Registration No. 33-89510
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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POST EFFECTIVE AMENDMENT NO. 7
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
The Equitable Life Assurance Society of the United States
(Exact name of registrant as specified in its charter)
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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)
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MARY JOAN HOENE
VICE PRESIDENT AND 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)
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Please send copies of all communications to:
PETER E. PANARITES, ESQ.
Freedman, Levy, Kroll & Simonds
1050 Connecticut Avenue, N.W., Washington D.C. 20036
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NOTE
This Post Effective Amendment No. 7 ("PEA") to the Form S-3 Registration
Statement No. 33-89510 ("Registration Statement") of The Equitable Life
Assurance Society of the United States ("Equitable Life") is being filed for the
purpose of including in this Registration Statement Prospectuses and exhibits
that were filed in connection with Equitable Life's new EQUI-VEST Express and
EQUI-VEST variable annuity products on Form N-4, Registration Statement File
Nos. 333-81393 and 333-81501, filed on June 23, 1999 and June 24, 1999,
respectively, and amended on September 1, 1999.
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EQUI-VEST(R) Express(SM)
A combination variable and fixed deferred annuity contract
PROSPECTUS DATED , 1999
Please read and keep this prospectus for future reference. It contains important
information that you should know before purchasing, or taking any other action
under your contract. Also, at the end of this prospectus you will find attached
the prospectuses for The Hudson River Trust and EQ Advisors Trust which contain
important information about their Portfolios.
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WHAT IS EQUI-VEST EXPRESS?
EQUI-VEST Express is a deferred annuity contract issued by THE EQUITABLE LIFE
ASSURANCE SOCIETY OF THE UNITED STATES. It provides for the accumulation of
retirement savings and for income. The contract also offers death benefit
protection and a number of payout options. You invest to accumulate value on a
tax-deferred basis in one or more of our variable investment options or in our
fixed maturity options ("investment options"). This contract may not currently
be available in all states.
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VARIABLE INVESTMENT OPTIONS
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FIXED INCOME OPTIONS:
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DOMESTIC FIXED INCOME AGGRESSIVE FIXED INCOME
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o Alliance Money Market o Alliance High Yield
o Alliance Intermediate
Government Securities
o Alliance Quality Bond
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EQUITY OPTIONS:
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DOMESTIC EQUITY
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o T. Rowe Price Equity Income o Alliance Equity Index
o EQ/Putnam Growth & o Merrill Lynch Basic Value
Income Value Equity
o Alliance Growth & Income o Alliance Common Stock
o EQ/Alliance Premier Growth o MFS Research
o Capital Guardian Research o MFS Growth with Income
o Capital Guardian U.S.
Equity
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INTERNATIONAL EQUITY
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o Alliance Global o Morgan Stanley Emerging
o Alliance International Markets Equity
o T. Rowe Price International
Stock
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AGGRESSIVE EQUITY
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o Alliance Aggressive Stock o Alliance Small Cap Growth
o EQ/Evergreen o MFS Emerging Growth Companies
o Warburg Pincus Small
Company Value
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ASSET ALLOCATION OPTIONS:
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o Alliance Conservative o EQ/Evergreen Foundation
Investors o Alliance Growth Investors
o EQ/Putnam Balanced o Merrill Lynch World Strategy
o Alliance Balanced
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You may allocate amounts to any of the variable investment options. Each
variable investment option is a subaccount of our Separate Account A. Each
variable investment option, in turn, invests in a corresponding securities
portfolio ("Portfolio") of The Hudson River Trust or EQ Advisors Trust. Your
investment results in a variable investment option will depend on the investment
performance of the related Portfolio.
FIXED MATURITY OPTIONS. You may allocate amounts to one or more fixed maturity
options. These amounts will receive a fixed rate of interest for a specified
period. Interest is earned at a guaranteed rate we set. We make a market value
adjustment (up or down) if you make transfers or withdrawals from a fixed
maturity option before its maturity date.
TYPES OF CONTRACTS. We offer the contracts for use as:
o A nonqualified annuity ("NQ") for after-tax contributions only
o An individual retirement annuity ("IRA"), either Traditional IRA or Roth IRA
o A Traditional IRA as a conduit to hold rollover distributions ("QP IRA")
from a qualified plan or a Tax-Sheltered Annuity ("TSA")
A contribution of at least $50 is required to purchase a contract.
Registration statements relating to this offering have been filed with the
Securities and Exchange Commission ("SEC"). The statement of additional
information ("SAI") dated _________________, 1999, is a part of one of the
registration statements. The SAI is available free of charge. You may request
one by writing to our Processing Office or calling 1 (800) 628-6673. The SAI has
been incorporated by reference into this prospectus. This prospectus and the SAI
can also be obtained from the SEC's Web site at http://www.sec.gov. The table of
contents for the SAI appears at the back of this prospectus.
THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. THE CONTRACTS ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY.
THEY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE NOT BANK
GUARANTEED. THEY ARE SUBJECT TO INVESTMENT RISKS AND POSSIBLE LOSS OF PRINCIPAL.
<PAGE>
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2 CONTENTS OF THIS PROSPECTUS
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Contents of this prospectus
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EQUI-VEST(R) EXPRESS(SM)
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Index of key words and phrases 4
Who is Equitable Life? 5
How to reach us 6
EQUI-VEST Express at a glance - key features 9
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FEE TABLE 11
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Examples 14
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1
CONTRACT FEATURES AND BENEFITS 16
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How you can purchase and contribute to your contract 16
Owner and annuitant requirements 18
How you can make your contributions 18
What are your investment options under the contract? 18
Allocating your contributions 22
Your right to cancel within a certain number of days 22
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2
DETERMINING YOUR CONTRACT'S VALUE 23
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Your account value 23
Your contract's value in the variable investment options 23
Your contract's value in the fixed maturity options 23
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"We," "our" and "us" refer to Equitable Life.
When we address the reader of this prospectus with words such as "you" and
"your," we mean the person who has the right or responsibility that the
prospectus is discussing at that point. This is usually the contract owner.
When we use the word "contract" it also includes certificates that are issued
under group contracts in some states.
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CONTENTS OF THIS PROSPECTUS 3
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3
TRANSFERRING YOUR MONEY AMONG
INVESTMENT OPTIONS 24
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Transferring your account value 24
Automatic transfer options 24
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4
ACCESSING YOUR MONEY 26
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Withdrawing your account value 26
Surrender of your contract to receive its cash value 27
When we may terminate your contract 27
When to expect payments 27
Choosing your annuity payout options 28
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5
CHARGES AND EXPENSES 30
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Charges that Equitable Life deducts 30
Charges that the trusts deduct 32
Group or sponsored arrangements 32
Other distribution arrangements 33
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6
PAYMENT OF DEATH BENEFIT 34
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Your beneficiary and payment of benefit 34
How death benefit payment is made 34
Beneficiary continuation option under Traditional
IRA and QP IRA contracts 35
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7
TAX INFORMATION 36
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Overview 36
Transfers among investment options 36
Taxation of nonqualified annuities 36
Special rules for NQ contracts issued in Puerto Rico 37
Individual retirement arrangements ("IRAs") 38
Federal and state income tax withholding and
information reporting 48
Impact of taxes to Equitable Life 49
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8
MORE INFORMATION 50
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About our Separate Account A 50
About The Hudson River Trust and EQ Advisors Trust 50
About our fixed maturity options 51
About the general account 53
About other methods of payment 53
Dates and prices at which contract events occur 53
About your voting rights 54
About our year 2000 progress 55
About legal proceedings 55
About our independent accountants 55
Transfers of ownership, collateral assignments, loans,
and borrowing 56
Distribution of the contracts 56
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9
INVESTMENT PERFORMANCE 57
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Benchmarks 57
Communicating performance data 67
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10
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE 68
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APPENDIX
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Market value adjustment example A-1
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STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
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4 INDEX OF KEY WORDS AND PHRASES
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Index of key words and phrases
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This index should help you locate more information on the terms used in this
prospectus.
Page
account value 23
annuitant 16
annuity payout options 28
beneficiary 34
business day 53
cash value 23
conduit IRA 42
contract date 10
contract date anniversary 10
contract year 10
contributions 16
Contributions to Roth IRAs
Regular contribution 45
Rollover contributions 45
Conversion contributions 46
Direct custodian-to-custodian
transfers 46
Contributions to Traditional IRAs
Regular contributions 39
Rollover contributions 41
Direct custodian-to-custodian
transfers 41
fixed maturity amount 21
fixed maturity options 21
IRA cover
IRS 36
investment options 18
market adjusted amount 21
market value adjustment 21
maturity value 21
NQ cover
Portfolio cover
Processing Office 6
QP IRAs cover
rate to maturity 21
recharacterized 41
regular contribution 39
Required Beginning Date 42
Roth IRA cover
SAI cover
SEC cover
Substitution 50
TOPS 6
Traditional IRA cover
TSA cover
unit 23
unit investment trust 50
variable investment options 18
To make this prospectus easier to read, we sometimes use different words than in
the contract. This is illustrated below. Although we do use different words,
they have the same meaning in this prospectus as in the contract or supplemental
materials. Your Equitable associate can provide further explanation about your
contract.
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PROSPECTUS CONTRACT OR SUPPLEMENTAL MATERIALS
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fixed maturity options Guarantee Periods or Fixed Maturity Accounts
variable investment options Investment Funds or Investment Divisions
account value Annuity Account Value
rate to maturity Guaranteed Rates
unit Accumulation Unit
unit value Accumulation Unit Value
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WHO IS EQUITABLE LIFE? 5
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Who is Equitable Life?
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We are The Equitable Life Assurance Society of the United States ("Equitable
Life"), a New York stock life insurance corporation. We have been doing
business since 1859. Equitable Life is a wholly owned subsidiary of The
Equitable Companies Incorporated ("Equitable Companies"), whose majority
shareholder is AXA, a French holding company for an international group of
insurance and related financial services companies. As a majority shareholder,
and under its other arrangements with Equitable Life and Equitable Life's
parent, AXA exercises significant influence over the operations and capital
structure of Equitable Life and its parent. No company other than Equitable
Life, however, has any legal responsibility to pay amounts that Equitable Life
owes under the contracts. During 1999, Equitable Companies plans to change its
name to AXA Financial, Inc.
Equitable Companies and its consolidated subsidiaries managed approximately
$390.8 billion in assets as of June 30, 1999. For over 100 years we have been
among the largest insurance companies in the United States. We are licensed to
sell life insurance and annuities in all fifty states, the District of
Columbia, Puerto Rico, and the U.S. Virgin Islands. Our home office is located
at 1290 Avenue of the Americas, New York, N.Y. 10104.
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6 WHO IS EQUITABLE LIFE?
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HOW TO REACH US
You may communicate with our Processing Office as listed below for any of the
following purposes:
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FOR NQ AND IRA OWNERS WHO SEND
CONTRIBUTIONS INDIVIDUALLY BY REGULAR MAIL:
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Equitable Life
EQUI-VEST Express
Individual Collections
P.O. Box 13459
Newark, NJ 07188-0459
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FOR NQ AND IRA OWNERS WHO SEND
CONTRIBUTIONS INDIVIDUALLY BY EXPRESS
DELIVERY:
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Equitable Life
c/o First Chicago National Processing Center
300 Harmon Meadow Boulevard, 3rd Floor
Secaucus, NJ 07094
Attn: Box 13459
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FOR ALL OTHER COMMUNICATIONS (E.G.,
REQUESTS FOR TRANSFERS, WITHDRAWALS, OR
REQUIRED NOTICES) SENT BY REGULAR MAIL:
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Equitable Life
EQUI-VEST Express
P.O. Box 2996
New York, NY 10116-2996
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FOR ALL OTHER COMMUNICATIONS (E.G.,
REQUESTS FOR TRANSFERS, WITHDRAWALS, OR
REQUIRED NOTICES) SENT BY EXPRESS DELIVERY:
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Equitable Life
EQUI-VEST Express
200 Plaza Drive, 2nd Floor
Secaucus, NJ 07094
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FOR NQ AND IRA CONTRIBUTIONS REMITTED BY
EMPLOYERS AND SENT BY REGULAR MAIL:
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Equitable Life
EQUI-VEST Express
Unit Collections
P.O. Box 13463
Newark, New Jersey 07188-0463
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FOR NQ AND IRA CONTRIBUTIONS REMITTED BY
EMPLOYERS AND SENT BY EXPRESS DELIVERY:
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Equitable Life
c/o First Chicago National Processing Center
300 Harmon Meadow Boulevard, 3rd Floor
Secaucus, NJ 07094
Attn: Box 13463
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REPORTS WE PROVIDE:
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o written confirmation of financial transactions;
o annual statement of your contract values as of the close of
the calendar year;
o statement of your contract values as of the last day of the
contract year.
We reserve the right to change the frequency of these reports.
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TELEPHONE OPERATED PROGRAM SUPPORT
("TOPS") SYSTEM:
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TOPS is designed to provide you with up-to-date information
via touch-tone telephone. You can obtain information on:
o your current account value;
o your current allocation percentages;
o the number of units you have in the variable investment options; and
o unit values.
<PAGE>
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WHO IS EQUITABLE LIFE? 7
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You can also:
o change your allocation percentages and/or transfer among the variable
investment options;
o elect general dollar - cost averaging; and
o change your personal identification number ("PIN").
TOPS is normally available seven days a week, 24 hours a day, by calling toll
free 1 (800) 755-7777. Of course, for reasons beyond our control, the service
may sometimes be unavailable.
We have established procedures to reasonably confirm that the instructions
communicated by telephone are genuine. For example, we will require certain
personal identification information before we will act on telephone instructions
and we will provide written confirmation of your transfers. We will not be
liable for following telephone instructions we reasonably believe to be genuine.
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BY INTERNET:
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You can also access information about your contract on the Internet. Please
visit our Web site at http://www.equitable.com, and click on EQAccess.
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CUSTOMER SERVICE REPRESENTATIVE:
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You may also use our toll-free number 1 (800) 628-6673 to speak with one of our
customer service representatives. Our customer service representatives are
available on each business day Monday through Thursday from 8:00 a.m. to 7:00
p.m., and on Fridays until 5:00 p.m. Eastern time.
You should send all contributions, notices, and requests to our Processing
Office at an address above.
WE REQUIRE THAT THE FOLLOWING TYPES OF COMMUNICATIONS BE ON SPECIFIC FORMS WE
PROVIDE FOR THAT PURPOSE:
(1) conversion of your Traditional IRA to a Roth IRA;
(2) cancellation of your Roth IRA contract and return to a Traditional IRA
contract;
(3) election of the automatic investment program;
(4) election of general dollar - cost averaging;
(5) election of the rebalancing program;
(6) election of required minimum distribution option;
(7) election of beneficiary continuation option;
(8) tax withholding election;
(9) request for a transfer/rollover of assets or 1035 exchange to another
carrier; and
(10) contract surrender and withdrawal requests.
WE ALSO HAVE SPECIFIC FORMS THAT WE RECOMMEND YOU USE FOR THE FOLLOWING TYPES OF
REQUESTS:
(1) address changes;
(2) beneficiary changes;
(3) transfers among investment options; and
(4) change of ownership.
TO CHANGE OR CANCEL ANY OF THE FOLLOWING WE REQUIRE WRITTEN NOTIFICATION
GENERALLY AT LEAST SEVEN CALENDAR DAYS BEFORE THE NEXT SCHEDULED TRANSACTION:
(1) automatic investment program;
(2) general dollar - cost averaging; and
(3) rebalancing program.
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8 WHO IS EQUITABLE LIFE?
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You must sign and date all these requests. Any written request that is not on
one of our forms must include your name and your contract number along with
adequate details about the notice you wish to give or the action you wish us to
take.
SIGNATURES:
The proper person to sign forms, notices and requests would normally be the
owner.
<PAGE>
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EQUI-VEST EXPRESS AT A GLANCE - KEY FEATURES 9
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EQUI-VEST Express at a glance - key features
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<TABLE>
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<S> <C>
PROFESSIONAl EQUI-VEST Express variable investment options invest in 30 different Portfolios managed by
INVESTMENT professional investment advisers.
MANAGEMENT management Fixed maturity o 10 fixed maturity options with maturities ranging
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FIXED MATURITY o 10 fixed maturity options with maturities ranging from approximately 1 to 10 years.
OPTIONS
o Each fixed maturity option offers a guarantee of principal and interest rate if you hold it to
maturity.
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If you make withdrawals or transfers from a fixed maturity option before maturity, there will be
a market value adjustment due to differences in interest rates. This may increase or decrease
any value that you have left in that fixed maturity option. If you surrender your contract, a
market value adjustment may also apply.
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TAX ADVANTAGES o ON EARNINGS INSIDE THE No tax on any dividends, interest or capital gains until you
CONTRACT make withdrawals from your contract or receive annuity payments.
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o ON TRANSFERS INSIDE THE No tax on transfers among investment options.
CONTRACT
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If you are buying a contract to fund a retirement plan that already provides tax deferral under
the Internal Revenue Code (any type of IRA) you should do so for the contract's features and
benefits other than tax deferral. In such situations, the tax deferral of the contract does not
provide additional benefits.
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MINIMUM CONTRIBUTION $50 ($20 under our automatic investment program)
AMOUNTS Maximum contribution limits may apply.
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ACCESS TO YOUR MONEY o Lump sum withdrawals
o Withdrawals on a periodic basis
o Contract surrender
You may be subject to a withdrawal charge for certain withdrawals. You may also incur income
tax and a penalty tax.
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PAYOUT ALTERNATIVES o Annuity payout options
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ADDITIONAL FEATURES o General dollar - cost averaging
o Automatic investment program
o Account value rebalancing (quarterly, semiannually, and annually)
o No charge on transfers among investment options
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</TABLE>
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10 EQUI-VEST EXPRESS AT A GLANCE - KEY FEATURES
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<TABLE>
<S> <C>
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FEES AND CHARGES o Daily charge on amounts invested in variable investment options for mortality and expense
risks and other expenses at an annual rate of 0.95%
o If your account value at the end of the contract year is less than $25,000 for NQ contracts
(or less than $20,000 IRA contracts), we deduct an annual administrative charge equal to
$30 or during the first two contract years 2% of your account value, if less. If your account
value is $25,000 or more for NQ contracts (or $20,000 or more for IRA contracts), we will
not deduct the charge.
o Charge for third-party transfer (such as in the case of a trustee-to-trustee
transfer for an IRA contract) or exchange (if your contract is exchanged for a contract issued
by another issuance company) - $25 currently ($65 maximum) per occurrence.
o No sales charge deducted when you make contributions.
o During the first seven contract years following each contribution, a charge will be deducted
from amounts that you withdraw that exceed 10% of your account value. We use the
account value on the date of the withdrawal to calculate the 10% amount available. The
charge begins at 7% in the first contract year following each contribution. It declines each
year to 1% in the seventh contract year. There is no withdrawal charge in the eighth and
later contract years following a contribution.
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The 12-month period beginning on your contract date and each 12-month period after
that date is a "contract year." The end of each 12-month period is your "contract date
anniversary." The "contract date" is the effective date of a contract. This usually is the
business day we receive your initial contribution. Your contract date will be shown in
your contract.
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o We deduct a charge for taxes such as premium taxes that may be imposed in your state. The
charge is generally deducted from the amount applied to an annuity payout option.
o We generally deduct a $350 annuity administrative fee from amounts applied to purchase
certain life annuity payout options.
o Annual expenses of The Hudson River Trust and EQ Advisors Trust Portfolios are calculated
as a percentage of the average daily net assets invested in each Portfolio. These expenses
include management and advisory fees ranging from 0.31% to 1.15% annually, 12b-1 fees
of 0.25% annually and other expenses.
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</TABLE>
ANNUITANT NQ 0-79
ISSUE AGES QP IRA 0-79
Traditional IRA 0-70
Roth IRA 0-79
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THE ABOVE IS NOT A COMPLETE DESCRIPTION OF ALL MATERIAL PROVISIONS OF THE
CONTRACT. IN SOME CASES RESTRICTIONS OR EXCEPTIONS APPLY. MAXIMUM EXPENSE
LIMITATIONS APPLY TO CERTAIN VARIABLE INVESTMENT OPTIONS, AND RIGHTS ARE
RESERVED TO CHANGE OR WAIVE CERTAIN CHARGES WITHIN SPECIFIED LIMITS. FOR
TRADITIONAL IRAS, THE MAXIMUM ISSUE AGE IS 70, BUT WE WILL ISSUE UP TO AGE 79 IF
IT IS A ROLLOVER CONTRIBUTION. FOR ALL OTHER IRAS WE WILL ISSUE CONTRACTS UP TO
ANNUITANT AGES 80-83 WITH OUR PRIOR APPROVAL. ALSO, ALL FEATURES OF THE CONTRACT
ARE NOT NECESSARILY AVAILABLE IN YOUR STATE OR AT CERTAIN AGES.
For more detailed information we urge you to read the contents of this
prospectus, as well as your contract. Please feel free to speak with your
Equitable associate, or call us, if you have any questions.
<PAGE>
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FEE TABLE 11
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Fee table
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The fee table below will help you understand the various charges and expenses
that apply to your contract. The table reflects charges you will directly incur
under the contract, as well as charges and expenses of the Portfolios that you
will bear indirectly. Charges for taxes, such as premium taxes, may also apply.
Also, an annuity administrative fee may apply when your annuity payments are to
begin. Each of the charges and expenses is more fully described under "Charges
and expenses" later in this prospectus. For a complete description of Portfolio
charges and expenses, please see the attached prospectuses for The Hudson River
Trust and EQ Advisors Trust.
The fixed maturity options are not covered by the fee table and examples.
However, the annual administrative charge, the withdrawal charge, and the
third-party transfer or exchange charge do apply to the fixed maturity options.
Also, an administrative fee may apply when your annuity payments are to begin. A
market value adjustment (up or down) may apply as a result of a withdrawal,
transfer or surrender of amounts from a fixed maturity option.
<TABLE>
<CAPTION>
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CHARGES WE DEDUCT FROM YOUR VARIABLE INVESTMENT OPTIONS (SEPARATE ACCOUNT A) EXPRESSED AS AN
ANNUAL PERCENTAGE OF DAILY NET ASSETS
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<S> <C>
Mortality and expense risk(1) 0.70%
Other expenses 0.25%
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Total Separate Account A annual expenses(2) 0.95%
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CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE ON EACH CONTRACT DATE ANNIVERSARY
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Annual administrative charge(3)
If your account value on a contract date anniversary is less than $25,000 for NQ
contracts (or less than $20,000 for IRA contracts) $30
If your account value on a contract date anniversary is $25,000 or more for NQ
contracts (or $20,000 or more for IRA contracts) $0
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CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE AT THE TIME YOU REQUEST CERTAIN TRANSACTIONS
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Withdrawal charge as a percentage of contributions (deducted if you Contract
surrender your contract or make certain withdrawals. The withdrawal charge year
percentage we use is determined by the contract year in which you make the 1 7.00%
withdrawal or surrender your contract. For each contribution, we consider 2 6.00%
the contract year in which we receive that contribution to be "contract 3 5.00%
year 1")(4) 4 4.00%
5 3.00%
6 2.00%
7 1.00%
8+ 0.00%
Charge for third-party transfer or exchange(5) $25 for each occurrence
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</TABLE>
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12 FEE TABLE
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THE HUDSON RIVER TRUST ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
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Total
Annual
Investment Expenses
Management & Other (After Expense
Advisory Fees 12b-1 Fee(6) Expenses Limitation)(7)(8)
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<S> <C> <C> <C> <C>
Alliance Aggressive Stock 0.54% 0.25% 0.03% 0.82%
Alliance Balanced 0.41% 0.25% 0.04% 0.70%
Alliance Common Stock 0.36% 0.25% 0.03% 0.64%
Alliance Conservative Investors 0.48% 0.25% 0.05% 0.78%
Alliance Equity Index 0.31% 0.25% 0.03% 0.59%
Alliance Global 0.64% 0.25% 0.07% 0.96%
Alliance Growth & Income 0.55% 0.25% 0.03% 0.83%
Alliance Growth Investors 0.51% 0.25% 0.04% 0.80%
Alliance High Yield 0.60% 0.25% 0.03% 0.88%
Alliance Intermediate Government Securities 0.50% 0.25% 0.05% 0.80%
Alliance International 0.90% 0.25% 0.16% 1.31%
Alliance Money Market 0.35% 0.25% 0.02% 0.62%
Alliance Quality Bond 0.53% 0.25% 0.03% 0.81%
Alliance Small Cap Growth 0.90% 0.24% 0.06% 1.20%
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</TABLE>
EQ ADVISORS TRUST ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
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Total
Other Annual
Investment Expenses Expenses
Management & (After Expense (After Expense
Advisory Fees 12b-1 Fee(6) Limitation)(8) Limitation)(8)
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<S> <C> <C> <C> <C>
EQ/Alliance Premier Growth 0.90% 0.25% 0.00% 1.15%
Capital Guardian Research 0.65% 0.25% 0.05% 0.95%
Capital Guardian U.S. Equity 0.65% 0.25% 0.05% 0.95%
EQ/Evergreen 0.75% 0.25% 0.05% 1.05%
EQ/Evergreen Foundation 0.63% 0.25% 0.07% 0.95%
MFS Emerging Growth Companies 0.55% 0.25% 0.05% 0.85%
MFS Growth with Income 0.55% 0.25% 0.05% 0.85%
MFS Research 0.55% 0.25% 0.05% 0.85%
Merrill Lynch Basic Value Equity 0.55% 0.25% 0.05% 0.85%
Merrill Lynch World Strategy 0.70% 0.25% 0.25% 1.20%
Morgan Stanley Emerging Markets Equity 1.15% 0.25% 0.35% 1.75%
EQ/Putnam Balanced 0.55% 0.25% 0.10% 0.90%
EQ/Putnam Growth & Income Value 0.55% 0.25% 0.05% 0.85%
T. Rowe Price Equity Income 0.55% 0.25% 0.05% 0.85%
T. Rowe Price International Stock 0.75% 0.25% 0.20% 1.20%
Warburg Pincus Small Company Value 0.65% 0.25% 0.10% 1.00%
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
FEE TABLE 13
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Notes:
(1) A portion of this charge is for providing the death benefit.
(2) We reserve the right to increase the total Separate Account A annual
expenses, but they will not exceed a maximum of 2%.
(3) During the first two contract years this charge is equal to the lesser of
$30 or 2% of your account value if it applies. Thereafter, the charge is
$30 for each contract year. We reserve the right to increase this charge
to an annual maximum of $65.
(4) Deducted upon a withdrawal of amounts in excess of the 10% free withdrawal
amount. Important exceptions and limitations may eliminate or reduce this
charge.
(5) We reserve the right to increase this charge to a maximum of $65 for each
occurrence.
(6) The Class IB shares of The Hudson River Trust and EQ Advisors Trust are
subject to fees imposed under distribution plans (the "Rule 12b-1 Plans")
adopted by The Hudson River Trust and EQ Advisors Trust pursuant to Rule
12b-1 under the Investment Company Act of 1940, as amended. The 12b-1 fee
will not be increased for the life of the contracts. The Rule 12b-1 Plan
for the Alliance Small Cap Growth Portfolio provides that EQ Financial
Consultants, Inc. ("EQF") will receive an annual fee not to exceed the
lesser of (a) 0.25% of the average daily net assets of the Portfolio
attributable to Class IB shares and (b) an amount that, when added to
certain other expenses of the Class IB shares, would result in the ratio
of expenses to average daily net assets attributable to Class IB shares
equaling 1.20%. Absent the expense limitation, the total annual expenses
for 1998 for the Alliance Small Cap Growth Portfolio would have been
1.21%.
(7) The fees and expenses shown for all Portfolios are for the year ended
December 31, 1998. The investment management and advisory fee for each
Portfolio of The Hudson River Trust may vary from year to year depending
upon the average daily net assets of the respective Portfolio. The
maximum investment management and advisory fees, however, cannot be
increased without a vote of that Portfolio's shareholders. See the
prospectus for The Hudson River Trust. The other direct operating
expenses will also fluctuate from year to year depending on actual
expenses.
The fees and expenses shown for Class IB shares of the Alliance Balanced
Portfolio and Alliance Quality Bond Portfolio are annualized for the year
ended December 31, 1998. These shares were first offered on July 8, 1998.
(8) The investment management and advisory fees for each Portfolio of EQ
Advisors Trust cannot be increased without a vote of that Portfolio's
shareholders. The amounts shown as "Other Expenses" will fluctuate from
year to year depending on actual expenses. However, EQF, EQ Advisors
Trust's manager, has entered into an expense limitation agreement with
respect to each Portfolio. Under this agreement EQF has agreed to waive
or limit its fees and assume other expenses. Under the expense limitation
agreement, total annual operating expenses of each Portfolio (other than
interest, taxes, brokerage commissions, capitalized expenditures,
extraordinary expenses and 12b-1 fees) are limited for the average daily
net assets of each Portfolio as follows: 0.60% for EQ/Putnam Growth &
Income Value, MFS Emerging Growth Companies, MFS Growth with Income, MFS
Research, Merrill Lynch Basic Value Equity, and T. Rowe Price Equity
Income; 0.65% for EQ/Putnam Balanced; 0.70% for Capital Guardian
Research, Capital Guardian U.S. Equity, and EQ/Evergreen Foundation;
0.75% for Warburg Pincus Small Company Value; 0.80% for EQ/Evergreen;
0.90% for EQ/Alliance Premier Growth; 0.95% for Merrill Lynch World
Strategy and T. Rowe Price International Stock; and 1.50% for Morgan
Stanley Emerging Markets Equity.
Absent the expense limitation, "Other Expenses" for 1998 on an annualized
basis for each of the Portfolios would have been as follows: 0.24% for MFS
Emerging Growth Companies, EQ/Putnam Growth & Income Value, and T. Rowe
Price Equity Income; 0.25% for MFS Research; 0.26% for Merrill Lynch Basic
Value Equity; 0.66% for Merrill Lynch World Strategy; 1.23% for Morgan
Stanley Emerging Markets Equity, 0.45% for EQ/Putnam Balanced; 0.40% for
T. Rowe Price International Stock; and 0.27% for Warburg Pincus Small
Company Value. For the following Portfolios, the "Other Expenses" for
1999, absent the expense limitation, are estimated to be as follows: 0.74%
for EQ/Alliance Premier Growth, Capital Guardian Research and Capital
Guardian U.S. Equity; 0.76% for EQ/Evergreen; 0.86% for EQ/Evergreen
Foundation; 0.59% for MFS Growth with Income. Initial seed capital was
invested on December 31, 1998 for the EQ/Evergreen, EQ/Evergreen
Foundation, and MFS Growth with Income Portfolios.
<PAGE>
- --------------------------------------------------------------------------------
14 FEE TABLE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Initial seed capital for the EQ/Alliance Premier Growth, Capital Guardian
U.S. Equity, and Capital Guardian Research Portfolios was invested on
April 30, 1999.
Each Portfolio may at a later date make a reimbursement to EQF for any of
the management fees waived or limited and other expenses assumed and paid
by EQF pursuant to the expense limitation agreement provided, that among
other things, such Portfolio has reached sufficient size to permit such
reimbursement to be made and provided that the Portfolio's current annual
operating expenses do not exceed the operating expense limit determined
for such Portfolio. For more information see the prospectus for EQ
Advisors Trust
EXAMPLES
The examples below show the expenses that a hypothetical contract owner would
pay in the situations illustrated. We assume a $1,000 contribution is invested
in one of the variable investment options listed, and a 5% annual return is
earned on the assets in that option.(1) The annual administrative charge is
based on the charges that apply to a mix of estimated contract sizes, resulting
in an estimated administrative charge for the purpose of these examples of $0.57
per $1,000. We calculate the annual administrative charge by using the total
actual annual administrative charges for 1998 under other EQUI-VEST contracts
that we issue, as a percentage of the total assets held under those EQUI-VEST
contracts.
These examples should not be considered a representation of past or future
expenses for each option. Actual expenses may be greater or less than those
shown. Similarly, the annual rate of return assumed in the examples is not an
estimate or guarantee of future investment performance.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
IF YOU SURRENDER YOUR CONTRACT AT THE END
OF EACH PERIOD SHOWN, THE EXPENSES WOULD
BE:
- -----------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -----------------------------------------------------------------------------------------------
THE HUDSON RIVER TRUST OPTIONS
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock $89.17 $109.32 $131.97 $220.66
Alliance Balanced $87.92 $105.49 $125.51 $207.37
Alliance Common Stock $87.29 $103.57 $122.27 $200.66
Alliance Conservative Investors $88.76 $108.04 $129.82 $216.24
Alliance Equity Index $86.76 $101.97 $119.57 $195.04
Alliance Global $90.64 $113.77 $139.46 $235.96
Alliance Growth & Income $89.28 $109.63 $132.51 $221.76
Alliance Growth Investors $88.97 $108.68 $130.90 $218.45
Alliance High Yield $89.80 $111.23 $135.19 $227.24
Alliance Intermediate Government Securities $88.97 $108.68 $130.90 $218.45
Alliance International $94.32 $124.84 $157.99 $273.29
Alliance Money Market $87.08 $102.93 $121.19 $198.42
Alliance Quality Bond $89.07 $109.00 $131.43 $219.56
Alliance Small Cap Growth $93.16 $121.37 $152.20 $261.70
- -----------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
IF YOU DO NOT SURRENDER YOUR CONTRACT AT
THE END OF EACH PERIOD SHOWN, THE
EXPENSES WOULD BE:
- -----------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -----------------------------------------------------------------------------------------------
THE HUDSON RIVER TRUST OPTIONS
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock $19.17 $59.32 $101.97 $220.66
Alliance Balanced $17.92 $55.49 $ 95.51 $207.37
Alliance Common Stock $17.29 $53.57 $ 92.27 $200.66
Alliance Conservative Investors $18.76 $58.04 $ 99.82 $216.24
Alliance Equity Index $16.76 $51.97 $ 89.57 $195.04
Alliance Global $20.64 $63.77 $109.46 $235.96
Alliance Growth & Income $19.28 $59.63 $102.51 $221.76
Alliance Growth Investors $18.97 $58.68 $100.90 $218.45
Alliance High Yield $19.80 $61.23 $105.19 $227.24
Alliance Intermediate Government Securities $18.97 $58.68 $100.90 $218.45
Alliance International $24.32 $74.84 $127.99 $273.29
Alliance Money Market $17.08 $52.93 $ 91.19 $198.42
Alliance Quality Bond $19.07 $59.00 $101.43 $219.56
Alliance Small Cap Growth $23.16 $71.37 $122.20 $261.70
- -----------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
FEE TABLE 15
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
IF YOU SURRENDER YOUR CONTRACT AT THE END
OF EACH PERIOD SHOWN, THE EXPENSES WOULD
BE:
- -----------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -----------------------------------------------------------------------------------------------
EQ ADVISORS TRUST OPTIONS
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EQ/Alliance Premier Growth $92.64 $119.79 - -
Capital Guardian Research $90.54 $113.45 - -
Capital Guardian U.S. Equity $90.54 $113.45 - -
EQ/Evergreen $91.59 $116.62 - -
EQ/Evergreen Foundation $90.54 $113.45 - -
MFS Emerging Growth Companies $89.49 $110.27 $133.58 $223.95
MFS Growth with Income $89.49 $110.27 - -
MFS Research $89.49 $110.27 $133.58 $223.95
Merrill Lynch Basic Value Equity $89.49 $110.27 $133.58 $223.95
Merrill Lynch World Strategy $93.16 $121.37 $152.20 $261.70
Morgan Stanley Emerging Markets Equity $98.93 $138.64 $180.90 $318.37
EQ/Putnam Balanced $90.01 $111.86 $136.26 $229.43
EQ/Putnam Growth & Income Value $89.49 $110.27 $133.58 $223.95
T. Rowe Price Equity Income $89.49 $110.27 $133.58 $223.95
T. Rowe Price International Stock $93.16 $121.37 $152.20 $261.70
Warburg Pincus Small Company Value $91.06 $115.04 $141.59 $240.29
- -----------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
IF YOU DO NOT SURRENDER YOUR CONTRACT AT
THE END OF EACH PERIOD SHOWN, THE
EXPENSES WOULD BE:
- -----------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -----------------------------------------------------------------------------------------------
EQ ADVISORS TRUST OPTIONS
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EQ/Alliance Premier Growth $22.64 $69.79 - -
Capital Guardian Research $20.54 $63.45 - -
Capital Guardian U.S. Equity $20.54 $63.45 - -
EQ/Evergreen $21.59 $66.62 - -
EQ/Evergreen Foundation $20.54 $63.45 - -
MFS Emerging Growth Companies $19.49 $60.27 $103.58 $223.95
MFS Growth with Income $19.49 $60.27 - -
MFS Research $19.49 $60.27 $103.58 $223.95
Merrill Lynch Basic Value Equity $19.49 $60.27 $103.58 $223.95
Merrill Lynch World Strategy $23.16 $71.37 $122.20 $261.70
Morgan Stanley Emerging Markets Equity $28.93 $88.64 $150.90 $318.37
EQ/Putnam Balanced $20.01 $61.86 $106.26 $229.43
EQ/Putnam Growth & Income Value $19.49 $60.27 $103.58 $223.95
T. Rowe Price Equity Income $19.49 $60.27 $103.58 $223.95
T. Rowe Price International Stock $23.16 $71.37 $122.20 $261.70
Warburg Pincus Small Company Value $21.06 $65.04 $111.59 $240.29
- -----------------------------------------------------------------------------------------------
</TABLE>
(1) The amount accumulated from the $1,000 contribution could not be paid in
the form of an annuity payout option at the end of any of the periods
shown in the examples. This is because if the amount applied to purchase
an annuity payout option is less than $2,000, or the initial payment is
less than $20, we may pay the amount to you in a single sum instead of as
payments under an annuity payout option. See "Accessing your money."
IF YOU ELECT AN ANNUITY PAYOUT OPTION:
Assuming an annuity payout option could be issued, (see Note (1) above), and you
elect a life annuity payout option, the expenses shown in the above example for
"if you do not surrender your contract" would, in each case, be increased by
$4.43 based on the average amount applied to annuity payout options in 1998. See
"Annuity administrative fee" under "Charges and expenses."
<PAGE>
- --------------------------------------------------------------------------------
16 CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
1
Contract features and benefits
- --------------------------------------------------------------------------------
HOW YOU CAN PURCHASE AND CONTRIBUTE TO YOUR CONTRACT
You may purchase a contract by making payments to us that we call
"contributions." We require a minimum contribution amount of $50 to purchase a
contract. The minimum contribution amount under our automatic investment program
is $20. We discuss the automatic investment program under "About other methods
of payment" under "More information" later in this prospectus. The following
table summarizes our rules regarding contributions to your contract. All ages in
the table refer to the age of the annuitant named in the contract.
- --------------------------------------------------------------------------------
The "annuitant" is the person who is the measuring life for determining contract
benefits. The annuitant is not necessarily the contract owner.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
CONTRACT AVAILABLE FOR SOURCE OF LIMITATIONS ON
TYPE ANNUITANT ISSUE AGES* CONTRIBUTIONS CONTRIBUTIONS
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NQ 0 through 79 o After-tax money. Not applicable.
o Paid to us by check or transfer
of contract value in a tax
deferred exchange under Section
1035 of the Internal Revenue
Code.
o Paid to us by an employer who
establishes a payroll deduction
program.
- ----------------------------------------------------------------------------------------------------------------
Traditional IRA 0 through 70 o "Regular" traditional IRA o For all types of IRAs,
contributions either made by you regular IRA contributions
or paid to us by an employer who may not exceed $2,000 for
establishes a payroll deduction a year.
program. o No regular IRA
o Rollovers from a qualified plan. contributions in the year
o Rollovers from a TSA. you turn age 70 1/2 and
o Rollovers from another thereafter.
traditional individual retirement o Rollover and direct
arrangement. transfer contributions
o Direct custodian-to-custodian after age 70 1/2 must
transfers from other traditional be net of required
individual retirement minimum distributions.
arrangements.
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
CONTRACT FEATURES AND BENEFITS 17
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Contract Available for Source of Limitations on
type annuitant issue ages* contributions contributions
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Roth IRA 0 through 79 o Regular after-tax contributions o For all types of IRAs,
either made by you or paid to us regular IRA contributions
by an employer who establishes a may not exceed $2,000 for
payroll deduction program. a year.
o Rollovers from another Roth IRA. o Contributions are subject
o Conversion rollovers from a to income limits and
traditional IRA. other tax rules. See "Tax
o Direct transfers from another information - Contributions
Roth IRA. to Roth IRAs."
- ----------------------------------------------------------------------------------------------------------------
QP Traditional 0 through 79 o Rollovers from a qualified plan. o Rollover contributions
IRA o Rollovers from a TSA. after age 70 1/2 must be
o The EQUI-VEST QP Traditional IRA net of required minimum
contract is intended to be a distributions.
conduit IRA. Only rollovers from o Regular after-tax
a qualified plan or TSA are contributions are not
permitted. permitted.
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
* For Traditional IRAs, the maximum issue age is 70, but we will issue up to
age 79 if it is a rollover contribution. For all other IRAs we will issue
contracts up to annuitant ages 80-83 with our prior approval.
See "Tax information" for a more detailed discussion of sources of contributions
and certain contribution limitations. We may refuse to accept any contribution
if the sum of all contributions under all EQUI-VEST contracts with the same
annuitant would then total more than $1,000,000. We may also refuse to accept
any contribution if the sum of all contributions under all Equitable Life
annuity accumulation contracts that you own would then total more than
$2,500,000.
For information on when contributions are credited see "Dates and prices at
which contract events occur" under "More information" later in this prospectus.
<PAGE>
- --------------------------------------------------------------------------------
18 CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
OWNER AND ANNUITANT REQUIREMENTS
Under NQ contracts, the annuitant can be different than the owner.
Under any type of the IRA contract, the owner and annuitant must be the same
person.
HOW YOU CAN MAKE YOUR CONTRIBUTIONS
Except as indicated below, contributions must be by check drawn on a U.S. bank
in U.S. dollars, and made payable to Equitable Life. We do not accept
third-party checks endorsed to us except for rollover contributions, tax-free
exchanges or trustee checks that involve no refund. All checks are subject to
our ability to collect the funds. We reserve the right to reject a payment if it
is received in an unacceptable form.
You may also make contributions by wire transfer or our automatic investment
program. See "About other methods of payment" under "More information" later in
this prospectus.
Your initial contribution must generally be accompanied by an application and
any other form we need to process the payments. If any information is missing or
unclear, we will try to obtain that information. If we are unable to obtain all
of the information we require within five business days after we receive an
incomplete application or form, we will inform the Equitable associate
submitting the application on your behalf. We will then return the contribution
to you unless you specifically direct us to keep your contribution until we
receive the required information.
Generally, you may make additional contributions at any time. You may do so in
single sum amounts, on a regular basis, or as your financial situation permits.
- --------------------------------------------------------------------------------
Generally our "business day" is any day on which Equitable Life is open and the
New York Stock Exchange is open for trading.
- --------------------------------------------------------------------------------
SECTION 1035 EXCHANGES
You may apply the value of an existing nonqualified deferred annuity contract
(or life insurance or endowment contract) to purchase an NQ contract in a
tax-free exchange if you follow certain procedures as shown in the form that we
require you to use. Also see "Tax information" later in this prospectus.
WHAT ARE YOUR INVESTMENT OPTIONS UNDER THE CONTRACT?
Your investment options are the variable investment options and the fixed
maturity options.
VARIABLE INVESTMENT OPTIONS
Your investment results in any one of the 30 variable investment options will
depend on the investment performance of the underlying Portfolios. Listed below
are the currently available Portfolios, their investment objectives, and their
advisers.
- --------------------------------------------------------------------------------
You can choose from among 30 variable investment options.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
CONTRACT FEATURES AND BENEFITS 19
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIOS OF THE HUDSON RIVER TRUST
<TABLE>
<CAPTION>
Portfolio Name Objective Adviser
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Alliance Aggressive Stock Long-term growth of capital Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------
Alliance Balanced High return through a combination of current Alliance Capital Management L.P.
income and capital appreciation
- ------------------------------------------------------------------------------------------------------------------------
Alliance Common Stock Long-term growth of capital and increasing Alliance Capital Management L.P.
income
- ------------------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors High total return without, in the adviser's Alliance Capital Management L.P.
opinion, undue risk to principal
- ------------------------------------------------------------------------------------------------------------------------
Alliance Equity Index Total return (before The Hudson River Trust and Alliance Capital Management L.P.
Separate Account A annual expenses) that
approximates the total return performance of the
Standard & Poor's 500 Composite Stock Price
Index
- ------------------------------------------------------------------------------------------------------------------------
Alliance Global Long-term growth of capital Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------
Alliance Growth & Income High total return through a combination of Alliance Capital Management L.P.
current income and capital appreciation
- ------------------------------------------------------------------------------------------------------------------------
Alliance Growth Investors High total return consistent with the adviser's Alliance Capital Management L.P.
determination of reasonable risk
- ------------------------------------------------------------------------------------------------------------------------
Alliance High Yield High return by maximizing current income and, Alliance Capital Management L.P.
to the extent consistent with that objective,
capital appreciation
- ------------------------------------------------------------------------------------------------------------------------
Alliance Intermediate High current income consistent with relative Alliance Capital Management L.P.
Government Securities stability of principal
- ------------------------------------------------------------------------------------------------------------------------
Alliance International Long-term growth of capital Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------
Alliance Money Market High level of current income while preserving Alliance Capital Management L.P.
assets and maintaining liquidity
- ------------------------------------------------------------------------------------------------------------------------
Alliance Quality Bond High current income consistent with preservation Alliance Capital Management L.P.
of capital
- ------------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth Long-term growth of capital Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
20 CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIOS OF EQ ADVISORS TRUST
<TABLE>
<CAPTION>
Portfolio Name Objective Adviser
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
EQ/Alliance Premier Growth Long-term growth of capital Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------
Capital Guardian Research Long-term growth of capital Capital Guardian Trust Company
- ------------------------------------------------------------------------------------------------------------------------
Capital Guardian U.S. Equity Long-term growth of capital Capital Guardian Trust Company
- ------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Capital appreciation Evergreen Asset Management Corp.
- ------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Foundation In order of priority, reasonable income, Evergreen Asset Management Corp.
conservation of capital, and capital
appreciation
- ------------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Long-term growth of capital Massachusetts Financial Services
Companies Company
- ------------------------------------------------------------------------------------------------------------------------
MFS Growth with Income Reasonable current income and long-term Massachusetts Financial Services
growth of capital and income Company
- ------------------------------------------------------------------------------------------------------------------------
MFS Research Long-term growth of capital and future income Massachusetts Financial Services
Company
- ------------------------------------------------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity Capital appreciation and, secondarily, income Merrill Lynch Asset Management, L.P.
- ------------------------------------------------------------------------------------------------------------------------
Merrill Lynch World Strategy High total investment return Merrill Lynch Asset Management, L.P.
- ------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Long-term capital appreciation Morgan Stanley Asset Management
Markets Equity
- ------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Balanced Balanced investment Putnam Investment Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Capital growth, current income is a secondary Putnam Investment Management, Inc.
Value objective
- ------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income Substantial dividend income and also capital T. Rowe Price Associates, Inc.
appreciation
- ------------------------------------------------------------------------------------------------------------------------
T. Rowe Price International Long-term growth of capital Rowe Price-Fleming International, Inc.
Stock
- ------------------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Long-term capital appreciation Warburg Pincus Asset Management, Inc.
Value
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
Other important information about the Portfolios is included in the separate
prospectuses for The Hudson River Trust and EQ Advisors Trust attached at the
end of this prospectus. See "Proposed substitution of Portfolios" under "More
information" for information regarding the proposed substitution of newly
created Portfolios of EQ Advisors Trust for the Portfolios of The Hudson River
Trust currently available under the variable investment options.
<PAGE>
- --------------------------------------------------------------------------------
CONTRACT FEATURES AND BENEFITS 21
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FIXED MATURITY OPTIONS
We offer fixed maturity options with maturity dates ranging from one to ten
years. You can allocate your contributions to one or more of these fixed
maturity options. However, you may not allocate more than one contribution to
any one fixed maturity option. These amounts become part of our general account
assets. They will accumulate interest at the "rate to maturity" for each fixed
maturity option. The total amount you allocate to and accumulate in each fixed
maturity option is called the "fixed maturity amount." The fixed maturity
options are not available in contracts issued in Maryland.
- --------------------------------------------------------------------------------
Fixed maturity options range from one to ten years to maturity
- --------------------------------------------------------------------------------
The rate to maturity you will receive for each fixed maturity option is the rate
to maturity in effect for new contributions allocated to that fixed maturity
option on the date we apply your contribution. This rate will never be less than
3%. If you make any withdrawals or transfers from a fixed maturity option before
the maturity date, we will make a market value adjustment that may increase or
decrease any fixed maturity amount you have left in that fixed maturity option.
We discuss the market value adjustment below and in greater detail later in this
prospectus under "More information."
On the maturity date of a fixed maturity option your fixed maturity amount,
assuming you have not made any withdrawals or transfers, will equal your
contribution to that fixed maturity option plus interest, at the rate to
maturity for that contribution, to the date of the calculation. This is the
fixed maturity option's "maturity value." Before maturity, the current value we
will report for your fixed maturity amount will reflect a market value
adjustment. Your current value will reflect the market value adjustment that we
would make if you were to withdraw all of your fixed maturity amounts on the
date of the report. We call this your "market adjusted amount."
FIXED MATURITY OPTIONS AND MATURITY DATES. We currently offer fixed maturity
options ending on June 15th for each of the maturity years 2000 through 2009.
See "Allocating your contributions" below. As fixed maturity options expire, we
expect to add maturity years so that generally 10 fixed maturity options are
available at any time.
We will not accept allocations to a fixed maturity option if on the date the
contribution is to be applied:
o you previously allocated a contribution or made a transfer to the same
fixed maturity option; or
o the rate to maturity is 3%; or
o the fixed maturity option's maturity date is within the current calendar
year; or
o the fixed maturity option's maturity date is later than the date annuity
payments are to begin.
YOUR CHOICES AT THE MATURITY DATE. We will notify you at least 45 days before
each of your fixed maturity options is scheduled to mature. At that time, you
may choose to have one of the following take place on the maturity date, as long
as none of the conditions listed above or in "Allocating your contributions,"
below would apply:
(a) transfer the maturity value into another available fixed maturity option,
or into any of the variable investment options; or
(b) withdraw the maturity value (there may be a withdrawal charge).
If we do not receive your choice on or before the fixed maturity option's
maturity date, we will automatically transfer your maturity value into the
Alliance Money Market option, or another investment option if we are required to
do so by any state regulation.
MARKET VALUE ADJUSTMENT. If you make any withdrawals (including transfers,
surrender or termination of your contract, or when we make deductions for
charges) from a fixed maturity option before it matures we will make a market
value adjustment, which will increase or decrease any fixed maturity amount you
have in that fixed maturity
<PAGE>
- --------------------------------------------------------------------------------
22 CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
option. The amount of the adjustment will depend on two factors:
(a) the difference between the rate to maturity that applies to the amount
being withdrawn and the rate to maturity in effect at that time for new
allocations to that same fixed maturity option, and
(b) the length of time remaining until the maturity date.
In general, if interest rates rise from the time that you originally allocate an
amount to a fixed maturity option to the time that you take a withdrawal, the
market value adjustment will be negative. Likewise, if interest rates drop at
the end of that time, the market value adjustment will be positive. Also, the
amount of the market value adjustment, either up or down, will be greater the
longer the time remaining until the fixed maturity option's maturity date.
