EQUI-VEST(R)
A combination variable and fixed deferred
annuity contract
PROSPECTUS DATED OCTOBER 18, 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 prospectus for EQ Advisors Trust which contains important information about
its portfolios.
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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").
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 Intermediate o Alliance High Yield
Government Securities
o Alliance Money Market
o Alliance Quality Bond
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EQUITY OPTIONS:
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DOMESTIC EQUITY
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o Alliance Common Stock o MFS Growth with Income
o Alliance Equity Index o MFS Research
o Alliance Growth and o Merrill Lynch Basic Value
Income Equity
o EQ/Alliance Premier Growth o EQ/Putnam Growth & Income
o Capital Guardian Research Value
o Capital Guardian U.S. o T. Rowe Price Equity Income
Equity
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INTERNATIONAL EQUITY
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o Alliance Global o T. Rowe Price International
o Alliance International Stock
o Morgan Stanley Emerging
Markets Equity
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AGGRESSIVE EQUITY
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o Alliance Aggressive Stock o MFS Emerging Growth
o Alliance Small Cap Growth Companies
o EQ/Evergreen o Warburg Pincus Small
Company Value
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ASSET ALLOCATION OPTIONS:
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o Alliance Balanced o EQ/Evergreen Foundation
o Alliance Conservative o Merrill Lynch World Strategy
Investors o EQ/Putnam Balanced
o Alliance Growth Investors
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 of either Class IA or IB shares of 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 set by us. 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 different "series" of 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")
Minimum contribution amounts ranging from $20 to $2,500 are required to
purchase a contract. The minimum amount required depends on the type of
contract, NQ, IRA or QP IRA, and the series purchased.
Registration statements relating to this offering have been filed with the
Securities and Exchange Commission ("SEC"). The statement of additional
information ("SAI") dated October 18, 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.
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2 CONTENTS OF THIS PROSPECTUS
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Contents of this prospectus
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EQUI-VEST(R)
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Index of key words and phrases 4
Who is Equitable Life? 6
How to reach us 7
EQUI-VEST at a glance -- key features 10
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FEE TABLE 13
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EQUI-VEST series 300, 400, and 500 contracts 13
EQUI-VEST series 200 contracts 20
EQUI-VEST series 100 contracts 27
Condensed financial information 34
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1
CONTRACT FEATURES AND BENEFITS 35
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How you can purchase and contribute to your contract 35
Owner and annuitant requirements 38
How you can make your contributions 38
What are your investment options under the contract? 38
Selecting your investment method 42
Allocating your contributions 43
Your right to cancel within a certain number of days 43
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2
DETERMINING YOUR CONTRACT'S VALUE 45
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Your account value 45
Your contract's value in the variable investment options 45
Your contract's value in the guaranteed interest option 45
Your contract's value in the fixed maturity options 45
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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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Contents of this prospectus
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3
TRANSFERRING YOUR MONEY AMONG
INVESTMENT OPTIONS 46
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Transferring your account value 46
Automatic transfer options-investment simplifier 46
Rebalancing your account value 47
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4
ACCESSING YOUR MONEY 48
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Withdrawing your account value 48
Surrender of your contract to receive its cash value 49
When we may terminate your contract 49
When to expect payments 49
Choosing your annuity payout options 50
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5
CHARGES AND EXPENSES 52
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Charges that Equitable Life deducts 52
Charges that EQ Advisors deducts 59
Group or sponsored arrangements 59
Other distribution arrangements 60
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6
PAYMENT OF DEATH BENEFIT 61
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Your beneficiary and payment of benefit 61
How death benefit payment is made 61
Beneficiary continuation option under Series 400
Traditional IRA and QP IRA contracts 62
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7
TAX INFORMATION 63
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Overview 63
Transfers among investment options 63
Taxation of nonqualified annuities 63
Special rules for NQ contracts issued in Puerto Rico 64
Individual retirement arrangements ("IRAs") 65
Federal and state income tax withholding and
information reporting 78
Impact of taxes to Equitable Life 78
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8
MORE INFORMATION 79
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About our Separate Account A 79
About EQ Advisors Trust 79
About our fixed maturity options 80
About the general account 81
About other methods of payment 81
Dates and prices at which contract events occur 82
About your voting rights 83
About our year 2000 progress 83
About legal proceedings 84
About our independent accountants 84
Transfers of ownership, collateral assignments, loans,
and borrowing 84
Distribution of the contracts 84
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9
INVESTMENT PERFORMANCE 86
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Benchmarks 86
