the Guarantee Periods. Also call during our
regular business hours to speak to one of our customer service
representatives.
O PROCESSING OFFICE
O FOR CONTRIBUTIONS SENT BY REGULAR MAIL:
Equitable Life
Income Management Group
<PAGE>
Post Office Box 13014
Newark, NJ 07188-0014
8
<PAGE>
<PAGE>
O FOR CONTRIBUTIONS SENT BY EXPRESS MAIL:
Equitable Life
c/o First Chicago National Processing Center
300 Harmon Meadow Boulevard, 3rd Floor
Attn: Box 13014
Secaucus, NJ 07094
O FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANSFERS, WITHDRAWALS)
SENT BY REGULAR MAIL:
Equitable Life
Income Management Group
P.O. Box 1547
Secaucus, NJ 07096-1547
O FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANSFERS, WITHDRAWALS)
SENT BY EXPRESS MAIL:
Equitable Life
Income Management Group
200 Plaza Drive
Secaucus, NJ 07096
WITHDRAWAL OPTIONS
o Lump Sum Withdrawals--Before the Annuity Commencement Date while the
Certificate is in effect, you may take Lump Sum Withdrawals from your
Certificate at any time. The minimum withdrawal amount is $1,000.
o Systematic Withdrawals--You may also withdraw funds under our Systematic
Withdrawal option, where the minimum withdrawal amount is $250.
o Systematic Withdrawals Plus Life Contingent Annuity--This option provides
systematic withdrawals during a deferral period and lifetime guaranteed
annuity payments thereafter. Payments increase each year, subject to
availability of Annuity Account Value. The minimum withdrawal amount in the
first year must be at least $250.
Withdrawals may be subject to a withdrawal charge and withdrawals from
Guarantee Periods prior to their Expiration Dates will result in a market
value adjustment. Withdrawals may be subject to income tax and tax penalty.
DEATH BENEFITS
If the Annuitant and successor Annuitant, if any, die before the Annuity
Commencement Date, the Accumulator provides a death benefit. The beneficiary
will be paid the greater of the Annuity Account Value in the Investment Funds
and the guaranteed minimum death benefit (GMDB), plus any death benefit
provided with respect to the Guaranteed Period Account.
There are two plans available under the Certificates for providing guaranteed
benefits, Plan A and Plan B. Plan A provides both a GMDB and a guaranteed
minimum income benefit (described below). Plan B provides a GMDB only.
GUARANTEED MINIMUM INCOME BENEFIT (GMIB)
The GMIB, available under the Combined GMDB/ GMIB Benefit (Plan A), may not
currently be available in all states.
The GMIB provides a minimum guaranteed lifetime income from application of
the Annuity Account Value in the Investment Funds to purchase the Assured
Payment Plan (Life Annuity with a Period Certain). Any amounts in the
Guaranteed Period Account will be applied to increase the payments provided
under the GMIB. A market value adjustment may apply.
SURRENDERING THE CERTIFICATES
You may surrender a Certificate and receive the Cash Value at any time before
the Annuity Commencement Date while the Annuitant is living. Withdrawal
charges and a market value adjustment may apply. A surrender may also be
subject to income tax and tax penalty.
INCOME ANNUITY OPTIONS
The Certificates provide income annuity options to which amounts may be
applied at the Annuity Commencement Date. The income annuity options are
offered on a fixed and variable basis.
TAXES
Generally, earnings on contributions made to the Certificate will not be
included in your taxable income until distributions are made from the
Certificate. Distributions prior to your attaining age 59 1/2 may be subject
to tax penalty.
DEDUCTIONS FROM ANNUITY
ACCOUNT VALUE
<PAGE>
Distribution Fee
We deduct a sales load annually in an amount of 0.20% of each contribution
received during the first Contract Year. This sales load is deducted on each
of the first seven Processing Dates. The amount deducted is based on
contributions that have not been withdrawn.
Withdrawal Charge
A withdrawal charge will be imposed as a percentage of the initial and each
subsequent contribution if
9
<PAGE>
<PAGE>
a withdrawal exceeds the 15% free corridor amount or if the Certificate is
surrendered. We determine the withdrawal charge separately for each
contribution in accordance with the table below.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CONTRACT YEAR
1 2 3 4 5 6 7 8+
------ ------ ------ ------ ------ ------ ------ -----
Percentage of
Contribution 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0%
</TABLE>
The applicable withdrawal charge percentage is determined by the Contract
Year in which the withdrawal is made or the Certificate is surrendered,
beginning with "Contract Year 1" with respect to each contribution withdrawn
or surrendered. For each contribution the Contract Year in which we receive
that contribution is "Contract Year 1."
Withdrawal Processing Charge
We reserve the right to impose an administrative charge of the lesser of $25
and 2.0% of the amount withdrawn for each Lump Sum Withdrawal after the fifth
in a Contract Year.
Charges for Combined GMDB/GMIB Benefit (Plan A)
We deduct a charge annually on each Processing Date for providing the
Combined GMDB/GMIB Benefit (Plan A). The charge is equal to a percentage of
the GMDB in effect on the Processing Date. The percentage is equal to 0.45%.
Charges for GMDB Only Benefit (Plan B)
We deduct a charge annually on each Processing Date for providing the GMDB
Only Benefit (Plan B). The charge is equal to a percentage of the GMDB in
effect on the Processing Date. The percentage is equal to 0.20%.
Annual Contract Fee
The charge will be $30 per Contract Year if your initial contribution is less
than $25,000, and zero if your initial contribution is $25,000 or more.
Charges for State Premium and Other Applicable Taxes
Generally, we deduct a charge for premium or other applicable taxes from the
Annuity Account Value on the Annuity Commencement Date. The current tax
charge that might be imposed varies by state and ranges from 0 to 3.5% (the
rate is 1% in Puerto Rico and 5% in the Virgin Islands).
DEDUCTIONS FROM INVESTMENT FUNDS
Mortality and Expense Risk Charge
We charge each Investment Fund a daily asset based charge for mortality and
expense risks equivalent to an annual rate of 0.90%.
Asset Based Administrative Charge
We charge each Investment Fund a daily asset based charge to cover a portion
of the administrative expenses under the Certificate equivalent to an annual
rate of 0.25%.
TRUST CHARGES TO PORTFOLIOS
Investment advisory fees and other expenses of the Trust are charged daily
against the Trust's assets. These are reflected in the Portfolio's daily
share price and in the daily Accumulation Unit Value for the Investment
Funds.
10
<PAGE>
<PAGE>
PART 2: EQUITABLE LIFE, THE SEPARATE ACCOUNT
AND THE INVESTMENT FUNDS
EQUITABLE LIFE
Equitable Life is a New York stock life insurance company that has been in
business since 1859. For more than 100 years we have been among the largest
life insurance companies in the United States. Equitable Life has been
selling annuities since the turn of the century. Our home office is located
at 787 Seventh Avenue, New York, New York 10019. We are authorized to sell
life insurance and annuities in all fifty states, the District of Columbia,
Puerto Rico and the Virgin Islands. We maintain local offices throughout the
United States.
Equitable Life is a wholly owned subsidiary of The Equitable Companies
Incorporated (the Holding Company). The largest stockholder of the Holding
Company is AXA S.A. AXA beneficially owns 60.6% of the outstanding shares of
common stock of the Holding Company plus convertible preferred stock. Under
its investment arrangements with Equitable Life and the Holding Company, AXA
is able to exercise significant influence over the operations and capital
structure of the Holding Company and its subsidiaries, including Equitable
Life. AXA, a French company, is the holding company for an international
group of insurance and related financial service companies.
Equitable Life, the Holding Company and their subsidiaries managed
approximately $217.6 billion of assets as of June 30, 1996.
SEPARATE ACCOUNT NO. 45
Separate Account No. 45 is organized as a unit investment trust, a type of
investment company, and is registered with the SEC under the Investment
Company Act of 1940 (1940 Act). This registration does not involve any
supervision by the SEC of the management or investment policies of the
Separate Account. The Separate Account has several Investment Funds, each of
which invests in shares of a corresponding Portfolio of the Trust. Because
amounts allocated to the Investment Funds are invested in a mutual fund,
investment return and principal will fluctuate and the Certificate Owner's
Accumulation Units may be worth more or less than the original cost when
redeemed.
Under the New York Insurance Law, the portion of the Separate Account's
assets equal to the reserves and other liabilities relating to the
Certificates are not chargeable with liabilities arising out of any other
business we may conduct. Income, gains or losses, whether or not realized,
from assets of the Separate Account are credited to or charged against the
Separate Account without regard to our other income gains or losses. We are
the issuer of the Certificates, and the obligations set forth in the
Certificates (other than those of Annuitants or Certificate Owners) are our
obligations.
In addition to contributions made under the Accumulator Certificates, we may
allocate to the Separate Account monies received under other contracts,
certificates, or agreements. Owners of all such contracts, certificates or
agreements will participate in the Separate Account in proportion to the
amounts they have in the Investment Funds that relate to their contracts,
certificates or agreements. We may retain in the Separate Account assets that
are in excess of the reserves and other liabilities relating to the
Accumulator Certificates or to other contracts, certificates or agreements,
or we may transfer the excess to our General Account.
We reserve the right, subject to compliance with applicable law; (1) to add
Investment Funds (or sub-funds of Investment Funds) to, or to remove
Investment Funds (or sub-funds) from, the Separate Account, or to add other
separate accounts; (2) to combine any two or more Investment Funds or
sub-funds thereof; (3) to transfer the assets we determine to be the share of
the class of contracts to which the Certificate belongs from any Investment
Fund to another Investment Fund; (4) to operate the Separate Account or any
Investment Fund as a management investment company under the 1940 Act, in
which case charges and expenses that otherwise would be assessed against an
underlying mutual fund would be assessed against the Separate Account; (5) to
deregister the Separate Account under the 1940 Act, provided that such action
conforms with the requirements of applicable law; (6) to restrict or
eliminate any voting rights as to the Separate Account; and (7) to cause one
or more Investment Funds to invest some or all of their assets in one or more
other trusts or investment companies. If any changes are made that result in
a material change in the underlying investment policy of an Investment Fund,
you will be notified as required by law.
THE TRUST
The Trust is an open-end diversified management investment company, more
commonly called a mu-
11
<PAGE>
<PAGE>
tual fund. As a "series" type of mutual fund, it issues several different
series of stock, each of which relates to a different Portfolio of the Trust.
The Trust commenced operations in January 1976 with a predecessor of its
Common Stock Portfolio. The Trust does not impose a sales charge or "load"
for buying and selling its shares. All dividend distributions to the Trust
are reinvested in full and fractional shares of the Portfolio to which they
relate. More detailed information about the Trust, its investment
objec-tives, policies, restrictions, risks, expenses and all other aspects of
its operations appears in its prospectus which accompanies this prospectus or
in its statement of additional information.
THE TRUST'S INVESTMENT ADVISER
The Trust is advised by Alliance Capital Management L.P. (Alliance), which is
registered with the SEC as an investment adviser under the Investment
Advisers Act of 1940. Alliance, a publicly-traded limited partnership, is
indirectly majority-owned by Equitable Life. On June 30, 1996, Alliance was
managing over $168 billion in assets. 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 record as an investment manager is based, in part, on its ability
to provide a diversity of investment services to domestic, international and
global markets. Alliance prides itself on its ability to attract and retain a
quality, professional work force. Alliance employs more than 188 investment
professionals, including 74 research analysts. Portfolio managers have an
average investment experience of more than 14 years.
Alliance's main office is located at 1345 Avenue of the Americas, New York,
New York 10105.
12
<PAGE>
<PAGE>
INVESTMENT POLICIES AND OBJECTIVES OF THE TRUST'S PORTFOLIOS
Each Portfolio has a different investment objective which it tries to achieve
by following separate investment policies. The policies and objectives of
each Portfolio will affect its return and its risks. There is no guarantee
that these objectives will be achieved.
The policies and objectives of the Trust's Portfolios are as follows:
<TABLE>
<CAPTION>
PORTFOLIO INVESTMENT POLICY OBJECTIVE
- --------------------------- ---------------------------------------------------- -----------------------------
<S> <C> <C>
ASSET ALLOCATION SERIES:
Conservative Investors Diversified mix of publicly-traded, fixed-income and High total return without, in
equity securities; asset mix and security selection the adviser's opinion, undue
are primarily based upon factors expected to reduce risk to principal
risk. The Portfolio is generally expected to hold
approximately 70% of its assets in fixed income
securities and 30% in equity securities.
Growth Investors Diversified mix of publicly-traded, fixed-income and High total return consistent
equity securities; asset mix and security selection with the adviser's
based upon factors expected to increase possibility determination of reasonable
of high long-term return. The Portfolio is generally risk
expected to hold approximately 70% of its assets in
equity securities and 30% in fixed income
securities.
EQUITY SERIES:
Growth & Income Primarily income producing common stocks and High total return through a
securities convertible into common stocks. combination of current income
and capital appreciation
Common Stock Primarily common stock and other equity-type Long-term growth of capital
instruments. and increasing income
Global Primarily equity securities of non-United States as Long-term growth of capital
well as United States companies.
International Primarily equity securities selected principally to Long-term growth of capital
permit participation in non-United States companies
with prospects for growth.
Aggressive Stock Primarily common stocks and other equity-type Long-term growth of capital
securities issued by medium and other smaller sized
companies with strong growth potential.
FIXED INCOME SERIES:
Money Market Primarily high quality short-term money market High level of current income
instruments. while preserving assets and
maintaining liquidity
Intermediate Government Primarily debt securities issued or guaranteed by High current income
Securities the U.S. government, its agencies and consistent with relative
instrumentalities. Each investment will have a final stability of principal
maturity of not more than 10 years or a duration not
exceeding that of a 10-year Treasury note.
</TABLE>
13
<PAGE>
<PAGE>
PART 3: INVESTMENT PERFORMANCE
This Part presents performance data for each of the Investment Funds
calculated by two methods. The first method, used in calculating values for
the two tables in "Performance Data for a Certificate," reflects all
applicable fees and charges other than the charge for tax such as premium
taxes. The second method, used in preparing rates of return for the three
tables in "Rate of Return Data for Investment Funds," reflects all fees and
charges other than the distribution fee, the withdrawal charge, the GMDB/
GMIB charge, the annual contract fee and the charge for tax such as premium
taxes. These additional charges would effectively reduce the rates of return
credited to a particular Certificate.
The Separate Account commenced operations in May 1995 and no Certificates
were issued prior to that date. The calculations of investment performance
shown below are based on the actual investment results of the Portfolios of
the Trust, from which certain fees and charges applicable under the
Accumulator have been deducted. The results shown are not an estimate or
guarantee of future investment performance, and do not reflect the actual
experience of amounts invested under a particular Certificate.
See "Part 4: The Guaranteed Period Account" for information on the Guaranteed
Period Account.
PERFORMANCE DATA FOR A CERTIFICATE
The standardized performance data in the following tables illustrate the
average annual total return of the Investment Funds over the periods shown,
assuming a single initial contribution of $1,000 and the surrender of the
Certificate at the end of each period. These tables (which reflect the first
calcu lation method described above) are prepared in a manner prescribed by
the SEC for use when we advertise the performance of the Separate Account. An
Investment Fund's average annual total return is the annual rate of growth of
the Investment Fund that would be necessary to achieve the ending value of a
contribution kept in the Investment Fund for the period specified.
Each calculation assumes that the $1,000 contribution was allocated to only
one Investment Fund, no transfers or subsequent contributions were made and
no amounts were allocated to any other Investment Option under the
Certificate.
In order to calculate annualized rates of return, we divide the Cash Value of
a Certificate which is surrendered on December 31, 1995 by the $1,000
contribution made at the beginning of each period illustrated. The annual
contract fee is computed based on an initial contribution of $10,000. The
result of that calculation is the total growth rate for the period. Then we
annualize that growth rate to obtain the average annual percentage increase
(decrease) during the period shown. When we "annualize," we assume that a
single rate of return applied each year during the period will produce the
ending value, taking into account the effect of compounding.
GROWTH OF $1,000 UNDER A CERTIFICATE SURRENDERED ON DECEMBER 31, 1995*
<TABLE>
<CAPTION>
LENGTH OF INVESTMENT PERIOD
-----------------------------------------------------
INVESTMENT THREE FIVE TEN SINCE
FUND ONE YEAR YEARS YEARS YEARS INCEPTION**
- ---------------------- -------- -------- -------- -------- -------------
<S> <C> <C> <C> <C> <C>
ASSET ALLOCATION SERIES:
Conservative Investors $1,117 $1,160 $1,448 -- $ 1,558
Growth Investors 1,176 1,285 1,994 -- 2,243
EQUITY SERIES:
Growth & Income 1,154 -- -- -- 1,122
Common Stock 1,236 1,484 2,082 $3,458 11,394
Global 1,102 1,519 1,936 -- 2,076
International -- -- -- -- 1,030
Aggressive Stock 1,228 1,350 2,438 -- 5,198
</TABLE>
14
<PAGE>
<PAGE>
GROWTH OF $1,000 UNDER A CERTIFICATE SURRENDERED ON DECEMBER 31, 1995*
(CONTINUED)
<TABLE>
<CAPTION>
LENGTH OF INVESTMENT PERIOD
----------------------------------------------------
INVESTMENT ONE THREE FIVE TEN SINCE
FUND YEAR YEARS YEARS YEARS INCEPTION**
- ----------------------------- ------- -------- -------- -------- -------------
<S> <C> <C> <C> <C> <C>
FIXED INCOME SERIES:
Money Market $ 972 $1,020 $1,098 $1,479 $2,156
Intermediate Govt. Securities 1,047 1,083 -- -- 1,265
</TABLE>
[FN]
- ------------
* See footnotes below.
AVERAGE ANNUAL TOTAL RETURN UNDER A CERTIFICATE SURRENDERED ON
DECEMBER 31, 1995*
<TABLE>
<CAPTION>
LENGTH OF INVESTMENT PERIOD
---------------------------------------------------
INVESTMENT THREE FIVE TEN SINCE
FUND ONE YEAR YEARS YEARS YEARS INCEPTION**
- ----------------------------- -------- ------- ------- -------- -------------
<S> <C> <C> <C> <C> <C>
ASSET ALLOCATION SERIES:
Conservative Investors 11.72% 5.07% 7.69% -- 6.53%
Growth Investors 17.62 8.73 14.80 -- 12.23
EQUITY SERIES:
Growth & Income 15.35 -- -- -- 3.90
Common Stock 23.63 14.07 15.80 13.21% 12.94
Global 10.15 14.95 14.12 -- 8.45
International -- -- -- -- 3.04
Aggressive Stock 22.83 10.51 19.51 -- 17.92
FIXED INCOME SERIES:
Money Market (2.77) 0.66 1.89 3.99 5.25
Intermediate Govt. Securities 4.73 2.68 -- -- 4.81
</TABLE>
- ------------
* The tables reflect charges under a Certificate with the 0.45% GMDB/GMIB
charge.
** The "Since Inception" dates are as follows: Conservative Investors
(October 2, 1989); Growth Investors (October 2, 1989); Growth & Income
(October 1, 1993); Common Stock (January 13, 1976); Global (August 27,
1987); International (April 3, 1995); Aggressive Stock (January 27,
1986); Money Market (July 13, 1981); and Intermediate Government
Securities (April 1, 1991). The "Since Inception" numbers for the
International Fund are unannualized.
RATE OF RETURN DATA FOR INVESTMENT FUNDS
The following tables (which reflect the second calculation method described
above) provide you with information on rates of return on an annualized,
cumulative and year-by-year basis.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends. Cumulative rates of
return reflect performance over a stated period of time. Annualized rates of
return represent the annual rate of growth that would have produced the same
cumulative return, if performance had been constant over the entire period.
Performance data of the Money Market and Common Stock Funds for the periods
prior to March 22, 1985, reflect the investment results of two open-end
management separate accounts (the "predecessor separate accounts") which were
reorganized in unit investment trust form. The "Since Inception" figures for
these Funds are based on the date of inception of the predecessor separate
accounts. This performance data has been adjusted to reflect the maximum
investment advisory fee payable for the corresponding Portfolio of the Trust
as well as an assumed charge of 0.06% for direct operating expenses.
Performance data for the remaining Investment Funds reflect (i) the
investment results of the corresponding Portfolios of the Trust from the date
of inception of those Portfolios and (ii) the actual investment advisory fee
and direct operating expenses of the relevant Portfolio.
15
<PAGE>
<PAGE>
The performance data for all periods has also been adjusted to reflect the
Separate Account mortality and expense risk charge, and the asset based
administrative charge equal to a total of 1.15% relating to the Certificates,
as well as the Trust's expenses.
BENCHMARKS
Market indices are not subject to any charges for investment advisory fees,
brokerage commission or other operating expenses typically associated with a
managed portfolio. Nor do they reflect other charges such as the mortality
and expense risk charge and the asset based administrative charge under the
Certificates. Comparisons with these benchmarks, therefore, are of limited
use. We include them because they are widely known and may help you to
understand the universe of securities from which each Portfolio is likely to
select its holdings. Benchmark data reflect the reinvestment of dividend
income.
PORTFOLIO INCEPTION DATES AND COMPARATIVE BENCHMARKS:
Asset Allocation Series:
CONSERVATIVE INVESTORS: October 2, 1989; 70% Lehman Treasury Bond Composite
Index and 30% Standard & Poor's 500 Index.
GROWTH INVESTORS: October 2, 1989; 30% Lehman Government/Corporate Bond Index
and 70% Standard & Poor's 500 Index.
Equity Series:
GROWTH & INCOME: October 1, 1993; 75% Standard & Poor's 500 Index and 25%
Value Line Convertible Index.
COMMON STOCK: January 13, 1976; Standard & Poor's 500 Index.
GLOBAL: August 27, 1987; Morgan Stanley Capital International World Index.
INTERNATIONAL: April 3, 1995; Morgan Stanley Capital International Europe,
Australia, Far East Index.
AGGRESSIVE STOCK: January 27, 1986; 50% Standard & Poor's Mid-Cap Total
Return Index and 50% Russell 2000 Small Stock Index.
Fixed Income Series:
MONEY MARKET: July 13, 1981; Salomon Brothers Three-Month T-Bill Index.
INTERMEDIATE GOVERNMENT SECURITIES: April 1, 1991; Lehman Intermediate
Government Bond Index.
The Lipper Variable Insurance Products Performance Analysis Survey (Lipper)
records the performance of a large group of variable annuity products,
including managed separate accounts of insurance companies. According to
Lipper Analytical Services, Inc., the data are presented net of investment
management fees, direct operating expenses and asset-based charges applicable
under annuity contracts. Lipper data provide a more accurate picture than
market benchmarks of the Accumulator performance relative to other variable
annuity products.
ANNUALIZED RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1995:*
<TABLE>
<CAPTION>
SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS INCEPTION
-------- --------- --------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSET ALLOCATION SERIES:
CONSERVATIVE INVESTORS 19.02% 7.32% 8.89% -- -- 8.39%
Lipper Income 21.25 9.65 11.99 -- -- 9.79
Benchmark 24.11 10.41 11.73 -- -- 10.55
GROWTH INVESTORS 24.92 10.87 15.77 -- -- 14.70
Lipper Flexible Portfolio 21.58 9.32 11.43 -- -- 9.44
Benchmark 32.05 13.35 14.70 -- -- 11.97
EQUITY SERIES:
GROWTH & INCOME 22.65 -- -- -- -- 8.40
Lipper Growth & Income 31.18 -- -- -- -- 12.76
Benchmark 34.93 -- -- -- -- 15.45
COMMON STOCK 30.93 16.05 16.80 13.84% 13.06% 13.47
Lipper Growth 31.08 12.09 15.53 12.05 12.26 12.25
Benchmark 37.54 15.30 16.57 14.87 14.79 14.24
</TABLE>
16
<PAGE>
<PAGE>
ANNUALIZED RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1995:* (CONTINUED)
<TABLE>
<CAPTION>
SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS INCEPTION
-------- --------- --------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
GLOBAL 17.45% 16.86% 15.16% -- -- 10.09%
Lipper Global 13.87 13.45 9.10 -- -- 2.52
Benchmark 20.72 15.83 11.74 -- -- 6.75
INTERNATIONAL -- -- -- -- -- 10.34**
Lipper International -- -- -- -- -- 12.21**
Benchmark -- -- -- -- -- 9.17**
AGGRESSIVE STOCK 30.13 12.61 20.35 -- -- 18.59
Lipper Small Company Growth 28.19 15.26 25.72 -- -- 16.06
Benchmark 29.69 13.67 20.16 -- -- 13.58
FIXED INCOME SERIES:
MONEY MARKET 4.53 3.04 3.29 4.81% -- 6.19
Lipper Money Market 4.35 2.88 3.10 4.71 -- 6.27
Benchmark 5.74 4.34 4.47 5.77 -- 7.09
INTERMEDIATE GOVERNMENT
SECURITIES 12.03 4.99 -- -- -- 6.43
Lipper Gen. U.S. Government 15.47 6.27 -- -- -- 7.87
Benchmark 14.41 6.74 -- -- -- 8.17
<FN>
- ------------
* See footnote on next page.
