<PAGE>
Registration No. 333-24009
- --------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
- --------------------------------------------------------------------------
POST-EFFECTIVE AMENDMENT NO. 2 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.)
1290 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK 10104
(212) 554-1234
(Address, including zip code, and telephone number,
including area code, of registrant's
principal executive offices)
MARY P. BREEN, VICE PRESIDENT AND ASSOCIATE GENERAL COUNSEL
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
1290 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK 10104
(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
- -------------------------------------------------------------------------------
Approximate date of commencement of proposed sale to the public: As soon after
the effective date of this Registration Statement as is practicable.
<PAGE>
NOTE
The purpose of this Amendment is to include in Registrant's Form S-3
Registration Statement ("Registration Statement") a prospectus, as supplemented
and exhibits relating to a new form of Registrant's Accumulator Combination
Variable and Fixed Deferred Annuity Certificates ("new Certificates"). The new
Certificates are the subject of a Form N-4 registration statement (File
No.333-31131), an amendment to which Registrant is filing contemporaneously
herewith. Registrant does not intend this Amendment to delete or amend any
currently effective prospectus or any supplement thereto contained in the
Registration Statement.
<PAGE>
SUPPLEMENT TO
EQUITABLE ACCUMULATOR(SM) SELECT
(IRA AND NQ)
PROSPECTUS DATED _______, 1997
COMBINATION VARIABLE AND FIXED DEFERRED ANNUITY CERTIFICATES
Issued By:
The Equitable Life Assurance Society of the United States
This prospectus supplement describes the Combined Guaranteed Minimum Income
Benefit and Guaranteed Minimum Death Benefit offered to Annuitant issue ages 76
or older under the Equitable Accumulator Select prospectus. Capitalized terms
in this supplement have the same meaning as in the prospectus.
The Combined Guaranteed Minimum Income Benefit and Guaranteed Minimum Death
Benefit discussed on page 17 of the prospectus under "baseBUILDER Benefits" is
available for Annuitant issue ages 76 or older at a charge of 0.30% of the
Guaranteed Minimum Income Benefit benefit base in effect on a Processing Date.
The benefit is as discussed below:
The Guaranteed Minimum Income Benefit may be exercised only within 30
days following the 7th or later Contract Date anniversary, but in no
event later than the Annuitant's age 90.
The period certain will be 90 less the Annuitant's age at election.
The Guaranteed Minimum Death Benefit applicable to the combined benefit is as
follows:
4% to Age 85 Roll Up - On the Contract Date, the Guaranteed Minimum
Death Benefit is equal to the initial contribution. Thereafter, the
Guaranteed Minimum Death Benefit is credited with interest at 4% on
each Contract Date anniversary through the Annuitant's age 85 (or at
the Annuitant's death, if earlier), and 0% thereafter, and is adjusted
for any subsequent contributions and withdrawals.
The Guaranteed Minimum Income Benefit benefit base described on page 24 of the
prospectus is as follows:
The Guaranteed Minimum Income Benefit benefit base is equal to the
initial contribution on the Contract Date. Thereafter, the Guaranteed
Minimum Income Benefit benefit base is credited with interest at 4% on
each Contract Date anniversary through the Annuitant's age 85, and 0%
thereafter, and is adjusted for any subsequent contributions and
withdrawals.
- ------------------------------------------------------------------------------
Accumulator is a service mark of The Equitable Life Assurance Society of the
United States.
SUPPLEMENT DATED , 1997.
<PAGE>
____________, 1997
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
PROFILE OF THE EQUITABLE ACCUMULATOR(SM) SELECT (IRA
AND NQ) COMBINATION VARIABLE AND FIXED DEFERRED
ANNUITY CERTIFICATES
This Profile is a summary of some of the more important points that you should
know and consider before purchasing a Certificate. The Certificate is more
fully described in the prospectus which accompanies this Profile. Please read
the prospectus carefully.
1. THE ANNUITY CERTIFICATE. The Equitable Accumulator Select Certificate is a
combination variable and fixed deferred annuity issued by Equitable Life.
Certificates can be issued as individual retirement annuities (IRAs) or as
non-qualified annuities (NQ) for after-tax contributions only. The Equitable
Accumulator Select Certificate is designed to provide for the accumulation of
retirement savings and for income through the investment, during an
accumulation phase, of (a) rollover contributions, direct transfers from other
individual retirement arrangements and additional IRA contributions or (b)
after-tax money.
You may invest in Investment Funds where your Certificate's value may vary up
or down depending upon investment performance. You may also invest in Guarantee
Periods (also called Guaranteed Fixed Interest Accounts) that when held to
maturity provide guaranteed interest rates that we have set for your class of
Certificate and a guarantee of principal. If you make any transfers or
withdrawals, the Guaranteed Fixed Interest Accounts' investment value may
increase or decrease until maturity due to interest rate changes. Earnings
accumulate under your Certificate on a tax-deferred basis until amounts are
distributed. Amounts distributed under the Equitable Accumulator Select
Certificate may be subject to income tax.
The Investment Funds offer the potential for better returns than the interest
rates guaranteed under Guaranteed Fixed Interest Accounts, but the Investment
Funds involve risk and you can lose money. You may make transfers among the
Investment Funds and Guaranteed Fixed Interest Accounts. The value of
Guaranteed Fixed Interest Accounts prior to their maturity fluctuates and you
can lose money on premature transfers or withdrawals.
The Certificate provides a number of distribution methods during the
accumulation phase and for converting to annuity income. The amount accumulated
under your Certificate during the accumulation phase will affect the amount of
distribution or annuity benefits you receive.
- ------------------------------------------------------------------------------
Accumulator and baseBUILDER are service marks, and Income Manager is a
registered service mark of The Equitable Life Assurance Society of the
United States.
1
<PAGE>
You can elect the baseBUILDER(SM) at issue of the Certificate for an additional
charge. The baseBUILDER provides a combined Guaranteed Minimum Income Benefit
and Guaranteed Minimum Death Benefit. The Guaranteed Minimum Income Benefit
provides a minimum amount of guaranteed lifetime income regardless of
investment performance when converting, at specific times, to the Income
Manager(R) (Life Annuity with a Period Certain).
2. ANNUITY PAYMENTS. When you are ready to start receiving income, annuity
income is available by applying your Certificate's value to an Income Manager
payout annuity certificate. You can also have your Certificate's value applied
to any of the following ANNUITY BENEFITS: (1) Life Annuity - payments for your
life, (2) Life Annuity - Period Certain - payments for your life, but with
payments continuing to the beneficiary for the balance of the 5, 10, 15 or 20
years (as you select) if you die before the end of the selected period; (3)
Life Annuity - Refund Certain - payments for your life, with payments
continuing to the beneficiary after your death until any remaining amount
applied to this option runs out; and (4) Period Certain Annuity - payments for
a specified period of time, usually 5, 10, 15 or 20 years, with no life
contingencies. Options (2) and (3) are also available as a Joint and Survivor
Annuity - payments for your life, and after your death, continuation of
payments to the survivor for life. Annuity Benefits (other than the Refund
Certain which is only available on a fixed basis) are available as a fixed
annuity, or as a variable annuity, where the dollar amount of your payments
will depend upon the investment performance of the Investment Funds. Once you
begin receiving annuity payments, you cannot change your annuity benefit.
3. PURCHASE. You can purchase an Equitable Accumulator Select IRA Certificate
by rolling over or transferring at least $25,000 or more from one or more
individual retirement arrangements. You may add additional amounts of $1,000 or
more at any time (subject to certain restrictions). Additional amounts are
limited to $2,000 per year, but additional rollover or IRA transfer amounts are
unlimited.
An Equitable Accumulator Select NQ Certificate can be purchased with $25,000 or
more. Additional amounts of $1,000 or more can be made at anytime (subject to
certain restrictions).
4. INVESTMENT OPTIONS. You may invest in any or all of the following Investment
Funds, which invest in shares of corresponding portfolios of EQ Advisors Trust
(EQ Trust) and The Hudson River Trust (HR Trust). The portfolios are described
in the prospectuses for EQ Trust and HR Trust.
EQ TRUST INVESTMENT FUNDS HR TRUST INVESTMENT FUNDS
------------------------- -------------------------
o EQ/Putnam Growth & Income Value o Alliance Money Market
o EQ/Putnam Investors Growth o Alliance High Yield
o EQ/Putnam International Equity o Alliance Common Stock
o MFS Research o Alliance Aggressive Stock
o MFS Emerging Growth Companies o Alliance Small Cap Growth
You may also invest in one or more Guaranteed Fixed Interest Accounts currently
maturing in years 1998 through 2007.
2
<PAGE>
5. EXPENSES. The Certificates have expenses as follows: As a percentage of
assets in the Investment Funds, a daily charge is deducted for mortality and
expense risks (including the Guaranteed Minimum Death Benefit) at an annual
rate of 1.10%, a daily charge is deducted for administration expenses at an
annual rate of 0.25%, and a daily distribution charge is deducted for sales
expenses at an annual rate of 0.25%. If the baseBUILDER benefit is elected,
there is an annual charge of 0.30% expressed as a percentage of the Guaranteed
Minimum Income Benefit benefit base.
The charges for the portfolios of EQ Trust range from 0.85% to 1.20% of the
average daily net assets of EQ Trust portfolios, depending upon EQ Trust
portfolios selected. The charges for the portfolios of HR Trust range from
0.64% to 1.20% of the average daily net assets of HR Trust portfolios,
depending upon HR Trust portfolios selected. The amounts for EQ Trust are based
on current expense caps, and the amounts for HR Trust are based on restated
values during 1996 (as well as an expense cap for the Alliance Small Cap Growth
portfolio). The 12b-1 fee for the portfolios of EQ Trust and HR Trust are 0.25%
of the average daily assets of EQ Trust and HR Trust, respectively. Charges for
state premium and other applicable taxes may also apply at the time you elect
to start receiving annuity payments.
The following chart is designed to help you understand the charges in the
Certificate. The "Total Annual Charges" column shows the combined total of the
Certificate charges deducted as a percentage of assets in the Investment Funds
and the portfolio charges, as shown in the first two columns. The last two
columns show you two examples of the charges, in dollars, that you would pay
under a Certificate, and include the benefit based charge for the baseBUILDER
benefit. The examples assume that you invested $1,000 in a Certificate which
earns 5% annually and that you withdraw your money: (1) at the end of year 1,
and (2) at the end of year 10. For year 1, the Total Annual Charges are
assessed. For year 10, the example shows the aggregate of all the annual
charges assessed for the 10 years. No charges for state premium and other
applicable taxes are assumed in the examples.
<TABLE>
<CAPTION>
EXAMPLES
TOTAL ANNUAL TOTAL ANNUAL TOTAL Toytal Annual
CERTIFICATE PORTFOLIO ANNUAL Expenses at end of:
INVESTMENT FUND CHARGES CHARGES CHARGES (1) (2)
<S> <C> <C> <C>
1 Year 10 Years
EQ/Putnam Growth & Income
Value 1.60% 0.85% 2.45% $28.01 $315.46
EQ/Putnam Investors Growth 1.60% 0.85% 2.45% $28.01 $315.46
EQ/Putnam International
Equity 1.60% 1.20% 2.80% $31.48 $348.76
MFS Research 1.60% 0.85% 2.45% $28.01 $315.46
MFS Emerging Growth
Companies 1.60% 0.85% 2.45% $28.01 $315.46
Alliance Money Market 1.60% 0.64% 2.24% $25.93 $294.91
Alliance High Yield 1.60% 0.91% 2.51% $28.61 $321.24
Alliance Common Stock 1.60% 0.66% 2.26% $26.13 $296.88
Alliance Aggressive Stock 1.60% 0.83% 2.43% $27.81 $313.50
Alliance Small Cap Growth 1.60% 1.20% 2.80% $31.48 $348.77
</TABLE>
For Investment Funds investing in portfolios with less than 10 years of
operations, charges have been estimated. The charges reflect any waiver or
limitation. For more detailed information, see the Fee Table in the prospectus.
3
<PAGE>
We also offer other Equitable Accumulator certificates that do not have a
distribution charge, but certain withdrawals are subject to a charge which
declines to zero after seven years for each contribution. These other
certificates may also provide higher guaranteed interest rates for Guaranteed
Fixed Interest Accounts. A current prospectus for the Equitable Accumulator
with a withdrawal charge instead of a distribution charge may be obtained from
your registered representative.
6. TAXES. In most cases, your earnings are not taxed until distributions are
made from your Certificate. If you are younger than age 59 1/2 when you receive
any distributions, in addition to the regular income tax you may be charged a
10% Federal tax penalty on the taxable amount received.
7. ACCESS TO YOUR MONEY. During the accumulation phase, you may receive
distributions under a Certificate through the following WITHDRAWAL OPTIONS.
Under both IRA and NQ Certificates: (1) Lump Sum Withdrawals of at least $1,000
taken at any time; and (2) Systematic Withdrawals paid monthly, quarterly or
annually, subject to certain restrictions, including a maximum percentage of
your Certificate's value. Under IRA Certificates only: (1) Substantially Equal
Payment Withdrawals (if you are less than age 59 1/2), paid monthly, quarterly
or annually based on life expectancy; and (2) Minimum Distribution Withdrawals
(after you are age 70 1/2), which pays the minimum amount necessary to meet
minimum distribution requirements in the Internal Revenue Code.
You also have access to your Certificate's value by surrendering the
Certificate. Withdrawals and surrenders are not subject to withdrawal charges,
but may be subject to income tax and a tax penalty. Withdrawals from Guaranteed
Fixed Interest Accounts prior to their maturity may result in a market value
adjustment.
8. PERFORMANCE. During the accumulation phase, your Certificate's value in the
Investment Funds may vary up or down depending upon the investment performance
of the Investment Funds you have selected. Past performance is not a
guarantee of future results.
9. DEATH BENEFIT. If the annuitant dies before amounts are applied under an
annuity benefit, the named beneficiary will be paid a death benefit. The death
benefit is equal to your Certificate's value in the Investment Funds and
Guaranteed Fixed Interest Accounts, or if greater, the Guaranteed Minimum Death
Benefit.