Therefore, it is possible that the market value adjustment could greatly reduce
your value in the fixed maturity options, particularly in the fixed maturity
options with later maturity dates.
We provide an illustration of the market adjusted amount of specified maturity
values, an explanation of how we calculate the market value adjustment, and
information concerning our general account and investments purchased with
amounts allocated to the fixed maturity options, under "More information" later
in this prospectus. The Appendix to this prospectus provides an example of how
the market value adjustment is calculated.
ALLOCATING YOUR CONTRIBUTIONS
You may allocate your contributions to one or more, or all of the investment
options. However, you may not allocate more than one contribution to any one
fixed maturity option. Allocations must be in whole percentages and you may
change your allocation percentages at any time. However, the total of your
allocations must equal 100%. Once your contributions are allocated to the
investment options they become part of your account value. We discuss account
value under "Determining your contract's value."
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your contract, you may return it to
us for a refund. To exercise this cancellation right you must mail the contract
directly to our Processing Office within 10 days after you receive it. In some
states, this "free look" period may be longer.
For contributions allocated to the variable investment options, your refund will
equal your contributions, reflecting any investment gain or loss that also
reflects the daily charges we deduct. For contributions allocated to the fixed
maturity options, your refund will equal the amount of the contribution
allocated to the fixed maturity options reflecting any positive or negative
market value adjustments. Some states require that we refund the full amount of
your contribution (not including any investment gain or loss, interest, or
market value adjustment). For IRA contracts returned to us within seven days
after you receive it, we are required to refund the full amount of your
contribution.
We may require that you wait six months before you apply for a contract with us
again if:
o you cancel your contract during the free look period; or
o you change your mind before you receive your contract whether we have
received your contribution or not.
Please see "Tax information" for possible consequences of cancelling your
contract.
If you fully or partially convert an existing Traditional IRA contract to a Roth
IRA contract, you may cancel your Roth IRA contract and return to a Traditional
IRA contract. Our Processing Office, or your Equitable associate, can provide
you with the cancellation instructions. Ask for the form entitled "EQUI-VEST
Roth IRA Re-Characterization Form."
<PAGE>
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DETERMINING YOUR CONTRACT'S VALUE 23
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2
Determining your contract's value
- --------------------------------------------------------------------------------
YOUR ACCOUNT VALUE
Your "account value" is the total of the values you have in the variable
investment options and the market adjusted amounts you have in the fixed
maturity options. These amounts are subject to certain fees and charges
discussed under "Charges and expenses."
Your contract also has a "cash value." At any time before annuity payments
begin, your contract's cash value is equal to the account value, less any
withdrawal charge that may apply, and less the total amount or a pro rata
portion of the annual administrative charge. Please see "Surrendering your
contract to receive its cash value" under "Accessing your money."
YOUR CONTRACT'S VALUE IN THE VARIABLE INVESTMENT OPTIONS
Each variable investment option invests in shares of a corresponding Portfolio.
Your value in each variable investment option is measured by "units." The value
of your units will increase or decrease as though you had invested it in the
corresponding Portfolio's shares directly. Your value, however, will be reduced
by the amount of the fees and charges that we deduct under the contract.
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Units measure your value in each variable investment option.
- --------------------------------------------------------------------------------
The unit value for each variable investment option depends on the investment
performance of that option minus daily charges for mortality and expense risks
and other expenses. On any day, your value in any variable investment option
equals the number of units credited to that option, adjusted for any units
deducted from your contract under that option, multiplied by that day's value
for one unit. The number of your contract units in any variable investment
option does not change unless you make additional contributions, make a
withdrawal, or transfer amounts among investment options. In addition, when we
deduct the withdrawal charge, the annual administrative charge, or third-party
transfer or exchange charge, the number of units credited to your contract will
be reduced. A description of how unit values are calculated is found in the SAI.
YOUR CONTRACT'S VALUE IN THE FIXED MATURITY OPTIONS
Your value in each fixed maturity option at any time before the maturity date is
the market adjusted amount in each option. This is equivalent to your fixed
maturity amount increased or decreased by the market value adjustment. Your
value, therefore, may be higher or lower than your contributions (less
withdrawals) accumulated at the rate to maturity. At the maturity date, your
value in the fixed maturity option will equal its maturity value.
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24 TRANSFERRING YOUR MONEY AMONG INVESTMENT OPTIONS
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3
Transferring your money
among investment
options
- --------------------------------------------------------------------------------
TRANSFERRING YOUR ACCOUNT VALUE
At any time before the date annuity payments are to begin, you can transfer some
or all of your account value among the investment options, subject to the
following:
o You must transfer at least $300 of account value or, if less, the entire
amount in the investment option. We may waive the $300 requirement.
o You may not transfer to a fixed maturity option in which you already have
value.
o You may not transfer to a fixed maturity option if its maturity date is
later than the date annuity payments are to begin.
o If you make transfers out of a fixed maturity option other than at its
maturity date the transfer may cause a market value adjustment.
Subject to the terms of your contract, upon advance notice, we may change or
establish additional restrictions on transfers among the investment options. A
transfer request does not change your percentages for allocating current or
future contributions among the investment options.
You may request a transfer in writing or by telephone using TOPS. You must send
in all signed written requests directly to our Processing Office. Transfer
requests should specify:
(1) the contract number,
(2) the dollar amounts to be transferred, and
(3) the investment options to and from which you are transferring.
We will confirm all transfers in writing.
AUTOMATIC TRANSFER OPTIONS
GENERAL DOLLAR-COST AVERAGING
One of our automatic transfer options, referred to as general dollar - cost
averaging, allows you to have amounts automatically transferred from the
Alliance Money Market option to the other variable investment options on a
monthly basis. In order to elect the general dollar - cost averaging option
you must have a minimum of $2,000 in the Alliance Money Market option on the
date we receive your election form at our Processing Office. You can specify
the number of monthly transfers or instruct us to continue to make monthly
transfers until all available amounts in the Alliance Money Market option have
been transferred out.
The minimum amount that we will transfer each month is $50. The maximum amount
we will transfer is equal to your value in the Alliance Money Market option at
the time the program is elected, divided by the number of transfers scheduled to
be made.
If, on any transfer date, your value in the Alliance Money Market option is
equal to or less than the amount you have elected to have transferred, the
entire amount will be transferred. General dollar - cost averaging will then
end. You may change the transfer amount once each contract year, or cancel this
program at any time.
Dollar-cost averaging allows you to gradually allocate amounts to the variable
investment options by periodically transferring approximately the same dollar
amount to the variable investment options you select. This will cause you to
purchase more units if the unit's value is low and fewer units if the unit's
value is high. Therefore, you may get a lower average cost per unit over the
long term. This plan of investing, however, does not guarantee that you will
earn a profit or be protected against losses.
REBALANCING YOUR ACCOUNT VALUE
Another automatic transfer option we currently offer is a rebalancing program
that you can use to automatically reallocate your account value among the
variable investment options. You must tell us:
(a) the percentage you want invested in each variable investment option (whole
percentages only), and
(b) how often you want the rebalancing to occur (quarterly, semiannually, or
annually).
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TRANSFERRING YOUR MONEY AMONG INVESTMENT OPTIONS 25
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While your rebalancing program is in effect, we will transfer amounts among each
variable investment option so that the percentage of your account value that you
specify is invested in each option at the end of each rebalancing date. You must
rebalance your entire account value in the variable investment options.
- --------------------------------------------------------------------------------
Rebalancing does not assure a profit or protect against loss. You should
periodically review your allocation percentages as your needs change. You may
want to discuss the rebalancing program with your Equitable associate and/or
financial adviser before electing the program.
- --------------------------------------------------------------------------------
You may elect the rebalancing program at any time. To be eligible, you must have
at least $5,000 of account value in the variable investment options. Rebalancing
is not available for amounts you have allocated in the fixed maturity options.
You may change your allocation instructions or cancel the program at any time.
<PAGE>
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26 ACCESSING YOUR MONEY
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4
Accessing your money
- --------------------------------------------------------------------------------
WITHDRAWING YOUR ACCOUNT VALUE
You have several ways to withdraw your account value before annuity payments
begin. The table below shows the methods available under each type of contract.
More information follows the table. For the tax consequences of taking
withdrawals, see "Tax information."
METHOD OF WITHDRAWAL
---------------------------------------------
MINIMUM
CONTRACT LUMP SUM SYSTEMATIC DISTRIBUTION
- -------------------------------------------------------------------
NQ Yes Yes No
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Traditional IRA Yes Yes Yes
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QP IRA Yes Yes Yes
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Roth IRA Yes Yes No
- -------------------------------------------------------------------
LUMP SUM WITHDRAWALS
(All contracts)
You may take lump sum withdrawals from your account value at any
time while the annuitant is living and before annuity payments
begin. The minimum amount you may withdraw at any time is $300. If
your account value is less than $500 after a withdrawal, we may
terminate your contract and pay you its cash value.
Lump sum withdrawals in excess of the 10% free withdrawal amount
may be subject to a withdrawal charge.
SYSTEMATIC WITHDRAWALS
(All contracts)
If you have at least $20,000 of account value in the variable
investment options you may elect systematic withdrawals. You may
elect to have your systematic withdrawals made on a monthly or
quarterly basis. The minimum amount you may take for each
withdrawal is $300. We will make the withdrawals on any day of the
month that you select as long as it is not later than the 28th day
of the month. If you do not select a date, your withdrawals will be
made on the first day of the month. A check for the amount of the
withdrawal will be mailed to you or, if you prefer, we will
electronically transfer the money to your checking account.
You may withdraw a fixed-dollar amount from the variable investment
options. You do not have to maintain a minimum amount. You may
elect to have the amount of the withdrawal subtracted from your
account value in one of three ways:
(1) pro rata from more than one variable investment option
(without using up your total value in those options); or
(2) pro rata from more than one variable investment option (until
your value in those options is used up); or
(3) you may specify a dollar amount from only one variable
investment option.
You can cancel the systematic withdrawal option at any time.
Amounts withdrawn in excess of the 10% free withdrawal amount may
be subject to a withdrawal charge.
MINIMUM DISTRIBUTION WITHDRAWALS
(Traditional IRA and QP IRA contracts -- See "Tax
information")
We offer the minimum distribution withdrawal option to help you
meet required minimum distributions under federal income tax rules.
You may elect this option in the year in which you reach age
70 1/2 and have account value in the variable investment options
of at least $2,000. The minimum amount we will pay out is $300, or
if less, your account value. If your account value is less than
$500 after the withdrawal, we may terminate your contract and pay
you its cash value. You elect the method you want us to use to
calculate your minimum distribution withdrawal from the choices we
offer. Currently, minimum distribution withdrawal payments will be
made annually.
Unless you specify otherwise, we will subtract your withdrawals on
a pro rata basis from your values in the variable investment
options. If those amounts are insufficient, we will make up
required amounts from the fixed maturity options to the extent you
have value in those options. A market value adjustment may apply.
We will
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ACCESSING YOUR MONEY 27
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- --------------------------------------------------------------------------------
calculate your payment each year based on your account value at the
end of each prior calendar year, based on the method you choose.
- --------------------------------------------------------------------------------
We will send to Traditional IRA and QP IRA owners a form outlining
the minimum distribution options available before you reach age
701/2 (if you have not begun your annuity payments before that
time).
- --------------------------------------------------------------------------------
AUTOMATIC NQ DEPOSIT SERVICE
If you are receiving required minimum distribution payments from a
Traditional IRA or QP IRA contract you may use our automatic NQ
deposit service.
Under this service we will automatically deposit the required
minimum distribution payment from your Traditional IRA or QP IRA
contract directly into an existing EQUI-VEST Express NQ or an
existing EQUI-VEST NQ contract according to your allocation
instructions.
DEPOSIT OPTION FOR NQ CONTRACTS ONLY
You can elect the deposit option for your benefit while you live,
or for the benefit of your beneficiary.
Proceeds from your NQ contract can be deposited with us for a
period you select (including one for as long as the annuitant
lives). We will hold the amounts in our general account. We will
credit interest on the amounts at a guaranteed rate for the
specified period. We will pay out the interest on the amount
deposited at least once each year.
If you elect this option for your benefit, you deposit the amount
with us that you would otherwise apply to an annuity payout option.
If you elect this option for your beneficiary before the
annuitant's death, death benefit proceeds can be left on deposit
with us subject to certain restrictions, instead of being paid out
to the beneficiary.
Other restrictions apply to the deposit option. Your Equitable
associate can provide more information about this option, or you
may call our Processing Office.
SURRENDER OF YOUR CONTRACT TO RECEIVE ITS CASH VALUE
You may surrender your contract to receive its cash value at any
time while the annuitant is living and before you begin to receive
annuity payments. For a surrender to be effective, we must receive
your written request and your contract at our Processing Office. We
will determine your cash value on the date we receive the required
information. All benefits under the contract will terminate as of
that date.
You may receive your cash value in a single sum payment or apply it
to one or more of the annuity payout options. See "Choosing your
annuity payout options" below. We will usually pay the cash value
within seven calendar days, but we may delay payment as described
in "When to expect payments" below. For the tax consequences of
surrenders, see "Tax information."
WHEN WE MAY TERMINATE YOUR CONTRACT
We may terminate your contract and pay you the cash value if:
(1) your account value is less than $500 and you have not made
contributions to your contract for a period of three years; or
(2) you request a lump sum withdrawal that reduces your account
value to an amount less than $500; or
(3) you have not made any contributions within 120 days from your
contract date.
WHEN TO EXPECT PAYMENTS
Generally, we will fulfill requests for payments out of the
variable investment options within seven calendar days after the
date of the transaction to which the request relates. These
transactions may include applying proceeds to a variable annuity
payout option, payment of a death benefit, payment of any amount
you withdraw (less any withdrawal charge) and, upon surrender or
termination, payment of the cash value. We may postpone such
payments or applying proceeds for any period during which:
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28 ACCESSING YOUR MONEY
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- --------------------------------------------------------------------------------
(1) the New York Stock Exchange is closed or restricts trading,
(2) sales of securities or determination of the fair value of a
variable investment option's assets is not reasonably
practicable because of an emergency, or
(3) the SEC, by order, permits us to defer payment to protect
people remaining in the variable investment options.
We can defer payment of any portion of your values in the fixed
maturity options (other than for death benefits) for up to six
months while you are living. We also may defer payments for a
reasonable amount of time (not to exceed 15 days) while we are
waiting for a contribution check to clear.
All payments are made by check and are mailed to you (or the payee
named in a tax-free exchange) by U.S. mail, unless you request that
we use an express delivery service at your expense.
CHOOSING YOUR ANNUITY PAYOUT OPTIONS
EQUI-VEST Express offers you several choices for receiving
retirement income. Each choice enables you to receive fixed or, in
some cases, variable annuity payments.
You can choose from among the different forms of annuity payout
options listed below. Restrictions apply, depending on the type of
contract you own.
ANNUITY PAYOUT OPTIONS
You can choose from among the following annuity payout options:
o Life annuity: An annuity that 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
continuation of benefits following the annuitant's death with
this payout option, it provides the highest monthly payment of
any of the life annuity options, so long as the annuitant is
living.
o Life annuity - period certain: An annuity that guarantees
payments for the rest of the annuitant's life. If the
annuitant dies before the end of a selected period of time
("period certain"), payments continue to the beneficiary for
the balance of the period certain. Under IRAs, the period
certain cannot exceed your life expectancy or the joint life
expectancy of you and your spouse.
o Life annuity - refund certain: An annuity that guarantees
payments for the rest of the annuitant's life. If the
annuitant dies before the amount applied to purchase the
annuity option has been recovered, payments to the beneficiary
will continue until that amount has been recovered. This
payout option is available only as a fixed annuity.
o Period certain annuity: An annuity that guarantees payments
for a specific period of time, usually 5, 10, 15, or 20 years.
This option does not guarantee payments for the rest of the
annuitant's life. It does not permit any repayment of the
unpaid principal, so you cannot elect to receive part of the
payments as a single sum payment with the rest paid in monthly
annuity payments. Currently, this payout option is available
only as a fixed annuity.
All of the above payout options are available as fixed annuities.
With fixed annuities, we guarantee fixed annuity payments that will
be based either on the tables of guaranteed annuity payments in
your contract or on our then current annuity rates, whichever is
more favorable for you.
The life annuity, life annuity - period certain, and life annuity -
refund certain payout options are available on a single life or
joint and survivor life basis. The joint and survivor life annuity
guarantees payments for the rest of the annuitant's life and, after
the annuitant's death, payments continue to the survivor.
The following annuity payout options are available as variable
annuities:
o Life annuity (except in New York)
o Life annuity - period certain
o Joint and survivor life annuity (100% to survivor)
<PAGE>
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ACCESSING YOUR MONEY 29
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- --------------------------------------------------------------------------------
o Joint and survivor life period certain annuity (100% to
survivor)
Variable annuities may be funded through your choice of variable
investment options investing in Portfolios of The Hudson River
Trust. On or about October 1, 1999, these Portfolios will become
Portfolios of EQ Advisors Trust. See "Proposed substitution of
Portfolios" under "About The Hudson River Trust and EQ Advisors
Trust." The contract also offers a fixed annuity payout option that
can be elected in combination with the variable annuity payout
options. The amount of each variable annuity payment will
fluctuate, depending upon the performance of the variable
investment options, and whether the actual rate of investment
return is higher or lower than an assumed base rate. Please see
"Annuity unit values" in the SAI.
We also make the variable annuity payout options available to
owners of our single premium deferred annuity ("SPDA") contract and
certain other combination fixed and variable annuity contracts.
Such contractholders who are considering purchasing a variable
payout option should also review the information in this prospectus
relating to the variable investment options. The Hudson River Trust
prospectus (directly following this prospectus), and the sections
of the SAI which discuss the variable annuity payout option should
also be reviewed.
We may offer other payout options not outlined here. Your Equitable
associate can provide details.
SELECTING AN ANNUITY PAYOUT OPTION
When you select a payout option, we will issue you a separate
written agreement confirming your right to receive annuity
payments. Unless you choose a different payout option, we will pay
annuity payments under a life annuity with a period certain of 10
years. We require you to return your contract before annuity
payments begin.
You can choose the date annuity payments are to begin. You can
change the date your annuity payments are to begin anytime before
that date as long as you do not choose a date later than the 28th
day of any month. Also, that date may not be later than the
contract date anniversary that follows the annuitant's 90th
birthday. This may be different in some states.
Before your annuity payments are to begin, we will notify you by
letter that the annuity payout options are available. Once you have
selected a payout option and payments have begun, no change can be
made, other than transfers (if permitted in the future) among the
variable investment options if a variable annuity is selected.
The amount of the annuity payments will depend on:
(1) the amount applied to purchase the annuity;
(2) the type of annuity chosen, and whether it is fixed or
variable. If you choose a variable annuity, we will use an
assumed based rate of either 5% or 3 1/2% to calculate the
level of payments. We provide information about the assumed
base rate in the SAI;
(3) in the case of a life annuity, the annuitant's age (or the
annuitant's and joint annuitant's ages); and
(4) in certain instances, the sex of the annuitant(s).
In no event will you ever receive payments under a fixed option or
an initial payment under a variable option of less than the minimum
amounts guaranteed by the contract.
If, at the time you elect a payout option, 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 account
value in a single sum rather than as payments under the payout
option chosen.
<PAGE>
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30 CHARGES AND EXPENSES
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5
Charges and expenses
- --------------------------------------------------------------------------------
CHARGES THAT EQUITABLE LIFE DEDUCTS
We deduct the following charges each day from the net assets of each variable
investment option. These charges are reflected in the unit values of each
variable investment option:
o A mortality and expense risks charge, which includes a death benefit charge
o A charge for other expenses
We deduct the following charges from your account value. When we deduct these
charges from your variable investment options, we reduce the number of units
credited to your contract:
o An annual administrative charge, if applicable
o Charge for third-party transfer or exchange
o At the time you make certain withdrawals or surrender your contract, or
your contract is terminated - a withdrawal charge
o At the time annuity payments are to begin - charges for any state premium
or other applicable taxes. An annuity administrative fee may also apply
More information about these charges appears below.
MORTALITY AND EXPENSE RISKS CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for mortality and expense risks, including the death benefit.
The daily charge is equivalent to an annual rate of 0.70% of the net assets in
each variable investment option.
The mortality risk we assume is the risk that annuitants as a group will live
for a longer time than our actuarial tables predict. If that happens, we would
be paying more in annuity benefits than we planned. We also assume a risk that
the mortality assumptions reflected in our guaranteed annuity payment tables,
shown in each contract, will differ from actual mortality experience. We may
change the actuarial basis for our guaranteed annuity payment tables, but only
for new contributions and only at five year intervals from the contract date.
Lastly, we assume a mortality risk to the extent that at the time of death, the
guaranteed death benefit exceeds the cash value of the contract. In addition, we
waive any withdrawal charge upon payment of a death benefit.
The expense risk we assume is the risk that it will cost us more to issue and
administer the contracts than we expect.
To the extent that the mortality and expense risk charges are not needed to
cover the actual expenses incurred, they may be considered an indirect
reimbursement for certain sales and promotional expenses relating to the
contracts.
CHARGE FOR OTHER EXPENSES
We deduct this daily charge from the net assets in each variable investment
option. This charge, together with the annual administrative charge described
below, is for providing administrative and financial accounting services under
the contracts. The daily charge is equivalent to a maximum annual rate of 0.25%
of net assets in each variable investment option.
ANNUAL ADMINISTRATIVE CHARGE
We deduct an administrative charge from your account value on the last business
day of each contract year. We will deduct a pro rata portion of the charge if
you surrender your contract, elect an annuity payout option, or the annuitant
dies during the contract year. We deduct the charge if your account value on the
last business day of the contract year, is less than $25,000 under NQ contracts
and $20,000 under IRA contracts. If your account value on such date is $25,000
or more for NQ ($20,000 or more for IRA) contracts, we do not deduct the charge.
During the first two contract years, the charge is equal to $30 or, if less, 2%
of your current account value. The charge is $30 for contract years three and
later. We may increase this charge if our administrative costs rise, but the
charge will never exceed $65 annually.
The charge is deducted pro rata from the variable investment options. If those
amounts are insufficient, we will make up
<PAGE>
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CHARGES AND EXPENSES 31
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- --------------------------------------------------------------------------------
the required amounts from the fixed maturity options to the extent you have
value in those options, unless you tell us otherwise.
CHARGE FOR THIRD-PARTY TRANSFER OR EXCHANGE
We impose a charge for making a direct transfer of amounts from your contract to
a third party, such as in the case of a trustee-to-trustee transfer for an IRA
contract, or if you request that your contract be exchanged for a contract
issued by another insurance company. In either case, we will deduct from your
account value any withdrawal charge that applies and a charge of $25 for each
direct transfer or exchange. We reserve the right to increase this charge to a
maximum of $65.
WITHDRAWAL CHARGE
A withdrawal charge may apply in three circumstances: (1) you make one or more
withdrawals during a contract year; (2) you surrender your contract to receive
its cash value; or (3) we terminate your contract. The amount of the charge will
depend on whether the free withdrawal amount applies, and the availability of
one or more exceptions.
The withdrawal charge equals a percentage of the contributions withdrawn. The
percentage that applies depends on how long each contribution has been invested
in the contract. We determine the withdrawal charge separately for each
contribution according to the following table:
- --------------------------------------------------------------------------------
CONTRACT YEAR
- --------------------------------------------------------------------------------
1 2 3 4 5 6 7 8+
- --------------------------------------------------------------------------------
Percentage of
contribution 7% 6% 5% 4% 3% 2% 1% 0%
- --------------------------------------------------------------------------------
For purposes of calculating the withdrawal charge, we treat the contract year in
which we receive a contribution as "contract year 1." Amounts withdrawn up to
the free withdrawal amount are not considered withdrawal of any contribution. We
also treat contributions that have been invested the longest as being withdrawn
first. We treat contributions as withdrawn before earnings for purposes of
calculating the withdrawal charge. However, federal income tax rules treat
earnings under most NQ contracts as withdrawn first. See "Tax information."
In order to give you the exact dollar amount of the withdrawal you request, we
deduct the amount of the withdrawal and the amount of the withdrawal charge from
your account value. Any amount deducted to pay withdrawal charges is also
subject to a withdrawal charge. We deduct the withdrawal amount and the
withdrawal charge pro rata from the variable investment options. If those
amounts are insufficient, we will make up the required amounts from the fixed
maturity options to the extent you have value in those options. If we deduct all
or a portion of the withdrawal charge from the fixed maturity options, a market
value adjustment may apply.
The withdrawal charge does not apply in the circumstances described below.
10% FREE WITHDRAWAL AMOUNT. Each contract year you can withdraw up to 10% of
your account value without paying a withdrawal charge. The 10% free withdrawal
amount is determined using your account value at the time you request a
withdrawal, minus any other withdrawals made during the contract year.
DEATH OR PURCHASE OF ANNUITY. The withdrawal charge does not apply:
o If the annuitant dies and a death benefit is payable to the beneficiary.
o If we receive a properly completed election form providing for the account
value to be used to buy a life contingent annuity or a non-life annuity
with a period certain for a term of at least ten years.
CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES
We deduct a charge for applicable taxes such as premium taxes that may be
imposed in your state. Generally, we deduct the charge from the amount applied
to provide an annuity payout option. The current tax charge that might be
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32 CHARGES AND EXPENSES
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imposed varies by state and ranges from 0% to 3.5% (1% in Puerto Rico and 5% in
the U.S. Virgin Islands).
We reserve the right to deduct any applicable charges for taxes such as premium
taxes from each contribution, or from withdrawals, or for surrender and
termination of your contract. If we have deducted any applicable charges from
contributions, we will not deduct a charge for the same taxes later. If,
however, an additional tax charge is later imposed upon us when you make a
withdrawal, or surrender your contract, or it is terminated, or you elect to
begin receiving annuity payments, we reserve the right to deduct a charge at
that time.
ANNUITY ADMINISTRATIVE FEE
We generally deduct a fee of up to $350 from the amount to be applied to
purchase a life annuity payout option.
CHARGES THAT THE TRUSTS DEDUCT
The Hudson River Trust and EQ Advisors Trust each deducts charges for the
following types of fees and expenses:
o Investment advisory fees ranging from 0.31% to 1.15%.
o 12b-1 fees of 0.25%.
o Operating expenses, such as trustees' fees, independent auditors' fees,
legal counsel fees, administrative service fees, custodian fees, and
liability insurance.
o Investment-related expenses, such as brokerage commissions.
These charges are reflected in the daily share price of each Portfolio. Since
shares of each trust are purchased at their net asset value, these fees and
expenses are, in effect, passed on to the variable investment options and are
reflected in their unit values. For more information about these charges, please
refer to the prospectuses for The Hudson River Trust and EQ Advisors Trust
following this prospectus.
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce the withdrawal charge
or the mortality and expense risks charge, or change the minimum contribution
requirements. We also may change the minimum death benefit or offer variable
investment options that invest in shares of The Hudson River Trust or EQ
Advisors Trust that are not subject to the 12b-1 fee. Group arrangements include
those in which a trustee or an employer, for example, purchases contracts
covering a group of individuals on a group basis. Group arrangements are not
available for Traditional IRA and Roth IRA contracts. Sponsored arrangements
include those in which an employer allows us to sell contracts to its employees
or retirees on an individual basis.
Our costs for sales, administration, and mortality generally vary with the size
and stability of the group or sponsoring organization, among other factors. We
take all these factors into account when reducing charges. To qualify for
reduced charges, a group or sponsored arrangement must meet certain
requirements, such as requirements for size and number of years in existence.
Group or sponsored arrangements that have been set up solely to buy contracts or
that have been in existence less than six months will not qualify for reduced
charges.
We also may establish different rates to maturity for the fixed maturity options
under different classes of contracts for group or sponsored arrangements.
We will make these and any similar reductions according to our rules in effect
when we approve a contract for issue. We may change these rules from time to
time. Any variation will reflect differences in costs or services and will not
be unfairly discriminatory.
Group or sponsored arrangements may be governed by federal income tax rules, the
Employee Retirement Income Security Act of 1974, or both. We make no
representations with regard to the impact of these and other applicable laws on
such programs. We recommend that employers, trustees,
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CHARGES AND EXPENSES 33
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and others purchasing or making contracts available for purchase under such
programs seek the advice of their own legal and benefits advisers.
OTHER DISTRIBUTION ARRANGEMENTS
We may reduce or eliminate charges when sales are made in a manner that results
in savings of sales and administrative expenses, such as sales through persons
who are compensated by clients for recommending investments and who receive no
commission or reduced commissions in connection with the sale of the contracts.
We will not permit a reduction or elimination of charges where it will be
unfairly discriminatory.
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34 PAYMENT OF DEATH BENEFIT
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6
Payment of death benefit
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YOUR BENEFICIARY AND PAYMENT OF BENEFIT
You designate your beneficiary when you apply for your contract. You may change
your beneficiary at any time by writing to our Processing Office. The change
will be effective on the date the written request for the change is received in
our Processing Office. We are not responsible for any beneficiary change request
that we do not receive.
The death benefit is equal to your account value, or, if greater, the "minimum
death benefit." The minimum death benefit is equal to your total contributions,
less withdrawals and any taxes that may apply. We determine the amount of the
death benefit as of the date we receive satisfactory proof of the annuitant's
death and any required instructions for the method of payment.
On the date we determine the death benefit, your account value will be deducted
from the investment options. We will hold this amount in our general account and
credit it with interest at a rate not less than the rate required by law. If you
have transferred the value of another annuity contract that we issue to your
EQUI-VEST Express contract, the value of the other contract's minimum death
benefit calculated as of the time of the transfer will be included in the total
contributions for the purpose of calculating the minimum death benefit.
EFFECT OF THE ANNUITANT'S DEATH
If the annuitant dies before the annuity payments begin, we will pay the death
benefit to your beneficiary.
Generally, the death of the annuitant terminates the contract. However, a
beneficiary who is the surviving spouse of the owner/annuitant can choose to be
treated as the successor owner/annuitant and continue the contract. Only a
spouse can be a successor owner/annuitant.
For Traditional IRA and QP IRA contracts, a beneficiary who is not a surviving
spouse may be able to have limited ownership as discussed under "Beneficiary
continuation option under Traditional IRA and QP IRA Contracts" below.
WHEN AN NQ CONTRACT OWNER DIES BEFORE THE ANNUITANT
Under certain conditions the owner can change after the original owner's death.
When you are not the annuitant under an NQ contract and you die before annuity
payments begin, the beneficiary named to receive the death benefit upon the
annuitant's death will automatically become the successor owner. If you do not
want the beneficiary to be the successor owner, you should name a specific
successor owner. You may name a successor owner at any time by sending
satisfactory notice to our Processing Office.
Unless the surviving spouse of the owner who has died is the successor owner for
this purpose, the entire interest in the contract must be distributed under the
following rules:
o The cash value of the contract must be fully paid to the designated
beneficiary (new owner) by December 31st of the fifth calendar year after
your death.
o The successor owner may instead elect to receive the cash value as a life
annuity (or payments for a period certain of not longer than the new
owner's life expectancy). Payments must begin no later than December 31st
following the calendar year of the non-annuitant owner's death. Unless this
alternative is elected, we will pay any cash value on December 31st of the
fifth calendar year following the year of your death.
If the surviving spouse is the successor owner, the spouse may elect to continue
the contract. No distributions are required as long as the surviving spouse and
annuitant are living.
HOW DEATH BENEFIT PAYMENT IS MADE
We will pay the death benefit to the beneficiary in the form of the annuity
payout option you have chosen. If you have not chosen an annuity payout option
as of the time of the annuitant's death, the beneficiary will receive the death
benefit in a single sum. However, subject to any exceptions in the contract, our
rules and any applicable requirements under federal income tax rules, the
beneficiary may elect to apply the death benefit to one or more annuity payout
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PAYMENT OF DEATH BENEFIT 35
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options we offer at the time. See "Choosing your annuity payout options" under
"Accessing your money" earlier in this prospectus. Please note that if you are
both the contract owner and the annuitant, you may elect only a life annuity or
an annuity that does not extend beyond the life expectancy of the beneficiary.
Single sum payments generally are paid through the Equitable Life Access
Account(TM), an interest bearing checking account. Beneficiaries have immediate
access to the proceeds by writing a check on the account. We pay interest from
the date the single sum is deposited into the Access Account until the account
is closed.
BENEFICIARY CONTINUATION OPTION UNDER TRADITIONAL IRA AND QP IRA CONTRACTS
Upon your death, a nonspouse beneficiary may generally elect to keep the
contract in your name and receive distributions under the contract instead of
the death benefit being paid in a single sum. The account value used to provide
the distributions will be increased to equal the amount of the death benefit.
The beneficiary's choices depend in part on whether or not you were taking
required minimum distributions under the contract prior to your death.
(1) If you were taking required minimum distributions under the contract, the
distributions to the beneficiary must continue to be made at least as
rapidly as prior to your death.
(2) If you die before you must take required minimum distributions under the
contract, the beneficiary may begin taking minimum distributions under the
contract, but such withdrawals must be based on the beneficiary's life
expectancy. The withdrawals must begin by December 31st of the calendar
year following your death. If there is more than one beneficiary, the
shortest life expectancy must be used.
(3) The withdrawals must be taken annually. There will not be a withdrawal
charge for these withdrawals. The beneficiary along with his or her tax
adviser will be responsible for determining the amount of the
withdrawals.
(4) The designated beneficiary must be a natural person and of legal age at the
time of election. The beneficiary must elect this option within 30 days
following the date we receive proof of your death. If no election is made
within 30 days to: (1) receive the death benefit, or (2) continue the
contract and take annual withdrawals as described above, or (3) defer
payment of the account value for five years, the death benefit will be paid
to the beneficiary according to our standard procedures.
(5) While the contract continues in your name, the beneficiary may transfer the
contract's account value among the investment options. However, additional
contributions will not be permitted and the death benefit provisions will
no longer be in effect. Although the only withdrawals that will be
permitted are minimum distribution withdrawals, the beneficiary may choose
at any time to withdraw all of the account value and no withdrawal charges
will apply.
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36 TAX INFORMATION
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7
Tax information
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OVERVIEW
In this part of the prospectus, we discuss the current federal income tax rules
that generally apply to EQUI-VEST Express contracts owned by United States
taxpayers. The tax rules can differ, depending on the type of contract, whether
NQ, Traditional IRA, QP IRA, or Roth IRA. Therefore, we discuss the tax aspects
of each type of contract separately.
Federal income tax rules include the United States laws in the Internal Revenue
Code, and Treasury Department Regulations and Internal Revenue Service ("IRS")
interpretations of the Internal Revenue Code. These tax rules may change. We
cannot predict whether, when, or how these rules could change. Any change could
affect contracts purchased before the change.
We cannot provide detailed information on all tax aspects of the contracts.
Moreover, the tax aspects that apply to a particular person's contract may vary
depending on the facts applicable to that person. We do not discuss state income
and other state taxes, federal income tax and withholding rules for non-U.S.
taxpayers, or federal gift and estate taxes. Transfers of the contract, rights
under the contract, or payments under the contract may be subject to gift or
estate taxes. You should not rely only on this document, but should consult your
tax adviser before your purchase.
If you are buying a contract to fund a retirement plan that already provides tax
deferral under the Internal Revenue Code (any type of IRA) you should do so for
the contract's features and benefits other than tax deferral. In such
situations, the tax deferral of the contract does not provide additional
benefits.
TRANSFERS AMONG INVESTMENT OPTIONS
You can make transfers among investment options inside the contract without
triggering taxable income.
TAXATION OF NONQUALIFIED ANNUITIES
CONTRIBUTIONS
You may not deduct the amount of your contributions to a nonqualified annuity
contract.
CONTRACT EARNINGS
Generally, you are not taxed on contract earnings until you receive a
distribution from your contract, whether as a withdrawal or as an annuity
payment. However, earnings are taxable, even without a distribution:
o if a contract fails investment diversification requirements as specified in
federal income tax rules (these rules are based on or are similar to those
specified for mutual funds under securities laws);
o if you transfer a contract, for example, as a gift to someone other than
your spouse (or former spouse);
o if you use a contract as security for a loan (in this case, the amount
pledged will be treated as a distribution); and
o if the owner is other than an individual (such as a corporation,
partnership, trust, or other non-natural person).
All nonqualified deferred annuity contracts that Equitable Life and its
affiliates issue to you during the same calendar year are linked together and
treated as one contract for calculating the taxable amount of any distribution
from any of those contracts.
ANNUITY PAYMENTS
Once annuity payments begin, a portion of each payment is taxable as ordinary
income. You get back the remaining portion without paying taxes on it. This is
your "investment in the contract." Generally, your investment in the contract
equals the contributions you made, less any amounts you previously withdrew that
were not taxable.
For fixed annuity payments, the tax-free portion of each payment is determined
by (1) dividing your investment in the contract by the total amount you are
expected to receive out of the contract, and (2) multiplying the result by the
amount
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TAX INFORMATION 37
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of the payment. For variable annuity payments, your investment in the contract
divided by the number of expected payments is your tax-free portion of each
payment.
Once you have received the amount of your investment in the contract, all
payments after that are fully taxable. If payments under a life annuity stop
because the annuitant dies, there is an income tax deduction for any unrecovered
investment in the contract.
PAYMENTS MADE BEFORE ANNUITY PAYMENTS BEGIN
If you make withdrawals before annuity payments begin under your contract, they
are taxable to you as ordinary income if there are earnings in the contract.
Generally, earnings are your account value less your investment in the contract.
If you withdraw an amount which is more than the earnings in the contract as of
the date of the withdrawal, the balance of the distribution is treated as a
return of your investment in the contract and is not taxable.
CONTRACTS PURCHASED THROUGH EXCHANGES
You may purchase your NQ contract through an exchange of another contract.
Normally, exchanges of contracts are taxable events. The exchange will not be
taxable under Section 1035 of the Internal Revenue Code if:
o the contract that is the source of the funds you are using to purchase the
NQ contract is another nonqualified deferred annuity contract (or life
insurance or endowment contract).
o the owner and the annuitant are the same under the source contract and the
EQUI-VEST Express NQ contract. If you are using a life insurance or
endowment contract the owner and the insured must be the same on both sides
of the exchange transaction.
The tax basis of the source contract carries over to the EQUI-VEST Express NQ
contract.
SURRENDERS
If you surrender or cancel the contract, the distribution is taxable as ordinary
income (not capital gain) to the extent it exceeds your investment in the
contract.
DEATH BENEFIT PAYMENTS MADE TO A BENEFICIARY AFTER YOUR DEATH
For the rules applicable to death benefits, see "Payment of death benefit" and
"When an NQ contract owner dies before the annuitant" earlier in this
prospectus. The tax treatment of a death benefit taken as a single sum is
generally the same as the tax treatment of a withdrawal from or surrender of
your contract. The tax treatment of a death benefit taken as annuity payments is
generally the same as the tax treatment of annuity payments under your contract.
EARLY DISTRIBUTION PENALTY TAX
If you take distributions before you are age 59 1/2 a penalty tax of 10% of the
taxable portion of your distribution applies in addition to the income tax. The
extra penalty tax does not apply to pre-age 59 1/2 distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o in the form of substantially equal periodic annuity payments for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and a beneficiary.
SPECIAL RULES FOR NQ CONTRACTS ISSUED IN PUERTO RICO
Under current law we treat income from NQ contracts as U.S. source. A Puerto
Rico resident is subject to U.S. taxation on such U.S. source income. Only
Puerto Rico source income of Puerto Rico residents is excludable from U.S.
taxation. Income from NQ contracts is also subject to Puerto Rico tax. The
calculation of the taxable portion of amounts distributed from a contract may
differ in the two jurisdictions. Therefore, you might have to file both U.S. and
Puerto Rico tax returns, showing different amounts of income from the contract
for each tax return. Puerto Rico generally provides a credit against Puerto Rico
tax for U.S. tax paid. Depending on your
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38 TAX INFORMATION
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personal situation and the timing of the different tax liabilities, you may not
be able to take full advantage of this credit.
INDIVIDUAL RETIREMENT ARRANGEMENTS ("IRAS")
GENERAL
"IRA" stands for individual retirement arrangement. There are two basic types of
such arrangements, individual retirement accounts and individual retirement
annuities. In an individual retirement account, a trustee or custodian holds the
assets for the benefit of the IRA owner. The assets can include mutual funds and
certificates of deposit. In an individual retirement annuity, an insurance
company issues an annuity contract that serves as the IRA.
There are two basic types of IRAs, as follows:
o "Traditional IRAs," typically funded on a pre-tax basis including SEP-IRAs
and SIMPLE-IRAs, issued and funded in connection with employer-sponsored
retirement plans. EQUIVEST Express Traditional IRA and QP-IRA are
traditional IRAs.
o Roth IRAs, first available in 1998, funded on an after-tax basis. EQUI-VEST
Express Roth IRA.
Regardless of the type of IRA, your ownership interest in the IRA cannot be
forfeited. You or your beneficiaries who survive you are the only ones who can
receive the IRA's benefits or payments.
You can hold your IRA assets in as many different accounts and annuities as you
would like, as long as you meet the rules for setting up and making
contributions to IRAs. However, if you own multiple IRAs, you may be required to
combine IRA values or contributions for tax purposes. For further information
about individual retirement arrangements, you can read Internal Revenue Service
Publication 590 ("Individual Retirement Arrangements (IRAs)"). This publication
is usually updated annually, and can be obtained from any IRS district office or
the IRS Web site (www.irs.ustreas.gov).
Equitable Life designs its traditional IRA contracts to qualify as "individual
retirement annuities" under Section 408(b) of the Internal Revenue Code. This
prospectus contains the information that the IRS requires you to have before you
purchase an IRA. This section of the prospectus covers some of the special tax
rules that apply to IRAs. The next section covers Roth IRAs. Education IRAs are
not discussed in this prospectus because they are not available in individual
retirement annuity form.
The EQUI-VEST Express IRA contract has been approved by the IRS as to form for
use as a Traditional IRA. We have submitted the Roth IRA version for formal IRS
approval. This IRS approval is a determination only as to the form of the
annuity. It does not represent a determination of the merits of the annuity as
an investment. The IRS approval does not address every feature possibly
available under the EQUI-VEST Express IRA contract.
CANCELLATION
You can cancel any version of the EQUI-VEST Express IRA contract (Traditional
IRA, QP IRA, or Roth IRA) by following the directions under "Your right to
cancel within a certain number of days" under "Contract features and benefits"
earlier in the prospectus. You can cancel an EQUI-VEST Express Roth IRA contract
issued as a result of a full or partial conversion of any EQUI-VEST Traditional
IRA contract by following the instructions in the "EQUI-VEST Roth IRA
Re-Characterization Form." The form is available from our Processing Office or
your Equitable associate. If you cancel a Traditional IRA, or Roth IRA contract,
we may have to withhold tax, and we must report the transaction to the IRS. A
contract cancellation could have an unfavorable tax impact.
TRADITIONAL INDIVIDUAL RETIREMENT ANNUITIES (TRADITIONAL IRAS)
CONTRIBUTIONS TO TRADITIONAL IRAS. Individuals may make three different types of
contributions to a traditional IRA:
o regular contributions out of earned income or compensation; or
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TAX INFORMATION 39
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o tax-free "rollover" contributions; or
o direct custodian-to-custodian transfers from other traditional IRAs
("direct transfers").
REGULAR CONTRIBUTIONS TO TRADITIONAL IRAS
The EQUI-VEST Express Traditional IRA is intended receive regular contributions.
LIMITS ON CONTRIBUTIONS TO TRADITIONAL IRAS. Generally, $2,000 is the maximum
amount that you may contribute to all IRAs (including Roth IRAs) in any taxable
year. When your earnings are below $2,000, your earned income or compensation
for the year is the most you can contribute. This $2,000 limit does not apply to
rollover contributions or direct custodian-to-custodian transfers into a
traditional IRA. You cannot make regular contributions for the tax year in which
you reach age 70 1/2 or any tax year after that.
SPECIAL RULES FOR SPOUSES. If you are married and file a joint income tax
return, you and your spouse may combine your compensation to determine the
amount of regular contributions you are permitted to make to traditional IRAs
(and Roth IRAs discussed below). Even if one spouse has no compensation or
compensation under $2,000, married individuals filing jointly can contribute up
to $4,000 for any taxable year to any combination of traditional IRAs and Roth
IRAs. (Any contributions to Roth IRAs reduce the ability to contribute to
traditional IRAs and vice versa.) The maximum amount may be less if earned
income is less and the other spouse has made IRA contributions. No more than a
combined total of $2,000 can be contributed annually to either spouse's
traditional IRAs and Roth IRAs. Each spouse owns his or her traditional IRAs and
Roth IRAs even if the other spouse funded the contributions. A working spouse
age 70 1/2 or over can contribute up to the lesser of $2,000 or 100% of "earned
income" to a traditional IRA for a nonworking spouse until the year in which the
nonworking spouse reaches age 70 1/2.
DEDUCTIBILITY OF CONTRIBUTIONS. The amount of traditional IRA contributions that
you can deduct for a tax year depends on whether you are covered by an
employer-sponsored tax-favored retirement plan, as defined under special federal
income tax rules. Your Form W-2 will indicate whether or not you are covered by
such a retirement plan.
IF YOU ARE NOT COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, you can
make fully deductible contributions to your traditional IRAs for each tax year
up to $2,000 or, if less, your earned income.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
adjusted gross income (AGI) is BELOW THE LOWER DOLLAR FIGURE IN A PHASE-OUT
RANGE, you can make fully deductible contributions to your traditional IRAs. For
each tax year your fully deductible contribution can be up to $2,000 or, if
less, your earned income.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
AGI falls within a PHASE-OUT range, you can make partially deductible
contributions to your traditional IRAs.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
AGI falls ABOVE THE HIGHER FIGURE IN THE PHASE-OUT RANGE, you may not deduct any
of your regular contributions to your traditional IRAs.
If you are single and covered by a retirement plan during any part of the
taxable year, the deduction for traditional IRA contributions phases out with
AGI between $31,000 and $41,000 in 1999. This range will increase every year
until 2005 when the range is $50,000-$60,000.
If you are married and file a joint return, and you are covered by a retirement
plan during any part of the taxable year, the deduction for traditional IRA
contributions phases out with AGI between $51,000 and $61,000 in 1999. This
range will increase every year until 2007 when the range is $80,000-$100,000.
Married individuals filing separately and living apart at all times are not
considered married for purposes of this deductible contribution calculation.
Generally, the active participation in an employer-sponsored retirement plan of
an individual is determined independently for each spouse.
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40 TAX INFORMATION
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Where spouses have "married filing jointly" status, however, the maximum
deductible traditional IRA contribution for an individual who is not an active
participant (but whose spouse is an active participant) is phased out for
taxpayers with AGI of between $150,000 and $160,000.
To determine the deductible amount of the contribution in 1999, you determine
AGI and subtract $31,000 if you are single, or $51,000 if you are married and
file a joint return with your spouse. The resulting amount is your Excess AGI.
You then determine the limit on the deduction for traditional IRA contributions
using the following formula:
<TABLE>
<S> <C> <C> <C> <C>
times $2,000 (or earned Equals the adjusted
($10,000-excess AGI) income, if less) deductible
- ------------------------------ contribution limit
divided by $10,000 x =
</TABLE>
NONDEDUCTIBLE REGULAR CONTRIBUTIONS. If you are not eligible to deduct part or
all of the traditional IRA contribution, you may still make nondeductible
contributions on which earnings will accumulate on a tax-deferred basis. The
combined deductible and nondeductible contributions to your traditional IRA (or
the nonworking spouse's traditional IRA) may not, however, exceed the maximum
$2,000 per person limit. See "Excess Contributions" below. You must keep your
own records of deductible and nondeductible contributions in order to prevent
double taxation on the distribution of previously taxed amounts. See
"Withdrawals, payments and transfers of funds out of Traditional IRAs" below.
If you are making nondeductible contributions in any taxable year, or you have
made nondeductible contributions to a traditional IRA in prior years and are
receiving distributions from any traditional IRA, you must file the required
information with the IRS. Moreover, if you are making nondeductible traditional
IRA contributions, you must retain all income tax returns and records pertaining
to such contributions until interests in all traditional IRAs are fully
distributed.
WHEN YOU CAN MAKE REGULAR CONTRIBUTIONS. If you file your tax returns on a
calendar year basis like most taxpayers, you have until the April 15th return
filing deadline (without extensions) of the following calendar year to make your
regular contributions for a tax year.
EXCESS CONTRIBUTIONS
Excess contributions to IRAs are subject to a 6% excise tax for the year in
which made and for each year after until withdrawn. The following are excess
contributions to IRAs:
o regular contributions of more than $2,000; or
o regular contributions of more than earned income for the year, if that
amount is under $2,000; or
o regular contributions to a traditional IRA made after you reach age
70 1/2; or
o rollover contributions of 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.
You can avoid the excise tax by withdrawing an excess contribution (rollover or
regular) before the due date (including extensions) for filing your federal
income tax return for the year. If it is an excess regular contribution, you
cannot take a tax deduction for the amount withdrawn. You do not have to include
the excess contribution withdrawn as part of your income. It is also not subject
to the 10% additional penalty tax on early distributions discussed below under
"Early distribution penalty tax." You do have to withdraw any earnings that are
attributed to the excess contribution. The withdrawn earnings would be included
in your gross income and could be subject to the 10% penalty tax.
Even after the due date for filing your return, you may withdraw an excess
rollover contribution, without income inclusion or 10% penalty, if:
(1) the rollover was from a qualified retirement plan to a traditional IRA;
(2) the excess contribution was due to incorrect information that the plan
provided; and
(3) you took no tax deduction for the excess contribution.
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TAX INFORMATION 41
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RECHARACTERIZATIONS
You may also change your mind about amounts contributed as Roth IRA funds to
Traditional IRA funds, in accordance with special federal income tax rules, if
you use the forms we prescribe. This is referred to as having "recharacterized"
your contribution.
ROLLOVERS AND TRANSFERS
Rollover contributions may be made to a traditional IRA from these sources:
o qualified plans;
o TSAs (including Internal Revenue Code Section 403(b)(7) custodial
accounts); and
o other traditional IRAs.
Any amount contributed to a traditional IRA after you reach 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.
ROLLOVERS FROM QUALIFIED PLANS OR TSAS
There are two ways to do rollovers:
o Do it yourself
You actually receive a distribution that can be rolled over and you roll it over
to a traditional IRA within 60 days after the date you receive the funds. The
distribution from your qualified plan or TSA will be net of 20% mandatory
federal income tax withholding. If you want, you can replace the withheld funds
yourself and roll over the full amount.
o Direct rollover
You tell your qualified plan trustee or TSA issuer/custodian/fiduciary to send
the distribution directly to your traditional IRA issuer. Direct rollovers are
not subject to mandatory federal income tax withholding.
All distributions from a TSA or qualified plan are eligible rollover
distributions, unless the distribution is:
o only after-tax contributions you made to the plan; or
o "required minimum distributions" after age 70 1/2 or separation from
service; or
o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancies) of you
and your designated beneficiary; or
o a hardship withdrawal; or
o substantially equal periodic payments made for a specified period of 10
years or more; or
o corrective distributions that fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse;
or
o a qualified domestic relations order distribution to a beneficiary who is
not your current spouse or former spouse.
ROLLOVERS FROM TRADITIONAL IRAS TO TRADITIONAL IRAS
You may roll over amounts from one traditional IRA to one or more of your other
traditional IRAs if you complete the transaction within 60 days after you
receive the funds. You may make such a rollover only once in every 12-month
period for the same funds. Trustee-to-trustee or custodian-to-custodian direct
transfers are not rollover transactions. You can make these more frequently than
once in every 12-month period.