** Unannualized.
</TABLE>
CUMULATIVE RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1995:*
<TABLE>
<CAPTION>
SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS INCEPTION
-------- --------- --------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSET ALLOCATION SERIES:
CONSERVATIVE INVESTORS 19.02% 23.60% 53.06% -- -- 65.42%
Lipper Income 21.25 31.95 76.42 -- -- 79.42
Benchmark 24.11 34.58 74.09 -- -- 87.24
GROWTH INVESTORS 24.92 36.28 108.00 -- -- 135.55
Lipper Flexible Portfolio 21.58 30.92 72.73 -- -- 76.92
Benchmark 32.05 45.64 98.56 -- -- 102.72
EQUITY SERIES:
GROWTH & INCOME 22.65 -- -- -- -- 19.89
Lipper Growth & Income 31.18 -- -- -- -- 31.42
Benchmark 34.93 -- -- -- -- 38.14
COMMON STOCK 30.93 56.29 117.35 265.55% 530.07% 1,146.22
Lipper Growth 31.08 41.29 107.30 215.49 483.45 920.87
Benchmark 37.54 53.30 115.25 300.11 692.18 1,327.94
GLOBAL 17.45 59.57 102.53 -- -- 123.08
Lipper Global 13.87 46.36 55.44 -- -- 23.09
Benchmark 20.72 55.39 74.20 -- -- 72.38
INTERNATIONAL -- -- -- -- -- 10.34**
Lipper International -- -- -- -- -- 12.21**
Benchmark -- -- -- -- -- 9.17**
AGGRESSIVE STOCK 30.13 42.79 152.49 -- -- 443.46
Lipper Small Company Growth 28.19 55.24 268.67 -- -- 337.96
Benchmark 29.69 46.89 150.49 -- -- 254.09
FIXED INCOME SERIES:
MONEY MARKET 4.53 9.40 17.55 59.97 -- 138.38
Lipper Money Market 4.35 8.87 16.48 58.55 -- 140.42
Benchmark 5.74 13.58 24.45 75.23 -- 170.07
<FN>
- ------------
* See footnote on next page.
** Unannualized.
</TABLE>
17
<PAGE>
<PAGE>
CUMULATIVE RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1995:* (CONTINUED)
<TABLE>
<CAPTION>
SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS INCEPTION
-------- --------- --------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
INTERMEDIATE GOVERNMENT
SECURITIES 12.03% 15.72% -- -- -- 34.43 %
Lipper Gen. U.S. Government 15.47 20.05 -- -- -- 43.43
Benchmark 14.41 21.60 -- -- -- 45.17
</TABLE>
YEAR-BY-YEAR RATES OF RETURN*
<TABLE>
<CAPTION>
1983 1984 1985 1986 1987 1988
-------- --------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
ASSET ALLOCATION
SERIES:
CONSERVATIVE
INVESTORS -- -- -- -- -- --
GROWTH INVESTORS -- -- -- -- -- --
EQUITY SERIES:
GROWTH & INCOME -- -- -- -- -- --
COMMON STOCK*** 24.67% (3.09)% 31.91% 16.02% 6.21% 21.03%
GLOBAL -- -- -- -- (13.62) 9.61
INTERNATIONAL -- -- -- -- -- --
AGGRESSIVE STOCK -- -- -- 33.83 6.06 (0.03)
FIXED INCOME SERIES:
MONEY MARKET*** 7.70 9.59 6.91 5.39 5.41 6.09
INTERMEDIATE
GOVERNMENT --
SECURITIES -- -- -- -- --
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994 1995
------- -------- -------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSET ALLOCATION
SERIES:
CONSERVATIVE
INVESTORS 2.79% 5.14% 18.51% 4.50% 9.54% (5.20)% 19.02%
GROWTH INVESTORS 3.53 9.39 47.19 3.69 13.95 (4.27) 24.92
EQUITY SERIES:
GROWTH & INCOME -- -- -- -- (0.55) (1.72) 22.65
COMMON STOCK*** 24.16 (9.17) 36.30 2.03 23.39 (3.26) 30.93
GLOBAL 25.29 (7.15) 29.06 (1.65) 30.60 4.02 17.45
INTERNATIONAL -- -- -- -- -- -- 10.34
AGGRESSIVE STOCK 41.86 6.92 84.73 (4.28) 15.41 (4.92) 30.13
FIXED INCOME SERIES:
MONEY MARKET*** 7.93 6.99 4.97 2.37 1.78 2.82 4.53
INTERMEDIATE
GOVERNMENT
SECURITIES -- -- 11.30 4.38 9.27 (5.47) 12.03
</TABLE>
- ------------
* Returns do not reflect the distribution fee, the withdrawal charge, the
GMDB/GMIB charge, the annual contract fee and any charges for state
premium and other applicable taxes.
** Unannualized.
*** Prior to 1983 the Year-by-Year Rates of Return were:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
1976 1977 1978 1979 1980 1981 1982
------ ------ ------ ------ ------ ------ ------
COMMON STOCK 8.20% (10.28)% 6.99% 28.35% 48.39% (6.94)% 16.22%
MONEY MARKET - - - - - 5.71 11.72
</TABLE>
COMMUNICATING PERFORMANCE DATA
In reports or other communications or in advertising material, we may
describe general economic and market conditions affecting the Separate
Account and the Trust and may compare the performance of the Investment Funds
with (1) that of other insurance company separate accounts or mutual funds
included in the rankings prepared by Lipper Analytical Services, Inc.,
Morningstar, Inc., VARDS or similar investment services that monitor the
performance of insurance company separate accounts or mutual funds, (2) other
appropriate indices of investment securities and averages for peer universes
of funds which are shown under "Benchmarks" and "Fund Inception Dates and
Comparative Benchmarks" in this Part 3, or (3) data developed by us derived
<PAGE>
from such indices or averages. The Morningstar Variable Annuity/Life Report
consists of nearly 700 variable life and annuity funds, all of which report
their data net of investment management fees, direct operating expenses and
separate account charges. VARDS is a monthly reporting service that monitors
approximately 760 variable life and variable annuity funds on performance and
account information. Advertisements or other communications furnished to
present or prospective Certificate Owners may also include evaluations of an
Investment Fund or Portfolio by financial publications that are nationally
recognized such as Barron's, Morningstar's Variable Annuity Sourcebook,
Business Week, Chicago Tribune, Forbes, Fortune, Institutional Investor,
Investment Adviser, Investment Dealer's Digest, Investment Management Weekly,
Los Angeles Times, Money, Money Management Letter, Kiplinger's Personal
Finance, Financial Planning, National Underwriter, Pension & Investments, USA
Today, Investor's Daily, The New York Times, and The Wall Street Journal.
18
<PAGE>
<PAGE>
MONEY MARKET FUND AND INTERMEDIATE GOVERNMENT SECURITIES FUND YIELD
INFORMATION
The current yield and effective yield of the Money Market Fund and
Intermediate Government Securities Fund may appear in reports and promotional
material to current or prospective Certificate Owners.
Money Market Fund
Current yield for the Money Market Fund will be based on net changes in a
hypothetical investment over a given seven-day period, exclusive of capital
changes, and then "annualized" (assuming that the same seven-day result would
occur each week for 52 weeks). "Effective yield" is calculated in a manner
similar to that used to calculate current yield, but when annualized, any
income earned by the investment is assumed to be reinvested. The "effective
yield" will be slightly higher than the "current yield" because any earnings
are compounded weekly. Money Market Fund yields and effective yields assume
the deduction of all Certificate charges and expenses other than the
distribution fee, withdrawal charge, GMDB/GMIB charge and any charge for tax
such as premium tax. See "Part 4: Money Market Fund and Intermediate
Government Securities Fund Yield Information" in the SAI.
Intermediate Government Securities Fund
Current yield for the Intermediate Government Securities Fund will be based
on net changes in a hypothetical investment over a given 30-day period,
exclusive of capital changes, and then "annualized" (assuming that the same
30-day result would occur each month for 12 months). "Effective yield" is
calculated in a manner similar to that used to calculate current yield, but
when annualized, any income earned by the investment is assumed to be
reinvested. The "effective yield" will be slightly higher than the "current
yield" because any earnings are compounded monthly.
Intermediate Government Securities Fund yields and effective yields assume
the deduction of all Certificate charges and expenses other than the
distribution fee, withdrawal charge, GMDB/GMIB charge and any charge for tax
such as premium tax. See "Part 4: Money Market Fund and Intermediate
Government Securities Fund Yield Information" in the SAI.
19
<PAGE>
<PAGE>
PART 4: THE GUARANTEED PERIOD ACCOUNT
GUARANTEE PERIODS
Each amount allocated to a Guarantee Period and held to the Period's
Expiration Date accumulates interest at a Guaranteed Rate. The Guaranteed
Rate for each allocation is the annual interest rate applicable to new
allocations to that Guarantee Period, which was in effect on the Transaction
Date for the allocation. We may establish different Guaranteed Rates under
different classes of Certificates. We use the term GUARANTEED PERIOD AMOUNT
to refer to the amount allocated to and accumulated in each Guarantee Period.
The Guaranteed Period Amount is reduced or increased by any market value
adjustment as a result of withdrawals, transfers or charges (see below).
Your Guaranteed Period Account contains the Guarantee Periods to which you
have allocated Annuity Account Value. On the Expiration Date of a Guarantee
Period, its Guaranteed Period Amount and its value in the Guaranteed Period
Account are equal. We call the Guaranteed Period Amount on an Expiration Date
the Guarantee Period's Maturity Value. We report the Annuity Account Value in
your Guaranteed Period Account to reflect any market value adjustment that
would apply if all Guaranteed Period Amounts were withdrawn as of the
calculation date. The Annuity Account Value in the Guaranteed Period Account
on any Business Day, therefore, will be the sum of the present value of the
Maturity Value in each Guarantee Period, using the Guaranteed Rate in effect
for new allocations to each such Guarantee Period on such date.
Guarantee Periods and Expiration Dates
We currently offer Guarantee Periods ending on February 15th for each of the
maturity years 1997 through 2007.
Not all Guarantee Periods will be available for Annuitants ages 76 and above.
See "Allocation of Contributions" in Part 5. Also, the Guarantee Periods may
not be available for investment in all states. As Guarantee Periods expire we
expect to add maturity years so that generally 10 are available at any time.
We will not accept allocations to a Guarantee Period if, on the Transaction
Date:
o Such Transaction Date and the Expiration Date for such Guarantee Period
fall within the same calendar year.
o The Guaranteed Rate is 3%.
o The Guarantee Period has an Expiration Date beyond the February 15th
immediately following the Annuity Commencement Date.
Guaranteed Rates and Price Per $100 of Maturity Value
Because the Maturity Value of a contribution allocated to a Guarantee Period
can be determined at the time it is made, you can determine the amount
required to be allocated to a Guarantee Period in order to produce a target
Maturity Value (assuming no transfers or withdrawals are made and no charges
are allocated to the Guarantee Period). The required amount is the present
value of that Maturity Value at the Guaranteed Rate on the Transaction Date
for the contribution, which may also be expressed as the price per $100 of
Maturity Value on such Transaction Date.
Guaranteed Rates for new allocations as of October 1, 1996 and the related
price per $100 of Maturity Value for each currently available Guarantee
Period were as follows:
<TABLE>
<CAPTION>
GUARANTEE
PERIODS WITH GUARANTEED
EXPIRATION DATE RATE AS OF PRICE PER $100
FEBRUARY 15TH OF OCTOBER 1, OF MATURITY
MATURITY YEAR 1996 VALUE
- ---------------- ------------ --------------
<S> <C> <C>
1997 4.21% $98.46
1998 4.80 93.76
1999 5.10 88.86
2000 5.29 84.03
2001 5.41 79.40
2002 5.52 74.90
2003 5.65 70.43
2004 5.66 66.62
2005 5.80 62.34
2006 5.92 58.30
2007 6.03 54.45
</TABLE>
Allocation Among Guarantee Periods
The same approach as described above may also be used to determine the amount
which you would need to allocate to each Guarantee Period in order to create
a series of constant Maturity Values for two or more years.
<PAGE>
For example, if you wish to have $100 mature on February 15th of each of
years 1997 through 2001, then according to the above table the lump sum
contribution you would have to make as of
20
<PAGE>
<PAGE>
October 1, 1996 would be $444.51 (i.e., the sum of the price per $100 of
Maturity Value for each maturity year from 1997 through 2001).
The above table is provided to illustrate the use of present value
calculations. It does not take into account the potential for charges to be
deducted or withdrawals or transfers from Guarantee Periods. Actual
calculations will also be based on Guaranteed Rates on each actual
Transaction Date, which may differ.
Options at Expiration Date
We will notify you on or before December 31st prior to the Expiration Date of
each Guarantee Period in which you have any Guaranteed Period Amount. You may
elect one of the following options to be effective at the Expiration Date,
subject to the restrictions set forth on the prior page and under "Allocation
of Contributions" in Part 5:
(a) to transfer the Maturity Value into any Guarantee Period we are then
offering, or into any of our Investment Funds; or
(b) to withdraw the Maturity Value (subject to any withdrawal charges
which may apply).
If we have not received your election as of the Expiration Date, the Maturity
Value in the expired Guarantee Period will be transferred into the Guarantee
Period with the earliest Expiration Date.
MARKET VALUE ADJUSTMENT FOR
TRANSFERS, WITHDRAWALS OR SURRENDER
PRIOR TO THE EXPIRATION DATE
Any withdrawal (including transfers, surrender and deductions) from a
Guarantee Period prior to its Expiration Date will cause any remaining
Guaranteed Period Amount for that Guarantee Period to be increased or
decreased by a market value adjustment. The amount of the adjustment will
depend on two factors: (a) the difference between the Guaranteed Rate
applicable to the amount being withdrawn and the Guaranteed Rate on the
Transaction Date for new allocations to a Guarantee Period with the same
Expiration Date, and (b) the length of time remaining until the Expiration
Date. In general, if interest rates have risen between the time when an
amount was originally allocated to a Guarantee Period and the time it is
withdrawn, the market value adjustment will be negative, and vice versa; and
the longer the period of time remaining until the Expiration Date, the
greater the impact of the interest rate difference. Therefore, it is possible
that a significant rise in interest rates could result in a substantial
reduction in your Annuity Account Value in the Guaranteed Period Account
related to longer term Guarantee Periods.
The market value adjustment (positive or negative) resulting from a
withdrawal of all funds from a Guarantee Period will be determined for each
contribution allocated to that Guarantee Period as follows:
(1) We determine the present value of the Maturity Value on the Transaction
Date as follows:
(a) We determine the Guaranteed Period Amount that would be payable on
the Expiration Date, using the applicable Guaranteed Rate.
(b) We determine the period remaining in your Guarantee Period (based on
the Transaction Date) and convert it to fractional years based on a
365 day year. For example three years and 12 days becomes 3.0329.
(c) We determine the current Guaranteed Rate which applies on the
Transaction Date to new allocations to the same Guarantee Period.
(d) We determine the present value of the Guaranteed Period Amount
payable at the Expiration Date, using the period determined in (b)
and the rate determined in (c).
(2) We determine the Guaranteed Period Amount as of the current date.
(3) We subtract (2) from the result in (1)(d). The result is the market
value adjustment applicable to such Guarantee Period, which may be
positive or negative.
The market value adjustment (positive or negative) resulting from a
withdrawal of a portion of the amount in a Guarantee Period will be a
percentage of the market value adjustment that would be applicable upon a
withdrawal of all funds from a Guarantee Period. This percentage is
determined by (i) dividing the amount of the withdrawal or transfer from the
Guarantee Period by (ii) the Annuity Account Value in such Guarantee Period
prior to the withdrawal or transfer. See Appendix I for an example.
The Guaranteed Rate for new allocations to a Guarantee Period is the rate we
have in effect for this purpose even if new allocations to that Guarantee
Period would not be accepted at the time. This rate will not be less than 3%.
If we do not have a Guaranteed Rate in effect for a Guarantee Period to which
the "current Guaranteed Rate" in (1)(c) would apply, we will use the rate at
the next closest Expiration Date. If we are no longer offering new
21
<PAGE>
<PAGE>
Guarantee Periods, the "current Guaranteed Rate" will be determined in
accordance with our procedures then in effect. For purposes of calculating
the market value adjustment only, we reserve the right to add up to 0.25% to
the current rate in (1)(c) above.
DEATH BENEFIT AMOUNT
The death benefit provided with respect to the Guaranteed Period Account is
equal to the Annuity Account Value in the Guaranteed Period Account or, if
greater, the sum of the Guaranteed Period Amounts in each Guarantee Period.
See "Annuity Account Value" in Part 5.
INVESTMENTS
Amounts allocated to Guarantee Periods will be held in a "nonunitized"
separate account established by Equitable Life under the laws of New York.
This separate account provides an additional measure of assurance that full
payment of amounts due under the Guarantee Periods will be made. Under the
New York Insurance Law, the portion of the separate account's assets equal to
the reserves and other contract liabilities relating to the Certificates are
not chargeable with liabilities arising out of any other business we may
conduct.
Investments purchased with amounts allocated to the Guaranteed Period Account
are the property of Equitable Life. Any favorable investment performance on
the assets held in the separate account accrues solely to Equitable Life's
benefit. Certificate Owners do not participate in the performance of the
assets held in this separate account. Equitable Life may, subject to
applicable state law, transfer all assets allocated to the separate account
to its general account. Regardless of whether assets supporting Guaranteed
Period Accounts are held in a separate account or our general account, all
benefits relating to the Annuity Account Value in the Guaranteed Period
Account are guaranteed by Equitable Life.
Equitable Life has no specific formula for establishing the Guaranteed Rates
for the Guarantee Periods. Equitable Life expects the rates to be influenced
by, but not necessarily correspond to, among other things, the yields on the
fixed income securities to be acquired with amounts that are allocated to the
Guarantee Periods at the time that the Guaranteed Rates are established. Our
current plans are to invest such amounts in fixed income obligations,
including corporate bonds, mortgage backed and asset backed securities and
government and agency issues having durations in the aggregate consistent
with those of the Guarantee Periods.
Although the foregoing generally describes Equitable Life's plans for
investing the assets supporting Equitable Life's obligations under the fixed
portion of the Certificates, Equitable Life is not obligated to invest those
assets according to any particular plan except as may be required by state
insurance laws, nor will the Guaranteed Rates Equitable Life establishes be
determined by the performance of the nonunitized separate account.
General Account
Our general account supports all of our policy and contract guarantees,
including those applicable to the Guaranteed Period Account, as well as our
general obligations. Amounts applied under the Life Contingent Annuity become
part of the general account. See "Systematic Withdrawals Plus Life Contingent
Annuity" in Part 5.
The general account is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations
of all jurisdictions where we are authorized to do business. Because of
applicable exemptions and exclusionary provisions, interests in the general
account have not been registered under the Securities Act of 1933 (1933 Act),
nor is the general account an investment company under the 1940 Act.
Accordingly, neither the general account nor the Life Contingent Annuity is
subject to regulation under the 1933 Act or the 1940 Act. However, the market
value adjustment interests under the Certificates are registered under the
1933 Act.
We have been advised that the staff of the SEC has not made a review of the
disclosure that is included in this prospectus for your information that
relates to the general account (other than market value adjustment interests)
and the Life Contingent Annuity. The disclosure, 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.
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PART 5: PROVISIONS OF THE CERTIFICATES AND SERVICES WE PROVIDE
The provisions of your Certificate may be restricted by applicable laws or
regulations.
AVAILABILITY OF THE CERTIFICATES
The Certificates are available for Annuitant issue ages 20 through 83. These
Certificates may not be available in all states.
CONTRIBUTIONS UNDER THE CERTIFICATES
Your initial contribution must be at least $10,000.
Subsequent contributions may be made in an amount of at least $1,000 at any
time up until the Annuitant attains age 84. We may refuse to accept any
contributions if the sum of all contributions under all INCOME MANAGER
accumulation Certificates with the same Annuitant would then total more than
$1,000,000. We reserve the right to limit aggregate contributions made after
the first Contract Year to 150% of first year contributions. We may also
refuse to accept any contribution if the sum of all contributions under all
Equitable annuity accumulation certificates/contracts that you own would then
total more than $2,500,000.
Contributions are credited as of the Transaction Date.
METHODS OF PAYMENT
Except as indicated below, all contributions must be made by check. All
contributions made by check must be drawn on a bank or credit union in the
U.S., in U.S. dollars and made payable to Equitable Life. All checks are
accepted subject to collection. All contributions should be sent to Equitable
Life at our Processing Office address designated for contributions.
Wire Transmittals
We will accept, by agreement with broker-dealers who use wire transmittals,
transmittal of initial contributions by wire order from the broker-dealer to
the Processing Office. Such transmittals must be accompanied by essential
information we require to allocate the contribution.
Contributions accepted by wire order will be invested at the value next
determined following receipt for contributions allocated to the Investment
Funds. Contributions allocated to the Guaranteed Period Account will receive
the Guaranteed Rate(s) in effect for the applicable Guarantee Period(s) on
the date contributions are received. Wire orders not accompanied by complete
information, may be retained for a period not exceeding five Business Days
while an attempt is made to obtain the required information. If the required
information cannot be obtained within those five Business Days, the
Processing Office will inform the broker-dealer, on behalf of the applicant,
of the reasons for the delay and return the contribution immediately to the
applicant, unless the applicant specifically consents to our retaining the
contribution until the required information is received by the Processing
Office.
Notwithstanding the acceptance by us of the wire order and the essential
information, however, a Certificate will not be issued until the receipt and
acceptance of a properly completed application. During the time from receipt
of the initial contribution until a signed application is received from the
Certificate Owner, no other financial transactions may be requested.
If an application is not received within ten days of receipt of the initial
contribution via wire order, or if an incomplete application is received and
cannot be completed within ten days of receipt of the initial contribution,
the amount of the initial contribution will be returned to the applicant.
After your Certificate has been issued, subsequent contributions may be
transmitted by wire.
ALLOCATION OF CONTRIBUTIONS
You have two options from which to choose for allocation of your
contributions: Self-Directed Allocation and Principal Assurance.
Self-Directed Allocation
You design your own investment program by allocating your contributions among
the Investment Options in any way you choose. Your contributions may be
allocated to one or up to all of the available Investment Options at any
time. We allocate contributions among the Investment Options according to
your allocation percentages. Allocations must be in whole percentages.
Allocation percentages can be changed at any time by writing to our
Processing Office, or by telephone. The change will be effective on the
Transaction Date and will remain in effect for future contributions unless
another change is requested. Allocation of the initial contribution is
subject to the provisions for the free look period. See "Free Look Period"
below. Allocation of any contribution to the Guaranteed Period Account is
subject to the following restrictions.
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o No more than 60% of any contribution may be allocated to the
Guaranteed Period Account.
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o For Annuitants ages 76 and above, allocations may be made only to
Guarantee Periods with maturities of five years or less; however, in
no event may allocations be made to Guarantee Periods with maturities
beyond the February 15th immediately following the Annuity
Commencement Date.
Principal Assurance
This option (available for Annuitant issue ages 20 through 75) is designed to
assure that your Maturity Value in a specified Guarantee Period equals your
initial contribution, while at the same time allowing you to invest in the
Investment Funds. The maturity year you select for such specified Guaranteed
Period generally may not be later than 10 years nor earlier than seven years.
In order to accomplish this strategy, we will allocate a portion (equal to
the present value) of your initial contribution to a Guarantee Period based
on the year you select. See "Guaranteed Rates and Price Per $100 of Maturity
Value" in Part 4. You may allocate the balance of your contribution to the
Investment Funds in any way you choose. Such allocations to the Investment
Funds must be in whole percentages. Allocation of the portion of your initial
contribution to the Investment Funds is subject to the provisions for the
free look period. See "Free Look Period" below.