If you are between the ages of 20 through 79, you choose one of two types of
Guaranteed Minimum Death Benefit available under the Certificate: a "6% to Age
80 Roll Up" and an "Annual Ratchet to Age 80." Both types are described below.
Both benefits are based on the amount you initially put in and are adjusted for
additional contributions and withdrawals. For ages 80 through 83 a return of
the money you have invested under the Certificate will be the Guaranteed
Minimum Death Benefit.
4
<PAGE>
6% to Age 80 Roll Up (Not available in New York) -- We add interest to the
initial amount at 6% (4% for amounts in the Alliance Money Market Fund and
Guaranteed Fixed Interest Accounts) through the Annuitant's age 80 (or at the
annuitant's death, if earlier). The 6% interest rate will still apply for
amounts in the Alliance Money Market Fund under the Special Dollar Cost
Averaging program discussed below.
Annual Ratchet to Age 80 -- The Guaranteed Minimum Death Benefit is reset
each year through the Annuitant's age 80 to the Certificate's value, if it is
higher than the prior year's Guaranteed Minimum Death Benefit. In New York, the
Guaranteed Minimum Death Benefit at the death of the annuitant will never be
less than the amounts in the Investment Funds, plus amounts (not reflecting any
increase due to interest rate changes) in the Guaranteed Fixed Interest
Accounts reflecting guaranteed interest.
10. OTHER INFORMATION.
QUALIFIED PLANS. If the Certificates will be purchased by certain types of
plans qualified under Section 401(a), or 401(k) of the Internal Revenue Code,
please consult your tax adviser first. Any discussion of taxes in this profile
does not apply.
BASEBUILDER BENEFIT. The baseBUILDER (available for annuitant ages 20 through
75 at issue of the Certificates) is an optional benefit that combines the
Guaranteed Minimum Income Benefit and the Guaranteed Minimum Death Benefit. The
baseBUILDER benefit may be available for annuitant ages 76 and older, and is
currently not available in New York.
Income Benefit - The Guaranteed Minimum Income Benefit, as part of the
baseBUILDER, provides a minimum amount of guaranteed lifetime income
for your future. When you are ready to convert (at specified future
times) your Certificate's value to the Income Manager (Life Annuity
with a Period Certain) the amount of lifetime income that will be
provided will be the greater of (i) your Guaranteed Minimum Income
Benefit or (ii) your Certificate's current value applied at current
annuity factors.
Death Benefit - As part of the baseBUILDER you have the choice, at
issue of the Certificate, of two Guaranteed Minimum Death Benefit
options: (i) the 6% to Age 80 Roll Up or, (ii) the Annual Ratchet to
Age 80. These options are described in "Death Benefit" above.
FREE LOOK. You can examine the Certificate for a period of 10 days after you
receive it, and return it to us for a refund. The free look period is longer in
some states.
Your refund will equal your Certificate's value, reflecting any investment gain
or loss, in the Investment Funds, and any increase or decrease in the value of
any amounts held in the Guaranteed Fixed Interest Accounts, through the date we
receive your Certificate. Some states or Federal income tax regulations may
require that we calculate the refund differently.
PRINCIPAL ASSURANCE. This option is designed to assure the return of your
original amount invested on a Guaranteed Fixed Interest Account maturity date,
by putting a portion of your money in a particular Guaranteed Fixed Interest
Account, and the balance in the Investment Funds in any way you choose.
5
<PAGE>
Assuming that you make no transfers or withdrawals of the portion in the
Guaranteed Fixed Interest Account, such amount will grow to your original
investment upon maturity.
DOLLAR COST AVERAGING. Special Dollar Cost Averaging - You can elect when you
apply for your Certificate to allocate your contribution to the Alliance Money
Market Fund and have it transferred from the Alliance Money Market Fund into
the other Investment Funds on a monthly basis over the first twelve months,
during which time mortality and expense risks, administration, and distribution
charges will not be deducted from the Alliance Money Market Fund. General
Dollar Cost Averaging -You can elect at any time to put money into the Alliance
Money Market Fund and have a dollar amount or percentage transferred from the
Alliance Money Market Fund into the other Investment Funds on a periodic basis
over a longer period of time, and all applicable charges deducted from the
Alliance Money Market Fund will apply. Dollar cost averaging does not assure a
profit or protect against a loss should market prices decline.
REPORTS. We will provide you with an annual statement of your Certificate's
values as of the last day of each year, and three additional reports of your
Certificate's values each year. You also will be provided with written
confirmations of each financial transaction, and copies of annual and
semi-annual statements of EQ Trust and HR Trust.
You may call toll-free at 1-800-789-7771 for a recording of daily Investment
Fund values and guaranteed rates applicable to Guaranteed Fixed Interest
Accounts.
11. INQUIRIES. If you need more information, please contact your registered
representative. You may also contact us, at:
The Equitable Life Assurance Society of the United States
Income Management Group
P.O. Box 1547
Secaucus, NJ 07096-1547
Telephone 1-800-789-7771 and Fax 1-201-583-2224
6
<PAGE>
EQUITABLE ACCUMULATOR(SM) SELECT
(IRA AND NQ)
PROSPECTUS DATED , 1997
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 issued on a group
basis or as individual contracts. Enrollment under a group contract is
evidenced by issuance of a certificate. Certificates and individual contracts
are each referred to as "Certificates." Certificates can be issued as
individual retirement annuities (IRA), or non-qualified annuities for
after-tax contributions only (NQ). Under IRA Certificates we 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 $25,000 is required to put an
IRA or NQ Certificate into effect.
The Certificates are designed to provide for the accumulation of retirement
savings and for 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.
There are no withdrawal charges under the Certificates; however an asset
based distribution charge applies for the life of the Certificate.
The Certificates offer investment options (INVESTMENT OPTIONS) that permit
you to create your own strategies. These Investment Options include 10
variable investment funds (INVESTMENT FUNDS) and each GUARANTEE PERIOD in the
GUARANTEED PERIOD ACCOUNT.
We invest each Investment Fund in Class IB shares of a corresponding
portfolio (PORTFOLIO) of EQ Advisors Trust (EQ TRUST) and The Hudson River
Trust (HR TRUST), mutual funds whose shares are purchased by separate
accounts of insurance companies. The prospectuses for EQ Trust and HR Trust,
both of which accompany this prospectus, describe the investment objectives,
policies and risks, of the Portfolios.
INVESTMENT FUNDS
<TABLE>
<CAPTION>
<S> <C>
O EQ/PUTNAM GROWTH & INCOME VALUE O ALLIANCE MONEY MARKET
O EQ/PUTNAM INVESTORS GROWTH O ALLIANCE HIGH YIELD
O EQ/PUTNAM INTERNATIONAL EQUITY O ALLIANCE COMMON STOCK
O MFS RESEARCH O ALLIANCE AGGRESSIVE STOCK
O MFS EMERGING GROWTH COMPANIES O ALLIANCE SMALL CAP GROWTH
</TABLE>
Amounts allocated to a Guarantee Period accumulate on a fixed basis and are
credited with interest at a rate we set for your class of Certificate
(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. The Guarantee Periods
currently available have Expiration Dates of February 15, in years 1998
through 2007.
This prospectus provides information about IRA and NQ Certificates 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 current prospectuses for EQ Trust and HR Trust, both of
which you should also read carefully.
Registration statements relating to Separate Account No. 49 (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 , 1997, 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 1997 The Equitable Life Assurance Society of the United States, New
York, New York 10104.
All rights reserved. Accumulator and baseBUILDER are service marks, and
Income Manager is a registered service mark of
The Equitable Life Assurance Society of the United States.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Equitable Life's Annual Report on Form 10-K for the year ended December
31, 1996, its quarterly reports on Form 10-Q for the quarters ended March 31,
1997 and June 30, 1997, and a current report on Form 8-K dated July 10, 1997
are 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, as amended
(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. The SEC maintains
a web site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the SEC. The
address of the site is http://www.sec.gov.
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, 1290
Avenue of the Americas, New York, New York 10104. Attention: Corporate
Secretary (telephone: (212) 554-1234).
2
<PAGE>
PROSPECTUS TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
GENERAL TERMS PAGE 4
FEE TABLE PAGE 6
PART 1: EQUITABLE LIFE, THE SEPARATE
ACCOUNT AND THE
INVESTMENT FUNDS PAGE 8
Equitable Life 8
Separate Account No. 49 8
EQ Trust 8
EQ Trust's Manager and Advisers 9
HR Trust 9
HR Trust's Manager and Adviser 9
Investment Policies and Objectives of
EQ Trust's Portfolios and HR Trust's
Portfolios 10
PART 2: THE GUARANTEED PERIOD
ACCOUNT PAGE 11
Guarantee Periods 11
Market Value Adjustment for Transfers,
Withdrawals or Surrender Prior to the
Expiration Date 12
Investments 13
PART 3: PROVISIONS OF THE
CERTIFICATES AND SERVICES
WE PROVIDE PAGE 14
What is the Equitable Accumulator Select? 14
Contributions Under the Certificates 14
Methods of Payment 14
Allocation of Contributions 15
Free Look Period 15
Annuity Account Value 16
Transfers Among Investment Options 16
Dollar Cost Averaging 17
baseBUILDER Benefits 17
Guaranteed Minimum Income Benefit 17
Death Benefit 18
How Death Benefit Payment is Made 19
When the NQ Certificate Owner Dies Before
the Annuitant 19
Cash Value 20
Surrendering the Certificates to
Receive the Cash Value 20
When Payments are Made 20
Assignment 20
Services We Provide 20
Distribution of the Certificates 21
PART 4: DISTRIBUTION METHODS UNDER THE
CERTIFICATES PAGE 22
Withdrawal Options 22
How Withdrawals Affect Your Guaranteed
Minimum Income Benefit and Guaranteed
Minimum Death Benefit 24
Annuity Benefits and Payout Annuity Options 24
PART 5: DEDUCTIONS AND CHARGES PAGE 27
Charges Deducted from the Annuity
Account Value 27
Charges Deducted from the Investment
Funds 27
EQ Trust Charges to Portfolios 27
HR Trust Charges to Portfolios 28
Group or Sponsored Arrangements 28
PART 6: VOTING RIGHTS PAGE 30
EQ Trust and HR Trust Voting Rights 30
Voting Rights of Others 30
Separate Account Voting Rights 30
Changes in Applicable Law 30
PART 7: TAX ASPECTS OF THE CERTIFICATES PAGE 31
Tax Changes 31
Taxation of Non-Qualified Annuities 31
Special Rules for NQ Certificates Issued in
Puerto Rico 32
IRA Tax Information 32
Federal and State Income Tax
Withholding 38
Other Withholding 38
Impact of Taxes to Equitable Life 39
Transfers Among Investment Options 39
PART 8: INDEPENDENT ACCOUNTANTS PAGE 40
PART 9: INVESTMENT PERFORMANCE PAGE 41
Adjusted Historical Performance Data 41
Rate of Return Data for Investment
Funds 43
Communicating Performance Data 44
Alliance Money Market Fund Yield Information 45
APPENDIX I: MARKET VALUE
ADJUSTMENT EXAMPLE PAGE 46
APPENDIX II: QUALIFIED PLAN
CERTIFICATES--NQ CERTIFICATES PAGE 47
APPENDIX III: GUARANTEED MINIMUM
DEATH BENEFIT EXAMPLE PAGE 48
APPENDIX IV: IRS CHART--ESTIMATED
DEDUCTION TABLE PAGE 49
STATEMENT OF ADDITIONAL
INFORMATION TABLE OF CONTENTS PAGE 50
</TABLE>
3
<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 benefits
under a Certificate. Under NQ Certificates the Annuitant can be different
from the Certificate Owner; under IRA Certificates, the Annuitant and
Certificate Owner must be the same individual.
ANNUITY ACCOUNT VALUE--The sum of the amounts in the Investment Options under
the Certificate. See "Annuity Account Value" in Part 3.
ANNUITY COMMENCEMENT DATE--The date on which annuity benefit payments are to
commence.
BASEBUILDER (SERVICE MARK) --Optional protection benefit, consisting of the
Guaranteed Minimum Income Benefit and the Guaranteed Minimum Death 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 Cash Value is equal to the Annuity Account Value.
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 Certificate and has the right to
exercise all rights under the Certificate. Under NQ Certificates the
Certificate Owner can be different from the Annuitant; under IRA Certificates
the Certificate Owner must be the same individual as the Annuitant.
CODE--The Internal Revenue Code of 1986, as amended.
CONTRACT DATE--The effective date of the Certificates. 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.
EQ TRUST--EQ Advisors Trust, a mutual fund in which the assets of separate
accounts of insurance companies are invested. EQ Financial Consultants, Inc.
(EQ Financial) is the manager of EQ Trust and has appointed advisers for each
of the Portfolios.
EXPIRATION DATE--The date on which a Guarantee Period ends.
GUARANTEED MINIMUM DEATH BENEFIT--The minimum amount payable upon death of
the Annuitant.
GUARANTEED MINIMUM INCOME BENEFIT--The minimum amount of future guaranteed
lifetime income.
GUARANTEE PERIOD--Any of the periods of time ending on an Expiration Date
that are available for investment under the Certificates. Guarantee Periods
may also be referred to as Guaranteed Fixed Interest Accounts.
GUARANTEED PERIOD ACCOUNT--The Account that contains the Guarantee Periods.
GUARANTEED RATE--The annual interest rate established for each allocation to
a Guarantee Period.
HR TRUST--The Hudson River Trust, a mutual fund in which the assets of
separate accounts of insurance companies are invested. Alliance Capital
Management L.P. (Alliance) is the manager and adviser to HR Trust.
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.
MATURITY VALUE--The amount in a Guarantee Period on its Expiration Date.
<PAGE>
NQ--An annuity contract which may be purchased only with after-tax
contributions.
PORTFOLIOS--The portfolios of HR Trust and EQ 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 3.
SAI--The statement of additional information for the Separate Account under
the Certificates.
4
<PAGE>
SEPARATE ACCOUNT--Equitable Life's Separate Account No. 49.
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.
VALUATION PERIOD--Each Business Day together with any preceding non-business
days.
5
<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 Certificates
so that you may compare them with other similar products. The table reflects
both the charges of the Separate Account and the expenses of EQ Trust and HR
Trust. Charges for applicable taxes such as state or local premium taxes may
also apply. For a complete description of the charges under the Certificates,
see "Part 5: Deductions and Charges." For a complete description of each
trust's charges and expenses, see the prospectuses for EQ Trust and HR Trust.