The surviving spouse beneficiary of a deceased individual can roll over or
directly transfer an inherited traditional IRA to one or more other traditional
IRAs. Also, in some cases, traditional IRAs can be transferred on a tax-free
basis between spouses or former spouses as a result of a court ordered divorce
or separation decree.
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42 TAX INFORMATION
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WITHDRAWALS, PAYMENTS AND TRANSFERS OF FUNDS OUT OF TRADITIONAL IRAS
NO FEDERAL INCOME TAX LAW RESTRICTIONS ON WITHDRAWALS. You can withdraw any or
all of your funds from a traditional IRA at any time. You do not need to wait
for a special event like retirement.
TAXATION OF PAYMENTS. Earnings in traditional IRAs are not subject to federal
income tax until you or your beneficiary receive them. Taxable payments or
distributions include withdrawals from your contract, surrender of your contract
and annuity payments from your contract. Death benefits are also taxable. Except
as discussed below, the total amount of any distribution from a traditional IRA
must be included in your gross income as ordinary income.
If you have ever made nondeductible IRA contributions to any traditional IRA (it
does not have to be to this particular traditional IRA contract), those
contributions are recovered tax free when you get distributions from any
traditional IRA. You must keep permanent tax records of all of your
nondeductible contributions to traditional IRAs. At the end of any year in which
you have received a distribution from any traditional IRA, you calculate the
ratio of your total nondeductible Traditional IRA contributions (less any
amounts previously withdrawn tax free) to the total account balances of all
traditional IRAs you own at the end of the year plus all traditional IRA
distributions made during the year. Multiply this by all distributions from the
traditional IRA during the year to determine the nontaxable portion of each
distribution.
In addition, a distribution is not taxable if:
o the amount received is a withdrawal of excess contributions, as described
under "Excess contributions" above; or
o the entire amount received is rolled over to another traditional IRA (see
"Rollovers and transfers" above); or
o in certain limited circumstances, where the traditional IRA acts as a
conduit, you roll over the entire amount into a qualified plan or TSA that
accepts rollover contributions. To get this conduit Traditional IRA
treatment:
o the source of funds you used to establish the traditional IRA must
have been a rollover contribution from a qualified plan, and
o the entire amount received from the traditional 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. However, you may lose conduit
treatment, if you make an eligible rollover distribution contribution to a
Traditional IRA and you commingle this contribution with other contributions. In
that case, you may not be able to roll over these eligible rollover distribution
contributions and earnings to another qualified plan or TSA at a future date.
Distributions from a traditional IRA are not eligible for favorable five-year
averaging (or, in some cases, ten-year averaging and long-term capital gain
treatment) available to certain distributions from qualified plans.
The EQUI-VEST Express QP IRA contract is intended to be used as a conduit IRA
however, non-rollover contributions cannot be commingled.
REQUIRED MINIMUM DISTRIBUTIONS
LIFETIME REQUIRED MINIMUM DISTRIBUTIONS. You must start taking annual
distributions from your Traditional IRAs beginning at age 70 1/2.
WHEN YOU HAVE TO TAKE THE FIRST REQUIRED MINIMUM DISTRIBUTION. The first
required minimum distribution is for the calendar year in which you turn age
70 1/2. You have the choice to take this first required minimum distribution
during the calendar year you actually reach age 70 1/2, or to delay taking it
until the first three-month period in the next calendar year (January 1 - April
1). Distributions must start no later than your "Required Beginning Date," which
is April 1st of the calendar year after the calendar year in which you turn age
70 1/2. If you choose to delay taking the first annual minimum distribution,
then you will have to
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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 each year.
HOW YOU CALCULATE REQUIRED MINIMUM DISTRIBUTIONS. There are two approaches to
taking required minimum distributions - "account-based" or "annuity-based."
Account-based method. If you choose an account-based method, you divide the
value of your traditional IRA as of December 31st of the past calendar year by a
life expectancy factor from IRS tables. This gives you the required minimum
distribution amount for that particular IRA for that year. The required minimum
distribution amount will vary each year as the account value and your life
expectancy factors change.
You have a choice of life expectancy factors, depending on whether you choose a
method based only on your life expectancy, or the joint life expectancies of you
and another individual. You can decide to "recalculate" your life expectancy
every year by using your current life expectancy factor. You can decide instead
to use the "term certain" method, where you reduce your life expectancy by one
every year after the initial year. If your spouse is your designated beneficiary
for the purpose of calculating annual account-based required minimum
distributions, you can also annually recalculate your spouse's life expectancy
if you want. If you choose someone who is not your spouse as your designated
beneficiary for the purpose of calculating annual account-based required minimum
distributions, you have to use the term certain method of calculating that
person's life expectancy. If you pick a nonspouse designated beneficiary, you
may also have to do another special calculation.
You can later apply your traditional IRA funds to a life annuity-based payout.
You can only do this if you already chose to recalculate your life expectancy
annually (and your spouse's life expectancy if you select a spousal joint
annuity). For example, if you anticipate selecting any form of life annuity
payout after you are age 701|M/2, you must have elected to recalculate life
expectancies.
Annuity-based method. If you choose an annuity-based method you do not have to
do annual calculations. You apply the account value to an annuity payout for
your life or the joint lives of you and a designated beneficiary, or for a
period certain not extending beyond applicable life expectancies.
DO YOU HAVE TO PICK THE SAME METHOD TO CALCULATE YOUR REQUIRED MINIMUM
DISTRIBUTIONS FOR ALL OF YOUR TRADITIONAL IRAS AND OTHER RETIREMENT PLANS? No.
If you want, you can choose a different method and a different beneficiary for
each of your Traditional IRAs and other retirement plans. For example, you can
choose an annuity payout from one IRA, a different annuity payout from a
qualified plan, and an account-based annual withdrawal from another IRA.
WILL WE PAY YOU THE ANNUAL AMOUNT EVERY YEAR FROM YOUR TRADITIONAL IRA BASED ON
THE METHOD YOU CHOOSE? No, unless you affirmatively select an annuity payout
option or an account-based withdrawal option such as our minimum distribution
withdrawal option. Because the options we offer do not cover every option
permitted under federal income tax rules, you may prefer to do your own required
minimum distribution calculations for one or more of your traditional IRAs.
WHAT IF YOU TAKE MORE THAN YOU NEED TO FOR ANY YEAR? The required minimum
distribution amount for your traditional IRAs is calculated on a year-by-year
basis. There are no carry-back or carry-forward provisions. Also, you cannot
apply required minimum distribution amounts you take from your qualified plans
to the amounts you have to take from your traditional IRAs and vice-versa.
However, the IRS will let you calculate the required minimum distribution for
each traditional IRA that you maintain, using the method that you picked for
that particular IRA. You can add these required minimum distribution amount
calculations together. As long as the total amount you take out every year
satisfies your overall traditional IRA required minimum distribution amount, you
may choose to take your annual required minimum distribution from any one or
more traditional IRAs that you own.
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WHAT IF YOU TAKE LESS THAN YOU NEED TO FOR ANY YEAR? Your IRA could be
disqualified, and you could have to pay tax on the entire value. Even if your
IRA is not disqualified, you could have to pay a 50% penalty tax on the
shortfall (required amount for traditional IRAs less amount actually taken). It
is your responsibility to meet the required minimum distribution rules. We will
remind you when our records show that your age 70 1/2 is approaching. If you do
not select a method with us, we will assume you are taking your required minimum
distribution from another traditional IRA that you own.
WHAT ARE THE REQUIRED MINIMUM DISTRIBUTION PAYMENTS AFTER YOU DIE? If you die
after either (a) the start of annuity payments, or (b) your Required Beginning
Date, your beneficiary must receive payment of the remaining values in the
contract at least as rapidly as under the distribution method before your death.
In some circumstances, your surviving spouse may elect to become the owner of
the traditional IRA and halt distributions until he or she reaches age 70 1/2.
If you die before your Required Beginning Date and before annuity payments
begin, federal income tax rules require complete distribution of your entire
value in the contract within five years after your death. Payments to a
designated beneficiary over the beneficiary's life or over a period certain that
does not extend beyond the beneficiary's life expectancy are also permitted, if
these payments start within one year of your death. A surviving spouse
beneficiary can also (a) delay starting any payments until you would have
reached age 70 1/2 or (b) roll over your traditional IRA into his or her own
traditional IRA.
SUCCESSOR ANNUITANT AND OWNER
If your spouse is the sole primary beneficiary and elects to become the
successor annuitant and owner, no death benefit is payable until your surviving
spouse's death.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
IRA death benefits are taxed the same as IRA distributions.
BORROWING AND LOANS ARE PROHIBITED TRANSACTIONS
You cannot get loans from a traditional IRA. You cannot use a traditional IRA as
collateral for a loan or other obligation. If you borrow against your IRA or use
it as collateral, its tax-favored status will be lost as of the first day of the
tax year in which this prohibited event occurs. If this happens, you must
include the value of the traditional IRA in your federal gross income. Also, the
early distribution penalty tax of 10% will apply if you have not reached age
59 1/2 before the first day of that tax year.
EARLY DISTRIBUTION PENALTY TAX
A penalty tax of 10% of the taxable portion of a distribution applies to
distributions from a traditional IRA made before you reach age 59 1/2. The
extra penalty tax does not apply to pre-age 59 1/2 distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o to pay for certain extraordinary medical expenses (special federal income
tax definition); or
o to pay medical insurance premiums for unemployed individuals (special
federal income tax definition); or
o to pay certain first-time home buyer expenses (special federal income tax
definition); or
o to pay certain higher education expenses (special federal income tax
definition); or
o in the form of substantially equal periodic payments made at least annually
over your life (or your life expectancy), or over the joint lives of you
and your beneficiary (or your joint life expectancy) using an IRS-approved
distribution method.
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ROTH INDIVIDUAL RETIREMENT ANNUITIES (ROTH IRAS)
This section of the prospectus covers some of the special tax rules that apply
to Roth IRAs. If the rules are the same as those that apply to the Traditional
IRA, we will refer you to the same topic under "Traditional IRAs."
The EQUI-VEST Express Roth IRA contracts are designed to qualify as Roth
individual retirement annuities under Sections 408A and 408(b) of the Internal
Revenue Code.
CONTRIBUTIONS TO ROTH IRAS
Individuals may make four different types of contributions to a Roth IRA:
o regular after-tax contributions out of earnings; or
o taxable rollover contributions from Traditional IRAs ("conversion"
contributions); or
o tax-free rollover contributions from other Roth IRAs; or
o tax-free direct custodian-to-custodian transfers from other Roth IRAs
("direct transfers").
If you use the forms we require, we will also accept traditional IRA funds which
are subsequently recharacterized as Roth IRA funds following special federal
income tax rules.
REGULAR CONTRIBUTIONS TO ROTH IRAS
LIMITS ON REGULAR CONTRIBUTIONS. Generally, $2,000 is the maximum amount that
you may contribute to all IRAs (including Roth IRAs) in any taxable year. This
$2,000 limit does not apply to rollover contributions or direct
custodian-to-custodian transfers into a Roth IRA. Any contributions to Roth IRAs
reduce your ability to contribute to traditional IRAs and vice versa. When your
earnings are below $2,000, your earned income or compensation for the year is
the most you can contribute. If you are married and file a joint income tax
return, you and your spouse may combine your compensation to determine the
amount of regular IRA and after-tax contributions you are permitted to make to
Roth IRAs and traditional IRAs. See the discussion above under traditional IRAs.
With a Roth IRA, you can make regular contributions when you reach 70 1/2, as
long as you have sufficient earnings. But, you cannot make contributions for any
year that:
o your federal income tax filing status is "married filing jointly" and your
adjusted gross income is over $160,000; or,
o your federal income tax filing status is "single" and your adjusted gross
income is over $110,000.
However, you can make regular Roth IRA contributions in reduced amounts when:
o your federal income tax filing status is "married filing jointly" and your
adjusted gross income is between $150,000 and $160,000; or
o your federal income tax filing status is "single" and your adjusted gross
income is between $95,000 and $110,000.
If you are married and filing separately and your adjusted gross income is
between $0 and $10,000 the amount of regular contribution you are permitted to
make is phased out. If your adjusted gross income is more than $10,000 you
cannot make a regular Roth IRA contribution.
WHEN YOU CAN MAKE CONTRIBUTIONS? Same as traditional IRAs.
DEDUCTIBILITY OF CONTRIBUTIONS. Roth IRA contributions are not tax deductible.
ROLLOVERS AND DIRECT TRANSFERS
WHAT IS THE DIFFERENCE BETWEEN ROLLOVER AND DIRECT TRANSFER TRANSACTIONS? You
may make rollover contributions to a Roth IRA from only two sources:
o another Roth IRA ("tax-free rollover contribution"); or
o another traditional IRA, including a SEP-IRA or SIMPLE-IRA, in a taxable
"conversion" rollover ("conversion contribution").
You may not make contributions to a Roth IRA from a qualified plan under Section
401(a) of the Internal Revenue Code, or a TSA under Section 403(b) of the
Internal Revenue
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46 TAX INFORMATION
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Code. You may make direct transfer contributions to a Roth IRA only from another
Roth IRA.
The difference between a rollover transaction and a direct transfer transaction
is the following. In a rollover transaction you actually take possession of the
funds rolled over, or are considered to have received them under tax law in the
case of a change from one type of plan to another. In a direct transfer
transaction, you never take possession of the funds, but direct the first Roth
IRA custodian, trustee, or issuer to transfer the first Roth IRA funds directly
to Equitable Life, as the Roth IRA issuer. You can make direct transfer
transactions only between identical plan types (for example, Roth IRA to Roth
IRA). You can also make rollover transactions between identical plan types.
However, you can only use rollover transactions between different plan types
(for example, Traditional IRA to Roth IRA).
You may make both Roth IRA to Roth IRA rollover transactions and Roth IRA to
Roth IRA direct transfer transactions. This can be accomplished on a completely
tax-free basis. However, you may make Roth IRA to Roth IRA rollover transactions
only once in any 12-month period for the same funds. Trustee-to-trustee or
custodian-to-custodian direct transfers can be made more frequently than once a
year. Also, if you send us the rollover contribution to apply it to a Roth IRA,
you must do so within 60 days after you receive the proceeds from the original
IRA to get rollover treatment.
The surviving spouse beneficiary of a deceased individual can roll over or
directly transfer an inherited Roth IRA to one or more other Roth IRAs. In some
cases, Roth IRAs can be transferred on a tax-free basis between spouses or
former spouses as a result of a court ordered divorce or separation decree.
CONVERSION CONTRIBUTIONS TO ROTH IRAS
In a conversion rollover transaction, you withdraw (or are considered to have
withdrawn) all or a portion of funds from a traditional IRA you maintain and
convert it to a Roth IRA within 60 days after you receive (or are considered to
have received) the traditional IRA proceeds. Unlike a rollover from a
traditional IRA to another Traditional IRA, the conversion rollover transaction
is not tax-free. Instead, the distribution from the traditional IRA is generally
fully taxable. For this reason, we are required to withhold 10% federal income
tax from the amount converted unless you elect out of such withholding. (If you
have ever made nondeductible regular IRA contributions to any traditional IRA -
whether or not it is the traditional IRA you are converting - a pro rata portion
of the distribution is tax-free.)
There is, however, no early distribution penalty tax on the traditional IRA
withdrawal that you are converting to a Roth IRA, even if you are under age
59 1/2.
You cannot make conversion contributions to a Roth IRA for any taxable year in
which your adjusted gross income exceeds $100,000. (For this purpose, your
adjusted gross income is calculated without the gross income stemming from the
traditional IRA conversion.) You also cannot make conversion contributions to a
Roth IRA for any taxable year in which your federal income tax filing status is
"married filing separately."
Finally, you cannot make conversion contributions to a Roth IRA to the extent
that the funds in your traditional IRA are subject to the annual required
minimum distribution rule applicable to traditional IRAs beginning at age
70 1/2.
WITHDRAWALS, PAYMENTS AND TRANSFERS OF FUNDS OUT OF ROTH IRAS
NO FEDERAL INCOME TAX LAW RESTRICTIONS ON WITHDRAWALS. You can withdraw any or
all of your funds from a Roth IRA at any time; you do not need to wait for a
special event like retirement.
DISTRIBUTIONS FROM ROTH IRAS
Distributions include withdrawals from your contract, surrender and termination
of your contract and annuity payments from your contract. Death benefits are
also distributions.
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The following distributions from Roth IRAs are free of income tax:
o Rollovers from a Roth IRA to another Roth IRA;
o Direct transfers from a Roth IRA to another Roth IRA;
o "Qualified Distributions" from Roth IRAs; and
o Return of excess contributions or amounts recharacterized to a traditional
IRA.
QUALIFIED DISTRIBUTIONS FROM ROTH IRAS
Qualified distributions from Roth IRAs made because of one of the following four
qualifying events or reasons are not includable in income:
o you reach age 59 1/2; or
o you die; or
o you become disabled (special federal income tax definition); or
o your distribution is a "qualified first-time homebuyer distribution"
(special federal income tax definition; $10,000 lifetime total limit for
these distributions from all of your traditional and Roth IRAs).
You also have to meet a five-year aging period. A qualified distribution is any
distribution made after the five-taxable year period beginning with the first
taxable year for which you made any contribution to any Roth IRA (whether or not
the one from which the distribution is being made). It is not possible to have a
tax-free qualified distribution before the year 2003 because of the five-year
aging requirement.
NONQUALIFIED DISTRIBUTIONS FROM ROTH IRAS
Nonqualified distributions from Roth IRAs are distributions that do not meet the
qualifying event and five-year aging period tests described above. Such
distributions are potentially taxable as ordinary income. Nonqualified
distributions receive return-of-investment-first treatment. Only the difference
between the amount of the distribution and the amount of contributions to all of
your Roth IRAs is taxable. You have to reduce the amount of contributions to all
of your Roth IRAs to reflect any previous tax-free recoveries.
You must keep your own records of regular and conversion contributions to all
Roth IRAs to assure appropriate taxation. You may have to file information on
your contributions to and distributions from any Roth IRA on your tax return.
You may have to retain all income tax returns and records pertaining to such
contributions and distributions until your interests in all Roth IRAs are
distributed.
Like traditional IRAs, taxable distributions from a Roth 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 AT DEATH
Same as traditional IRA under "What are the required minimum distribution
payments after you die?" Lifetime required minimum distributions do not apply.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
Distributions to a beneficiary generally receive the same tax treatment as if
the distribution had been made to you.
BORROWING AND LOANS ARE PROHIBITED TRANSACTIONS
Same as traditional IRA.
EXCESS CONTRIBUTIONS
Same as traditional IRA, except that regular contributions made after age
70 1/2 are not "excess contributions."
Excess rollover contributions to Roth IRAs are contributions not eligible to be
rolled over (for example, conversion contributions from a traditional IRA if
your adjusted gross income is in excess of $100,000 in the conversion year).
You can withdraw or recharacterize any contribution to a Roth IRA before the due
date (including extensions) for filing your federal income tax return for the
tax year. If you do this,
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you must also withdraw or recharacterize any earnings attributable to the
contribution.
EARLY DISTRIBUTION PENALTY TAX
Same as traditional IRA.
For Roth IRAs, special penalty rules may apply to amounts withdrawn attributable
to 1998 conversion rollovers.
FEDERAL AND STATE INCOME TAX WITHHOLDING AND INFORMATION REPORTING
We must withhold federal income tax from distributions from annuity contracts.
You may be able to elect out of this income tax withholding in some cases.
Generally, we do not have to withhold if your distributions are not taxable. The
rate of withholding will depend on the type of distribution and, in certain
cases, the amount of your distribution. Any income tax withheld is a credit
against your income tax liability. If you do not have sufficient income tax
withheld or do not make sufficient estimated income tax payments, you may incur
penalties under the estimated income tax rules.
You must file your request not to withhold in writing before the payment or
distribution is made. Our Processing Office will provide forms for this purpose.
You cannot elect out of withholding unless you provide us with your correct
taxpayer Identification Number and a United States residence address. You cannot
elect out of withholding if we are sending the payment out of the United States.
You should note the following special situations:
o We might have to withhold on amounts we pay under a free look or
cancellation.
o We are generally required to withhold on conversion rollovers of
traditional IRAs to Roth IRAs, as it is considered a withdrawal from the
traditional IRA and is taxable.
o We are required to withhold on the gross amount of a distribution from a
Roth IRA unless you elect out of withholding. This may result in tax being
withheld even though the Roth IRA distribution is not taxable in whole or
in part.
Special withholding rules apply to foreign recipients and United States citizens
residing outside the United States. We do not discuss these rules here. Certain
states have indicated that state income tax withholding will also apply to
payments from the contracts made to residents. In some states, you may elect out
of state withholding, even if federal withholding applies. 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.
FEDERAL INCOME TAX WITHHOLDING ON PERIODIC ANNUITY PAYMENTS
We withhold differently on "periodic" and "non-periodic" payments. For a
periodic annuity payment, for example, unless you specify a different number of
withholding exemptions, we withhold assuming that you are married and claiming
three withholding exemptions. If you do not give us your correct Taxpayer
Identification Number, we withhold as if you are single with no exemptions.
Based on the assumption that you are married and claiming three withholding
exemptions, if you receive less than $14,700 in periodic annuity payments in
1999 your payments will generally be exempt from federal income tax withholding.
You could specify a different choice of withholding exemption or request that
tax be withheld. Your withholding election remains effective unless and until
you revoke it. You may revoke or change your withholding election at any time.
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FEDERAL INCOME TAX WITHHOLDING ON NON-PERIODIC ANNUITY PAYMENTS (WITHDRAWALS)
For a non-periodic distribution (total surrender, termination, or partial
withdrawal), we generally withhold at a flat 10% rate. We apply that rate to the
taxable amount in the case of nonqualified contracts, and to the payment amount
in the case of IRAs and Roth IRAs.
IMPACT OF TAXES TO EQUITABLE LIFE
The contracts provide that we may charge Separate Account A for taxes. We do not
now, but may in the future set up reserves for such taxes.
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8
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ABOUT OUR SEPARATE ACCOUNT A
Each variable investment option is a subaccount of our Separate Account A. We
established Separate Account A in 1968 under special provisions of the New York
Insurance Law. These provisions prevent creditors from any other business we
conduct from reaching the assets we hold in our variable investment options for
owners of our variable annuity contracts. We are the legal owner of all of the
assets in Separate Account A and may withdraw any amounts that exceed our
reserves and other liabilities with respect to variable investment options under
our contracts. The results of Separate Account A's operations are accounted for
without regard to Equitable Life's other operations.
Separate Account A is registered under the Investment Company Act of 1940 and is
classified by that act as a "unit investment trust." The SEC, however, does not
manage or supervise Equitable Life or Separate Account A.
Each subaccount (variable investment option) within Separate Account A invests
solely in Class IB shares issued by the corresponding Portfolios of The Hudson
River Trust and EQ Advisors Trust.
We reserve the right subject to compliance with laws that apply:
(1) to add variable investment options to, or to remove variable investment
options from, Separate Account A, or to add other separate accounts;
(2) to combine any two or more variable investment options;
(3) to transfer the assets we determine to be the shares of the class of
contracts to which the contracts belong from any variable investment option
to another variable investment option;
(4) to operate Separate Account A or any variable investment option as a
management investment company under the Investment Company Act of 1940 (in
which case, charges and expenses that otherwise would be assessed against
an underlying mutual fund would be assessed against Separate Account A or a
variable investment option directly);
(5) to deregister Separate Account A under the Investment Company Act of 1940;
(6) to restrict or eliminate any voting rights as to Separate Account A; and
(7) to cause one or more variable investment options to invest some or all of
their assets in one or more other trusts or investment companies.
ABOUT THE HUDSON RIVER TRUST AND EQ ADVISORS TRUST
The Hudson River Trust and EQ Advisors Trust are registered under the Investment
Company Act of 1940. They are classified as "open-end management investment
companies," more commonly called mutual funds. Each trust issues different
shares relating to each Portfolio.
The Hudson River Trust and EQ Advisors Trust do not impose sales charges or
"loads" for buying and selling their shares. All dividends and other
distributions on a trust's shares are reinvested in full. The Boards of Trustee
of The Hudson River Trust and EQ Advisors Trust each may establish additional
Portfolios or eliminate existing Portfolios at any time. More detailed
information about The Hudson River Trust and EQ Advisors Trust, their investment
objectives, policies, restrictions, risks, expenses, their Rule 12b-1 Plans, and
other aspects of their operations, appears in their prospectuses attached at the
end of this prospectus, or in their SAIs which are available upon request.
PROPOSED SUBSTITUTION OF PORTFOLIOS. We are asking the SEC to approve the
substitution of newly created Portfolios of the EQ Advisors Trust for each of
The Hudson River Trust Portfolios currently available under the variable
investment options (the "Substitution"). The EQ Advisors Trust Portfolios will
have substantially identical investment objectives, strategies, and policies as
those of The Hudson River Trust Portfolios they would replace. The assets of any
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Portfolio of The Hudson River Trust underlying your contract would be
transferred to the substituted EQ Advisors Trust Portfolio.
We believe that this Substitution will be in your best interest because you
would have a single set of variable investment options with similar advisory
structures. You also will have a single EQ Advisors Trust prospectus for all the
Portfolios, rather than the two separate prospectuses you now receive. EQ
Financial Consultants Inc. will be the manager of the new EQ Advisors Trust
Portfolios, and Alliance Capital Management L.P. will continue to provide the
day-to-day advisory services to each of the new Portfolios.
You should note that:
o No action is required on your part. You will not need to vote a proxy, file
a new election, or take any other action if the SEC approves the
Substitution.
o The elections you have on file for allocating your account value and
contributions will remain unchanged until you direct us otherwise.
o We will bear all expenses directly relating to the Substitution
transaction.
o The management fees for the new Portfolios will be the same as those for
the corresponding Portfolios of The Hudson River Trust. Certain of the new
EQ Advisors Trust Portfolios may have slightly higher expense ratios.
o On the effective date of the Substitution transaction, your account value
(i.e., the units you own) in the variable investment options will be the
same as before the transaction.
o The Substitution will have no tax consequences for you.
Please review the EQ Advisors Trust prospectus that accompanies this prospectus.
It contains more information about EQ Advisors Trust, including its management
structure, advisory arrangements, and general fees and expenses that will be of
interest to you.
Subject to SEC approval, we expect the Substitution to be completed in the fall
of 1999. It will affect everyone who has a balance in The Hudson River Trust
Portfolios at that time. Of course, you may transfer your account value among
the investment options, as usual.
We will notify you when we receive SEC approval and the Substitution is
complete.
ABOUT OUR FIXED MATURITY OPTIONS
RATES TO MATURITY AND PRICE PER $100 OF MATURITY VALUE
We can determine the amount required to be allocated to one or more fixed
maturity options in order to produce specified maturity values. For example, we
can tell you how much you need to allocate per $100 of maturity value.
The rates to maturity for new allocations as of July 15, 1999 and the related
price per $100 of maturity value were as follows:
<TABLE>
<CAPTION>
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Fixed Maturity
Options
With June 15th
Maturity Date Rate to Maturity as Price
of of Per $100 of
Maturity Year July 15, 1999 Maturity Value
- ---------------------------------------------------------------
<S> <C> <C>
2000 4.10% $ 96.38
2001 4.90% $ 91.23
2002 5.25% $ 86.13
2003 5.55% $ 80.93
2004 5.60% $ 76.49
2005 5.70% $ 72.03
2006 5.75% $ 67.93
2007 5.80% $ 63.99
2008 5.90% $ 59.98
2009 5.95% $ 56.37
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</TABLE>
HOW WE DETERMINE THE MARKET VALUE ADJUSTMENT
We use the following procedure to calculate the market value
adjustment (up or down) we make if you withdraw all of your
value from a fixed maturity option before its maturity date.
(1) We determine the market adjusted amount on the date of the
withdrawal as follows:
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(a) We determine the fixed maturity amount that would be
payable on the maturity date, using the rate to
maturity for the fixed maturity option.
(b) We determine the period remaining in your fixed
maturity option (based on the withdrawal 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 rate to maturity that
applies on the withdrawal date to new allocations to
the same fixed maturity option.
(d) We determine the present value of the fixed maturity
amount payable at the maturity date, using the period
determined in (b) and the rate determined in (c).
(2) We determine the fixed maturity 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 fixed
maturity option, which may be positive or negative.
- --------------------------------------------------------------------------------
Your market adjusted amount is the present value of the
maturity value discounted at the rate to maturity in effect for
new contributions to that same fixed maturity option on the
date of the calculation.
- --------------------------------------------------------------------------------
If you withdraw only a portion of the amount in a fixed maturity option, the
market value adjustment will be a percentage of the market value adjustment that
would have applied if you had withdrawn the entire value in that fixed maturity
option. This percentage is equal to the percentage of the value in the fixed
maturity option that you are withdrawing. Any withdrawal charges that are
deducted from a fixed maturity option will result in a market value adjustment
calculated in the same way. See the Appendix for an example.
For purposes of calculating the rate to maturity for new allocations to a fixed
maturity option (see (1)(c) above), we use the rate we have in effect for new
allocations to that fixed maturity option. We use this rate even if new
allocations to that option would not be accepted at that time. This rate will
not be less than 3%. If we do not have a rate to maturity in effect for a fixed
maturity option to which the "current rate to maturity" in (1)(c) above would
apply, we will use the rate at the next closest maturity date. If we are no
longer offering new fixed maturity options, the "current rate to maturity" will
be determined in accordance with our procedures then in effect. We reserve the
right to add up to 0.50% to the current rate in (1)(c) above for purposes of
calculating the market value adjustment only.
INVESTMENTS UNDER THE FIXED MATURITY OPTIONS
Amounts allocated to the fixed maturity options are held in a "nonunitized"
separate account we have established under the New York Insurance Law. This
separate account provides an additional measure of assurance that we will make
full payment of amounts due under the fixed maturity options. Under New York
Insurance Law, the portion of the separate account's assets equal to the
reserves and other contract liabilities relating to the contracts are not
chargeable with liabilities from any other business we may conduct. We own the
assets of the separate account, as well as any favorable investment performance
on those assets. You do not participate in the performance of the assets held in
this separate account. We may, subject to state law that applies, transfer all
assets allocated to the separate account to our general account. We guarantee
all benefits relating to your value in the fixed maturity options, regardless of
whether assets supporting fixed maturity options are held in a separate account
or our general account.
We have no specific formula for establishing the rates to maturity for the fixed
maturity options. We expect the rates to be influenced by, but not necessarily
correspond to, among other things, the yields that we can expect to realize on
the separate account's investments from time to time. Our current plans are to
invest in fixed-income obligations, including corporate bonds, mortgage-backed
and asset-backed securities and government and agency issues having durations in
the aggregate consistent with those of the fixed maturity options.
<PAGE>
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MORE INFORMATION 53
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- --------------------------------------------------------------------------------
Although the above generally describes our plans for investing the assets
supporting our obligations under the fixed maturity options under the contracts,
we are not obligated to invest those assets according to any particular plan
except as we may be required to by state insurance laws. We will not determine
the rates to maturity we establish by the performance of the nonunitized
separate account.
ABOUT THE GENERAL ACCOUNT
Our general account supports all of our policy and contract guarantees,
including those that apply to the fixed maturity options, 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 exemptions
and exclusionary provisions that apply, interests in the general account have
not been registered under the Securities Act of 1933, nor is the general account
an investment company under the Investment Company Act of 1940. However, the
market value adjustment interests under the contracts are registered under the
Securities Act of 1933.
We have been advised that the staff of the SEC has not reviewed the portions of
this prospectus that relate to the general account (other than market value
adjustment interests). The disclosure with regard to general accounts, however,
may be subject to certain provisions of the federal securities laws relating to
the accuracy and completeness of statements made in prospectuses.
ABOUT OTHER METHODS OF PAYMENT
AUTOMATIC INVESTMENT PROGRAM - FOR NQ,
TRADITIONAL IRA, AND ROTH IRA CONTRACTS
You may use our automatic investment program, or "AIP," to have a specified
amount automatically deducted from a bank checking account, bank money market
account, or credit union checking account and contributed as an additional
contribution into an NQ, Traditional IRA, or Roth IRA contract on a monthly
basis.
AIP additional contributions may be allocated to any of the variable investment
options but not the fixed maturity options. Our minimum contribution amount
requirement is $20. You choose the day of the month you wish to have your
account debited. However, you may not choose a date later than the 28th day of
the month.
You may cancel AIP at any time by notifying our Processing Office. We are not
responsible for any debits made to your account before the time written notice
of cancellation is received at our Processing Office.
PAYROLL DEDUCTION PROGRAM. You can authorize your employer to remit your IRA
contributions to us if your employer has a payroll deduction program. Those
contributions are still your contributions, not your employer's.
WIRE TRANSFERS. You may also send your contributions by wire transfer from your
bank.
DATES AND PRICES AT WHICH CONTRACT EVENTS OCCUR
We describe below the general rules for when, and at what prices, events under
your contract will occur. Other portions of this prospectus describe
circumstances that may cause exceptions. We generally do not repeat those
exceptions below.
BUSINESS DAY
Our business day is any day on which Equitable Life is open and the New York
Stock Exchange is open for trading. We are closed on national business holidays
including Martin Luther King, Jr. Day and the Friday after Thanksgiving.
Additionally, we may choose to close on the day immediately preceding or
following a national business holiday or due to emergency conditions. Our
business day ends at 4:00 p.m., Eastern time for purposes of determining the
date when contributions are applied and any other transaction requests are
processed. Contributions will be applied and any other transaction requests will
be processed when they are
<PAGE>
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54 MORE INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
received along with all the required information unless another date applies as
indicated below.
o If your contribution, transfer, or any other transaction request,
containing all the required information, reaches us on a non-business day
or after 4:00 p.m., Eastern time on a business day, we will use the next
business day.
o When a charge is to be deducted on a contract date anniversary that is a
non-business day, we will deduct the charge on the next business day.
o Quarterly rebalancing will be processed on a calendar year basis and
semiannual or annual rebalancing will be processed on the first business
day of the month. Rebalancing will not be done retroactively.
CONTRIBUTIONS AND TRANSFERS
o Contributions allocated to the variable investment options are invested at
the unit value next determined after the close of the business day.
o Contributions allocated to a fixed maturity option will receive the rate to
maturity in effect for that fixed maturity option on that business day.
o If a fixed maturity option is scheduled to mature on June 15th and June
15th is a non-business day, that fixed maturity option will mature on the
prior business day.
o Transfers to or from variable investment options will be made at the unit
value next determined after the close of the business day.
o Transfers to a fixed maturity option will receive the rate to maturity in
effect for that fixed maturity option on that business day.
o Transfers out of a fixed maturity option will be at the market adjusted
amount on that business day.
o For general dollar-cost averaging, the first monthly transfer will occur
on the last business day of the month in which we receive your election
form at our Processing Office.
ABOUT YOUR VOTING RIGHTS
As the owner of the shares of The Hudson River Trust and EQ Advisors Trust we
have the right to vote on certain matters involving the Portfolios, such as:
o the election of trustees; or
o the formal approval of independent auditors selected for each trust; or
o any other matters described in the prospectuses for the trusts or requiring
a shareholders' vote under the Investment Company Act of 1940.
We will give contract owners the opportunity to instruct us how to vote the
number of shares attributable to their contracts if a shareholder vote is taken.
If we do not receive instructions in time from all contract 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 a Portfolio in the same proportions that contract
owners vote.
VOTING RIGHTS OF OTHERS
Currently, we control each trust. EQ Advisors Trust shares are sold only to our
separate accounts and an affiliated qualified plan trust. The Hudson River Trust
shares are also held by separate accounts of ours and by separate accounts of
insurance companies 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 contract owners, we
currently do not foresee any disadvantages because of this. The Hudson River
Trust Board of Trustees intends to monitor events in order to identify any
material irreconcilable conflicts that may arise and to determine what action,
if any, should be taken in response. If we believe that a response to any of
those events insufficiently protects our contract owners, we will see to it that
appropriate action is taken.
<PAGE>
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MORE INFORMATION 55
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SEPARATE ACCOUNT A VOTING RIGHTS
If actions relating to Separate Account A require contract owner approval,
contract owners will be entitled to one vote for each unit they have in the
variable investment options. Each contract owner who has elected a variable
annuity payout option may cast the number of votes equal to the dollar amount of
reserves we are holding for that annuity in a variable investment option divided
by the annuity unit value for that option. We will cast votes attributable to
any amounts we have in the variable investment options in the same proportion as
votes cast by contract owners.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under applicable
federal securities laws. To the extent that those laws or the regulations
published 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.
ABOUT OUR YEAR 2000 PROGRESS
Equitable Life relies upon various computer systems in order to administer your
contract and operate the investment options. Some of these systems belong to
service providers who are not affiliated with Equitable Life.
In 1995, Equitable Life began addressing the question of whether its computer
systems would recognize the year 2000 before, on or after January 1, 2000, and
Equitable Life has identified those of its systems critical to business
operations that were not year 2000 compliant. Equitable Life has completed the
work of modifying or replacing non-compliant systems and has confirmed, through
testing, that its systems are year 2000 compliant. Equitable Life has contacted
third-party vendors and service providers to seek confirmation that they are
acting to address the year 2000 issue with the goal of avoiding any material
adverse effect on services provided to contract owners and on operations of the
investment options. All third-party vendors and service providers considered
critical to Equitable Life's business, and substantially all vendors and service
providers considered non-critical, have provided us confirmation of their year
2000 compliance or a satisfactory plan for compliance. With respect to vendors
and service providers considered non-critical, we believe we are on schedule for
substantially all such vendors and service providers to be confirmed by
September 30, 1999 as year 2000 compliant or the subject of a satisfactory plan
for compliance. If such confirmation is not received by September 30, 1999 the
vendor or service provider will be replaced, eliminated or the subject of
contingency plans. Additionally, Equitable Life has supplemented its existing
business continuity and disaster recovery plans to cover certain categories of
contingencies that could arise as a result of year 2000 related failures.
There are many risks associated with year 2000 issues, including the risk that
Equitable Life's computer systems will not operate as intended. Additionally,
there can be no assurance that the systems of third parties will be year 2000
compliant. Any significant unresolved difficulty related to the year 2000
compliance initiatives could result in an interruption in, or a failure of,
normal business operations and, accordingly, could have a material adverse
effect on our ability to administer your contract and operate the investment
options.
To the fullest extent permitted by law, the foregoing year 2000 discussion is a
"Year 2000 Readiness Disclosure" within the meaning of The Year 2000 Information
and Readiness Disclosure Act (P.L. 105-271) (1998).
ABOUT LEGAL PROCEEDINGS
Equitable Life and its affiliates are parties to various legal proceedings. In
our view, none of these proceedings is likely to have a material adverse effect
upon Separate Account A, our ability to meet our obligations under the
contracts, or the distribution of the contracts.
ABOUT OUR INDEPENDENT ACCOUNTANTS
The financial statements of Equitable Life incorporated in this prospectus by
reference to the Annual Report on Form 10-K at December 31, 1998 and 1997, and
for the three
<PAGE>
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56 MORE INFORMATION
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- --------------------------------------------------------------------------------
years ended December 31, 1998, have been so incorporated in reliance on the
report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
TRANSFERS OF OWNERSHIP, COLLATERAL ASSIGNMENTS, LOANS, AND BORROWING
You can transfer ownership of an NQ contract at any time before annuity payments
begin. We will continue to treat you as the owner until we receive written
notification of any change at our Processing Office. You cannot assign your NQ
contract as collateral or security for a loan. Loans are also not available
under your NQ contract. In some cases, an assignment or change of ownership may
have adverse tax consequences. See "Tax information" earlier in this prospectus.
You cannot assign or transfer ownership of a Traditional IRA, QP IRA, or Roth
IRA contract except by surrender to us. Loans are not available and you cannot
assign Traditional IRA, QP IRA and Roth IRA contracts as security for a loan or
other obligation.
For limited transfers of ownership after the owner's death see "Payment of death
benefit" and "Beneficiary continuation option under Traditional IRA and QP IRA
contracts." You may direct the transfer of the values under your Traditional
IRA, QP IRA and Roth IRA contract to another similar arrangement.
DISTRIBUTION OF THE CONTRACTS
Equitable Financial Consultants, Inc. ("EQF"), an indirect, wholly owned
subsidiary of Equitable Life, is the distributor of the contracts and has
responsibility for sales and marketing functions for Separate Account A. EQF
serves as the principal underwriter of Separate Account A. EQF is registered
with the SEC as a broker-dealer and is a member of the National Association of
Securities Dealers, Inc. EQF's principal business address is 1290 Avenue of the
Americas, New York, NY 10104. Under a Distribution and Servicing Agreement
between EQF, Equitable life, and certain of Equitable Life's separate accounts,
including Separate Account A, Equitable Life paid EQF fees of $325,380 for 1998
and $325,380 for 1997, as distributor of certain contracts and as the principal
underwriter of certain separate accounts, including Separate Account A. By year
end 1999, EQF plans to become AXA Advisors, LLC, and will become a subsidiary of
AXA Financial, Inc.
The contracts will be sold by registered representatives of EQF and its
affiliates, who are also our licensed insurance agents. EQF may also receive
compensation and reimbursement for its marketing services under the terms of its
distribution agreements with Equitable Life. The offering of the contracts is
intended to be continuous.
<PAGE>
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INVESTMENT PERFORMANCE 57
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9
Investment performance
- --------------------------------------------------------------------------------
We provide the following tables to show five different measurements of the
investment performance of the variable investment options and/or the Portfolios
in which they invest. We include these tables because they may be of general
interest to you. THE RESULTS SHOWN REFLECT PAST PERFORMANCE. THEY DO NOT
INDICATE HOW THE VARIABLE INVESTMENT OPTIONS MAY PERFORM IN THE FUTURE. THEY
ALSO DO NOT REPRESENT THE RESULTS EARNED BY ANY PARTICULAR INVESTOR. YOUR
RESULTS WILL DIFFER.
Table 1 shows the average annual total return of the variable investment
options. Average annual total return is the annual rate of growth that would be
necessary to achieve the ending value of a contribution invested in the variable
investment options for the periods shown.
Table 2 shows the growth of a hypothetical $1,000 investment in the variable
investment options over the periods shown. Both Tables 1 and 2 take into account
all fees and charges under the contract, but do not reflect the charges for any
applicable taxes such as premium taxes, or any applicable annuity administrative
fee.
Tables 3, 4 and 5 show the rates of return of the variable investment options on
an annualized, cumulative, and year-by-year basis. These tables take into
account all fees and charges under the contract, but do not reflect the annual
administrative charge and any withdrawal charge, or charges for any applicable
taxes such as premium taxes, or any applicable annuity administrative fee. If
the charges were reflected they would effectively reduce the rates of return
shown.
In all cases the results shown are based on the actual historical investment
experience of the Portfolios in which the variable investment options invest. In
some cases, the results shown relate to periods when the variable investment
options and/or the contracts were not available. In those cases, we adjusted the
results of the Portfolios to reflect the charges under the contracts that would
have applied had the investment options and/or contracts been available. The
contracts are being offered for the first time as of the date of this
prospectus.
In addition, we have adjusted the results prior to October 1996, when The Hudson
River Trust Class IB shares were not available, to reflect the 12b-1 fees
currently imposed. Finally, the results shown for the Alliance Money Market,
Alliance Balanced, Alliance Common Stock and Alliance Aggressive Stock options
for periods before those options were operated as part of a unit investment
trust reflect the results of the separate accounts that preceded them. The
"Since Portfolio inception" figures for these options are based on the date of
inception of the preceding separate accounts. We have adjusted these results to
reflect the fee and expense structure in effect for Separate Account A as a unit
investment trust. See "The Reorganization" in the SAI for additional
information.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends.
BENCHMARKS
Tables 3 and 4 compare the performance of variable investment options to market
indices that serve as 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. Also, they do not reflect other
charges such as the mortality and expense risks and other expense charges,
annual administrative charge, or any withdrawal charge, under the contracts.
Comparisons with these benchmarks, therefore, may be 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. The benchmarks
include:
<PAGE>
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58 INVESTMENT PERFORMANCE
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ALLIANCE AGGRESSIVE STOCK: 50% Russell 2000 Index and 50%
Standard & Poor's Mid-Cap Total Return Index.
ALLIANCE BALANCED: 50% Standard & Poor's 500 and 50% Lehman
Government/Corporate Bond Index.
ALLIANCE COMMON STOCK: Standard & Poor's 500 Index.
ALLIANCE CONSERVATIVE INVESTORS: 70% Lehman Treasury Bond
Composite Index and 30% Standard & Poor's 500 Index.
ALLIANCE EQUITY INDEX: Standard & Poor's 500 Index.
ALLIANCE GLOBAL: Morgan Stanley Capital International World Index.
ALLIANCE GROWTH & INCOME: 75% Standard & Poor's 500 Index
and 25% Value Line Convertibles Index.
ALLIANCE GROWTH INVESTORS: 30% Lehman Government/Corporate
Bond Index and 70% Standard & Poor's 500 Index.
ALLIANCE HIGH YIELD: Merrill Lynch High Yield Master Index.
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES: Lehman
Intermediate Government Bond Index.
ALLIANCE INTERNATIONAL: Morgan Stanley Capital International
Europe, Australia, Far East Index.
ALLIANCE MONEY MARKET: Salomon Brothers Three-Month T-Bill
Index.
ALLIANCE QUALITY BOND: Lehman Aggregate Bond Index.
ALLIANCE SMALL CAP GROWTH: Russell 2000 Growth Index.
EQ/ALLIANCE PREMIER GROWTH: Standard & Poor's 500 Index.
CAPITAL GUARDIAN RESEARCH: Standard & Poor's 500 Index.
CAPITAL GUARDIAN U.S. EQUITY: Standard & Poor's 500 Index.
EQ/EVERGREEN: Russell 2000 Index.
EQ/EVERGREEN FOUNDATION: 60% Standard & Poor's 500
Index/40% Lehman Brothers Aggregate Bond Index.
MFS EMERGING GROWTH COMPANIES: Russell 2000 Index.
MFS GROWTH WITH INCOME: Standard & Poor's 500 Index.
MFS Research: Standard & Poor's 500 Index.
MERRILL LYNCH BASIC VALUE EQUITY: Standard & Poor's 500 Index.
MERRILL LYNCH STRATEGY: 36% Standard & Poor's 500 Index/24%
Morgan Stanley Capital International Europe, Australia, Far East
Index/21% Salomon Brothers U.S. Treasury Bond 1 Year+ 14%
Salomon Brothers World Government Bond (excluding U.S.)/and
5% Three-Month U.S. Treasury Bill.
MORGAN STANLEY EMERGING MARKETS EQUITY: Morgan Stanley
Capital International Emerging Markets Free Price Return Index.
EQ/PUTNAM BALANCED: 60% Standard & Poor's 500 Index and 40%
Lehman Government/Corporate Bond Index.
EQ/PUTNAM GROWTH & INCOME VALUE: Standard & Poor's 500
Index.
T. ROWE PRICE EQUITY INCOME: Standard & Poor's 500 Index.
T. ROWE PRICE INTERNATIONAL STOCK: Morgan Stanley Capital
International Europe, Australia, Far East Index.
WARBURG PINCUS SMALL COMPANY VALUE: Russell 2000 Index.
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LIPPER SURVEY. The Lipper Variable Insurance Products Performance
Analysis Survey (Lipper Survey) records the performance of a large
group of variable annuity products, including managed separate
accounts of insurance companies. According to Lipper Analytical
Services, Inc., (Lipper), 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 EQUI-VEST Express
performance relative to other variable annuity products.
<PAGE>
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INVESTMENT PERFORMANCE 59
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TABLE 1
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 1998
<TABLE>
<CAPTION>
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Length of investment period
--------------------------------------------------------------------------
Since Since
1 3 5 10 option Portfolio
Variable Investment Options year years years years Inception* inception**
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Alliance Aggressive Stock (9.92)% 5.60% 7.45% 16.14% - -
- --------------------------------------------------------------------------------------------------------------
Alliance Balanced 7.39% 9.86% 6.61% 9.34% - -
- --------------------------------------------------------------------------------------------------------------
Alliance Common Stock 18.32% 22.69% 18.03% 15.44% - -
- --------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors 3.28% 5.59% 5.16% - 5.26% 6.42%
- --------------------------------------------------------------------------------------------------------------
Alliance Equity Index 17.04% 22.71% - - 22.12% 20.47%
- --------------------------------------------------------------------------------------------------------------
Alliance Global 10.97% 10.87% 10.21% 11.57% 10.12% -
- --------------------------------------------------------------------------------------------------------------
Alliance Growth & Income 10.04% 17.57% 13.86% - 13.97% 12.89%
- --------------------------------------------------------------------------------------------------------------
Alliance Growth Investors 7.50% 10.82% 9.67% - 9.86% 12.86%
- --------------------------------------------------------------------------------------------------------------
Alliance High Yield (15.15)% 6.27% 5.97% 7.79% 5.93% -
- --------------------------------------------------------------------------------------------------------------
Alliance Intermediate Government
Securities (2.66)% 1.04% 0.99% - 2.26% 3.35%
- --------------------------------------------------------------------------------------------------------------
Alliance International 0.08% 0.34% - - 1.44% 2.57%
- --------------------------------------------------------------------------------------------------------------
Alliance Money Market (5.00)% 0.12% 0.79% 1.81% - -
- --------------------------------------------------------------------------------------------------------------
Alliance Quality Bond (1.75)% 2.54% 2.45% - 2.51% 2.04%
- --------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth (14.34)% - - - (1.34)% 5.25%
- --------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies 23.58% - - - 22.80% 27.93%
- --------------------------------------------------------------------------------------------------------------
MFS Research 13.47% - - - 13.93% 17.57%
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Merrill Lynch Basic Value Equity 1.31% - - - 6.22% 10.56%
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Merrill Lynch World Strategy (3.31)% - - - (2.91)% 0.27%
- --------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets
Equity (36.16)% - - - (39.83)% (39.83)%
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E/Q Putnam Balanced 1.54% - - - 7.19% 9.18%
- --------------------------------------------------------------------------------------------------------------
E/Q Putnam Growth & Income Value 2.51% - - - 7.97% 10.84%
- --------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income (1.12)% - - - 9.29% 11.95%
- --------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock 3.37% - - - (1.95)% 0.34%
- --------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company
Value (19.64%) - - - (6.57)% (2.40)%
- --------------------------------------------------------------------------------------------------------------
</TABLE>
* Variable investment option inception dates are: Alliance Aggressive Stock
(5/1/84), Alliance Balanced (5/1/84), Alliance Common Stock (8/27/81),
Alliance Conservative Investors (1/4/94), Alliance Equity Index (6/1/94),
Alliance Global (1/4/94), Alliance Growth & Income (1/4/94), Alliance
Growth Investors (1/4/94), Alliance High Yield (1/4/94), Alliance
Intermediate Government Securities (6/1/94), Alliance International
(9/1/95), Alliance Money Market (5/11/82), Alliance Quality Bond (1/4/94),
Alliance Small Cap Growth (6/2/97), MFS Emerging Growth Companies (6/2/97),
MFS Research (6/2/97), Merrill Lynch Basic Value Equity (6/2/97), Merrill
Lynch World Strategy (6/2/97), Morgan Stanley Emerging Markets Equity
(8/20/97), EQ/Putnam Balanced (6/2/97), EQ/Putnam Growth & Income Value
(6/2/97), T. Rowe Price Equity Income (6/2/97), T. Rowe Price International
Stock (6/2/97), Warburg Pincus Small Company Value (6/2/97). The inception
dates for the options that became available on or after December 31, 1998
and are therefore not shown in this table are: EQ/Evergreen, EQ/Evergreen
Foundation, and MFS Growth with Income (December 31, 1998), EQ/Alliance
Premiere Growth, Capital Guardian Research, and Capital Guardian U.S.