Principal Assurance may only be elected at issue of your Certificate and
assumes no withdrawals or transfers of the amount allocated to the specified
Guarantee Period.
Subsequent contributions must be allocated under "Self-Directed Allocation"
described above.
Allocations to the Investment Funds
A contribution allocated to an Investment Fund purchases Accumulation Units
in that Investment Fund based on the Accumulation Unit Value for that
Investment Fund computed on the Transaction Date.
Allocations to the Guaranteed Period Account
Contributions allocated to the Guaranteed Period Account will have the
Guaranteed Rate for the specified Guarantee Period offered on the Transaction
Date.
FREE LOOK PERIOD
You have the right to examine the Accumulator Certificate for a period of 10
days after you receive it, and to return it to us for a refund. You cancel it
by sending it to our Processing Office. The free look is extended if your
state requires a refund period of longer than 10 days. This right applies
only to the initial owner of a Certificate.
Your refund will equal the Annuity Account Value reflecting any investment
gain or loss, and any positive or negative market value adjustment, through
the date we receive your Certificate at our Processing Office. Some states
may require that we calculate the refund differently. In those states that
require that we calculate the refund differently, we may require that any
portion of your initial contribution that you request to have allocated to
the Investment Funds, be allocated to the Money Market Fund until the end of
the free look period.
If Systematic Withdrawals Plus Life Contingent Annuity is elected in the
application for the Certificate, your refund will include any amount applied
under the Life Contingent Annuity (discussed below).
We follow these same procedures if you change your mind before a Certificate
has been issued, but after a contribution has been made. See "Part 8: Tax
Aspects of the Certificates" for possible consequences of canceling your
Certificate during the free look period.
If you cancel your Certificate during the free look period, we may require
that you wait six months before you may apply for a Certificate with us
again.
ANNUITY ACCOUNT VALUE
The Annuity Account Value is the sum of the Annuity Account Values in the
Investment Funds and the Guaranteed Period Account.
Annuity Account Value in Investment Funds
The Annuity Account Value in an Investment Fund on any Business Day is equal
to the number of Accumulation Units in that Investment Fund times the
Accumulation Unit Value for the Investment Fund for that date. The number of
Accumulation Units in an Investment Fund at any time is equal to the sum of
Accumulation Units purchased by contributions and transfers less the sum of
Accumulation Units redeemed for withdrawals, transfers or deductions for
charges.
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The number of Accumulation Units purchased or sold in any Investment Fund
equals the dollar amount of the transaction divided by the Accumulation Unit
Value for that Investment Fund for the applicable Transaction Date.
The number of Accumulation Units will not vary because of any later change in
the Accumulation Unit Value. The Accumulation Unit Value varies with the
investment performance of the corresponding Portfolios of the Trust, which in
turn reflects the investment income and realized and unrealized capital gains
and losses of the Portfolios, as well as the
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Trust fees and expenses. The Accumulation Unit Value is also stated after
deduction of the Separate Account asset charges relating to the Certificates.
A description of the computation of the Accumulation Unit Value is found in
the SAI.
Annuity Account Value in Guaranteed Period
Account
The Annuity Account Value in the Guaranteed Period Account on any Business
Day will be the sum of the present value of the Maturity Value in each
Guarantee Period, using the Guaranteed Rate in effect for new allocations to
such Guarantee Period on such date. (This is equivalent to the Guaranteed
Period Amount increased or decreased by the full market value adjustment.)
The Annuity Account Value, therefore, may be higher or lower than the
contributions (less withdrawals) accumulated at the Guaranteed Rate. At the
Expiration Date the Annuity Account Value in the Guaranteed Period Account
will equal the Maturity Value. See "Part 4: The Guaranteed Period Account."
TRANSFERS AMONG INVESTMENT OPTIONS
At any time prior to the Annuity Commencement Date, you may transfer all or
portions of your Annuity Account Value among the Investment Options, subject
to the following restrictions.
o Transfers are permitted to or from a Guarantee Period once per quarter
during each Contract Year. Such transfers may be made at any time during each
quarter.
o Transfers out of a Guarantee Period other than at the Expiration Date will
result in a market value adjustment. See "Part 4: The Guaranteed Period
Account."
o Transfers to Guarantee Periods are subject to the restrictions set forth
under "Guarantee Periods and Expiration Dates" in Part 4 and are limited
based on the age of the Annuitant. See "Allocation of Contributions" above.
Transfer requests must be made directly to our Processing Office. Your
request for a transfer should specify your Certificate number, the amounts or
percentages to be transferred and the Investment Options to and from which
the amounts are to be transferred. Your transfer request may be in writing or
by telephone.
For telephone transfer requests, 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.
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 restrict, in our sole discretion, the use of an agent acting under a
power of attorney, such as a market timer, on behalf of more than one
Certificate Owner to effect transfers. Any agreements to use market timing
services to effect transfers are subject to our rules then in effect and must
be on a form satisfactory to us.
A transfer request will be effective on the Transaction Date and the transfer
to or from Investment Funds will be made at the Accumulation Unit Value next
computed after the Transaction Date. All transfers will be confirmed in
writing.
DOLLAR COST AVERAGING
If you have at least $10,000 of Annuity Account Value in the Money Market
Fund, you may choose to have a specified dollar amount transferred from the
Money Market Fund to other Investment Funds on a monthly basis. The main
objective of dollar cost averaging is to attempt to shield your investment
from short term price fluctuations. Since the same dollar amount is
transferred to other Investment Funds each month, more Accumulation Units are
purchased in an Investment Fund if the value per Accumulation Unit is low and
fewer Accumulation Units are purchased if the value per Accumulation Unit is
high. Therefore, a lower average value per Accumulation Unit may be achieved
over the long term. This plan of investing allows you to take advantage of
market fluctuations but does not assure a profit or protect against a loss in
declining markets.
The dollar cost averaging option may be elected at the time you apply for the
Certificate or at a later date. The minimum amount that may be transferred
each month is $250. The maximum amount which may be transferred is equal to
the Annuity Account Value in the Money Market Fund at the time the option is
elected, divided by 12.
The transfer date will be the same calendar day each month as the Contract
Date. If, on any transfer date, the Annuity Account Value in the Money Market
Fund is equal to or less than the amount you have elected to have
transferred, the entire amount will be transferred and the dollar cost
averaging option will end. You may change the transfer amount once each
Contract Year, or cancel this option by sending us satisfactory notice to our
Processing Office at least seven calendar days before the next transfer date.
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WITHDRAWAL OPTIONS
The Accumulator is an annuity contract, even though you may elect to receive
your benefits in a non-annuity form. You may take withdrawals from your
Certificate before the Annuity Commencement Date and while the Annuitant is
alive. Three withdrawal options are available: Lump Sum Withdrawals,
Systematic Withdrawals and Systematic Withdrawals Plus Life Contingent
Annuity. Withdrawals may result in withdrawal charges. See "Part 6:
Deductions and Charges." Withdrawals may also be taxable and subject to tax
penalty. See "Part 8: Tax Aspects of the Certificates."
Amounts withdrawn from the Guaranteed Period Account, other than at the
Expiration Date, will result in a market value adjustment. See "Market Value
Adjustment for Transfers, Withdrawals or Surrender Prior to the Expiration
Date" in Part 4.
As a deterrent to early withdrawal (generally prior to age 59 1/2) the Code
provides certain penalties. We may also be required to withhold income taxes
from the amount distributed. These rules are outlined in "Part 8: Tax Aspects
of the Certificates."
o LUMP SUM WITHDRAWALS--You may take Lump Sum Withdrawals any time subject
to a minimum withdrawal amount of $1,000. A request to withdraw more
than 90% of the Cash Value as of the date of the withdrawal will result
in the termination of the Certificate and will be treated as a surrender
of the Certificate for its Cash Value. See "Surrendering the
Certificates to Receive the Cash Value," below.
To make a Lump Sum Withdrawal, you must submit a request satisfactory to us
which specifies the Investment Options from which the Lump Sum Withdrawal
will be taken. If we have received the information we require, the
requested withdrawal will become effective on the Transaction Date and
proceeds will usually be mailed within seven calendar days thereafter, but
we may delay payment as described in "When Payments Are Made" below. If we
receive only partially completed information, our Processing Office will
contact you for specific instructions before your request can be processed.
o SYSTEMATIC WITHDRAWALS--Systematic Withdrawals provide level percentage
or level amount payouts. You may choose to receive Systematic
Withdrawals on a monthly, quarterly or annual frequency. You select a
dollar amount or percentage of the Annuity Account Value to be
withdrawn, subject to a maximum of 1.2% monthly, 3.6% quarterly and
15.0% annually, but in no event may any payment be less than $250. If at
the time a Systematic Withdrawal is to be made, the withdrawal amount
would be less than $250, no payment will be made and your Systematic
Withdrawal election will terminate.
You select the date of the month when the withdrawals will be made, but you
may not choose a date later than the 28th day of the month. If no date is
selected, withdrawals will be made on the same calendar day of the month as
the Contract Date. The commencement of payments under the Periodic
Withdrawal option may not be elected to start sooner than 28 days after
issue of the Certificate.
You may elect Systematic Withdrawals at any time by completing the proper
form and sending it to our Processing Office. You may change the payment
frequency of your Systematic Withdrawals once each Contract Year or cancel
this withdrawal option at any time by sending notice in a form satisfactory
to us. The notice must be received at our Processing Office at least seven
calendar days prior to the next scheduled withdrawal date. You may also
change the amount or percentage of your Systematic Withdrawals once in each
Contract Year. However, you may not change the amount or percentage in any
Contract Year where you have previously taken another withdrawal under the
Lump Sum Withdrawals option described above.
o SYSTEMATIC WITHDRAWALS PLUS LIFE CONTINGENT ANNUITY--This option is
available for election under Certificates with the GMDB Only Benefit
(Plan B) at ages 60 through 75 if you are the Owner and Annuitant under
the Certificate. This option provides systematic withdrawals during a
deferral period and guaranteed annuity payments thereafter for your
lifetime (SINGLE LIFE) or the lifetime of you and a joint Annuitant
(JOINT & SURVIVOR) you designate. Withdrawals you receive during the
deferral period are made from the Annuity Account Value under your
Certificate, and are followed by Life Contingent Annuity payments
(described below). Deferral period withdrawals in the first year are
designed to equal 6% of the initial contribution (or Annuity Account
Value at time of election), with withdrawals increasing by 3% each year
thereafter. The first payment under the Life Contingent Annuity will be
3% greater than the final withdrawal scheduled to be made at the end of
the deferral period and will increase annually on each anniversary of
the payment start date based on the annual increase, if any, in the
Consumer Price Index, but in no event greater than 3% per year.
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You may elect this option at any time by completing the proper form. You
select the length of the deferral period subject to a minimum of seven
years and a maximum of 15 years. You may
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choose to receive withdrawals on a monthly, quarterly or annual mode,
subject to a minimum of $250 in the first year. All withdrawals will be
made on the 15th of the month. Withdrawals will begin one payment mode
after the Contract Date or effective date of the option. You may cancel
your Systematic Withdrawals at any time by sending notice in a form
satisfactory to us. The notice must be received at our Processing Office at
least seven calendar days prior to the next scheduled withdrawal date. If
you cancel the Systematic Withdrawals, the Life Contingent Annuity will
still be in effect and payments will begin on the scheduled initial payment
date. The Life Contingent Annuity may only be cancelled during its Free
Look Period, discussed below.
Withdrawals during the Deferral Period
Withdrawals are not guaranteed since the Annuity Account Value available
for withdrawal will depend on the performance of the Investment Funds and
any market value adjustment for amounts in the Guarantee Periods. It is
possible that poor investment performance in the Investment Funds and
negative market value adjustments in the Guarantee Periods, may result in
the Annuity Account Value being exhausted prior to the end of the deferral
period. This may result in no withdrawals being made for a period of time
until the Life Contingent Annuity payments are scheduled to begin. However,
you may elect to accelerate the date the Life Contingent Annuity payments
will begin in order to receive continuous payments. Such payments will be
made in reduced amounts.
Good investment performance and positive market value adjustments may
result in significant Annuity Account Value at the end of the deferral
period. In such a case, any remaining Annuity Account Value will be applied
to increase the annuity payments under the Life Contingent Annuity. Excess
Annuity Account Value at the end of the deferral period may also result
from payment of subsequent contributions as discussed below.
Withdrawals under this option are not subject to withdrawal charges
provided no other withdrawals are made. Once you take a Lump Sum
Withdrawal, all subsequent withdrawals under this option will be subject to
a withdrawal charge to the extent that in any Contract Year that they
exceed the 15% free corridor.
Allocation of Contributions
If elected at issue of the Certificate, based on the amount of your initial
contribution, your age and sex (and the age and sex of the joint Annuitant,
if applicable), the mode of payment, the form of payments and the deferral
period you select, a portion of your initial contribution is applied by us
to the Life Contingent Annuity. The balance of the initial contribution is
allocated to the Investment Options according to your instructions. If
elected after issue, a portion of your Annuity Account Value is applied to
the Life Contingent Annuity and the balance is allocated according to your
instructions. A market value adjustment may apply with respect to amounts
transferred from the Guaranteed Period Account.
If you elect this option in the application and your initial contribution
will come from multiple sources, your application must also indicate that
contributions are to be initially allocated to the Money Market Fund.
Election of this option must include your instructions to apply a portion
of your Annuity Account Value to the Life Contingent Annuity and the
balance according to your instructions, on the date the last such
contribution is received.
Any subsequent contributions will be allocated according to you
instructions. However, if withdrawal payments have begun, subsequent
contributions will not increase the amount of withdrawal payments you will
receive.
You may transfer your Annuity Account Value among the Investment Options
subject to the rules indicated under "Transfers Among Investment Options"
above.
Life Contingent Annuity Payments
The Life Contingent Annuity provides lifetime payments starting after the
end of the deferral period. The portion of your contributions or Annuity
Account Value applied under the Life Contingent Annuity does not have a
Cash Value or an Annuity Account Value and, therefore, does not provide for
transfers or withdrawals. Once the deferral period has ended and payments
have begun under the Life Contingent Annuity, subsequent amounts may no
longer be applied under the Life Contingent Annuity.
THERE IS NO DEATH BENEFIT PROVIDED UNDER THE LIFE CONTINGENT ANNUITY AND
ANNUITY INCOME IS PAID ONLY IF YOU (OR A JOINT ANNUITANT) ARE LIVING AT THE
DATE ANNUITY BENEFITS BEGIN. BENEFITS ARE ONLY PAID DURING YOUR LIFETIME
AND, IF APPLICABLE THE LIFETIME OF A JOINT ANNUITANT. CONSEQUENTLY, YOU
SHOULD CONSIDER THE POSSIBILITY THAT NO AMOUNTS WILL BE PAID UNDER THE LIFE
CONTINGENT ANNUITY IF YOU (OR A JOINT ANNUITANT) DO NOT SURVIVE TO THE DATE
PAYMENTS ARE TO START UNDER SUCH ANNUITY.
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You may elect to have the Life Contingent Annuity provide increasing
payments on a Single Life or a Joint and 100% to Survivor basis. The Life
Contingent Annuity may also provide payments on a Joint and one-half to
Survivor or a Joint and two-thirds to Survivor basis. If you elect Joint &
Survivor, the joint Annuitant must be your spouse, who must also be
designated as successor Annuitant/Certificate Owner and sole primary
beneficiary under the Certificate.
Payments under the Life Contingent Annuity will be made to you during your
lifetime (and the lifetime of the joint Annuitant, if applicable) on the
same payment mode and date as the payments that were made during the
deferral period.
A portion of each annuity payment under the Life Contingent Annuity will be
excluded from taxable income. See "Part 8: Tax Aspects of the
Certificates."
Free Look Period
If the Systematic Withdrawals Plus Life Contingent Annuity option is
elected after issue of the Certificate, after the first application of an
amount under the Life Contingent Annuity, you have the right to examine the
Life Contingent Annuity for a period of 10 days. During this period you may
request that we cancel the Life Contingent Annuity and the amount applied
will be allocated to the Investment Options under the Accumulator
Certificate according to your allocation percentages, as described under
"Allocation of Contributions" above. If you cancel the Life Contingent
Annuity, we may require that you wait one year from the date of
cancellation before amounts may be applied again.
Distribution Fee and Withdrawal Charge
Once amounts are applied under the Life Contingent Annuity, the
distribution fee and the withdrawal charge (discussed in Part 6) under the
Certificate will be imposed as a percentage of contributions that have not
been withdrawn, less the amount applied under the Life Contingent Annuity.
Income Annuity Option and Surrendering
the Certificates
If you elect to cancel your systematic withdrawals, and elect an annuity
benefit as described under "Income Annuity Options" below, or surrender the
Certificate for its Cash Value as described under "Surrendering the
Certificates to Receive the Cash Value" below, once we receive your
returned Certificate, your Certificate will be returned to you with a
notation that the Life Contingent Annuity is still in effect. Thereafter,
no subsequent contributions will be accepted under the Certificate and no
amounts may be applied under the Life Contingent Annuity.
Assignment
Once amounts are applied to the Life Contingent Annuity, the Life
Contingent Annuity may not be assigned.
1035 Exchanges
Under the Certificate, a transfer of the Cash Value under your Certificate
to another issuer may not qualify under Section 1035 of the Code as a tax
free exchange, once amounts have been applied under the Life Contingent
Annuity.
Allocation of Systematic Withdrawals
Unless you specify otherwise, Systematic Withdrawals under both options
above, will be withdrawn on a pro rata basis from your Annuity Account Value
in the Investment Funds. If there is insufficient value or no value in the
Investment Funds, any additional amount of the withdrawal required or the
total amount of the withdrawal, as applicable, will be withdrawn from the
Guarantee Periods in order of the earliest Expiration Date(s) first.
Withdrawal Charges
Withdrawals in excess of the 15% free corridor amount may be subject to a
withdrawal charge. See "Withdrawal Charge" in Part 6.
DEATH BENEFIT
When the Annuitant Dies
Generally, upon receipt of proof satisfactory to us of the Annuitant's death,
prior to the Annuity Commencement Date, we will pay the death benefit to the
beneficiary named in your Certificate. You designate the beneficiary at the
time you apply for the Certificate. While the Certificate is in effect, you
may change your beneficiary by writing to our Processing Office. The change
will be effective on the date the written submission was signed. The death
benefit payable will be determined as of the date we receive such proof of
death and any required instructions as to the method of payment.
The death benefit is equal to the sum of:
(1) the Annuity Account Value in the Investment Funds, or, if greater,
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the GMDB defined below; and
(2) the death benefit provided with respect to the Guaranteed Period
Account. See "Part 4: The Guaranteed Period Account."
There are two plans available under the Certificates for providing guaranteed
benefits, Plan A and Plan B. Plan A (available for Annuitant issue ages 20
through
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75) provides a combined GMDB/GMIB Benefit. Plan B provides a GMDB Only
Benefit, and has a lower charge.
For Annuitant issue ages 20 through 75, you must select the Combined
GMDB/GMIB Benefit (Plan A) or the GMDB Only Benefit (Plan B) in the
application. To elect the Combined GMDB/GMIB Benefit (Plan A), you must be
both the Owner and the Annuitant under the Certificate. Once selected, the
plan may not be changed. For Annuitant issue ages 76 through 83, for
Certificates issued in New York and in states where the GMIB is not currently
available, the GMDB Only Benefit (Plan B) will apply.
For the specific charges, see "Part 6: Deductions and Charges."
GMDB
Applicable to Certificates issued in all states except
New York
The GMDB is determined daily. On the Contract Date, the GMDB is equal to the
portion of the initial contribution allocated to the Investment Funds.
Thereafter, the GMDB is equal to (a) the GMDB determined on the immediately
preceding Business Day, plus (b) any subsequent contributions and transfers
into the Investment Funds, less (c) any transfers and withdrawals from such
Funds. In addition, interest (see below) is credited to and becomes part of
the GMDB on each Processing Date.
o 6% to 80 Benefit--interest will be credited at the effective annual GMDB
interest rate of 6% (3% for amounts in the Fixed Income Series) through
age 80, and 0% thereafter. Contributions, transfers and withdrawals
during the Contract Year will be taken into account.
Applicable to Certificates issued in New York for Annuitant issue ages 20
through 79.
The GMDB is determined daily. On the Contract Date, the GMDB is equal to the
portion of the initial contribution allocated to the Investment Funds.
Thereafter, the GMDB is equal to (a) the GMDB calculated on the immediately
preceding Business Day, plus (b) any subsequent contributions and transfers
into the Investment Funds, less (c) any transfers and withdrawals from such
Funds. Additionally, on each Processing Date the GMDB is reset at the greater
of the current GMDB and the current Annuity Account Value in the Investment
Funds, not to exceed a cap as described below. The cap does not apply on the
seventh Processing Date. The cap is equal to (a) the portion of the initial
contribution allocated to the Investment Funds, plus (b) any subsequent
contributions and transfers into the Investment Funds, less (c) any transfers
and withdrawals from such Funds, plus (d) interest (see below) that is
credited on each Processing Date plus (e) any amount by which the GMDB is
increased because the cap did not apply on the seventh Processing Date.
o 6% to 80 Cap--interest will be credited at the effective annual GMDB
interest rate of 6% (3% for amounts in the Fixed Income Series) through
age 80, and 0% thereafter. Contributions, transfers and withdrawals will
be taken into account.
Applicable to Certificates issued in New York for Annuitant issue ages 80
through 83
The GMBD is determined daily. On the Contract Date, the GMDB is equal to the
portion of the initial contribution allocated to the Investment Funds.
Thereafter, the GMDB is equal to such portion of the initial contribution
plus (a) any subsequent contributions and transfers into the Investment
Funds, less (b) any transfers and withdrawals from such Funds.
See Appendix II for an example of the calculation of the GMDB.
How Withdrawals and Transfers Affect the GMDB
Withdrawals and transfers out of the Investment Funds will generally cause a
reduction in the GMDB on a dollar-for-dollar basis. However, if on any
Transaction Date, (i) the GMDB exceeds the Annuity Account Value and (ii) the
sum of withdrawals and transfers out of the Investment Funds is greater than
6% of the beginning of year GMDB, the GMDB will be reduced on a pro rata
basis on the Transaction Date. The amount of the reduction will be determined
by dividing the amount of the withdrawal by the Annuity Account Value on the
Transaction Date and multiplying this percentage by the current GMDB.
The timing of your withdrawals and whether they exceed the 6% threshold
described above can have a significant impact on your GMDB.
For example, assuming a beginning of year GMDB of $100,000 and a withdrawal
of $5,000 which represents 5% of the beginning of year GMDB ($5,000/
$100,000), such withdrawal would cause the current GMDB to be reduced by
$5,000. If a withdrawal in the amount of $10,000, which represents 10% of the
beginning of year GMDB ($10,000/$100,000) were to be made, assuming a current
Annuity Account Value of $50,000 the current GMDB would be reduced by 20%
($10,000/$50,000), or $20,000 ($100,000 x .20).
How Payment is Made
<PAGE>
We will pay the death benefit to the beneficiary in the form of the income
annuity option you have chosen under your Certificate. If no income annuity
29
<PAGE>
<PAGE>
option has been chosen at the time of the Annuitant's death, the beneficiary
will receive the death benefit in a lump sum. However, subject to certain
exceptions in the Certificate, Equitable Life's rules then in effect and any
other applicable requirements under the Code, the beneficiary may elect to
apply the death benefit to one or more income annuity options offered by
Equitable Life. See "Income Annuity Options" below. Note that if you are both
the Certificate Owner and the Annuitant, only a life annuity or an annuity
that does not extend beyond the life expectancy of the beneficiary may be
elected.
Successor Annuitant
If you are both the Certificate Owner and the Annuitant and you elect your
spouse to be both the sole primary beneficiary and the successor Annuitant/
Certificate Owner, then no death benefit is payable until your surviving
spouse's death.
On the Processing Date following your death, if the successor
Annuitant/Certificate Owner election was elected at issue of the Certificate
and is in effect at your death, the GMDB will be reset at the greater of the
current GMDB and the current Annuity Account Value in the Investment Funds.