As explained in Part 2, the Guarantee Periods are not a part of the Separate
Account and are not covered by the fee table and examples. A market value
adjustment (either positive or negative) may be applicable as a result of a
withdrawal, transfer or surrender of amounts from a Guarantee Period. See
"Part 2: The Guaranteed Period Account."
SEPARATE ACCOUNT ANNUAL EXPENSES (AS A PERCENTAGE OF ASSETS IN EACH
INVESTMENT FUND)
<TABLE>
<CAPTION>
<S> <C>
MORTALITY AND EXPENSE RISKS(1) ................................................................. 1.10%
ADMINISTRATION(2) .............................................................................. 0.25%
DISTRIBUTION(3) ................................................................................ 0.25%
-------
TOTAL SEPARATE ACCOUNT ANNUAL EXPENSES ....................................................... 1.60%
=======
OPTIONAL BENEFIT EXPENSE (DEDUCTED FROM ANNUITY ACCOUNT VALUE)
BASEBUILDER BENEFIT EXPENSE (calculated as a percentage of the Guaranteed Minimum Income
Benefit benefit base)(4) ...................................................................... 0.30%
</TABLE>
EQ TRUST AND HR TRUST ANNUAL EXPENSES (AS A PERCENTAGE OF AVERAGE DAILY NET
ASSETS IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
INVESTMENT TOTAL
MANAGEMENT & OTHER ANNUAL
PORTFOLIOS ADVISORY FEES 12B-1 FEE(5) EXPENSES EXPENSES
- ---------------------------------- --------------- ------------ ---------- ----------
<S> <C> <C> <C> <C>
EQ TRUST
EQ/Putnam Growth & Income Value(6) 0.55% 0.25% 0.05% 0.85%
EQ/Putnam Investors Growth(6) 0.55% 0.25% 0.05% 0.85%
EQ/Putnam International Equity(6) 0.70% 0.25% 0.25% 1.20%
MFS Research(6) 0.55% 0.25% 0.05% 0.85%
MFS Emerging Growth Companies(6) 0.55% 0.25% 0.05% 0.85%
HR TRUST
Alliance Money Market(7) 0.35% 0.25% 0.04% 0.64%
Alliance High Yield(7) 0.60% 0.25% 0.06% 0.91%
Alliance Common Stock(7) 0.38% 0.25% 0.03% 0.66%
Alliance Aggressive Stock(7) 0.55% 0.25% 0.03% 0.83%
Alliance Small Cap Growth(7) 0.90% 0.25%(8) 0.10% 1.20%(8)
</TABLE>
- ------------
See footnotes on next page.
6
<PAGE>
Notes:
(1) A portion of this charge is for providing the Guaranteed Minimum Death
Benefit. See "Mortality and Expense Risks Charge" in Part 5.
(2) We reserve the right to increase this charge to an annual rate of 0.35%,
the maximum permitted under the Certificates.
(3) The deduction of this charge is subject to regulatory limits. See
"Distribution Charge" in Part 5.
(4) If the baseBUILDER Benefit is elected, this charge is deducted annually
on each Processing Date. See "baseBUILDER Benefit Charge" in Part 5. For
the description of the Guaranteed Minimum Income Benefit benefit base,
see "Guaranteed Minimum Income Benefit Benefit Base" in Part 4.
(5) The Class IB shares of EQ Trust and HR Trust are subject to fees imposed
under distribution plans (herein, the "Rule 12b-1 Plans") adopted by EQ
Trust and HR Trust pursuant to Rule 12b-1 under the Investment Company
Act of 1940, as amended. The Rule 12b-1 Plans provide that EQ Trust and
HR Trust, on behalf of each Portfolio, may pay annually up to 0.25% of
the average daily net assets of a Portfolio attributable to its Class IB
shares in respect of activities primarily intended to result in the sale
of the Class IB shares. The 12b-1 fee will not be increased for the life
of the Certificates.
(6) "Other Expenses" shown are based on estimated amounts (after expense
waiver or limitation) for the current fiscal year, as EQ Trust commenced
operations on May 1, 1997. The maximum investment advisory fees cannot
be increased without a vote of that Portfolio's shareholders. The other
direct operating expenses will fluctuate from year to year depending on
actual expenses but pursuant to agreement, cannot together with other
fees specified exceed total annual expenses specified. See "EQ Trust
Charges to Portfolios" in Part 5.
(7) The amounts shown for the Portfolios of HR Trust (other than Alliance
Small Cap Growth) have been restated to reflect advisory fees which went
into effect as of May 1, 1997. "Other Expenses" are based on average
daily net assets in each Portfolio during 1996. The amounts shown for
the Alliance Small Cap Growth Portfolio are estimated for the current
fiscal year as this Portfolio commenced operations on May 1, 1997. 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 HR 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 "HR Trust Charges to Portfolios" in
Part 5.
(8) Equitable Distributors Inc. (EDI) has agreed to waive the 0.25% 12b-1
fee to the extent necessary to limit annual expenses for the Alliance
Small Cap Growth Portfolio to 1.20% of the average daily net assets of
that Portfolio as set forth above. This agreement may be modified by EDI
and HR Trust at any time, and there can be no assurance that the 12b-1
fee will not be restored to 0.25% in the future.
We also offer other Equitable Accumulator certificates that do not have a
distribution charge, but withdrawals of contributions are subject to a charge
which declines to zero after seven years for each contribution. These other
certificates may also provide higher Guaranteed Rates for the Guarantee
Periods. A current prospectus for the Equitable Accumulator with a withdrawal
charge instead of a distribution charge may be obtained from your registered
representative.
EXAMPLE
The example below shows the expenses that a hypothetical Certificate Owner
(who has elected the baseBUILDER benefit) would pay assuming a $1,000
contribution invested in one of the Investment Funds listed, and a 5% annual
return on assets.(1)
This example 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 example is not an estimate or guarantee of future investment
performance.
<PAGE>
AT THE END OF EACH PERIOD SHOWN, THE EXPENSES WOULD BE:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
-------- ---------
<S> <C> <C>
EQ TRUST
EQ/Putnam Growth & Income Value $28.01 $86.24
EQ/Putnam Investors Growth 28.01 86.24
EQ/Putnam Int'l Equity 31.48 96.58
MFS Research 28.01 86.24
MFS Emerging Growth Companies 28.01 86.24
HR TRUST
Alliance Money Market 25.93 80.00
Alliance High Yield 28.61 88.02
Alliance Common Stock 26.13 80.60
Alliance Aggressive Stock 27.81 85.64
Alliance Small Cap Growth 31.48 96.58
</TABLE>
- ------------
Note:
(1) The amount accumulated from the $1,000 contribution could not be paid in
the form of an annuity at the end of any of the periods shown in the
example. 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 "Annuity Benefits and Payout Annuity Options" in Part 4. The example
does not reflect charges for applicable taxes such as state or local
premium taxes that may also be deducted in certain jurisdictions.
7
<PAGE>
PART 1: 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. Our home office is located at
1290 Avenue of the Americas, New York, New York 10104. 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 shareholder of the Holding
Company is AXA-UAP (AXA). As of March 1, 1997, AXA beneficially owned
approximately 63.8% of the outstanding common stock of the Holding Company
(assuming conversion of convertible preferred stock held by AXA). 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 $251.4 billion of assets as of June 30, 1997.
SEPARATE ACCOUNT NO. 49
Separate Account No. 49 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, as amended (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 EQ Trust and
HR 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 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 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 Certificates belong 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.
EQ TRUST
EQ Trust is an open-end management investment company. As a "series type" of
mutual fund, EQ Trust
8
<PAGE>
issues different series of stock, each of which relates to a different
Portfolio of EQ Trust. EQ Trust commenced operations on May 1, 1997. EQ Trust
does not impose a sales charge or "load" for buying and selling its shares.
All dividend distributions to EQ Trust are reinvested in full and fractional
shares of the Portfolio to which they relate. Investment Funds that invest in
Portfolios of EQ Trust purchase Class IB shares of a corresponding Portfolio
of EQ Trust. More detailed information about EQ Trust, its investment
objectives, policies and restrictions, risks, expenses, the Rule 12b-1 Plan
relating to the Class IB shares, and all other aspects of its operations
appears in its prospectus which accompanies this prospectus or in its
statement of additional information.
EQ TRUST'S MANAGER AND ADVISERS
EQ Trust is managed by EQ Financial Consultants, Inc. (EQ Financial) which,
subject to supervision and direction of the Trustees of EQ Trust, has overall
responsibility for the general management and administration of EQ Trust. EQ
Financial is an investment adviser registered under the 1940 Act, and a
broker-dealer registered under the Exchange Act. EQ Financial is a Delaware
corporation and an indirect, wholly-owned subsidiary of Equitable Life.
EQ Financial's main office is located at 1290 Avenue of the Americas, New
York, New York 10104.
EQ Financial has entered into investment advisory agreements with Putnam
Investments, and Massachusetts Financial Services Company, which serve as
advisers to the EQ/Putnam and MFS Portfolios, respectively, of EQ Trust.
HR TRUST
HR Trust is an open-end diversified management investment company, more
commonly called a mutual fund. As a "series" type of mutual fund, it issues
several different series of stock, each of which relates to a different
Portfolio of HR Trust. HR Trust commenced operations in January 1976 with a
predecessor of its Alliance Common Stock Portfolio. HR Trust does not impose
a sales charge or "load" for buying and selling its shares. All dividend
distributions to HR Trust are reinvested in full and fractional shares of the
Portfolio to which they relate. Investment Funds that invest in Portfolios of
HR Trust purchase Class IB shares of a corresponding Portfolio of HR Trust.
More detailed information about HR Trust, its investment objectives,
policies, restrictions, risks, expenses, the Rule 12b-1 Plan relating to the
Class IB shares, and all other aspects of its operations appears in its
prospectus which accompanies this prospectus or in its statement of
additional information.
HR TRUST'S MANAGER AND ADVISER
HR Trust is managed and advised by Alliance Capital Management L.P.
(Alliance), which is registered with the SEC as an investment adviser under
the 1940 Act. Alliance, a publicly-traded limited partnership, is indirectly
majority-owned by Equitable Life. On June 30, 1997, Alliance was managing
approximately $199.3 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 main office is located at 1345 Avenue of the Americas, New York,
New York 10105.
9
<PAGE>
INVESTMENT POLICIES AND OBJECTIVES OF EQ TRUST'S PORTFOLIOS AND HR 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. Set forth below is a summary of the
investment policies and objectives of each Portfolio. This summary is
qualified in its entirety by reference to the prospectuses for EQ Trust and
HR Trust, both of which accompany this prospectus. Please read the
prospectuses for each of the trusts carefully before investing.
<TABLE>
<CAPTION>
PORTFOLIO INVESTMENT POLICY OBJECTIVE
- ----------------------------- ------------------------------------------------------ -----------------------------
<S> <C> <C>
EQ TRUST
EQ/Putnam Growth & Income Primarily common stocks that offer potential for Capital growth and,
Value capital growth and may, consistent with the secondarily, current income
Portfolio's investment objective, invest in common
stocks that offer potential for current income.
EQ/Putnam Investors Growth Primarily common stocks that the Portfolio adviser Long-term growth of capital
believes afford the best opportunity for long-term and any increased income that
capital growth. results from this growth
EQ/Putnam International Primarily a diversified portfolio of equity securities Capital appreciation
Equity of companies organized under laws of countries other
than the United States.
MFS Research A substantial portion of assets invested in common Long-term growth of capital
stock or securities convertible into common stock of and future income
companies believed by the Portfolio adviser to possess
better than average prospects for long-term growth.
MFS Emerging Growth Companies Primarily (i.e., at least 80% of its assets under Long-term growth of capital
normal circumstances) in common stocks of emerging
growth companies that the Portfolio adviser believes
are early in their life cycle but which have the
potential to become major enterprises.
HR TRUST
Alliance Money Market Primarily high quality U.S. dollar denominated money High level of current income
market instruments. while preserving assets and
maintaining liquidity
Alliance High Yield Primarily a diversified mix of high yield, High return by maximizing
fixed-income securities which generally involve current income and, to the
greater volatility of price and risk of principal and extent consistent with that
income than higher quality fixed-income securities. objective, capital
Lower quality debt securities are commonly known as appreciation
"junk bonds."
Alliance Common Stock Primarily common stock and other equity-type Long-term growth of capital
instruments. and increasing income
Alliance Aggressive Stock Primarily common stocks and other equity-type Long-term growth of capital
securities issued by quality small and intermediate
sized companies with strong growth prospects and in
covered options on those securities.
Alliance Small Cap Primarily U.S. common stocks and other equity-type Long-term growth of capital
Growth securities issued by smaller companies that, in the
opinion of the adviser, have favorable growth
prospects.
</TABLE>
10
<PAGE>
PART 2: 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 under your
class of Certificate 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 other 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 1998 through 2007. Not all of these Guarantee Periods will be
available for Annuitant ages 76 and above. See "Allocation of Contributions"
in Part 3. 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 September 2, 1997 and the related
price per $100 of Maturity Value for each currently available Guarantee
Period were as follows:
<PAGE>
<TABLE>
<CAPTION>
GUARANTEE
PERIODS WITH GUARANTEED
EXPIRATION DATE RATE AS OF PRICE
FEBRUARY 15TH OF SEPTEMBER 2, PER $100 OF
MATURITY YEAR 1997 MATURITY VALUE
- ---------------- -------------- --------------
<S> <C> <C>
1998 4.29% $98.11
1999 4.57 93.71
2000 4.77 89.19
2001 4.89 84.78
2002 4.97 80.56
2003 5.06 76.38
2004 5.15 72.30
2005 5.23 68.36
2006 5.29 64.65
2007 5.36 61.02
</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.
For example, if you wish to have $100 mature on February 15th of each of
years 1998 through 2002, then according to the above table the lump sum
contribution you would have to make as of September 2,
11
<PAGE>
1997 would be $446.35 (the sum of the prices per $100 of Maturity Value for
each maturity year from 1998 through 2002).