Communicating performance data 95
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10
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE 97
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APPENDICES
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I -- Original contracts A-1
II -- Condensed financial information B-1
III -- Market value adjustment example C-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 42
annuitant 35
annuity payout options 47
beneficiary 58
business day 81
cash value 42
conduit IRA 67
contract date 11
contract date anniversary 11
contract year 11
contributions 34
Contributions to Roth IRAs
Regular contribution 73
Rollover contributions 73
Conversion contributions 74
Direct custodian-to-custodian
transfers 74
Contributions to Traditional IRAs
Regular contributions 64
Rollover contributions 66
Direct custodian-to-custodian
transfers 64
financial professional 85
fixed maturity amount 39
fixed maturity options 39
guaranteed interest option 38
IRA cover
IRS 61
investment options 36
market adjusted amount 39
market value adjustment 40
maturity value 39
NQ cover
portfolio cover
processing office 7
QP IRAs cover
rate to maturity 39
recharacterized 66
regular contribution 64
Required Beginning Date 68
Roth Advantage 5
Roth IRA cover
SAI cover
SEC cover
Standard Roth IRA 5
TOPS 7
Traditional IRA cover
TSA cover
unit 42
unit investment trust 78
variable investment options 36
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 financial professional 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
guaranteed interest option Guaranteed Interest Account
unit accumulation unit
unit value accumulation unit value
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INDEX OF KEY WORDS AND PHRASES 5
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In this prospectus, we use a "series" number when necessary to identify a
particular contract. We discuss five series of contracts. However, only three
are available for new purchasers. Once you have purchased a contract you can
identify the EQUI-VEST series you have by referring to your confirmation notice,
or you may contact your financial professional, or you may call our toll-free
number. The series designations are as follows:
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o NQ, Traditional IRA, and QP IRA contracts issued before January 3, 1994; series 100
and
This series is no longer available for
o Standard Roth IRA contracts converted from such IRA and QP IRA contracts. new purchasers. Information in this
prospectus on this series is provided
for our existing contract owners only.
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o All NQ, Traditional IRA and QP IRA contracts issued in the state of Oregon series 200
on or after August 17, 1995.
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o NQ, Traditional IRA, QP IRA, and Standard Roth IRA contracts issued on or series 300
after January 3, 1994 and before the date series 400 contracts became
available in a state; and
o Standard Roth IRA contracts converted from such IRA and QP IRA contracts.
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o NQ, Traditional IRA, QP IRA, and Standard Roth IRA contracts issued on or series 400
after July 10, 1995 in states where approved; and
o Standard Roth IRA contracts converted from such IRA and QP IRA contracts.
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o Roth Advantage contracts series 500
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This series is no longer available for
new purchasers. Information in this
prospectus on this series is provided
for our existing contract owners only.
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We also have contracts that we refer to as "original contracts." These contracts
are no longer available for new purchasers. Any information about original
contracts which is different from the current series we offer can be found in
Appendix I, which will be referenced throughout this prospectus when it applies.
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6 WHO IS EQUITABLE LIFE?
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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 AXA
Financial Inc. (previously, The Equitable Companies Incorporated). The majority
shareholder of AXA Financial, Inc. 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.
AXA Financial, Inc. 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.
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WHO IS EQUITABLE LIFE? 7
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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
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 Bank One, N.A.
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
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
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
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 Bank One, N.A.
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; and
o annual 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; and
o the number of units you have in the variable investment options.
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8 WHO IS EQUITABLE LIFE?
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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.
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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.
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TOLL-FREE TELEPHONE SERVICE:
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You may reach us toll-free by calling 1 (800) 841-0801 for a
recording of daily unit values for the variable investment
options.
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 contract to a Standard Roth IRA;
(2) cancellation of your Standard Roth IRA or Roth Advantage contract 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) to obtain a PIN required for TOPS;
(8) election of required minimum distribution option;
(9) tax withholding election;
(10) election of the beneficiary continuation option;
(11) request for a transfer/rollover of assets or 1035 exchange to another
carrier; and
(12) 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; and
(3) transfers among investment options.
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.
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WHO IS EQUITABLE LIFE? 9
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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.