If the Certificate was issued to an Owner/Annuitant with an issue age of 75
or under, the GMDB interest rate will subsequently be credited based on the
current age (as of the Processing Date) of the successor Annuitant/
Certificate Owner. For such Certificates, if the Combined GMDB/GMIB Benefit
(Plan A) was elected, the GMIB (discussed below) will continue to be
available on Contract Date anniversaries seven and later based on the
Contract Date of the Accumulator Certificate, provided the GMIB is exercised
as specified under GMIB below, based on the age of the successor
Annuitant/Certificate Owner.
If the Certificate was issued to an Owner/Annuitant with an issue age of 76
or over, the GMDB interest rate will continue to be 0% and the GMIB will not
be available.
WHEN THE CERTIFICATE OWNER DIES
BEFORE THE ANNUITANT
When you are not the Annuitant and you die before the Annuity Commencement
Date, the beneficiary named to receive the death benefit upon the Annuitant's
death will automatically succeed as Certificate Owner (unless you name a
different person as a successor Owner in a written form acceptable to us and
send it to our Processing Office). The Certificate provides that the original
Certificate Owner's entire interest in the Certificate be completely
distributed to the named beneficiary by the fifth anniversary of such Owner's
death (unless an income annuity option is elected and payments begin within
one year after the Certificate Owner's death and are made over the
beneficiary's life or over a period not to exceed the beneficiary's life
expectancy). If an income annuity option has not been elected, as described
above, on the fifth anniversary of your death, we will pay any Annuity
Account Value remaining on such date, less any applicable withdrawal charge.
If the successor Certificate Owner is your surviving spouse, no distributions
are required as long as both the surviving spouse and the Annuitant are
living.
GMIB
The GMIB, available under the Combined GMDB/ GMIB Benefit (Plan A), may not
currently be available in your state. When it becomes available it will be
added to your Certificate if you then elect the Combined GMDB/GMIB Benefit
(Plan A). State availability information may be obtained from your registered
representative.
The GMIB provides a minimum guaranteed lifetime income upon the application
of the Annuity Account Value in the Investment Funds to purchase the Assured
Payment Plan (Life Annuity with a Period Certain). The Assured Payment Plan
provides payments during a period certain with payments continuing for life
thereafter. On the Transaction Date the amount of the periodic lifetime
income to be purchased under the Assured Payment Plan will be based on the
greater of (i) the Annuity Account Value in the Investment Funds and (ii) an
amount equal to the GMDB described above, reduced by any remaining withdrawal
charges; each divided by "guaranteed maximum annuity purchase rates" under
the Certificate. The guaranteed maximum annuity purchase rates are based on
(i) interest at 2.5% if the GMIB is exercised within 30 days following a
Contract Date anniversary in years 7 through 9 and at 3% if exercised within
30 days following the 10th or later Contract Date anniversary, and (ii)
mortality based on the 1983 Individual Annuity Mortality Table "a" projected
with modified Scale G. The mortality table used in determining such annuity
purchase rates assumes that mortality will improve in the future and is more
conservative than the basis underlying current annuity purchase rates. Your
Annuity Account Value in the Investment Funds will depend on the performance of
such Funds. The amount equal to the GMDB (as discussed above) does not have an
Annuity Account Value or a Cash Value and is used solely for purposes of
calculating the GMIB.
<PAGE>
If you have any Annuity Account Value in the Guaranteed Period Account under
your Accumulator Certificate as of the Transaction Date that you exercise the
GMIB, such Annuity Account Value will also be applied (at current annuity
purchase rates) toward the purchase of payments under the Assured Payment
Plan. Such Annuity Account Value will increase the payments provided by the
GMIB. A market value adjustment may apply.
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<PAGE>
When you exercise the GMIB, we automatically determine whether the
application of your Annuity Account Value in the Investment Funds at current
purchase rates under the Assured Payment Plan (with a period certain as
specified below) would produce higher lifetime income, and if so, the higher
income will be provided.
In addition you can elect any of our income annuity options discussed below.
The GMIB applies only if your election of the Assured Payment Plan meets the
following conditions:
o You are the Owner and Annuitant of the Accumulator Certificate.
o The Assured Payment Plan is purchased within 30 days following the
7th or later Contract Date anniversary under your Accumulator
Certificate; provided it is not purchased earlier than your age 60,
nor later than age 83.
o The period certain you select is as indicated below, based on your
issue age for the Assured Payment Plan Certificate and the type of
payments selected:
<TABLE>
<CAPTION>
LEVEL PAYMENTS
- --------------------------------------------------
ISSUE AGE PERIOD CERTAIN
- ---------------------- --------------------------
<S> <C>
60 through 80 10 years
81 through 83 90 less your issue age
INCREASING PAYMENTS
ISSUE AGE PERIOD CERTAIN
- ---------------------- --------------------------
60 through 70 15 years
71 through 75 12 years
76 through 80 9 years
81 through 83 6 years
</TABLE>
o Payments start one payment mode from the Contract Date of the Assured
Payment Plan Certificate.
Each year on your Contract Date anniversary, if you are eligible to exercise
the GMIB, we will send you a notice of how much income could be provided
under such option on the Contract Date anniversary. You may then notify us
within 30 days following the Contract Date anniversary if you want to
exercise the GMIB by submitting the proper form and returning your
Accumulator Certificate. The income to be provided under the Assured Payment
Plan Certificate will be determined on the Transaction Date that we receive
your request and the Certificate and, therefore, may differ from the notice.
It will be based on the GMIB as of such Transaction Date.
The Assured Payment Plan (Life Annuity with a Period Certain) is offered
through our Prospectus for the Assured Payment Plan dated May 1, 1996, which
may be obtained from your registered representative. You should read it
carefully before you decide to purchase such Plan.
See Appendix III for examples on the GMIB.
CASH VALUE
The Cash Value under the Certificate fluctuates daily with the investment
performance of the Investment Funds you have selected and reflects any upward
or downward market value adjustment. See "Part 4: The Guaranteed Period
Account." We do not guarantee any minimum Cash Value except for amounts in a
Guarantee Period held to the Expiration Date. On any date before the Annuity
Commencement Date while the Certificate is in effect, the Cash Value is equal
to: (1) the Annuity Account Value; (2) less any withdrawal charge; and (3)
less any annual contract fee incurred but not yet deducted. The free corridor
amount will not apply when calculating the withdrawal charge applicable upon
a surrender. See "Part 6: Deductions and Charges."
SURRENDERING THE CERTIFICATES TO
RECEIVE THE CASH VALUE
You may surrender a Certificate to receive the Cash Value at any time while
the Annuitant is living and before the Annuity Commencement Date.
For a surrender to be effective, we must receive your written request and the
Certificate at our Processing Office. The Cash Value will be determined on
the Transaction Date. All benefits under the Certificate will be terminated
as of that date. You may receive the Cash Value in a single sum payment or
apply it under one or more of the income annuity options described below. We
will usually pay the Cash Value within seven calendar days, but we may delay
payment as described in "When Payments are Made" below.
<PAGE>
In some cases, surrenders may have adverse tax consequences. See "Part 8: Tax
Aspects of the Certificates."
INCOME ANNUITY OPTIONS
Income annuity options provide periodic payments over a specified period of
time which may be fixed or may be based on the Annuitant's life. Annuity
forms of payment are calculated as of the Annuity Commencement Date, which is
on file with our Processing Office. You can change the Annuity Commencement
Date by writing to our Processing Office any time before the Annuity
Commencement Date. However, you may not choose a date later than the 28th day
of any month. Also, based on the issue age of the Annuitant, the Annuity
Commencement Date may not be later than the Processing Date which follows the
Annuitant's 90th birthday (may be different in some states).
Before the Annuity Commencement Date, we will send a letter advising that
annuity benefits are
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<PAGE>
<PAGE>
available. Unless you otherwise elect, we will pay fixed annuity benefits on
the "normal form" indicated for your Certificate as of the Annuity
Commencement Date. The amount applied to provide the annuity benefit will be
(1) the Annuity Account Value for any life annuity form or (2) the Cash Value
for any period certain only annuity form except that if the period certain is
more than five years, the amount applied will be no less than 95% of the
Annuity Account Value.
Amounts in the Guarantee Periods that are applied to an income annuity option
prior to an Expiration Date will result in a market value adjustment. See
"Market Value Adjustment for Transfers, Withdrawals or Surrender Prior to the
Expiration Date" in Part 4.
ANNUITY FORMS
o Life Annuity: An annuity which guarantees payments for the rest of the
Annuitant's life. Payments end with the last monthly payment before the
Annuitant's death. Because there is no death benefit associated with
this annuity form, it provides the highest monthly payment of any of the
life income annuity options, so long as the Annuitant is living.
o Life Annuity-Period Certain: This annuity form also guarantees payments
for the rest of the Annuitant's life. In addition, if the Annuitant dies
before a specified period of time (the "certain period") has ended,
payments will continue to the beneficiary for the balance of the certain
period. Certain periods may be 5, 10, 15 or 20 years. A life annuity
with a certain period of 10 years is the normal form of annuity under
the Certificates.
o Life Annuity-Refund Certain: This annuity form guarantees payments to
you for the rest of your life. In addition, if you die before the amount
applied to purchase this annuity option has been recovered, payments
will continue to your beneficiary until that amount has been recovered.
This option is available only as a fixed annuity.
o Period Certain Annuity: This annuity form guarantees payments for a
specific period of time, usually 5, 10, 15 or 20 years, and does not
involve life contingencies.
o Joint and Survivor Life Annuity: This annuity form guarantees life
income to you and, after your death, continuation of income to the
survivor.
The life annuity-period certain and the life annuity-refund certain are
available on either a single life or joint and survivor life basis.
The income annuity options outlined above are available in both fixed and
variable form, unless otherwise indicated. Fixed annuity payments are
guaranteed by us and will be based either on the tables of guaranteed annuity
payments in your Certificate or on our then current annuity rates, whichever
is more favorable for the Annuitant. Variable income annuities may be funded
through the Common Stock Fund through the purchase of annuity units. The
amount of each variable annuity payment may fluctuate, depending upon the
performance of the Common Stock Fund. That is because the annuity unit value
rises and falls depending on whether the actual rate of net investment return
(after deduction of charges) is higher or lower than the assumed base rate.
See "Annuity Unit Values" in the SAI. Variable income annuities may also be
available by separate prospectus through the Common Stock or other Funds of
other separate accounts we offer.
For all Annuitants, the normal form of annuity provides for fixed payments.
We may offer other forms not outlined here. Your registered representative
can provide details.
For each income annuity option, we will issue a separate written agreement
putting the option into effect. Before we pay any annuity benefit, we require
the return of the Certificate.
The amount of the annuity payments will depend on the amount applied to
purchase the annuity, the type of annuity chosen and, in the case of a life
income annuity option, the Annuitant's age (or the Annuitant's and joint
Annuitant's ages) and in certain instances, the sex of the Annuitant(s). Once
an income annuity option is chosen and payments have commenced, no change can
be made.
If, at the time you elect an income annuity option, the amount to be applied
is less than $2,000 or the initial payment under the option elected is less
than $20 monthly, we reserve the right to pay the Annuity Account Value in a
single sum rather than as payments under the annuity form chosen.
<PAGE>
ASSURED PAYMENT PLAN
If you are the Owner and the Annuitant, you may apply your Annuity Account
Value, in whole or in part, and subject to any withdrawal charges to the
extent described below, to purchase the Assured Payment Plan (Life Annuity
with a Period Certain), provided you meet the issue age and payment
restrictions for the Assured Payment Plan. If you apply a part of the Annuity
Account Value, it will be considered a withdrawal and may be subject to
withdrawal charges. See "Withdrawal Options" above. The Assured Payment Plan,
is designed to provide guaranteed level or increasing annual payments for
your life or for your life and the life of a joint Annuitant. If 100% of the
Annuity Account
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<PAGE>
<PAGE>
Value is applied from an Accumulator Certificate to purchase the Assured
Payment Plan at a time when the dollar amount of the withdrawal charge is
greater than 2% of remaining contributions (after withdrawals), such
withdrawal charge will not be deducted. However, a new withdrawal charge
schedule will apply under the Assured Payment Plan. For purposes of the
Assured Payment Plan withdrawal charge schedule, the year in which your
Annuity Account Value is applied under the Assured Payment Plan will be
"Contract Year 1." If 100% of the Annuity Account Value is applied from the
Accumulator when the dollar amount of the withdrawal charge is 2% or less,
such withdrawal charge will not be deducted and there will be no withdrawal
charge schedule under the Assured Payment Plan. You should consider the
timing of your purchase as it relates to the potential for withdrawal charges
under the Assured Payment Plan. No subsequent contributions will be permitted
under the Assured Payment Plan Certificate.
You may also apply your Annuity Account Value to purchase the Assured Payment
Plan (Period Certain) once withdrawal charges are no longer in effect. This
version of the Assured Payment Plan provides for annual payments for a
specified period. No withdrawal charges will apply under the Assured Payment
Plan Certificate.
The Assured Payment Plan (Life Annuity with a Period Certain) and Assured
Payment Plan (Period Certain) are described in our prospectus for the Assured
Payment Plan, dated May 1, 1996. Copies are available from your registered
representative.
To purchase this annuity form we also require the return of your Certificate.
An Assured Payment Plan Certificate will be issued putting this annuity form
into effect.
Depending upon your circumstances, this may be accomplished on a tax-free
basis. Consult your tax adviser.
WHEN PAYMENTS ARE MADE
Under applicable law, application of proceeds from the Investment Funds to a
variable annuity, payment of a death benefit from the Investment Funds,
payment of any portion of the Annuity Account Value (less any applicable
withdrawal charge) from the Investment Funds, and, upon surrender, payment of
the Cash Value from the Investment Funds will be made within seven calendar
days after the Transaction Date. Payments or application of proceeds from the
Investment Funds can be deferred for any period during which (1) the New York
Stock Exchange is closed or trading on it is restricted, (2) sales of
securities or determination of the fair value of an Investment Fund's assets
is not reasonably practicable because of an emergency, or (3) the SEC, by
order, permits us to defer payment in order to protect persons with interest
in the Investment Funds.
We can defer payment of any portion of the Annuity Account Value in the
Guaranteed Period Account (other than for death benefits) for up to six
months while you are living. We may also defer payments for any amount
attributable to a contribution made in the form of a check for a reasonable
amount of time (not to exceed 15 days) to permit the check to clear.
ASSIGNMENT
The Certificates may be assigned at any time before the Annuity Commencement
Date and for any purpose other than as collateral or security for a loan.
Equitable Life will not be bound by an assignment unless it is in writing and
we have received it at our Processing Office. In some cases, an assignment
may have adverse tax consequences. See "Part 8: Tax Aspects of the
Certificates."
DISTRIBUTION OF THE CERTIFICATES
As the distributor of the Certificates, Equitable Distributors, Inc. (EDI),
an indirect wholly owned subsidiary of Equitable Life, has responsibility for
sales and marketing functions for the Certificates. EDI also serves as the
principal underwriter of the Separate Account under the 1940 Act. EDI is
registered with the SEC as a broker-dealer under the Exchange Act and is a
member of the National Association of Securities Dealers, Inc. EDI's
principal business address is 787 Seventh Avenue, New York, New York 10019.
For 1995, EDI was paid a fee of $126,914 for its services under its
"Distribution Agreement" with Equitable Life and the Separate Account.
The Certificates will be sold by registered representatives of EDI and its
affiliates, who are also our licensed insurance agents, as well as by
unaffiliated broker-dealers with which EDI has entered into selling
agreements. Broker-dealer sales compensation (including for EDI and its
affiliates) will not exceed six percent of total contributions made under a
Certificate. EDI may also receive compensation and reimbursement for its
marketing services under the terms of its distribution agreement with
Equitable Life. Broker-dealers receiving sales compensation will generally
pay a portion thereof to their registered representatives as commission
related to sales of the Certificates. The offering of the Certificates is
intended to be continuous.
33
<PAGE>
<PAGE>
PART 6: DEDUCTIONS AND CHARGES
CHARGES DEDUCTED FROM THE
ANNUITY ACCOUNT VALUE
We allocate the entire amount of each contribution to the Investment Options
you select, subject to certain restrictions. We then periodically deduct
certain amounts from your Annuity Account Value. The charges described below
and under "Charges Deducted from the Investment Funds" below will not be
increased by us for the life of the Certificates. We may reduce certain
charges under group or sponsored arrangements. See "Group or Sponsored
Arrangements" below. Charges are deducted proportionately from all the
Investment Funds in which your Annuity Account Value is invested on a pro
rata basis, except as noted below.
Distribution Fee
We deduct a sales load annually in an amount of 0.20% of each contribution
received during the first Contract Year. This sales load is deducted on each
of the first seven Processing Dates (so long as the Certificate is in force).
See "Example" below.
Withdrawal Charge
A withdrawal charge will be imposed as a percentage of each contribution made
to the extent that a withdrawal exceeds the free corridor amount, or if the
Certificate is surrendered to receive its Cash Value. We determine the
withdrawal charge separately for each contribution in accordance with the
table below.
<TABLE>
<CAPTION>
CONTRACT YEAR
1 2 3 4 5 6 7 8+
------ ------ ------ ------ ------ ------ ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Percentage of
Contribution 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0%
</TABLE>
The applicable withdrawal charge percentage is determined by the Contract
Year in which the withdrawal is made or the Certificate is surrendered,
beginning with "Contract Year 1" with respect to each contribution withdrawn
or surrendered. For each contribution, the Contract Year in which we receive
that contribution is "Contract Year 1."
The withdrawal charge is deducted from the Investment Options from which each
such withdrawal is made in proportion to the amount being withdrawn from each
Investment Option.
Free Corridor Amount
The free corridor amount is 15% of the Annuity Account Value at the
beginning of the Contract Year minus any amount previously withdrawn
during that Contract Year.
Any withdrawal requested that exceeds the free corridor amount will be
subject to the withdrawal charge. The 15% free corridor amount is not
applicable to a surrender.
For purposes of calculating the withdrawal charge, (1) we treat contributions
as being withdrawn on a first-in first-out basis, and (2) amounts withdrawn
up to the free corridor amount are not considered a withdrawal of any
contributions. Although we treat contributions as withdrawn before earnings
for purposes of calculating the withdrawal charge, the Federal income tax law
treats earnings as withdrawn first. See "Part 8: Tax Aspects of the
Certificates."
The withdrawal charge is to help cover sales expenses. Because of the way the
distribution fee is calculated the distribution fee and the withdrawal charge
combined will never exceed the 7.0% maximum withdrawal charge.
Example--The example below illustrates how the withdrawal charge and the
distribution fee would be calculated upon a withdrawal. This example assumes
an initial contribution of $12,000 and subsequent contributions of $12,000
each in the second and third Contract Years for total contributions under the
Certificate of $36,000. It also assumes a withdrawal from the Investment
Funds at the beginning of the fourth Contract Year of 25% of an Annuity
Account Value of $40,000.
The total withdrawal amount would be $10,000 ($40,000 x .25). In this case,
$6,000 ($40,000 x .15) would be the free corridor amount and could be
withdrawn without imposition of a withdrawal charge. The balance of $4,000
($10,000 -$6,000) would be considered a withdrawal of a part of the initial
contribution of $12,000. This contribution would be subject to a 4.0%
withdrawal charge of $160 ($4,000 x .04) as indicated in the chart above.
The distribution fee deducted on the Processing Date following the withdrawal
would be based on the remaining initial contribution of $8,000
($12,000-$4,000).
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<PAGE>
<PAGE>
Withdrawal Processing Charge
We reserve the right to impose a charge of the lesser of $25 and 2.0% of the
amount withdrawn for each Lump Sum Withdrawal after the fifth in a Contract
Year. This charge, if made, is to cover our administrative expenses in
processing Lump Sum Withdrawals. See "Asset Based Administrative Charge"
below.
Charges for Combined GMDB/GMIB Benefit (Plan A)
We deduct a charge annually on each Processing Date for providing the
Combined GMDB/GMIB Benefit (Plan A). The charge is equal to a percentage of
the GMDB in effect on the Processing Date. The percentage is equal to 0.45%.
Charges for GMDB Only Benefit (Plan B)
We deduct a charge annually on each Processing Date for providing the GMDB
Only Benefit (Plan B). The charge is equal to a percentage of the GMDB in
effect on the Processing Date. The percentage is equal to 0.20%.
If the amount collected from this charge exceeds the cost of providing the
benefits, it will be to our profit, and may be used to pay distribution
expenses not recovered from sales charges under the Certificates.
Annual Contract Fee
The annual contract fee is incurred at the beginning of the Contract Year and
deducted at the end of each Contract Year on the Processing Date. We deduct
this charge when determining the Cash Value payable if you surrender the
Certificate prior to the end of a Contract Year. The amount deducted is
determined by the amount of your initial contribution. The charge will be $30
per Contract Year if your initial contribution is less than $25,000, and zero
if your initial contribution equals $25,000 or more. This charge is to cover
a portion of our administrative expenses. See "Asset Based Administrative
Charge," below under "Charges Deducted from the Investment Funds."
Charges for State Premium and Other Applicable Taxes
We deduct a charge for applicable taxes, such as state or local premium
taxes, that might be imposed in your state. Generally we deduct this charge
from the amount applied to provide an income annuity option. In certain
states, however, we may deduct the charge for taxes from contributions. The
current tax charge that might be imposed varies by state and ranges from 0%
to 3.5% (the rate is 1% in Puerto Rico and 5% in the Virgin Islands).
Allocation of Certain Charges to the
Guaranteed Period Account
No portion of the distribution fee or the annual contract fee will be
deducted from the Guaranteed Period Account, unless there is insufficient
value in the Investment Funds. If charges are deducted from the Guaranteed
Period Account, they will be deducted from the Annuity Account Value with
respect to the Guarantee Periods in order of the earliest Expiration Date(s)
first. If charges are deducted from the Guaranteed Period Account, you will
not receive the full Guaranteed Rate if held to the Expiration Date. See
"Market Value Adjustment for Transfers, Withdrawals or Surrender Prior to the
Expiration Date" in Part 4.
CHARGES DEDUCTED FROM THE
INVESTMENT FUNDS
Mortality and Expense Risk Charge
We will deduct a daily charge from the assets in each Investment Fund to
compensate us for mortality and expense risks. The daily charge is at the
rate of 0.002477%, which is equivalent to an annual rate of 0.90%, on the
assets in each Investment Fund. Approximately 0.60% of this annual charge is
allocated to the mortality risk and 0.30% is allocated to the expense risk.
We will realize a gain from this charge to the extent it is not needed to
provide for benefits and expenses under the Certificate. We will use any gain
for any lawful purpose including payment of distribution expenses not
recovered from sales charges under the Certificate.
The mortality risk assumed is the risk that Annuitants as a group will live
for a longer time than our actuarial tables predict. As a result, we would be
paying more in annuity income than we planned. We also assume a risk that the
mortality assumptions reflected in our guaranteed annuity payment tables,
shown in each Certificate, will differ from actual mortality experience.
Lastly, we assume a mortality risk to the extent that the guaranteed minimum
death benefit charge is insufficient to pay any amount by which such death
benefit exceeds the Cash Value of the Certificate.
The expense risk assumed is the risk that it will cost us more to issue and
administer the Certificates than we expect.
Asset Based Administrative Charge
We will deduct a daily charge from the assets in each Investment Fund, to
compensate us for a portion of the administrative expenses under the
Certificates. The daily charge is at a rate of 0.000692% (equivalent to an
<PAGE>
annual rate of 0.25%) on the assets in each Investment Fund. The withdrawal
processing charge, the annual contract fee and the asset based administrative
charge are not designed to produce a profit for Equitable Life.
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<PAGE>
<PAGE>
TRUST CHARGES TO PORTFOLIOS
Investment advisory fees charged daily against the Trust's assets, direct
operating expenses of the Trust (such as trustees' fees, expenses of
independent auditors and legal counsel, bank and custodian charges and
liability insurance), and certain investment-related expenses of the Trust
(such as brokerage commissions and other expenses related to the purchase and
sale of securities), are reflected in each Portfolio's daily share price. The
maximum investment advisory fees paid annually by the Portfolios cannot be
changed without a vote by shareholders. They are as follows:
<TABLE>
<CAPTION>
DAILY AVERAGE NET ASSETS
-------------------------------------
FIRST NEXT OVER
$350 $400 $750
MILLION MILLION MILLION
----------- ----------- -----------
<S> <C> <C> <C>
ASSET ALLOCATION SERIES:
Conservative Investors ... .550% .525% .500%
Growth Investors .......... .550% .525% .500%
EQUITY SERIES:
Common Stock .............. .400% .375% .350%
Global .................... .550% .525% .500%
Aggressive Stock .......... .500% .475% .450%
FIXED INCOME SERIES:
Money Market .............. .400% .375% .350%
Intermediate Govt.