The above example is provided to illustrate the use of present value
calculations. It does not take into account the potential for charges to be
deducted, withdrawals or transfers to be made from Guarantee Periods or for
the market value adjustment that would apply to such transactions. Actual
calculations will 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 3:
(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.
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 Guarantee
Periods, the "current Guaranteed Rate" will be determined in accordance with
our proce-
12
<PAGE>
dures 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.
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.
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, as amended
(1933 Act), nor is the general account an investment company under the 1940
Act. Accordingly, the general account is not subject to regulation under the
1933 Act or the 1940 Act. 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). 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.
13
<PAGE>
PART 3: PROVISIONS OF THE CERTIFICATES AND SERVICES
WE PROVIDE
WHAT IS THE EQUITABLE ACCUMULATOR
SELECT?
The Equitable Accumulator Select is a deferred annuity designed to provide
for the accumulation of retirement savings, and for income at a future date.
Investment Options available are Investment Funds providing variable returns
and Guarantee Periods providing guaranteed interest when held to maturity.
Equitable Accumulator Select Certificates can be issued as individual
retirement annuities (IRAs) or non-qualified annuities for after-tax
contributions only (NQ). The provisions of your Certificate may be restricted
by applicable laws or regulations. The Certificates may not be available in
all states.
Earnings generally accumulate on a tax-deferred basis until withdrawn or when
distributions become payable. Withdrawals made prior to 59 1/2 may be subject
to tax penalty.
IRA CERTIFICATES
IRA Certificates are available for Annuitant issue ages 20 through 78. IRA
Certificates are not available in Puerto Rico.
NQ CERTIFICATES
NQ Certificates are available for Annuitant issue ages 20 through 83.
When issued with the appropriate endorsement, an NQ Certificate may be
purchased by a plan qualified under Section 401(a) of the Code. Such
purchases may not be available in all states. Plan fiduciaries considering
purchase of a Certificate should read the important information in Appendix
II.
CONTRIBUTIONS UNDER THE CERTIFICATES
The minimum initial contribution is $25,000. Under IRA Certificates 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 "IRA Tax Information" in Part 7.
Under NQ Certificates, you may make subsequent contributions of at least
$1,000 at any time until the Annuitant attains age 84.
Under IRA Certificates your subsequent contributions of at least $1,000 may
be made at any time until you attain age 79. Subsequent IRA Certificate
contributions may be "regular" IRA contributions (limited to a maximum of
$2,000 a year), or rollover contributions or direct transfers as described
above.
"Regular" IRA contributions may not be made for the taxable year in which you
attain age 70 1/2 or thereafter. Rollover and direct transfer contributions
may be made until you attain age 79. However, under the Code 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 "IRA Tax Information" in Part 7. For the
consequences of making a "regular" IRA contribution to your IRA Certificate,
also see Part 7.
We may refuse to accept any contribution if the sum of all contributions
under all accumulation Certificates with the same Annuitant would then total
more than $1,500,000. 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 Life 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 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. Contributions
must be sent to Equitable Life at our Processing Office address designated
for contributions. Your initial contribution must be accompanied by a
completed application which is acceptable to us. In the event the application
information is incomplete or the application is otherwise not acceptable, we
may retain your contribution 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 or non-acceptability and return the contribution
immediately to the appli-
14
<PAGE>
cant, unless the applicant specifically consents to our retaining the
contribution until the required information is received by the Processing
Office.
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 Business Day contributions are received. Wire orders not accompanied by
complete information may be retained as described above.
Notwithstanding the acceptance by us of the wire order and the essential
information, however, a Certificate generally will not be issued until the
receipt and acceptance of a properly completed application. In certain cases
we may issue a Certificate based on information forwarded electronically. In
these cases, you must sign our Acknowledgment of Receipt form.
Where a signed application is required, no financial transactions will be
permitted until such time as we receive such signed application and have
issued the Certificate. Where an Acknowledgment of Receipt is required,
financial transactions will only be permitted if requested in writing, signed
by the Certificate Owner and signature guaranteed until we receive such
signed Acknowledgment of Receipt.
After your Certificate has been issued, subsequent contributions may be
transmitted by wire.
1035 Exchanges
You may apply the values of an existing NQ life insurance or deferred annuity
contract to purchase an NQ Accumulator Select Certificate in a tax deferred
exchange, if you follow certain procedures. For further information, consult
your tax adviser. See also "Taxation of Non-Qualified Annuities: Withdrawals"
in Part 7.
ALLOCATION OF CONTRIBUTIONS
You may choose Self-Directed, Principal Assurance or Dollar Cost Averaging
allocations.
A contribution allocated to an Investment Fund purchases Accumulation Units
in that Investment Fund based on the Accumulation Unit Value for that
Investment Fund computed for the Transaction Date. A contribution allocated
to the Guaranteed Period Account will have the Guaranteed Rate for the
specified Guarantee Period offered on the Transaction Date.
Self-Directed Allocation
You allocate your contributions to one or up to all of the available
Investment Options. Allocations among the Investment Options 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.
At Annuitant ages 76 and above, allocations to Guarantee Periods must be
limited to those with maturities of five years or less and with maturity
dates no later than the February 15th immediately following the Annuity
Commencement Date.
Principal Assurance
This option (for Annuitant issue ages 20 through 75) assures that your
Maturity Value in a specified Guarantee Period will equal your initial
contribution on the Guarantee Period's Expiration Date, while at the same
time allowing you to invest in the Investment Funds. It may be elected only
at issue of your Certificate and assumes no withdrawals or transfers from the
Guarantee Period. The maturity year generally may not be later than 10 years
nor earlier than seven years from the Contract Date. In order to accomplish
this strategy, we will allocate a portion of your initial contribution to the
selected Guarantee Period. See "Guaranteed Rates and Price Per $100 of
Maturity Value" in Part 2. The balance of your initial contribution and all
subsequent contributions must be allocated under "Self-Directed Allocation"
as described above.
If you are applying for an IRA Certificate, before you select a maturity 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 7.
FREE LOOK PERIOD
You have the right to examine your 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 period is extended if your state
requires a refund period of longer than 10 days.
15
<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. 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.
We follow these same procedures if you change your mind before you receive
your Certificate, but after a contribution has been made. See "Part 7: Tax
Aspects of the Certificates" for possible consequences of cancelling your
Certificate during the free look period.
ANNUITY ACCOUNT VALUE
Your Annuity Account Value is the sum of the amounts in the Investment
Options.
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 corresponding Portfolios of each respective
trust, which in turn reflects the investment income and realized and
unrealized capital gains and losses of the Portfolios, as well as each
respective trust's 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 2: 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 out of a Guarantee Period other than at the Expiration Date
will result in a market value adjustment. See "Part 2: The Guaranteed
Period Account."
o At Annuitant age 76 and above, transfers to Guarantee Periods must be
limited to those with maturities of five years or less and with
maturity dates no later than the February 15th immediately following
the Annuity Commencement Date.
o Transfers may not be made to a Guarantee Period with an Expiration
Date in the current calender year, or if the Guaranteed Rate is 3%.
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
16
<PAGE>
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
We offer two programs for Dollar Cost Averaging as described below. The main
objective of dollar cost averaging is to attempt to shield your investment
from short term price fluctuations. Since approximately the same dollar
amounts are transferred from the Alliance Money Market Fund to other
Investment Funds periodically, 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.
Special Dollar Cost Averaging
For Certificate Owners who at issue of the Certificate want to dollar cost
average their entire initial contribution from the Alliance Money Market Fund
into the other Investment Funds monthly over a period of twelve months, we
offer a Special Dollar Cost Averaging program under which the mortality and
expense risks charge, the administration charge, and the distribution charge
normally deducted from the Alliance Money Market Fund will not be deducted.
See "Charges Deducted from the Investment Funds" in Part 5.
General Dollar Cost Averaging
If you have at least $25,000 of Annuity Account Value in the Alliance Money
Market Fund, you may choose to have a specified dollar amount or percentage
of your Annuity Account Value transferred from the Alliance Money Market Fund
to other Investment Funds on a monthly, quarterly or annual basis. This
program may be elected at any time.
The minimum amount that may be transferred on each Transaction Date is $250.
The maximum amount which may be transferred is equal to the Annuity Account
Value in the Alliance Money Market Fund at the time the option is elected,
divided by the number of transfers scheduled to be made each Contract Year.
Dollar cost averaging may not be elected while the Systematic Withdrawal
option (described under "Withdrawal Options" in Part 4) is in effect.
The transfer date will be the same calendar day of the month as the Contract
Date. If, on any transfer date, the Annuity Account Value in the Alliance
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.
BASEBUILDER BENEFITS
The baseBUILDER option provides guaranteed benefits in the form of a Combined
Guaranteed Minimum Income Benefit and Guaranteed Minimum Death Benefit. The
combined benefit is available for Annuitant issue ages 20 through 75 and is
subject to an additional charge (see "baseBUILDER Benefit Charge" in Part 5).
The baseBUILDER provides a degree of protection while you live (Income
Benefit) as well as for your beneficiary should you die. As part of the
baseBUILDER you will have a choice of two Guaranteed Minimum Death Benefit
options (i) a 6% to Age 80 Roll Up or (ii) an Annual Ratchet to Age 80 (both
options are described below). If you do not elect the baseBUILDER benefit,
the Guaranteed Minimum Death Benefit choices are still provided under the
Certificate. The baseBUILDER benefit is not currently available in New York.
If the Annuitant is age 76 or older and you are interested in the Combined
Guaranteed Minimum Income Benefit and Guaranteed Minimum Death Benefit, ask
your registered representative for a copy of the prospectus supplement
describing this benefit.
The main advantages of the Guaranteed Minimum Income Benefit relate to
amounts allocated to the Investment Funds. Before electing the baseBUILDER,
you should consider the extent to which you expect to utilize the Investment
Funds. You elect the baseBUILDER guaranteed benefits when you apply for a
Certificate and once elected, it may not be changed or cancelled.
GUARANTEED MINIMUM INCOME BENEFIT
The Guaranteed Minimum Income Benefit provides a minimum amount of guaranteed
lifetime income when you apply the Annuity Account Value under your Equitable
Accumulator Certificate to an Income Manager(Registered Trademark) (Life
Annuity with a Period Certain) certificate during the periods of time
indicated below. The Income Manager provides payments during a period certain
with payments continuing for life thereafter. This means that payments will
be made for the rest of the Annuitant's life. In addition, if the Annuitant
dies before a specified period of time
17
<PAGE>
(period certain) has ended, payments will continue to the beneficiary for the
balance of the period certain.
On the Transaction Date that you exercise the Guaranteed Minimum Income
Benefit, the annual lifetime income that will be provided under the Income
Manager (Life Annuity with a Period Certain) will be the greater of (i) your
Guaranteed Minimum Income Benefit, and (ii) the income provided by
application of your Annuity Account Value at our then current annuity
factors. The Guaranteed Minimum Income Benefit does not provide an Annu-ity
Account Value or guarantee performance of your Investment Options. Because
this benefit is based on conservative actuarial factors, the level of
lifetime income that it guarantees may often be less than the level that
would be provided by application of your Annuity Account Value at current
annuity factors. It should therefore be regarded as a safety net.
Illustrated below are Guaranteed Minimum Income Benefit amounts per $100,000
of initial contribution, for a male Annuitant age 60 (at issue) on Contract
Date anniversaries as indicated below, assuming no subsequent contributions
or withdrawals and assuming there were no allocations to the Alliance Money
Market Fund or the Guaranteed Period Account.
<TABLE>
<CAPTION>
GUARANTEED MINIMUM INCOME BENEFIT
ANNUAL
CONTRACT DATE INCOME PAYABLE
ANNIVERSARY FOR LIFE WITH
AT ELECTION 10 YEAR PERIOD CERTAIN
- --------------- ---------------------------------
<S> <C>
7 $ 8,992
10 12,160
15 18,358
</TABLE>
Withdrawals will reduce your Guaranteed Minimum Income Benefit, see "How
Withdrawals Affect Your Guaranteed Minimum Death Benefit and Guaranteed
Minimum Income Benefit" in Part 4.
The Guaranteed Minimum Income Benefit may be exercised only within 30 days
following the seventh or later Contract Date anniversary under your Equitable
Accumulator Select Certificate. However, it may not be exercised earlier than
the Annuitant's age 60, nor later than the Annuitant's age 83; except that
for Annuitant issue ages 20 through 44, it may be exercised following the
15th or later Contract Date anniversary.
When you exercise the Guaranteed Minimum Income Benefit, you will receive an
Income Manager (Life Annuity with a Period Certain) payout annuity
certificate and extinguish your rights in your Equitable Accumulator Select
Certificate, with at least the minimum annual income specified and a period
certain based on the Annuitant's age at the time the benefit is exercised as
follows:
<TABLE>
<CAPTION>
LEVEL PAYMENTS*
- ------------------------------------
PERIOD CERTAIN
YEARS
ANNUITANT'S ---------------
AGE AT ELECTION IRA NQ
- ------------------- ------- ------
<S> <C> <C>
60 to 75 10 10
76 9 10
77 8 10
78 7 10
79 7 10
80 7 10
81 7 9
82 7 8
83 7 7
</TABLE>
* Other forms and period certains may also be available. For IRA
Certificates, please see "Required Minimum Distributions" in Part 7 to
see how this option may be affected if exercised after age 70 1/2.
Payments will start one payment mode from the Contract Date of the Income
Manager certificate.
Each year on your Contract Date anniversary, if you are eligible to exercise
the Guaranteed Minimum Income Benefit, we will send you an eligibility notice
illustrating how much income could be provided on the Contract Date
anniversary. You may then notify us within 30 days following the Contract
Date anniversary if you want to exercise the Guaranteed Minimum Income
Benefit by submitting the proper form and returning your Equitable
Accumulator Select Certificate. The amount of income you actually receive
will be determined on the Transaction Date that we receive your properly
completed exercise notice.
You may also apply your Cash Value at any time to an Income Manager (Life
Annuity with a Period Certain), and you may always apply your Annuity Account
Value to any of our life annuity benefits. The annuity benefits are discussed
in Part 4. These benefits differ from the Income Manager payout annuities and
may provide higher or lower income levels, but do not have all the features
of Income Manager. You may request an illustration from your registered
representative.