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10 EQUI-VEST AT A GLANCE -- KEY FEATURES
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EQUI-VEST at a glance -- key features
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PROFESSIONAL EQUI-VEST's variable investment options invest in 30 different portfolios managed by
INVESTMENT professional investment advisers.
MANAGEMENT
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GUARANTEED INTEREST o Principal and interest guarantees
OPTION
o Interest rates set periodically
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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.
o Only available under series 400 and 500 contracts in states where approved.
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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 o NQ:
AMOUNTS -- $1,000 (initial) or $50 (initial for payroll deduction); $50 (additional).
O TRADITIONAL IRA, STANDARD ROTH IRA AND ROTH ADVANTAGE:
-- series 300, 400, and 500 -- $50 (initial and additional);
-- series 100 and 200 -- $20 (initial and additional).
o QP IRA:
-- series 300 and 400 -- $2,500 each rollover amount;
series 100 and 200 -- $1,000 each rollover amount.
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Maximum contribution limits may apply.
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EQUI-VEST AT A GLANCE -- KEY FEATURES 11
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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 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 (series 300, 400, and 500 only)
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FEES AND CHARGES UNDER o Daily charge on amounts invested in variable investment options for mortality and expense
SERIES 300, 400, AND 500 risks and other expenses at annual rates determined by contract series.
-- series 300 and 400 -- 1.35%
o Annual administrative charge.
-- $30 currently or during the first two contract years 2% of the account value if less
($65 maximum).
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 under any series.
o Withdrawal charge
All contract types:
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 10% 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.
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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. 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."
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12 EQUI-VEST AT A GLANCE -- KEY FEATURES
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FEES AND CHARGES UNDER o We deduct a charge for taxes such as premium taxes that may be imposed in your state. The
SERIES 300, 400, AND 500 charge is generally deducted from the amount applied to an annuity payout option.
(CONTINUED)
o We generally deduct a $350 annuity administrative fee from amounts applied to purchase
certain life annuity payout options.
o Annual expenses of EQ Advisors Trust portfolios are calculated as a percentage of the
average daily net assets invested in each portfolio. These expenses include management
fees ranging from 0.31% to 1.15% annually, other expenses, and for Class IB shares, 12b-1
fees of 0.25% annually.
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FEES AND CHARGES UNDER o Daily charge on amounts invested in variable investment options for mortality and expense
SERIES 100 AND 200 risks and other expenses at annual rates determined by contract series.
series 100 -- 1.34%; three options at 1.49%
series 200 -- 1.34%; three options at 1.40%
o Annual administrative charge: $30 maximum
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): none
o No sales charges are deducted when you make contributions
o Withdrawal charge:
-- for NQ -- 6% of the contributions that have been withdrawn if such contributions were made
in the current and five prior contract years; or
-- for IRAs -- 6%, generally declining for the first through 12th contract years. The total of
all withdrawal charges may not exceed 8% of all contributions made during a specified period
before the withdrawal is made.
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 EQ Advisors Trust portfolios are calculated as a percentage of the
average daily net assets invested in each portfolio. These expenses include management
fees ranging from 0.31% to 1.15% annually, other expenses, and for Class IB shares, 12b-1
fees of 0.25% annually.
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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
THE CONTRIBUTION 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
financial professional, or call us, if you have any questions.
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FEE TABLE 13
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Fee table
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The fee tables below will help you understand the various charges and expenses
that apply to your contract series. The tables reflect 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 prospectus for EQ
Advisors Trust.
The guaranteed interest option and fixed maturity options are not covered by the
fee tables and examples. However, the annual administrative charge, the
withdrawal charge, and the third-party transfer or exchange charge do apply to
the guaranteed interest option and fixed maturity options. Also, an annuity
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.