Securities ................ .500% .475% .450%
FIRST NEXT OVER
$500 $500 $1
MILLION MILLION BILLION
----------- ----------- -----------
EQUITY SERIES:
Growth & Income ........... .550% .525% .500%
FIRST NEXT OVER
$500 $1 $1.5
MILLION BILLION BILLION
----------- ----------- -----------
EQUITY SERIES:
International ............. .900% .850% .800%
</TABLE>
Investment advisory fees are established under the Trust's investment
advisory agreements between the Trust and its investment adviser, Alliance.
All of these fees and expenses are described more fully in the Trust
prospectus.
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce the distribution
fee, the withdrawal charge and the annual contract fee or change the minimum
initial contribution requirements. We may also change the guaranteed minimum
death benefit and the guaranteed minimum income benefit. Group arrangements
include those in which a trustee or an employer, for example, purchases
contracts covering a group of individuals on a group basis. Sponsored
arrangements include those in which an employer allows us to sell
Certificates to its employees or retirees on an individual basis.
Our costs for sales, administration, and mortality generally vary with the
size and stability of the group among other factors. We take all these
factors into account when reducing charges. To qualify for reduced charges, a
group or sponsored arrangement must meet certain requirements, including our
requirements for size and number of years in existence. Group or sponsored
arrangements that have been set up solely to buy Certificates or that have
been in existence less than six months will not qualify for reduced charges.
We may also establish different Guaranteed Rates for the Guarantee Periods
under different classes of Certificates for group or sponsored arrangements.
We will make these and any similar reductions according to our rules in
effect when a Certificate is approved for issue. We may change these rules
from time to time. Any variation in the distribution fee, withdrawal charge
or annual contract fee will reflect differences in costs or services and will
not be unfairly discriminatory.
Group and sponsored arrangements may be governed by the Code, the Employee
Retirement Income Security Act of 1974 (ERISA), or both. We make no
representations as to the impact of those and other applicable laws on such
programs. WE RECOMMEND THAT EMPLOYERS, TRUSTEES, AND OTHERS PURCHASING OR
MAKING CERTIFICATES AVAILABLE FOR PURCHASE UNDER SUCH PROGRAMS SEEK THE
ADVICE OF THEIR OWN LEGAL AND BENEFITS ADVISERS.
OTHER DISTRIBUTION ARRANGEMENTS
The distribution fee, the withdrawal charge and the annual contract fee may
be reduced or eliminated when sales are made in a manner that results in
<PAGE>
savings of sales and administrative expenses, such as sales through persons
who are compensated by clients for recommending investments and receive no
commission or reduced commissions in connection with the sale of the
Certificates. In no event will a reduction or elimination of a fee or charge
be permitted where it would be unfairly discriminatory.
36
<PAGE>
<PAGE>
PART 7: VOTING RIGHTS
TRUST VOTING RIGHTS
As explained previously, contributions allocated to the Investment Funds are
invested in shares of the corresponding Portfolios of the Trust. Since we own
the assets of the Separate Account, we are the legal owner of the shares and,
as such, have the right to vote on certain matters. Among other things, we
may vote:
o to elect the Trust's Board of Trustees,
o to ratify the selection of independent auditors for the Trust, and
o on any other matters described in the Trust's current prospectus or
requiring a vote by shareholders under the 1940 Act.
Because the Trust is a Massachusetts business trust, annual meetings are not
required. Whenever a shareholder vote is taken, we will give Certificate
Owners the opportunity to instruct us how to vote the number of shares
attributable to their Certificates. If we do not receive instructions in time
from all Certificate Owners, we will vote the shares of a Portfolio for which
no instructions have been received in the same proportion as we vote shares
of that Portfolio for which we have received instructions. We will also vote
any shares that we are entitled to vote directly because of amounts we have
in an Investment Fund in the same proportions that Certificate Owners vote.
Each Trust share is entitled to one vote. Fractional shares will be counted.
Voting generally is on a Portfolio-by-Portfolio basis except that shares will
be voted on an aggregate basis when universal matters, such as election of
Trustees and ratification of independent auditors, are voted upon. However,
if the Trustees determine that shareholders in a Portfolio are not affected
by a particular matter, then such shareholders generally would not be
entitled to vote on that matter.
VOTING RIGHTS OF OTHERS
Currently, we control the Trust. Trust shares are held by other separate
accounts of ours and by separate accounts of insurance companies affiliated
and unaffiliated with us. Shares held by these separate accounts will
probably be voted according to the instructions of the owners of insurance
policies and contracts issued by those insurance companies. While this will
dilute the effect of the voting instructions of the Accumulator Certificate
Owners, we currently do not foresee any disadvantages arising out of this.
The Trust's Board of Trustees intends to monitor events in order to identify
any material irreconcilable conflicts that possibly may arise and to
determine what action, if any, should be taken in response. If we believe
that the Trust's response to any of those events insufficiently protects our
Certificate Owners, we will see to it that appropriate action is taken to
protect our Certificate Owners.
SEPARATE ACCOUNT VOTING RIGHTS
If actions relating to the Separate Account require Certificate Owner
approval, Certificate Owners will be entitled to one vote for each
Accumulation Unit they have in the Investment Funds. Each Certificate Owner
who has elected a variable annuity payout may cast the number of votes equal
to the dollar amount of reserves we are holding for that annuity in the
Common Stock Fund divided by the Accumulation Unit Value for the Common Stock
Fund. We will cast votes attributable to any amounts we have in the
Investment Funds in the same proportion as votes cast by Certificate Owners.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under applicable
Federal securities laws. To the extent that those laws or the regulations
promulgated under those laws eliminate the necessity to submit matters for
approval by persons having voting rights in separate accounts of insurance
companies, we reserve the right to proceed in accordance with those laws or
regulations.
37
<PAGE>
<PAGE>
PART 8: TAX ASPECTS OF THE CERTIFICATES
This prospectus generally covers our understanding of the current Federal
income tax rules that apply to an annuity purchased with after-tax dollars
(non-qualified annuity).
This prospectus does not provide detailed tax information and does not
address issues such as state income and other taxes or Federal gift and
estate taxes. Please consult a tax adviser when considering the tax aspects
of the Accumulator Certificates.
TAX CHANGES
The United States Congress has in the past considered and may in the future
consider proposals for legislation that, if enacted, could change the tax
treatment of annuities. In addition, the Treasury Department may amend
existing regulations, issue new regulations, or adopt new interpretations of
existing laws. State tax laws or, if you are not a United States resident,
foreign tax laws, may affect the tax consequences to you or the beneficiary.
These laws may change from time to time without notice and, as a result, the
tax consequences may be altered. There is no way of predicting whether, when
or in what form any such change would be adopted.
Any such change could have retroactive effects regardless of the date of
enactment. We suggest you consult your legal or tax adviser.
TAXATION OF NON-QUALIFIED ANNUITIES
Equitable Life has designed the Accumulator Certificate to qualify as an
"annuity" for purposes of Federal income tax law. Gains in the Annuity
Account Value of the Certificate generally will not be taxable to an
individual until a distribution occurs, either by a withdrawal of part or all
of its value or as a series of periodic payments. However, there are some
exceptions to this rule: (1) if a Certificate fails the investment
diversification requirements; (2) if an individual transfers a Certificate as
a gift to someone other than a spouse (or divorced spouse), any gain in its
Annuity Account Value will be taxed at the time of transfer; (3) the
assignment or pledge of any portion of the value of a Certificate will be
treated as a distribution of that portion of the Certificate; and (4) when an
insurance company (or its affiliate) issues more than one non-qualified
deferred annuity certificate or contract during any calendar year to the same
taxpayer, the certificates or contracts are required to be aggregated in
computing the taxable amount of any distribution.
Corporations, partnerships, trusts and other non-natural persons generally
cannot defer the taxation of current income credited to the Certificate
unless an exception under the Code applies.
Prior to the Annuity Commencement Date, any withdrawals which do not
terminate your total interest in the Certificate are taxable to you as
ordinary income to the extent there has been a gain in the Annuity Account
Value. The balance of the distribution is treated as a return of the
"investment" or "basis" in the Certificate and is not taxable. Generally, the
investment or basis in the Certificate equals the contributions made, less
any amounts previously withdrawn which were not taxable. Special rules may
apply if contributions made to another annuity certificate or contract prior
to August 14, 1982 are transferred to a Certificate in a tax-free exchange.
To take advantage of these rules, you should notify us prior to such an
exchange.
If you surrender or cancel the Certificate, the distribution is taxable to
the extent it exceeds the investment in the Certificate.
Once annuity payments begin, a portion of each payment is considered to be a
tax-free recovery of investment based on the ratio of the investment to the
expected return under the Certificate. The remainder of each payment will be
taxable. In the case of a variable annuity, special rules apply if the
payments received in a year are less than the amount permitted to be
recovered tax-free. In the case of a life annuity, after the total investment
has been recovered, future payments are fully taxable. If payments cease as a
result of death, a deduction for any unrecovered investment will be allowed.
The taxable portion of a distribution is treated as ordinary income and is
subject to income tax withholding. See "Federal and State Income Tax
Withholding" below. In addition, a penalty tax of 10% applies to the taxable
portion of a distribution unless the distribution is (1) made on or after the
date the taxpayer attains age 59 1/2, (2) made on or after your death, (3)
attributable to the disability of the taxpayer, (4) part of a series of
substantially equal installments as an annuity for the life (or life
expectancy) of the taxpayer or the joint lives (or joint life expectancies)
of the taxpayer and a beneficiary, or (5) with respect to income allocable to
amounts contributed to an annuity certificate or contract prior to August 14,
1982 which are transferred to the Certificate in a tax-free exchange.
38
<PAGE>
<PAGE>
If, as a result of the Annuitant's death, the beneficiary is entitled to
receive the death benefit described in Part 5, the beneficiary is generally
subject to the same tax treatment as would apply to you, had you surrendered
the Certificate (discussed above).
If the beneficiary elects to take the death benefit in the form of a life
income or installment option, the election should be made within 60 days
after the day on which a lump sum death benefit first becomes payable and
before any benefit is actually paid. The tax computation will reflect your
investment in the Certificate.
The Certificate provides a minimum guaranteed death benefit that in certain
circumstances may be greater than either the contributions made or the
Annuity Account Value. This provision provides investment protection against
an untimely termination of a Certificate on the death of an Annuitant at a
time when the Certificate's Annuity Account Value might otherwise have
provided a lower benefit. Although we do not believe that the provision of
this benefit should have any adverse tax effect, it is possible that the IRS
could take a contrary position and could assert that some portion of the
charges for the minimum guaranteed death benefit should be treated for
Federal income tax purposes as a partial withdrawal from the Certificate. If
this were so, such a deemed withdrawal could be taxable, and for Certificate
Owners under age 59 1/2, also subject to tax penalty.
You should discuss with your tax adviser the effect of any surrender or
withdrawal under the Accumulator Certificate after amounts have been applied
to the Life Contingent Annuity.
FEDERAL AND STATE INCOME TAX
WITHHOLDING
Equitable Life is required to withhold Federal income tax on the taxable
portion of annuity payments, unless the recipient elects not to be subject to
income tax withholding. The rate of withholding will depend on the type of
distribution and, in certain cases, the amount of the distribution. Special
withholding rules apply to foreign recipients and United States citizens
residing outside the United States. If a recipient does not have sufficient
income tax withheld or does not make sufficient estimated income tax
payments, however, the recipient may incur penalties under the estimated
income tax rules. Recipients should consult their tax advisers to determine
whether they should elect out of withholding. Requests not to withhold
Federal income tax must be made in writing prior to receiving benefits under
the Certificate. Our Processing Office will provide forms for this purpose.
No election out of withholding is valid unless the recipient provides us with
the correct taxpayer identification number and a United States residence
address.
Certain states have indicated that income tax withholding will apply to
payments made from the Certificate to residents. In some states, a recipient
may elect out of state withholding. Generally, an election out of Federal
withholding will also be considered an election out of state withholding. If
you need more information concerning a particular state or any required
forms, call our Processing Office at the toll-free number and consult your
tax adviser.
Periodic payments are generally subject to wage-bracket type withholding (as
if such payments were payments of wages by an employer to an employee) unless
the recipient elects no withholding. If a recipient does not elect out of
withholding or does not specify the number of withholding exemptions,
withholding will generally be made as if the recipient is married and
claiming three withholding exemptions. There is an annual threshold of
taxable income from periodic annuity payments which is exempt from
withholding based on this assumption. For 1996, a recipient of periodic
payments (e.g., monthly or annual payments) which total less than a $14,075
taxable amount will generally be exempt from Federal income tax withholding,
unless the recipient specifies a different choice of withholding exemption. A
withholding election may be revoked at any time and remains effective until
revoked. If a recipient fails to provide a correct taxpayer identification
number, withholding is made as if the recipient is single with no exemptions.
A recipient of a non-periodic distribution (total or partial) will generally
be subject to withholding at a flat 10% rate. A recipient who provides a
United States residence address and a correct taxpayer identification number
will generally be permitted to elect not to have tax withheld.
All recipients receiving periodic and non-periodic payments will be further
notified of the withholding requirements and of their right to make
withholding elections.
OTHER WITHHOLDING
As a general rule, if death benefits are payable to a person two or more
generations younger than you, a Federal generation skipping tax may be
payable with respect to the benefit at rates similar to the maximum estate
tax rate in effect at the time. The generation skipping tax provisions
generally apply to transfers which would also be subject to the gift and
estate tax rules. Individuals are generally allowed an aggregate generation
skipping tax exemp-
39
<PAGE>
<PAGE>
tion of $1 million. Because these rules are complex, you should consult with
your tax adviser for specific information, especially where benefits are
passing to younger generations, as opposed to a spouse or child.
If we believe a benefit may be subject to generation skipping tax we may be
required to withhold for such tax unless we receive acceptable written
confirmation that no such tax is payable.
SPECIAL RULES FOR CERTIFICATES ISSUED IN PUERTO RICO
Under current law Equitable Life treats income from Accumulator Certificates
as U.S.-source. A Puerto Rico resident is subject to U.S. taxation on such
U.S.-source income. Only Puerto Rico-source income of Puerto Rico residents
is excludable from U.S. taxation. Income from Accumulator Certificates is
also subject to Puerto Rico tax. The computation of the taxable portion of
amounts distributed from a Certificate may differ in the two jurisdictions.
Therefore, an individual might have to file both U.S. and Puerto Rico tax
returns, showing different amounts of income for each. Puerto Rico generally
provides a credit against Puerto Rico tax for U.S. tax paid. Depending on an
individual's personal situation and the timing of the different tax
liabilities, an individual may not be able to take full advantage of this
credit.
Please consult your tax adviser to determine the applicability of these rules
to your own tax situation.
IMPACT OF TAXES TO EQUITABLE LIFE
The Certificates provide that Equitable Life may charge the Separate Account
for taxes. Equitable Life can set up reserves for such taxes.
TRANSFERS AMONG INVESTMENT OPTIONS
Transfers among the Investment Funds or between the Guaranteed Period Account
and one or more Investment Funds are not taxable.
40
<PAGE>
<PAGE>
PART 9: KEY FACTORS IN RETIREMENT PLANNING
INTRODUCTION
The Accumulator is available to help meet the retirement income and
investment needs of individuals. In assessing these retirement needs, some
key factors need to be addressed: (1) the impact of inflation on fixed
retirement incomes; (2) the importance of planning early for retirement; (3)
the benefits of tax-deferral; (4) the selection of an appropriate investment
strategy; and (5) the benefit of annuitization. Each of these factors is
addressed below.
Unless otherwise noted, all of the following presentations use an assumed
annual rate of return of 7.5% compounded annually. This rate of return is for
illustrative purposes only and is not intended to represent an expected or
guaranteed rate of return for any investment vehicle, including the
Accumulator. In addition, unless otherwise noted, none of the illustrations
reflect any charges that may be applied under a particular investment
vehicle, including the Accumulator. Such charges would effectively reduce the
actual return under any investment vehicle.
All earnings in these presentations are assumed to accumulate tax-deferred
unless otherwise noted. Most programs designed for retirement savings offer
tax-deferral. Monies are taxed upon withdrawal and a 10% penalty tax may
apply to premature withdrawals. Certain retirement programs prohibit early
withdrawals. See "Part 8: Tax Aspects of the Certificates." Where taxes are
taken into consideration in these presentations, a 28% tax rate is assumed.
The source of the data used by us to compile the charts which appear in this
Part 9 (other than charts 1, 2, 3, 4 and 7) is Ibbotson Associates, Inc.
Chicago. Stocks, Bonds, Bills and Inflation 1996 Yearbook (TM). All rights
reserved.
In reports or other communications or in advertising material we may make use
of these or other graphic or numerical illustrations that we prepare showing
the impact of inflation, planning early for retirement, tax-deferral,
diversification and other concepts important to retirement planning.
INFLATION
Inflation erodes purchasing power. This means that, in an inflationary
period, the dollar is worth less as time passes. Because many people live on
a fixed income during retirement, inflation is of particular concern to them.
The charts that follow illustrate the detrimental impact of inflation over an
extended period of time. Between 1965 and 1995, the average annual inflation
rate was 5.39%. As demonstrated in Chart 1, this 5.39% annual rate of
inflation would cause the purchasing power of $35,000 to decrease to only
$7,246 after 30 years.
In Chart 2, the impact of inflation is examined from another perspective.
Specifically, the chart illustrates the additional income needed to maintain
the purchasing power of $35,000 over a thirty year period. Again, the
1965-1995 historical inflation rate of 5.39% is used. In this case, an
additional $134,064 would be required to maintain the purchasing power of
$35,000 after 30 years.
CHART 1
[THE FOLLOWING TABLE WAS REPRESENTED AS A
3-D BAR GRAPH IN THE PROSPECTUS]
Today -- $35,000
10 years -- $20,705
20 years -- $12,248
30 years -- $ 7,246
[END OF GRAPHICALLY REPRESENTED DATA]
CHART 2
ANNUAL INCOME NEEDED
[THE FOLLOWING TABLE WAS REPRESENTED AS A
3-D BAR GRAPH IN THE PROSPECTUS]
Today -- $ 35,000
10 years -- $ 59,165
20 years -- $100,013
30 years -- $169,064
Increase Needed: $24,165 $65,013 $134,064
[END OF GRAPHICALLY REPRESENTED DATA]
41
<PAGE>
<PAGE>
STARTING EARLY
The impact of inflation accentuates the need to begin a retirement program
early. The value of starting early is illustrated in the following charts.
As shown in Chart 3, if an individual makes annual contributions of $2,500 to
his or her retirement program beginning at age 30, he or she would accumulate
$414,551 by age 65 under the assumptions described earlier. If that
individual waited until age 50, he or she would only accumulate $70,193 by
age 65 under the same assumptions.
CHART 3
[THE FOLLOWING TABLE WAS REPRESENTED AS
A STACKED AREA GRAPH IN THE PROSPECTUS:]
30 ................. $414,551
40 ................. $182,691
50 ................. $ 70,193
BLACK - Age 30 GRAY - Age 40 DOTTED - Age 50
[END OF GRAPHICALLY REPRESENTED DATA]
In Table 1, the impact of starting early is demonstrated in another format.
For example, if an individual invests $300 monthly, he or she would
accumulate $387,193 in thirty years under our assumptions. In contrast, if
that individual invested the same $300 per month for 15 years, he or she
would accumulate only $97,804 under our assumptions.
TABLE 1
<TABLE>
<CAPTION>
MONTHLY
CONTRIBUTION YEAR 10 YEAR 15 YEAR 20 YEAR 25 YEAR 30
- -------------- -------- -------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
$ 20 $ 3,532 $ 6,520 $ 10,811 $ 16,970 $ 25,813
50 8,829 16,301 27,027 42,425 64,532
100 17,659 32,601 54,053 84,851 129,064
200 35,317 65,202 108,107 169,701 258,129
300 52,969 97,804 162,160 254,552 387,193
</TABLE>
Chart 4 presents an additional way to demonstrate the significant impact of
starting to make contributions to a retirement program earlier rather than
later. It assumes that an individual had a goal to accumulate $250,000
(pre-tax) by age 65. If he or she starts at age 30, under our assumptions he
or she could reach the goal by making a monthly pre-tax contribution of $130
(equivalent to $93 after taxes). The total net cost for the 30 year old in
this hypothetical example would be $39,265. If the individual in this
hypothetical example waited until age 50, he or she would have to make a
monthly pre-tax contribution of $767 (equivalent to $552 after taxes) to
attain the goal, illustrating the importance of starting early.
CHART 4
GOAL: $250,000 BY AGE 65
[THE FOLLOWING TABLE WAS REPRESENTED
AS A BAR GRAPH IN THE PROSPECTUS:]
$ 93 a Month ............. 30 $39,265 $210,735
$212 a Month ............. 40 $63,641 $186,359
$552 a Month ............. 50 $99,383 $150,617
BLACK - Net Cost
WHITE - Tax Savings and Tax-Deferred Earnings at 7.5%
[END OF GRAPHICALLY REPRESENTED DATA]
<PAGE>
TAX-DEFERRAL
Contributing to a retirement plan early is part of an effective strategy for
addressing the impact of inflation. Another part of such a strategy is to
carefully select the types of retirement programs in which to invest. In
deciding where to invest retirement contributions, there are three basic
types of programs.
The first type offers the most tax benefits, and therefore is potentially the
most beneficial for accumulating funds for retirement. Contributions are made
with pre-tax dollars or are tax-deductible and earnings grow income
tax-deferred. An example of this type of program is the deductible Individual
Retirement Annuity (IRA).
The second type of program also provides for tax deferred earnings growth;
however, contributions are made with after-tax dollars. Examples of this type
of program are non-deductible IRAs and non-qualified annuities.
The third approach to retirement savings is fully taxable. Contributions are
made with after-tax dol-
42
<PAGE>
<PAGE>
lars and earnings are taxed each year. Examples of this type of program
include certificates of deposit, savings accounts, and taxable stock, bond or
mutual fund investments.
Consider an example. For the type of retirement program that offers both
pre-tax contributions and tax-deferral, assume that a $2,000 annual pre-tax
contribution is made for thirty years. In this example, the retirement funds
would be $176,363 after thirty years (assuming a 7.5% rate of return, no
withdrawals and assuming the deduction of the 1.15% Separate Account daily
asset charge and the $30 annual contract fee--but no withdrawal charge or
other charges under the Certificate, or Trust charges to Portfolios), and
such funds would be $222,309 without the effect of any charges. Assuming a
lump sum withdrawal was made in year thirty and a 28% tax bracket, these
amounts would be $126,981 and $160,062, respectively.
For the type of program that offers only tax-deferral, assume an after-tax
annual contribution of $1,440 for thirty years and the same rate of return.
The after-tax contribution is derived by taxing the $2,000 pre-tax
contribution again assuming a 28% tax bracket. In this example, the
retirement funds would be $126,275 after thirty years assuming the deduction
of charges and no withdrawals, and $160,062 without the effect of charges.
Assuming a lump sum withdrawal in year thirty, the total after-tax amount
would be $103,014 with charges deducted and $127,341 without charges as
described above.
For the fully taxable investment, assume an after-tax contribution of $1,440
for thirty years. Earnings are taxed annually. After thirty years, the amount
of this fully taxable investment is $108,046.
Keep in mind that taxable investments have fees and charges too (investment
advisory fees, administrative charges, 12b-1 fees, sales loads, brokerage
commissions, etc.). We have not attempted to apply these fees and charges to
the fully taxable amounts since this is intended merely as an example of tax
deferral.
Again, it must be emphasized that the assumed rate of return of 7.5%
compounded annually used in these examples is for illustrative purposes only
and is not intended to represent a guaranteed or expected rate of return on
any investment vehicle. Moreover, early withdrawals of tax-deferred
investments are generally subject to a 10% penalty tax.
INVESTMENT OPTIONS
Selecting an appropriate retirement program is clearly an important part of
an effective retirement planning strategy. Carefully choosing among
Investment Options is another essential component.
During the 1965-1995 period, common stock average annual returns outperformed
the average annual returns of fixed investments such as long-term government
bonds and Treasury Bills (T-Bills). See "Notes" below. Common stocks earned
an average annual return of 10.68% over this period, in contrast to 6.72% and
7.92% for the other two investment categories. Significantly, common stock
returns also outpaced inflation which grew at 5.39% over this period.