The Income Manager (Life Annuity with a Period Certain) is offered through
our prospectus for the Income Manager payout annuities. A copy of the most
current version may be obtained from your registered representative. You
should read it carefully before you decide to exercise your Guaranteed
Minimum Income Benefit.
Successor Annuitant/Certificate Owner
If the successor Annuitant/Certificate Owner election (discussed below) was
elected at issue of the Certificate and is in effect at your death, the
Guaranteed Minimum Income Benefit will continue to be available on Contract
Date anniversaries specified above based on the Contract Date of your
Equitable Accumulator Select Certificate, provided the Guar-
18
<PAGE>
anteed Minimum Income Benefit is exercised as specified above based on the
age of the successor Annuitant/Certificate Owner.
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 Annuity Account Value or, if greater, the
Guaranteed Minimum Death Benefit described below.
GUARANTEED MINIMUM DEATH BENEFIT
Applicable for Annuitant issue ages 20 through 79
You elect either the "6% to Age 80 Roll Up" or the "Annual Ratchet to Age 80"
Guaranteed Minimum Death Benefit when you apply for a Certificate. Once
elected, the benefit may not be changed.
6% to Age 80 Roll Up--On the Contract Date the Guaranteed Minimum Death
Benefit is equal to the initial contribution. Thereafter, the Guaranteed
Minimum Death Benefit is credited with interest at 6% (4% for amounts in the
Alliance Money Market Fund and the Guarantee Periods, except as indicated
below) on each Contract Date anniversary through the Annuitant's age 80 (or
at the Annuitant's death, if earlier), and 0% thereafter, and is adjusted for
any subsequent contributions and withdrawals. The Guaranteed Minimum Death
Benefit interest applicable to amounts in the Alliance Money Market Fund
under the Special Dollar Cost Averaging program (described above) will be 6%.
The 6% to Age 80 Roll Up is not available in New York.
Annual Ratchet to Age 80--On the Contract Date, the Guaranteed Minimum Death
Benefit is equal to the initial contribution. Thereafter, the Guaranteed
Minimum Death Benefit is reset through the Annuitant's age 80, to the Annuity
Account Value on a Contract Date anniversary if higher than the then current
Guaranteed Minimum Death Benefit, and is adjusted for any subsequent
contributions and withdrawals.
Applicable for Annuitant issue ages 80 through 83
On the Contract Date, the Guaranteed Minimum Death Benefit is equal to the
initial contribution. Thereafter, the initial contribution is adjusted for
any subsequent contributions, and any withdrawals.
Withdrawals will reduce your Guaranteed Minimum Death Benefit, see "How
Withdrawals Affect Your Guaranteed Minimum Income Benefit and Guaranteed
Minimum Death Benefit" in Part 4. For Certificates issued in New York, the
Guaranteed Minimum Death Benefit at the Annuitant's death will not be less
than the Annuity Account Value in the Investment Funds plus the sum of the
Guaranteed Period Amounts in each Guarantee Period. See "Guarantee Periods"
in Part 2.
See Appendix III for an example of the calculation of the Guaranteed Minimum
Death Benefit.
HOW DEATH BENEFIT PAYMENT IS MADE
We will pay the death benefit to the beneficiary in the form of the annuity
benefit you have chosen under your Certificate. If no annuity benefit 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 any 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 annuity benefits offered by Equitable Life.
See "Annuity Benefits and Payout Annuity Options" in Part 4. 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 Contract Date anniversary following your death, if the successor
Annuitant/Certificate Owner election was elected at issue of your Certificate
and is in effect at your death, the Guaranteed Minimum Death Benefit will be
reset at the greater of the then current Guaranteed Minimum Death Benefit and
the then current Annuity Account Value. In determining whether the Guaranteed
Minimum Death Benefit will continue to grow, we will use the age (as of the
Contract Date anniversary) of the successor Annuitant/Certificate Owner.
19
<PAGE>
WHEN THE NQ CERTIFICATE OWNER DIES
BEFORE THE ANNUITANT
When you are not the Annuitant under an NQ Certificate 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 annuity benefit 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 annuity benefit 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. 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.
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 2: 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 the Annuity Account Value.
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 annuity benefits. See "Annuity Benefits and Payout Annuity
Options" in Part 4. 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 7: 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 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 IRA Certificates are not assignable or transferable except through
surrender to us. They may not be borrowed against or used as collateral for a
loan or other obligation.
The NQ 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 7: Tax Aspects of the
Certificates."
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 each trust; and
20
<PAGE>
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
Post Office Box 13014
Newark, NJ 07188-0014
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, 4th Floor
Secaucus, NJ 07096
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 1290 Avenue of the Americas, New York, New York
10104. For 1996, EDI was paid a fee of $1,204,370 for its services under a
"Distribution Agreement" with Equitable Life and the Separate Account.
The Certificates will be sold by registered representatives of EDI, as well
as by unaffiliated broker-dealers with which EDI has entered into selling
agreements. Broker-dealer sales compensation will not exceed 1.0% annually of
the Annuity Account Value on a Contract Date anniversary. 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.
21
<PAGE>
PART 4: DISTRIBUTION METHODS UNDER THE CERTIFICATES
The Certificates offer several distribution methods specifically designed to
provide retirement income. IRA Certificates permit Lump Sum Withdrawals,
Substantially Equal Payment Withdrawals, Systematic Withdrawals and Minimum
Distribution Withdrawals. NQ Certificates permit Lump Sum Withdrawals and
Systematic Withdrawals. The Certificates also offer fixed and variable
annuity benefits and Income Manager payout annuity options. IRA Certificate
Owners should consider how the distribution method selected may affect the
ability to comply with the minimum distribution rules discussed in "Part 7:
Tax Aspects of the Certificates."
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 begun your distribution in the form of a
life contingent annuity before that time).
WITHDRAWAL OPTIONS
The Certificates are annuity contracts, 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.
Withdrawals are not subject to a withdrawal charge. 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 2. Withdrawals
may be taxable and subject to tax penalty. See "Part 7: 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 7: Tax Aspects
of the Certificates."
LUMP SUM WITHDRAWALS
(Available under IRA and NQ Certificates)
You may take Lump Sum Withdrawals 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 3.
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 3. If we receive
only partially completed information, our Processing Office will contact you
for specific instructions before your request can be processed.
SYSTEMATIC WITHDRAWALS
(Available under IRA and NQ Certificates)
Under IRA Certificates this option may be elected only if you are between 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 basis. 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 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.
22
<PAGE>
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. A market value adjustment may
apply.
SUBSTANTIALLY EQUAL PAYMENT WITHDRAWALS
(Available under IRA Certificates)
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 7. 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 election
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. As indicated in the
preceding paragraph, you may be liable for the 10% penalty tax on
Substantially Equal Payment Withdrawals made before cancellation.
Unless you specify otherwise, Substantially Equal Payment Withdrawals will be
withdrawn on a pro 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. A market value adjustment may
apply.
MINIMUM DISTRIBUTION WITHDRAWALS
(Available under IRA Certificates)
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.
Example
The chart below illustrates the pattern of payments, under Minimum
Distribution Withdrawals for a male who purchases an IRA Certificate 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
23
<PAGE>
the recalculation method of determining payments. (See "Part 1--Minimum
Distribution Withdrawals--IRA Certificates" in the SAI.) Payments are made
annually, and it is further assumed that no Lump Sum Withdrawals are 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.
HOW WITHDRAWALS AFFECT YOUR GUARANTEED MINIMUM INCOME BENEFIT AND GUARANTEED
MINIMUM DEATH BENEFIT
Except as described in the next sentence, each withdrawal will cause a
reduction in your current Guaranteed Minimum Death Benefit and Guaranteed
Minimum Income Benefit benefit base (described below) on a pro rata basis.
Your current Guaranteed Minimum Death Benefit if based on the 6% to Age 80
Roll Up, and your Guaranteed Minimum Income Benefit benefit base, will be
reduced on a dollar-for-dollar basis as long as the sum of your withdrawals
in any Contract Year is 6% or less of the beginning of Contract Year
Guaranteed Minimum Death Benefit. Once a withdrawal is made that causes
cumulative withdrawals in a Contract Year to exceed 6% of the beginning of
Contract Year Guaranteed Minimum Death Benefit, that withdrawal and any
subsequent withdrawals in that Contract Year will cause a pro rata reduction
to occur.
Reduction on a dollar-for-dollar basis means your current Guaranteed Minimum
Death Benefit and Guaranteed Minimum Income Benefit benefit base are reduced
by the dollar amount of the withdrawal. Reduction on a pro rata basis means
that we calculate the percentage of the Annuity Account Value as of the
Transaction Date that is being withdrawn and we reduce your current
Guaranteed Minimum Death Benefit and Guaranteed Minimum Income Benefit
benefit base by that same percentage. For example, if your Annuity Account
Value is $30,000 and you withdraw $12,000 you have withdrawn 40%
($12,000/$30,000) of your Annuity Account Value. If your Guaranteed Minimum
Death Benefit was $40,000 prior to the withdrawal, it would be reduced by
$16,000 ($40,000 x .40) and your new Guaranteed Minimum Death Benefit after
the withdrawal would be $24,000 ($40,000 -$16,000).
The timing of your withdrawals and whether they exceed the 6% threshold
described above can have a significant impact on your Guaranteed Minimum
Death Benefit or Guaranteed Minimum Income Benefit.
GUARANTEED MINIMUM INCOME BENEFIT
BENEFIT BASE
The Guaranteed Minimum Income Benefit benefit base is equal to the initial
contribution on the Contract Date. Thereafter, the Guaranteed Minimum Income
Benefit benefit base is credited with interest at 6% (4% for amounts in the
Alliance Money Market Fund and the Guarantee Periods, except as indicated
below) on each Contract Date anniversary through the Annuitant's age 80, and
0% thereafter, and is adjusted for any subsequent contributions and
withdrawals. The Guaranteed Minimum Income Benefit benefit base interest
applicable to amounts in the Alliance Money Market Fund under the Special
Dollar Cost Averaging program (described in Part 3) will be 6%.
Your Guaranteed Minimum Income Benefit benefit base is applied to guaranteed
minimum annuity factors to determine the Guaranteed Minimum Income Benefit.
The guaranteed minimum annuity factors are based on (i) interest at 2.5% if
the Guaranteed Minimum Income Benefit 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 tables that assume increasing longevity. These interest and
mortality factors are generally more conservative than the basis underlying
current annuity factors, which means that they would produce less periodic
income for an equal amount applied.
Your Guaranteed Minimum Income Benefit benefit base does not create an
Annuity Account Value or a Cash Value and is used solely for purposes of
calculating your Guaranteed Minimum Income Benefit.
ANNUITY BENEFITS AND PAYOUT ANNUITY
OPTIONS
The Equitable Accumulator Select Certificates offer annuity benefits and
Income Manager payout annuity options, described below, for providing
retirement income.
ANNUITY BENEFITS
Annuity benefits under the Equitable Accumulator Select Certificates 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
24
<PAGE>
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 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 the Annuity Account Value.
Amounts in the Guarantee Periods that are applied to an annuity benefit 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 2.
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 annuity forms 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
Investment Funds through the purchase of annuity units. The amount of each
variable annuity payment may fluctuate, depending upon the performance of the
Investment Funds. 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 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 annuity benefit, we will issue a separate written agreement putting
the benefit 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
annuity form, 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 form is chosen and payments have commenced, no change can be made.
If, at the time you elect an annuity form, the amount to be applied is less
than $2,000 or the initial payment under the form 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.
INCOME MANAGER PAYOUT ANNUITY OPTIONS
Under Equitable Accumulator Select Certificates, you may apply your Annuity
Account Value to an Income Manager (Life Annuity with a Period Certain), or
an Income Manager (Period Certain) payout annuity certificate. Income Manager
(Life Annuity with a Period Certain) certificates provide guaranteed payments
for the Annuitant's life or for the Annuitant's life and the life of a joint
Annuitant,
25
<PAGE>
Income Manager (Period Certain) certificates provide payments for a specified
period. The Certificate Owner and Annuitant must meet the issue age and
payment requirements. Income Manager payout annuities provide guaranteed
level (IRA and NQ Certificates) payments under both forms of certificate, or
guaranteed increasing (NQ Certificates) payments under only Income Manager
(Life Annuity with a Period Certain) certificates.
If you apply a part of the Annuity Account Value under any of the above
Income Manager payout annuity certificates, it will be considered a
withdrawal. See "Withdrawal Options" above. Amounts received under the Income
Manager payout annuity certificates in such case will be taxable as
withdrawals. See Part 7, "Tax Aspects of the Certificates."
No subsequent contributions will be permitted under an Income Manager (Life
Annuity with a Period Certain) certificate.
The payout annuities are described in our prospectus for the Income Manager.
Copies of the most current version are available from your registered
representative. To purchase an Income Manager payout annuity we also require
the return of your Equitable Accumulator Select Certificate. An Income
Manager payout annuity certificate will be issued to put one of the payout
annuity options into effect. Depending upon your circumstances, this may be
accomplished on a tax-free basis. Consult your tax adviser.
26
<PAGE>
PART 5: 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. Unless otherwise indicated,
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 "Group or
Sponsored Arrangements" below.
baseBUILDER Benefit Charge
If you elect the Combined Guaranteed Minimum Income Benefit and Guaranteed
Minimum Death Benefit, we deduct a charge annually on each Processing Date.
The charge is equal to a percentage of the Guaranteed Minimum Income Benefit
benefit base in effect on the Processing Date. The percentage is equal to
0.30%. The Guaranteed Minimum Income Benefit benefit base is described under
"How Withdrawals Affect Your Guaranteed Minimum Income Benefit and Guaranteed
Minimum Death Benefit" in Part 4.
This charge will be deducted from your 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 such charge will be deducted from the
Guarantee Periods in order of the earliest Expiration Date(s) first. A market
value adjustment may apply. See "Market Value Adjustment for Transfers,
Withdrawals or Surrender Prior to the Expiration Date" in Part 2.
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 annuity benefit. 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%
for IRA Certificates, and from 0% to 3.5% for NQ Certificates (1% in Puerto
Rico and 5% in the Virgin Islands).
CHARGES DEDUCTED FROM THE
INVESTMENT FUNDS
Mortality and Expense Risks Charge
We will deduct a daily charge from the assets in each Investment Fund to
compensate us for mortality and expense risks, including the Guaranteed
Minimum Death Benefit. The daily charge is at the rate of 0.003032%, which is
equivalent to an annual rate of 1.10%, on the assets in each Investment Fund.