Equity (April 30, 1999).
<PAGE>
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60 INVESTMENT PERFORMANCE
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** The Portfolio inception dates are: Alliance Aggressive Stock (5/1/84),
Alliance Balanced (5/1/84), Alliance Common Stock (8/1/68), Alliance
Conservative Investors (10/2/89), Alliance Equity Index (3/1/94), Alliance
Global (8/27/87), Alliance Growth & Income (10/1/93), Alliance Growth
Investors (10/2/89), Alliance High Yield (1/2/87), Alliance Intermediate
Government Securities (4/1/91), Alliance International (4/3/95), Alliance
Money Market (5/11/82), Alliance Quality Bond (10/1/93), Alliance Small Cap
Growth (5/1/97), MFS Emerging Growth Companies (5/1/97), MFS Research
(5/1/97), Merrill Lynch Basic Value Equity (5/1/97), Merrill Lynch World
Strategy (5/1/97), Morgan Stanley Emerging Markets Equity (8/20/97),
EQ/Putnam Balanced (5/1/97), EQ/Putnam Growth & Income Value (5/1/97), T.
Rowe Price Equity Income (5/1/97), T. Rowe Price International Stock
(5/1/97), Warburg Pincus Small Company Value (5/1/97). The inception dates
for the Portfolios that became available on or after December 31, 1998 and
are therefore not shown in the tables are; EQ/Evergreen, EQ/Evergreen
Foundation, and MFS Growth with Income (December 31, 1998), EQ/Alliance
Premiere Growth, Capital Guardian Research, and Capital Guardian U.S.
Equity (April 30, 1999).
<PAGE>
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INVESTMENT PERFORMANCE 61
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TABLE 2
GROWTH OF $1,000 UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 1998
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Length of investment period
- ---------------------------------------------------------------------------------------------------------------------
Since
1 3 5 10 Portfolio
Variable Investment Options year years years years inception*
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alliance Aggressive Stock $ 900.77 $1,177.51 $1,432.42 $4,464.14 -
- ---------------------------------------------------------------------------------------------------------------------
Alliance Balanced $1,073.88 $1,325.78 $1,376.99 $2,442.53 -
- ---------------------------------------------------------------------------------------------------------------------
Alliance Common Stock $1,183.17 $1,846.96 $2,290.48 $4,201.72 -
- ---------------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors $1,032.85 $1,177.13 $1,285.99 - $1,777.49
- ---------------------------------------------------------------------------------------------------------------------
Alliance Equity Index $1,170.40 $1,847.65 - - $2,462.10
- ---------------------------------------------------------------------------------------------------------------------
Alliance Global $1,109.66 $1,362.88 $1,625.93 $2,989.23 -
- ---------------------------------------------------------------------------------------------------------------------
Alliance Growth & Income $1,100.45 $1,625.20 $1,913.69 - $1,890.30
- ---------------------------------------------------------------------------------------------------------------------
Alliance Growth Investors $1,075.00 $1,360.86 $1,586.82 - $3,060.62
- ---------------------------------------------------------------------------------------------------------------------
Alliance High Yield $ 848.52 $1,200.12 $1,336.27 $2,118.07 -
- ---------------------------------------------------------------------------------------------------------------------
Alliance Intermediate Government Securities $ 973.35 $1,031.52 $1,050.35 - $1,291.31
- ---------------------------------------------------------------------------------------------------------------------
Alliance International $1,000.81 $1,010.22 - - $1,099.90
- ---------------------------------------------------------------------------------------------------------------------
Alliance Money Market $ 950.04 $1,003.73 $1,040.24 $1,196.16 -
- ---------------------------------------------------------------------------------------------------------------------
Alliance Quality Bond $ 982.49 $1,078.07 $1,128.85 - $1,111.64
- ---------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth $ 856.56 - - - $1,089.22
- ---------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies $1,235.75 - - - $1,509.32
- ---------------------------------------------------------------------------------------------------------------------
MFS Research $1,134.68 - - - $1,310.64
- ---------------------------------------------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity $1,013.11 - - - $1,182.60
- ---------------------------------------------------------------------------------------------------------------------
Merrill Lynch World Strategy $ 966.92 - - - $1,004.48
- ---------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity $ 638.40 - - - $ 499.27
- ---------------------------------------------------------------------------------------------------------------------
E/Q Putnam Balanced $1,015.36 - - - $1,158.15
- ---------------------------------------------------------------------------------------------------------------------
E/Q Putnam Growth & Income Value $1,025.14 - - - $1,187.74
- ---------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income $ 988.76 - - - $1,207.69
- ---------------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock $1,033.65 - - - $1,005.69
- ---------------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Value $ 803.56 - - - $ 960.21
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
* Portfolio inception dates are shown in Table 1.
<PAGE>
- --------------------------------------------------------------------------------
62 INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TABLE 3
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Since
Portfolio
1 year 3 years 5 years 10 years 20 years inception*
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ALLIANCE AGGRESSIVE STOCK (0.94)% 9.40% 10.11% 17.47% - 16.09%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap Growth 12.16% 16.33% 14.87% 15.44% - 13.95%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 8.28% 17.77% 15.56% 16.49% - 15.78%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE BALANCED 16.72% 13.54% 9.50% 11.27% - 10.98%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Balanced 13.48% 15.79% 13.84% 12.97% - 13.56%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 19.02% 18.70% 16.88% 15.21% - 15.37%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK 27.87% 26.11% 20.48% 17.27% 17.33% 12.18%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Growth 22.86% 22.23% 18.63% 16.72% 16.30% 11.34%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% 28.23% 24.06% 19.21% 17.76% 12.75%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE CONSERVATIVE INVESTORS 12.54% 9.39% 8.10% - - 8.70%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Income 14.20% 15.62% 14.31% - - 12.55%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 15.59% 14.45% 13.37% - - 12.08%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE EQUITY INDEX 26.57% 26.11% - - - 22.88%
- ---------------------------------------------------------------------------------------------------------------------
Lipper S&P 500 Index Funds 28.05% 27.67% - - - 24.31%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% 28.23% - - - 24.79%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE GLOBAL 20.37% 14.53% 12.90% 13.44% - 11.20%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Global 14.34% 14.67% 11.98% 11.21% - 9.64%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 24.34% 17.77% 15.68% 10.66% - 9.55%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME 19.43% 21.09% 16.43% - - 15.46%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.61% 21.25% 18.35% - - 17.89%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 20.10% 23.99% 21.07% - - 20.48%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS 16.84% 14.48% 12.39% - - 14.63%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Flexible Portfolio 14.20% 15.62% 14.31% - - 12.55%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 22.85% 22.69% 19.96% - - 15.55%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE HIGH YIELD (6.27)% 10.05% 8.70% 9.86% - 9.19%
- ---------------------------------------------------------------------------------------------------------------------
Lipper High Yield (0.44)% 8.21% 7.37% 9.34% - 8.97%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 3.66% 9.11% 9.01% 11.08% - 10.72%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERMEDIATE GOVERNMENT
SECURITIES 6.46% 4.99% 4.14% - - 5.83%
- ---------------------------------------------------------------------------------------------------------------------
Lipper U.S. Government 7.68% 6.21% 5.91% - - 7.25%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 8.49% 6.74% 6.45% - - 7.60%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERNATIONAL 9.27% 4.32% - - - 6.04%
- ---------------------------------------------------------------------------------------------------------------------
Lipper International 13.02% 9.94% - - - 10.74%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 20.00% 9.00% - - - 9.68%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE MONEY MARKET 4.09% 4.11% 3.92% 4.35% - 5.52%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Money Market 4.84% 4.87% 4.77% 5.20% - 6.34%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 5.05% 5.18% 5.11% 5.44% 6.41%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE QUALITY BOND 7.40% 6.44% 5.51% - - 5.08%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Corporate Bond A-Rated 7.47% 6.38% 6.54% - - 6.21%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 8.69% 7.29% 7.27% - - 6.92%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH (5.45)% - - - - 10.91%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Small-Cap (0.33)% - - - - 16.72%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 1.23% - - - - 16.58%
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE 63
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TABLE 3 (CONTINUED)
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Since
Portfolio
1 year 3 years 5 years 10 years 20 years inception*
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
MFS EMERGING GROWTH COMPANIES 33.24% - - - - 33.58%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap 15.97% - - - - 22.72%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark (2.54)% - - - - 14.53%
- ---------------------------------------------------------------------------------------------------------------------
MFS RESEARCH 22.93% - - - - 23.26%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Growth 25.82% - - - - 28.73%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% - - - - 31.63%
- ---------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH BASIC VALUE EQUITY 10.52% - - - - 16.22%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.54% - - - - 21.32%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% - - - - 31.63%
- ---------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH WORLD STRATEGY 5.81% - - - - 5.93%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Global Flexible Portfolio 9.34% - - - - 11.15%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 19.55% - - - - 20.00%
- ---------------------------------------------------------------------------------------------------------------------
MORGAN STANLEY EMERGING MARKETS
EQUITY (27.71)% - - - - (33.35)%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Emerging Markets (30.50)% - - - - (36.28)%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark (25.34)% - - - - (28.92)%
- ---------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM BALANCED 10.75% - - - - 14.85%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Balanced 14.61% - - - - 17.83%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 21.36% - - - - 23.48%
- ---------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME VALUE 11.75% - - - - 16.51%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.54% - - - - 21.32%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% - - - - 31.63%
- ---------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE EQUITY INCOME 8.04% - - - - 17.63%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Equity Income 10.76% - - - - 19.07%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% - - - - 31.63%
- ---------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE INTERNATIONAL STOCK 12.62% - - - - 6.00%
- ---------------------------------------------------------------------------------------------------------------------
Lipper International 12.17% - - - - 9.06%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 20.00% - - - - 13.43%
- ---------------------------------------------------------------------------------------------------------------------
WARBURG PINCUS SMALL COMPANY
VALUE (10.86)% - - - - 3.27%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Small-Cap 1.53% - - - - 16.77%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark (2.54)% - - - - 14.53%
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
* Portfolio inception dates are shown in Table 1.
<PAGE>
- --------------------------------------------------------------------------------
64 INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TABLE 4
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Since
Portfolio
1 year 3 years 5 years 10 years 20 years inception*
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ALLIANCE AGGRESSIVE STOCK (0.94)% 30.94% 61.88% 400.31% - 792.41%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap Growth 12.16% 58.64% 102.73% 334.88% - 613.05%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 8.28% 63.35% 106.12% 360.30% - 759.55%
- ----------------------------------------------------------------------------------------------------------------------------
ALLIANCE BALANCED 16.72% 46.37% 57.41% 190.84% - 361.24%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Balanced 13.48% 55.60% 91.92% 240.69% - 553.21%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 19.02% 67.24% 118.08% 311.86% - 715.64%
- ----------------------------------------------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK 27.87% 100.54% 153.84% 391.87% 2,343.81% 3,201.58%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Growth 22.86% 84.52% 138.97% 388.00% 2,185.68% 1,203.81%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% 110.85% 193.91% 479.62% 2,530.43% 3,755.68%
- ----------------------------------------------------------------------------------------------------------------------------
ALLIANCE CONSERVATIVE INVESTORS 12.54% 30.90% 47.60% - - 116.21%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Income 14.20% 55.28% 97.15% - - 202.48%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 15.59% 49.92% 87.28% - - 187.40%
- ----------------------------------------------------------------------------------------------------------------------------
ALLIANCE EQUITY INDEX 26.57% 100.57% - - - 170.83%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper S&P 500 Index Funds 28.05% 108.12% - - - 186.34%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% 110.85% - - - 192.17%
- ----------------------------------------------------------------------------------------------------------------------------
ALLIANCE GLOBAL 20.37% 50.24% 83.45% 253.05% - 233.57%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Global 14.34% 51.58% 77.94% 194.96% - 188.08%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 24.34% 63.34% 107.19% 175.31% - 181.57%
- ----------------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME 19.43% 77.55% 113.91% - - 112.72%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.61% 79.05% 133.95% - - 139.10%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 20.10% 90.62% 160.09% - - 166.00%
- ----------------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS 16.84% 50.03% 79.33% - - 253.37%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Flexible Portfolio 14.20% 55.28% 97.15% - - 202.45%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 22.85% 84.68% 148.41% - - 280.88%
- ----------------------------------------------------------------------------------------------------------------------------
ALLIANCE HIGH YIELD (6.27)% 33.29% 51.74% 156.03% - 187.19%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper High Yield (0.44)% 26.80% 43.00% 145.62% - 182.21%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 3.66% 29.90% 53.96% 186.01% - 239.69%
- ----------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERMEDIATE
GOVERNMENT SECURITIES 6.46% 15.73% 22.46% - - 55.13%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper U.S. Government 7.68% 19.84% 33.36% - - 72.35%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 8.49% 21.61% 36.71% - - 76.55%
- ----------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERNATIONAL 9.27% 13.52% - - - 24.58%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper International 13.02% 33.62% - - - 47.74%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 20.00% 29.52% - - - 41.40%
- ----------------------------------------------------------------------------------------------------------------------------
ALLIANCE MONEY MARKET 4.09% 12.84% 21.20% 53.10% - 144.55%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Money Market 4.84% 15.34% 26.25% 66.09% - 178.83%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 5.05% 16.35% 28.27% 69.88% - 181.74%
- ----------------------------------------------------------------------------------------------------------------------------
ALLIANCE QUALITY BOND 7.40% 20.58% 30.76% - - 29.71%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Corporate Bond A-Rated 7.47% 20.42% 37.37% - - 37.26%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 8.69% 23.51% 42.06% - - 42.14%
- ----------------------------------------------------------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH (5.45)% - - - - 18.86%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Small-Cap (0.33)% - - - - 28.98%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 1.23% - - - - 29.23%
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE 65
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TABLE 4 (CONTINUED)
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Since
Portfolio
1 year 3 years 5 years 10 years 20 years inception*
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
MFS EMERGING GROWTH COMPANIES 33.24% - - - - 62.10%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap 15.97% - - - - 42.16%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark (2.54)% - - - - 25.40%
- ---------------------------------------------------------------------------------------------------------------------
MFS RESEARCH 22.93% - - - - 41.78%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Growth 25.82% - - - - 52.86%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% - - - - 57.60%
- ---------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH BASIC VALUE EQUITY 10.52% - - - - 28.51%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.54% - - - - 15.59%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% - - - - 57.60%
- ---------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH WORLD STRATEGY 5.81% - - - - 10.09%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Global Flexible Portfolio 9.34% - - - - 19.41%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 19.55% - - - - 33.33%
- ---------------------------------------------------------------------------------------------------------------------
MORGAN STANLEY EMERGING MARKETS
EQUITY (27.71)% - - - - (42.51)%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Emerging Markets (30.50)% - - - - (45.67)%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark (25.34)% - - - - (36.71)%
- ---------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM BALANCED 10.75% - - - - 25.99%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Balanced 14.61% - - - - 31.59%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 21.36% - - - - 42.22%
- ---------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME VALUE 11.75% - - - - 29.05%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.54% - - - - 38.49%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% - - - - 57.60%
- ---------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE EQUITY INCOME 8.04% - - - - 31.11%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Equity Income 10.76% - - - - 33.92%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% - - - - 57.60%
- ---------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE INTERNATIONAL STOCK 12.62% - - - - 10.22%
- ---------------------------------------------------------------------------------------------------------------------
Lipper International 12.17% - - - - 15.88%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 20.00% - - - - 23.42%
- ---------------------------------------------------------------------------------------------------------------------
WARBURG PINCUS SMALL COMPANY
VALUE (10.86)% - - - - 5.51%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Small-Cap 1.53% - - - - 29.95%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark (2.54)% - - - - 25.40%
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
* Portfolio inception dates are shown in Table 1.
<PAGE>
- --------------------------------------------------------------------------------
66 INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TABLE 5
YEAR-BY-YEAR RATES OF RETURN
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
1989 1990 1991 1992 1993
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alliance Aggressive Stock 43.18% 5.79% 84.94% (4.37)% 15.37%
- --------------------------------------------------------------------------------------------------
Alliance Balanced 24.97% (1.20)% 40.46% (4.02)% 10.99%
- --------------------------------------------------------------------------------------------------
Alliance Common Stock 24.43% (9.13)% 36.21% 1.98% 23.38%
- --------------------------------------------------------------------------------------------------
Alliance Conservative Investors 2.79% 5.14% 18.46% 4.53% 9.46%
- --------------------------------------------------------------------------------------------------
Alliance Equity Index - - - - -
- --------------------------------------------------------------------------------------------------
Alliance Global 25.27% (7.25)% 29.04% (1.71)% 30.60%
- --------------------------------------------------------------------------------------------------
Alliance Growth & Income - - - - (0.56)%
- --------------------------------------------------------------------------------------------------
Alliance Growth Investors 3.70% 9.28% 47.22% 3.68% 13.91%
- --------------------------------------------------------------------------------------------------
Alliance High Yield 3.89% (2.29)% 23.03% 11.00% 21.73%
- --------------------------------------------------------------------------------------------------
Alliance Intermediate Government
Securities - - 11.09% 4.34% 9.28%
- --------------------------------------------------------------------------------------------------
Alliance International - - - - -
- --------------------------------------------------------------------------------------------------
Alliance Money Market 7.97% 7.07% 4.95% 2.33% 1.74%
- --------------------------------------------------------------------------------------------------
Alliance Quality Bond - - - - (0.81)%
- --------------------------------------------------------------------------------------------------
Alliance Small Cap Growth - - - - -
- --------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies - - - - -
- --------------------------------------------------------------------------------------------------
MFS Research - - - - -
- --------------------------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity - - - - -
- --------------------------------------------------------------------------------------------------
Merrill Lynch World Strategy - - - - -
- --------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets
Equity - - - - -
- --------------------------------------------------------------------------------------------------
E/Q Putnam Balanced - - - - -
- --------------------------------------------------------------------------------------------------
E/Q Putnam Growth & Income Value - - - - -
- --------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income - - - - -
- --------------------------------------------------------------------------------------------------
T. Rowe Price International Stock - - - - -
- --------------------------------------------------------------------------------------------------
Warburg Pincus Small Company
Value - - - - -
- --------------------------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------------------------
1994 1995 1996 1997 1998
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
Alliance Aggressive Stock (5.00)% 30.13% 20.74% 9.47% (0.94)%
- --------------------------------------------------------------------------------------------------
Alliance Balanced (9.15)% 18.37% 10.35% 13.64% 16.72%
- --------------------------------------------------------------------------------------------------
Alliance Common Stock (3.33%) 30.94% 22.81% 27.70% 27.87%
- --------------------------------------------------------------------------------------------------
Alliance Conservative Investors (5.26)% 19.01% 3.95% 11.90% 12.54%
- --------------------------------------------------------------------------------------------------
Alliance Equity Index 0.07% 34.94% 20.95% 31.02% 26.57%
- --------------------------------------------------------------------------------------------------
Alliance Global 3.98% 17.44% 13.24% 10.21% 20.37%
- --------------------------------------------------------------------------------------------------
Alliance Growth & Income (1.77)% 22.65% 18.67% 25.27% 19.43%
- --------------------------------------------------------------------------------------------------
Alliance Growth Investors (4.32)% 24.93% 11.27% 15.40% 16.84%
- --------------------------------------------------------------------------------------------------
Alliance High Yield (3.96)% 18.53% 21.46% 17.09% (6.27)%
- --------------------------------------------------------------------------------------------------
Alliance Intermediate Government
Securities (5.53)% 12.01% 2.53% 6.02% 6.46%
- --------------------------------------------------------------------------------------------------
Alliance International - 9.74% 8.50% (4.25)% 9.27%
- --------------------------------------------------------------------------------------------------
Alliance Money Market 2.79% 4.50% 4.07% 4.17% 4.09%
- --------------------------------------------------------------------------------------------------
Alliance Quality Bond (6.25)% 15.67% 4.10% 7.86% 7.40%
- --------------------------------------------------------------------------------------------------
Alliance Small Cap Growth - - - 25.71% (5.45)%
- --------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies - - - 21.66% 33.24%
- --------------------------------------------------------------------------------------------------
MFS Research - - - 15.32% 22.93%
- --------------------------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity - - - 16.28% 10.52%
- --------------------------------------------------------------------------------------------------
Merrill Lynch World Strategy - - - 4.05% 5.81%
- --------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets
Equity - - - (20.47)% (27.71)%
- --------------------------------------------------------------------------------------------------
E/Q Putnam Balanced - - - 13.76% 10.75%
- --------------------------------------------------------------------------------------------------
E/Q Putnam Growth & Income Value - - - 15.48% 11.75%
- --------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income - - - 21.36% 8.04%
- --------------------------------------------------------------------------------------------------
T. Rowe Price International Stock - - - (2.13)% 12.62%
- --------------------------------------------------------------------------------------------------
Warburg Pincus Small Company
Value - - - 18.37% (10.86)%
- --------------------------------------------------------------------------------------------------
</TABLE>
+ Returns for these Portfolios represent less than 12 months of
performance. The returns are as of each Portfolio inception date as
shown in Table 1.
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE 67
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMUNICATING PERFORMANCE DATA
In reports or other communications to contract owners or in advertising
material, we may describe general economic and market conditions affecting our
variable investment options, and the Portfolios and may compare the performance
or ranking of those options and the Portfolios with:
o those 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;
o other appropriate indices of investment securities and averages for peer
universes of mutual funds; or
o data developed by us derived from such indices or averages.
We also may furnish to present or prospective contract owners advertisements or
other communications that include evaluations of a variable investment option or
Portfolio by nationally recognized financial publications. Examples of such
publications are:
- --------------------------------------------------------------------------------
Barron's Money Management Letter
Morningstar's Variable Annuity Investment Dealers Digest
Sourcebook National Underwriter
Business Week Pension & Investments
Forbes USA Today
Fortune Investor's Business Daily
Institutional Investor The New York Times
Money The Wall Street Journal
Kiplinger's Personal Finance The Los Angeles Times
Financial Planning The Chicago Tribune
Investment Adviser
Investment Management Weekly
- --------------------------------------------------------------------------------
Lipper compiles performance data for peer universes of funds with similar
investment objectives in its Lipper Survey. Morningstar, Inc. compiles similar
data in the Morningstar Variable Annuity/Life Report (Morningstar Report).
The Lipper Survey records performance data as reported to it by over 800 mutual
funds underlying variable annuity and life insurance products. It divides these
actively managed Portfolios into 25 categories by Portfolio objectives. The
Lipper Survey contains two different universes, which reflect different types of
fees in performance data:
o The "separate account" universe reports performance data net of investment
management fees, direct operating expenses and asset-based charges
applicable under variable life and annuity contracts; and
o The "mutual fund" universe reports performance net only of investment
management fees and direct operating expenses, and therefore reflects only
charges that relate to the underlying mutual fund.
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 level charges.
VARDS is a monthly reporting service that monitors approximately 2,500 variable
life and variable annuity funds on performance and account information.
YIELD INFORMATION
Current yield for the Alliance Money Market option 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). Current yield for the other options will be based
on net changes in a hypothetical investment over a given 30-day period,
exclusive of capital changes, and then "annualized" (assuming that the same
30-day result would occur each month for 12 months).
"Effective yield" is calculated in a similar manner, 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 for the Alliance Money Market option. The yields and effective
yields assume the deduction of all contract charges and expenses other than the
annual administrative charge, withdrawal charge, and any charge for taxes such
as premium tax. For more information, see "Alliance Money Market Option and
other Yield information" in the SAI.
<PAGE>
- --------------------------------------------------------------------------------
68 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
- --------------------------------------------------------------------------------
10
Incorporation of certain documents by reference
- --------------------------------------------------------------------------------
Equitable Life's annual report on Form 10-K for the year ended December 31,
1998, a current report on Form 8-K dated April 9, 1999, and a quarterly report
on Form 10-Q for the quarter ended June 30, 1999, are considered to be a part of
this prospectus because they are incorporated by reference.
After the date of this prospectus and before we terminate the offering of
the securities under this prospectus, all documents or reports we file with the
SEC under the Securities Exchange Act of 1934 ("Exchange Act") will be
considered to become part of this prospectus because they are incorporated by
reference.
Any statement contained in a document that is or becomes part of this
prospectus, will be considered changed or replaced for purposes of this
prospectus if a statement contained in this prospectus changes or is replaced.
Any statement that is considered to be a part of this prospectus because of its
incorporation, will be considered changed or replaced for the purpose of this
prospectus if a statement contained in any other subsequently filed document
that is considered to be part of this prospectus changes or replaces that
statement. After that, only the statement that is changed or replaced will be
considered to be part of this prospectus.
We file our Exchange Act documents and reports, including our annual and
quarterly reports on Form 10-K and Form 10-Q, electronically according 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.
Upon written or oral request, we will provide, free of charge, to each
person to whom this prospectus is delivered a copy of any or all of the
documents considered to be part of this prospectus because they are incorporated
herein. This does not include exhibits not specifically incorporated by
reference into the text of such documents. Requests for 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).
<PAGE>
- --------------------------------------------------------------------------------
APPENDIX: MARKET VALUE ADJUSTMENT EXAMPLE A-1
- --------------------------------------------------------------------------------
Appendix: 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 had been
invested on June 14, 1999 to a fixed maturity option with a maturity date of
June 15, 2008 (i.e., nine years later) at a rate to maturity of 7.00%, resulting
in a maturity value at the maturity date of $183,846. We further assume that a
withdrawal of $50,000 is made four years later, on June 15, 2003.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
ASSUMED RATE TO
MATURITY ON JUNE 15, 2003
-------------------------------------
5.00% 9.00%
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
AS OF JUNE 15, 2003 (BEFORE WITHDRAWAL)
- -----------------------------------------------------------------------------------------------
(1) Market adjusted amount $144,048 $119,487
- ----------------------------------------------------------------------------------------------
(2) Fixed maturity amount $131,080 $131,080
- ----------------------------------------------------------------------------------------------
(3) Market value adjustment:
(1) - (2) $ 12,968 $(11,593)
- ----------------------------------------------------------------------------------------------
ON JUNE 15, 2003 (AFTER WITHDRAWAL)
- ----------------------------------------------------------------------------------------------
(4) Portion of market value adjustment associated with withdrawal:
(3) x [$50,000/(1)] $ 4,501 $ (4,851)
- ----------------------------------------------------------------------------------------------
(5) Reduction in fixed maturity amount
[$50,000 - (4)] $ 45,499 $ 54,851
- ----------------------------------------------------------------------------------------------
(6) Fixed maturity amount (2) - (5) $ 85,581 $ 76,229
- ----------------------------------------------------------------------------------------------
(7) Maturity value $120,032 $106,915
- ----------------------------------------------------------------------------------------------
(8) Market adjusted amount of (7) $ 94,048 $ 69,487
- -----------------------------------------------------------------------------------------------
</TABLE>
You should note that under this example if a withdrawal is made when rates have
increased from 7.00% to 9.00% (right column), a negative market value adjustment
is realized. On the other hand, if a withdrawal is made when rates have
decreased from 7.00% to 5.00% (left column), a positive market value adjustment
is realized.
<PAGE>
Statement of additional information
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
Required Minimum Distributions Option 2
Unit Values 2
Calculation of Annuity Payments 3
The Reorganization 3
Custodian and Independent Accountants 4
Alliance Money Market Option Yield Information 4
Other Yield Information 5
Key Factors in Retirement Planning 5
Long-Term Market Trends 10
Financial Statements 12
HOW TO OBTAIN AN EQUI-VEST EXPRESS STATEMENT OF ADDITIONAL INFORMATION FOR
SEPARATE ACCOUNT A
Call 1-800-628-6673 or send this request form to:
EQUI-VEST Express
Processing Office
The Equitable Life
P.O. Box 2996
New York, NY 10116-2996
Please send me an EQUI-VEST Express Statement of Additional Information dated
, 1999.
(Combination variable and fixed deferred annuity)
- ------------------------------------------------------------------------------
Name:
- ------------------------------------------------------------------------------
Address:
- ------------------------------------------------------------------------------
City State Zip
888-1209
<PAGE>
EQUI-VEST(Reg. TM)
A combination variable and fixed deferred
annuity contract
PROSPECTUS DATED , 1999
Please read and keep this prospectus for future reference. It contains important
information that you should know before purchasing, or taking any other action
under your contract. Also, at the end of this prospectus you will find attached
the prospectuses for The Hudson River Trust and EQ Advisors Trust which contain
important information about their Portfolios.
- --------------------------------------------------------------------------------
WHAT IS EQUI-VEST?
EQUI-VEST is a deferred annuity contract issued by The Equitable Life Assurance
Society of the United States. It provides for the accumulation of retirement
savings and for income. The contract also offers death benefit protection and a
number of payout options. You invest to accumulate value on a tax-deferred basis
in one or more of our variable investment options, our guaranteed interest
option or in our fixed maturity options ("investment options"). This contract
may not currently be available in all states.
- --------------------------------------------------------------------------------
VARIABLE INVESTMENT OPTIONS
- --------------------------------------------------------------------------------
FIXED INCOME OPTIONS:
- --------------------------------------------------------------------------------
Domestic Fixed Income Aggressive Fixed Income
- --------------------------------------------------------------------------------
o Alliance Money Market o Alliance High Yield
o Alliance Intermediate
Government Securities
o Alliance Quality Bond
- --------------------------------------------------------------------------------
EQUITY OPTIONS:
- --------------------------------------------------------------------------------
DOMESTIC EQUITY
- --------------------------------------------------------------------------------
o T. Rowe Price Equity Income o Alliance Equity Index
o EQ/Putnam Growth & o Merrill Lynch Basic Value
Income Value Equity
o Alliance Growth & Income o Alliance Common Stock
o EQ/Alliance Premier Growth o MFS Growth with Income
o Capital Guardian Research o MFS Research
o Capital Guardian U.S.
Equity
- --------------------------------------------------------------------------------
INTERNATIONAL EQUITY
- --------------------------------------------------------------------------------
o Alliance Global o T. Rowe Price International
Stock
o Alliance International
o Morgan Stanley Emerging
Markets Equity
- --------------------------------------------------------------------------------
AGGRESSIVE EQUITY
- -----------------------------------------------------------------------
o Alliance Aggressive Stock o Alliance Small Cap Growth
o EQ/Evergreen o MFS Emerging Growth
Companies
o Warburg Pincus Small
Company Value
- --------------------------------------------------------------------------------
ASSET ALLOCATION OPTIONS:
- --------------------------------------------------------------------------------
o Alliance Conservative o EQ/Evergreen Foundation
Investors o Alliance Growth Investors
o EQ/Putnam Balanced o Merrill Lynch World Strategy
o Alliance Balanced
- --------------------------------------------------------------------------------
You allocate amounts to any of the variable investment options, subject to any
restrictions. Each variable investment option is a subaccount of our Separate
Account A. Each variable investment option, in turn, invests in a corresponding
securities portfolio ("Portfolio") of The Hudson River Trust or EQ Advisors
Trust. Your investment results in a variable investment option will depend on
the investment performance of the related Portfolio.
GUARANTEED INTEREST OPTION. You may allocate amounts to the guaranteed interest
option. This option is part of our general account and pays interest at
guaranteed rates.
FIXED MATURITY OPTIONS. You may allocate amounts to one or more fixed maturity
options. These amounts will receive a fixed rate of interest for a specified
period. Interest is earned at a guaranteed rate we set. We make a market value
adjustment (up or down) if you make transfers or withdrawals from a fixed
maturity option before its maturity date.
TYPES OF CONTRACTS. We offer the contracts for use as:
o A nonqualified annuity ("NQ") for after-tax contributions only
o An individual retirement annuity ("IRA"), Traditional IRA or Roth IRA ("Roth
IRA")
o A Traditional IRA as a conduit to hold rollover distributions ("QP IRA")
from a qualified plan or a Tax-Sheltered Annuity ("TSA")
Minimum contribution amounts ranging from $50 to $2,500 are required to purchase
a contract. The minimum amount required depends on the type of contract, NQ, IRA
or QP IRA, purchased.
Registration statements relating to this offering have been filed with the
Securities and Exchange Commission ("SEC"). The statement of additional
information ("SAI") dated , 1999, is a part of one of the registration
statements. The SAI is available free of charge. You may request one by writing
to our Processing Office or calling 1(800) 628-6673. The SAI has been
incorporated by reference into this prospectus. This prospectus and the SAI can
also be obtained from the SEC's Web site at http://www.sec.gov. The table of
contents for the SAI appears at the back of this prospectus.
THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. THE CONTRACTS ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY.
THEY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE NOT BANK
GUARANTEED. THEY ARE SUBJECT TO INVESTMENT RISKS AND POSSIBLE LOSS OF PRINCIPAL.
<PAGE>
- --------------------------------------------------------------------------------
2 CONTENTS OF THIS PROSPECTUS
- --------------------------------------------------------------------------------
Contents of this prospectus
- --------------------------------------------------------------------------------
EQUI-VEST(TM)
- ---------------------------------------------------------------
Index of key words and phrases 4
Who is Equitable Life? 5
How to reach us 6
EQUI-VEST at a glance - key features 9
- ---------------------------------------------------------------
FEE TABLE 12
- ---------------------------------------------------------------
Examples 15
- ---------------------------------------------------------------
1
CONTRACT FEATURES AND BENEFITS 17
- ---------------------------------------------------------------
How you can purchase and contribute to your contract 17
Owner and annuitant requirements 19
How you can make your contributions 19
What are your investment options under the contract? 19
Selecting your investment method 23
Allocating your contributions 24
Your right to cancel within a certain number of days 24
Death benefit 25
- ---------------------------------------------------------------
2
DETERMINING YOUR CONTRACT'S VALUE 26
- ---------------------------------------------------------------
Your account value 26
Your contract's value in the variable investment options 26
Your contract's value in the guaranteed interest option 26
Your contract's value in the fixed maturity options 26
- --------------------------------------------------------------------------------
"We," "our" and "us" refer to Equitable Life.
When we address the reader of this prospectus with words such as "you" and
"your," we mean the person who has the right or responsibility that the
prospectus is discussing at that point. This is usually the contract owner.
When we use the word "contract" it also includes certificates that are issued
under group contracts in some states.
<PAGE>
- --------------------------------------------------------------------------------
CONTENTS OF THIS PROSPECTUS 3
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- ---------------------------------------------------------------
3
TRANSFERRING YOUR MONEY AMONG
INVESTMENT OPTIONS 27
- ---------------------------------------------------------------
Transferring your account value 27
Automatic transfer options-investment simplifier 27
Rebalancing your account value 28
- ---------------------------------------------------------------
4
ACCESSING YOUR MONEY 29
- ---------------------------------------------------------------
Withdrawing your account value 29
Surrender of your contract to receive its cash value 30
When we may terminate your contract 30
When to expect payments 30
Choosing your annuity payout options 31
- ---------------------------------------------------------------
5
CHARGES AND EXPENSES 33
- ---------------------------------------------------------------
Charges that Equitable Life deducts 33
Charges that the trusts deduct 37
Group or sponsored arrangements 37
Other distribution arrangements 38
- ---------------------------------------------------------------
6
PAYMENT OF DEATH BENEFIT 39
- ---------------------------------------------------------------
Your beneficiary and payment of benefit 39
How death benefit payment is made 39
Beneficiary continuation option under
Traditional IRA and QP IRA contracts 40
- ---------------------------------------------------------------
7
TAX INFORMATION 41
- ---------------------------------------------------------------
Overview 41
Transfers among investment options 41
Taxation of nonqualified annuities 41
Special rules for NQ contracts issued in Puerto Rico 42
Individual retirement arrangements ("IRAs") 43
Federal and state income tax withholding and
information reporting 56
Impact of taxes to Equitable Life 57
- ---------------------------------------------------------------
8
MORE INFORMATION 58
- ---------------------------------------------------------------
About our Separate Account A 58
About The Hudson River Trust and EQ Advisors Trust 58
About our fixed maturity options 59
About the general account 61
About other methods of payment 61
Dates and prices at which contract events occur 61
About your voting rights 62
About our year 2000 progress 63
About legal proceedings 63
About our independent accountants 64
Transfers of ownership, collateral assignments, loans,
and borrowing 64
Distribution of the contracts 64
- ---------------------------------------------------------------
9
INVESTMENT PERFORMANCE 65
- ------------------------------------------------------- ----
Benchmarks 65
Communicating performance data 75
- ---------------------------------------------------------------
10
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE 77
- ---------------------------------------------------------------
- ---------------------------------------------------------------
APPENDICES
- ---------------------------------------------------------------
I -- Condensed financial information A-1
II -- Market value adjustment example B-1
III -- Death benefit example C-1
- ---------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
- ---------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
4 INDEX OF KEY WORDS AND PHRASES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Index of key words and
phrases
This index should help you locate more information on the terms used in this
prospectus.
Page
account value 26
annuitant 18
annuity payout options 31
beneficiary 39
business day 61
cash value 26
conduit IRA 47
contract date 10
contract date anniversary 10
contract year 10
contributions 17
Contributions to Roth IRAs
Regular contribution 53
Rollover contributions 53
Conversion contributions 54
Direct custodian-to-custodian
transfers 53
Contributions to Traditional IRAs
Regular contributions 44
Rollover contributions 46
Direct custodian-to-custodian
transfers 46
fixed maturity amount 22
fixed maturity options 22
guaranteed interest option 22
Page
IRA cover
IRS 41
investment options 19
market adjusted amount 23
market value adjustment 23
maturity value 22
NQ cover
Portfolio cover
Processing Office 6
QP IRAs cover
ratcheted death benefit 25
rate to maturity 22
recharacterized 46
regular contribution 45
Required Beginning Date 47
Roth IRA cover
SAI cover
SEC cover
Substitution 58
TOPS 6
Traditional IRA cover
TSA cover
unit 26
unit investment trust 58
variable investment options 19
To make this prospectus easier to read, we sometimes use different words than in
the contract. This is illustrated below. Although we do use different words,
they have the same meaning in this prospectus as in the contract or supplemental
materials. Your Equitable associate can provide further explanation about your
contract.
- --------------------------------------------------------------------------------
PROSPECTUS CONTRACT OR SUPPLEMENTAL MATERIALS
- --------------------------------------------------------------------------------
fixed maturity options Guarantee Periods or Fixed Maturity Accounts
variable investment options Investment Funds or Investment Divisions
account value Annuity Account Value
rate to maturity Guaranteed Rates
guaranteed interest option Guaranteed Interest Account
unit accumulation unit
unit value accumulation unit value
<PAGE>
- --------------------------------------------------------------------------------
WHO IS EQUITABLE LIFE? 5
- --------------------------------------------------------------------------------
Who is Equitable Life?
- --------------------------------------------------------------------------------
We are The Equitable Life Assurance Society of the United States ("Equitable
Life"), a New York stock life insurance corporation. We have been doing business
since 1859. Equitable Life is a wholly owned subsidiary of The Equitable
Companies Incorporated ("Equitable Companies"), whose majority shareholder is
AXA, a French holding company for an international group of insurance and
related financial services companies. As a majority shareholder, and under its
other arrangements with Equitable Life and Equitable Life's parent, AXA
exercises significant influence over the operations and capital structure of
Equitable Life and its parent. No company other than Equitable Life, however,
has any legal responsibility to pay amounts that Equitable Life owes under the
contracts. During 1999, Equitable Companies plans to change its name to AXA
Financial, Inc.
Equitable Companies and its consolidated subsidiaries managed approximately
$390.8 billion in assets as of June 30, 1999. For over 100 years Equitable Life
has been among the largest insurance companies in the United States. We are
licensed to sell life insurance and annuities in all fifty states, the District
of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our home office is
located at 1290 Avenue of the Americas, New York, N.Y. 10104.
<PAGE>
- --------------------------------------------------------------------------------
6 WHO IS EQUITABLE LIFE?
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
HOW TO REACH US
You may communicate with our Processing Office as listed below for any of the
following purposes:
- --------------------------------------------------------------------------------
FOR NQ AND IRA OWNERS WHO SEND
CONTRIBUTIONS INDIVIDUALLY BY REGULAR MAIL:
- --------------------------------------------------------------------------------
Equitable Life
EQUI-VEST
Individual Collections
P.O. Box 13459
Newark, NJ 07188-0459
- --------------------------------------------------------------------------------
FOR NQ AND IRA OWNERS WHO SEND
CONTRIBUTIONS INDIVIDUALLY BY EXPRESS
DELIVERY:
- --------------------------------------------------------------------------------
Equitable Life
c/o First Chicago National Processing Center
300 Harmon Meadow Boulevard, 3rd Floor
Secaucus, NJ 07094
Attn: Box 13459
- --------------------------------------------------------------------------------
FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANSFERS, WITHDRAWALS, OR
REQUIRED NOTICES) SENT BY REGULAR MAIL:
- ---------------------------------------------
Equitable Life
EQUI-VEST
P.O. Box 2996
New York, NY 10116-2996
- --------------------------------------------------------------------------------
FOR ALL OTHER COMMUNICATIONS (E.G.,
REQUESTS FOR TRANSFERS, WITHDRAWALS, OR
REQUIRED NOTICES) SENT BY EXPRESS DELIVERY:
- --------------------------------------------------------------------------------
Equitable Life
EQUI-VEST
200 Plaza Drive, 2nd Floor
Secaucus, NJ 07094
- --------------------------------------------------------------------------------
FOR NQ AND IRA CONTRIBUTIONS REMITTED BY
EMPLOYERS AND SENT BY REGULAR MAIL:
- --------------------------------------------------------------------------------
Equitable Life
EQUI-VEST
Unit Collections
P.O. Box 13463
Newark, New Jersey 07188-0463
- --------------------------------------------------------------------------------
FOR NQ AND IRA CONTRIBUTIONS REMITTED BY
EMPLOYERS AND SENT BY EXPRESS DELIVERY:
- --------------------------------------------------------------------------------
Equitable Life
c/o First Chicago National Processing Center
300 Harmon Meadow Boulevard, 3rd Floor
Secaucus, NJ 07094
Attn: Box 13463
- --------------------------------------------------------------------------------
REPORTS WE PROVIDE:
- --------------------------------------------------------------------------------
o written confirmation of financial transactions;
o annual statement of your contract values as of the close of the calendar
year;
o statement of your contract values as of the last day of the contract year.
We reserve the right to change the frequency of these reports.
- --------------------------------------------------------------------------------
TELEPHONE OPERATED PROGRAM SUPPORT
("TOPS") SYSTEM:
- --------------------------------------------------------------------------------
TOPS is designed to provide you with up-to-date information via touch-tone
telephone. You can obtain information on:
o your current account value;
o your current allocation percentages;
o the number of units you have in the variable investment options; and
o unit values.
<PAGE>
- --------------------------------------------------------------------------------
WHO IS EQUITABLE LIFE? 7
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
You can also:
o change your allocation percentages and/or transfer among the variable
investment options and the guaranteed interest option;
o elect the investment simplifier; and
o change your personal identification number ("PIN").
TOPS is normally available seven days a week, 24 hours a day, by calling
toll-free 1 (800) 755-7777. Of course, for reasons beyond our control, the
service may sometimes be unavailable.
We have established procedures to reasonably confirm that the instructions
communicated by telephone are genuine. For example, we will require certain
personal identification information before we will act on telephone instructions
and we will provide written confirmation of your transfers. We will not be
liable for following telephone instructions we reasonably believe to be genuine.
- --------------------------------------------------------------------------------
BY INTERNET:
- --------------------------------------------------------------------------------
You can also access information about your contract on the Internet. Please
visit our Web site at http://www.equitable.com, and click on EQAccess.
- --------------------------------------------------------------------------------
CUSTOMER SERVICE REPRESENTATIVE:
- --------------------------------------------------------------------------------
You may also use our toll-free number 1 (800) 628-6673 to speak with one of our
customer service representatives. Our customer service representatives are
available on each business day Monday through Thursday from 8:00 a.m. to 7:00
p.m., and on Fridays until 5:00 p.m. Eastern time.
You should send all contributions, notices, and requests to our Processing
Office at an address above.
WE REQUIRE THAT THE FOLLOWING TYPES OF COMMUNICATIONS BE ON SPECIFIC FORMS WE
PROVIDE FOR THAT PURPOSE:
(1) conversion of your Traditional IRA to a Roth IRA;
(2) cancellation of your Roth IRA and return to a Traditional IRA contract;
(3) election of the automatic investment program;
(4) election of the investment simplifier;
(5) election of the automatic NQ deposit service;
(6) election of the rebalancing program;
(7) election of required minimum distribution option;
(8) tax withholding election;
(9) election of beneficiary continuation option;
(10) request for a transfer/rollover of assets or 1035 exchange to another
carrier; and
(11) contract surrender and withdrawal requests.
WE ALSO HAVE SPECIFIC FORMS THAT WE RECOMMEND YOU USE FOR THE FOLLOWING TYPES
OF REQUESTS:
(1) address changes;
(2) beneficiary changes;
(3) transfers among investment options; and
(4) change of ownership.
TO CHANGE OR CANCEL ANY OF THE FOLLOWING WE REQUIRE WRITTEN NOTIFICATION
GENERALLY AT LEAST SEVEN CALENDAR DAYS BEFORE THE NEXT SCHEDULED TRANSACTION:
(1) automatic investment program;
(2) investment simplifier; and
(3) rebalancing program.
You must sign and date all these requests. Any written request that is not on
one of our forms must include your name and your contract number along with
adequate details about the notice you wish to give or the action you wish us to
take.
<PAGE>
- --------------------------------------------------------------------------------
8 WHO IS EQUITABLE LIFE?
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SIGNATURES:
The proper person to sign forms, notices and requests would normally be the
owner.
<PAGE>
- --------------------------------------------------------------------------------
EQUI-VEST AT A GLANCE - - KEY FEATURES 9
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EQUI-VEST at a glance --
key features
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
PROFESSIONAL EQUI-VEST's variable investment options invest in 30 different Portfolios managed by
INVESTMENT professional investment advisers.
MANAGEMENT
- ------------------------------------------------------------------------------------------------------------------------------------
GUARANTEED INTEREST o Principal and interest guarantees
OPTION o Interest rates set periodically
- ------------------------------------------------------------------------------------------------------------------------------------
FIXED MATURITY o 10 fixed maturity options with maturities ranging from
OPTIONS approximately 1 to 10 years.
o Each fixed maturity option offers a guarantee of principal and interest rate if you hold
it to maturity.
---------------------------------------------------------------------------------------------------------
If you make withdrawals or transfers from a fixed maturity option before maturity, there will be a market
value adjustment due to differences in interest rates. This may increase or decrease any value that you
have left in that fixed maturity option. If you surrender your contract, a market value adjustment may
also apply.
---------------------------------------------------------------------------------------------------------
TAX ADVANTAGES o ON EARNINGS INSIDE THE No tax on any dividends, interest or capital gains until you
CONTRACT make withdrawals from your contract or receive annuity payments.
---------------------------------------------------------------------------------------------------------
o ON TRANSFERS INSIDE THE No tax on transfers among investment options.
CONTRACT
---------------------------------------------------------------------------------------------------------
If you are buying a contract to fund a retirement plan that already provides tax deferral under the
Internal Revenue Code (any type of IRA) you should do so for the contract's features and benefits other
than tax deferral. In such situations, the tax deferral of the contract does not provide additional
benefits.
- ------------------------------------------------------------------------------------------------------------------------------------
MINIMUM CONTRIBUTION o NQ:
AMOUNTS - $1,000 (initial) or $50 (initial for payroll deduction); $50 (additional).
o Traditional IRA and Roth IRA:
- $50 (initial and additional).
o QP IRA:
- $2,500 each rollover amount.
---------------------------------------------------------------------------------------------------------
Maximum contribution limits may apply.
- ------------------------------------------------------------------------------------------------------------------------------------
DEATH BENEFIT PROTECTION The contract provides a death benefit for the beneficiary should the annuitant die. The
death benefit is equal to the highest of the following:
o the account value, or
o the minimum death benefit, or
o if elected, the optional ratcheted death benefit.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
10 EQUI-VEST AT A GLANCE -- KEY FEATURES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ACCESS TO YOUR MONEY o Lump sum withdrawals
o Withdrawals on a periodic basis
o Contract surrender
You may be subject to a withdrawal charge for certain
withdrawals. You may also incur income tax and a penalty
tax.
- --------------------------------------------------------------------------------
PAYOUT ALTERNATIVES o Annuity payout options
- --------------------------------------------------------------------------------
ADDITIONAL FEATURES o Dollar-cost averaging by automatic transfers
-- Interest sweep option
-- Fixed-dollar option
o Automatic investment program
o Account value rebalancing (quarterly, semiannually, and
annually)
o No charge on transfers among investment
options
o Waiver of withdrawal charge for disability,
confinement to a nursing home, and terminal illness
- --------------------------------------------------------------------------------
FEES AND CHARGES o Daily charge on amounts invested in variable
investment options for mortality and expense risks and
other expenses at an annual rate of 1.20%.
o If your account value at the end of the contract year
is less than $25,000 for NQ contracts (or less than
$20,000 for IRA contracts), we deduct an annual
administrative charge equal to $30 or during the first
two contract years 2% of your account value, if less
($65 maximum). If your account value is $25,000 or more
for NQ contracts (or $20,000 or more for IRA
contracts), we will not deduct the charge.
o Charge for third-party transfer (such as in the case of
a trustee-to-trustee transfer for an IRA contract) or
exchange (if your contract is exchanged for a contract
issued by another insurance company) - $25 currently
($65 maximum) per occurrence.
o No sales charge deducted when you make contributions.
o We deduct a charge equal to 6% of contributions that
have been withdrawn if such contributions were made in
the current and five prior contract years. There is no
charge in any contract year in which the amount
withdrawn does not exceed 15% of your account value at
the time of your withdrawal request minus prior
withdrawals in that contract year. Under certain
circumstances the withdrawal charge will not apply.
They are discussed under "Charges and expenses" later
in this prospectus.
---------------------------------------------------------
The 12-month period beginning on your contract date and
each 12-month period after that date is a "contract
year." The end of each 12-month period is your "contract
date anniversary." The "contract date" is the effective
date of a contract. This usually is the business day we
receive your initial contribution. Your contract date
will be shown in your contract.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
EQUI-VEST AT A GLANCE -- KEY FEATURES 11
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FEES AND CHARGES o We deduct an annual charge equal to 0.15% of the account
(CONTINUED) value on each contract date anniversary if you elect
the optional ratcheted death benefit.
o We deduct a charge for taxes such as premium taxes that
may be imposed in your state. The charge is generally
deducted from the amount applied to an annuity payout
option.
o We generally deduct a $350 annuity administrative fee
from amounts applied to purchase certain life annuity
payout options.
o Annual expenses of The Hudson River Trust and EQ
Advisors Trust Portfolios are calculated as a
percentage of the average daily net assets invested in
each Portfolio. These expenses include management and
advisory fees ranging from 0.31% to 1.15% annually,
12b-1 fees of 0.25% annually, and other expenses.