Although common stock returns have historically outpaced returns of fixed
investments, people often allocate a significant percentage of their
retirement funds to fixed return investments. Their primary concern is the
preservation of principal. Given this concern, Chart 5 illustrates the impact
of exposing only the interest generated by a fixed investment to the stock
market. In this illustration, the fixed investment is represented by a
Treasury Bill return and the stock investment is represented by the Standard
& Poor's 500 ("S&P 500").
The chart assumes that a $20,000 fixed investment was made on January 1,
1980. If the interest on that investment were to accumulate based upon the
return of the S&P 500, the total investment would have been worth $131,033 in
1995. Had the interest been reinvested in the fixed investment, the fixed
investment would have grown to $62,379. As illustrated in Chart 5,
significant opportunities for growth exist while preserving principal. See
"Notes" below.
CHART 5
$131,033 with Interest Exposed to Stock Market (S&P 500)
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PROSPECTUS]
Market Value Market Value
Month of S&P 500 If 100% in
Ending & Fixed Acct 3 Mo. T-Bill
1980 J 20,160 20,160
F 20,338 20,339
M 20,547 20,586
A 20,823 20,845
M 21,031 21,014
J 21,183 21,142
J 21,369 21,254
A 21,515 21,390
S 21,708 21,550
O 21,930 21,755
N 22,333 21,964
D 22,522 22,252
1981 J 22,619 22,483
F 22,888 22,724
<PAGE>
M 23,239 22,999
A 23,386 23,247
M 23,637 23,514
J 23,878 23,832
J 24,129 24,127
A 24,156 24,436
S 24,196 24,739
O 24,659 25,039
N 25,079 25,306
D 25,118 25,527
1982 J 25,195 25,731
F 25,113 25,968
M 25,278 26,222
A 25,722 26,518
M 25,770 26,799
J 25,861 27,057
J 25,945 27,341
A 26,850 27,549
S 27,028 27,689
O 27,937 27,852
N 28,411 28,028
D 28,690 28,216
1983 J 29,131 28,410
F 29,492 28,587
M 29,965 28,767
A 30,862 28,971
M 30,943 29,171
J 31,495 29,366
J 31,284 29,584
A 31,627 29,808
S 31,938 30,035
O 31,930 30,263
N 32,348 30,475
D 32,418 30,698
<PAGE>
1984 J 32,490 30,931
F 32,222 31,150
M 32,577 31,378
A 32,826 31,632
M 32,297 31,879
J 32,719 32,118
J 32,701 32,381
A 34,295 32,650
S 34,470 32,931
O 34,708 33,260
N 34,705 33,503
D 35,205 33,717
1985 J 36,503 33,936
F 36,845 34,133
M 37,000 34,345
A 37,089 34,592
M 38,272 34,820
J 38,673 35,012
J 38,748 35,229
A 38,744 35,423
S 38,262 35,635
O 39,208 35,867
N 40,706 36,086
D 41,803 36,320
1986 J 42,011 36,524
F 43,792 36,717
M 45,230 36,938
A 45,021 37,130
M 46,493 37,312
J 47,036 37,506
J 45,602 37,701
A 47,609 37,874
S 45,430 38,045
O 46,935 38,220
N 47,703 38,369
D 47,070 38,557
1987 J 50,789 38,719
F 52,147 38,885
M 53,115 39,068
A 52,912 39,240
M 53,327 39,389
J 55,086 39,578
J 56,925 39,760
A 58,441 39,947
S 57,685 40,127
O 49,695 40,367
N 47,333 40,509
D 49,428 40,667
1988 J 50,743 40,785
F 52,280 40,972
M 51,393 41,152
A 51,824 41,342
M 52,174 41,553
J 53,765 41,756
J 53,732 41,969
A 52,733 42,217
S 54,245 42,478
O 55,302 42,738
N 54,915 42,981
D 55,673 43,252
<PAGE>
1989 J 58,362 43,490
F 57,529 43,755
M 58,548 44,048
A 60,672 44,343
M 62,465 44,694
J 62,377 45,011
J 66,323 45,326
A 67,365 45,662
S 67,310 45,958
O 66,344 46,271
N 67,446 46,590
D 68,687 46,874
1990 J 65,533 47,142
F 66,234 47,410
M 67,578 47,714
A 66,541 48,043
M 71,214 48,370
J 70,982 48,674
J 70,955 49,005
A 66,481 49,329
S 64,314 49,625
O 64,286 49,962
N 67,252 50,247
D 68,667 50,548
1991 J 70,922 50,811
F 74,664 51,055
M 76,053 51,280
A 76,316 51,552
M 78,820 51,794
J 76,216 52,011
J 78,945 52,266
A 80,422 52,507
S 79,523 52,748
O 80,405 52,970
N 78,042 53,176
D 84,752 53,378
1992 J 83,616 53,560
F 84,486 53,710
M 83,290 53,892
A 85,196 54,065
M 85,604 54,216
J 84,717 54,390
J 87,387 54,558
A 86,078 54,700
S 86,890 54,842
O 87,176 54,969
N 89,486 55,095
D 90,453 55,249
1993 J 91,013 55,376
F 92,016 55,498
M 93,614 55,637
A 91,858 55,770
M 93,843 55,893
J 94,136 56,033
J 93,836 56,167
A 96,699 56,308
S 96,183 56,454
O 97,774 56,578
N 97,093 56,720
D 98,087 56,850
<PAGE>
1994 J 100,753 56,992
F 98,615 57,112
M 95,249 57,266
A 96,281 57,421
M 97,589 57,605
J 95,734 57,783
J 98,297 57,945
A 101,558 58,159
S 99,666 58,375
O 101,566 58,596
N 98,647 58,813
D 99,883 59,072
1995 J 102,044 59,320
F 105,307 59,557
M 107,925 59,831
A 110,571 60,095
M 114,257 60,419
J 116,566 60,703
J 119,871 60,976
A 120,235 61,263
S 124,521 61,526
O 124,249 61,816
N 128,920 62,075
D 131,033 63,379
$62,379 Without Interest Exposed to Stock Market
(S&P 500)
[END OF GRAPHICALLY REPRESENTED DATA]
Another variation of the example in Chart 5 is to gradually transfer
principal from a fixed investment into the stock market. Chart 6 assumes that
a $20,000 fixed investment was made on January 1, 1980. For the next two
years, $540 is transferred monthly into the stock market (represented by the
S&P 500). The total investment, given this strategy,
43
<PAGE>
<PAGE>
would have grown to $139,695 in 1995. In contrast, had the principal not been
transferred, the fixed investment would have grown to $62,379. See "Notes"
below.
CHART 6
$139,695 with Principal Transfer
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PROSPECTUS]
Market Value Market Value
Month of S&P 500 If 100% in
Ending & Fixed Acct 3 Mo. T-Bil
1980 J 20540 20160
F 20702 20339
M 20770 20586
A 21068 20845
M 21425 21014
J 21659 21142
J 22000 21254
A 22149 21390
S 22394 21550
O 22623 21755
N 23446 21964
D 23372 22252
1981 J 23246 22483
F 23569 22724
M 24053 22999
A 24031 23247
M 24246 23514
J 24324 23832
J 24514 24127
A 24051 24436
S 23651 24739
O 24397 25039
N 25087 25306
D 24857 25527
1982 J 24193 25731
F 23594 25968
M 23618 26222
A 24248 26518
M 23995 26799
J 23892 27057
J 23731 27341
A 25407 27549
S 25647 27689
O 27281 27852
N 28031 28028
D 28386 28216
1983 J 29041 28410
F 29568 28587
M 30282 28767
A 31737 28971
M 31721 29171
J 32549 29366
J 32000 29584
A 32424 29808
S 32790 30035
O 32616 30263
N 33176 30475
D 33142 30698
1984 J 33104 30931
F 32544 31150
M 32969 31378
A 33202 31632
M 32246 31879
J 32767 32118
J 32593 32381
A 34841 32650
S 34959 32931
O 35133 33260
N 35058 33503
D 35692 33717
<PAGE>
1985 J 37434 33936
F 37844 34133
M 37970 34345
A 37984 34592
M 39531 34820
J 40023 35012
J 40038 35229
A 39976 35423
S 39254 35635
O 40428 35867
N 42341 36086
D 43701 36320
1986 J 43926 36524
F 46184 36717
M 47968 36938
A 47659 37130
M 49498 37312
J 50136 37506
J 48265 37701
A 50769 37874
S 47982 38045
O 49830 38220
N 50767 38369
D 49918 38557
1987 J 54519 38719
F 56165 38885
M 57317 39068
A 57035 39240
M 57525 39389
J 59630 39578
J 61849 39760
A 63662 39947
S 62711 40127
O 52932 40367
N 50090 40509
D 52585 40667
1988 J 54165 40785
F 55951 40972
M 54862 41152
A 55344 41342
M 55720 41553
J 57582 41756
J 57509 41969
A 56280 42217
S 58018 42478
O 59225 42738
N 58749 42981
D 59588 43252
1989 J 62695 43490
F 61691 43755
M 62824 44048
A 65234 44343
M 67232 44694
J 67118 45011
J 71581 45326
A 72728 45662
S 72661 45958
O 71544 46271
N 72760 46590
D 74150 46874
1990 J 70617 47142
F 71385 47410
M 72851 47714
A 71676 48043
M 76833 48370
J 76576 48674
J 76526 49005
A 71611 49329
S 69246 49625
O 69192 49962
N 72438 50247
D 73964 50548
1991 J 76420 50811
F 80470 51055
M 81977 51280
A 82241 51552
M 84947 51794
J 82165 52011
J 85076 52266
A 86666 52507
S 85709 52748
O 86662 52970
N 84157 53176
D 91300 53378
<PAGE>
1992 J 90106 53560
F 91047 53710
M 89770 53892
A 91798 54065
M 92244 54216
J 91302 54390
J 94130 54558
A 92765 54700
S 93626 54842
O 93940 54969
N 96377 55095
D 97388 55249
1993 J 97994 55376
F 99055 55498
M 100732 55637
A 98899 55770
M 100989 55893
J 101297 56033
J 100991 56167
A 103992 56308
S 103458 56454
O 105136 56578
N 104425 56720
D 105474 56850
1994 J 108259 56992
F 106046 57112
M 102533 57266
A 103617 57421
M 104976 57605
J 103062 57783
J 105741 57945
A 109118 58159
S 107170 58375
O 109151 58596
N 106146 58813
D 107426 59072
1995 J 109681 59320
F 113071 59557
M 115775 59831
A 118526 60095
M 122319 60419
J 124733 60703
J 128155 60976
A 128547 61263
S 132973 61526
O 132710 61816
N 137525 62075
D 139695 62379
$62,379 Without Principal Transfer
[END OF GRAPHICALLY REPRESENTED DATA]
NOTES
1. Common Stocks: Standard & Poor's (S&P) Composite Index is an unmanaged
weighted index of the stock performance of 500 industrial,
transportation, utility and financial companies. Results shown assume
reinvestment of dividends. Both market value and return on common stock
will vary.
2. U.S. Government Securities: Long-term Government Bonds are measured
using a one-bond portfolio constructed each year containing a bond with
approximately a 20-year maturity and a reasonably current coupon. U.S.
Treasury Bills are measured by rolling over each month a one-bill
portfolio containing, at the beginning of each month, the bill having
the shortest maturity not less than one month. U.S. Government
securities are guaranteed as to principal and interest, and if held to
maturity, offer a fixed rate of return. However, market value and
return on such securities will fluctuate prior to maturity.
The Accumulator can be an effective program for diversifying ongoing
investments between various asset categories. In addition, the Accumulator
offers special features which help address the risk associated with timing
the equity markets, such as dollar cost averaging. By transferring the same
dollar amount each month from the Money Market Fund to other Investment
Funds, dollar cost averaging attempts to shield your investment from short
term price fluctuations. This, however, does not assure a profit or protect
against a loss in declining markets.
THE BENEFIT OF ANNUITIZATION
An individual may shift the risk of outliving his or her principal by
electing a lifetime income annuity. See "Income Annuity Options," in Part 5.
Chart 7 below shows the monthly income that can be generated under various
forms of life annuities, as compared to receiving level payments of interest
only or principal and interest from the investment. Calculations in the Chart
are based on the following assumption: a $100,000 contribution was made at
one of the ages shown, annuity payments begin immediately, and a 5%
annuitization interest rate is used. For purposes of this example, principal
and interest are paid out on a level basis over 15 years. In the case of the
interest only scenario, the principal is always available and may be left to
other individuals at death. Under the principal and interest scenario, a
<PAGE>
portion of the principal will be left at death, assuming the individual dies
within the 15 year period. In contrast, under the life annuity scenarios,
there is no residual amount left.
CHART 7
MONTHLY INCOME
($100,000 CONTRIBUTION)
<TABLE>
<CAPTION>
JOINT AND SURVIVOR*
-----------------------------------
INTEREST PRINCIPAL AND
ONLY FOR INTEREST FOR SINGLE 50% TO 66.67% TO 100% TO
ANNUITANT LIFE 15 YEARS LIFE SURVIVOR SURVIVOR SURVIVOR
- ----------- ---------- -------------- -------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Male 65 $401 $785 $ 617 $560 $544 $513
Male 70 401 785 685 609 588 549
Male 75 401 785 771 674 646 598
Male 80 401 785 888 760 726 665
Male 85 401 785 1,045 878 834 757
</TABLE>
- ------------
The numbers are based on 5% interest compounded annually and the 1983
Individual Annuity Mortality Table "a" projected with modified Scale G.
Annuity purchase rates available at annuitization may vary, depending
primarily on the annuitization interest rate, which may not be less than an
annual rate of 2.5%.
* The Joint and Survivor Annuity Forms are based on male and female
Annuitants of the same age.
44
<PAGE>
<PAGE>
PART 10: INDEPENDENT ACCOUNTANTS
The consolidated financial statements and consolidated financial statement
schedules of Equitable Life for the years ended December 31, 1995 and 1994
included in Equitable Life's Annual Report on Form 10-K, incorporated by
reference in the prospectus, have been examined by Price Waterhouse LLP,
independent accountants, whose reports thereon are incorporated herein by
reference. Such consolidated financial statements and consolidated financial
statement schedules have been incorporated herein by reference in reliance
upon the reports of Price Waterhouse LLP given upon their authority as
experts in accounting and auditing.
45
<PAGE>
<PAGE>
APPENDIX I: MARKET VALUE ADJUSTMENT EXAMPLE
- -----------------------------------------------------------------------------
The example below shows how the market value adjustment would be determined
and how it would be applied to a withdrawal, assuming that $100,000 were
allocated on February 15, 1997 to a Guarantee Period with an Expiration Date
of February 15, 2006 at a Guaranteed Rate of 7.00% resulting in a Maturity
Value at the Expiration Date of $183,846, and further assuming that a
withdrawal of $50,000 were made on February 15, 2001.
<TABLE>
<CAPTION>
ASSUMED
GUARANTEED RATE ON
FEBRUARY 15, 2001
----------------------
5.00% 9.00%
---------- ----------
<S> <C> <C>
As of February 15, 2001 (Before Withdrawal)
- -------------------------------------------
(1) Present Value of Maturity Value, also
Annuity Account Value .................. $144,048 $119,487
(2) Guaranteed Period Amount ............... 131,080 131,080
(3) Market Value Adjustment: (1)-(2) ...... 12,968 (11,593)
February 15, 2001 (After Withdrawal)
- -------------------------------------------
(4) Portion of (3) Associated
with Withdrawal: (3) x [$50,000 / (1)] $ 4,501 $ (4,851)
(5) Reduction in Guaranteed
Period Amount: [$50,000-(4)] ........... 45,499 54,851
(6) Guaranteed Period Amount: (2)-(5) ..... 85,581 76,229
(7) Maturity Value ......................... 120,032 106,915
(8) Present Value of (7), also
Annuity Account Value .................. 94,048 69,487
</TABLE>
You should note that under this example if a withdrawal is made when rates
have increased (from 7.00% to 9.00% in the example), a portion of a negative
market value adjustment is realized. On the other hand, if a withdrawal is
made when rates have decreased (from 7.00% to 5.00% in the example), a
portion of a positive market value adjustment is realized.
46
<PAGE>
<PAGE>
APPENDIX II: GUARANTEED MINIMUM DEATH BENEFIT (GMDB) EXAMPLE
- -----------------------------------------------------------------------------
Under the Certificates the death benefit is equal to the sum of:
(1) the Annuity Account Value in the Investment Funds, or, if greater,
the GMDB (see "GMDB" in Part 5); and
(2) the death benefit provided with respect to the Guaranteed Period
Account (see "Death Benefit Amount" in Part 4).
The following is an example illustrating the calculation of the GMDB.
Assuming $100,000 is allocated to the Investment Funds (with no allocation to
the Fixed Income Series), no subsequent contributions, no transfers and no
withdrawals, the GMDB for an Annuitant age 45 would be calculated as follows:
<TABLE>
<CAPTION>
END OF
CONTRACT ANNUITY ACCOUNT NON-NEW YORK
YEAR VALUE GMDB(1) NEW YORK GMDB
- ---------- --------------- -------------- -------------
<S> <C> <C> <C>
1 $105,000 $106,000 $105,000(2)
2 $108,675 $112,360 $108,675(2)
3 $124,976 $119,102 $119,102(3)
4 $135,912 $126,248 $126,248(3)
5 $149,503 $133,823 $133,823(3)
6 $149,503 $141,852 $141,852(3)
7 $161,463 $150,363 $161,463(3)
8 $161,463 $159,385 $161,463(2)
</TABLE>
The Annuity Account Values for Contract Years 1 through 8 are determined
based on hypothetical rates of return of 5.00%, 3.50%, 15.00%, 8.75%, 10.00%,
0.00%, 8.00% and 0.00%, respectively.
NON-NEW YORK
(1) For Contract Years 1 through 8, the GMDB equals the initial contribution
increased by 6%.
NEW YORK
(2) At the end of Contract Years 1 and 2, and again at the end of Contract
Year 8, the GMDB is equal to the Annuity Account Value.
(3) At the end of Contract Years 3 through 6, the GMDB is equal to the
contribution increased by 6% instead of the Annuity Account Value, since
the GMDB cannot be greater than this amount. However, at the end of the
seventh Contract Year the GMDB is equal to the Annuity Account Value of
$161,463 even though it is greater than the contribution increased at 6%
($150,363) because the cap does not apply on the seventh Processing
Date.
47
<PAGE>
<PAGE>
APPENDIX III: GMIB EXAMPLES
- -----------------------------------------------------------------------------
The GMIB is equal to:
(A) the greater of
(i) the Annuity Account Value in the Investment Funds, and
(ii) an amount equal to the GMDB (reduced by any remaining withdrawal
charges);
divided by
(B) the guaranteed maximum annuity purchase rates.
The examples below assume a male age 60 has purchased an Accumulator
Certificate with an initial contribution of $100,000 that is allocated 100%
to the Investment Funds (excluding the Fixed Income Series). The GMDB in the
10th Contract Year is $179,085 at 6% interest. Assuming hypothetical rates of
return (after deduction of charges) in the Investment Funds of 0% in Example
1 and 8% in Example 2 during the 10 Contract Years, the GMIB in the 10th
Contract Year (assuming level payments under the Assured Payment Plan) would
be as follows:
<TABLE>
<CAPTION>
EXAMPLE 1 EXAMPLE 2
----------- -----------
<S> <C> <C>
(1) Hypothetical Rate of Return ... 0% 8%
(2) Annuity Account Value as of the
Contract Date .................. $100,000 $100,000
(3) The greater of (i) the GMDB and (ii)
the Annuity Account Value as of the
10th Contract Date anniversary . $179,085 $215,892
(4) Guaranteed Maximum Annuity
Purchase Rates for level payments
under the Assured Payment Plan . $14.73 $14.73
(5) GMIB as of 10th Contract Date
anniversary ((3) / (4)) ....... $12,160 $14,659
</TABLE>
In Example 1, the GMDB which is higher than the Annuity Account Value would
provide a GMIB of $12,160. In Example 2, the Annuity Account Value, which at
this point is higher than the GMDB, would provide a GMIB of $14,659.
The rates of return shown above are for illustrative purposes only and are
not intended to represent an expected or guaranteed rate of return. Your
investment results will vary. The level of GMIB under the Assured Payment
Plan will also depend on the guaranteed maximum annuity purchase rates as of
the Transaction Date and the type of payments selected. The examples assume
no transfers or withdrawals, which would affect the GMDB and, thus, the GMIB.
48
<PAGE>
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
PAGE
--------
Part 1: Accumulation Unit Values 2
Part 2: Annuity Unit Values 2
Part 3: Custodian and Independent Accountants 3
Part 4: Money Market Fund and Intermediate Government 3
Securities Fund Yield Information
Part 5: Long-Term Market Trends 4
Part 6: Financial Statements 6
</TABLE>
HOW TO OBTAIN AN ACCUMULATOR STATEMENT OF ADDITIONAL
INFORMATION
Send this request form to:
Equitable Life
Income Management Group
P.O. Box 1547
Secaucus, NJ 07096-1547
Please send me an Accumulator SAI:
---------------------------------------------------------
Name
---------------------------------------------------------
Address
---------------------------------------------------------
City State Zip
49
<PAGE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The estimated expenses of issuance and distribution of the
certificates are as follows:
<TABLE>
<CAPTION>
Amount
------
<S> <C>
Securities and Exchange Commission Registration Fee $68,966
Printing Expenses $92,750
Accounting Fees and Expenses $45,000
Legal Fees and Miscellaneous Expenses $200,000
Total Expenses $406,716
</TABLE>
Item 15. Indemnification of Directors and Officers
Equitable Life's by-laws provide, in Article VII, as follows:
7.5 Indemnification of Directors, Officers and Employees.
(a) To the extent permitted by the law of the State of
New York and subject to all applicable requirements
thereof:
(i) any person 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, or his or her
testator or intestate, is or was a director, officer or
employee of the Company shall be indemnified by the
Company;
(ii) any person 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, or his or her
testator or intestate serves or served any other
organization in any capacity at the request of the
Company may be indemnified by the Company; and
(iii) the related expenses of any such person in any of said
categories may be advanced by the Company
(b) To the extent permitted by the law of the State of New
York, the Company may provide for further
indemnification or advancement of expenses by resolution
of shareholders of the Company or the Board of
Directors, by amendment of these By-Laws, or by
agreement. {Business Corporation Law [section][section]
721-726; Insurance Law [section]1216}
The directors and officers of Equitable Life are insured under
policies issued by Lloyd's of London, X. L. Insurance Company and ACE
Insurance Company. The annual limit on such policies is $100 million, and the
policies insure the officers and directors against certain liabilities arising
out of their conduct in such capacities.
<PAGE>
<PAGE>
Item 16. Exhibits
Exhibits No.
(1) (a) Form of Distribution Agreement by and among
Equitable Distributors, Inc., Separate Account
Nos. 45 and 49 of Equitable Life and Equitable
Life Assurance Society of the United States,
previously filed with this Registration Statement
No. 33-88456 on June 7, 1996.
(b) Form of Sales Agreement among Equitable
Distributors, Inc. as Distributor, a
Broker-Dealer (to be named) and a General Agent
(to be named), previously filed with this
Registration Statement No. 33-88456 on
June 7, 1996.
(c) Form of The Hudson River Trust Sales Agreement by
and among The Equitable Life Assurance Society of
the United States, Equitable Distributors, Inc.
and Separate Account No. 49 of The Equitable Life
Assurance Society of the United States, previously
filed with this Registration Statement No. 33-88456
on June 7, 1996.
(2) Not applicable.
(4) (a) Form of group annuity contract no. 1050-94IC,
previously filed with this Registration Statement
No. 33-88456 on January 17, 1995.
(b) Form of group annuity certificate nos. 94ICA and
94ICB, previously filed with this Registration
Statement No. 33-88456 on January 17, 1995.
(c) Forms of endorsement nos. 94ENIRAI, 94ENNQI and
94ENMVAI to contract no. 1050-94IC and data pages
no. 94ICA/BIM(IRA), (NQ), (NQ Plan A) and (NQ
Plan B), previously filed with this Registration
Statement No. 33-88456 on February 3, 1995.
(d) Forms of application used with the IRA, NQ and
Fixed Annuity Markets, previously filed with this
Registration Statement No. 33-88456 on February
3, 1995.
(e) Form of endorsement no. 95ENLCAI to contract no.