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 at the time of death,
the Guaranteed Minimum 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.
Administration Charge
We will deduct a daily charge from the assets in each Investment Fund, to
compensate us for administration 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. We reserve the right to increase this
charge to an annual rate of 0.35%, the maximum permitted under the
Certificates.
Distribution Charge
We will deduct a daily charge from the assets in each Investment Fund to
compensate us for sales expenses. The daily charge is at a rate of 0.000695%
(equivalent to an annual rate of 0.25%) on the assets in each Investment
Fund. This charge will never exceed applicable regulatory limitations.
We also offer other Equitable Accumulator certificates that do not have a
distribution charge, but withdrawals of contributions are subject to a charge
which declines to zero after seven years for each contribution. These other
certificates may also provide higher Guaranteed Rates for the Guarantee
Periods. A current prospectus for the Equitable
27
<PAGE>
Accumulator with a withdrawal charge instead of a distribution charge may be
obtained from your registered representative.
EQ TRUST CHARGES TO PORTFOLIOS
Investment management fees charged daily against EQ Trust's assets, the 12b-1
fee, direct operating expenses of EQ Trust (such as trustees' fees, expenses
of independent auditors and legal counsel, administrative service fees,
custodian fees, and liability insurance), and certain investment-related
expenses of EQ 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 investment management fees paid annually
by the Portfolio cannot be changed without a vote by shareholders. They are
as follows:
<TABLE>
<CAPTION>
AVERAGE DAILY
NET ASSETS
---------------
<S> <C>
EQ/Putnam Growth & Income
Value.......................... 0.55%
EQ/Putnam Investors Growth .... 0.55%
EQ/Putnam International Equity 0.70%
MFS Research ................... 0.55%
MFS Emerging Growth Companies . 0.55%
</TABLE>
Investment management fees are established under EQ Trust's Investment
Management Agreement between EQ Trust and its investment manager, EQ
Financial. EQ Financial has entered into expense limitation agreements with
EQ Trust, with respect to each Portfolio, pursuant to which EQ Financial has
agreed to waive or limit its fees and total annual operating expenses
(expressed as a percentage of the Portfolios' average daily net assets) to
0.85% each for the EQ/Putnam Growth & Income Value, EQ/Putnam Investors
Growth, MFS Research and MFS Emerging Growth Companies Portfolios; and 1.20%
for the EQ/Putnam International Equity Portfolio. See the prospectus for EQ
Trust for more information.
The Rule 12b-1 Plan provides that EQ Trust, on behalf of each Portfolio, may
pay annually up to 0.25% of the average daily net assets of a Portfolio
attributable to its Class IB shares in respect of activities primarily
intended to result in the sale of the Class IB shares. This fee will not be
increased for the life of the Certificates. Fees and expenses are described
more fully in the EQ Trust prospectus.
HR TRUST CHARGES TO PORTFOLIOS
Investment advisory fees charged daily against HR Trust's assets, the 12b-1
fee, direct operating expenses of HR 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 HR 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>
AVERAGE DAILY NET ASSETS
-------------------------------------------------------
FIRST NEXT NEXT NEXT
$750 $750 $1 $2.5
MILLION MILLION BILLION BILLION THEREAFTER
--------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
Alliance
Money
Market...... 0.350% 0.325% 0.300% 0.280% 0.270%
Alliance
High Yield . 0.600% 0.575% 0.550% 0.530% 0.520%
Alliance
Common
Stock ...... 0.475% 0.425% 0.375% 0.355% 0.345%*
Alliance
Aggressive
Stock ...... 0.625% 0.575% 0.525% 0.500% 0.475%
Alliance
Small Cap
Growth...... 0.900% 0.850% 0.825% 0.800% 0.775%
</TABLE>
*On assets in excess of $10 billion, the management fee for the Alliance
Common Stock Portfolio is reduced to 0.335% of average daily net assets.
Investment advisory fees are established under HR Trust's investment advisory
agreements between HR Trust and its investment adviser, Alliance.
The Rule 12b-1 Plan provides that HR Trust, on behalf of each Portfolio may
pay annually up to 0.25% of the average daily net assets of a Portfolio
attributable to its Class IB shares in respect of activities primarily
intended to result in the sale of the Class IB shares. This fee will not be
increased for the life of the Certificates. EDI is currently waiving a
portion of the 12b-1 fee with respect to the Alliance Small Cap Growth
Portfolio. Fees and expenses are described more fully in the HR Trust
prospectus.
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may change the minimum
initial contribution requirements. We may also change the Guaranteed Minimum
Death Benefit and the Guaranteed Minimum Income Benefit. We may also offer
Investment Funds investing in Class IA shares of HR Trust and EQ Trust, which
are not subject to the 12b-1 fee. 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
28
<PAGE>
group or sponsoring organization among other factors. We take all these
factors into account when making changes. To qualify for changes, 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 changes.
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 changes according to our rules in effect
when a Certificate is approved for issue. We may change these rules from time
to time. Any variations will reflect differences in costs or services and
will not be unfairly discriminatory.
Group or 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.
29
<PAGE>
PART 6: VOTING RIGHTS
EQ TRUST AND HR TRUST VOTING RIGHTS
As explained previously, contributions allocated to the Investment Funds are
invested in shares of the corresponding Portfolios of EQ Trust and HR 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 each trust's Board of Trustees,
o to ratify the selection of independent auditors for each trust, and
o on any other matters described in each trust's current prospectus or
requiring a vote by shareholders under the 1940 Act.
Because EQ Trust is a Delaware business trust and HR 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 share of each trust 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 each trust. EQ Trust shares currently are sold only to
our separate accounts. HR 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 Certificate Owners, we currently do
not foresee any disadvantages arising out of this. HR 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 HR 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 an
Investment Fund divided by the Accumulation Unit Value for that Investment
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.
30
<PAGE>
PART 7: TAX ASPECTS OF THE CERTIFICATES
This Part of the prospectus generally covers our understanding of the current
Federal income tax rules that apply to NQ and IRA Certificates.
This Part does not apply to NQ Certificates used as the investment vehicle
for qualified plans discussed in Appendix II.
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 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 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
enactment. We suggest you consult your legal or tax adviser.
TAXATION OF NON-QUALIFIED ANNUITIES
This section generally covers our understanding of the current Federal income
tax laws that apply to a non-qualified annuity purchased with only after-tax
dollars.
Equitable Life has designed the NQ 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.
Withdrawals
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, and is subject to income tax withholding. See "Federal and State
Income Tax Withholding" below. 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. If your Equitable Accumulator Select Certificate was issued as a
result of a tax free exchange of another NQ life insurance or deferred
annuity contract as described in "Methods of Payment: 1035 Exchanges" in Part
3, your investment in that original contract generally is treated as the
basis in the Equitable Accumulator Select Certificate regardless of the value
of that original contract at the time of the exchange. 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 must 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.
Annuity Payments
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
31
<PAGE>
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.
Early Distribution Penalty Tax
In addition to income tax, a penalty tax of 10% applies to the taxable
portion of a distribution unless the distribution is (1) made on or after the
date the taxpayer attains age 59 1/2, (2) made on or after the taxpayer's
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.
Payments as a Result of Death
If, as a result of the Annuitant's death, the beneficiary is entitled to
receive the death benefit described in Part 3, 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.
Special distribution requirements apply upon the death of the owner of a
non-qualified annuity. That is, in the case of a contract where the owner and
annuitant are different, even though the annuity contract could continue
because the annuitant has not died, Federal tax law requires that the person
who succeeds as owner of the contract take distribution of the contract
within a specified period of time.
SPECIAL RULES FOR NQ CERTIFICATES
ISSUED IN PUERTO RICO
Under current law Equitable Life treats income from NQ 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 NQ 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.
IRA TAX INFORMATION
TAX-QUALIFIED INDIVIDUAL RETIREMENT
ANNUITIES (IRAS)
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.
The IRA Certificate is designed to qualify as an IRA under Section 408(b) of
the Code. Your rights under the IRA Certificate cannot be forfeited.
This prospectus 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 IRA Certificates.
32
<PAGE>
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 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,
does not represent a determination of the merits of the annuity as an
investment, and may not address certain features under the IRA Certificate.
Cancellation
You can cancel a Certificate issued as an IRA by following the directions in
Part 3 under "Free Look Period." Since there may be adverse tax consequences
if a Certificate is cancelled (and because we are required to report to the
IRS certain distributions from cancelled 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 3. 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 $4,000 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.
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.
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.
33
<PAGE>
If the individual (or the individual's spouse, unless the couple has lived
apart the entire taxable year and their filing status is married, filing
separately) is covered by a tax-favored retirement plan, the deduction for
IRA contributions must be computed using one of two methods. Under the first
method, the individual determines AGI and subtracts $25,000 if the individual
is a single person, $40,000 if the individual is married and files a joint
return with the spouse, or $0 if the individual is married and files a
separate return. The resulting amount is the individual's Excess AGI. The
individual then determines the limit on the deduction for IRA contributions
using the following formula:
<TABLE>
<CAPTION>
<S> <C> <C>
$10,000-Excess AGI X Maximum = Adjusted
- ----------------------- Permissible Dollar
$10,000 Dollar Deduction
Deduction Limit
</TABLE>
Under the second method, the individual determines his or her Excess AGI and
then refers to the table in Appendix IV 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 to the
individual's IRA (or the nonworking spouse's IRA) may not, however, together
exceed the maximum $2,000 per person limit. 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 any
individual who has made nondeductible contributions to an IRA in prior years
and is receiving amounts from any IRA must file the required information with
the IRS. Moreover, individuals making nondeductible IRA contributions must
retain all income tax returns and records pertaining to such contributions
until interests in all 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 the year
(including extensions), "regular" contributions may still be withdrawn after
that time if the IRA contribution for the tax year did not exceed $2,000 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.
34
<PAGE>
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 has made 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 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.
35
<PAGE>
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.
An individual who has been computing minimum distributions with respect to
IRA funds on an account based approach (discussed above) may subsequently
apply such funds to a life annuity based payout, provided that the individual
had elected to recalculate life expectancy annually (and the spouse's life
expectancy if a spousal joint annuity is selected). For example, if you
anticipate exercising your Guaranteed Minimum Income Benefit or selecting any
other form of life annuity payout after you are age 70 1/2, you must have
elected to recalculate life expectancies.
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 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.
36
<PAGE>
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.
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.
Also not subject to penalty tax are IRA distributions used to pay certain
extraordinary medical expenses or medical insurance premiums for defined
unemployed individuals.
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 Income Manager (Life Annuity
with a Period Certain), both of which are described in Part 4. The version of
the Income Manager which would meet this exception must provide level
payments for life, with no deferral of the payment start date. If you are an
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 Income Manager 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 Income Manager
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 prior distributions under this option.
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 Income Manager 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
37
<PAGE>
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.
FEDERAL AND STATE INCOME TAX
WITHHOLDING
Equitable Life is required to withhold Federal income tax from IRA
distributions and 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 from the Certificates made 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 1997, a recipient of periodic
payments (e.g., monthly or annual payments) which total less than a $14,400
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 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.
38
<PAGE>
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.
39
<PAGE>
PART 8: INDEPENDENT ACCOUNTANTS
The consolidated financial statements and consolidated financial statement
schedules of Equitable Life at December 31, 1996 and 1995 and for each of the
three years in the period ended December 31, 1996 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.
40
<PAGE>
PART 9: INVESTMENT PERFORMANCE
This Part presents performance data for each of the Investment Funds included
in the tables below. The performance data were calculated by two methods. The
first method presented in the tables under "Adjusted Historical Performance
Data," reflects all applicable fees and charges, including the optional
benefit charge, but not the charges for any applicable taxes such as premium
taxes.
The second method presented in the tables under "Rate of Return Data for
Investment Funds," also reflects all applicable fees and charges, but does
not reflect the optional benefit charge, or the charge for tax such as
premium taxes. These additional charges would effectively reduce the rates of
return credited to a particular Certificate.
No Certificates were offered prior to the date of this prospectus.
Accordingly, the performance data for the Investment Funds have been adjusted
for expenses, as described herein, that would have been incurred had these
Certificates been available.
HR Trust Portfolios
The performance data shown for the Investment Funds investing in Class IB
shares of HR Trust Portfolios (other than the Alliance Small Cap Growth
Portfolio which commenced operations on May 1, 1997) are based on the actual
investment results of the Portfolios, and have been adjusted for the fees and
charges applicable under the Certificates. However, the investment results
prior to October 1996, when Class IB shares were not available, do not
reflect 12b-1 fees, which would effectively reduce such investment
performance.
The performance data for the Alliance Money Market and Alliance Common Stock
Funds that invest in corresponding HR Trust Portfolios, for 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 Investment Funds are based on the date of inception of the predecessor
separate accounts. These performance data have been adjusted to reflect the
maximum investment advisory fee payable for the corresponding Portfolio of HR
Trust, as well as an assumed charge of 0.06% for direct operating expenses.
EQ Trust Portfolios
The Investment Funds of the Separate Account that invest in Class IB shares
of Portfolios of EQ Trust have only recently been established and no
Certificates funded by those Investment Funds have been issued as of the date
of this Prospectus. EQ Trust commenced operations on May 1, 1997. Therefore,
no actual historical performance data for any of these Portfolios are
available. In this connection, see the discussion immediately following the
tables below.
See "Part 2: The Guaranteed Period Account" for information on the Guaranteed
Period Account.
ADJUSTED HISTORICAL PERFORMANCE DATA
The 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 a Certificate, at
the end of each period. These tables (which reflect the first calculation
method described above) are prepared 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, 1996 by the $1,000
contribution made at the beginning of each period illustrated. The result of
that calculation is the total growth rate for the period. Then we annualize
that growth rate to obtain the average annual percentage increase (decrease)
during the period shown. When we "annualize," we assume that a single rate of
return applied each year during the period will produce the ending value,
taking into account the effect of compounding.