- --------------------------------------------------------------------------------
ANNUITANT NQ 0 - 79
ISSUE AGES QP IRA 0 - 79
Traditional IRA 0 - 70
Roth IRA 0 - 79
- --------------------------------------------------------------------------------
THE ABOVE IS NOT A COMPLETE DESCRIPTION OF ALL MATERIAL PROVISIONS OF THE
CONTRACT. IN SOME CASES RESTRICTIONS OR EXCEPTIONS APPLY. MAXIMUM EXPENSE
LIMITATIONS APPLY TO CERTAIN VARIABLE INVESTMENT OPTIONS, AND RIGHTS ARE
RESERVED TO CHANGE OR WAIVE CERTAIN CHARGES WITHIN SPECIFIED LIMITS. FOR
TRADITIONAL IRAS, THE MAXIMUM ISSUE AGE IS 70, BUT WE WILL ISSUE UP TO AGE 79 IF
IT IS A ROLLOVER CONTRIBUTION. FOR ALL OTHER IRAS WE WILL ISSUE CONTRACTS UP TO
ANNUITANT AGES 80-83 WITH OUR PRIOR APPROVAL. ALSO, ALL FEATURES OF THE CONTRACT
ARE NOT NECESSARILY AVAILABLE IN YOUR STATE OR AT CERTAIN AGES.
For more detailed information we urge you to read the contents of this
prospectus, as well as your contract. Please feel free to speak with your
Equitable associate, or call us, if you have any questions.
<PAGE>
- --------------------------------------------------------------------------------
12 FEE TABLE
- --------------------------------------------------------------------------------
Fee Table
- --------------------------------------------------------------------------------
The fee table below will help you understand the various charges and expenses
that apply to your contract. The table reflects charges you will directly incur
under the contract, as well as charges and expenses of the Portfolios that you
will bear indirectly. Charges for taxes, such as premium taxes, may also apply.
Also, an annuity administrative fee may apply when your annuity payments are to
begin. Each of the charges and expenses is more fully described under "Charges
and expenses" later in this prospectus. For a complete description of Portfolio
charges and expenses, please see the attached prospectuses for The Hudson River
Trust and EQ Advisors Trust.
The guaranteed interest option and fixed maturity options are not covered by the
fee table and examples. However, the annual administrative charge, the
withdrawal charge, the optional ratcheted death benefit charge, and the
third-party transfer or exchange charge do apply to the guaranteed interest
option and fixed maturity options. Also, an administrative fee may apply when
your annuity payments are to begin. A market value adjustment (up or down) may
apply as a result of a withdrawal, transfer or surrender of amounts from a fixed
maturity option.
- --------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR VARIABLE INVESTMENT OPTIONS (SEPARATE ACCOUNT A)
EXPRESSED AS AN ANNUAL PERCENTAGE OF DAILY NET ASSETS
- --------------------------------------------------------------------------------
Mortality and expense risk(1) 0.95%
Other expenses 0.25%
----
Total Separate Account A annual expenses(2) 1.20%
- --------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE ON EACH CONTRACT DATE ANNIVERSARY
- --------------------------------------------------------------------------------
Annual administrative charge(3)
If your account value on a contract date anniversary is less than
$25,000 for NQ contracts (or less than $20,000 for IRA contracts) $30
If your account value on a contract date anniversary is $25,000 or more for
NQ contracts (or $20,000 or more for IRA contracts) $ 0
- --------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE AT THE TIME YOU REQUEST CERTAIN
TRANSACTIONS
- --------------------------------------------------------------------------------
Maximum withdrawal charge(4) 6%
Charge for third-party transfer or exchange(5) $25 for each occurrence
- --------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE EACH YEAR IF YOU ELECT THE OPTIONAL
BENEFIT
- --------------------------------------------------------------------------------
Optional ratcheted death benefit charge (as a percentage of your account value
this charge is deducted annually on each contract date anniversary) 0.15%
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
FEE TABLE 13
- --------------------------------------------------------------------------------
THE HUDSON RIVER TRUST ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL
ANNUAL
INVESTMENT EXPENSES
MANAGEMENT & OTHER (AFTER EXPENSE
ADVISORY FEES 12B-1 FEE(6) EXPENSES LIMITATION)(6)(7)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock 0.54% 0.25% 0.03% 0.82%
Alliance Balanced 0.41% 0.25% 0.04% 0.70%
Alliance Common Stock 0.36% 0.25% 0.03% 0.64%
Alliance Conservative Investors 0.48% 0.25% 0.05% 0.78%
Alliance Equity Index 0.31% 0.25% 0.03% 0.59%
Alliance Global 0.64% 0.25% 0.07% 0.96%
Alliance Growth & Income 0.55% 0.25% 0.03% 0.83%
Alliance Growth Investors 0.51% 0.25% 0.04% 0.80%
Alliance High Yield 0.60% 0.25% 0.03% 0.88%
Alliance Intermediate Government Securities 0.50% 0.25% 0.05% 0.80%
Alliance International 0.90% 0.25% 0.16% 1.31%
Alliance Money Market 0.35% 0.25% 0.02% 0.62%
Alliance Quality Bond 0.53% 0.25% 0.03% 0.81%
Alliance Small Cap Growth 0.90% 0.24% 0.06% 1.20%
- ------------------------------------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL
OTHER ANNUAL
INVESTMENT EXPENSES EXPENSES
MANAGEMENT & (AFTER EXPENSE (AFTER EXPENSE
ADVISORY FEES 12B-1 FEE(6) LIMITATION)(8) LIMITATION)(8)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EQ/Alliance Premier Growth 0.90% 0.25% 0.00% 1.15%
Capital Guardian Research 0.65% 0.25% 0.05% 0.95%
Capital Guardian U.S. Equity 0.65% 0.25% 0.05% 0.95%
EQ/Evergreen 0.75% 0.25% 0.05% 1.05%
EQ/Evergreen Foundation 0.63% 0.25% 0.07% 0.95%
MFS Emerging Growth Companies 0.55% 0.25% 0.05% 0.85%
MFS Growth with Income 0.55% 0.25% 0.05% 0.85%
MFS Research 0.55% 0.25% 0.05% 0.85%
Merrill Lynch Basic Value Equity 0.55% 0.25% 0.05% 0.85%
Merrill Lynch World Strategy 0.70% 0.25% 0.25% 1.20%
Morgan Stanley Emerging Markets Equity 1.15% 0.25% 0.35% 1.75%
EQ/Putnam Balanced 0.55% 0.25% 0.10% 0.90%
EQ/Putnam Growth & Income Value 0.55% 0.25% 0.05% 0.85%
T. Rowe Price Equity Income 0.55% 0.25% 0.05% 0.85%
T. Rowe Price International Stock 0.75% 0.25% 0.20% 1.20%
Warburg Pincus Small Company Value 0.65% 0.25% 0.10% 1.00%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
14 FEE TABLE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Notes:
(1) A portion of this charge is for providing the death benefit.
(2) We reserve the right to increase the total Separate Account A annual
expenses, but they will not exceed a maximum of 2%.
(3) During the first two contract years this charge is equal to the lesser of
$30 or 2% of your account value if it applies. Thereafter, the charge is
$30 for each contract year. We reserve the right to waive or increase this
charge to an annual maximum of $65.
(4) This charge applies to any contributions withdrawn that were made in the
current and five prior contract years. This charge is deducted upon a
withdrawal of amounts in excess of the 15% free withdrawal amount.
Important exceptions and limitations may eliminate or reduce this charge.
(5) We reserve the right to increase this charge to a maximum of $65 for each
occurrence.
(6) The Class IB shares of The Hudson River Trust and EQ Advisors Trust are
subject to fees imposed under distribution plans (the "Rule 12b-1 Plans")
adopted by The Hudson River Trust and EQ Advisors Trust pursuant to Rule
12b-1 under the Investment Company Act of 1940, as amended. The 12b-1 fee
will not be increased for the life of the contracts. The Rule 12b-1 Plan
for the Alliance Small Cap Growth Portfolio provides that EQ Financial
Consultants, Inc. ("EQF") will receive an annual fee not to exceed the
lesser of (a) 0.25% of the average daily net assets of the Portfolio
attributable to Class IB shares and (b) an amount that, when added to
certain other expenses of the Class IB shares, would result in the ratio
of expenses to average daily net assets attributable to Class IB shares
equaling 1.20%. Absent the expense limitation, the total annual expenses
for 1998 for the Alliance Small Cap Growth Portfolio would have been
1.21%.
(7) The fees and expenses shown for all Portfolios are for the year ended
December 31, 1998. The investment management and advisory fee for each
Portfolio of The Hudson River Trust may vary from year to year depending
upon the average daily net assets of the respective Portfolio. The
maximum investment management and advisory fees, however, cannot be
increased without a vote of that Portfolio's shareholders. See the
prospectus for The Hudson River Trust. The other direct operating
expenses will also fluctuate from year to year depending on actual
expenses.
The fees and expenses shown for Class IB shares of the Alliance Balanced
Portfolio and Alliance Quality Bond Portfolio are annualized for the year
ended December 31, 1998. These shares were first offered on July 8, 1998.
(8) The investment management and advisory fees for each Portfolio of EQ
Advisors Trust cannot be increased without a vote of that Portfolio's
shareholders. The amounts shown as "Other Expenses" will fluctuate from
year to year depending on actual expenses. However, EQF, EQ Advisors
Trust's manager, has entered into an expense limitation agreement with
respect to each Portfolio. Under this agreement EQF has agreed to waive
or limit its fees and assume other expenses. Under the expense limitation
agreement, total annual operating expenses of each Portfolio (other than
interest, taxes, brokerage commissions, capitalized expenditures,
extraordinary expenses and 12b-1 fees) are limited for the average daily
net assets of each Portfolio as follows: 0.60% for EQ/Putnam Growth &
Income Value, MFS Emerging Growth Companies, MFS Growth with Income, MFS
Research, Merrill Lynch Basic Value Equity, and T. Rowe Price Equity
Income; 0.65% for EQ/Putnam Balanced; 0.70% for Capital Guardian
Research, Capital Guardian U.S. Equity, and EQ/Evergreen Foundation;
0.75% for Warburg Pincus Small Company Value; 0.80% for EQ/Evergreen;
0.90% for EQ/Alliance Premier Growth; 0.95% for Merrill Lynch World
Strategy and T. Rowe Price International Stock; and 1.50% for Morgan
Stanley Emerging Markets Equity.
Absent the expense limitation, "Other Expenses" for 1998 on an annualized
basis for each of the Portfolios would have been as follows: 0.24% for MFS
Emerging Growth Companies, EQ/Putnam Growth & Income Value, and T. Rowe
Price Equity Income; 0.25% for MFS Research; 0.26% for Merrill Lynch Basic
Value Equity; 0.66% for Merrill Lynch World Strategy; 1.23% for Morgan
Stanley Emerging Markets Equity, 0.45% for EQ/Putnam Balanced; 0.40% for
T. Rowe Price International Stock; and 0.27% for Warburg Pincus Small
Company Value. For the following Portfolios, the "Other Expenses" for
1999, absent the expense limitation, are estimated to be as follows: 0.59%
for MFS Growth with Income; 0.74% for EQ/Alliance Premier Growth, Capital
Guardian Research, and Capital Guardian U.S. Equity; 0.76% for
EQ/Evergreen; 0.86% for EQ/Evergreen Foundation. Initial seed capital was
invested on December 31, 1998 for the EQ/Evergreen, EQ/Evergreen
Foundation, and MFS Growth with Income Portfolios. Initial seed capital
for EQ/Alliance Premier Growth, Capital Guardian Research, and Capital
Guardian U.S. Equity Portfolios was invested on April 30, 1999.
<PAGE>
- --------------------------------------------------------------------------------
FEE TABLE 15
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Each Portfolio may at a later date make a reimbursement to EQF for any of
the management fees waived or limited and other expenses assumed and paid
by EQF pursuant to the expense limitation agreement provided, that among
other things, such Portfolio has reached sufficient size to permit such
reimbursement to be made and provided that the Portfolio's current annual
operating expenses do not exceed the operating expense limit determined
for such Portfolio. For more information see the prospectus for Equitable
Advisors Trust.
EXAMPLES
The examples below show the expenses that a hypothetical contract owner would
pay in the situations illustrated. We assume a $1,000 contribution is invested
in one of the variable investment options listed, and a 5% annual return is
earned on the assets in that option. We also assume that the optional ratcheted
death benefit is not elected and there is no waiver of the withdrawal charge.(1)
The annual administrative charge is based on the charges that apply to a mix of
estimated contract sizes, resulting in an estimated administrative charge for
the purpose of these examples of $0.57 per $1,000. We calculate the annual
administrative charge by using the total actual annual administrative charges
for 1998 under total EQUI-VEST contracts that we issue as a percentage of the
total assets held under those EQUI-VEST contracts.
These examples should not be considered a representation of past or future
expenses for each option. Actual expenses may be greater or less than those
shown. Similarly, the annual rate of return assumed in the examples is not an
estimate or guarantee of future investment performance.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
IF YOU SURRENDER YOUR CONTRACT AT THE END
OF EACH PERIOD SHOWN, THE EXPENSES
WOULD BE:
-------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -----------------------------------------------------------------------------------------------
THE HUDSON RIVER TRUST OPTIONS
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock $ 74.14 $ 122.39 $ 173.42 $ 248.76
Alliance Balanced $ 73.04 $ 119.09 $ 167.90 $ 234.87
Alliance Common Stock $ 72.44 $ 117.29 $ 164.87 $ 228.34
Alliance Conservative Investors $ 73.84 $ 121.49 $ 171.92 $ 243.53
Alliance Equity Index $ 71.95 $ 115.78 $ 162.34 $ 222.86
Alliance Global $ 75.63 $ 126.89 $ 180.92 $ 262.76
Alliance Growth & Income $ 74.34 $ 122.99 $ 174.43 $ 248.91
Alliance Growth Investors $ 74.04 $ 122.09 $ 172.92 $ 245.69
Alliance High Yield $ 74.83 $ 124.49 $ 176.93 $ 254.26
Alliance Intermediate Government Securities $ 74.04 $ 122.09 $ 172.92 $ 245.69
Alliance International $ 79.12 $ 137.31 $ 198.22 $ 299.15
Alliance Money Market $ 72.24 $ 116.69 $ 163.86 $ 226.15
Alliance Quality Bond $ 74.24 $ 122.69 $ 173.92 $ 247.84
Alliance Small Cap Growth $ 78.02 $ 134.04 $ 192.81 $ 287.85
- -----------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------
IF YOU DO NOT SURRENDER YOUR CONTRACT AT
THE END OF EACH PERIOD SHOWN, THE
EXPENSES WOULD BE:
------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -----------------------------------------------------------------------------------------------
THE HUDSON RIVER TRUST OPTIONS
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock $ 21.69 $ 66.94 $ 114.78 $ 246.76
Alliance Balanced $ 20.54 $ 63.45 $ 108.93 $ 234.87
Alliance Common Stock $ 19.91 $ 61.54 $ 105.72 $ 228.34
Alliance Conservative Investors $ 21.38 $ 65.99 $ 113.19 $ 243.53
Alliance Equity Index $ 19.38 $ 59.95 $ 103.04 $ 222.86
Alliance Global $ 23.27 $ 71.69 $ 122.73 $ 262.76
Alliance Growth & Income $ 21.90 $ 67.57 $ 115.85 $ 248.91
Alliance Growth Investors $ 21.59 $ 66.62 $ 114.25 $ 245.69
Alliance High Yield $ 22.43 $ 69.16 $ 118.50 $ 254.26
Alliance Intermediate Government Securities $ 21.59 $ 66.62 $ 114.25 $ 245.69
Alliance International $ 26.94 $ 82.70 $ 141.06 $ 299.15
Alliance Money Market $ 19.70 $ 60.91 $ 104.65 $ 226.15
Alliance Quality Bond $ 21.80 $ 67.26 $ 115.32 $ 247.84
Alliance Small Cap Growth $ 25.79 $ 79.25 $ 135.33 $ 287.85
- --------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
16 FEE TABLE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
IF YOU SURRENDER YOUR CONTRACT AT THE END
OF EACH PERIOD SHOWN, THE EXPENSES
WOULD BE:
-------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------
EQ ADVISORS TRUST OPTIONS
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EQ/Alliance Premier Growth $ 77.52 $ 132.55 - -
Capital Guardian Research $ 75.53 $ 126.59 - -
Capital Guardian U.S. Equity $ 75.53 $ 126.59 - -
EQ/Evergreen $ 76.53 $ 129.57 - -
EQ/Evergreen Foundation $ 75.53 $ 126.59 - -
MFS Emerging Growth Companies $ 74.54 $ 123.59 $ 175.43 $ 251.05
MFS Growth with Income $ 74.54 $ 123.59 - -
MFS Research $ 74.54 $ 123.59 $ 175.43 $ 251.05
Merrill Lynch Basic Value Equity $ 74.54 $ 123.59 $ 175.43 $ 251.05
Merrill Lynch World Strategy $ 78.02 $ 134.04 $ 192.81 $ 287.85
Morgan Stanley Emerging Markets Equity $ 83.50 $ 150.30 $ 219.60 $ 343.10
EQ/Putnam Balanced $ 75.03 $ 125.09 $ 177.93 $ 256.39
EQ/Putnam Growth & Income Value $ 74.54 $ 123.59 $ 175.43 $ 251.05
T. Rowe Price Equity Income $ 74.54 $ 123.59 $ 175.43 $ 251.05
T. Rowe Price International Stock $ 78.02 $ 134.04 $ 192.81 $ 287.85
Warburg Pincus Small Company Value $ 76.03 $ 128.08 $ 182.91 $ 266.98
- ------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------
IF YOU DO NOT SURRENDER YOUR CONTRACT AT
THE END OF EACH PERIOD SHOWN, THE
EXPENSES WOULD BE:
------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------
EQ ADVISORS TRUST OPTIONS
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EQ/Alliance Premier Growth $ 25.26 $ 77.67 - -
Capital Guardian Research $ 23.16 $ 71.37 - -
Capital Guardian U.S. Equity $ 23.16 $ 71.37 - -
EQ/Evergreen $ 24.21 $ 74.53 - -
EQ/Evergreen Foundation $ 23.16 $ 71.37 - -
MFS Emerging Growth Companies $ 22.11 $ 68.21 $ 116.91 $ 251.05
MFS Growth with Income $ 22.11 $ 68.21 - -
MFS Research $ 22.11 $ 68.21 $ 116.91 $ 251.05
Merrill Lynch Basic Value Equity $ 22.11 $ 68.21 $ 116.91 $ 251.05
Merrill Lynch World Strategy $ 25.79 $ 79.25 $ 135.33 $ 287.85
Morgan Stanley Emerging Markets Equity $ 31.56 $ 96.43 $ 163.72 $ 343.10
EQ/Putnam Balanced $ 22.64 $ 69.79 $ 119.56 $ 256.39
EQ/Putnam Growth & Income Value $ 22.11 $ 68.21 $ 116.91 $ 251.05
T. Rowe Price Equity Income $ 22.11 $ 68.21 $ 116.91 $ 251.05
T. Rowe Price International Stock $ 25.79 $ 79.25 $ 135.33 $ 287.85
Warburg Pincus Small Company Value $ 23.69 $ 72.95 $ 124.84 $ 266.98
- ------------------------------------------------------------------------------------------
</TABLE>
(1) The amount accumulated from the $1,000 contribution could not be paid in
the form of an annuity payout option at the end of any of the periods
shown in the examples. This is because if the amount applied to purchase
an annuity payout option is less than $2,000, or the initial payment is
less than $20, we may pay the amount to you in a single sum instead of as
payments under an annuity payout option. See "Accessing your money."
IF YOU ELECT THE OPTIONAL RATCHETED DEATH BENEFIT:
The above examples do not reflect a charge for the optional ratcheted death
benefit. If you elect the optional ratcheted death benefit we will also deduct
an annual charge equal to 0.15% of your account value on each contract date
anniversary. Therefore, the expenses shown in the above examples would, in each
case, be increased by an amount not in excess of $1.57 in the first year and
$1.74 in the third year.
IF YOU ELECT AN ANNUITY PAYOUT OPTION:
Assuming an annuity payout option could be issued, (see Note (1) above), and you
elect a life annuity payout option, the expenses shown in the above example for
"if you do not surrender your contract" would, in each case, be increased by
$4.43 based on the average amount applied to annuity payout options in 1998. See
"Annuity administrative fee" under "Charges and expenses."
CONDENSED FINANCIAL INFORMATION
Please see Appendix I at the end of this prospectus for the unit values and the
number of units outstanding as of the end of the period shown for each of the
variable investment options available as of December 31, 1998.
<PAGE>
- --------------------------------------------------------------------------------
CONTRACT FEATURES AND BENEFITS 17
- --------------------------------------------------------------------------------
CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
HOW YOU CAN PURCHASE AND CONTRIBUTE TO YOUR CONTRACT
You may purchase a contract by making payments to us that we call
"contributions." We require a minimum contribution amount for each type of
contract purchased. The minimum contribution amount under our automatic
investment program is $20. We discuss the automatic investment program under
"About other methods of payment" under "More information" later in this
prospectus. The following table summarizes our rules regarding contributions to
your contract.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Available for
Contract annuitant Minimum Source of Limitations on
type issue ages* contributions contributions contributions
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NQ 0 - 79 $1,000 (initial), o After-tax money. Not applicable.
$50 (additional)
o Paid to us by check
or transfer of contract
value in a tax deferred
exchange under Section
1035 of the Internal
Revenue Code.
o Paid to us by an
employer who establishes
a payroll deduction program.
- ---------------------------------------------------------------------------------------------------------------------
Traditional IRA 0 - 70 $50 (initial and o "Regular" traditional o For all types of IRAs,
additional) IRA contributions either regular IRA contributions
made by you or paid to may not exceed $2,000 for
us by an employer who a year.
establishes a payroll
deduction program. o No additional regular
IRA contributions in the
o Rollovers from a year you turn age 70 1/2
qualified plan. and thereafter.
o Rollovers from a TSA.
o Rollover and direct
o Rollovers from another transfer contributions
traditional individual after age 70 1/2 must be
retirement arrangement. net of required
minimum distributions.
o Direct
custodian-to-custodian
transfers from other
traditional individual
retirement arrangements.
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
18 CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
AVAILABLE FOR
CONTRACT ANNUITANT MINIMUM SOURCE OF LIMITATIONS ON
TYPE ISSUE AGES* CONTRIBUTIONS CONTRIBUTIONS CONTRIBUTIONS
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Roth IRA 0 - 79 $50 (initial and o Regular after-tax o For all types of IRAs,
additional) contributions either regular IRA
made by you or paid to contributions may not
us by an employer who exceed $2,000 for a
establishes a payroll year.
deduction program.
o Contributions are
o Rollovers from another subject to income limits
Roth IRA. and other tax rules. See
"Tax information --
o Conversion rollovers Contributions to Roth
from a traditional IRA. IRAs."
o Direct transfers
from another Roth
IRA.
- ----------------------------------------------------------------------------------------------------------------------
QP Traditional 0 - 79 $2,500 o Rollovers from a o Rollover contributions
IRA qualified plan. after age 70 1/2 must be
net of required
o Rollovers from a TSA. minimum distributions.
o The EQUI-VEST QP o Regular after-tax
Traditional IRA contract contributions are not
is intended to be a permitted.
conduit IRA. Only
rollovers from a
qualified plan or TSA
are permitted.
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
* For Traditional IRA's, the maximum issue age is 70, but we will issue up
to age 79 if the contribution is a rollover contribution. For all other
IRA's, we will issue contracts up to annuitant ages 80-83 with our prior
approval.
See "Tax information" for a more detailed discussion of sources of
contributions and certain contribution limitations. We may refuse to accept any
contribution if the sum of all contributions under all EQUI-VEST contracts with
the same annuitant would then total more than $1,000,000. We may also refuse to
accept any contribution if the sum of all contributions under all Equitable
Life annuity accumulation contracts that you own would then total more than
$2,500,000.
- ------------------------------------------------------------------------------
The "annuitant" is the person who is the measuring life for determining contract
benefits. The annuitant is not necessarily the contract owner.
- ------------------------------------------------------------------------------
For information on when contributions are credited see "Dates and prices at
which contract events occur" under "More information" later in this prospectus.
<PAGE>
- --------------------------------------------------------------------------------
CONTRACT FEATURES AND BENEFITS 19
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
OWNER AND ANNUITANT REQUIREMENTS
Under NQ contracts, the annuitant can be different than the owner.
Under any type of the IRA contract, the owner and annuitant must be the same
person.
HOW YOU CAN MAKE YOUR CONTRIBUTIONS
Except as indicated below, contributions must be by check drawn on a U.S. bank
in U.S. dollars, and made payable to Equitable Life. We do not accept
third-party checks endorsed to us except for rollover contributions, tax-free
exchanges or trustee checks that involve no refund. All checks are subject to
our ability to collect the funds. We reserve the right to reject a payment if
it is received in an unacceptable form.
You may also make contributions by wire transfer or our automatic investment
program. See "About other methods of payment" under "More information" later in
this prospectus.
Your initial contribution must generally be accompanied by an application and
any other form we need to process the payments. If any information is missing
or unclear, we will try to obtain that information. If we are unable to obtain
all of the information we require within five business days after we receive an
incomplete application or form, we will inform the Equitable associate
submitting the application on your behalf. We will then return the contribution
to you unless you specifically direct us to keep your contribution until we
receive the required information.
Generally, you may make additional contributions at any time. You may do so in
single sum amounts, on a regular basis, or as your financial situation
permits.
-------------------------------------------------------------------------------
Generally our "business day" is any day on which Equitable Life is open and the
New York Stock Exchange is open for trading.
-------------------------------------------------------------------------------
SECTION 1035 EXCHANGES
You may apply the value of an existing nonqualified deferred annuity contract
(or life insurance or endowment contract) to purchase an NQ contract in a
tax-free exchange if you follow certain procedures as shown in the form that we
require you to use. Also see "Tax information" later in this prospectus.
WHAT ARE YOUR INVESTMENT OPTIONS UNDER THE CONTRACT?
Your investment options are the variable investment options, the guaranteed
interest option and the fixed maturity options.
VARIABLE INVESTMENT OPTIONS
Your investment results in any one of the 30 variable investment options will
depend on the investment performance of the underlying Portfolios. Listed
below are the currently available Portfolios, their investment objectives, and
their advisers.
-------------------------------------------------------------------------------
You can choose from among 30 variable investment options.
-------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
20 CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIOS OF THE HUDSON RIVER TRUST
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Alliance Aggressive Stock Long-term growth of capital Alliance Capital Management L.P.
- -----------------------------------------------------------------------------------------------------------------------
Alliance Balanced High return through a combination of current Alliance Capital Management L.P.
income and capital appreciation
- -----------------------------------------------------------------------------------------------------------------------
Alliance Common Stock Long-term growth of capital and increasing Alliance Capital Management L.P.
income
- -----------------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors High total return without, in the adviser's Alliance Capital Management L.P.
opinion, undue risk to principal
- -----------------------------------------------------------------------------------------------------------------------
Alliance Equity Index Total return (before The Hudson River Trust and Alliance Capital Management L.P.
Separate Account A annual expenses) that
approximates the total return performance of the
Standard & Poor's 500 Composite Stock Price
Index
- -----------------------------------------------------------------------------------------------------------------------
Alliance Global Long-term growth of capital Alliance Capital Management L.P.
- -----------------------------------------------------------------------------------------------------------------------
Alliance Growth & Income High total return through a combination of Alliance Capital Management L.P.
current income and capital appreciation
- -----------------------------------------------------------------------------------------------------------------------
Alliance Growth Investors High total return consistent with the adviser's Alliance Capital Management L.P.
determination of reasonable risk
- -----------------------------------------------------------------------------------------------------------------------
Alliance High Yield High return by maximizing current income and, Alliance Capital Management L.P.
to the extent consistent with that objective,
capital appreciation
- -----------------------------------------------------------------------------------------------------------------------
Alliance Intermediate High current income consistent with relative Alliance Capital Management L.P.
Government Securities stability of principal
- -----------------------------------------------------------------------------------------------------------------------
Alliance International Long-term growth of capital Alliance Capital Management L.P.
- -----------------------------------------------------------------------------------------------------------------------
Alliance Money Market High level of current income while preserving Alliance Capital Management L.P.
assets and maintaining liquidity
- -----------------------------------------------------------------------------------------------------------------------
Alliance Quality Bond High current income consistent with preservation Alliance Capital Management L.P.
of capital
- -----------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth Long-term growth of capital Alliance Capital Management L.P.
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
CONTRACT FEATURES AND BENEFITS 21
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIOS OF EQ ADVISORS TRUST
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
EQ/Alliance Premier Growth Long-term growth of capital Alliance Capital Management L.P.
- --------------------------------------------------------------------------------------------------------------------------------
Capital Guardian Research Long-term growth of capital Capital Guardian Trust Company
- --------------------------------------------------------------------------------------------------------------------------------
Capital Guardian U.S. Equity Long-term growth of capital Capital Guardian Trust Company
- --------------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Capital appreciation Evergreen Asset Management Corp.
- --------------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Foundation In order of priority, reasonable income, Evergreen Asset Management Corp.
conservation of capital, and capital appreciation
- --------------------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Long-term growth of capital Massachusetts Financial Services Company
Companies
- --------------------------------------------------------------------------------------------------------------------------------
MFS Growth with Income Reasonable current income and long-term Massachusetts Financial Services Company
growth of capital and income
- --------------------------------------------------------------------------------------------------------------------------------
MFS Research Long-term growth of capital and future income Massachusetts Financial Services Company
- --------------------------------------------------------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity Capital appreciation and, secondarily, income Merrill Lynch Asset Management, L.P.
- --------------------------------------------------------------------------------------------------------------------------------
Merrill Lynch World Strategy High total investment return Merrill Lynch Asset Management, L.P.
- --------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Long-term capital appreciation Morgan Stanley Asset Management
Markets Equity
- --------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Balanced Balanced investment Putnam Investment Management, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Capital growth, current income is a secondary Putnam Investment Management, Inc.
Value objective
- --------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income Substantial dividend income and also capital T. Rowe Price Associates, Inc.
appreciation
- --------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price International Long-term growth of capital Rowe Price-Fleming International, Inc.
Stock
- --------------------------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Long-term capital appreciation Warburg Pincus Asset Management, Inc.
Value
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Other important information about the Portfolios is included in the separate
prospectuses for The Hudson River Trust and EQ Advisors Trust attached at the
end of this prospectus. See "Proposed substitution of Portfolios" under "More
information" for information regarding the proposed substitution of newly
created Portfolios of EQ Advisors Trust for the Portfolios of The Hudson River
Trust currently available under the variable investment options.
<PAGE>
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22 CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GUARANTEED INTEREST OPTION
The guaranteed interest option is part of our general account and pays interest
at guaranteed rates. We discuss our general account under "More information."
We assign an interest rate to each amount allocated to the guaranteed interest
option. This rate is guaranteed for a specified period, depending on when the
allocation is made. Therefore, different interest rates may apply to different
amounts in the guaranteed interest option.
We credit interest daily to amounts in the guaranteed interest option. There
are three levels of interest in effect at the same time in the guaranteed
interest option:
(1) the minimum interest rate guaranteed over the life of the contract,
(2) the yearly guaranteed interest rate for the calendar year, and
(3) the current interest rate.
We set current interest rates periodically, according to our procedures that we
have in effect at the time. All interest rates are effective annual rates, but
before deduction of annual administrative charges or any withdrawal charges.
The yearly guaranteed interest rate is 4% for 1999 and 4% for the year 2000.
The yearly rates we set will never be less than the minimum guaranteed interest
rate of 3% for the life of the contract. Current interest rates will never be
less than the yearly guaranteed interest rate.
FIXED MATURITY OPTIONS
We offer fixed maturity options with maturity dates ranging from one to ten
years. You can allocate your contributions to one or more of these fixed
maturity options. However, you may not allocate more than one contribution to
any one fixed maturity option. These amounts become part of our general account
assets. They will accumulate interest at the "rate to maturity" for each fixed
maturity option. The total amount you allocate to and accumulate in each fixed
maturity option is called the "fixed maturity amount." The fixed maturity
options are not available in contracts issued in Maryland. For contracts issued
in New York see "Charges and expenses" for information on withdrawal charges
when amounts are allocated to the fixed maturity options.
-------------------------------------------------------------------------------
Fixed maturity options range from one to ten years to maturity
-------------------------------------------------------------------------------
The rate to maturity you will receive for each fixed maturity option is the
rate to maturity in effect for new contributions allocated to that fixed
maturity option on the date we apply your contribution. This rate will never be
less than 3%. If you make any withdrawals or transfers from a fixed maturity
option before the maturity date, we will make a market value adjustment that
may increase or decrease any fixed maturity amount you have left in that fixed
maturity option. We discuss the market value adjustment below and in greater
detail later in this prospectus under "More information."
On the maturity date of a fixed maturity option your fixed maturity amount,
assuming you have not made any withdrawals or transfers, will equal your
contribution to that fixed maturity option plus interest, at the rate to
maturity for that contribution, to the date of the calculation. This is the
fixed maturity option's "maturity value." Before maturity, the current value we
will report for your fixed maturity amount will reflect a market value
adjustment. Your current value will reflect the market value adjustment that we
would make if you were to withdraw all of your fixed maturity amounts on the
date of the report. We call this your "market adjusted amount."
FIXED MATURITY OPTIONS AND MATURITY DATES. We currently offer fixed maturity
options ending on June 15th for each of the maturity years 2000 through 2009.
See "Allocating your contributions" below. As fixed maturity options expire, we
expect to add maturity years so that generally 10 fixed maturity options are
available at any time.
We will not accept allocations to a fixed maturity option if on the date the
contribution is to be applied:
<PAGE>
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CONTRACT FEATURES AND BENEFITS 23
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
o you previously allocated a contribution or made a transfer to the same
fixed maturity option; or
o the rate to maturity is 3%; or
o the fixed maturity option's maturity date is within the current calendar
year; or
o the fixed maturity option's maturity date is later than the date annuity
payments are to begin.
YOUR CHOICES AT THE MATURITY DATE. We will notify you at least 45 days before
each of your fixed maturity options is scheduled to mature. At that time, you
may choose to have one of the following take place on the maturity date, as
long as none of the conditions listed above or in "Allocating your
contributions," below would apply:
(a) transfer the maturity value into another available fixed maturity option,
or into any of the variable investment options; or
(b) withdraw the maturity value (there may be a withdrawal charge).
If we do not receive your choice on or before the fixed maturity option's
maturity date, we will automatically transfer your maturity value into the
Alliance Money Market option, or another investment option if we are required
to do so by any state regulation. Such a case is the State of New York where a
different rule applies. See "Contracts issued in New York - fixed maturity
options."
MARKET VALUE ADJUSTMENT. If you make any withdrawals (including transfers,
surrender or termination of your contract, or when we make deductions for
charges) from a fixed maturity option before it matures we will make a market
value adjustment, which will increase or decrease any fixed maturity amount you
have in that fixed maturity option. The amount of the adjustment will depend on
two factors:
(a) the difference between the rate to maturity that applies to the amount
being withdrawn and the rate to maturity in effect at that time for new
allocations to that same fixed maturity option, and
(b) the length of time remaining until the maturity date.
In general, if interest rates rise from the time that you originally allocate
an amount to a fixed maturity option to the time that you take a withdrawal,
the market value adjustment will be negative. Likewise, if interest rates drop
at the end of that time, the market value adjustment will be positive. Also,
the amount of the market value adjustment, either up or down, will be greater
the longer the time remaining until the fixed maturity option's maturity date.
Therefore, it is possible that the market value adjustment could greatly reduce
your value in the fixed maturity options, particularly in the fixed maturity
options with later maturity dates.
We provide an illustration of the market adjusted amount of specified maturity
values, an explanation of how we calculate the market value adjustment, and
information concerning our general account and investments purchased with
amounts allocated to the fixed maturity options, under "More information" later
in this prospectus. Appendix II to this prospectus provides an example of how
the market value adjustment is calculated.
SELECTING YOUR INVESTMENT METHOD
You choose either of the following two methods for selecting your investment
options:
o MAXIMUM INVESTMENT OPTIONS CHOICE. Under this method you may allocate
contributions or transfer funds to any of the available investment options
listed in A and B in the investment chart. You can make transfers whenever you
choose. However, there will be restrictions on the amount you can transfer out
of the guaranteed interest option listed in A.
o MAXIMUM TRANSFER FLEXIBILITY. Under this method you may allocate contributions
to any of the investment options listed in A in the investment options chart
and no transfer restrictions will apply.
<PAGE>
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24 CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT OPTIONS
A
- --------------------------------------------------------------------------------
o Guaranteed Interest Option
- --------------------------------------------------------------------------------
DOMESTIC EQUITY INTERNATIONAL EQUITY
- --------------------------------------------------------------------------------
o Alliance Common Stock o Alliance Global
o Alliance Equity Index o Alliance International
o Alliance Growth & Income o Morgan Stanley Emerging
o EQ/Alliance Premier Growth Markets Equity
o Capital Guardian Research o T. Rowe Price International
o Capital Guardian U.S. Equity Stock
o MFS Growth with Income
o MFS Research
o Merrill Lynch Basic Value
Equity
o EQ/Putnam Growth & Income
Value
o T. Rowe Price Equity Income
- --------------------------------------------------------------------------------
ASSET ALLOCATION AGGRESSIVE EQUITY
- --------------------------------------------------------------------------------
o Alliance Balanced o Alliance Aggressive Stock
o EQ/Evergreen Foundation o Alliance Small Cap Growth
o Alliance Growth Investors o EQ/Evergreen
o Merrill Lynch World Strategy o MFS Emerging Growth
o EQ/Putnam Balanced Companies
o Warburg Pincus Small
Company Value
- --------------------------------------------------------------------------------
B
- --------------------------------------------------------------------------------
AGGRESSIVE FIXED INCOME
- --------------------------------------------------------------------------------
o Alliance High Yield
- --------------------------------------------------------------------------------
DOMESTIC FIXED INCOME ASSET ALLOCATION
- --------------------------------------------------------------------------------
o Alliance Intermediate o Alliance Conservative
Government Securities Investors
o Alliance Money Market
o Alliance Quality Bond
-------------------------------------------------------------------------------
FIXED MATURITY OPTIONS
- --------------------------------------------------------------------------------
Transfer restrictions apply as indicated above under "Fixed maturity
options and maturity dates."
ALLOCATING YOUR CONTRIBUTIONS
Once you have made your investment method choice, you may allocate your
contributions to one or more, or all of the investment options that you have
chosen, subject to any restrictions under the investment method you chose.
However, you may not allocate more than one contribution to any one fixed
maturity option. Allocations must be in whole percentages and you may change
your allocation percentages at any time. However, the total of your allocations
must equal 100%. Once your contributions are allocated to the investment
options they become part of your account value. We discuss account value under
"Determining your contract's value." After your contract is issued, you may
request that we add or eliminate any variable investment options that result in
transfer restrictions. We reserve the right to deny your request. See
"Transferring your money among investment options."
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your contract, you may return it
to us for a refund. To exercise this cancellation right you must mail the
contract directly to our Processing Office within 10 days after you receive it.
In some states, this "free look" period may be longer.
For contributions allocated to the variable investment options, your refund
will equal your contributions, reflecting any investment gain or loss that also
reflects the daily charges we deduct. For contributions allocated to the
guaranteed interest option, your refund will equal the amount of the
contributions but will not include interest. For contributions allocated to the
fixed maturity options, your refund will equal the amount of the contribution
allocated to the fixed maturity options reflecting any positive or negative
market value adjustments. Some states require that we refund the full amount of
your contribution (not including any investment gain or loss, interest, or
market value adjustment). For IRA contracts returned to us within seven days
after you receive it, we are required to refund the full amount of your
contribution.
We may require that you wait six months before you apply for a contract with us
again if:
o you cancel your contract during the free look period; or
o you change your mind before you receive your contract whether we have
received your contribution or not.
Please see "Tax information" for possible consequences of cancelling your
contract.
If you fully or partially convert an existing Traditional IRA contract to a
Roth IRA contract, you may cancel your Roth IRA contract and return to a
Traditional IRA contract. Our Processing Office, or your Equitable associate,
can provide
<PAGE>
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CONTRACT FEATURES AND BENEFITS 25
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
you with the cancellation instructions. Ask for the form entitled "EQUI-VEST
Roth IRA Re-Characterization Form."
DEATH BENEFIT
Your contract provides a death benefit. The death benefit is equal to (i) your
account value, or (ii) the "minimum death benefit" or, if elected, (iii) the
ratcheted death benefit, whichever provides the highest amount. The minimum
death benefit is equal to your total contributions, less withdrawals and any
withdrawal charges, and any taxes that apply.
RATCHETED DEATH BENEFIT
For an additional fee you may elect the ratcheted death benefit. You may only
elect the ratcheted death benefit at the time you apply for a contract. Once
you elect this benefit, you may not cancel it as long as the contract is in
effect. On the contract date, your ratcheted death benefit equals your initial
contribution. Then, on each third contract date anniversary, until the
annuitant is age 90, we will determine your ratcheted death benefit by
comparing your current ratcheted death benefit to your account value on that
third contract date anniversary. If your account value is higher than your
ratcheted death benefit, we will increase your ratcheted death benefit to equal
your account value. On the other hand, if your account value on the third
contract date anniversary is less than your ratcheted death benefit, we will
not adjust your ratcheted death benefit either up or down.
If you make additional contributions, we will increase your current ratcheted
death benefit by the dollar amount of the contribution on the date the
contribution is allocated to your investment options. If you take a withdrawal
from your contract, we will adjust your death benefit on the date you take the
withdrawal.
Each withdrawal you make will reduce the amount of your current ratcheted death
benefit on a pro rata basis. Reduction on a pro rata basis means that we
calculate the percentage of your current account value that is being withdrawn
and we reduce your current ratcheted death benefit by that same percentage. For
example, if your account value is $30,000 and you withdraw $12,000, you have
withdrawn 40% of your account value. If your ratcheted death benefit was
$40,000 before the withdrawal, it would be reduced by $16,000 ($40,000 x .40)
and your new ratcheted death benefit after the withdrawal would be $24,000
($40,000 - $16,000).
See Appendix III for an example of how we calculate the death benefit.
<PAGE>
- --------------------------------------------------------------------------------
26 DETERMINING YOUR CONTRACT'S VALUE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2
Determining your contract's value
- --------------------------------------------------------------------------------
YOUR ACCOUNT VALUE
Your "account value" is the total of the values you have in the (i) variable
investment options, (ii) guaranteed interest option, and (iii) the market
adjusted amounts you have in the fixed maturity options. These amounts are
subject to certain fees and charges discussed under "Charges and expenses."
Your contract also has a "cash value." At any time before annuity payments
begin, your contract's cash value is equal to the account value, less any
withdrawal charge that may apply, and less the total amount or a pro rata
portion of the annual administrative charge. Please see "Surrendering your
contract to receive its cash value" under "Accessing your money."
YOUR CONTRACT'S VALUE IN THE VARIABLE INVESTMENT OPTIONS
Each variable investment option invests in shares of a corresponding
Portfolio. Your value in each variable investment option is measured by
"units." The value of your units will increase or decrease as though you had
invested it in the corresponding Portfolio's shares directly. Your value,
however, will be reduced by the amount of the fees and charges that we deduct
under the contract.
-------------------------------------------------------------------------------
Units measure your value in each variable investment option.
-------------------------------------------------------------------------------
The unit value for each variable investment option depends on the investment
performance of that option minus daily charges for mortality and expense risks
and other expenses. On any day, your value in any variable investment option
equals the number of units credited to that option, adjusted for any units
deducted from your contract under that option, multiplied by that day's value
for one unit. The number of your contract units in any variable investment
option does not change unless you make additional contributions, make a
withdrawal, or transfer amounts among investment options. In addition, when we
deduct the withdrawal charge, the annual administrative charge, third-party
transfer or exchange charge, or the ratcheted death benefit charge, the number
of units credited to your contract will be reduced. A description of how unit
values are calculated is found in the SAI.
YOUR CONTRACT'S VALUE IN THE GUARANTEED INTEREST OPTION
Your value in the guaranteed interest option at any time will equal: your
contributions and transfers to that option, plus interest, minus withdrawals
and transfers out of the option, and charges we deduct.
YOUR CONTRACT'S VALUE IN THE FIXED MATURITY OPTIONS
Your value in each fixed maturity option at any time before the maturity date
is the market adjusted amount in each option. This is equivalent to your fixed
maturity amount increased or decreased by the market value adjustment. Your
value, therefore, may be higher or lower than your contributions (less
withdrawals) accumulated at the rate to maturity. At the maturity date, your
value in the fixed maturity option will equal its maturity value.
<PAGE>
- --------------------------------------------------------------------------------
TRANSFERRING YOUR MONEY AMONG INVESTMENT OPTIONS 27
- --------------------------------------------------------------------------------
3
Transferring your money among investment options
- --------------------------------------------------------------------------------
TRANSFERRING YOUR ACCOUNT VALUE
At any time before the date annuity payments are to begin, you can transfer
some or all of your account value among the investment options, subject to the
following:
o You must transfer at least $300 of account value or, if less, the entire
amount in the investment option. We may waive the $300 requirement.
o You may not transfer to a fixed maturity option in which you already have
value.
o You may not transfer to a fixed maturity option if its maturity date is
later than the date annuity payments are to begin.
o If you make transfers out of a fixed maturity option other than at its
maturity date the transfer may cause a market value adjustment.
o If you choose the maximum investment options choice method for selecting
investment options, the maximum amount you may transfer in any contract year
from the guaranteed interest option to any other investment option is (a)
25% of the amount you had in the guaranteed interest option on the last day
of the prior contract year or, if greater, (b) the total of all amounts you
transferred from the guaranteed interest option to any other investment
option in the prior contract year.
If you transfer money from another financial institution into the guaranteed
interest option during your first contract year, and if you have selected
maximum investment options choice, you may, during the balance of that contract
year, transfer up to 25% of such initial guaranteed interest option balance to
any other investment option.
Subject to the terms of your contract, upon advance notice, we may change or
establish additional restrictions on transfers among the investment options. A
transfer request does not change your percentages for allocating current or
future contributions among the investment options.
You may request a transfer in writing or by telephone using TOPS. You must send
in all signed written requests directly to our Processing Office.
Transfer requests should specify:
(1) the contract number,
(2) the dollar amounts to be transferred, and
(3) the investment options to and from which you are transferring.
We will confirm all transfers in writing.
AUTOMATIC TRANSFER OPTIONS
INVESTMENT SIMPLIFIER
You may choose from two automatic options for transferring amounts from the
guaranteed interest option to the variable investment options. The transfer
options are the "fixed-dollar option" and the "interest sweep." You may select
one or the other, but not both.
FIXED-DOLLAR OPTION. Under this option you may elect to have a fixed-dollar
amount transferred out of the guaranteed interest option and into the variable
investment options of your choice on a monthly basis. You can specify the
number of monthly transfers or instruct us to continue to make monthly
transfers until all available amounts in the guaranteed interest option have
been transferred out.
In order to elect the fixed-dollar option you must have a minimum of $5,000 in
the guaranteed interest option on the date we receive your election form at our
Processing Office. You also must elect to transfer at least $50 per month. The
fixed-dollar option is subject to the guaranteed interest option transfer
limitation described above.
The fixed-dollar option is a form of dollar-cost averaging. Dollar-cost
averaging allows you to gradually allocate amounts to the variable investment
options by periodically transferring approximately the same dollar amount to
the variable investment options you select. This will cause you to purchase
more units if the unit's value is low and fewer units if the unit's value is
high. Therefore, you may get a lower average cost per unit over the long term.
This plan of
<PAGE>
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28 TRANSFERRING YOUR MONEY AMONG INVESTMENT OPTIONS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
investing, however, does not guarantee that you will earn a profit or be
protected against losses.
INTEREST SWEEP. Under the interest sweep, we will make transfers on a monthly
basis from amounts in the guaranteed interest option. The amount we will
transfer will be the interest credited to amounts you have in the guaranteed
interest option from the last business day of the prior month to the last
business day of the current month. You must have at least $7,500 in the
guaranteed interest option on the date we receive your election and on the last
business day of each month thereafter to participate in the interest sweep
option.
WHEN YOUR PARTICIPATION IN AN AUTOMATIC TRANSFER OPTION WILL END. Your
participation in an automatic transfer option will end:
o Under the fixed-dollar option, when either the number of designated monthly
transfers have been completed or the amount you have available in the
guaranteed interest option has been transferred out.
o Under the interest sweep, when the amount you have in the guaranteed
interest option falls below $7,500 (determined on the last business day of
the month) for two months in a row.
o Under either option, on the date we receive at our Processing Office, your
written request to cancel automatic transfers, or on the date your contract
terminates.
REBALANCING YOUR ACCOUNT VALUE
We currently offer a rebalancing program that you can use to automatically
reallocate your account value among the variable investment options. You must
tell us:
(a) the percentage you want invested in each variable investment option
(whole percentages only), and
(b) how often you want the rebalancing to occur (quarterly, semiannually, or
annually).
While your rebalancing program is in effect, we will transfer amounts among
each variable investment option so that the percentage of your account value
that you specify is invested in each option at the end of each rebalancing
date. You must rebalance your entire account value in the variable investment
options.
-------------------------------------------------------------------------------
Rebalancing does not assure a profit or protect against loss. You should
periodically review your allocation percentages as your needs change. You may
want to discuss the rebalancing program with your Equitable associate and/or
financial adviser before electing the program.
-------------------------------------------------------------------------------
You may elect the rebalancing program at any time. To be eligible, you must
have at least $5,000 of account value in the variable investment options.
Rebalancing is not available for amounts you have allocated in the guaranteed
interest option or in the fixed maturity options.
You may change your allocation instructions or cancel the program at any time.
<PAGE>
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ACCESSING YOUR MONEY 29
- --------------------------------------------------------------------------------
4
Accessing your money
- --------------------------------------------------------------------------------
WITHDRAWING YOUR ACCOUNT VALUE
You have several ways to withdraw your account value before annuity payments
begin. The table below shows the methods available under each type of contract.
More information follows the table. For the tax consequences of taking
withdrawals, see "Tax information."
- ------------------------------------------------------------------
METHOD OF WITHDRAWAL
- ------------------------------------------------------------------
MINIMUM
CONTRACT LUMP SUM SYSTEMATIC DISTRIBUTION
- ------------------------------------------------------------------
NQ Yes Yes No
- ------------------------------------------------------------------
Traditional IRA Yes Yes Yes
- ------------------------------------------------------------------
QP IRA Yes Yes Yes
- ------------------------------------------------------------------
Roth IRA Yes Yes No
- ------------------------------------------------------------------
LUMP SUM WITHDRAWALS
(All Contracts)
You may take lump sum withdrawals from your account value at any time while the
annuitant is living and before annuity payments begin. The minimum amount you
may withdraw at any time is $300. If your account value is less than $500 after
a withdrawal, we may terminate your contract and pay you its cash value.
Lump sum withdrawals in excess of the 15% free withdrawal amount may be subject
to a withdrawal charge.
SYSTEMATIC WITHDRAWALS
(All Contracts)
If you have at least $20,000 of account value in the variable investment
options and the guaranteed interest option you may elect systematic
withdrawals. You may elect to have your systematic withdrawals made on a
monthly or quarterly basis. The minimum amount you may take for each withdrawal
is $300. We will make the withdrawals on any day of the month that you select
as long as it is not later than the 28th day of the month. If you do not select
a date, your withdrawals will be made on the first day of the month. A check
for the amount of the withdrawal will be mailed to you or, if you prefer, we
will electronically transfer the money to your checking account.