1050-94IC and data pages no. 94ICA/BLCA,
previously filed with this Registration Statement
No. 33-88456 on April 10, 1995.
(f) Forms of data pages for Rollover IRA, IRA Assured
Payment Option, IRA Assured Payment Option Plus,
Accumulator, Assured Growth Plan, Assured Growth
Plan (Flexible Income Program), Assured Payment
Plan (Period Certain) and Assured Payment Plan
(Life with a Period Certain), previously filed
with this Registration Statement No. 33-88456 on
August 31, 1995.
(g) Forms of data pages for Rollover IRA, IRA Assured
Payment Option, IRA Assured Payment Option Plus,
Accumulator, Assured Growth Plan and Assured
Payment Plan (Life Annuity with a Period
Certain), previously filed with this Registration
Statement No. 33-88456 on April 23, 1996.
2
<PAGE>
<PAGE>
Exhibits No.
(h) Form of Separate Account Insulation Endorsement
for the Endorsement Applicable to Market Value
Adjustment Terms, previously filed with this
Registration Statement No. 33-88456 on April 23,
1996.
(i) Forms of Guaranteed Minimum Income Benefit
Endorsements (and applicable data page for
Rollover IRA) for Endorsement Applicable to
Market Value Adjustment Terms and for the Life
Contingent Annuity Endorsement, previously filed
with this Registration Statement No. 33-88456 on
April 23, 1996.
(j) Forms of Enrollment Form/Application for Rollover
IRA, Choice Income Plan, Assured Growth Plan,
Accumulator and Assured Payment Plan, previously
filed with this Registration Statement No.
33-88456 on April 23, 1996.
(k) Forms of data pages for the Accumulator, previously
filed with this Registration Statement No. 33-88456
on June 7, 1996.
(l) Forms of data pages for the Rollover IRA,
previously filed with this Registration Statement
No. 33-88456 on June 7, 1996.
(m) Forms of data pages for Accumulator and Rollover
IRA previously filed with this Registration
Statement No. 33-88456 on October 15, 1996.
(n) Forms of Data Pages for Accumulator and Rollover
IRA.
(5) (a) Opinion and Consent of Jonathan E. Gaines, Esq.,
Vice President and Associate General Counsel of
Equitable, as to the legality of the securities
being registered, previously filed with this
Registration Statement No. 33-88456 on January
17, 1995.
(b) Copy of the Internal Revenue Service
determination letter regarding qualification
under Section 401 of the Internal Revenue Code,
previously filed with this Registration Statement
No. 33-88456 on August 31, 1995.
(8) Not applicable.
(12) Not applicable.
(15) Not applicable.
(23) Consent of Price Waterhouse LLP.
(24)(a) Powers of Attorney for all members of the Board of
Directors, previously filed with this Registration
Statement No. 33-88456 on October 16, 1996.
(24)(b) Power of Attorney for Stanley B. Tulin, previously filed
with this Registration Statement No. 33-88456 on
June 7, 1996.
(26) Not applicable.
(28) Not applicable.
3
<PAGE>
<PAGE>
Item 17. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by
section 10(a)(3) of the Securities Act of
1933;
(ii) to reflect in the Prospectus any facts or
events arising after the effective date of
the registration statement (or the most
recent post-effective amendment thereof)
which, individually or in the aggregate
represent a fundamental change in the
information set forth in the registration
statement;
(iii) To include any material information with
respect to the plan distribution not
previously disclosed in the registration
statement of or any material change to such
information in the registration statement;
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new
registration statement relating to the securities
offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
(b) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in
the Act and is, therefore, unenforceable. In the event
that claim for indemnification against such liabilities
(other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection
with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.
4
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City and State of New York, on
October 16, 1996.
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE
UNITED STATES
(Registrant)
By:/s/Jerome S. Golden
-----------------------
Jerome S. Golden
President
Income Management Group
A Division of The Equitable Life Assurance
Society of the United States
Pursuant to the requirements of the Securities Act of 1933, this
amendment to the Registration Statement has been signed by or on behalf of the
following persons in the capacities and on the date indicated.
PRINCIPAL EXECUTIVE OFFICERS:
James M. Benson President, Chief Executive Officer and Director
William T. McCaffrey Senior Executive Vice President, Chief Operating
Officer and Director
Joseph J. Melone Chairman of the Board and Director
PRINCIPAL FINANCIAL OFFICER:
Stanley B. Tulin Senior Executive Vice President and Chief Financial
Officer
PRINCIPAL ACCOUNTING OFFICER:
/s/ Alvin H. Fenichel Senior Vice President and Controller
Alvin H. Fenichel
October 16, 1996
DIRECTORS:
Claude Bebear Jean-Rene Foutou Winthrop Knowlton
James M. Benson Norman C. Francis Arthur L. Liman
Christopher Brocksom Donald J. Greene George T. Lowy
Francoise Colloc'h John T. Hartley William T. McCaffrey
Henri de Castries John H.F. Haskell, Jr. Joseph J. Melone
Joseph L. Dionne W. Edwin Jarmain Didier Pineau-Valencienne
William T. Esrey G. Donald Johnston, Jr. George J. Sella, Jr.
Dave H. Williams
By: /s/Jerome S. Golden
----------------------
Jerome S. Golden
Attorney-in-Fact
October 16, 1996
5
<PAGE>
<PAGE>
EXHIBIT INDEX
Exhibit No. Page
- ----------- ------
4(n) Forms of data pages for Accumulator
and Rollover IRA.
23 Consent of Price Waterhouse.
6
ACCUMULATOR [COMBINATION GMDB/GMIB BENEFIT (PLAN A)/
GMDB ONLY BENEFIT (PLAN B)]
DATA
PART A -- THIS PART LISTS YOUR PERSONAL DATA.
- ------
OWNER: [John Doe]
ANNUITANT: [John Doe] Age: [60] Sex: [Male]
CONTRACT: GROUP ANNUITY CONTRACT NO. AC 7625
CERTIFICATE NUMBER: [00000]
ENDORSEMENTS ATTACHED: Endorsement Applicable to Non-Qualified
Certificates
Endorsement Applicable to Market Value
Adjustment Terms
ISSUE DATE: [January 1, 1996]
CONTRACT DATE: [January 1, 1996]
ANNUITY COMMENCEMENT DATE: [January 22, 2021]
THE MAXIMUM MATURITY AGE IS AGE [90] -- SEE SECTION 7.03. The Annuity
Commencement Date may not be later than the Processing Date which
follows the Annuitant's [90th] birthday.
BENEFICIARY: [Jane Doe]
SUCCESSOR OWNER/ANNUITANT: [Applicable if Owner and Annuitant are the same
and beneficiary is the spouse at the time of
election and time of Owner/Annuitant's death]
[Jane Doe]
<PAGE>
<PAGE>
DATA PAGES (CONT'D)
PART B -- THIS PART DESCRIBES CERTAIN PROVISIONS OF YOUR CERTIFICATE.
- ------
INITIAL CONTRIBUTION RECEIVED (SEE SECTION 3.02): [$10,000.00]
INVESTMENT OPTIONS AVAILABLE (SEE PART II); YOUR ALLOCATION IS ALSO SHOWN.
INVESTMENT OPTIONS ALLOCATION (SEE SECTION 3.01)
- ------------------ -----------------------------
o [CONSERVATIVE INVESTORS FUND
o GROWTH INVESTORS FUND
o GROWTH AND INCOME FUND $2,500.00
o COMMON STOCK FUND
o GLOBAL FUND
o INTERNATIONAL FUND
o AGGRESSIVE STOCK FUND $2,500.00
o MONEY MARKET FUND
o INTERMEDIATE GOVERNMENT SECURITIES FUND
o GUARANTEE PERIODS (CLASS I)
EXPIRATION DATE AND GUARANTEED RATE
FEBRUARY 15, 1997 $2,500.00
FEBRUARY 15, 1998 $2,500.00
FEBRUARY 15, 1999
FEBRUARY 15, 2000
FEBRUARY 15, 2001
FEBRUARY 15, 2002
FEBRUARY 15, 2003
FEBRUARY 15, 2004
FEBRUARY 15, 2005
FEBRUARY 15, 2006]
-------------------
TOTAL: [$10,000.00]
[Investment Options shown are Investment Funds of our Separate Account No.
[45] and Guarantee Periods shown are in the Guaranteed Period Account. See
Endorsement Applicable to Market Value Adjustment Terms.]
"TYPES" OF INVESTMENT OPTIONS (SEE SECTION 4.02): Not applicable
GUARANTEED INTEREST ACCOUNT (SEE SECTION 2.01): Not available under this
Certificate
<PAGE>
<PAGE>
DATA PAGES (CONT'D)
BUSINESS DAY (SEE SECTION 1.05): A Business Day for this Certificate will mean
any day on which the New York Stock Exchange is open for trading.
PROCESSING DATES (SEE SECTION 1.20): A Processing Date is each Contract Date
anniversary.
AVAILABILITY OF INVESTMENT OPTIONS (SEE SECTION 2.04): (See Data pages, Part
C; Allocation Restrictions)
ALLOCATION OF CONTRIBUTIONS (SEE SECTION 3.01): [Except as indicated below,
your initial and any subsequent Contributions are allocated according to your
instructions. No more than [60%] of any Contribution may be allocated to the
Guaranteed Period Account.]
[If you have elected Principal Assurance in the application then a portion of
your initial Contribution is allocated by us to a Guarantee Period you have
selected. The remaining portion of your initial Contribution is allocated to
the Investment Funds according to your instructions. Any subsequent
Contributions will be allocated according to your instructions. ( See Data
pages, Part C; Allocation Restrictions)]
CONTRIBUTION LIMITS (SEE SECTION 3.02): [Initial Contribution minimum:
[$5,000]. Subsequent Contribution minimum: [$1,000]. Subsequent
Contributions can be made at any time until the Annuitant attains age 84. We
may refuse to accept any Contribution if the sum of all Contributions under
your Certificate would then total more than [$1,000,000]. We reserve the
right to limit aggregate Contributions made after the first Contract Year to
150% of first year Contributions. We may also refuse to accept any
contribution if the sum of all contributions under all Equitable annuity
accumulation certificates/contracts you own would then total more than
[$2,500,000].]
TRANSFER RULES (SEE SECTION 4.02): (See Data pages, Part C)
ALLOCATION OF WITHDRAWALS (SEE SECTION 5.01): Lump Sum Withdrawals - You must
provide withdrawal instructions indicating from which Investment Options the
Lump Sum Withdrawal and any withdrawal charge will be taken.
MINIMUM WITHDRAWAL AMOUNT (SEE SECTION 5.01): [Lump Sum Withdrawals minimum
- - $1,000; Systematic Withdrawals minimum - $250.]
MINIMUM AMOUNT OF ANNUITY ACCOUNT VALUE AFTER A WITHDRAWAL (SEE SECTION 5.02):
Requests for a withdrawal must be for either (a) [90%] or less of the Cash
Value or (b) 100% of the Cash Value (surrender of the Certificate).
We will NOT exercise our rights, described in Sections 5.02(b) and 5.02(c), to
terminate the Certificate.
<PAGE>
<PAGE>
DATA PAGES (CONT'D)
DEATH BENEFIT AMOUNT (SEE SECTION 6.01):
The sum of:
(1) The Annuity Account Value in the Investment Funds, or, if greater,
the guaranteed minimum death benefit defined below; and
(2) The death benefit amount provided with respect to the Endorsement
Applicable to Market Value Adjustment Terms. (See Data pages,
Part C)
Guaranteed Minimum Death Benefit (GMDB)
The GMDB is determined daily. On the Contract Date, the GMDB is equal to
the portion of the initial Contribution allocated to the Investment
Funds. Thereafter, the GMDB is equal to (a) the GMDB determined on the
immediately preceding Business Day, plus (b) any subsequent
Contributions and transfers into the Investment Funds, less (c) any
transfers and withdrawals from such Funds. In addition, interest (see
below) is credited to and becomes part of the GMDB on each Processing
Date.
6% to 80 Benefit - Interest will be credited at the effective annual
GMDB interest rate of 6% (3% for amounts in the Money Market Fund)
through age 80, and 0% thereafter. Contributions, transfers and
withdrawals during the Contract Year will be taken into account.
Withdrawals and transfers out of the Investment Funds generally cause a
reduction in the GMDB on a dollar-for-dollar basis. However, if on any
Transaction Date, (i) the GMDB exceeds the Annuity Account Value and
(ii) the sum of withdrawals and transfers out of the Investment Funds is
greater than 6% of the beginning of year GMDB, the GMDB will be reduced
on a pro rata basis on the Transaction Date. The amount of the reduction
will be determined by dividing the amount of the withdrawal by the
Annuity Account Value on the Transaction Date and multiplying this
percentage by the then current GMDB.
[Applicable for successor Owner/Annuitant election at issue] On the
Processing Date following your death, if the successor Owner/Annuitant
election is in effect at your death, the GMDB will be reset at the
greater of the current GMDB and the current Annuity Account Value in the
Investment Funds. The GMDB interest rate will subsequently be credited
based on the age (as of the Processing Date) of the successor
Owner/Annuitant. [Applicable to Plan A only] [For such Certificates, the
guaranteed minimum income benefit will continue to be available on
Contract Date anniversaries seven and later based on the Contract Date
of this Certificate, provided the guaranteed minimum income benefit is
exercised as specified below under "Guaranteed Minimum Income Benefit,"
based on the age of the successor Owner/Annuitant.]
NORMAL FORM OF ANNUITY (SEE SECTION 7.04): [Life Annuity 10 Year Period
Certain]
<PAGE>
<PAGE>
DATA PAGES (CONT'D)
AMOUNT OF ANNUITY BENEFIT (SEE SECTION 7.05): The amount applied to provide
the Annuity Benefit will be (1) the Annuity Account Value for any life annuity
form or (2) the Cash Value for any period certain only annuity form except
that if the period certain is more than five years the amount applied will be
no less than 95% of the Annuity Account Value.
INTEREST RATE TO BE APPLIED IN ADJUSTING FOR MISSTATEMENT OF AGE OR SEX (SEE
SECTION 7.06): [6% per year]
MINIMUM AMOUNT TO BE APPLIED TO AN ANNUITY (SEE SECTION 7.06): [$2,000, as
well as minimum of $20 for initial monthly annuity payment.]
[Applicable to Plan A only]
GUARANTEED MINIMUM INCOME BENEFIT (GMIB) (SEE SECTION 7.08): You may apply
your Annuity Account Value in the Investment Funds during the period of time
indicated below to purchase a minimum amount of guaranteed lifetime income
under our Assured Payment Plan (Life Annuity with a Period Certain)
Certificate. The Assured Payment Plan (Life Annuity with a Period Certain)
provides payments during a period certain with payments continuing for life
thereafter. The period certain will be based on your age at issue of the
Assured Payment Plan Certificate. For level payments the period certain will
be 10 years for issue ages 60 through 80; and 90 less your issue age for issue
ages 81 through 83. For increasing payments the period certain will be 15
years for issue ages 60 through 70; 12 years for issue ages 71 through 75; 9
years for issue ages 76 through 80; and 6 for issue ages 81 through 83.
The GMIB is available only if it is exercised within 30 days following the 7th
or later Contract Date anniversary under this Certificate; provided it is not
purchased earlier than your age 60, nor later than age 83.
On the Transaction Date the amount of periodic lifetime income to be purchased
under the Assured Payment Plan will be based on an amount equal to the GMDB
described above (reduced by any remaining withdrawal charges) divided by
guaranteed maximum annuity purchase rates under the Certificate. The
guaranteed maximum annuity purchase rates are based on (i) interest at 2.5% if
the GMIB is exercised within 30 days following a Contract Date anniversary in
years 7 through 9 and at 3.0% if exercised within 30 days following the 10th
or later Contract Date anniversary and (ii) mortality based on the 1983
Individual Annuity Mortality Table "a" projected with modified Scale G. See
the Guaranteed Minimum Income Benefit Table of Guaranteed Maximum Annuity
Purchase Rates attached.
If you have Annuity Account Value in the Guaranteed Period Account under your
Certificate as of the Transaction Date that you exercise the GMIB, such
Annuity Account Value will also be applied (at current annuity purchase rates)
towards the purchase of payments under the Assured Payment Plan.
<PAGE>
<PAGE>
DATA PAGES (CONT'D)
When you exercise the GMIB, we automatically determine whether the application
of your Annuity Account Value in the Investment Funds at current purchase
rates under the Assured Payment Plan (with a period certain as specified
above) would produce higher lifetime income, and if so, the higher income
would be provided.
WITHDRAWAL CHARGES (SEE SECTION 8.01): [A withdrawal charge will be imposed as
a percentage of each Contribution made to the extent that a withdrawal exceeds
the Free Corridor Amount as discussed in Section 8.01 or, if the Certificate
is surrendered to receive the Cash Value. We determine the withdrawal charge
separately for each Contribution in accordance with the table below.]
Current and Maximum
Percentage of
Contract Year Contributions
------------- -------------------
[1 7.00%
2 6.00%
3 5.00%
4 4.00%
5 3.00%
6 2.00%
7 1.00%
8 and later 0.00%]
[The applicable withdrawal charge percentage is determined by the Contract
Year in which the withdrawal is made or the Certificate is surrendered,
beginning with "Contract Year 1" with respect to each Contribution withdrawn
or surrendered. For purposes of the table, for each Contribution, the Contract
Year in which we receive that Contribution is "Contract Year 1."]
[Withdrawal charges will be deducted from the Investment Options from which
each withdrawal is made in proportion to the amount being withdrawn from each
Investment Option.]
FREE CORRIDOR AMOUNT (SEE SECTION 8.01): [[15%] of Annuity Account Value at
the beginning of the Contract Year minus any amount previously withdrawn
during the Contract Year. Amounts withdrawn up to the Free Corridor Amount
will not be deemed a withdrawal of Contributions.]
[Withdrawals in excess of the Free Corridor Amount will be deemed withdrawals
of Contributions in the order in which they were made (that is, the first-in,
first-out basis will apply).]
[The Free Corridor Amount does not apply when calculating the withdrawal
charge applicable upon a surrender.]
<PAGE>
<PAGE>
DATA PAGES (CONT'D)
CHARGES DEDUCTED FROM ANNUITY ACCOUNT VALUE (SEE SECTION 8.02):
(a) Distribution Fee: [A distribution fee is deducted in an amount
of [0.20%] of each Contribution received during the first
Contract Year. This charge is deducted on each of the first
seven Processing Dates (so long as the Certificate is in force).
[0.20%] is the maximum we will charge.]
(b) [Applicable to Plan A] Combined GMDB/GMIB Charge: [We deduct
annually on each Processing Date an amount equal to [0.45%] of
the GMDB in effect on such Processing Date. [0.45%] is the
maximum we will charge.]
[Applicable to Plan B] GMDB Charge: [We deduct annually on each
Processing Date an amount equal to [0.20%] of the GMDB in effect
on such Processing Date. [0.20%] is the maximum we will charge]
(c) Annual Contract Fee: [An administrative charge of [$30] per
Contract Year is incurred at the beginning of each Contract Year
and deducted on each Processing Date. [$30] is the maximum
amount we will charge.] [If the initial Contribution equals
$25,000 or more, this charge will be zero.]
(d) Premium Taxes: [A charge for any applicable premium tax
generally will be deducted from the amount applied to provide an
Annuity Benefit under Section 7.02. In certain states, however,
we may deduct the charge from Contributions rather than at the
Annuity Commencement Date.]
All of the above charges will be deducted from the Annuity Account Value in
the Investment Funds on a pro rata basis. If there is insufficient value in
the Investment Funds, all or a portion of the charges in (a), (c) and (d) will
be deducted from the Annuity Account Value with respect to the Guarantee
Periods in order of the earliest Expiration Date(s) first. The charge in (b)
will always be deducted from the Annuity Account Value in the Investment Funds
on a pro rata basis. Also, if you surrender the Certificate or it is
terminated during a Contract Year before the next Processing Date, we will
deduct any annual contract fee in (c) incurred but not yet deducted.
WITHDRAWAL PROCESSING CHARGE (SEE SECTION 8.02): [We reserve the right to
impose an administrative charge of the lesser of $25 and 2.0% of the amount
withdrawn for each Lump Sum Withdrawal after the fifth in a Contract Year.]
DAILY SEPARATE ACCOUNT CHARGES (SEE SECTION 8.04):
Mortality and Expense Risk Charge:
Current and Maximum [Annual rate of 0.90% (equivalent
to a daily rate of 0.002477%).]
Asset Based Administrative Charge:
Current and Maximum [Annual rate of 0.25% (equivalent
to a daily rate of 0.000692%).]
<PAGE>
<PAGE>
DATA PAGES (CONT'D)
PART C -- THIS PART LISTS THE TERMS WHICH APPLY TO THE ENDORSEMENT APPLICABLE
- ------ TO MARKET VALUE ADJUSTMENT TERMS (MVA ENDORSEMENT).
ALLOCATION RESTRICTIONS (SEE SECTION 3.01): If the Annuitant is age 76 or
above, allocations may be made only to Guarantee Periods with maturities of
five years or less; however, in no event may allocations be made to Guarantee
Periods with maturities beyond the February 15th immediately following the
Annuity Commencement Date.
TRANSFERS AT EXPIRATION DATE (SEE ITEM 1 OF MVA ENDORSEMENT): If no election
is made with respect to amounts in the Guaranteed Period Account as of the
Expiration Date, such amounts will be transferred into the Guarantee Period
with the earliest Expiration Date.
MARKET VALUE ADJUSTMENT (MVA) ON TRANSFERS AND WITHDRAWALS (SEE ITEM 2 OF MVA
ENDORSEMENT): The MVA (positive or negative) resulting from a withdrawal or
transfer of a portion of the amount in a Guarantee Period will be a percentage
of the MVA that would be applicable upon a withdrawal of all the Annuity
Account Value from a Guarantee Period. This percentage is determined by (i)
dividing the amount of the withdrawal or transfer from the Guarantee Period by
(ii) the Annuity Account Value in such Guarantee Period prior to the
withdrawal or transfer.
TRANSFER RULES (SEE SECTION 4.02): Transfers are permitted to or from the
Guaranteed Period Account or among the Guarantee Periods once per quarter
during each Contract Year at any time during the quarter. Guarantee Periods to
which transfers may be made are limited based on the attained age of the
Annuitant (see Allocation Restrictions above).
MVA FORMULA (SEE ITEM 3 OF MVA ENDORSEMENT): The Guaranteed Rate for new
allocations to a Guarantee Period is the rate we have in effect for this
purpose even if new allocations to that Guarantee Period would not be accepted
at the time. This rate will not be less than 3%.
The current rate percentage we use in item (c) of the formula is 0.00%. For
purposes of calculating the MVA only, we reserve the right to add up to 0.25%
to such current rate percentage.
DEATH BENEFIT AMOUNT (SEE SECTION 6.01): The larger of (a) the Annuity Account
Value in the Guaranteed Period Account and (b) the sum of the Guaranteed
Period Amounts in each Guarantee Period.
SEPARATE ACCOUNT (SEE ITEM 5 OF THE MVA ENDORSEMENT): The portion of the
assets of Separate Account No. [46] equal to the reserves and other contract
liabilities will not be chargeable with liabilities which arise out of any
other business we conduct.
<PAGE>
<PAGE>
DATA PAGES (CONT'D)
GUARANTEED MINIMUM INCOME BENEFIT
TABLE OF GUARANTEED MAXIMUM ANNUITY
PURCHASE RATES
PER $1,000 OF INITIAL LEVEL ANNUAL INCOME
SINGLE LIFE - [MALE]
AGE AT
CONTRACT DATE
ANNIVERSARIES RATE
------------- ----
67 $16,722
68 16,320
69 15,921
70 14,734
71 14,391
72 14,052
73 13,716
74 13,385
75 13,058
76 12,737
77 12,422
78 12,113
79 11,810
80 11,513
Interest Basis: 2.% years 7 through 9 and 3% years 7 and later
Non-participating
Mortality: 1983 Individual Annuity Mortality Table "a" for
[male] projected with modified Scale G.
Rates required for annuity forms not shown in the above table will be
calculated by us on the same actuarial basis.
<PAGE>
<PAGE>
ROLLOVER IRA [COMBINATION GMDB/GMIB BENEFIT (PLAN A)/
GMDB ONLY BENEFIT (PLAN B)]
DATA
PART A -- THIS PART LISTS YOUR PERSONAL DATA.