41
<PAGE>
ADJUSTED HISTORICAL PERFORMANCE DATA
AVERAGE ANNUAL TOTAL RETURN UNDER A CERTIFICATE SURRENDERED ON
DECEMBER 31, 1996*
<TABLE>
<CAPTION>
LENGTH OF INVESTMENT PERIOD
------------------------------------------------
INVESTMENT ONE THREE FIVE TEN SINCE
FUND YEAR YEARS YEARS YEARS INCEPTION**
------- ------- ------- ------- -------------
<S> <C> <C> <C> <C> <C>
HR TRUST
- -------------------------
Alliance Money Market 3.57% 3.11% 2.36% 3.90% 5.11%
Alliance High Yield 20.83 10.67 12.56 -- 9.33
Alliance Common Stock 22.20 15.09 13.60 13.73 13.15
Alliance Aggressive Stock 20.16 13.56 9.75 16.48 17.91
</TABLE>
- ------------
See footnotes below
The table below illustrates the growth of an assumed investment of $1,000,
with fees and charges deducted on the basis described above for the first
method of calculation.
ADJUSTED HISTORICAL PERFORMANCE DATA
GROWTH OF $1,000 UNDER A CERTIFICATE SURRENDERED ON
DECEMBER 31, 1996*
<TABLE>
<CAPTION>
LENGTH OF INVESTMENT PERIOD
----------------------------------------------------
INVESTMENT ONE THREE FIVE TEN SINCE
FUND YEAR YEARS YEARS YEARS INCEPTION**
-------- -------- -------- -------- -------------
<S> <C> <C> <C> <C> <C>
HR TRUST
- -------------------------
Alliance Money Market $1,036 $1,096 $1,124 $1,466 $ 2,218
Alliance High Yield 1,208 1,355 1,807 -- 2,440
Alliance Common Stock 1,222 1,525 1,892 3,620 13,394
Alliance Aggressive Stock 1,202 1,464 1,592 4,598 6,125
</TABLE>
- ------------
* The tables reflect the optional benefit charge.
** The "Since Inception" dates for the Portfolios of the HR Trust are as
follows: Alliance Money Market (July 13, 1981); Alliance High Yield
(January 2, 1987); Alliance Common Stock (January 13, 1976); and Alliance
Aggressive Stock (January 27, 1986).
Additional investment performance information appears in the attached HR
Trust and EQ Trust prospectuses.
The Alliance Small Cap Growth Portfolio of HR Trust commenced operations on
May 1, 1997. Therefore, no actual historical performance data are available.
However, historical performance of a composite of six other advisory accounts
managed by Alliance is described in the attached HR Trust prospectus.
According to that prospectus, these accounts have substantially the same
investment objectives and policies, and are managed in accordance with
essentially the same investment strategies and techniques, as those of the
Alliance Small Cap Growth Portfolio. It should be noted that these accounts
are not subject to certain of the requirements and restrictions to which the
Alliance Small Cap Growth Portfolio is subject and that they are managed for
tax exempt clients of Alliance. The investment performance information
included in the HR Trust prospectus for all Portfolios other than the
Alliance Small Cap Growth Portfolio is based on actual historical
performance.
The investment performance data for HR Trust's Alliance Small Cap Growth
Portfolio and for each of the Portfolios of EQ Trust, contained in the HR
Trust and the EQ Trust prospectuses, are provided by those prospectuses to
illustrate the past performance of each respective Portfolio adviser in
managing substantially similar investment vehicles as measured against
specified market indices and do not represent the past or future performance
of any Portfolio. None of the performance data contained in the HR Trust and
EQ Trust prospectuses reflects fees and charges imposed under your
Certificate, which fees and charges would reduce such performance figures.
Therefore, the performance data for each of the Portfolios described in the
EQ Trust prospectus
42
<PAGE>
and for the Alliance Small Cap Growth Portfolio in the HR Trust prospectus
may be of limited use and are not intended to be a substitute for actual
performance of the corresponding Portfolios, nor are such results an estimate
or guarantee of future performance for these Portfolios.
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.
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 risks charge, administration charge, distribution charge, or
optional benefit 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:
ALLIANCE MONEY MARKET: July 13, 1981; Salomon Brothers Three-Month T-Bill
Index.
ALLIANCE HIGH YIELD: January 2, 1987; Merrill Lynch High Yield Master Index.
ALLIANCE COMMON STOCK: January 13, 1976; Standard & Poor's 500 Index.
ALLIANCE AGGRESSIVE STOCK: January 27, 1986; 50% Standard & Poor's Mid-Cap
Total Return Index and 50% Russell 2000 Small Stock 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 Equitable Accumulator Select performance relative to
other variable annuity products.
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1996:*
<TABLE>
<CAPTION>
SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS 20 YEARS INCEPTION
-------- --------- --------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
HR TRUST
ALLIANCE MONEY MARKET 3.57% 3.33% 2.64% 4.20% 5.39% -- 5.59%
Lipper Money Market 3.82 3.60 2.93 4.52 5.72 -- 5.89
Benchmark 5.25 5.07 4.37 5.67 6.72 -- 6.97
ALLIANCE HIGH YIELD 20.83 10.90 12.81 -- -- -- 9.62
Lipper High Yield 12.46 7.93 11.47 -- -- -- 9.13
Benchmark 11.06 9.59 12.76 -- -- -- 11.24
ALLIANCE COMMON STOCK 22.20 15.32 13.86 13.96 14.64 13.64% 13.38
Lipper Growth 18.78 14.80 12.39 13.08 14.04 13.60 13.42
Benchmark 22.96 19.66 15.20 15.28 16.79 14.55 14.63
ALLIANCE AGGRESSIVE STOCK 20.16 13.79 10.03 16.69 -- -- 18.25
Lipper Small Company
Growth 16.55 12.70 17.53 16.29 -- -- 16.47
Benchmark 17.85 14.14 14.80 14.29 -- -- 13.98
</TABLE>
- ------------
See footnote on next page.
43
<PAGE>
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1996:*
<TABLE>
<CAPTION>
SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS 20 YEARS INCEPTION
-------- --------- --------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
HR TRUST
ALLIANCE MONEY MARKET 3.57% 10.31% 13.89% 50.89% 119.78% -- 131.84%
Lipper Money Market 3.82 11.18 15.58 55.73 130.46 -- 141.99
Benchmark 5.25 16.99 23.86 73.61 165.31 -- 184.26
ALLIANCE HIGH YIELD 20.83 36.40 82.67 -- -- -- 150.53
Lipper High Yield 12.46 25.77 72.39 -- -- -- 142.30
Benchmark 11.06 31.63 82.29 -- -- -- 190.43
ALLIANCE COMMON STOCK 22.20 53.37 91.34 269.51 676.19 1,190.82% 1,290.50
Lipper Growth 18.78 51.65 80.51 243.70 627.03 1,185.21 1,298.19
Benchmark 22.96 71.39 102.85 314.34 925.25 1,416.26 1,655.74
ALLIANCE AGGRESSIVE STOCK 20.16 47.32 61.27 368.29 -- -- 524.09
Lipper Small Company
Growth 16.55 43.42 142.70 352.31 -- -- 428.32
Benchmark 17.85 48.69 99.38 280.32 -- -- 318.19
</TABLE>
- ------------
See footnote below.
YEAR-BY-YEAR RATES OF RETURN*
<TABLE>
<CAPTION>
1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
HR TRUST
ALLIANCE MONEY
MARKET** 9.09% 6.74% 4.91% 4.93% 5.60% 7.44% 6.50% 4.49% 1.90% 1.32% 2.36% 4.06% 3.57%
ALLIANCE HIGH
YIELD -- -- -- 3.03 7.98 3.46 (2.71) 22.47 10.51 21.18 (4.34) 18.01 20.83
ALLIANCE COMMON
STOCK** (3.53) 31.30 15.49 5.72 20.48 23.59 (9.59) 35.68 1.57 22.83 (3.70) 30.34 22.20
ALLIANCE
AGGRESSIVE
STOCK -- -- 33.27 5.58 (0.48) 41.21 6.43 83.89 (4.71) 14.88 (5.35) 29.54 20.16
</TABLE>
- ------------
* Returns do not reflect the optional benefit charge, and any charge for
tax such as premium taxes.
** Prior to 1984 the Year-by-Year Rates of Return were:
<TABLE>
<CAPTION>
1976 1977 1978 1979 1980 1981 1982 1983
------- ---------- ------- -------- -------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ALLIANCE COMMON STOCK 7.72% (10.69)% 6.51% 27.77% 47.73% (7.37)% 15.70% 24.11%
ALLIANCE MONEY MARKET -- -- -- -- -- 5.49 11.22 7.21
</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 each respective trust and may present the performance of the
Investment Funds or compare it 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
"Portfolio Inception Dates and Comparative Benchmarks" in this Part 9, 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,
44
<PAGE>
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.
ALLIANCE MONEY MARKET FUND YIELD INFORMATION
The current yield and effective yield of the Alliance Money Market Fund may
appear in reports and promotional material to current or prospective
Certificate Owners.
Current yield for the Alliance 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. Alliance Money Market Fund yields
and effective yields assume the deduction of all Certificate charges and
expenses other than the optional benefit charge, and any charge for tax such
as premium tax. The yields and effective yields for the Alliance Money Market
Fund when used for the Special Dollar Cost Averaging program, assume that no
Certificate charges are deducted. See "Part 5: Alliance Money Market Fund
Yield Information" in the SAI.
45
<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, 1998 to a Guarantee Period with an Expiration Date
of February 15, 2007 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, 2002.
<TABLE>
<CAPTION>
ASSUMED
GUARANTEED RATE ON
FEBRUARY 15, 2002
----------------------
5.00% 9.00%
---------- ----------
<S> <C> <C>
As of February 15, 2002 (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, 2002 (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>
APPENDIX II: QUALIFIED PLAN CERTIFICATES--NQ CERTIFICATES
- -----------------------------------------------------------------------------
CONTRIBUTIONS
When issued with the appropriate endorsement, NQ Certificates may be used as
an investment vehicle for a defined contribution plan maintained by an
employer and which is a tax qualified plan within the meaning of Section
401(a) of the Code.
When issued in connection with such a qualified plan, we will only accept
employer contributions from a trust under a plan qualified under Section
401(a) of the Code. If the plan contains a cash or deferred arrangement
within the meaning of Section 401(k) of the Code, contributions may include
employee pre-tax and employer matching or other employer contributions, but
not employee after-tax contributions to the plan.
CERTIFICATE OWNER, ANNUITANT AND BENEFICIARY
The Certificate Owner must be the trustee of a trust for a qualified plan
maintained by the employer. The Annuitant must be the participant/employee
and the beneficiary under the Certificate must be the Certificate Owner.
PURCHASE CONSIDERATIONS
Any trustee considering a purchase of an NQ Certificate should discuss with
its tax adviser whether this is an appropriate investment vehicle for the
employer's plan. The form of Certificate and this prospectus should be
reviewed in full, and the following factors, among others, should be noted.
This Certificate accepts transfer contributions only and not regular, ongoing
payroll contributions. For 401(k) plans, no employee after-tax contributions
are accepted. Further, Equitable will not perform or provide any plan record
keeping services with respect to this Certificate. The plan's administrator
will be solely responsible for performing or providing for all such services.
There is no loan feature offered under the Certificates, so if the plan
provides for loans and a participant takes a loan from the plan, other plan
assets must be used as the source of the loan and any loan repayments must be
credited to other investment vehicles and/or accounts available under the
plan.
Finally, because the method of purchasing the Certificates and the features
of the Certificates may appeal more to plan participants who are older and
tend to be highly paid, and because certain features of the Certificates are
available only to plan participants who meet certain minimum and/or maximum
age requirements, plan trustees should discuss with their advisers whether
the purchase of the Certificates would cause the plan to engage in prohibited
discrimination in contributions, benefits or otherwise.
47
<PAGE>
APPENDIX III: GUARANTEED MINIMUM DEATH BENEFIT EXAMPLE
- -----------------------------------------------------------------------------
Under the Certificates the death benefit is equal to the Annuity Account
Value or, if greater, the Guaranteed Minimum Death Benefit (see "Guaranteed
Minimum Death Benefit" in Part 3);
The following is an example illustrating the calculation of the Guaranteed
Minimum Death Benefit. Assuming $100,000 is allocated to the Investment Funds
(with no allocation to the Money Market Fund or the Guarantee Periods), no
subsequent contributions, no transfers and no withdrawals, the Guaranteed
Minimum Death Benefit for an Annuitant age 45 would be calculated as follows:
<TABLE>
<CAPTION>
6% TO AGE 80 ANNUAL
ROLL UP RATCHET TO
GUARANTEED AGE 80
END OF MINIMUM GUARANTEED
CONTRACT ANNUITY DEATH MINIMUM
YEAR ACCOUNT VALUE BENEFIT(1) DEATH BENEFIT
- ---------- --------------- -------------- ---------------
<S> <C> <C> <C>
1 $105,000 $106,000 $105,000(2)
2 $115,500 $112,360 $115,500(2)
3 $132,825 $119,102 $132,825(2)
4 $106,260 $126,248 $132,825(3)
5 $116,886 $133,823 $132,825(3)
6 $140,263 $141,852 $140,263(2)
7 $140,263 $150,363 $140,263(3)
</TABLE>
The Annuity Account Values for Contract Years 1 through 7 are determined
based on hypothetical rates of return of 5.00%, 10.00%, 15.00%, (20.00)%,
10.00%, 20.00% and 0.00%, respectively.
6% TO AGE 80 ROLL UP
(1) For Contract Years 1 through 7, the Guaranteed Minimum Death Benefit
equals the initial contribution increased by 6%.
ANNUAL RATCHET TO AGE 80
(2) At the end of Contract Years 1, 2 and 3, and again at the end of
Contract Year 6, the Guaranteed Minimum Death Benefit is equal to the
current Annuity Account Value.
(3) At the end of Contract Years 4, 5 and 7, the Guaranteed Minimum Death
Benefit is equal to the Guaranteed Minimum Death Benefit at the end of
the prior year since it is equal to or higher than the current Annuity
Account Value.
48
<PAGE>
APPENDIX IV: IRS CHART--ESTIMATED DEDUCTION TABLE
- -----------------------------------------------------------------------------
If your Maximum Permissible Dollar Deduction is $2,000, use this table to
estimate the amount of your contribution which will be deductible.