You may withdraw either the amount of interest earned in the guaranteed
interest option or a fixed-dollar amount from either the variable investment
options or the guaranteed interest option. If you elect the interest option, a
minimum of $20,000 must be maintained in the guaranteed interest option. If you
elect the fixed-dollar option you do not have to maintain a minimum amount. You
may elect to have the amount of the withdrawal subtracted from your account
value in one of three ways:
(1) pro rata from more than one variable investment option (without using up
your total value in those options); or
(2) pro rata from more than one variable investment option (until your value
in those options is used up); or
(3) you may specify a dollar amount from only one variable investment option.
You can cancel the systematic withdrawal option at any time.
Amounts withdrawn in excess of the 15% free withdrawal amount may be subject to
a withdrawal charge.
MINIMUM DISTRIBUTION WITHDRAWALS
(Traditional IRA and QP IRA contracts - See "Tax information")
We offer the minimum distribution withdrawal option to help you meet required
minimum distributions under federal income tax rules. You may elect this option
in the year in which you reach age 70 1/2 and have account value in the
variable investment options and the guaranteed interest option of at least
$2,000. The minimum amount we will pay out is $300, or if less, your account
value. If your account value is less than $500 after the withdrawal, we may
terminate your contract and pay you its cash value. You elect the method you
want us to use to calculate your minimum distribution withdrawal from the
choices we offer. Currently, minimum distribution withdrawal payments will be
made annually.
Unless you specify otherwise, we will subtract your withdrawals on a pro rata
basis from your values in the variable investment options and the guaranteed
interest
<PAGE>
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30 ACCESSING YOUR MONEY
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- --------------------------------------------------------------------------------
option. If those amounts are insufficient, we will make up required amounts
from the fixed maturity options to the extent you have value in those options.
A market value adjustment may apply. We will calculate your payment each year
based on your account value at the end of each prior calendar year, based on
the method you choose.
-------------------------------------------------------------------------------
We will send to Traditional IRA and QP IRA owners a form outlining the minimum
distribution options available before you reach age 701/2 (if you have not
begun your annuity payments before that time).
-------------------------------------------------------------------------------
AUTOMATIC NQ DEPOSIT SERVICE
If you are receiving required minimum distribution payments from a Traditional
IRA or QP IRA contract you may use our automatic NQ deposit service.
Under this service we will automatically deposit the required minimum
distribution payment from your Traditional IRA or QP IRA contract directly into
an existing EQUI-VEST NQ or an existing EQUI-VEST Express NQ contract according
to your allocation instructions.
DEPOSIT OPTION FOR NQ CONTRACTS ONLY
You can elect the deposit option for your benefit while you live, or for the
benefit of your beneficiary.
Proceeds from your NQ contract can be deposited with us for a period you select
(including one for as long as the annuitant lives). We will hold the amounts in
our general account. We will credit interest on the amounts at a guaranteed
rate for the specified period. We will pay out the interest on the amount
deposited at least once each year.
If you elect this option for your benefit, you deposit the amount with us that
you would otherwise apply to an annuity payout option. If you elect this option
for your beneficiary before the annuitant's death, death benefit proceeds can
be left on deposit with us subject to certain restrictions, instead of being
paid out to the beneficiary.
Other restrictions apply to the deposit option. Your Equitable associate can
provide more information about this option, or you may call our Processing
Office.
SURRENDER OF YOUR CONTRACT TO RECEIVE ITS CASH VALUE
You may surrender your contract to receive its cash value at any time while the
annuitant is living and before you begin to receive annuity payments. For a
surrender to be effective, we must receive your written request and your
contract at our Processing Office. We will determine your cash value on the
date we receive the required information. All benefits under the contract will
terminate as of that date.
You may receive your cash value in a single sum payment or apply it to one or
more of the annuity payout options. See "Choosing your annuity payout options"
below. We will usually pay the cash value within seven calendar days, but we
may delay payment as described in "When to expect payments" below. For the tax
consequences of surrenders, see "Tax information."
WHEN WE MAY TERMINATE YOUR CONTRACT
We may terminate your contract and pay you the cash value if:
(1) your account value is less than $500 and you have not made contributions
to your contract for a period of three years; or
(2) you request a lump sum withdrawal that reduces your account value to an
amount less than $500; or
(3) you have not made any contributions within 120 days from your contract
date.
WHEN TO EXPECT PAYMENTS
Generally, we will fulfill requests for payments out of the variable investment
options within seven calendar days after the date of the transaction to which
the request relates. These transactions may include applying proceeds to a
variable annuity payout option, payment of a death benefit, payment of any
amount you withdraw (less any withdrawal charge) and, upon surrender or
termination, payment of the cash value. We may postpone such payments or
applying proceeds for any period during which:
<PAGE>
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ACCESSING YOUR MONEY 31
- --------------------------------------------------------------------------------
(1) the New York Stock Exchange is closed or restricts trading,
(2) sales of securities or determination of the fair value of a variable
investment option's assets is not reasonably practicable because of an
emergency, or
(3) the SEC, by order, permits us to defer payment to protect people
remaining in the variable investment options.
We can defer payment of any portion of your values in the guaranteed interest
option and the fixed maturity options (other than for death benefits) for up to
six months while you are living. We also may defer payments for a reasonable
amount of time (not to exceed 15 days) while we are waiting for a contribution
check to clear.
All payments are made by check and are mailed to you (or the payee named in a
tax-free exchange) by U.S. mail, unless you request that we use an express
delivery service at your expense.
CHOOSING YOUR ANNUITY PAYOUT OPTIONS
EQUI-VEST offers you several choices for receiving retirement income. Each
choice enables you to receive fixed or, in some cases, variable annuity
payments.
You can choose from among the different forms of annuity payout options listed
below. Restrictions apply, depending on the type of contract you own.
ANNUITY PAYOUT OPTIONS
You can choose from among the following annuity payout options:
o Life annuity: An annuity that 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 continuation of benefits following
the annuitant's death with this payout option, it provides the highest
monthly payment of any of the life annuity options, so long as the annuitant
is living.
o Life annuity - period certain: An annuity that guarantees payments for the
rest of the annuitant's life. If the annuitant dies before the end of a
selected period of time ("period certain"), payments continue to the
beneficiary for the balance of the period certain. Under IRAs, the period
certain cannot exceed your life expectancy or the joint life expectancy of
you and your spouse.
o Life annuity - refund certain: An annuity that guarantees payments for the
rest of the annuitant's life. If the annuitant dies before the amount
applied to purchase the annuity option has been recovered, payments to the
beneficiary will continue until that amount has been recovered. This payout
option is available only as a fixed annuity.
o Period certain annuity: An annuity that guarantees payments for a specific
period of time, usually 5, 10, 15, or 20 years. This option does not
guarantee payments for the rest of the annuitant's life. It does not permit
any repayment of the unpaid principal, so you cannot elect to receive part
of the payments as a single sum payment with the rest paid in monthly
annuity payments. Currently, this payout option is available only as a fixed
annuity.
All of the above payout options are available as fixed annuities. With fixed
annuities, we guarantee fixed annuity payments that will be based either on the
tables of guaranteed annuity payments in your contract or on our then current
annuity rates, whichever is more favorable for you.
The life annuity, life annuity -- period certain, and life annuity -- refund
certain payout options are available on a single life or joint and survivor
life basis. The joint and survivor life annuity guarantees payments for the
rest of the annuitant's life and, after the annuitant's death, payments
continue to the survivor.
The following annuity payout options are available as variable annuities:
o Life annuity (except in New York)
o Life annuity -- period certain
o Joint and survivor life annuity (100% to survivor)
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32 ACCESSING YOUR MONEY
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o Joint and survivor life period certain annuity (100% to survivor)
Variable annuities may be funded through your choice of variable investment
options investing in Portfolios of The Hudson River Trust. On or about October
1, 1999, these Portfolios will become Portfolios of EQ Advisors Trust. See
"Proposed substitution of Portfolios" under "About The Hudson River Trust and
EQ Advisors." The contract also offers a fixed annuity payout option that can
be elected in combination with the variable annuity payout options. The amount
of each variable annuity payment will fluctuate, depending upon the performance
of the variable investment options, and whether the actual rate of investment
return is higher or lower than an assumed base rate. Please see "Annuity unit
values" in the SAI.
We also make the variable annuity payout options available to owners of our
single premium deferred annuity ("SPDA") contract and certain other combination
fixed and variable annuity contracts. Such contractholders who are considering
purchasing a variable payout option should also review the information in this
prospectus relating to the variable investment options. The Hudson River Trust
prospectus (directly following this prospectus), and the sections of the SAI
which discuss the variable annuity payout option should also be reviewed.
We may offer other payout options not outlined here. Your Equitable associate
can provide details.
SELECTING AN ANNUITY PAYOUT OPTION
When you select a payout option, we will issue you a separate written agreement
confirming your right to receive annuity payments. Unless you choose a
different payout option, we will pay annuity payments under a life annuity with
a period certain of 10 years. We require you to return your contract before
annuity payments begin.
You can choose the date annuity payments are to begin. You can change the date
your annuity payments are to begin anytime before that date as long as you do
not choose a date later than the 28th day of any month. Also, that date may not
be later than the contract date anniversary that follows the annuitant's 90th
birthday. This may be different in some states.
Before your annuity payments are to begin, we will notify you by letter that
the annuity payout options are available. Once you have selected a payout
option and payments have begun, no change can be made, other than transfers (if
permitted in the future) among the variable investment options if a variable
annuity is selected.
The amount of the annuity payments will depend on
(1) the amount applied to purchase the annuity;
(2) the type of annuity chosen, and whether it is fixed or variable. If you
choose a variable annuity, we use an assumed base rate of either 5% or
3 1/2% to calculate the level of payments. We provide information about
the assumed base rate in the SAI;
(3) in the case of a life annuity, the annuitant's age (or the annuitant's and
joint annuitant's ages); and
(4) in certain instances, the sex of the annuitant(s).
In no event will you ever receive payments under a fixed option or an initial
payment under a variable option of less than the minimum amounts guaranteed by
the contract.
If, at the time you elect a payout option, 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 account value in a single sum rather
than as payments under the payout option chosen.
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CHARGES AND EXPENSES 33
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5
Charges and expenses
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CHARGES THAT EQUITABLE LIFE DEDUCTS
We deduct the following charges each day from the net assets of each variable
investment option. These charges are reflected in the unit values of each
variable investment option:
o A mortality and expense risks charge, which includes a death benefit charge
o A charge for other expenses
We deduct the following charges from your account value. When we deduct these
charges from your variable investment options, we reduce the number of units
credited to your contract:
o An annual administrative charge, if applicable
o Charge for third-party transfer or exchange
o At the time you make certain withdrawals or surrender your contract, or your
contract is terminated -- a withdrawal charge
o A ratcheted death benefit charge, if you elect the benefit
o At the time annuity payments are to begin -- charges for any state premium
or other applicable taxes. An annuity administrative fee may also apply
More information about these charges appears below.
MORTALITY AND EXPENSE RISKS CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for mortality and expense risks, including the death benefit.
The daily charge is equivalent to an annual rate of 0.95% of the net assets in
each variable investment option.
The mortality risk we assume is the risk that annuitants as a group will live
for a longer time than our actuarial tables predict. If that happens, we would
be paying more in annuity benefits than we planned. We also assume a risk that
the mortality assumptions reflected in our guaranteed annuity payment tables,
shown in each contract, will differ from actual mortality experience. We may
change the actuarial basis for our guaranteed annuity payment tables, but only
for new contributions and only at five year intervals from the contract date.
Lastly, we assume a mortality risk to the extent that at the time of death, the
guaranteed death benefit exceeds the cash value of the contract. In addition,
we waive any withdrawal charge upon payment of a death benefit.
The expense risk we assume is the risk that it will cost us more to issue and
administer the contracts than we expect.
To the extent that the mortality and expense risk charges are not needed to
cover the actual expenses incurred, they may be considered an indirect
reimbursement for certain sales and promotional expenses relating to the
contracts.
CHARGE FOR OTHER EXPENSES
We deduct this daily charge from the net assets in each variable investment
option. This charge, together with the annual administrative charge described
below, is for providing administrative and financial accounting services under
the contracts. The daily charge is equivalent to a maximum annual rate of 0.25%
of net assets in each variable investment option.
TOTAL MAXIMUM SEPARATE ACCOUNT A CHARGES. The total annual rate for Separate
Account A charges is 1.20%. We may increase or decrease this total annual rate,
but we may not increase it above a maximum rate of 2.00%. Any increase will
apply only to contributions you may make after the date of the change. Any
changes we make will reflect differences in costs and anticipated expenses, and
will not be unfairly discriminatory.
ANNUAL ADMINISTRATIVE CHARGE
We deduct an administrative charge from your account value on the last business
day of each contract year. We will deduct a pro rata portion of the charge if
you surrender your contract, elect an annuity payout option, or the annuitant
dies during the contract year. We deduct the charge if your account value on
the last business day of the contract year, is less than $25,000 under NQ and
QP IRA contracts and
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34 CHARGES AND EXPENSES
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$20,000 under Traditional IRA and Roth IRA contracts. If your account value on
such date is $25,000 or more for NQ and QP IRA ($20,000 or more for Traditional
IRA and Roth IRA) contracts, we do not deduct the charge. During the first two
contract years, the charge is equal to $30 or, if less, 2% of your current
account value. The charge is $30 for contract years three and later.
The charge is deducted pro rata from the variable investment options and the
guaranteed interest option. If those amounts are insufficient, we will make up
the required amounts from the fixed maturity options to the extent you have
value in those options, unless you tell us otherwise.
We may increase this charge if our administrative costs rise, but the charge
will never exceed $65 annually. We reserve the right to deduct this charge on a
quarterly, rather than annual basis.
CHARGE FOR THIRD-PARTY TRANSFER OR EXCHANGE
We impose a charge for making a direct transfer of amounts from your contract
to a third party, such as in the case of a trustee-to-trustee transfer for an
IRA contract, or if you request that your contract be exchanged for a contract
issued by another insurance company. In either case, we will deduct from your
account value any withdrawal charge that applies and a charge of $25 for each
direct transfer or exchange. We reserve the right to increase this charge to a
maximum of $65.
WITHDRAWAL CHARGE
A withdrawal charge may apply in three circumstances: (1) you make one or more
withdrawals during a contract year; (2) you surrender your contract to receive
its cash value; or (3) we terminate your contract. The amount of the charge
will depend on whether the free withdrawal amount applies, and the availability
of one or more exceptions.
In order to give you the exact dollar amount of the withdrawal you request, we
deduct the amount of the withdrawal and the amount of the withdrawal charge
from your account value. Any amount deducted to pay withdrawal charges is also
subject to a withdrawal charge. We deduct the withdrawal amount and the
withdrawal charge pro rata from the variable investment options and the
guaranteed interest option. If those amounts are insufficient, we will make up
the required amounts from the fixed maturity options to the extent you have
value in those options. If we deduct all or a portion of the withdrawal charge
from the fixed maturity options, a market value adjustment may apply.
The amount of the withdrawal charge we deduct is equal to 6% of contributions
withdrawn that were made in the current and five prior contract years. In the
case of surrenders, we will pay you the greater of (i) the account value after
any withdrawal charge has been imposed (cash value), or (ii) the free
withdrawal amount plus 94% of the remaining account value.
For purposes of calculating the withdrawal charge, amounts withdrawn up to the
free withdrawal amount are not considered a withdrawal of any contribution. We
also treat contributions that have been invested the longest as being withdrawn
first. We treat contributions as withdrawn before earnings for purposes of
calculating the withdrawal charge. However, the federal income tax rules treat
earnings under most NQ contracts as withdrawn first. See "Tax information."
We reserve the right to change the amount of the withdrawal charge, but it will
not exceed 6% of the contributions withdrawn.
Any change would not be unfairly discriminatory. We may also reduce the
withdrawal charge in order to comply with any state law requirement. See
"Contracts issued in New York -- fixed maturity options" below.
The withdrawal charge does not apply in the circumstances described below.
15% FREE WITHDRAWAL AMOUNT. Each contract year you can withdraw up to 15% of
your account value without paying a withdrawal charge. The 15% free withdrawal
amount is determined using your account value at the time you request a
withdrawal, minus any other withdrawals made during the contract year.
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CHARGES AND EXPENSES 35
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DEATH OR PURCHASE OF ANNUITY. The withdrawal charge does not apply:
o If the annuitant dies and a death benefit is payable to the beneficiary.
o If we receive a properly completed election form providing for the account
value to be used to buy a life contingent annuity or a non-life annuity with
a period certain for a term of at least ten years.
DISABILITY, TERMINAL ILLNESS, OR CONFINEMENT TO NURSING HOME. The withdrawal
charge also does not apply:
o If the annuitant has qualified to receive social security disability
benefits as certified by the Social Security Administration; or
o If we receive proof satisfactory to us (including certification by a
licensed physician) that the annuitant's life expectancy is six months or
less; or
o If the annuitant has been confined to a nursing home for more than 90 days
(or such other period, as required in your state) as verified by a licensed
physician. A nursing home for this purpose means one that is (a) approved by
Medicare as a provider of skilled nursing care service, or (b) licensed as a
skilled nursing home by the state or territory in which it is located (it
must be within the United States, Puerto Rico, U.S. Virgin Islands, or Guam)
and meets all of the following:
- its main function is to provide skilled, intermediate, or custodial
nursing care;
- it provides continuous room and board to three or more persons;
- it is supervised by a registered nurse or licensed practical nurse;
- it keeps daily medical records of each patient;
- it controls and records all medications dispensed; and
- its primary service is other than to provide housing for residents.
We reserve the right to impose a withdrawal charge, in accordance with your
contract and applicable state law, if the disability is caused by a preexisting
condition or a condition that began within 12 months of the contract date. Some
states may not permit us to waive the withdrawal charge in the above
circumstances, or may limit the circumstances for which the withdrawal charge
may be waived. Your Equitable associate can provide more information or you may
contact our Processing Office.
For Traditional IRA, QP IRA, and Roth IRA contracts the withdrawal charge also
does not apply:
o after six contract years and the annuitant is at least age 59 1/2; or
o if you request a refund of a contribution in excess of amounts allowed to be
contributed under the federal income tax rules within one month of the date
on which you made the contribution.
CONTRACTS ISSUED IN NEW YORK - FIXED MATURITY OPTIONS
For contracts issued in New York, the withdrawal charge that applies to
withdrawals taken from amounts in the fixed maturity options will never exceed
6%.
The withdrawal charge will be the greater of the charge determined by applying
the New York Declining Scale ("declining scale") and the New York Alternative
Scale ("alternative scale") method of accessing withdrawal charges, not to
exceed 6%. If you withdraw amounts that have been transferred from one fixed
maturity option to another, we use the alternative scale if it produces a
higher charge than the declining scale.
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36 CHARGES AND EXPENSES
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DECLINING SCALE ALTERNATIVE SCALE
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Year of in vestment in Year of transfer within
fixed maturity option* fixed maturity option*
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Within year 1 6% Within year 1 5%
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2 6% 2 4%
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3 5% 3 3%
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4 4% 4 2%
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5 3% 5 1%
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6 2% After year 5 0%
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After year 6 0% Not to exceed 1%
times the number of
years remaining in the
fixed maturity option,
rounded to the higher
number of years. In
other words, if 4.3
years remain, it would
be a 5% charge.
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* Measured from the contract date anniversary prior to the date of the
contribution or transfer.
In the following example we compare the withdrawal charge that would apply to a
withdrawal from a NQ, Traditional IRA or QP IRA contract that has an account
value of $10,000; $8,000 from a contribution made three years ago and $2,000
from positive investment performance.
o If you were to withdraw the total amount of the contribution within the
first six years after it was made the withdrawal charge that generally
applies would be $480 (6% of $8,000). However, if when you made your
contribution you allocated it to a fixed maturity option, the withdrawal
charge would be lower. According to the declining scale method described
above, the withdrawal charge would be limited to 5% of the $8,000, or $400
in the third year.
o The withdrawal charge may be different if when you made your contribution
three years ago, you allocated it to a fixed maturity option and then in
the third year, you transfer the amounts that apply to such contribution
to a new fixed maturity option. In this example we assume that there is
one year remaining in the new fixed maturity option. Because you made a
transfer among the fixed maturity options, the alternative scale may now
apply. Based on this alternative scale, a contribution that is transferred
will be subject to a 5% withdrawal charge if you withdraw that
contribution in the same year that you make the transfer. However, the
withdrawal charge may not exceed 1% for each year remaining in the new
fixed maturity option. Since, in this example, the time remaining in the
new fixed maturity option is one year, the withdrawal charge under the
alternative scale would be limited to 1%. Because New York regulations
permit us to use the greater of the declining scale or the alternative
scale, the withdrawal charge would be 5%, or $400, based on the declining
scale.
o The withdrawal charge may not exceed the charge that would normally apply
under the contract. Use of a New York scale can only result in a lower
charge. If your contribution has been in the contract for more than six
years and therefore would not have a withdrawal charge associated with it,
no withdrawal charge would apply.
o If you take a withdrawal from an investment option other than the fixed
maturity options, the amount available for withdrawal without a withdrawal
charge is reduced. It will be reduced by the amount of the contribution in
the fixed maturity options to which no withdrawal charge applies.
o As of any date on which 50% or more of your account value is held in fixed
maturity options, the free withdrawal amount is zero.
For contracts issued in New York, you should consider that on the maturity date
of a fixed maturity option if we have not received your instructions for
allocation of your maturity value, we will transfer your maturity value to the
fixed maturity option scheduled to mature next. If we are not offering other
fixed maturity options, we will transfer your maturity value to the Alliance
Money Market option.
The potential for lower withdrawal charges for withdrawals from the fixed
maturity options and the potential for a lower free withdrawal amount than
those that would normally apply, should be taken into account when deciding
whether to allocate amounts to, or transfer amounts to or from, the fixed
maturity options.
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CHARGES AND EXPENSES 37
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We will deduct the annual administrative charge and the withdrawal charge from
the variable investment options and the guaranteed interest option as discussed
above. If the amounts in those options are insufficient to cover the charges,
we reserve the right to deduct the charges from the fixed maturity options.
Charges deducted from the fixed maturity options are considered withdrawals
and, as such, will result in a market value adjustment.
CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES
We deduct a charge for applicable taxes such as premium taxes that may be
imposed in your state. Generally, we deduct the charge from the amount applied
to provide an annuity payout option. The current tax charge that might be
imposed varies by state and ranges from 0% to 3.5% (1% in Puerto Rico and 5% in
the U.S. Virgin Islands).
We reserve the right to deduct any applicable charges for taxes such as premium
taxes from each contribution, or from withdrawals, or for surrender and
termination of your contract. If we have deducted any applicable charges from
contributions, we will not deduct a charge for the same taxes later. If,
however, an additional tax charge is later imposed upon us when you make a
withdrawal, or surrender your contract, or it is terminated, or you elect to
begin receiving annuity payments, we reserve the right to deduct a charge at
that time.
ANNUITY ADMINISTRATIVE FEE
We generally deduct a fee of up to $350 from the amount to be applied to
purchase a life annuity payout option.
OPTIONAL RATCHETED DEATH BENEFIT CHARGE
If you elect the optional ratcheted death benefit we deduct a charge annually
from your account value on each contract date anniversary. The charge is equal
to 0.15% of your account value on the contract date anniversary.
We will deduct this charge from your investment options beginning first with
your value in the guaranteed interest option. If there is not enough value in
the guaranteed interest option we will deduct all or a portion of the charge
from your value in the variable investment options next, followed by your value
in the fixed maturity options in order of the earliest maturity date(s) first.
A market value adjustment may apply.
CHARGES THAT THE TRUSTS DEDUCT
The Hudson River Trust and EQ Advisors Trust each deducts charges for the
following types of fees and expenses:
o Investment advisory fees ranging from 0.31% to 1.15%.
o 12b-1 fees of 0.25%.
o Operating expenses, such as trustees' fees, independent auditors' fees,
legal counsel fees, administrative service fees, custodian fees, and
liability insurance.
o Investment-related expenses, such as brokerage commissions.
These charges are reflected in the daily share price of each Portfolio. Since
shares of each trust are purchased at their net asset value, these fees and
expenses are, in effect, passed on to the variable investment options and are
reflected in their unit values. For more information about these charges,
please refer to the prospectuses for The Hudson River Trust and EQ Advisors
Trust following this prospectus.
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce the withdrawal
charge or the mortality and expense risks charge, or change the minimum
contribution requirements. We also may change the minimum death benefit or
offer variable investment options that invest in shares of The Hudson River
Trust or EQ Advisors Trust that are not subject to the 12b-1 fee. Group
arrangements include those in which a trustee or an employer, for example,
purchases contracts covering a group of individuals on a group basis. Group
arrangements are not available for Traditional IRA and Roth IRA contracts.
Sponsored arrangements include those in which an employer allows us to sell
contracts to its employees or retirees on an individual basis.
<PAGE>
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38 CHARGES AND EXPENSES
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Our costs for sales, administration, and mortality generally vary with the size
and stability of the group or sponsoring organization, among other factors. We
take all these factors into account when reducing charges. To qualify for
reduced charges, a group or sponsored arrangement must meet certain
requirements, such as requirements for size and number of years in existence.
Group or sponsored arrangements that have been set up solely to buy contracts
or that have been in existence less than six months will not qualify for
reduced charges.
We also may establish different rates to maturity for the fixed maturity
options under different classes of contracts for group or sponsored
arrangements.
We will make these and any similar reductions according to our rules in effect
when we approve a contract for issue. We may change these rules from time to
time. Any variation will reflect differences in costs or services and will not
be unfairly discriminatory.
Group or sponsored arrangements may be governed by federal income tax rules,
the Employee Retirement Income Security Act of 1974, or both. We make no
representations with regard to the impact of these and other applicable laws on
such programs. We recommend that employers, trustees, and others purchasing or
making contracts available for purchase under such programs seek the advice of
their own legal and benefits advisers.
OTHER DISTRIBUTION ARRANGEMENTS
We may reduce or eliminate charges when sales are made in a manner that results
in savings of sales and administrative expenses, such as sales through persons
who are compensated by clients for recommending investments and who receive no
commission or reduced commissions in connection with the sale of the contracts.
We will not permit a reduction or elimination of charges where it will be
unfairly discriminatory.
<PAGE>
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PAYMENT OF DEATH BENEFIT 39
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6
Payment of death benefit
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YOUR BENEFICIARY AND PAYMENT OF BENEFIT
You designate your beneficiary when you apply for your contract. You may change
your beneficiary at any time by writing to our Processing Office. The change
will be effective on the date the written request for the change is received in
our Processing Office. We are not responsible for any beneficiary change
request that we do not receive.
We determine the amount of the death benefit as of the date we receive
satisfactory proof of the annuitant's death and any required instructions for
the method of payment. We describe the death benefit in "Contract features and
benefits" earlier in this prospectus.
On the date we determine the death benefit, your account value will be deducted
from the investment options. We will hold this amount in our general account
and credit it with interest at a rate not less than the rate required by law.
If you have transferred the value of another annuity contract that we issue to
your EQUI-VEST contract, the value of the other contract's minimum death
benefit calculated as of the time of the transfer will be included in the total
contributions for the purpose of calculating the minimum death benefit.
-------------------------
EFFECT OF THE ANNUITANT'S DEATH
If the annuitant dies before the annuity payments begin, we will pay the death
benefit to your beneficiary.
Generally, the death of the annuitant terminates the contract. However, a
beneficiary who is the surviving spouse of the owner/annuitant can choose to be
treated as the successor owner/annuitant and continue the contract. Only a
spouse can be a successor owner/annuitant.
For Traditional IRA and QP IRA contracts, a beneficiary
who is not a surviving spouse may be able to have
limited ownership as discussed under "Beneficiary continuation option under
Traditional IRA and QP IRA contracts" below.
WHEN AN NQ CONTRACT OWNER DIES BEFORE THE ANNUITANT
Under certain conditions the owner can change after the original owner's death.
When you are not the annuitant under an NQ contract and you die before annuity
payments begin, the beneficiary named to receive the death benefit upon the
annuitant's death will automatically become the successor owner. If you do not
want the beneficiary to be the successor owner, you should name a specific
successor owner. You may name a successor owner at any time by sending
satisfactory notice to our Processing Office.
Unless the surviving spouse of the owner who has died is the successor owner
for this purpose, the entire interest in the contract must be distributed under
the following rules:
o The cash value of the contract must be fully paid to the designated
beneficiary (new owner) by December 31st of the fifth calendar year after
your death.
o The successor owner may instead elect to receive the cash value as a life
annuity (or payments for a period certain of not longer than the new owner's
life expectancy). Payments must begin no later than December 31st following
the calendar year of the non-annuitant owner's death. Unless this
alternative is elected, we will pay any cash value on December 31st of the
fifth calendar year following the year of your death.
If the surviving spouse is the successor owner, the spouse may elect to
continue the contract. No distributions are required as long as the surviving
spouse and annuitant are living.
HOW DEATH BENEFIT PAYMENT IS MADE
We will pay the death benefit to the beneficiary in the form of the annuity
payout option you have chosen. If you have not chosen an annuity payout option
as of the time of the annuitant's death, the beneficiary will receive the death
benefit in a single sum. However, subject to any exceptions in the contract,
our rules and any applicable requirements under federal income tax rules, the
beneficiary may elect to apply the death benefit to one or more annuity payout
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40 PAYMENT OF DEATH BENEFIT
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options we offer at the time. See "Choosing your annuity payout options" under
"Accessing your money" earlier in this prospectus. Please note that if you are
both the contract owner and the annuitant, you may elect only a life annuity
or an annuity that does not extend beyond the life expectancy of the
beneficiary.
Single sum payments generally are paid through the Equitable Life Access
Account(TM), an interest bearing checking account. Beneficiaries have
immediate access to the proceeds by writing a check on the account. We pay
interest from the date the single sum is deposited into the Access Account
until the account is closed.
BENEFICIARY CONTINUATION OPTION UNDER TRADITIONAL IRA AND QP IRA CONTRACTS
Upon your death, a nonspouse beneficiary may generally elect to keep the
contract in your name and receive distributions under the contract instead of
the death benefit being paid in a single sum. The account value used to
provide the distributions will be increased to equal the amount of the death
benefit.
The beneficiary's choices depend in part on whether or not you were taking
required minimum distributions under the contract prior to your death.
(1) If you were taking required minimum distributions under the contract, the
distributions to the beneficiary must continue to be made at least as
rapidly as prior to your death.
(2) If you die before you must take required minimum distributions under the
contract, the beneficiary may begin taking minimum distributions under the
contract, but such withdrawals must be based on the beneficiary's life
expectancy. The withdrawals must begin by December 31st of the calendar
year following your death. If there is more than one beneficiary, the
shortest life expectancy must be used.
(3) The withdrawals must be taken annually. There will not be a withdrawal
charge for these withdrawals. The beneficiary along with his or her tax
adviser will be responsible for determining the amount of the withdrawals.
(4) The designated beneficiary must be a natural person and of legal age at the
time of election. The beneficiary must elect this option within 30 days
following the date we receive proof of your death. If no election is made
within 30 days to: (1) receive the death benefit, or (2) continue the
contract and take annual withdrawals as described above, or (3) defer
payment of the account value for five years, the death benefit will be paid
to the beneficiary according to our standard procedures.
(5) While the contract continues in your name, the beneficiary may transfer the
contract's account value among the investment options. However, additional
contributions will not be permitted and the death benefit provisions will
no longer be in effect. Although the only withdrawals that will be
permitted are minimum distribution withdrawals, the beneficiary may choose
at any time to withdraw all of the account value and no withdrawal charges
will apply.
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TAX INFORMATION 41
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7
Tax information
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OVERVIEW
In this part of the prospectus, we discuss the current federal income tax
rules that generally apply to EQUI-VEST contracts owned by United States
taxpayers. The tax rules can differ, depending on the type of contract,
whether NQ, Traditional IRA, QP IRA, or Roth IRA. Therefore, we discuss the
tax aspects of each type of contract separately.
Federal income tax rules include the United States laws in the Internal
Revenue Code, and Treasury Department Regulations and Internal Revenue Service
("IRS") interpretations of the Internal Revenue Code. These tax rules may
change. We cannot predict whether, when, or how these rules could change. Any
change could affect contracts purchased before the change.
We cannot provide detailed information on all tax aspects of the contracts.
Moreover, the tax aspects that apply to a particular person's contract may
vary depending on the facts applicable to that person. We do not discuss state
income and other state taxes, federal income tax and withholding rules for
non-U.S. taxpayers, or federal gift and estate taxes. Transfers of the
contract, rights under the contract, or payments under the contract may be
subject to gift or estate taxes. You should not rely only on this document,
but should consult your tax adviser before your purchase.
If you are buying a contract to fund a retirement plan that already provides
tax deferral under the Internal Revenue Code (any type of IRA) you should do
so for the contract's features and benefits other than tax deferral. In such
situations, the tax deferral of the contract does not provide additional
benefits.
TRANSFERS AMONG INVESTMENT OPTIONS
You can make transfers among investment options inside the contract without
triggering taxable income.
TAXATION OF NONQUALIFIED ANNUITIES
CONTRIBUTIONS
You may not deduct the amount of your contributions to a nonqualified annuity
contract.
CONTRACT EARNINGS
Generally, you are not taxed on contract earnings until you receive a
distribution from your contract, whether as a withdrawal or as an annuity
payment. However, earnings are taxable, even without a distribution:
o if a contract fails investment diversification requirements as specified in
federal income tax rules (these rules are based on or are similar to those
specified for mutual funds under securities laws);
o if you transfer a contract, for example, as a gift to someone other than
your spouse (or former spouse);
o if you use a contract as security for a loan (in this case, the amount
pledged will be treated as a distribution); and
o if the owner is other than an individual (such as a corporation,
partnership, trust, or other non-natural person).
All nonqualified deferred annuity contracts that Equitable Life and its
affiliates issue to you during the same calendar year are linked together and
treated as one contract for calculating the taxable amount of any distribution
from any of those contracts.
ANNUITY PAYMENTS
Once annuity payments begin, a portion of each payment is taxable as ordinary
income. You get back the remaining portion without paying taxes on it. This is
your "investment in the contract." Generally, your investment in the contract
equals the contributions you made, less any amounts you previously withdrew
that were not taxable.
For fixed annuity payments, the tax-free portion of each payment is determined
by (1) dividing your investment in the contract by the total amount you are
expected to receive out of the contract, and (2) multiplying the result by the
amount
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of the payment. For variable annuity payments, your investment in the contract
divided by the number of expected payments is your tax-free portion of each
payment.
Once you have received the amount of your investment in the contract, all
payments after that are fully taxable. If payments under a life annuity stop
because the annuitant dies, there is an income tax deduction for any
unrecovered investment in the contract.
PAYMENTS MADE BEFORE ANNUITY PAYMENTS BEGIN
If you make withdrawals before annuity payments begin under your contract,
they are taxable to you as ordinary income if there are earnings in the
contract. Generally, earnings are your account value less your investment in
the contract. If you withdraw an amount which is more than the earnings in the
contract as of the date of the withdrawal, the balance of the distribution is
treated as a return of your investment in the contract and is not taxable.
CONTRACTS PURCHASED THROUGH EXCHANGES
You may purchase your NQ contract through an exchange of another contract.
Normally, exchanges of contracts are taxable events. The exchange will not be
taxable under Section 1035 of the Internal Revenue Code if:
o The contract that is the source of the funds you are using to purchase the
NQ contract is another nonqualified deferred annuity contract (or life
insurance or endowment contract).
o The owner and the annuitant are the same under the source contract and the
EQUI-VEST NQ contract. If you are using a life insurance or endowment
contract the owner and the insured must be the same on both sides of the
exchange transaction.
The tax basis of the source contract carries over to the EQUI-VEST NQ contract.
SURRENDERS
If you surrender or cancel the contract, the distribution is taxable as
ordinary income (not capital gain) to the extent it exceeds your investment in
the contract.
DEATH BENEFIT PAYMENTS MADE TO A BENEFICIARY AFTER YOUR DEATH
For the rules applicable to death benefits, see "Payment of death benefit" and
"When an NQ contract owner dies before the annuitant" earlier in this
prospectus. The tax treatment of a death benefit taken as a single sum is
generally the same as the tax treatment of a withdrawal from or surrender of
your contract. The tax treatment of a death benefit taken as annuity payments
is generally the same as the tax treatment of annuity payments under
your contract.
EARLY DISTRIBUTION PENALTY TAX
If you take distributions before you are age 59 1/2 a penalty tax of 10% of
the taxable portion of your distribution applies in addition to the income
tax. The extra penalty tax does not apply to pre-age 59 1/2 distributions
made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o in the form of substantially equal periodic annuity payments for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and a beneficiary.
SPECIAL RULES FOR NQ CONTRACTS ISSUED IN PUERTO RICO
Under current law we treat income from NQ contracts as U.S. source. A Puerto
Rico resident is subject to U.S. taxation on such U.S. source income. Only
Puerto Rico source income of Puerto Rico residents is excludable from U.S.
taxation. Income from NQ contracts is also subject to Puerto Rico tax. The
calculation of the taxable portion of amounts distributed from a contract may
differ in the two jurisdictions. Therefore, you might have to file both U.S.
and Puerto Rico tax returns, showing different amounts of income from the
contract for each tax return. Puerto Rico generally provides a credit against
Puerto Rico tax for U.S. tax paid. Depending on your
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personal situation and the timing of the different tax liabilities, you may
not be able to take full advantage of this credit.
INDIVIDUAL RETIREMENT ARRANGEMENTS ("IRAS")
GENERAL
"IRA" stands for individual retirement arrangement. There are two basic types
of such arrangements, individual retirement accounts and individual retirement
annuities. In an individual retirement account, a trustee or custodian holds
the assets for the benefit of the IRA owner. The assets can include mutual
funds and certificates of deposit. In an individual retirement annuity, an
insurance company issues an annuity contract that serves as the IRA.
There are two basic types of IRAs, as follows:
o "Traditional IRAs," typically funded on a pre-tax basis including SEP-IRAs
and SIMPLE-IRAs, issued and funded in connection with employer-sponsored
retirement plans. EQUIT-VEST Traditional IRA and QP IRA are traditional
IRAs.
o Roth IRAs, first available in 1998, funded on an after-tax basis. EQUI-VEST
Roth IRA.
Regardless of the type of IRA, your ownership interest in the IRA cannot be
forfeited. You or your beneficiaries who survive you are the only ones who can
receive the IRA's benefits or payments.
You can hold your IRA assets in as many different accounts and annuities as
you would like, as long as you meet the rules for setting up and making
contributions to IRAs. However, if you own multiple IRAs, you may be required
to combine IRA values or contributions for tax purposes. For further
information about individual retirement arrangements, you can read Internal
Revenue Service Publication 590 ("Individual Retirement Arrangements (IRAs)").
This publication is usually updated annually, and can be obtained from any IRS
district office or the IRS Web site (www.irs.ustreas.gov).
Equitable Life designs its traditional IRA contracts to qualify as "individual
retirement annuities" under Section 408(b) of the Internal Revenue Code. This
prospectus contains the information that the IRS requires you to have before
you purchase an IRA. This section of the prospectus covers some of the special
tax rules that apply to IRAs. The next section covers Roth IRAs. Education
IRAs are not discussed in this prospectus because they are not available in
individual retirement annuity form.
The EQUI-VEST IRA contract has been approved by the IRS as to form for use as
a Traditional IRA. We have submitted the Roth IRA version for formal IRS
approval. This IRS approval is a determination only as to the form of the
annuity. It does not represent a determination of the merits of the annuity as
an investment. The IRS approval does not address every feature possibly
available under the EQUI-VEST IRA contract.
CANCELLATION
You can cancel any version of the EQUI-VEST IRA contract (Traditional IRA, QP
IRA, or Roth IRA) by following the directions under "Your right to cancel
within a certain number of days" under "Contract features and benefits"
earlier in the prospectus. You can cancel an EQUI-VEST Roth IRA contract
issued as a result of a full or partial conversion of any EQUI-VEST
Traditional IRA contract by following the instructions in the "EQUI-VEST Roth
IRA Re-Characterization Form." The form is available from our Processing
Office or your Equitable associate. If you cancel a Traditional IRA or Roth
IRA contract, we may have to withhold tax, and we must report the transaction
to the IRS. A contract cancellation could have an unfavorable tax impact.
TRADITIONAL INDIVIDUAL RETIREMENT ANNUITIES
(TRADITIONAL IRAS)
CONTRIBUTIONS TO TRADITIONAL IRAS. Individuals may make three different types
of contributions to a traditional IRA:
o regular contributions out of earned income or compensation; or
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o tax-free "rollover" contributions; or
o direct custodian-to-custodian transfers from other traditional IRAs
("direct transfers").
REGULAR CONTRIBUTIONS TO TRADITIONAL IRAS.
The EQUI-VEST Traditional IRA is intended to receive regular contributions.
LIMITS ON CONTRIBUTIONS TO TRADITIONAL IRAS. Generally, $2,000 is the maximum
amount that you may contribute to all IRAs (including Roth IRAs) in any
taxable year. When your earnings are below $2,000, your earned income or
compensation for the year is the most you can contribute. This $2,000 limit
does not apply to rollover contributions or direct custodian-to-custodian
transfers into a traditional IRA. You cannot make regular contributions for
the tax year in which you reach age 70 1/2 or any tax year after that.
SPECIAL RULES FOR SPOUSES. If you are married and file a joint income tax
return, you and your spouse may combine your compensation to determine the
amount of regular contributions you are permitted to make to traditional IRAs
(and Roth IRAs discussed below). Even if one spouse has no compensation or
compensation under $2,000, married individuals filing jointly can contribute
up to $4,000 for any taxable year to any combination of traditional IRAs and
Roth IRAs. (Any contributions to Roth IRAs reduce the ability to contribute to
traditional IRAs and vice versa.) The maximum amount may be less if earned
income is less and the other spouse has made IRA contributions. No more than a
combined total of $2,000 can be contributed annually to either spouse's
traditional IRAs and Roth IRAs. Each spouse owns his or her traditional IRAs
and Roth IRAs even if the other spouse funded the contributions. A working
spouse age 70 1/2 or over can contribute up to the lesser of $2,000 or 100%
of "earned income" to a traditional IRA for a nonworking spouse until the year
in which the nonworking spouse reaches age 70 1/2.
DEDUCTIBILITY OF CONTRIBUTIONS. The amount of traditional IRA contributions
that you can deduct for a tax year depends on whether you are covered by an
employer-sponsored tax-favored retirement plan, as defined under special
federal income tax rules. Your Form W-2 will indicate whether or not you are
covered by such a retirement plan.
IF YOU ARE NOT COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, you
can make fully deductible contributions to your traditional IRAs for each tax
year up to $2,000 or, if less, your earned income.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
adjusted gross income (AGI) is BELOW THE LOWER DOLLAR FIGURE IN A PHASE-OUT
RANGE, you can make fully deductible contributions to your traditional IRAs.
For each tax year your fully deductible contribution can be up to $2,000 or,
if less, your earned income.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
AGI falls within a PHASE-OUT RANGE, you can make partially deductible
contributions to your traditional IRAs.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
AGI falls ABOVE THE HIGHER FIGURE IN THE PHASE-OUT RANGE, you may not deduct
any of your regular contributions to your traditional IRAs.
If you are single and covered by a retirement plan during any part of the
taxable year, the deduction for traditional IRA contributions phases out with
AGI between $31,000 and $41,000 in 1999. This range will increase every year
until 2005 when the range is $50,000-$60,000.
If you are married and file a joint return, and you are covered by a
retirement plan during any part of the taxable year, the deduction for
traditional IRA contributions phases out with AGI between $51,000 and $61,000
in 1999. This range will increase every year until 2007 when the range is
$80,000-$100,000.
Married individuals filing separately and living apart at all times are not
considered married for purposes of this deductible contribution calculation.
Generally, the active participation in an employer-sponsored retirement plan
of an individual is determined independently for each spouse.
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Where spouses have "married filing jointly" status, however, the maximum
deductible traditional IRA contribution for an individual who is not an active
participant (but whose spouse is an active participant) is phased out for
taxpayers with AGI of between $150,000 and $160,000.
To determine the deductible amount of the contribution in 1999, you determine
AGI and subtract $31,000 if you are single, or $51,000 if you are married and
file a joint return with your spouse. The resulting amount is your Excess AGI.
You then determine the limit on the deduction for traditional IRA
contributions using the following formula:
<TABLE>
<S> <C> <C> <C> <C>
($10,000-excess AGI) times $2,000 (or earned Equals the adjusted
- ------------------------------
divided by $10,000 x income, if less) = deductible
contribution
limit
</TABLE>
NONDEDUCTIBLE REGULAR CONTRIBUTIONS. If you are not eligible to deduct part
or all of the traditional IRA contribution, you may still make nondeductible
contributions on which earnings will accumulate on a tax-deferred basis. The
combined deductible and nondeductible contributions to your traditional IRA
(or the nonworking spouse's traditional IRA) may not, however, exceed the
maximum $2,000 per person limit. See "Excess Contributions" below. You must
keep your own records of deductible and nondeductible contributions in order
to prevent double taxation on the distribution of previously taxed amounts.
See "Withdrawals, payments and transfers of funds out of traditional IRAs"
below.
If you are making nondeductible contributions in any taxable year, or you have
made nondeductible contributions to a traditional IRA in prior years and are
receiving distributions from any traditional IRA, you must file the required
information with the IRS. Moreover, if you are making nondeductible
traditional IRA contributions, you must retain all income tax returns and
records pertaining to such contributions until interests in all traditional
IRAs are fully distributed.
WHEN YOU CAN MAKE REGULAR CONTRIBUTIONS. If you file your tax returns on a
calendar year basis like most taxpayers, you have until the April 15th return
filing deadline (without extensions) of the following calendar year to make
your regular contributions for a tax year.
EXCESS CONTRIBUTIONS
Excess contributions to IRAs are subject to a 6% excise tax for the year in
which made and for each year after until withdrawn. The following are excess
contributions to IRAs:
o regular contributions of more than $2,000; or
o regular contributions of more than earned income for the year, if that
amount is under $2,000; or
o regular contributions to a traditional IRA made after you reach age
70 1/2; or
o rollover contributions of 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.
You can avoid the excise tax by withdrawing an excess contribution (rollover
or regular) before the due date (including extensions) for filing your federal
income tax return for the year. If it is an excess regular contribution, you
cannot take a tax deduction for the amount withdrawn. You do not have to
include the excess contribution withdrawn as part of your income. It is also
not subject to the 10% additional penalty tax on early distributions discussed
below under "Early distribution penalty tax." You do have to withdraw any
earnings that are attributed to the excess contribution. The withdrawn
earnings would be included in your gross income and could be subject to the
10% penalty tax.
Even after the due date for filing your return, you may withdraw an excess
rollover contribution, without income inclusion or 10% penalty, if:
(1) the rollover was from a qualified retirement plan to a traditional IRA;
(2) the excess contribution was due to incorrect information that the plan
provided; and
(3) you took no tax deduction for the excess contribution.
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RECHARACTERIZATIONS
You may also change your mind about amounts contributed as Roth IRA funds to
traditional IRA funds, in accordance with special federal income tax rules, if
you use the forms we prescribe. This is referred to as having
"recharacterized" your contribution.
ROLLOVERS AND TRANSFERS
Rollover contributions may be made to a traditional IRA from these sources:
o qualified plans;
o TSAs (including Internal Revenue Code Section 403(b)(7) custodial
accounts); and
o other traditional IRAs.
Any amount contributed to a traditional IRA after you reach 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.
ROLLOVERS FROM QUALIFIED PLANS OR TSAS
There are two ways to do rollovers:
o Do it yourself
You actually receive a distribution that can be rolled over and you roll
it over to a traditional IRA within 60 days after the date you receive the
funds. The distribution from your qualified plan or TSA will be net of 20%
mandatory federal income tax withholding. If you want, you can replace the
withheld funds yourself and roll over the full amount.
o Direct rollover
You tell your qualified plan trustee or TSA issuer/custodian/fiduciary to
send the distribution directly to your traditional IRA issuer. Direct
rollovers are not subject to mandatory federal income tax withholding.
All distributions from a TSA or qualified plan are eligible
rollover distributions, unless the distribution is:
o only after-tax contributions you made to the plan; or
o "required minimum distributions" after age 70 1/2 or separation from
service; or
o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancies) of
you and your designated beneficiary; or
o a hardship withdrawal; or
o substantially equal periodic payments made for a specified period of 10
years or more; or
o corrective distributions which fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse;
or
o a qualified domestic relations order distribution to a beneficiary who is
not your current spouse or former spouse.
ROLLOVERS FROM TRADITIONAL IRAS TO TRADITIONAL IRAS
You may roll over amounts from one traditional IRA to one or more of your
other traditional IRAs if you complete the transaction within 60 days after
you receive the funds. You may make such a rollover only once in every
12-month period for the same funds. Trustee-to-trustee or
custodian-to-custodian direct transfers are not rollover transactions. You can
make these more frequently than once in every 12-month period.
The surviving spouse beneficiary of a deceased individual can roll over or
directly transfer an inherited traditional IRA to one or more other
traditional IRAs. Also, in some cases, traditional IRAs can be transferred on
a tax-free basis between spouses or former spouses as a result of a court
ordered divorce or separation decree.
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WITHDRAWALS, PAYMENTS AND TRANSFERS OF FUNDS OUT OF TRADITIONAL IRAS
NO FEDERAL INCOME TAX LAW RESTRICTIONS ON WITHDRAWALS. You can withdraw any
or all of your funds from a traditional IRA at any time. You do not need to
wait for a special event like retirement.
TAXATION OF PAYMENTS. Earnings in traditional IRAs are not subject to federal
income tax until you or your beneficiary receive them. Taxable payments or
distributions include withdrawals from your contract, surrender of your
contract and annuity payments from your contract. Death benefits are also
taxable. Except as discussed below, the total amount of any distribution from
a traditional IRA must be included in your gross income as ordinary income.
If you have ever made nondeductible IRA contributions to any traditional IRA
(it does not have to be to this particular traditional IRA contract), those
contributions are recovered tax free when you get distributions from any
traditional IRA. You must keep permanent tax records of all of your
nondeductible contributions to traditional IRAs. At the end of any year in
which you have received a distribution from any traditional IRA, you calculate
the ratio of your total nondeductible traditional IRA contributions (less any
amounts previously withdrawn tax free) to the total account balances of all
traditional IRAs you own at the end of the year plus all traditional IRA
distributions made during the year. Multiply this by all distributions from
the traditional IRA during the year to determine the nontaxable portion of
each distribution.
In addition, a distribution is not taxable if:
o the amount received is a withdrawal of excess contributions, as described
under "Excess contributions" above; or
o the entire amount received is rolled over to another traditional IRA (see
"Rollovers and transfers" above); or
o in certain limited circumstances, where the traditional IRA acts as a
conduit, you roll over the entire amount into a qualified plan or TSA that
accepts rollover contributions. To get this conduit traditional IRA
treatment:
o the source of funds you used to establish the traditional IRA must have
been a rollover contribution from a qualified plan, and
o the entire amount received from the traditional 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.
However, you may lose conduit treatment, if you make an eligible rollover
distribution contribution to a traditional IRA and you commingle this
contribution with other contributions. In that case, you may not be able to
roll over these eligible rollover distribution contributions and earnings to
another qualified plan or TSA at a future date.
Distributions from a traditional IRA are not eligible for favorable five-year
averaging (or, in some cases, ten-year averaging and long-term capital gain
treatment) available to certain distributions from qualified plans.