- ------
OWNER: [John Doe]
ANNUITANT: [John Doe] Age: [60] Sex: [Male]
CONTRACT: GROUP ANNUITY CONTRACT NO. AC 7627
CERTIFICATE NUMBER: [00000]
ENDORSEMENTS ATTACHED: Endorsement Applicable to IRA Certificates
Endorsement Applicable to Market Value
Adjustment Terms
Endorsement Applicable to Life Contingent Annuity
ISSUE DATE: [January 1, 1996]
CONTRACT DATE: [January 1, 1996]
ANNUITY COMMENCEMENT DATE: [January 22, 2021]
THE MAXIMUM MATURITY AGE IS AGE [90] -- SEE SECTION 7.03. The Annuity
Commencement Date may not be later than the Processing Date which
follows your [90th] birthday.
However, if you choose a date later than age 70 1/2, distribution of at
least the minimum payments required must commence by April 1 of the
calendar year following the calendar year in which you attain age 70 1/2
(see item 2 of the Endorsement Applicable to IRA Certificates).
BENEFICIARY: [Jane Doe]
SUCCESSOR OWNER/ANNUITANT: [Applicable if the beneficiary is the spouse at
the time of election and time of Owner/Annuitant's
death] [Jane Doe]
<PAGE>
<PAGE>
DATA PAGES (CONT'D)
PART B -- THIS PART DESCRIBES CERTAIN PROVISIONS OF YOUR CERTIFICATE.
- ------
INITIAL CONTRIBUTION RECEIVED (SEE SECTION 3.02): [$10,000.00]
INVESTMENT OPTIONS AVAILABLE (SEE PART II); YOUR ALLOCATION IS ALSO SHOWN.
ALLOCATION
INVESTMENT OPTIONS (SEE SECTION 3.01)
- ------------------ ------------------
o [CONSERVATIVE INVESTORS FUND
o GROWTH INVESTORS FUND
o GROWTH AND INCOME FUND $2,500.00
o COMMON STOCK FUND
o GLOBAL FUND
o INTERNATIONAL FUND
o AGGRESSIVE STOCK FUND $2,500.00
o MONEY MARKET FUND
o INTERMEDIATE GOVERNMENT SECURITIES FUND
o GUARANTEE PERIODS (CLASS I)
EXPIRATION DATE AND GUARANTEED RATE
FEBRUARY 15, 1997 5.00% $2,500.00
FEBRUARY 15, 1998 5.00% $2,500.00
FEBRUARY 15, 1999
FEBRUARY 15, 2000
FEBRUARY 15, 2001
FEBRUARY 15, 2002
FEBRUARY 15, 2003
FEBRUARY 15, 2004
FEBRUARY 15, 2005
FEBRUARY 15, 2006
FEBRUARY 15, 2007
FEBRUARY 15, 2008*
FEBRUARY 15, 2009*
FEBRUARY 15, 2010*
FEBRUARY 15, 2011*]
-------------------
TOTAL: [$10,000.00]
[Investment Options shown are Investment Funds of our Separate Account No.
[45] and Guarantee Periods shown are in the Guaranteed Period Account. See
Endorsement Applicable to Market Value Adjustment Terms.]
* Only available under the IRA Assured Payment Option and IRA APO Plus.
"TYPES" OF INVESTMENT OPTIONS (SEE SECTION 4.02): Not applicable
GUARANTEED INTEREST ACCOUNT (SEE SECTION 2.01): Not available under this
Certificate
<PAGE>
<PAGE>
DATA PAGES (CONT'D)
BUSINESS DAY (SEE SECTION 1.05): A Business Day for this Certificate will mean
any day on which the New York Stock Exchange is open for trading.
PROCESSING DATES (SEE SECTION 1.20): A Processing Date is each Contract Date
anniversary.
AVAILABILITY OF INVESTMENT OPTIONS (SEE SECTION 2.04): (See Data pages, Part
C; Allocation Restrictions)
ALLOCATION OF CONTRIBUTIONS (SEE SECTION 3.01): [Except as indicated below,
your initial and any subsequent Contributions are allocated according to your
instructions. No more than [60%] of any Contribution may be allocated to the
Guaranteed Period Account.]
[If you have elected Principal Assurance in the application, then a portion of
your initial Contribution is allocated by us to a Guarantee Period you have
selected. The remaining portion of your initial Contribution is allocated to
the Investment Funds according to your instructions. Any subsequent
Contributions will be allocated according to your instructions.
(See Data pages, Part C; Allocation Restrictions)]
[If you elect the IRA Assured Payment Option after issue of the Certificate,
your Annuity Account Value and any subsequent Contributions will be allocated
by us to the Guaranteed Period Account and the Life Contingent Annuity and no
amounts may be allocated to the Investment Funds. (See Data pages, Part C;
Allocation Restrictions)]
[If you elect the IRA APO Plus after issue of the Certificate, a portion of
your Annuity Account Value is allocated by us to the Guaranteed Period
Account and the Life Contingent Annuity. The remaining Annuity Account Value
is allocated to the Investment Funds according to your instructions until
transferred by us. (See Data pages, Part C; Allocation Restrictions)]
CONTRIBUTION LIMITS (SEE SECTION 3.02): [We will only accept initial
Contributions of at least [$5,000 ] in the form of either a rollover
Contribution or a direct custodian-to-custodian transfer from other individual
retirement arrangements. Subsequent Contributions may be made in an amount of
at least [$1,000]. Subsequent Contributions may be "regular" IRA Contributions
(limited to a maximum of $2,000 a year), rollover Contributions or direct
transfers. Rollover Contributions and direct transfers are not subject to the
$2,000 annual limit. "Regular" IRA Contributions may not be made for the
taxable year in which you attain age 70 1/2 and thereafter. Rollover and
direct transfer Contributions may be made until you attain age 84. However,
any amount contributed after you attain age 70 1/2 must be net of your minimum
distribution for the year in which the rollover or direct transfer
Contribution is made (see item 2 Annuity Commencement Date in Endorsement
Applicable to IRA Certificates). We may refuse to accept any Contribution if
the sum of all Contributions under your Certificate would then total more than
[$1,000,000]. We reserve the right to limit aggregate Contributions made after
the first Contract Year to 150% of first year Contributions. We may also
refuse to accept any contribution if the sum of all contributions under all
Equitable annuity accumulation certificates/contracts you own would then total
more than [$2,500,000].]
<PAGE>
<PAGE>
DATA PAGES (CONT'D)
[A minimum Annuity Account Value of $10,000 is required to elect the IRA
Assured Payment Option or IRA APO Plus.]
TRANSFER RULES (SEE SECTION 4.02): (See Data pages, Part C)
ALLOCATION OF WITHDRAWALS (SEE SECTION 5.01): [Lump Sum Withdrawals - You must
provide withdrawal instructions indicating from which Investment Options the
Lump Sum Withdrawal and any withdrawal charge will be taken; Minimum
Distribution Withdrawals - Unless you specify otherwise, Minimum Distribution
Withdrawals will be withdrawn on a pro rata basis from your Annuity Account
Value in the Investment Funds. If there is insufficient value or no value in
the Investment Funds, any additional amount of the withdrawal required or the
total amount of the withdrawal, as applicable, will be withdrawn from the
Guarantee Periods in order of the earliest Expiration Date(s) first.]
WITHDRAWAL RESTRICTIONS (SEE SECTION 5.01): Minimum Distribution Withdrawals
May be elected in the year in which you attain age 70 1/2 or at a later date.
Minimum Distribution Withdrawals will be made annually.
Minimum Distribution Withdrawals may not be elected while the IRA Assured
Payment Option or IRA APO Plus is in effect.
MINIMUM WITHDRAWAL AMOUNT (SEE SECTION 5.01): [Lump Sum Withdrawals minimum
- - $1,000; Minimum Distribution Withdrawals minimum - $250.]
MINIMUM AMOUNT OF ANNUITY ACCOUNT VALUE AFTER A WITHDRAWAL (SEE SECTION 5.02):
Requests for a withdrawal must be for either (a) [90]% or less of the Cash
Value or (b) 100% of the Cash Value (surrender of the Certificate).
We will NOT exercise our rights, described in Sections 5.02(b) and 5.02(c), to
terminate the Certificate.
DEATH BENEFIT AMOUNT (SEE SECTION 6.01):
The sum of:
(1) The Annuity Account Value in the Investment Funds or, if greater,
the guaranteed minimum death benefit defined below; and
(2) The death benefit amount provided with respect to the Endorsement
Applicable to Market Value Adjustment Terms. (See Data pages,
Part C)
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DATA PAGES (CONT'D)
Guaranteed Minimum Death Benefit (GMDB)
The GMDB is determined daily. On the Contract Date, the GMDB is equal to
the portion of the initial Contribution allocated to the Investment
Funds. Thereafter, the GMDB is equal to (a) the GMDB determined on the
immediately preceding Business Day, plus (b) any subsequent
Contributions and transfers into the Investment Funds, less (c) any
transfers and withdrawals from such Funds. In addition, interest (see
below) is credited to and becomes part of the GMDB on each Processing
Date.
[6% to 80 Benefit - Interest will be credited at the effective annual
GMDB interest rate of 6% (3% for amounts in the Money Market Fund)
through age 80, and 0% thereafter. Contributions, transfers and
withdrawals during the Contract Year will be taken into account.]
[Applicable to Plan A only] [Alternate 6% to 70 Benefit - Interest will
be calculated at the effective annual GMDB interest rate of 6% (3% for
amounts in the Money Market Fund) through age 70, and 0% thereafter.
Contributions, transfers and withdrawals during the Contract Year will
be taken into account.]
Withdrawals and transfers out of the Investment Funds generally cause a
reduction in the GMDB on a dollar-for-dollar basis. However, if on any
Transaction Date, (i) the GMDB exceeds the Annuity Account Value and
(ii) the sum of withdrawals and transfers out of the Investment Funds is
greater than 6% of the beginning of year GMDB, the GMDB will be reduced
on a pro rata basis on the Transaction Date. The amount of the reduction
will be determined by dividing the amount of the withdrawal by the
Annuity Account Value on the Transaction Date and multiplying this
percentage by the then current GMDB.
[Applicable for successor Owner/Annuitant election at issue] On the
Processing Date following your death, if the successor Owner/Annuitant
election is in effect at your death, the GMDB will be reset at the
greater of the current GMDB and the current Annuity Account Value in the
Investment Funds. The GMDB interest rate will subsequently be credited
based on the age (as of the Processing Date) of the successor
Owner/Annuitant. [Applicable to Plan A only] [For such Certificates, the
guaranteed minimum income benefit will continue to be available on
Contract Date anniversaries seven and later based on the Contract Date
of this Certificate, provided the guaranteed minimum income benefit is
exercised as specified below under "Guaranteed Minimum Income Benefit,"
based on the age of the successor Owner/Annuitant.]
NORMAL FORM OF ANNUITY (SEE SECTION 7.04): [Life Annuity 10 Year Period
Certain]
AMOUNT OF ANNUITY BENEFIT (SEE SECTION 7.05): The amount applied to provide
the Annuity Benefit will be (1) the Annuity Account Value for any life annuity
form or (2) the Cash Value for any period certain only annuity form except
that if the period certain is more than five years the amount applied will be
no less than 95% of the Annuity Account Value.
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DATA PAGES (CONT'D)
INTEREST RATE TO BE APPLIED IN ADJUSTING FOR MISSTATEMENT OF AGE OR SEX (SEE
SECTION 7.06): [6% per year]
MINIMUM AMOUNT TO BE APPLIED TO AN ANNUITY (SEE SECTION 7.06): [$2,000, as
well as minimum of $20 for initial monthly annuity payment.]
WITHDRAWAL CHARGES (SEE SECTION 8.01): [A withdrawal charge will be imposed as
a percentage of each Contribution made to the extent that (i) any withdrawals
during a Contract Year exceed the Free Corridor Amount as discussed in Section
8.01 or, (ii) the Certificate is surrendered to receive the Cash Value. We
determine the withdrawal charge separately for each Contribution in accordance
with the table below.]
Current and Maximum
Percentage of
Contract Year Contributions
------------- -------------------
[1 7.00%
2 6.00%
3 5.00%
4 4.00%
5 3.00%
6 2.00%
7 1.00%
8 and later 0.00%]
[The applicable withdrawal charge percentage is determined by the Contract
Year in which the withdrawal is made or the Certificate is surrendered,
beginning with "Contract Year 1" with respect to each Contribution withdrawn
or surrendered. For purposes of the table, for each Contribution, the Contract
Year in which we receive that Contribution is "Contract Year 1."]
[Withdrawal charges will be deducted from the Annuity Account Value in the
Investment Options from which each withdrawal is made in proportion to the
amount being withdrawn from each Investment Option.]
FREE CORRIDOR AMOUNT (SEE SECTION 8.01): [[15%] of Annuity Account Value at
the beginning of the Contract Year, minus any amount previously withdrawn
during the Contract Year. Amounts withdrawn up to the Free Corridor Amount
will not be deemed a withdrawal of Contributions. In any Contract Year when a
Minimum Distribution Withdrawal is the only withdrawal taken, no withdrawal
charge will apply.]
[Lump Sum Withdrawals in excess of the Free Corridor Amount or a Minimum
Distribution Withdrawal when added to a Lump Sum Withdrawal previously taken
in the same Contract Year, which exceeds the Free Corridor Amount will be
deemed withdrawals of Contributions in the order in which they were made (that
is, the first-in, first-out basis will apply).]
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<PAGE>
DATA PAGES (CONT'D)
[The Free Corridor Amount does not apply when calculating the withdrawal
charge applicable upon a surrender.]
[If the IRA Assured Payment Option or IRA APO Plus is in effect a 10% Free
Corridor Amount will apply for Lump Sum Withdrawals.]
CHARGES DEDUCTED FROM ANNUITY ACCOUNT VALUE (SEE SECTION 8.02):
(a) Distribution Fee: [A distribution fee is deducted in an amount
of [0.20%] of each Contribution received during the first
Contract Year. This charge is deducted on each of the first
seven Processing Dates (so long as the Certificate is in force).
[0.20%] is the maximum we will charge.]
(b) [Applicable to Plan A] Combined GMDB/GMIB Charge: [We deduct
annually on each Processing Date an amount equal to [0.45%] of
the GMDB in effect on such Processing Date. [0.45%] is the
maximum we will charge.] [Alternate] [We deduct annually on each
Processing Date an amount equal to [0.30%] of the GMDB in effect
on such Processing Date. [0.30%] is the maximum we will charge.]
[Applicable to Plan B] GMDB Charge: [We deduct annually on each
Processing Date an amount equal to [0.20%] of the GMDB in effect
on such Processing Date. [0.20%] is the maximum we will charge.]
(c) Annual Contract Fee: [An administrative charge of [$30] per
Contract Year is incurred at the beginning of each Contract Year
and deducted on each Processing Date. [$30] is the maximum
amount we will charge.] [If the initial Contribution equals
$25,000 or more, this charge will be zero.]
(d) Premium Taxes: [A charge for any applicable premium tax
generally will be deducted from the amount applied to provide an
Annuity Benefit under Section 7.02. In certain states, however,
we may deduct the charge from Contributions rather than at the
Annuity Commencement Date.]
All of the above charges will be deducted from the Annuity Account Value in
the Investment Funds on a pro rata basis. If there is insufficient value in
the Investment Funds, all or a portion of the charges in (a), (c) and (d) will
be deducted from the Annuity Account Value with respect to the Guarantee
Periods in order of the earliest Expiration Date(s) first. The charge in (b)
will always be deducted from the Annuity Account Value in the Investment Funds
on a pro rata basis. Also, if you surrender the Certificate or it is
terminated during a Contract Year before the next Processing Date, we will
deduct any annual contract fee in (c) incurred but not yet deducted.
WITHDRAWAL PROCESSING CHARGE (SEE SECTION 8.02): [We reserve the right to
impose an administrative charge of the lesser of $25 and 2.0% of the amount
withdrawn for each Lump Sum Withdrawal after the fifth in a Contract Year.]
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DATA PAGES (CONT'D)
DAILY SEPARATE ACCOUNT CHARGES (SEE SECTION 8.04):
Mortality and Expense Risk Charge:
Current and Maximum [Annual rate of 0.90% (equivalent
to a daily rate of 0.002477%).]
Asset Based Administrative Charge:
Current and Maximum [Annual rate of 0.25% (equivalent
to a daily rate of 0.000692%).]
<PAGE>
<PAGE>
DATA PAGES (CONT'D)
PART C -- THIS PART LISTS THE TERMS WHICH APPLY TO THE ENDORSEMENT APPLICABLE
- ------ TO MARKET VALUE ADJUSTMENT TERMS (MVA ENDORSEMENT).
ALLOCATION RESTRICTIONS (SEE SECTION 3.01): Except as indicated below, if you
are age 76 or above, allocations may be made only to Guarantee Periods with
maturities of five years or less; however, in no event may allocations be made
to Guarantee Periods with maturities beyond the February 15th immediately
following the Annuity Commencement Date.
If you elect the IRA Assured Payment Option, your Contributions and Annuity
Account Value will be allocated by us to serially maturing Guarantee Periods
having Expiration Dates in annual sequence and the Modal Payment portion of
the Guaranteed Period Account, if applicable, and applied to the Life
Contingent Annuity, so as to provide substantially equal or increasing
withdrawal payments during a fixed period followed by annuity payments for
life under the Life Contingent Annuity. The fixed period payments consist of
payments described under Transfers at Expiration Date, below. When amounts are
applied under the Life Contingent Annuity, Data pages, Part D will be issued.
If you elect the APO Plus, a portion of your Annuity Account Value is
allocated by us to serially maturing Guarantee Periods having Expiration Dates
in annual sequence and the Modal Payment portion of the Guaranteed Period
Account, if applicable, and applied to the Life Contingent Annuity, so as to
provide substantially equal withdrawal payments during a fixed period followed
by annuity payments for life under the Life Contingent Annuity. Fixed period
payments are described under Transfers at Expiration Date, below. The
remaining Annuity Account Value is allocated among the Investment Funds
according to your instructions. Any subsequent Contributions will also be
allocated to the Investment Funds according to your instructions and then will
be periodically transferred by us to the Guarantee Periods and the Life
Contingent Annuity. When amounts are applied under the Life Contingent
Annuity, Data pages, Part D will be issued.
TRANSFERS AT EXPIRATION DATE (SEE ITEM 1 OF MVA ENDORSEMENT): Except as
indicated below, if no election is made with respect to amounts in the
Guaranteed Period Account as of the Expiration Date, such amounts will be
transferred into the Guarantee Period with the earliest Expiration Date.
If the IRA Assured Payment Option or IRA APO Plus is in effect, upon the
expiration of a Guarantee Period, the Guaranteed Period Amount will be paid to
you in full, if annual payments are to be made on an Expiration Date in each
calendar year. Otherwise, the Guaranteed Period Amount will be transferred
into the Modal Payment portion of the Guaranteed Period Account. You may not
transfer these amounts into any other Investment Options. These withdrawals
will not be subject to a withdrawal charge.
<PAGE>
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DATA PAGES (CONT'D)
[Applicable to Plan A only]
GUARANTEED MINIMUM INCOME BENEFIT (GMIB) (SEE ITEM 1 OF MVA ENDORSEMENT): When
you elect the IRA Assured Payment Option (described above) during the period
of time indicated below, the GMIB provides a minimum amount of guaranteed
lifetime income under such option. The fixed period will be based on your age
at the time of election. For level payments the fixed period will be 10 years
for ages 60 through 75; 85 less your age for ages 76 through 78; and 7 years
for ages 79 through 83. For increasing payments the fixed period will be 15
years for ages 60 through 70; 12 years for ages 71 through 75; 9 years for
ages 76 through 80; and 6 years for ages 81 through 83.
The GMIB is available only if it is exercised within 30 days following the 7th
or later Contract Date anniversary under this Certificate; provided it is not
purchased earlier than your age 60, nor later than age 83.
On the Transaction Date the amount of the periodic lifetime income to be
provided under the IRA Assured Payment Option will be based on an amount equal
to the GMDB described above (reduced by any remaining withdrawal charges)
divided by guaranteed maximum annuity purchase rates under the Certificate.
The guaranteed maximum annuity purchase rates are based on (i) interest at
2.5% if the GMIB is exercised within 30 days following a Contract Date
anniversary in years 7 through 9 and at 3.0% if exercised within 30 days
following the 10th or later Contract Date anniversary and (ii) mortality based
on the 1983 Individual Annuity Mortality Table "a" projected with modified
Scale G. See the Guaranteed Minimum Income Benefit Table of Guaranteed Maximum
Annuity Purchase Rates attached.
If you have Annuity Account Value in the Guaranteed Period Account under your
Certificate as of the Transaction Date that you exercise the GMIB, such
Annuity Account Value will also be applied (at current annuity purchase rates)
toward providing payments under the IRA Assured Payment Option.
When you exercise the GMIB, we automatically determine whether the application
of your Annuity Account Value in the Investment Funds at current purchase
rates under the IRA Assured Payment Option (with a fixed period as specified
above) would produce higher lifetime income, and if so, the higher income
would be provided.
MARKET VALUE ADJUSTMENT (MVA) ON TRANSFERS AND WITHDRAWALS (SEE ITEM 2 OF MVA
ENDORSEMENT): The MVA (positive or negative) resulting from a withdrawal or
transfer of a portion of the amount in a Guarantee Period will be a percentage
of the MVA that would be applicable upon a withdrawal of all of the Annuity
Account Value from a Guarantee Period. This percentage is determined by (i)
dividing the amount of the withdrawal or transfer from the Guarantee Period by
(ii) the Annuity Account Value in such Guarantee Period prior to the
withdrawal or transfer.
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DATA PAGES (CONT'D)
TRANSFER RULES (SEE SECTION 4.02): Transfers are permitted to or from the
Guaranteed Period Account or among the Guarantee Periods once per quarter
during each Contract Year at any time during the quarter. Guarantee Periods to
which transfers may be made are limited based on your attained age (see
Allocation Restrictions above).
MVA FORMULA (SEE ITEM 3 OF MVA ENDORSEMENT): The Guaranteed Rate for new
allocations to a Guarantee Period is the rate we have in effect for this
purpose even if new allocations to that Guarantee Period would not be accepted
at the time. This rate will not be less than 3%.
The current rate percentage we use in item (c) of the formula is [0.00%]. For
purposes of calculating the MVA only, we reserve the right to add up to
[0.25%] to such current rate percentage.
DEATH BENEFIT AMOUNT (SEE SECTION 6.01): The larger of (a) the Annuity Account
Value in the Guaranteed Period Account and (b) the sum of the Guaranteed
Period Amounts in each Guarantee Period.
SEPARATE ACCOUNT (SEE ITEM 5 OF THE MVA ENDORSEMENT): The portion of the
assets of Separate Account No. [46] equal to the reserves and other contract
liabilities will not be chargeable with liabilities which arise out of any
other business we conduct.
<PAGE>
<PAGE>
DATA PAGES (CONT'D)
GUARANTEED MINIMUM INCOME BENEFIT
TABLE OF GUARANTEED MAXIMUM ANNUITY
PURCHASE RATES
PER $1,000 OF INITIAL LEVEL ANNUAL INCOME
SINGLE LIFE - [MALE]
AGE AT
CONTRACT DATE
ANNIVERSARIES RATE
------------- ----
67 $16,722
68 16,320
69 15,921
70 14,734
71 14,391
72 14,052
73 13,716
74 13,385
75 13,058
76 12,737
77 12,422
78 12,113
79 11,810
80 11,513
Interest Basis: 2.% years 7 through 9 and 3% years 7 and later
Non-participating
Mortality: 1983 Individual Annuity Mortality Table "a" for
[male] projected with modified Scale G.
Rates required for annuity forms not shown in the above table will be
calculated by us on the same actuarial basis.
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in each Prospectus
constituting part of this Post-Effective Amendment No. 7 to the Registration
Statement No. 33-88456 on Form S-3 of our report dated February 7, 1996,
appearing on page F-1 of the The Equitable Life Assurance Society of the United
States' Annual Report on Form 10-K for the year ended December 31, 1995. We also
consent to the incorporation by reference of our report on the Consolidated
Financial Statement Schedules dated February 7, 1996, which appears on page F-41
of such Annual Report on Form 10-K. We also consent to the references to us
under the heading "Independent Accountants" in each Prospectus.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
New York, New York
October 15, 1996