<TABLE>
<CAPTION>
EXCESS AGI DEDUCTION EXCESS AGI DEDUCTION EXCESS AGI DEDUCTION EXCESS AGI DEDUCTION
- ------------ ----------- ------------ ----------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 0..........$2,000 $2,550 $1,490 $5,050 $990 $ 7,550 $490
50 ......... 1,990 2,600 1,480 5,100 980 7,600 480
100 ......... 1,980 2,650 1,470 5,150 970 7,650 470
150 ......... 1,970 2,700 1,460 5,200 960 7,700 460
200 ......... 1,960 2,750 1,450 5,250 950 7,750 450
250 ......... 1,950 2,800 1,440 5,300 940 7,800 440
300 ......... 1,940 2,850 1,430 5,350 930 7,850 430
350 ......... 1,930 2,900 1,420 5,400 920 7,900 420
400 ......... 1,920 2,950 1,410 5,450 910 7,950 410
450 ......... 1,910 3,000 1,400 5,500 900 8,000 400
500 ......... 1,900 3,050 1,390 5,550 890 8,050 390
550 ......... 1,890 3,100 1,380 5,600 880 8,100 380
600 ......... 1,880 3,150 1,370 5,650 870 8,150 370
650 ......... 1,870 3,200 1,360 5,700 860 8,200 360
700 ......... 1,860 3,250 1,350 5,750 850 8,250 350
750 ......... 1,850 3,300 1,340 5,800 840 8,300 340
800 ......... 1,840 3,350 1,330 5,850 830 8,350 330
850 ......... 1,830 3,400 1,320 5,900 820 8,400 320
900 ......... 1,820 3,450 1,310 5,950 810 8,450 310
950 ......... 1,810 3,500 1,300 6,000 800 8,500 300
1,000 ......... 1,800 3,550 1,290 6,050 790 8,550 290
1,050 ......... 1,790 3,600 1,280 6,100 780 8,600 280
1,100 ......... 1,780 3,650 1,270 6,150 770 8,650 270
1,150 ......... 1,770 3,700 1,260 6,200 760 8,700 260
1,200 ......... 1,760 3,750 1,250 6,250 750 8,750 250
1,250 ......... 1,750 3,800 1,240 6,300 740 8,800 240
1,300 ......... 1,740 3,850 1,230 6,350 730 8,850 230
1,350 ......... 1,730 3,900 1,220 6,400 720 8,900 220
1,400 ......... 1,720 3,950 1,210 6,450 710 8,950 210
1,450 ......... 1,710 4,000 1,200 6,500 700 9,000 200
1,500 ......... 1,700 4,050 1,190 6,550 690 9,050 200
1,550 ......... 1,690 4,100 1,180 6,600 680 9,100 200
1,600 ......... 1,680 4,150 1,170 6,650 670 9,150 200
1,650 ......... 1,670 4,200 1,160 6,700 660 9,200 200
1,700 ......... 1,660 4,250 1,150 6,750 650 9,250 200
1,750 ......... 1,650 4,300 1,140 6,800 640 9,300 200
1,800 ......... 1,640 4,350 1,130 6,850 630 9,350 200
1,850 ......... 1,630 4,400 1,120 6,900 620 9,400 200
1,900 ......... 1,620 4,450 1,110 6,950 610 9,450 200
1,950 ......... 1,610 4,500 1,100 7,000 600 9,500 200
2,000 ......... 1,600 4,550 1,090 7,050 590 9,550 200
2,050 ......... 1,590 4,600 1,080 7,100 580 9,600 200
2,100 ......... 1,580 4,650 1,070 7,150 570 9,650 200
2,150 ......... 1,570 4,700 1,060 7,200 560 9,700 200
2,200 ......... 1,560 4,750 1,050 7,250 550 9,750 200
2,250 ......... 1,550 4,800 1,040 7,300 540 9,800 200
2,300 ......... 1,540 4,850 1,030 7,350 530 9,850 200
2,350 ......... 1,530 4,900 1,020 7,400 520 9,900 200
2,400 ......... 1,520 4,950 1,010 7,450 510 9,950 200
2,450 ......... 1,510 5,000 1,000 7,500 500 10,000 0
2,500 ......... 1,500
</TABLE>
Excess AGI = Your AGI minus your Threshold Level:
If you are single, your Threshold Level is $25,000.
If you are married, your Threshold Level is $40,000.
If you are married and file a separate tax return, your Excess AGI = your
AGI.
49
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
PAGE
--------
Part 1: Minimum Distribution Withdrawals--IRA 2
Certificates
Part 2: Accumulation Unit Values 2
Part 3: Annuity Unit Values 2
Part 4: Custodian and Independent Accountants 3
Part 5: Alliance Money Market Fund Yield Information 3
Part 6: Long-Term Market Trends 4
Part 7: Key Factors In Retirement Planning 5
Part 8: Financial Statements 9
</TABLE>
HOW TO OBTAIN AN EQUITABLE ACCUMULATOR SELECT STATEMENT
OF ADDITIONAL INFORMATION FOR SEPARATE ACCOUNT NO. 49
Send this request form to:
Equitable Life
Income Management Group
P.O. Box 1547
Secaucus, NJ 07096-1547
Please send me an Equitable Accumulator Select SAI:
---------------------------------------------------------
Name
---------------------------------------------------------
Address
---------------------------------------------------------
City State Zip
50
<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:
Amount
------
Securities and Exchange Commission Registration Fee $60,606.06
Printing Expenses $200,000
Accounting Fees and Expenses $100,000
Legal Fees and Expenses $10,000
Miscellaneous Expenses $35,000
----------------
Total Expenses $405,606.06
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The by-laws of The Equitable Life Assurance Society of the
United States ("Equitable Life") provide, in Article VII, as follows:
7.4 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
ss.ss. 721 -726; Insurance Law ss.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>
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, incorporated by reference to
Exhibit 1(a) to the Registration Statement
on Form S-3 (File No. 33-88456).
(b) Form of Sales Agreement among Equitable
Distributors, Inc. as Distributor, a
Broker-Dealer (to be named) and a General
Agent (to be named), incorporated by
reference to Exhibit 1(b) to the
Registration Statement on Form S-3 (File No.
33-88456).
(c) Form of The Hudson River Trust Sales
Agreement by and among Equico Securities,
Inc., 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, incorporated by
reference to Exhibit 1(c) to the
Registration Statement on Form S-3 (File No.
33-88456).
(4) (a) Form of group annuity contract no.
1050-94IC, incorporated by reference to
Exhibit 4(a) to the Registration Statement
on Form S-3 (File No. 33-88456).
(b) Form of group annuity certificate nos. 94ICA
and 94ICB, incorporated by reference to
Exhibit 4(b) to the Registration Statement
on Form S-3 (File No. 33-88456).
(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), incorporated by
reference to Exhibit 4(c) to the
Registration Statement on Form S-3 (File No.
33-88456).
(d) Forms of application used with the IRA, NQ
and Fixed Annuity Markets, incorporated by
reference to Exhibit 4(d) to the
Registration Statement on Form S-3 (File No.
33-88456).
(e) Form of endorsement no. 95ENLCAI to contract
no. 1050-94IC and data pages no. 94ICA/BLCA,
incorporated by reference to Exhibit 4(e) to
the Registration Statement on Form S-3 (File
No. 33-88456).
(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), incorporated by reference
to Exhibit 4(f) to the Registration
Statement on Form S-3 (File No. 33-88456).
<PAGE>
Exhibits No.
(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), incorporated by
reference to Exhibit 4(g) to the
Registration Statement on Form S-3 (File No.
33-88456).
(h) Form of Separate Account Insulation
Endorsement for the Endorsement Applicable
to Market Value Adjustment Terms,
incorporated by reference to Exhibit 4(h) to
the Registration Statement on Form S-3 (File
No. 33- 88456).
(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,
incorporated by reference to Exhibit 4(i) to
the Registration Statement on Form S-3 (File
No. 33-88456).
(j) Forms of Enrollment Form/Application for
Rollover IRA, Choice Income Plan, Assured
Growth Plan, Accumulator and Assured Payment
Plan, incorporated by reference to Exhibit
4(j) to the Registration Statement on Form
S-3 (File No. 33-88456).
(k) Forms of data pages for the Accumulator,
incorporated by reference to Exhibit 4(k) to
the Registration Statement on Form S-3 (File
No. 33- 88456).
(l) Forms of data pages for the Rollover IRA,
incorporated by reference to Exhibit 4(l) to
the Registration Statement on Form S-3 (File
No. 33-88456).
(m) Forms of data pages for the Accumulator and
Rollover IRA, incorporated by reference to
Exhibit 4(m) to the Registration Statement
on Form S-3 (File No. 33-88456).
(n) Forms of data pages for Accumulator and
Rollover IRA, incorporated by reference to
Exhibit 4(n) to the Registration Statement
on Form S-3 (File No. 33-88456).
(o) Forms of data pages for the Accumulator,
Rollover IRA, Income Manager Accumulator,
Income Manager Rollover IRA, Equitable
Accumulator, Income Manager (IRA and NQ) and
MVA Annuity (IRA and NQ), previously filed
with this Registration Statement (File No.
333-24009) on April 30, 1997.
(p) Forms of Enrollment Form/Application for
Income Manager Accumulator, Income Manager
Rollover IRA, Equitable Accumulator, Income
Manager (IRA and NQ) and MVA Annuity (IRA
and NQ), previously filed with this
Registration Statement (File No. 333-24009)
on April 30, 1997.
(q) Forms of data pages for Equitable
Accumulator Select (IRA) and Equitable
Accumulator Select (NQ).
(r) Forms of Enrollment Form/Application for
Equitable Accumulator Select (IRA and NQ).
<PAGE>
Exhibits No.
(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 (File
No. 333-24009) on April 30, 1997.
(b) 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,
incorporated by reference to Exhibit 9 of
the Registrant's Registration Statement on
Form N-4 (File No. 333-31131).
(c) Copy of the Internal Revenue Service
determination letter regarding qualification
under Section 401 of the Internal Revenue
Code, incorporated by reference to Exhibit
5(b) to the Registration Statement on Form
S-3 (File No. 33-88456).
(10) Form of Participation Agreement among EQ Advisors
Trust, Equitable, Equitable Distributors, Inc. and EQ
Financial Consultants, Inc., incorporated by
reference to the Registration Statement of EQ
Advisors Trust on Form N-1A (File Nos. 333-17217 and
811-07953).
(23) Consent of Price Waterhouse LLP.
(24) (a) Powers of Attorney, previously filed with
this Registration Statement No. 333-24009
on March 26, 1997.
(b) Power of attorney for Edward D. Miller.
<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 of
distribution not previously
disclosed in the registration
statement or any material change to
such information in the registration
statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
with or furnished to the Commission by the registrant pursuant to
Section 13 or 15(d) of the Securities Act of 1934 that are incorporated
by reference 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) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or 15(d) of the Securities Exchange
Act of 1934 that is incorporated by reference in the
registration statement 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.
<PAGE>
(h) 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.
<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 or amendment thereto to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City and State of New York, on
September 18, 1997.
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
Registration Statement or amendment thereto has been signed by or on behalf of
the following persons in the capacities and on the date indicated.
<TABLE>
<CAPTION>
PRINCIPAL EXECUTIVE OFFICERS:
<S> <C>
William T. McCaffrey Senior Executive Vice President, Chief Operating Officer
and Director
Joseph J. Melone Chairman of the Board and Director
Edward D. Miller President, Chief Executive Officer 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
September 18, 1997
</TABLE>
DIRECTORS:
Claude Bebear Jean-Rene Fourtou Winthrop Knowlton
James M. Benson Norman C. Francis Arthur L. Liman
Christopher Brocksom Donald J. Greene George T. Lowy
Francoise Colloc'h John T. Hartley William T. McCaffrey
Henri de Castries John H.F. Haskell, Jr. Joseph J. Melone
Joseph L. Dionne W. Edwin Jarmain Edward D. Miller
William T. Esrey G. Donald Johnston, Jr. Didier Pineau-Valencienne
George J. Sella, Jr.
Dave H. Williams
By: /s/Jerome S. Golden
-------------------
Jerome S. Golden
Attorney-in-Fact
September 18, 1997
<PAGE>
EXHIBIT INDEX
Exhibit No. Page
(23) Consent of Price Waterhouse LLP.
24(b) Power of Attorney for Edward D. Miller
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Post-Effective Amendment No. 2 to the Registration
Statement No. 333-24009 on Form S-3 of our report dated February 10, 1997
appearing on page F-1 of The Equitable Life Assurance Society of the United
States' Annual Report on Form 10-K for the year ended December 31, 1996. We
also consent to the incorporation by reference of our report on the
Consolidated Financial Statement Schedules dated February 10, 1997 which
appears on page F-47 of such Annual Report on Form 10-K. We also consent to
the references to us under the heading "Independent Accountants" in this
Prospectus.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
New York, New York
September 18, 1997
<PAGE>
POWER OF ATTORNEY
KNOW BY PERSONS BY THESE PRESENTS, that the undersigned officer or director
of The Equitable Life Assurance Society of the United States (the "Company"),
a New York stock life insurance company, hereby constitutes and appoints
Samuel B. Shlesinger, Donald R. Kaplan, Pauline Sherman, Michael F. McNelis,
Naomi J. Weinstein, Maureen K. Wolfson, Mildred Oliver, Jerome S. Golden and
Dennis D. Witte and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the
Securities Exchange Act of 1934 and the Investment Company Act of 1940 with
respect to any insurance or annuity contracts or other agreements providing for
allocation of amounts to Separate Accounts of the Company, and related units or
interests in Separate Accounts: registration statements on any form or forms
under the Securities Act of 1933 and the Investment Company Act of 1940 and
annual reports on any form or forms under the Securities Exchange Act of 1934,
and any and all amendments and supplements thereto, with all exhibits and all
instruments necessary or appropriate in connection therewith, each of said
attorneys-in-fact and agents and his, her or their substitutes being
empowered to act with or without the others or other, and to have full power
and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to effectuate
the same, as fully to all intents and purposes as the undersigned might or
could do in person, hereby ratifying and confirming all that said attorneys-
in-fact and agents, or any of them, may do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
17th day of September, 1997.
/s/ Edward D. Miller
------------------------------------------
Edward D. Miller