The EQUI-VEST QP IRA contract can be used as a conduit IRA however,
non-rollover contributions cannot be commingled.
REQUIRED MINIMUM DISTRIBUTIONS
LIFETIME REQUIRED MINIMUM DISTRIBUTIONS. You must start taking annual
distributions from your Traditional IRAs beginning at age 70 1/2.
WHEN YOU HAVE TO TAKE THE FIRST REQUIRED MINIMUM DISTRIBUTION. The first
required minimum distribution is for the calendar year in which you turn age
70 1/2. You have the choice to take this first required minimum distribution
during the calendar year you actually reach age 70 1/2, or to delay taking it
until the first three-month period in the next calendar year (January 1 -
April 1). Distributions must start no later than your "Required Beginning
Date," which is April 1st of the calendar year after the calendar year in which
you turn age 70 1/2. If you choose to delay taking the
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first annual minimum distribution, then you 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 each year.
HOW YOU CALCULATE REQUIRED MINIMUM DISTRIBUTIONS. There are two approaches to
taking required minimum distributions -- "account-based" or "annuity-based."
Account-based method. If you choose an account-based method, you divide the
value of your traditional IRA as of December 31st of the past calendar year by
a life expectancy factor from IRS tables. This gives you the required minimum
distribution amount for that particular IRA for that year. The required
minimum distribution amount will vary each year as the account value and your
life expectancy factors change.
You have a choice of life expectancy factors, depending on whether you choose
a method based only on your life expectancy, or the joint life expectancies of
you and another individual. You can decide to "recalculate" your life
expectancy every year by using your current life expectancy factor. You can
decide instead to use the "term certain" method, where you reduce your life
expectancy by one every year after the initial year. If your spouse is your
designated beneficiary for the purpose of calculating annual account-based
required minimum distributions, you can also annually recalculate your
spouse's life expectancy if you want. If you choose someone who is not your
spouse as your designated beneficiary for the purpose of calculating annual
account-based required minimum distributions, you have to use the term certain
method of calculating that person's life expectancy. If you pick a nonspouse
designated beneficiary, you may also have to do another special calculation.
You can later apply your traditional IRA funds to a life annuity-based payout.
You can only do this if you already chose to recalculate your life expectancy
annually (and your spouse's life expectancy if you select a spousal joint
annuity). For example, if you anticipate selecting any form of life annuity
payout after you are age 70 1/2, you must have elected to recalculate life
expectancies.
Annuity-based method. If you choose an annuity-based method you do not have to
do annual calculations. You apply the account value to an annuity payout for
your life or the joint lives of you and a designated beneficiary, or for a
period certain not extending beyond applicable life expectancies.
DO YOU HAVE TO PICK THE SAME METHOD TO CALCULATE YOUR REQUIRED MINIMUM
DISTRIBUTIONS FOR ALL OF YOUR TRADITIONAL IRAS AND OTHER RETIREMENT PLANS?
No. If you want, you can choose a different method and a different beneficiary
for each of your traditional IRAs and other retirement plans. For example, you
can choose an annuity payout from one IRA, a different annuity payout from a
qualified plan, and an account-based annual withdrawal from another IRA.
WILL WE PAY YOU THE ANNUAL AMOUNT EVERY YEAR FROM YOUR TRADITIONAL IRA BASED
ON THE METHOD YOU CHOOSE? No, unless you affirmatively select an annuity
payout option or an account-based withdrawal option such as our minimum
distribution withdrawal option. Because the options we offer do not cover
every option permitted under federal income tax rules, you may prefer to do
your own required minimum distribution calculations for one or more of your
traditional IRAs.
WHAT IF YOU TAKE MORE THAN YOU NEED TO FOR ANY YEAR? The required minimum
distribution amount for your traditional IRAs is calculated on a year-by-year
basis. There are no carry-back or carry-forward provisions. Also, you cannot
apply required minimum distribution amounts you take from your qualified plans
to the amounts you have to take from your traditional IRAs and vice-versa.
However, the IRS will let you calculate the required minimum distribution for
each traditional IRA that you maintain, using the method that you picked for
that particular IRA. You can add these required minimum distribution amount
calculations together. As long as the total amount you take out every year
satisfies your overall traditional IRA required minimum distribution amount,
you may choose to take your annual
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required minimum distribution from any one or more Traditional IRAs that you
own.
WHAT IF YOU TAKE LESS THAN YOU NEED TO FOR ANY YEAR? Your IRA could be
disqualified, and you could have to pay tax on the entire value. Even if your
IRA is not disqualified, you could have to pay a 50% penalty tax on the
shortfall (required amount for traditional IRAs less amount actually taken). It
is your responsibility to meet the required minimum distribution rules. We will
remind you when our records show that your age 70 1/2 is approaching. If you
do not select a method with us, we will assume you are taking your required
minimum distribution from another traditional IRA that you own.
WHAT ARE THE REQUIRED MINIMUM DISTRIBUTION PAYMENTS AFTER YOU DIE? If you die
after either (a) the start of annuity payments, or (b) your Required Beginning
Date, your beneficiary must receive payment of the remaining values in the
contract at least as rapidly as under the distribution method before your
death. In some circumstances, your surviving spouse may elect to become the
owner of the traditional IRA and halt distributions until he or she reaches age
70 1/2.
If you die before your Required Beginning Date and before annuity payments
begin, federal income tax rules require complete distribution of your entire
value in the contract within five years after your death. Payments to a
designated beneficiary over the beneficiary's life or over a period certain
that does not extend beyond the beneficiary's life expectancy are also
permitted, if these payments start within one year of your death. A surviving
spouse beneficiary can also (a) delay starting any payments until you would
have reached age 70 1/2 or (b) roll over your traditional IRA into his or her
own traditional IRA.
SUCCESSOR ANNUITANT AND OWNER
If your spouse is the sole primary beneficiary and elects to become the
successor annuitant and owner, no death benefit is payable until your
surviving spouse's death.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
IRA death benefits are taxed the same as IRA distributions.
BORROWING AND LOANS ARE PROHIBITED TRANSACTIONS
You cannot get loans from a traditional IRA. You cannot use a traditional IRA
as collateral for a loan or other obligation. If you borrow against your IRA
or use it as collateral, its tax-favored status will be lost as of the first
day of the tax year in which this prohibited event occurs. If this happens,
you must include the value of the traditional IRA in your federal gross
income. Also, the early distribution penalty tax of 10% will apply if you have
not reached age 59 1/2 before the first day of that tax year.
EARLY DISTRIBUTION PENALTY TAX
A penalty tax of 10% of the taxable portion of a distribution applies to
distributions from a traditional IRA made before you reach age 59 1/2. The
extra penalty tax does not apply to pre-age 59 1/2 distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o to pay for certain extraordinary medical expenses (special federal income
tax definition); or
o to pay medical insurance premiums for unemployed individuals (special
federal income tax definition); or
o to pay certain first-time home buyer expenses (special federal income tax
definition); or
o to pay certain higher education expenses (special federal income tax
definition); or
o in the form of substantially equal periodic payments made at least annually
over your life (or your life expectancy), or over the joint lives of you
and your beneficiary (or your joint life expectancy) using an IRS-approved
distribution method.
<PAGE>
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50 TAX INFORMATION
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- --------------------------------------------------------------------------------
ILLUSTRATION OF GUARANTEED INTEREST RATES
In the following two tables, we provide information that the IRS requires us
to furnish to prospective IRA contract owners. In the tables we illustrate the
3% minimum guaranteed interest rate for contributions we assume are allocated
entirely to the guaranteed interest option. In Table I we assume a $1,000
contribution made annually on the contract date and on each anniversary after
that. We assume no withdrawals or transfers were made under the contract. In
Table II we assume a single initial contribution of $1,000, and no additional
contributions. We also assume no withdrawals or transfers. The 3% guaranteed
interest rate is in the contract.
The values shown assume the withdrawal charge applies. These values reflect
the effect of the annual administrative charge deducted at the end of each
contract year in which the account value is less than $20,000.
To find the appropriate value for the end of the contract year at any
particular age, you subtract the age (nearest birthday) at issue of the
contract from the current age and find the corresponding year in the table.
Years that correspond to a current age over 70, should be ignored, unless the
contract is a Roth IRA.
You should consider the information shown in the tables in light of your
present age. Also, with respect to Table I, you should consider your ability
to contribute $1,000 annually. Any change in the amounts contributed annually
in Table I, or in the amount of the single contribution in Table II would, of
course, change the results shown.
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TAX INFORMATION 51
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- --------------------------------------------------------------------------------
TABLE I
ACCOUNT VALUES AND CASH VALUES
(assuming $1,000 contributions made annually
at the beginning of the contract year)
- --------------------------------------------------------------------------------
3% Minimum Guarantee
- --------------------------------------------------------------------------------
Contract Account Cash
Year End Value Value
- --------------------------------------------------------------------------------
1 $ 1,009.40 $ 954.89
- --------------------------------------------------------------------------------
2 $ 2,039.68 $ 1,929.54
- --------------------------------------------------------------------------------
3 $ 3,100.87 $ 2,933.43
- --------------------------------------------------------------------------------
4 $ 4,193.90 $ 3,967.43
- --------------------------------------------------------------------------------
5 $ 5,319.72 $ 5,032.45
- --------------------------------------------------------------------------------
6 $ 6,479.31 $ 6,129.42
- --------------------------------------------------------------------------------
7 $ 7,673.69 $ 7,313.69
- --------------------------------------------------------------------------------
8 $ 8,903.90 $ 8,543.90
- --------------------------------------------------------------------------------
9 $10,171.01 $ 9,811.01
- --------------------------------------------------------------------------------
10 $11,476.14 $11,116.14
- --------------------------------------------------------------------------------
11 $12,820.43 $12,460.43
- --------------------------------------------------------------------------------
12 $14,205.04 $13,845.04
- --------------------------------------------------------------------------------
13 $15,631.19 $15,271.19
- --------------------------------------------------------------------------------
14 $17,100.13 $16,740.13
- --------------------------------------------------------------------------------
15 $18,613.13 $18,253.13
- --------------------------------------------------------------------------------
16 $20,201.53 $19,841.53
- --------------------------------------------------------------------------------
17 $21,837.57 $21,477.57
- --------------------------------------------------------------------------------
18 $23,522.70 $23,162.70
- --------------------------------------------------------------------------------
19 $25,258.38 $24,898.38
- --------------------------------------------------------------------------------
20 $27,046.13 $26,686.13
- --------------------------------------------------------------------------------
21 $28,887.52 $28,527.52
- --------------------------------------------------------------------------------
22 $30,784.14 $30,424.14
- --------------------------------------------------------------------------------
23 $32,737.67 $32,377.67
- --------------------------------------------------------------------------------
24 $34,749.80 $34,389.80
- --------------------------------------------------------------------------------
25 $36,822.29 $36,462.29
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
3% Minimum Guarantee
- --------------------------------------------------------------------------------
Contract Account Cash
Year End Value Value
- --------------------------------------------------------------------------------
26 $ 38,956.96 $ 38,596.96
- --------------------------------------------------------------------------------
27 $ 41,155.67 $ 40,795.67
- --------------------------------------------------------------------------------
28 $ 43,420.34 $ 43,060.34
- --------------------------------------------------------------------------------
29 $ 45,752.95 $ 45,392.95
- --------------------------------------------------------------------------------
30 $ 48,155.53 $ 47,795.53
- --------------------------------------------------------------------------------
31 $ 50,630.20 $ 50,270.20
- --------------------------------------------------------------------------------
32 $ 53,179.11 $ 52,819.11
- --------------------------------------------------------------------------------
33 $ 55,804.48 $ 55,444.48
- --------------------------------------------------------------------------------
34 $ 58,508.61 $ 58,148.61
- --------------------------------------------------------------------------------
35 $ 61,293.87 $ 60,933.87
- --------------------------------------------------------------------------------
36 $ 64,162.69 $ 63,802.69
- --------------------------------------------------------------------------------
37 $ 67,117.57 $ 66,757.57
- --------------------------------------------------------------------------------
38 $ 70,161.10 $ 69,801.10
- --------------------------------------------------------------------------------
39 $ 73,295.93 $ 72,935.93
- --------------------------------------------------------------------------------
40 $ 76,524.81 $ 76,164.81
- --------------------------------------------------------------------------------
41 $ 79,850.55 $ 79,490.55
- --------------------------------------------------------------------------------
42 $ 83,276.07 $ 82,916.07
- --------------------------------------------------------------------------------
43 $ 86,804.35 $ 86,444.35
- --------------------------------------------------------------------------------
44 $ 90,438.48 $ 90,078.48
- --------------------------------------------------------------------------------
45 $ 94,181.64 $ 93,821.64
- --------------------------------------------------------------------------------
46 $ 98,037.08 $ 97,677.08
- --------------------------------------------------------------------------------
47 $102,008.20 $101,648.20
- --------------------------------------------------------------------------------
48 $106,098.44 $105,738.44
- --------------------------------------------------------------------------------
49 $110,311.40 $109,951.40
- --------------------------------------------------------------------------------
50 $114,650.74 $114,290.74
- --------------------------------------------------------------------------------
<PAGE>
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52 TAX INFORMATION
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- --------------------------------------------------------------------------------
TABLE II
ACCOUNT VALUES AND CASH VALUES
(assuming a single contribution of $1,000 and
no further contribution)
- --------------------------------------------------------------------------------
3% Minimum Guarantee
- --------------------------------------------------------------------------------
Contract Account Cash
Year End Value Value
- --------------------------------------------------------------------------------
1 $1,009.40 $ 954.89
- --------------------------------------------------------------------------------
2 $1,018.89 $ 963.87
- --------------------------------------------------------------------------------
3 $1,019.46 $ 964.40
- --------------------------------------------------------------------------------
4 $1,020.04 $ 964.96
- --------------------------------------------------------------------------------
5 $1,020.64 $ 965.53
- --------------------------------------------------------------------------------
6 $1,021.26 $ 966.11
- --------------------------------------------------------------------------------
7 $1,021.90 $1,021.90
- --------------------------------------------------------------------------------
8 $1,022.55 $1,022.55
- --------------------------------------------------------------------------------
9 $1,023.23 $1,023.23
- --------------------------------------------------------------------------------
10 $1,023.93 $1,023.93
- --------------------------------------------------------------------------------
11 $1,024.65 $1,024.65
- --------------------------------------------------------------------------------
12 $1,025.38 $1,025.38
- --------------------------------------------------------------------------------
13 $1,026.15 $1,026.15
- --------------------------------------------------------------------------------
14 $1,026.93 $1,026.93
- --------------------------------------------------------------------------------
15 $1,027.74 $1,027.74
- --------------------------------------------------------------------------------
16 $1,028.57 $1,028.57
- --------------------------------------------------------------------------------
17 $1,029.43 $1,029.43
- --------------------------------------------------------------------------------
18 $1,030.31 $1,030.31
- --------------------------------------------------------------------------------
19 $1,031.22 $1,031.22
- --------------------------------------------------------------------------------
20 $1,032.16 $1,032.16
- --------------------------------------------------------------------------------
21 $1,033.12 $1,033.12
- --------------------------------------------------------------------------------
22 $1,034.11 $1,034.11
- --------------------------------------------------------------------------------
23 $1,035.14 $1,035.14
- --------------------------------------------------------------------------------
24 $1,036.19 $1,036.19
- --------------------------------------------------------------------------------
25 $1,037.28 $1,037.28
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
3% Minimum Guarantee
- --------------------------------------------------------------------------------
Contract Account Cash
Year End Value Value
- --------------------------------------------------------------------------------
26 $1,038.40 $1,038.40
- --------------------------------------------------------------------------------
27 $1,039.55 $1,039.55
- --------------------------------------------------------------------------------
28 $1,040.73 $1,040.73
- --------------------------------------------------------------------------------
29 $1,041.96 $1,041.96
- --------------------------------------------------------------------------------
30 $1,043.22 $1,043.22
- --------------------------------------------------------------------------------
31 $1,044.51 $1,044.51
- --------------------------------------------------------------------------------
32 $1,045.85 $1,045.85
- --------------------------------------------------------------------------------
33 $1,047.22 $1,047.22
- --------------------------------------------------------------------------------
34 $1,048.64 $1,048.64
- --------------------------------------------------------------------------------
35 $1,050.10 $1,050.10
- --------------------------------------------------------------------------------
36 $1,051.60 $1,051.60
- --------------------------------------------------------------------------------
37 $1,053.15 $1,053.15
- --------------------------------------------------------------------------------
38 $1,054.74 $1,054.74
- --------------------------------------------------------------------------------
39 $1,056.39 $1,056.39
- --------------------------------------------------------------------------------
40 $1,058.08 $1,058.08
- --------------------------------------------------------------------------------
41 $1,059.82 $1,059.82
- --------------------------------------------------------------------------------
42 $1,061.61 $1,061.61
- --------------------------------------------------------------------------------
43 $1,063.46 $1,063.46
- --------------------------------------------------------------------------------
44 $1,065.37 $1,065.37
- --------------------------------------------------------------------------------
45 $1,067.33 $1,067.33
- --------------------------------------------------------------------------------
46 $1,069.35 $1,069.35
- --------------------------------------------------------------------------------
47 $1,071.43 $1,071.43
- --------------------------------------------------------------------------------
48 $1,073.57 $1,073.57
- --------------------------------------------------------------------------------
49 $1,075.78 $1,075.78
- --------------------------------------------------------------------------------
50 $1,078.05 $1,078.05
- --------------------------------------------------------------------------------
<PAGE>
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TAX INFORMATION 53
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ROTH INDIVIDUAL RETIREMENT ANNUITIES (ROTH IRAS)
This section of the prospectus covers some of the special tax rules that apply
to Roth IRAs. If the rules are the same as those that apply to the Traditional
IRA, we will refer you to the same topic under "Traditional IRAs."
The EQUI-VEST Roth IRA contracts are designed to qualify as Roth individual
retirement annuities under Sections 408A and 408(b) of the Internal Revenue
Code.
CONTRIBUTIONS TO ROTH IRAS
Individuals may make four different types of contributions to a Roth IRA:
o regular after-tax contributions out of earnings; or
o taxable rollover contributions from Traditional IRAs ("conversion"
contributions); or
o tax-free rollover contributions from other Roth IRAs; or
o tax-free direct custodian-to-custodian transfers from other Roth IRAs
("direct transfers").
If you use the forms we require, we will also accept traditional IRA funds
which are subsequently recharacterized as Roth IRA funds following special
federal income tax rules.
REGULAR CONTRIBUTIONS TO ROTH IRAS
LIMITS ON REGULAR CONTRIBUTIONS. Generally, $2,000 is the maximum amount that
you may contribute to all IRAs (including Roth IRAs) in any taxable year. This
$2,000 limit does not apply to rollover contributions or direct
custodian-to-custodian transfers into a Roth IRA. Any contributions to Roth
IRAs reduce your ability to contribute to traditional IRAs and vice versa.
When your earnings are below $2,000, your earned income or compensation for
the year is the most you can contribute. If you are married and file a joint
income tax return, you and your spouse may combine your compensation to
determine the amount of regular IRA and after-tax contributions you are
permitted to make to Roth IRAs and traditional IRAs. See the discussion above
under traditional IRAs.
With a Roth IRA, you can make regular contributions when you reach 70 1/2, as
long as you have sufficient earnings. But, you cannot make contributions for
any year that:
o your federal income tax filing status is "married filing jointly" and your
adjusted gross income is over $160,000; or,
o your federal income tax filing status is "single" and your adjusted gross
income is over $110,000.
However, you can make regular Roth IRA contributions in
reduced amounts when:
o your federal income tax filing status is "married filing jointly" and your
adjusted gross income is between $150,000 and $160,000; or
o your federal income tax filing status is "single" and your adjusted gross
income is between $95,000 and $110,000.
If you are married and filing separately and your adjusted gross income is
between $0 and $10,000 the amount of regular contribution you are permitted to
make is phased out. If your adjusted gross income is more than $10,000 you
cannot make a regular Roth IRA contribution.
WHEN YOU CAN MAKE CONTRIBUTIONS? Same as traditional IRAs.
DEDUCTIBILITY OF CONTRIBUTIONS. Roth IRA contributions are not tax deductible.
ROLLOVERS AND DIRECT TRANSFERS
WHAT IS THE DIFFERENCE BETWEEN ROLLOVER AND DIRECT TRANSFER TRANSACTIONS? You
may make rollover contributions to a Roth IRA from only two sources:
o another Roth IRA ("tax-free rollover contribution"); or
o another traditional IRA, including a SEP-IRA or SIMPLE-IRA, in a taxable
"conversion" rollover ("conversion contribution").
You may not make contributions to a Roth IRA from a qualified plan under
Section 401(a) of the Internal Revenue Code, or a TSA under Section 403(b) of
the Internal Revenue
<PAGE>
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54 TAX INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Code. You may make direct transfer contributions to a Roth IRA only from
another Roth IRA.
The difference between a rollover transaction and a direct transfer
transaction is the following. In a rollover transaction you actually take
possession of the funds rolled over, or are considered to have received them
under tax law in the case of a change from one type of plan to another. In a
direct transfer transaction, you never take possession of the funds, but
direct the first Roth IRA custodian, trustee, or issuer to transfer the first
Roth IRA funds directly to Equitable Life, as the Roth IRA issuer. You can
make direct transfer transactions only between identical plan types (for
example, Roth IRA to Roth IRA). You can also make rollover transactions
between identical plan types. However, you can only use rollover transactions
between different plan types (for example, traditional IRA to Roth IRA).
You may make both Roth IRA to Roth IRA rollover transactions and Roth IRA to
Roth IRA direct transfer transactions. This can be accomplished on a
completely tax-free basis. However, you may make Roth IRA to Roth IRA rollover
transactions only once in any 12-month period for the same funds.
Trustee-to-trustee or custodian-to-custodian direct transfers can be made more
frequently than once a year. Also, if you send us the rollover contribution to
apply it to a Roth IRA, you must do so within 60 days after you receive the
proceeds from the original IRA to get rollover treatment.
The surviving spouse beneficiary of a deceased individual can roll over or
directly transfer an inherited Roth IRA to one or more other Roth IRAs. In
some cases, Roth IRAs can be transferred on a tax-free basis between spouses
or former spouses as a result of a court-ordered divorce or separation decree.
CONVERSION CONTRIBUTIONS TO ROTH IRAS
In a conversion rollover transaction, you withdraw (or are considered to have
withdrawn) all or a portion of funds from a traditional IRA you maintain and
convert it to a Roth IRA within 60 days after you receive (or are considered
to have received) the traditional IRA proceeds. Unlike a rollover from a
traditional IRA to another traditional IRA, the conversion rollover
transaction is not tax-free. Instead, the distribution from the traditional
IRA is generally fully taxable. For this reason, we are required to withhold
10% federal income tax from the amount converted unless you elect out of such
withholding. (If you have ever made nondeductible regular IRA contributions to
any traditional IRA -- whether or not it is the traditional IRA you are
converting -- a pro rata portion of the distribution is tax-free.)
There is, however, no early distribution penalty tax on the Traditional IRA
withdrawal that you are converting to a Roth IRA, even if you are under age
59 1/2.
You cannot make conversion contributions to a Roth IRA for any taxable year in
which your adjusted gross income exceeds $100,000. (For this purpose, your
adjusted gross income is calculated without the gross income stemming from the
traditional IRA conversion.) You also cannot make conversion contributions to
a Roth IRA for any taxable year in which your federal income tax filing status
is "married filing separately."
Finally, you cannot make conversion contributions to a Roth IRA to the extent
that the funds in your traditional IRA are subject to the annual required
minimum distribution rule applicable to traditional IRAs beginning at age
70 1/2.
WITHDRAWALS, PAYMENTS AND TRANSFERS OF FUNDS OUT OF ROTH IRAS
NO FEDERAL INCOME TAX LAW RESTRICTIONS ON WITHDRAWALS. You can withdraw any
or all of your funds from a Roth IRA at any time; you do not need to wait for
a special event like retirement.
DISTRIBUTIONS FROM ROTH IRAS
Distributions include withdrawals from your contract, surrender and
termination of your contract and annuity payments from your contract. Death
benefits are also distributions.
The following distributions from Roth IRAs are free of income tax:
<PAGE>
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TAX INFORMATION 55
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
o Rollovers from a Roth IRA to another Roth IRA;
o Direct transfers from a Roth IRA to another Roth IRA;
o "Qualified Distributions" from a Roth IRA; and
o Return of excess contributions or amounts recharacterized to a traditional
IRA.
QUALIFIED DISTRIBUTIONS FROM ROTH IRAS
Qualified distributions from Roth IRAs made because of one of the following
four qualifying events or reasons are not includable in income:
o you reach age 59 1/2; or
o you die; or
o you become disabled (special federal income tax definition); or
o your distribution is a "qualified first-time homebuyer distribution"
(special federal income tax definition; $10,000 lifetime total limit for
these distributions from all of your traditional and Roth IRAs).
You also have to meet a five-year aging period. A qualified distribution is
any distribution made after the five-taxable-year period beginning with the
first taxable year for which you made any contribution to any Roth IRA
(whether or not the one from which the distribution is being made). It is not
possible to have a tax-free qualified distribution before the year 2003
because of the five-year aging requirement.
NONQUALIFIED DISTRIBUTIONS FROM ROTH IRAS
Nonqualified distributions from Roth IRAs are distributions that do not meet
the qualifying event and five-year aging period tests described above. Such
distributions are potentially taxable as ordinary income. Nonqualified
distributions receive return-of-investment-first treatment. Only the
difference between the amount of the distribution and the amount of
contributions to all of your Roth IRAs is taxable. You have to reduce the
amount of contributions to all of your Roth IRAs to reflect any previous
tax-free recoveries.
You must keep your own records of regular and conversion contributions to all
Roth IRAs to assure appropriate taxation. You may have to file information on
your contributions to and distributions from any Roth IRA on your tax return.
You may have to retain all income tax returns and records pertaining to such
contributions and distributions until your interests in all Roth IRAs are
distributed.
Like traditional IRAs, taxable distributions from a Roth 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 AT DEATH
Same as traditional IRA under "What are the required minimum distribution
payments after you die?" Lifetime required minimum distributions do not apply.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
Distributions to a beneficiary generally receive the same tax treatment as if
the distribution had been made to you.
BORROWING AND LOANS ARE PROHIBITED TRANSACTIONS
Same as traditional IRA.
EXCESS CONTRIBUTIONS
Same as traditional IRA, except that regular contributions made after age
70 1/2 are not "excess contributions."
Excess rollover contributions to Roth IRAs are contributions not eligible to
be rolled over (for example, conversion contributions from a traditional IRA
if your adjusted gross income is in excess of $100,000 in the conversion
year).
<PAGE>
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56 TAX INFORMATION
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- --------------------------------------------------------------------------------
You can withdraw or recharacterize any contribution to a Roth IRA before the
due date (including extensions) for filing your federal income tax return for
the tax year. If you do this, you must also withdraw or recharacterize any
earnings attributable to the contribution.
EARLY DISTRIBUTION PENALTY TAX
Same as traditional IRA.
For Roth IRAs, special penalty rules may apply to amounts withdrawn
attributable to 1998 conversion rollovers.
FEDERAL AND STATE INCOME TAX WITHHOLDING AND INFORMATION REPORTING
We must withhold federal income tax from distributions from annuity contracts.
You may be able to elect out of this income tax withholding in some cases.
Generally, we do not have to withhold if your distributions are not taxable.
The rate of withholding will depend on the type of distribution and, in
certain cases, the amount of your distribution. Any income tax withheld is a
credit against your income tax liability. If you do not have sufficient income
tax withheld or do not make sufficient estimated income tax payments, you may
incur penalties under the estimated income tax rules.
You must file your request not to withhold in writing before the payment or
distribution is made. Our Processing Office will provide forms for this
purpose. You cannot elect out of withholding unless you provide us with your
correct taxpayer Identification Number and a United States residence address.
You cannot elect out of withholding if we are sending the payment out of the
United States.
You should note the following special situations:
o We might have to withhold on amounts we pay under a free look or
cancellation.
o We are generally required to withhold on conversion rollovers of
traditional IRAs to Roth IRAs, as it is considered a withdrawal from the
traditional IRA and is taxable.
o We are required to withhold on the gross amount of a distribution from a
Roth IRA unless you elect out of withholding. This may result in tax being
withheld even though the Roth IRA distribution is not taxable in whole or in
part.
Special withholding rules apply to foreign recipients and United States
citizens residing outside the United States. We do not discuss these rules
here. Certain states have indicated that state income tax withholding will
also apply to payments from the contracts made to residents. In some states,
you may elect out of state withholding, even if federal withholding applies.
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.
FEDERAL INCOME TAX WITHHOLDING ON PERIODIC ANNUITY PAYMENTS
We withhold differently on "periodic" and "non-periodic" payments. For a
periodic annuity payment, for example, unless you specify a different number
of withholding exemptions, we withhold assuming that you are married and
claiming three withholding exemptions. If you do not give us your correct
Taxpayer Identification Number, we withhold as if you are single with no
exemptions.
Based on the assumption that you are married and claiming three withholding
exemptions, if you receive less than $14,700 in periodic annuity payments in
1999 your payments will generally be exempt from federal income tax
withholding. You could specify a different choice of withholding exemption or
request that tax be withheld. Your withholding election remains effective
unless and until you revoke it. You may revoke or change your withholding
election at any time.
FEDERAL INCOME TAX WITHHOLDING ON NON-PERIODIC ANNUITY PAYMENTS (WITHDRAWALS)
For a non-periodic distribution (total surrender, termination, or partial
withdrawal), we generally withhold at a flat 10%
- --------------------------------------------------------------------------------
TAX INFORMATION 57
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rate. We apply that rate to the taxable amount in the case of nonqualified
contracts, and to the payment amount in the case of IRAs and Roth IRAs.
IMPACT OF TAXES TO EQUITABLE LIFE
The contracts provide that we may charge Separate Account A for taxes. We do
not now, but may in the future set up reserves for such taxes.
<PAGE>
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58 MORE INFORMATION
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8
More information
- --------------------------------------------------------------------------------
ABOUT OUR SEPARATE ACCOUNT A
Each variable investment option is a subaccount of our Separate Account A. We
established Separate Account A in 1968 under special provisions of the New
York Insurance Law. These provisions prevent creditors from any other business
we conduct from reaching the assets we hold in our variable investment options
for owners of our variable annuity contracts. We are the legal owner of all of
the assets in Separate Account A and may withdraw any amounts that exceed our
reserves and other liabilities with respect to variable investment options
under our contracts. The results of Separate Account A's operations are
accounted for without regard to Equitable Life's other operations.
Separate Account A is registered under the Investment Company Act of 1940 and
is classified by that act as a "unit investment trust." The SEC, however, does
not manage or supervise Equitable Life or Separate Account A.
Each subaccount (variable investment option) within Separate Account A invests
solely in Class IB shares issued by the corresponding Portfolios of The Hudson
River Trust and EQ Advisors Trust.
We reserve the right subject to compliance with laws that apply:
(1) to add variable investment options to, or to remove variable investment
options from, Separate Account A, or to add other separate accounts;
(2) to combine any two or more variable investment options;
(3) to transfer the assets we determine to be the shares of the class of
contracts to which the contracts belong from any variable investment
option to another variable investment option;
(4) to operate Separate Account A or any variable investment option as a
management investment company under the Investment Company Act of 1940
(in which case, charges and expenses that otherwise would be assessed
against an underlying mutual fund would be assessed against Separate
Account A or a variable investment option directly);
(5) to deregister Separate Account A under the Investment Company Act of 1940;
(6) to restrict or eliminate any voting rights as to Separate Account A; and
(7) to cause one or more variable investment options to invest some or all of
their assets in one or more other trusts or investment companies.
ABOUT THE HUDSON RIVER TRUST AND EQ ADVISORS TRUST
The Hudson River Trust and EQ Advisors Trust are registered under the
Investment Company Act of 1940. They are classified as "open-end management
investment companies," more commonly called mutual funds. Each trust issues
different shares relating to each Portfolio.
The Hudson River Trust and EQ Advisors Trust do not impose sales charges or
"loads" for buying and selling their shares. All dividends and other
distributions on a trust's shares are reinvested in full. The Boards of
Trustee of The Hudson River Trust and EQ Advisors Trust each may establish
additional Portfolios or eliminate existing Portfolios at any time. More
detailed information about The Hudson River Trust and EQ Advisors Trust, their
investment objectives, policies, restrictions, risks, expenses, the Rule 12b-1
plans relating to the Class IB shares of The Hudson River Trust and EQ
Advisors Trust, and other aspects of their operations, appears in their
prospectuses attached at the end of this prospectus, or in their SAIs which
are available upon request.
PROPOSED SUBSTITUTION OF PORTFOLIOS. We are asking the SEC to approve the
substitution of newly created Portfolios of the EQ Advisors Trust for each of
The Hudson River Trust Portfolios currently available under the variable
investment options (the "Substitution"). The EQ Advisors Trust Portfolios will
have substantially identical investment objectives, strategies, and policies
as those of The Hudson
<PAGE>
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MORE INFORMATION 59
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- --------------------------------------------------------------------------------
River Trust Portfolios they would replace. The assets of any Portfolio of The
Hudson River Trust underlying your contract would be transferred to the
substituted EQ Advisors Trust Portfolio.
We believe that this Substitution will be in your best interest because you
would have a single set of variable investment options with similar advisory
structures. You also will have a single EQ Advisors Trust prospectus for all
the Portfolios, rather than the two separate prospectuses you now receive. EQ
Financial Consultants Inc. will be the manager of the new EQ Advisors Trust
Portfolios, and Alliance Capital Management L.P. will continue to provide the
day-to-day advisory services to each of the new Portfolios.
You should note that:
o No action is required on your part. You will not need to vote a proxy, file
a new election, or take any other action if the SEC approves the
Substitution.
o The elections you have on file for allocating your account value and
contributions will remain unchanged until you direct us otherwise.
o We will bear all expenses directly relating to the Substitution
transaction.
o The management fees for the new Portfolios will be the same as those for
the corresponding Portfolios of The Hudson River Trust. Certain of the new
EQ Advisors Trust Portfolios may have slightly higher expense ratios.
o On the effective date of the Substitution transaction, your account value
(i.e., the units you own) in the variable investment options will be the
same as before the transaction.
o The Substitution will have no tax consequences for you.
Please review the EQ Advisors Trust prospectus that accompanies this
prospectus. It contains more information about EQ Advisors Trust, including
its management structure, advisory arrangements, and general fees and expenses
that will be of interest to you.
Subject to SEC approval, we expect the Substitution to be completed in the
fall of 1999. It will affect everyone who has a balance in The Hudson River
Trust Portfolios at that time. Of course, you may transfer your account value
among the investment options, as usual.
We will notify you when we receive SEC approval and the Substitution is
complete.
ABOUT OUR FIXED MATURITY OPTIONS
RATES TO MATURITY AND PRICE PER $100 OF MATURITY VALUE
We can determine the amount required to be allocated to one or more fixed
maturity options in order to produce specified maturity values. For example,
we can tell you how much you need to allocate per $100 of maturity value.
The rates to maturity for new allocations as of July 15, 1999 and the related
price per $100 of maturity value were as follows:
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FIXED MATURITY
OPTIONS
WITH JUNE 15TH
MATURITY DATE RATE TO MATURITY AS PRICE
OF OF PER $100 OF
MATURITY YEAR JULY 15, 1999 MATURITY VALUE
- --------------------------------------------------------------------------------
2000 4.10% $ 96.38
2001 4.90% $ 91.23
2002 5.25% $ 86.13
2003 5.55% $ 80.93
2004 5.60% $ 76.49
2005 5.70% $ 72.03
2006 5.75% $ 67.93
2007 5.80% $ 63.99
2008 5.90% $ 59.98
2009 5.95% $ 56.37
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HOW WE DETERMINE THE MARKET VALUE ADJUSTMENT
We use the following procedure to calculate the market value adjustment (up or
down) we make if you withdraw all of your value from a fixed maturity option
before its maturity date.
(1) We determine the market adjusted amount on the date of the withdrawal as
follows:
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60 MORE INFORMATION
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(a) We determine the fixed maturity amount that would be payable on the
maturity date, using the rate to maturity for the fixed maturity
option.
(b) We determine the period remaining in your fixed maturity option (based
on the withdrawal 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 rate to maturity that applies on the
withdrawal date to new allocations to the same fixed maturity
option.
(d) We determine the present value of the fixed maturity amount payable at
the maturity date, using the period determined in (b) and the rate
determined in (c).
(2) We determine the fixed maturity 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 fixed maturity option, which may be
positive or negative.
-------------------------------------------------------------------------------
Your market adjusted amount is the present value of the maturity value
discounted at the rate to maturity in effect for new contributions to that
same fixed maturity option on the date of the calculation.
-------------------------------------------------------------------------------
If you withdraw only a portion of the amount in a fixed maturity option, the
market value adjustment will be a percentage of the market value adjustment
that would have applied if you had withdrawn the entire value in that fixed
maturity option. This percentage is equal to the percentage of the value in
the fixed maturity option that you are withdrawing. Any withdrawal charges
that are deducted from a fixed maturity option will result in a market value
adjustment calculated in the same way. See Appendix II for an example.
For purposes of calculating the rate to maturity for new allocations to a
fixed maturity option (see (1)(c) above), we use the rate we have in effect
for new allocations to that fixed maturity option. We use this rate even if
new allocations to that option would not be accepted at that time. This rate
will not be less than 3%. If we do not have a rate to maturity in effect for a
fixed maturity option to which the "current rate to maturity" in (1)(c) above
would apply, we will use the rate at the next closest maturity date. If we are
no longer offering new fixed maturity options, the "current rate to maturity"
will be determined in accordance with our procedures then in effect. We
reserve the right to add up to 0.50% to the current rate in (1)(c) above for
purposes of calculating the market value adjustment only.
INVESTMENTS UNDER THE FIXED MATURITY OPTIONS
Amounts allocated to the fixed maturity options are held in a "nonunitized"
separate account we have established under the New York Insurance Law. This
separate account provides an additional measure of assurance that we will make
full payment of amounts due under the fixed maturity options. Under New York
Insurance Law, the portion of the separate account's assets equal to the
reserves and other contract liabilities relating to the contracts are not
chargeable with liabilities from any other business we may conduct. We own the
assets of the separate account, as well as any favorable investment
performance on those assets. You do not participate in the performance of the
assets held in this separate account. We may, subject to state law that
applies, transfer all assets allocated to the separate account to our general
account. We guarantee all benefits relating to your value in the fixed
maturity options, regardless of whether assets supporting fixed maturity
options are held in a separate account or our general account.
We have no specific formula for establishing the rates to maturity for the
fixed maturity options. We expect the rates to be influenced by, but not
necessarily correspond to, among other things, the yields that we can expect
to realize on the separate account's investments from time to time. Our
current plans are to invest in fixed-income obligations, including corporate
bonds, mortgage-backed and asset-backed securities and government and agency
issues having durations in the aggregate consistent with those of the fixed
maturity options.
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MORE INFORMATION 61
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Although the above generally describes our plans for investing the assets
supporting our obligations under the fixed maturity options under the
contracts, we are not obligated to invest those assets according to any
particular plan except as we may be required to by state insurance laws. We
will not determine the rates to maturity we establish by the performance of
the nonunitized separate account.
ABOUT THE GENERAL ACCOUNT
Our general account supports all of our policy and contract guarantees,
including those that apply to the guaranteed interest option and the fixed
maturity options, 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
exemptions and exclusionary provisions that apply, interests in the general
account have not been registered under the Securities Act of 1933, nor is the
general account an investment company under the Investment Company Act of
1940. However, the market value adjustment interests under the contracts are
registered under the Securities Act of 1933.
We have been advised that the staff of the SEC has not reviewed the portions
of this prospectus that relate to the general account (other than market value
adjustment interests). The disclosure with regard to general accounts,
however, may be subject to certain provisions of the federal securities laws
relating to the accuracy and completeness of statements made in prospectuses.
ABOUT OTHER METHODS OF PAYMENT
AUTOMATIC INVESTMENT PROGRAM - FOR NQ, TRADITIONAL IRA, AND ROTH IRA CONTRACTS
You may use our automatic investment program, or "AIP," to have a specified
amount automatically deducted from a bank checking account, bank money market
account, or credit union checking account and contributed as an additional
contribution into an NQ, Traditional IRA, or Roth IRA contract on a monthly
basis.
AIP additional contributions may be allocated to any of the variable
investment options and the guaranteed interest option, but not the fixed
maturity options. Our minimum contribution amount requirement is $20. You
choose the day of the month you wish to have your account debited. However,
you may not choose a date later than the 28th day of the month.
You may cancel AIP at any time by notifying our Processing Office. We are not
responsible for any debits made to your account before the time written notice
of cancellation is received at our Processing Office.
PAYROLL DEDUCTION PROGRAM. You can authorize your employer to remit your IRA
contributions to us if your employer has a payroll deduction program. Those
contributions are still your contributions, not your employer's.
WIRE TRANSFERS. You may also send your contributions by wire transfer from
your bank.
DATES AND PRICES AT WHICH CONTRACT EVENTS OCCUR
We describe below the general rules for when, and at what prices, events under
your contract will occur. Other portions of this prospectus describe
circumstances that may cause exceptions. We generally do not repeat those
exceptions below.
BUSINESS DAY
Our business day is any day on which Equitable Life is open and the New York
Stock Exchange is open for trading. We are closed on national business
holidays including Martin Luther King, Jr. Day and the Friday after
Thanksgiving. Additionally, we may choose to close on the day immediately
preceding or following a national business holiday or due to emergency
conditions. Our business day ends at 4:00 p.m., Eastern time for purposes of
determining the date when contributions are applied and any other transaction
requests
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62 MORE INFORMATION
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are processed. Contributions will be applied and any other transaction
requests will be processed when they are received along with all the required
information unless another date applies as indicated below.
o If your contribution, transfer, or any other transaction request,
containing all the required information, reaches us on a non-business day
or after 4:00 p.m. on a business day, we will use the next business day.
o When a charge is to be deducted on a contract date anniversary that is a
non-business day, we will deduct the charge on the next business day.
o Quarterly rebalancing will be processed on a calendar year basis and
semiannual or annual rebalancing will be processed on the first business
day of the month. Rebalancing will not be done retroactively.
CONTRIBUTIONS AND TRANSFERS
o Contributions allocated to the variable investment options are invested at
the unit value next determined after the close of the business day.
o Contributions allocated to a fixed maturity option will receive the rate to
maturity in effect for that fixed maturity option on that business day.
o Contributions allocated to the guaranteed interest option will receive the
guaranteed interest rate in effect on that business day.
o If a fixed maturity option is scheduled to mature on June 15th and June
15th is a non-business day, that fixed maturity option will mature on the
prior business day.
o Transfers to or from variable investment options will be made at the unit
value next determined after the close of the business day.
o Transfers to the guaranteed interest option will receive the guaranteed
interest rate in effect on that business day.
o Transfers to a fixed maturity option will receive the rate to maturity in
effect for that fixed maturity option on that business day.
o Transfers out of a fixed maturity option will be at the market adjusted
amount on that business day.
o For the fixed-dollar option, the first monthly transfer will occur on the
last business day of the month in which we receive your election form at
our Processing Office.
o For the interest sweep, the first monthly transfer will occur on the last
business day of the month following the month that we receive your
election form at our Processing Office.
ABOUT YOUR VOTING RIGHTS
As the owner of the shares of The Hudson River Trust and EQ Advisors Trust we
have the right to vote on certain matters involving the Portfolios, such as:
o the election of trustees; or
o the formal approval of independent auditors selected for each trust; or
o any other matters described in the prospectuses for the trusts or requiring
a shareholders' vote under the Investment Company Act of 1940.
We will give contract owners the opportunity to instruct us how to vote the
number of shares attributable to their contracts if a shareholder vote is
taken. If we do not receive instructions in time from all contract 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 a Portfolio in the
same proportions that contract owners vote.
VOTING RIGHTS OF OTHERS
Currently, we control each trust. EQ Advisors Trust shares are sold only to
our separate accounts and an affiliated qualified plan trust. The Hudson River
Trust shares are also held by separate accounts of ours and by separate
accounts of insurance companies unaffiliated with us. Shares held by these
separate accounts will probably be voted according to the instructions of the
owners of insurance policies and
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MORE INFORMATION 63
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contracts issued by those insurance companies. While this will dilute the
effect of the voting instructions of the contract owners, we currently do not
foresee any disadvantages because of this. The Hudson River Trust Board of
Trustees intends to monitor events in order to identify any material
irreconcilable conflicts that may arise and to determine what action, if any,
should be taken in response. If we believe that a response to any of those
events insufficiently protects our contract owners, we will see to it that
appropriate action is taken.
SEPARATE ACCOUNT A VOTING RIGHTS
If actions relating to Separate Account A require contract owner approval,
contract owners will be entitled to one vote for each unit they have in the
variable investment options. Each contract owner who has elected a variable
annuity payout option may cast the number of votes equal to the dollar amount
of reserves we are holding for that annuity in a variable investment option
divided by the annuity unit value for that option. We will cast votes
attributable to any amounts we have in the variable investment options in the
same proportion as votes cast by contract owners.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under applicable
federal securities laws. To the extent that those laws or the regulations
published 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.
ABOUT OUR YEAR 2000 PROGRESS
Equitable Life relies upon various computer systems in order to administer
your contract and operate the investment options. Some of these systems belong
to service providers who are not affiliated with Equitable Life.
In 1995, Equitable Life began addressing the question of whether its computer
systems would recognize the year 2000 before, on or after January 1, 2000, and
Equitable Life has identified those of its systems critical to business
operations that were not year 2000 compliant. Equitable Life has completed the
work of modifying or replacing non-compliant systems and has confirmed,
through testing, that its systems are year 2000 compliant. Equitable Life has
contacted third-party vendors and service providers to seek confirmation that
they are acting to address the year 2000 issue with the goal of avoiding any
material adverse effect on services provided to contract owners and on
operations of the investment options. All third-party vendors and service
providers considered critical to Equitable Life's business, have provided us
confirmation of their year 2000 compliance or a satisfactory plan for
compliance. With respect to vendors and service providers considered
non-critical, we believe we are on schedule for substantially all such vendors
and service providers to be confirmed by September 30, 1999 as year 2000
compliant or the subject of a satisfactory plan for compliance. If such
confirmation is not received by September 30, 1999 the vendor or service
provider will be replaced, eliminated or the subject of contingency plans.
Additionally, Equitable Life has supplemented its existing business continuity
and disaster recovery plans to cover certain categories of contingencies that
could arise as a result of year 2000 related failures.
There are many risks associated with year 2000 issues, including the risk that
Equitable Life's computer systems will not operate as intended. Additionally,
there can be no assurance that the systems of third parties will be year 2000
compliant. Any significant unresolved difficulty related to the year 2000
compliance initiatives could result in an interruption in, or a failure of,
normal business operations and, accordingly, could have a material adverse
effect on our ability to administer your contract and operate the investment
options.
To the fullest extent permitted by law, the foregoing year 2000 discussion is
a "Year 2000 Readiness Disclosure" within the meaning of The Year 2000
Information and Readiness Disclosure Act, (P.L. 105-271) (1998).
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64 MORE INFORMATION
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ABOUT LEGAL PROCEEDINGS
Equitable Life and its affiliates are parties to various legal proceedings. In
our view, none of these proceedings is likely to have a material adverse
effect upon Separate Account A, our ability to meet our obligations under the
contracts, or the distribution of the contracts.
ABOUT OUR INDEPENDENT ACCOUNTANTS
The financial statements of Equitable Life incorporated in this prospectus by
reference to the Annual Report on Form 10-K at December 31, 1998 and 1997, and
for the three years ended December 31, 1998, have been so incorporated in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of said firm as experts in auditing and accounting.
TRANSFERS OF OWNERSHIP, COLLATERAL ASSIGNMENTS, LOANS, AND BORROWING
You can transfer ownership of an NQ contract at any time before annuity
payments begin. We will continue to treat you as the owner until we receive
written notification of any change at our Processing Office. You cannot assign
your NQ contract as collateral or security for a loan. Loans are also not
available under your NQ contract. In some cases, an assignment or change of
ownership may have adverse tax consequences. See "Tax information" earlier in
this prospectus.
You cannot assign or transfer ownership of a Traditional IRA, QP IRA or Roth
IRA contract except by surrender to us. Loans are not available and you cannot
assign Traditional IRA, QP IRA and Roth IRA contracts as security for a loan
or other obligation.
For limited transfers of ownership after the owner's death see "Payment of
death benefit" and "Beneficiary continuation option under Traditional IRA and
QP IRA contracts." You may direct the transfer of the values under your
Traditional IRA, QP IRA and Roth IRA contract to another similar arrangement.
DISTRIBUTION OF THE CONTRACTS
Equitable Financial Consultants, Inc. ("EQF"), an indirect, wholly owned
subsidiary of Equitable Life, is the distributor of the contracts and has
responsibility for sales and marketing functions for Separate Account A. EQF
serves as the principal underwriter of Separate Account A. EQF is registered
with the SEC as a broker-dealer and is a member of the National Association of
Securities Dealers, Inc. EQF's principal business address is 1290 Avenue of
the Americas, New York, NY 10104. Under a Distribution and Servicing Agreement
between EQF, Equitable life, and certain of Equitable Life's separate
accounts, including Separate Account A, Equitable Life paid EQF fees of
$325,380 for 1998 and $325,380 for 1997, as distributor of certain contracts
and as the principal underwriter of certain separate accounts, including
Separate Account A. By year end 1999, EQF plans to become AXA Advisors, LLC,
and will become a subsidiary of AXA Financial, Inc.
The contracts will be sold by registered representatives of EQF and its
affiliates, who are also our licensed insurance agents. EQF may also receive
compensation and reimbursement for its marketing services under the terms of
its distribution agreements with Equitable Life. The offering of the contracts
is intended to be continuous.
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INVESTMENT PERFORMANCE 65
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9
Investment performance
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We provide the following tables to show five different measurements of the
investment performance of the variable investment options and/or the
Portfolios in which they invest. We include these tables because they may be
of general interest to you. THE RESULTS SHOWN REFLECT PAST PERFORMANCE. THEY
DO NOT INDICATE HOW THE VARIABLE INVESTMENT OPTIONS MAY PERFORM IN THE FUTURE.
THEY ALSO DO NOT REPRESENT THE RESULTS EARNED BY ANY PARTICULAR INVESTOR. YOUR
RESULTS WILL DIFFER.
Table 1 shows the average annual total return of the variable investment
options. Average annual total return is the annual rate of growth that would
be necessary to achieve the ending value of a contribution invested in the
variable investment options for the periods shown.
Table 2 shows the growth of a hypothetical $1,000 investment in the variable
investment options over the periods shown. Both Tables 1 and 2 take into
account all fees and charges under the contract, but do not reflect the
charges for any applicable taxes such as premium taxes, or any applicable
annuity administrative fee.
Tables 3, 4 and 5 show the rates of return of the variable investment options
on an annualized, cumulative, and year-by-year basis. These tables take into
account all fees and charges under the contract, but do not reflect the annual
administrative charge, any withdrawal charge, ratcheted death benefit charge,
charges for any applicable taxes such as premium taxes, or any applicable
annuity administrative fee. If the charges were reflected they would
effectively reduce the rates of return shown.
In all cases the results shown are based on the actual historical investment
experience of the Portfolios in which the variable investment options invest.
In some cases, the results shown relate to periods when the variable
investment options and/or the contracts were not available. In those cases, we
adjusted the results of the Portfolios to reflect the charges under the
contracts that would have applied had the investment options and/or contracts
been available. The contracts are being offered for the first time as of the
date of this prospectus.
In addition, we have adjusted the results prior to October 1996, when The
Hudson River Trust Class 1B shares were not available, to reflect the 12b-1
fees currently imposed. Finally, the results shown for the Alliance Money
Market, Alliance Balanced, Alliance Common Stock and Alliance Aggressive Stock
options for periods before those options were operated as part of a unit
investment trust reflect the results of the separate accounts that preceded
them. The "Since portfolio inception" figures for these options are based on
the date of inception of the preceding separate accounts. We have adjusted
these results to reflect the fee and expense structure in effect for Separate
Account A as a unit investment trust. See "The Reorganization" in the SAI for
additional information.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends.
BENCHMARKS
Tables 3 and 4 compare the performance of variable investment options to
market indices that serve as 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. Also, they do not
reflect other charges such as the mortality and expense risks and other
expense charges, administrative charge, or any withdrawal charge or optional
ratcheted death benefit charge, under the contracts. Comparisons with these
benchmarks, therefore, may be 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. The benchmarks include:
<PAGE>
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66 INVESTMENT PERFORMANCE
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ALLIANCE AGGRESSIVE STOCK: 50% Russell 2000 Index and 50%
Standard & Poor's Mid-Cap Total Return Index.
ALLIANCE BALANCED: 50% Standard & Poor's 500 and 50% Lehman
Government/Corporate Bond Index.
ALLIANCE COMMON STOCK: Standard & Poor's 500 Index.
ALLIANCE CONSERVATIVE INVESTORS: 70% Lehman Treasury Bond
Composite Index and 30% Standard & Poor's 500 Index.
ALLIANCE EQUITY INDEX: Standard & Poor's 500 Index.
ALLIANCE GLOBAL: Morgan Stanley Capital International World Index.
ALLIANCE GROWTH & INCOME: 75% Standard & Poor's 500 Index
and 25% Value Line Convertibles Index.
ALLIANCE GROWTH INVESTORS: 30% Lehman Government/Corporate
Bond Index and 70% Standard & Poor's 500 Index.
ALLIANCE HIGH YIELD: Merrill Lynch High Yield Master Index.
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES: Lehman
Intermediate Government Bond Index.
ALLIANCE INTERNATIONAL: Morgan Stanley Capital International
Europe, Australia, Far East Index.
ALLIANCE MONEY MARKET: Salomon Brothers Three-Month T-Bill
Index.
ALLIANCE QUALITY BOND: Lehman Aggregate Bond Index.
ALLIANCE SMALL CAP GROWTH: Russell 2000 Growth Index.
EQ/ALLIANCE PREMIER GROWTH: Standard & Poor's 500 Index.
CAPITAL GUARDIAN RESEARCH: Standard & Poor's 500 Index.
CAPITAL GUARDIAN U.S. EQUITY: Standard & Poor's 500 Index.
EQ/EVERGREEN: Russell 2000 Index.
EQ/EVERGREEN FOUNDATION: 60% Standard & Poor's 500
Index/40% Lehman Brothers Aggregate Bond Index.
MFS EMERGING GROWTH COMPANIES: Russell 2000 Index.
MFS GROWTH WITH INCOME: Standard & Poor's 500 Index.
MFS RESEARCH: Standard & Poor's 500 Index.
MERRILL LYNCH BASIC VALUE EQUITY: Standard & Poor's 500 Index.
MERRILL LYNCH STRATEGY: 36% Standard & Poor's 500 Index/24%
Morgan Stanley Capital International Europe, Australia, Far East
Index/21% Salomon Brothers U.S. Treasury Bond 1 Year+ 14%
Salomon Brothers World Government Bond (excluding U.S.)/and
5% Three-Month U.S. Treasury Bill.
MORGAN STANLEY EMERGING MARKETS EQUITY: Morgan Stanley
Capital International Emerging Markets Free Price Return Index.
EQ/PUTNAM BALANCED: 60% Standard & Poor's 500 Index and 40%
Lehman Government/Corporate Bond Index.
EQ/PUTNAM GROWTH & INCOME VALUE: Standard & Poor's 500
Index.
T. ROWE PRICE EQUITY INCOME: Standard & Poor's 500 Index.
T. ROWE PRICE INTERNATIONAL STOCK: Morgan Stanley Capital
International Europe, Australia, Far East Index.
WARBURG PINCUS SMALL COMPANY VALUE: Russell 2000 Index.
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LIPPER SURVEY. The Lipper Variable Insurance Products Performance Analysis
Survey (Lipper Survey) records the performance of a large group of variable
annuity products, including managed separate accounts of insurance companies.
According to Lipper Analytical Services, Inc., (Lipper), 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 EQUI-VEST performance
relative to other variable annuity products.
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INVESTMENT PERFORMANCE 67
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TABLE 1
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 1998
<TABLE>
<CAPTION>
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LENGTH OF INVESTMENT PERIOD
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SINCE SINCE
1 3 5 10 OPTION PORTFOLIO
VARIABLE INVESTMENT OPTIONS YEAR YEARS YEARS YEARS INCEPTION* INCEPTION**
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<S> <C> <C> <C> <C> <C> <C>
Alliance Aggressive Stock (8.11)% 5.01% 6.70% 15.83% - -
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Alliance Balanced 8.28% 9.28% 5.84% 9.04% - -
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Alliance Common Stock 19.00% 22.14% 17.40% 15.12% - -
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Alliance Conservative Investors 4.40% 5.00% 4.37% - 4.47% 6.12%
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Alliance Equity Index 17.73% 22.16% - - 21.48% 19.84%
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Alliance Global 11.67% 10.30% 9.50% 11.27% 9.41% -
- -----------------------------------------------------------------------------------------------------------------------------
Alliance Growth & Income 10.80% 17.02% 13.19% - 13.31% 12.12%
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Alliance Growth Investors 8.39% 10.25% 8.96% - 9.14% 12.55%
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Alliance High Yield (13.05)% 5.69% 5.20% 7.50% 5.15% -
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Alliance Intermediate Government Securities (1.24)% 0.61% 0.23% - 1.42% 3.06%
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Alliance International 1.36% (0.06)% - - 0.72% 1.85%
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Alliance Money Market (3.44)% (0.26)% 0.04% 1.51% - -
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Alliance Quality Bond (0.37)% 2.03% 1.65% - 1.70% 1.09%
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Alliance Small Cap Growth (12.29)% - - - (1.14)% 5.06%
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MFS Emerging Growth Companies 24.25% - - - 22.47% 27.59%
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MFS Research 14.16% - - - 13.63% 17.26%
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Merrill Lynch Basic Value Equity 2.53% - - - 6.00% 10.26%
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Merrill Lynch World Strategy (1.84)% - - - (2.62)% 0.35%
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Morgan Stanley Emerging Markets Equity (32.94)% - - - (37.24)% (37.24)%
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E/Q Putnam Balanced 2.74% - - - 6.92% 8.89%
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E/Q Putnam Growth & Income Value 3.67% - - - 7.68% 10.55%
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T. Rowe Price Equity Income 0.22% - - - 9.00% 11.66%
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T. Rowe Price International Stock 4.47% - - - (1.72)% 0.42%
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Warburg Pincus Small Company Value (17.31)% - - - (6.07)% (2.16)%
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</TABLE>
* The variable investment option inception dates are: Alliance Aggressive
Stock (5/1/84), Alliance Balanced (5/1/84), Alliance Common Stock
(8/27/81), Alliance Conservative Investors (1/4/94), Alliance Equity
Index (6/1/94), Alliance Global (1/4/94), Alliance Growth & Income
(1/4/94), Alliance Growth Investors (1/4/94), Alliance High Yield
(1/4/94), Alliance Intermediate Government Securities (6/1/94), Alliance
International (9/1/95), Alliance Money Market (5/11/82), Alliance Quality
Bond (1/4/94), Alliance Small Cap Growth (6/2/97), MFS Emerging Growth
Companies (6/2/97), MFS Research (6/2/97), Merrill Lynch Basic Value
Equity (6/2/97), Merrill Lynch World Strategy (6/2/97), Morgan Stanley
Emerging Markets Equity (8/20/97), EQ/Putnam Balanced (6/2/97), EQ/Putnam
Growth & Income Value (6/2/97), T. Rowe Price Equity Income (6/2/97), T.
Rowe Price International Stock (6/2/97), Warburg Pincus Small Company
Value (6/2/97). The inception dates for the options that became available
on or after December 31, 1998 and are therefore not shown in this table
are: EQ/Evergreen, EQ/Evergreen Foundation, and MFS Growth with Income
(December 31, 1998), EQ/Alliance Premier Growth, Capital Guardian
Research, and Capital Guardian U.S. Equity (April 30, 1999.)
** The Portfolio inception dates are: Alliance Aggressive Stock (5/1/84),
Alliance Balanced (5/1/84), Alliance Common Stock (8/1/68), Alliance
Conservative Investors (10/2/89), Alliance Equity Index (3/1/94),
Alliance Global (8/27/87), Alliance
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68 INVESTMENT PERFORMANCE
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Growth & Income (10/1/93), Alliance Growth Investors (10/2/89), Alliance
High Yield (1/2/87), Alliance Intermediate Government Securities (4/1/91),
Alliance International (4/3/95), Alliance Money Market (5/11/82), Alliance
Quality Bond (10/1/93), Alliance Small Cap Growth (5/1/97), MFS Emerging
Growth Companies (5/1/97), MFS Research (5/1/97), Merrill Lynch Basic Value
Equity (5/1/97), Merrill Lynch World Strategy (5/1/97), Morgan Stanley
Emerging Markets Equity (8/20/97), EQ/Putnam Balanced (5/1/97), EQ/Putnam
Growth & Income Value (5/1/97), T. Rowe Price Equity Income (5/1/97), T.
Rowe Price International Stock (5/1/97), Warburg Pincus Small Company Value
(5/1/97). The inception dates for the Portfolios that became available on
or after December 31, 1998 and are therefore not shown in this table are:
EQ/Evergreen, EQ/Evergreen Foundation, and MFS Growth with Income (December
31, 1998), EQ/Alliance Premier Growth, Capital Guardian Research, and
Capital Guardian U.S. Equity (April 30, 1999.)
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE 69
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TABLE 2
GROWTH OF $1,000 UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
LENGTH OF INVESTMENT PERIOD
-------------------------------------------------------------------------------
SINCE
1 3 5 10 PORTFOLIO
VARIABLE INVESTMENT OPTIONS YEAR YEARS YEARS YEARS INCEPTION*
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alliance Aggressive Stock $ 918.94 $1,158.01 $1,383.14 $4,347.68 -
- --------------------------------------------------------------------------------------------------------------------------
Alliance Balanced $1,082.81 $1,305.16 $1,328.30 $2,376.23 -
- --------------------------------------------------------------------------------------------------------------------------
Alliance Common Stock $1,190.01 $1,822.21 $2,230.22 $4,089.48 -
- --------------------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors $1,043.96 $1,157.64 $1,238.46 - $1,732.00
- --------------------------------------------------------------------------------------------------------------------------
Alliance Equity Index $1,177.27 $1,822.90 - - $2,400.74
- --------------------------------------------------------------------------------------------------------------------------
Alliance Global $1,116.68 $1,341.98 $1,574.10 $2,908.79 -
- --------------------------------------------------------------------------------------------------------------------------
Alliance Growth & Income $1,107.95 $1,602.32 $1,858.21 - $1,823.68
- --------------------------------------------------------------------------------------------------------------------------
Alliance Growth Investors $1,083.87 $1,339.97 $1,535.49 - $2,984.94
- --------------------------------------------------------------------------------------------------------------------------
Alliance High Yield $ 869.48 $1,180.45 $1,288.21 $2,060.20 -
- --------------------------------------------------------------------------------------------------------------------------
Alliance Intermediate Government Securities $ 987.64 $1,018.39 $1,011.47 - $1,263.61
- --------------------------------------------------------------------------------------------------------------------------
Alliance International $1,013.64 $ 998.33 - - $1,071.09
- --------------------------------------------------------------------------------------------------------------------------
Alliance Money Market $ 965.57 $ 992.22 $1,002.02 $1,162.00 -
- --------------------------------------------------------------------------------------------------------------------------
Alliance Quality Bond $ 996.29 $1,062.24 $1,085.03 - $1,058.60
- --------------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth $ 877.09 - - - $1,086.02
- --------------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies $1,242.46 - - - $1,502.59
- --------------------------------------------------------------------------------------------------------------------------
MFS Research $1,141.64 - - - $1,304.87
- --------------------------------------------------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity $1,025.29 - - - $1,177.38
- --------------------------------------------------------------------------------------------------------------------------
Merrill Lynch World Strategy $ 981.56 - - - $1,005.94
- --------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity $ 670.57 - - - $ 528.92
- --------------------------------------------------------------------------------------------------------------------------
E/Q Putnam Balanced $1,027.41 - - - $1,153.02
- --------------------------------------------------------------------------------------------------------------------------
E/Q Putnam Growth & Income Value $1,036.67 - - - $1,182.49
- --------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income $1,002.23 - - - $1,202.36
- --------------------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock $1,044.72 - - - $1,007.09
- --------------------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Value $ 826.91 - - - $ 964.11
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Portfolio inception dates are shown in Table 1.
<PAGE>
- --------------------------------------------------------------------------------
70 INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TABLE 3
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Since
portfolio
1 year 3 years 5 years 10 years 20 years inception*
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ALLIANCE AGGRESSIVE STOCK (1.19)% 9.12% 9.83% 17.17% - 15.80%
- --------------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap Growth 12.16% 16.33% 14.87% 15.44% - 13.95%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark 8.28% 17.77% 15.56% 16.49% - 15.78%
- --------------------------------------------------------------------------------------------------------------------------
ALLIANCE BALANCED 16.43% 13.25% 9.22% 10.99% - 10.70%
- --------------------------------------------------------------------------------------------------------------------------
Lipper Balanced 13.48% 15.79% 13.84% 12.97% - 13.56%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark 19.02% 18.70% 16.88% 15.21% - 15.37%
- --------------------------------------------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK 27.55% 25.79% 20.17% 16.97% 17.03% 11.90%
- --------------------------------------------------------------------------------------------------------------------------
Lipper Growth 22.86% 22.23% 18.63% 16.72% 16.30% 11.34%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% 28.23% 24.06% 19.21% 17.76% 12.75%
- --------------------------------------------------------------------------------------------------------------------------
ALLIANCE CONSERVATIVE INVESTORS 12.25% 9.11% 7.82% - - 8.42%
- --------------------------------------------------------------------------------------------------------------------------
Lipper Income 14.20% 15.62% 14.31% - - 12.55%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark 15.59% 14.45% 13.37% - - 12.08%
- --------------------------------------------------------------------------------------------------------------------------
ALLIANCE EQUITY INDEX 26.25% 25.79% - - - 22.57%
- --------------------------------------------------------------------------------------------------------------------------
Lipper S&P 500 Index Funds 28.05% 27.67% - - - 24.31%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% 28.23% - - - 24.79%
- --------------------------------------------------------------------------------------------------------------------------
ALLIANCE GLOBAL 20.07% 14.24% 12.62% 13.16% - 10.92%
- --------------------------------------------------------------------------------------------------------------------------
Lipper Global 14.34% 14.67% 11.98% 11.21% - 9.64%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark 24.34% 17.77% 15.68% 10.66% - 9.55%
- --------------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME 19.13% 20.78% 16.13% - - 15.17%
- --------------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.61% 21.25% 18.35% - - 17.89%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark 20.10% 23.99% 21.07% - - 20.48%
- --------------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS 16.54% 14.19% 12.11% - - 14.34%
- --------------------------------------------------------------------------------------------------------------------------
Lipper Flexible Portfolio 14.20% 15.62% 14.31% - - 12.55%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark 22.85% 22.69% 19.96% - - 15.55%
- --------------------------------------------------------------------------------------------------------------------------
ALLIANCE HIGH YIELD (6.51)% 9.77% 8.42% 9.58% - 8.92%
- --------------------------------------------------------------------------------------------------------------------------
Lipper High Yield ( 0.44)% 8.21% 7.37% 9.34% - 8.97%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark 3.66% 9.11% 9.01% 11.08% - 10.72%
- --------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERMEDIATE GOVERNMENT
SECURITIES 6.20% 4.73% 3.87% - - 5.56%
- --------------------------------------------------------------------------------------------------------------------------
Lipper U.S. Government 7.68% 6.21% 5.91% - - 7.25%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark 8.49% 6.74% 6.45% - - 7.60%
- --------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERNATIONAL 8.99% 4.05% - - - 5.78%
- --------------------------------------------------------------------------------------------------------------------------
Lipper International 13.02% 9.94% - - - 10.74%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark 20.00% 9.00% - - - 9.68%
- --------------------------------------------------------------------------------------------------------------------------
ALLIANCE MONEY MARKET 3.82% 3.85% 3.66% 4.09% - 5.25%
- --------------------------------------------------------------------------------------------------------------------------
Lipper Money Market 4.84% 4.87% 4.77% 5.20% - 6.34%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark 5.05% 5.18% 5.11% 5.44% 6.41%
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE 71
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TABLE 3 (CONTINUED)
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Since
portfolio
1 year 3 years 5 years 10 years 20 years inception*
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
ALLIANCE QUALITY BOND 7.13% 6.17% 5.24% - - 4.81%
- --------------------------------------------------------------------------------------------------------------------------
Lipper Corporate Bond A-Rated 7.47% 6.38% 6.54% - - 6.21%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark 8.69% 7.29% 7.27% - - 6.92%
- --------------------------------------------------------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH (5.69)% - - - - 10.63%
- --------------------------------------------------------------------------------------------------------------------------
Lipper Small-Cap (0.33)% - - - - 16.72%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark 1.23% - - - - 16.58%
- --------------------------------------------------------------------------------------------------------------------------
MFS EMERGING GROWTH COMPANIES 32.90% - - - - 33.24%
- --------------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap 15.97% - - - - 22.72%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark (2.54)% - - - - 14.53%
- --------------------------------------------------------------------------------------------------------------------------
MFS RESEARCH 22.62% - - - - 22.95%
- --------------------------------------------------------------------------------------------------------------------------
Lipper Growth 25.82% - - - - 28.73%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% - - - - 31.63%
- --------------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH BASIC VALUE EQUITY 10.24% - - - - 15.93%
- --------------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.54% - - - - 21.32%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% - - - - 31.63%
- --------------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH WORLD STRATEGY 5.54% - - - - 5.66%
- --------------------------------------------------------------------------------------------------------------------------
Lipper Global Flexible Portfolio 9.34% - - - - 11.15%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark 19.55% - - - - 20.00%
- --------------------------------------------------------------------------------------------------------------------------
MORGAN STANLEY EMERGING MARKETS
EQUITY (27.90)% - - - - (33.52)%
- --------------------------------------------------------------------------------------------------------------------------
Lipper Emerging Markets (30.50)% - - - - (36.28)%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark (25.34)% - - - - (28.92)%
- --------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM BALANCED 10.47% - - - - 14.56%
- --------------------------------------------------------------------------------------------------------------------------
Lipper Balanced 14.61% - - - - 17.83%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark 21.36% - - - - 23.48%
- --------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME VALUE 11.47% - - - - 16.22%
- --------------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.54% - - - - 21.32%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% - - - - 31.63%
- --------------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE EQUITY INCOME 7.76% - - - - 17.33%
- --------------------------------------------------------------------------------------------------------------------------
Lipper Equity Income 10.76% - - - - 19.07%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% - - - - 31.63%
- --------------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE INTERNATIONAL STOCK 12.33% - - - - 5.74%
- --------------------------------------------------------------------------------------------------------------------------
Lipper International 12.17% - - - - 9.06%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark 20.00% - - - - 13.43%
- --------------------------------------------------------------------------------------------------------------------------
WARBURG PINCUS SMALL COMPANY
VALUE (11.09)% - - - - 3.01%
- --------------------------------------------------------------------------------------------------------------------------
Lipper Small-Cap 1.53% - - - - 16.77%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark (2.54)% - - - - 14.53%
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Portfolio inception dates are shown in Table 1.
<PAGE>
- --------------------------------------------------------------------------------
72 INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TABLE 4
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ALLIANCE AGGRESSIVE STOCK (1.19)% 29.95% 59.84% 387.82% - 759.93%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap Growth 12.16% 58.64% 102.73% 334.88% - 613.05%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 8.28% 63.35% 106.12% 360.30% - 759.55%
- ----------------------------------------------------------------------------------------------------------------------------
ALLIANCE BALANCED 16.43% 45.27% 55.44% 183.58% - 344.46%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Balanced 13.48% 55.60% 91.92% 240.69% - 553.21%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 19.02% 67.24% 118.08% 311.86% - 715.64%
- ----------------------------------------------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK 27.55% 99.03% 150.65% 379.60% 2,223.36% 2,957.30%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Growth 22.86% 84.52% 138.97% 388.00% 2,185.68% 1,203.81%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% 110.85% 193.91% 479.62% 2,530.43% 3,755.68%
- ----------------------------------------------------------------------------------------------------------------------------
ALLIANCE CONSERVATIVE INVESTORS 12.25% 29.91% 45.74% - - 111.22%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Income 14.20% 55.28% 97.15% - - 202.48%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 15.59% 49.92% 87.28% - - 187.40%
- ----------------------------------------------------------------------------------------------------------------------------
ALLIANCE EQUITY INDEX 26.25% 99.06% - - - 167.54%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper S&P 500 Index Funds 28.05% 108.12% - - - 186.34%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% 110.85% - - - 192.17%
- ----------------------------------------------------------------------------------------------------------------------------
ALLIANCE GLOBAL 20.07% 49.10% 81.15% 244.24% - 224.14%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Global 14.34% 51.58% 77.94% 194.96% - 188.08%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 24.34% 63.34% 107.19% 175.31% - 181.57%
- ----------------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME 19.13% 76.21% 111.23% - - 109.92%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.61% 79.05% 133.95% - - 139.10%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 20.10% 90.62% 160.09% - - 166.00%
- ----------------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS 16.54% 48.89% 77.08% - - 245.21%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Flexible Portfolio 14.20% 55.28% 97.15% - - 202.45%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 22.85% 84.68% 148.41% - - 280.88%
- ----------------------------------------------------------------------------------------------------------------------------
ALLIANCE HIGH YIELD (6.51)% 32.28% 49.83% 149.64% - 178.62%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper High Yield (0.44)% 26.80% 43.00% 145.62% - 182.21%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 3.66% 29.90% 53.96% 186.01% - 239.69%
- ----------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERMEDIATE
GOVERNMENT SECURITIES 6.20% 14.86% 20.93% - - 52.12%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper U.S. Government 7.68% 19.84% 33.36% - - 72.35%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 8.49% 21.61% 36.71% - - 76.55%
- ----------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERNATIONAL 8.99% 12.66% - - - 23.41%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper International 13.02% 33.62% - - - 47.74%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 20.00% 29.52% - - - 41.40%
- ----------------------------------------------------------------------------------------------------------------------------
ALLIANCE MONEY MARKET 3.82% 11.99% 19.68% 49.28% - 134.48%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Money Market 4.84% 15.34% 26.25% 66.09% - 178.83%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 5.05% 16.35% 28.27% 69.88% - 181.74%
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE 73
- --------------------------------------------------------------------------------
TABLE 4 (CONTINUED)
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ALLIANCE QUALITY BOND 7.13% 19.67% 29.12% - - 28.00 %
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Corporate Bond A-Rated 7.47% 20.42% 37.37% - - 37.26 %
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 8.69% 23.51% 42.06% - - 42.14 %
- ----------------------------------------------------------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH (5.69)% - - - - 18.36 %
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Small-Cap (0.33)% - - - - 28.98 %
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 1.23% - - - - 29.23 %
- ----------------------------------------------------------------------------------------------------------------------------
MFS EMERGING GROWTH COMPANIES 32.90% - - - - 61.42 %
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap 15.97% - - - - 42.16 %
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark (2.54)% - - - - 25.40 %
- ----------------------------------------------------------------------------------------------------------------------------
MFS RESEARCH 22.62% - - - - 41.16 %
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Growth 25.82% - - - - 52.86 %
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% - - - - 57.60 %
- ----------------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH BASIC VALUE EQUITY 10.24% - - - - 27.97 %
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.54% - - - - 15.59 %
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% - - - - 57.60 %
- ----------------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH WORLD STRATEGY 5.54% - - - - 9.63 %
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Global Flexible Portfolio 9.34% - - - - 19.41 %
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 19.55% - - - - 33.33 %
- ----------------------------------------------------------------------------------------------------------------------------
MORGAN STANLEY EMERGING MARKETS
- ----------------------------------------------------------------------------------------------------------------------------
EQUITY (27.90)% - - - - (42.71)%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Emerging Markets (30.50)% - - - - (45.67)%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark (25.34)% - - - - (36.71)%
- ----------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM BALANCED 10.47% - - - - 25.46 %
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Balanced 14.61% - - - - 31.59 %
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 21.36% - - - - 42.22 %
- ----------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME VALUE 11.47% - - - - 28.50 %
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.54% - - - - 38.49 %
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% - - - - 57.60 %
- ----------------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE EQUITY INCOME 7.76% - - - - 30.56 %
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Equity Income 10.76% - - - - 33.92 %
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% - - - - 57.60 %
- ----------------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE INTERNATIONAL STOCK 12.33% - - - - 9.75 %
- ----------------------------------------------------------------------------------------------------------------------------
Lipper International 12.17% - - - - 15.88 %
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 20.00% - - - - 23.42 %
- ----------------------------------------------------------------------------------------------------------------------------
WARBURG PINCUS SMALL COMPANY
VALUE (11.09)% - - - - (5.07)%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Small-Cap 1.53% - - - - 29.95 %
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark (2.54)% - - - - 25.40 %
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Portfolio inception dates are shown in Table 1.
<PAGE>
- --------------------------------------------------------------------------------
74 INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
TABLE 5
YEAR-BY-YEAR RATES OF RETURN
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
1989 1990 1991 1992 1993
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alliance Aggressive Stock 42.82% 5.52% 84.47% (4.61)% 15.08%
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Balanced 24.66% (1.45)% 40.11% (4.26)% 10.71%
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Common Stock 24.12% (9.36)% 35.86% 1.72% 23.07%
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors 2.73%+ 4.88% 18.16% 4.27% 9.18%
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Equity Index - - - - -
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Global 24.95% (7.49)% 28.72% (1.96)% 30.27%
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Growth & Income - - - - (0.62)%+
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Growth Investors 3.63%+ 9.01% 46.85% 3.42% 13.63%
- ----------------------------------------------------------------------------------------------------------------------------
Alliance High Yield 3.62% (2.54)% 22.72% 10.72% 21.42%
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Intermediate Government
Securities - - 10.88%+ 4.08% 9.01%
- ----------------------------------------------------------------------------------------------------------------------------
Alliance International - - - - -
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Money Market 7.70% 6.80% 4.69% 2.07% 1.48%
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Quality Bond - - - - (0.87)%+
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth - - - - -
- ----------------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies - - - - -
- ----------------------------------------------------------------------------------------------------------------------------
MFS Research - - - - -
- ----------------------------------------------------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity - - - - -
- ----------------------------------------------------------------------------------------------------------------------------
Merrill Lynch World Strategy - - - - -
- ----------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets
Equity - - - - -
- ----------------------------------------------------------------------------------------------------------------------------
E/Q Putnam Balanced - - - - -
- ----------------------------------------------------------------------------------------------------------------------------
E/Q Putnam Growth & Income Value - - - - -
- ----------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income - - - - -
- ----------------------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock - - - - -
- ----------------------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company
Value - - - - -
- ----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
1994 1995 1996 1997 1998
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Aggressive Stock (5.24)% 29.81% 20.44% 9.20% (1.19)%
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Balanced (9.38)% 18.07% 10.07% 13.35% 16.43%
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Common Stock (3.58)% 30.61% 22.50% 27.37% 27.55%
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors (5.50)% 18.71% 3.68% 11.62% 12.25%
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Equity Index (0.14)%+ 34.60% 20.64% 30.69% 26.25%
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Global 3.71% 17.14% 12.96% 9.93% 20.07%
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Growth & Income (2.02)% 22.34% 18.37% 24.95% 19.13%
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Growth Investors (4.56)% 24.61% 10.99% 15.11% 16.54%
- ----------------------------------------------------------------------------------------------------------------------------
Alliance High Yield (4.20)% 18.24% 21.15% 16.79% (6.51)%
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Intermediate Government
Securities (5.77)% 11.73% 2.27% 5.76% 6.20%
- ----------------------------------------------------------------------------------------------------------------------------
Alliance International - 9.54%+ 8.23% (4.49)% 8.99%
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Money Market 2.53% 4.23% 3.81% 3.91% 3.82%
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Quality Bond (6.49)% 15.38% 3.84% 7.58% 7.13%
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth - - - 25.50%+ (5.69)%
- ----------------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies - - - 21.45%+ 32.90%
- ----------------------------------------------------------------------------------------------------------------------------
MFS Research - - - 15.12%+ 22.62%
- ----------------------------------------------------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity - - - 16.08%+ 10.24%
- ----------------------------------------------------------------------------------------------------------------------------
Merrill Lynch World Strategy - - - 3.87%+ 5.54%
- ----------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets
Equity - - - (20.54)%+ (27.90)%
- ----------------------------------------------------------------------------------------------------------------------------
E/Q Putnam Balanced - - - 13.56%+ 10.47%
- ----------------------------------------------------------------------------------------------------------------------------
E/Q Putnam Growth & Income Value - - - 15.28%+ 11.47%
- ----------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income - - - 21.15%+ 7.76%
- ----------------------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock - - - (2.30)%+ 12.33%
- ----------------------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company
Value - - - 18.17%+ (11.09)%
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Returns for these Portfolios represent less than 12 months of
performance. The returns are as of each Portfolio inception date as shown
in Table 1.
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE 75
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMUNICATING PERFORMANCE DATA
In reports or other communications to contract owners or in advertising
material, we may describe general economic and market conditions affecting our
variable investment options, and the Portfolios and may compare the
performance or ranking of those options and the Portfolios with:
o those 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;
o other appropriate indices of investment securities and averages for peer
universes of mutual funds; or
o data developed by us derived from such indices or averages.
We also may furnish to present or prospective contract owners advertisements
or other communications that include evaluations of a variable investment
option or Portfolio by nationally recognized financial publications. Examples
of such publications are:
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
Barron's Money Management Letter
Morningstar's Variable Annuity Investment Dealers Digest
Sourcebook National Underwriter
Business Week Pension & Investments
Forbes USA Today
Fortune Investor's Business Daily
Institutional Investor The New York Times
Money The Wall Street Journal
Kiplinger's Personal Finance The Los Angeles Times
Financial Planning The Chicago Tribune
Investment Adviser
Investment Management Weekly
- --------------------------------------------------------------------------------
</TABLE>
Lipper compiles performance data for peer universes of funds with similar
investment objectives in its Lipper Survey. Morningstar, Inc. compiles similar
data in the Morningstar Variable Annuity/Life Report (Morningstar Report).
The Lipper Survey records performance data as reported to it by over 800
mutual funds underlying variable annuity and life insurance products. It
divides these actively managed portfolios into 25 categories by portfolio
objectives. The Lipper Survey contains two different universes, which reflect
different types of fees in performance data:
o The "separate account" universe reports performance data net of investment
management fees, direct operating expenses and asset-based charges
applicable under variable life and annuity contracts; and
o The "mutual fund" universe reports performance net only of investment
management fees and direct operating expenses, and therefore reflects only
charges that relate to the underlying mutual fund.
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 level charges.
VARDS is a monthly reporting service that monitors approximately 2,500
variable life and variable annuity funds on performance and account
information.
YIELD INFORMATION
Current yield for the Alliance Money Market option 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). Current yield for the other options will
be based on net changes in a hypothetical investment over a given 30-day
period, exclusive of capital changes, and then "annualized" (assuming that the
same 30-day result would occur each month for 12 months).
"Effective yield" is calculated in a similar manner, 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 for the Alliance Money Market option. The yields and
effective yields assume the deduction of all contract charges and expenses
other than the annual administrative charge, withdrawal charge, optional
ratcheted
<PAGE>
- --------------------------------------------------------------------------------
76 INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
death benefit charge, and any charge for taxes such as premium tax. For more
information, see "Alliance Money Market Option and other Yield information" in
the SAI.
<PAGE>
- --------------------------------------------------------------------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 77
- --------------------------------------------------------------------------------
10
Incorporation of certain documents by reference
- --------------------------------------------------------------------------------
Equitable Life's annual report on Form 10-K for the year ended December 31,
1998, a current report on Form 8-K dated April 9, 1999, and a quarterly report
on form 10-Q for the quarter ended June 30, 1999, are considered to be a part
of this prospectus because they are incorporated by reference.
After the date of this prospectus and before we terminate the offering of
the securities under this prospectus, all documents or reports we file with
the SEC under the Securities Exchange Act of 1934 ("Exchange Act") will be
considered to become part of this prospectus because they are incorporated by
reference.
Any statement contained in a document that is or becomes part of this
prospectus, will be considered changed or replaced for purposes of this
prospectus if a statement contained in this prospectus changes or is replaced.
Any statement that is considered to be a part of this prospectus because of
its incorporation, will be considered changed or replaced for the purpose of
this prospectus if a statement contained in any other subsequently filed
document that is considered to be part of this prospectus changes or replaces
that statement. After that, only the statement that is changed or replaced
will be considered to be part of this prospectus.
We file our Exchange Act documents and reports, including our annual and
quarterly reports on Form 10-K and Form 10-Q, electronically according 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.
Upon written or oral request, we will provide, free of charge, to each
person to whom this prospectus is delivered a copy of any or all of the
documents considered to be part of this prospectus because they are
incorporated herein. This does not include exhibits not specifically
incorporated by reference into the text of such documents. Requests for
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).
<PAGE>
- --------------------------------------------------------------------------------
APPENDIX I: CONDENSED FINANCIAL INFORMATION A-1
- --------------------------------------------------------------------------------
Appendix I: Condensed financial information
- --------------------------------------------------------------------------------
The contracts described in this prospectus are being offered for the first time
as of the date of this prospectus. The unit values and number of units
outstanding shown below are for another contract offered under Separate Account
A with the same asset based charge of 1.20%.
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION
- --------------------------------------------------------------------------------
DECEMBER 31,
1998
- --------------------------------------------------------------------------------
THE HUDSON RIVER TRUST OPTIONS
- --------------------------------------------------------------------------------
ALLIANCE AGGRESSIVE STOCK
- --------------------------------------------------------------------------------
Unit value $ 90.25
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
ALLIANCE BALANCED
- --------------------------------------------------------------------------------
Unit value $ 102.39
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
ALLIANCE COMMON STOCK
- --------------------------------------------------------------------------------
Unit value $ 102.87
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
ALLIANCE CONSERVATIVE INVESTORS
- --------------------------------------------------------------------------------
Unit value $ 102.74
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
ALLIANCE EQUITY INDEX
- --------------------------------------------------------------------------------
Unit value $ 103.69
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
ALLIANCE GLOBAL
- --------------------------------------------------------------------------------
Unit value $ 98.37
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME
- --------------------------------------------------------------------------------
Unit value $ 102.73
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS
- --------------------------------------------------------------------------------
Unit value $ 101.93
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
ALLIANCE HIGH YIELD
- --------------------------------------------------------------------------------
Unit value $ 89.20
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES
- --------------------------------------------------------------------------------
Unit value $ 103.32
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
A-2 APPENDIX I: CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION (CONTINUED)
- --------------------------------------------------------------------------------
DECEMBER 31,
1998
- --------------------------------------------------------------------------------
ALLIANCE INTERNATIONAL
- --------------------------------------------------------------------------------
Unit value $ 93.00
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
ALLIANCE MONEY MARKET
- --------------------------------------------------------------------------------
Unit value $ 101.68
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
ALLIANCE QUALITY BOND
- --------------------------------------------------------------------------------
Unit value $ 103.62
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH
- --------------------------------------------------------------------------------
Unit value $ 86.94
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
EQ ADVISORS TRUST OPTIONS
- --------------------------------------------------------------------------------
MFS EMERGING GROWTH COMPANIES
- --------------------------------------------------------------------------------
Unit value $ 103.53
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
MFS RESEARCH
- --------------------------------------------------------------------------------
Unit value $ 99.10
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
MERRILL LYNCH BASIC VALUE EQUITY
- --------------------------------------------------------------------------------
Unit value $ 97.91
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
MERRILL LYNCH WORLD STRATEGY
- --------------------------------------------------------------------------------
Unit value $ 94.96
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
MORGAN STANLEY EMERGING MARKETS EQUITY
- --------------------------------------------------------------------------------
Unit value $ 81.49
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
EQ/PUTNAM BALANCED
- --------------------------------------------------------------------------------
Unit value $ 101.17
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
APPENDIX I: CONDENSED FINANCIAL INFORMATION A-3
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION (CONTINUED)
- --------------------------------------------------------------------------------
DECEMBER 31,
1998
- --------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME VALUE
- --------------------------------------------------------------------------------
Unit value $ 100.60
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
T. ROWE PRICE EQUITY INCOME
- --------------------------------------------------------------------------------
Unit value $ 101.12
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
T. ROWE PRICE INTERNATIONAL STOCK
- --------------------------------------------------------------------------------
Unit value $ 94.15
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
WARBURG PINCUS SMALL COMPANY VALUE
- --------------------------------------------------------------------------------
Unit value $ 82.88
- --------------------------------------------------------------------------------
Number of units outstanding (000's) -
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
APPENDIX II: MARKET VALUE ADJUSTMENT EXAMPLE B-1
- --------------------------------------------------------------------------------
Appendix II: 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 had been
invested on June 14, 1999 to a fixed maturity option with a maturity date of
June 15, 2008 (i.e., nine years later) at a rate to maturity of 7.00%,
resulting in a maturity value at the maturity date of $183,846. We further
assume that a withdrawal of $50,000 is made four years later, on June 15, 2003.
- --------------------------------------------------------------------------------
Assumed Rate to
maturity on June 15, 2003
- --------------------------------------------------------------------------------
5.00% 9.00%
- --------------------------------------------------------------------------------
AS OF JUNE 15, 2003 (BEFORE WITHDRAWAL)
- --------------------------------------------------------------------------------
(1) Market adjusted amount $144,048 $ 119,487
- --------------------------------------------------------------------------------
(2) Fixed maturity amount $131,080 $ 131,080
- --------------------------------------------------------------------------------
(3) Market value adjustment:
(1) - (2) $ 12,968 $ (11,593)
- --------------------------------------------------------------------------------
ON JUNE 15, 2003 (AFTER WITHDRAWAL)
- --------------------------------------------------------------------------------
(4) Portion of market value adjustment associated
with withdrawal: (3) x [$50,000/(1)] $ 4,501 $ (4,851)
- --------------------------------------------------------------------------------
(5) Reduction in fixed maturity amount
[$50,000 - (4)] $ 45,499 $ 54,851
- --------------------------------------------------------------------------------
(6) Fixed maturity amount (2) - (5) $ 85,581 $ 76,229
- --------------------------------------------------------------------------------
(7) Maturity value $120,032 $ 106,915
- --------------------------------------------------------------------------------
(8) Market adjusted amount of (7) $ 94,048 $ 69,487
- --------------------------------------------------------------------------------
You should note that under this example if a withdrawal is made when rates have
increased from 7.00% to 9.00% (right column), a negative market value
adjustment is realized. On the other hand, if a withdrawal is made when rates
have decreased from 7.00% to 5.00% (left column), a positive market value
adjustment is realized.
<PAGE>
- --------------------------------------------------------------------------------
APPENDIX III: DEATH BENEFIT EXAMPLE C-1
- --------------------------------------------------------------------------------
Appendix III: Death benefit example
- --------------------------------------------------------------------------------
The death benefit under the contracts is equal to (i) the account value or,
(ii) the minimum death benefit (contributions, less withdrawals, and any
withdrawal charges and taxes that may apply) or, if elected, (iii) the optional
ratcheted death benefit, whichever provides the highest amount.
The following illustrates the death benefit calculation. Assuming $100,000 is
allocated to the variable investment options, no additional contributions, no
transfers and no withdrawals, the death benefit for an annuitant age 45 would
be calculated as follows:
- --------------------------------------------------------------------------------
END OF
CONTRACT RATCHETED
YEAR ACCOUNT VALUE(1) CONTRIBUTION DEATH BENEFIT
- --------------------------------------------------------------------------------
1 $105,000(2) $100,000 $100,000
- --------------------------------------------------------------------------------
2 $115,500(2) $100,000
- --------------------------------------------------------------------------------
3 $129,360(2) $129,360(2)
- --------------------------------------------------------------------------------
4 $103,488 $129,360(3)
- --------------------------------------------------------------------------------
5 $113,837 $129,360(3)
- --------------------------------------------------------------------------------
6 $127,497 $129,360(3)
- --------------------------------------------------------------------------------
7 $127,497 $129,360(3)
- --------------------------------------------------------------------------------
8 $133,872(2) $129,360
- --------------------------------------------------------------------------------
9 $147,259 $147,259(4)
- --------------------------------------------------------------------------------
The account values for contract years 1 through 9 are based on hypothetical
rates of return of 5.00%, 10.00%, 12.00%, (20.00)%, 10.00%, 12.00%, 0.00%, 5%
and 10%. We are using these rates solely to illustrate how the benefit is
determined. The return rates bear no relationship to past or future investment
results.
(1) If the optional ratcheted death benefit was not elected, the death
benefit on each contract date anniversary would be equal to the account
value, since it is higher than the contribution.
(2) If the optional ratcheted death benefit was elected at the end of
contract year 1, 2, 3 and 8, the death benefit will be equal to the
account value. Also in year 3, the ratcheted death benefit is increased
to equal the account value.
(3) At the end of contract years 4, 5, 6 and 7, the death benefit would be
equal to the ratcheted death benefit since it is higher than the account
value. Also, at the end of contract year six, no adjustment would be made
to the ratcheted death benefit, since the ratcheted death benefit is
higher than the account value.
(4) At the end of contract year 9, the ratcheted death benefit would be
increased to the account value, since the account value on the contract
date anniversary is higher than the current ratcheted death benefit.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
Required Minimum Distributions Option 2
Accumulation Unit Values 2
Calculation of Annuity Payments 3
The Reorganization 3
Custodian and Independent Accountants 4
Alliance Money Market Option Yield Information 4
Other Yield Information 5
Key Factors in Retirement Planning 5
Long-Term Market Trends 10
Financial Statements 12
HOW TO OBTAIN AN EQUI-VEST STATEMENT OF ADDITIONAL INFORMATION FOR SEPARATE
ACCOUNT A
Call 1-800-628-6673 or send this request form to:
EQUI-VEST
Processing Office
The Equitable Life
P.O. Box 2996
New York, NY 10116-2996
- - - - - - - - - - - - - - - - - - - - - - - - - - - -
Please send me an EQUI-VEST Statement of Additional Information dated ,
1999.
(Combination variable and fixed deferred annuity)
- ------------------------------------------------------------------------------
Name:
- ------------------------------------------------------------------------------
Address:
- ------------------------------------------------------------------------------
City State Zip
888-1210
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 15. Indemnification of Directors and Officers
-----------------------------------------
Equitable Life's By-Laws 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.
Item 16. Exhibits
--------
Exhibits No.
------------
(1) (a) Distribution and Servicing Agreement among
Equico Securities, Inc. (now EQ Financial
Consultants, Inc.), Equitable and Equitable
Variable Life Insurance Company, dated as of
May 1, 1994, incorporated by reference to
Exhibit 3.(c) to Registration Statement File
No. 2-30070, previously filed on February
14, 1995, refiled electronically on July 10,
1998.
II-1
<PAGE>
(b) Sales Agreement dated as of January 1, 1995
by and among Equico Securities, Inc. (now EQ
Financial Consultants, Inc.), Equitable,
Separate Account A, Separate Account No. 301
and Separate Account No. 51, previously
filed as Exhibit 1(c) to this Registration
Statement No. 33-89510 on April 24, 1995,
incorporated by reference to Exhibit 3(e) to
Registration Statement File No. 2-30070,
filed electronically July 10, 1998.
(2) Not applicable.
(4) (a) Form of group annuity contract no.
1050-94IC, previously filed with this
Registration Statement No. 33-89510 on April
24, 1995, incorporated herein by reference
to Exhibit 4(f) to Registration Statement
File No. 2-30070, refiled electronically
July 10, 1998.
(b) Form of group annuity certificate nos. 94ICA
and 94ICB, previously filed with this
Registration Statement No. 33-89510 on April
24, 1995, incorporated herein by reference
to Exhibit 4(g) to Registration Statement
File No. 2-30070, refiled electronically
July 10, 1998.
(c) Forms of endorsement nos. 94ENIRAI, 94ENNQI
and 94ENMVAI to contract no. 1050-94IC,
previously filed with this Registration
Statement No. 33-89510 on April 24, 1995,
incorporated herein by reference to Exhibit
4(h) to Registration Statement File No.
2-30070, refiled electronically July 10,
1998.
(d) Forms of data pages to endorsement nos.
94ENIRAI, 94ENNQI and 94ENMVAI, previously
filed with this Registration Statement No.
33-89510 on April 24, 1995, incorporated
herein by reference to Registration
Statement File No. 2-30070, refiled
electronically July 10, 1998.
(e) Form of application used with the annuity
contract identified above, previously filed
with this Registration Statement No.
33-89510 on April 26, 1996.
(f) Form of data pages for standard Roth IRA
Certificates, incorporated herein by
reference to Exhibit 4(m) to the
Registration Statement on Form N-4, File No.
2-30070, filed June 9, 1998.
(g) Form of endorsement for standard Roth IRA
Certificates, incorporated herein by
reference to Exhibit 4(n) to the
Registration Statement on Form N-4, File No.
2-30070, filed June 9, 1998.
(h) Form of data pages for Roth Advantage
Certificates, incorporated herein by
reference to Exhibit 4(o) to the
Registration Statement on Form N-4, File No.
2-30070, filed June 9, 1998.
(i) Form of endorsement for Roth Advantage
Certificates, incorporated herein by
reference to Exhibit 4(p) to the
Registration Statement on Form N-4, File No.
2-30070, filed June 9, 1998.
(j) Form of data pages for EQUI-VEST Express No.
94ICA/B (8/99), incorporated herein by
reference to Exhibit No. 4(g) to the
Registration Statement File No. 333-81393,
filed on Form N-4 on June 23, 1999.
(k) Form of data pages for EQUI-VEST Tax
Deferred Variable Annuity Application Form
#180-1009, incorporated herein by
reference to Exhibit No. 5(a) to the
Registration Statement File No. 333-81393,
filed on Form N-4 on June 23, 1999.
(l) Form of Guaranteed Death Benefit Rider,
Form No. 99GDB, incorporated herein by
reference to Exhibit No. 4(g) to
Registration Statement File No. 333-81501
filed on Form N-4 on June 24, 1999.
(m) Form of EQUI-VEST data pages, Form No.
94ICA/B (8/99), incorporated herein by
reference to Exhibit No. 4(h) to
Registration Statement File No. 333-81501
filed on Form N-4 on June 24, 1999.
(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 No.
33-89510 on February 14, 1995, refiled
electronically, July 10, 1998.
(b) Copies of the Internal Revenue Service
determination letters regarding
qualification under Section 408 of the
Internal Revenue Code, previously filed with
this Registration Statement No. 33-89510 on
April 26, 1996.
(c) Form of application for use with standard
IRA Certificates and Roth Advantage
Certificates, incorporated herein by
reference to Exhibit No. 5(c) to the
Registration Statement on Form N-4, File No.
2-30070, filed June 9, 1998.
(d) Form of EQUI-VEST(R) Tax-Deferred Variable
Individual Annuity Application, Form No.
180-1009, incorporated herein by reference
to Exhibit No. 5(a) to Registration
Statement File No. 333-81501, filed on
Form N-4 on June 24, 1999.
(8) Not applicable.
(12) Not applicable.
(15) Not applicable.
(23) Consent of PricewaterhouseCoopers LLP.
II-2
<PAGE>
(24)(a) Powers of Attorney, previously filed with this
Registration Statement, File No. 33-89510 on
April 30, 1999.
(b) Power of Attorney.
(26) Not applicable.
(27) Not applicable.
(28) Not applicable.
Item 17. Undertakings
------------
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers
or sales are being made, a post-effective
amendment to this registration statement:
(i) To include any prospectus
required by section 10(a)(3) of
the Securities Act of 1933;
(ii) to reflect in the Prospectus any
facts or events arising after the
effective date of the
registration statement (or the
most recent post-effective
amendment thereof) which,
individually or in the aggregate,
represent a fundamental change in
the information set forth in the
registration statement;
(iii) To include any material
information with respect to the
plan distribution not previously
disclosed in the registration
statement of or any material
change to such information in the
registration statement;
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.
(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.
(c) 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.
II-3
<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 amendment to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City and State of New York, on September 1,
1999.
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE
UNITED STATES
(Registrant)
By: /s/ Naomi J. Weinstein
----------------------
Naomi J. Weinstein
Vice President
Pursuant to the requirements of the Securities Act of 1933, this
amendment to the Registration Statement has been signed by or on behalf of the
following persons in the capacities and on the date indicated.
PRINCIPAL EXECUTIVE OFFICERS:
*Michael Hegarty President, Chief Operating Officer and
Director
*Edward D. Miller Chairman of the Board, Chief Executive
Officer and Director
PRINCIPAL FINANCIAL OFFICER:
*Stanley B. Tulin Vice Chairman of the Board,
Chief Financial Officer and Director
PRINCIPAL ACCOUNTING OFFICER:
*Alvin H. Fenichel Senior Vice President and
Controller
*DIRECTORS:
Francoise Colloc'h Donald J. Greene George T. Lowy
Henri de Castries John T. Hartley Edward D. Miller
Joseph L. Dionne John H.F. Haskell, Jr. Didier Pineau Valencienne
Denis Duverne Michael Hegarty George J. Sella, Jr.
Jean-Rene Fourtou Mary R. (Nina) Henderson Peter J. Tobin
Norman C. Francis W. Edwin Jarmain Stanley B. Tulin
Dave H. Williams
*By: /s/ Naomi J. Weinstein
- ---------------------------
Naomi J. Weinstein
Attorney-in-Fact
September 1, 1999.
II-4
<PAGE>
EXHIBIT LIST
Exhibit No. TAG VALUE
- ----------- ---------
23 Consent of PricewaterhouseCoopers LLP. EX-99.23
24(b) Power of Attorney. EX-99.24b
23959
II-5
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in each Prospectus
constituting part of Post-Effective Amendment No. 7 to the Registration
Statement No. 33-89510 on Form S-3 of our report dated February 8, 1999
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, 1998. We also
consent to the incorporation by reference of our report on the Consolidated
Financial Statement Schedules dated February 8, 1999 which appears on page F-53
of such Annual Report on Form 10-K. We also consent to the references to us
under the heading "About our independent accountants" in each Prospectus.
PricewaterhouseCoopers LLP
New York, New York
September 1, 1999
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints, Mark A. Hug, James D. Goodwin, Pauline Sherman, Michael F. McNelis,
Naomi J. Weinstein, Maureen K. Wolfson, Mildred Oliver, Mary P. Breen 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, 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
11th day of August, 1999.
/s/ Alvin H. Fenichel
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Alvin H. Fenichel
59838v2