EQUI-VEST SERIES 300, 400, AND 500 CONTRACTS
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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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SERIES 300 AND 400 SERIES 500
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Mortality and expense risk(1) 1.10% 1.20%
Other expenses(2) 0.25% 0.25%
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Total Separate Account A annual expenses(3) 1.35% 1.45%
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CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE ON EACH CONTRACT DATE ANNIVERSARY
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Annual administrative charge(4) $30
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CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE AT THE TIME YOU REQUEST CERTAIN TRANSACTIONS
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Maximum withdrawal charge(5) 6%
Charge for third-party transfer or exchange(6) $25 for each occurrence
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14 FEE TABLE
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Fee table
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EQ ADVISORS TRUST
CLASS IA SHARES ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
MANAGEMENT OTHER ANNUAL
FEES(7) EXPENSES(8) EXPENSES
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Alliance Aggressive Stock 0.54% 0.03% 0.57%
Alliance Balanced 0.41% 0.05% 0.46%
Alliance Common Stock 0.36% 0.04% 0.40%
Alliance Conservative Investors 0.48% 0.06% 0.54%
Alliance Equity Index 0.31% 0.04% 0.35%
Alliance Global 0.64% 0.08% 0.72%
Alliance Growth and Income 0.55% 0.04% 0.59%
Alliance Growth Investors 0.51% 0.05% 0.56%
Alliance High Yield 0.60% 0.04% 0.64%
Alliance Intermediate Government Securities 0.50% 0.06% 0.56%
Alliance International 0.90% 0.17% 1.07%
Alliance Money Market 0.35% 0.03% 0.38%
Alliance Quality Bond 0.53% 0.05% 0.58%
Alliance Small Cap Growth 0.90% 0.07% 0.97%
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
CLASS 1B SHARES ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
TOTAL
OTHER ANNUAL
EXPENSES EXPENSES
MANAGEMENT (AFTER EXPENSE (AFTER EXPENSE
FEES(7) 12B-1 FEE(9) LIMITATION)(8) LIMITATION)(7)(10)
- ---------------------------------------------------------------------------------------------------------------------
<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 15
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Notes:
(1) A portion of this charge is for providing the death benefit.
(2) For the series 300 and 400 contracts we currently charge 0.25% for the
Alliance Aggressive Stock, Alliance Balanced, Alliance Common Stock, and
Alliance Money Market portfolios. The charge is 0.24% for all the other
portfolios. We reserve the right to increase this charge to 0.25% at our
discretion.
(3) The total Separate Account A annual expenses of the variable investment
options are not permitted to exceed a total annual rate of 1.35% (for
series 300 and 400 contracts) and 2.00% (for series 500 contracts).
(4) 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.
(5) This charge applies to withdrawn contributions that were made in the
current and five prior years. This charge is deducted upon a withdrawal of
amounts in excess of the 10% free withdrawal amount. Important exceptions
and limitations may eliminate or reduce this charge.
(6) We reserve the right to increase this charge to a maximum of $65 for each
occurrence.
(7) The management fees or the maximum management fees, if a maximum applies,
for each portfolio cannot be increased without a vote of that portfolio's
shareholders.
(8) The amounts shown as "Other Expenses" will fluctuate from year to year
depending on actual expenses. See footnote (10) for any expense limitation
agreements.
On October 18, 1999, the Alliance portfolios (other than EQ/Alliance Premier
Growth) became part of the portfolios of EQ Advisors Trust. The "other
expenses" for these portfolios have been restated to reflect the estimated
expenses that would have been incurred had these portfolios been portfolios
of EQ Advisors Trust for the year ended December 31, 1998. The restated
expenses reflect an increase of 0.01%.
(9) The Class IB shares of EQ Advisors Trust are subject to fees imposed under
a distribution plan (the "Rule 12b-1 Plan") adopted by EQ Advisors Trust
pursuant to Rule 12b-1 under the Investment Company Act of 1940. The 12b-1
fee will not be increased for the life of the contracts.
(10)Equitable Life, EQ Advisors Trust's manager, has entered into an expense
limitation agreement with respect to each portfolio. Under this agreement
Equitable Life 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 as a percentage of 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; and
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; and on April 30, 1999 for the EQ/Alliance
Premier Growth, Capital Guardian Research, and Capital Guardian U.S. Equity
portfolios and therefore expenses have been estimated.
Each portfolio may at a later date make a reimbursement to Equitable Life
for any of the management fees waived or limited and other expenses assumed
and paid by Equitable Life 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.
<PAGE>
- --------------------------------------------------------------------------------
16 FEE TABLE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EXAMPLES: EQUI-VEST SERIES 300 AND 400 CONTRACTS
For each type of series 300 and 400 contract, 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) We also assume there is no waiver of the withdrawal charge. We
calculate the annual administrative charge by using the total actual annual
administrative charges for 1998 under all EQUI-VEST contracts as a percentage of
the total assets held under all EQUI-VEST contracts.
These examples should not be considered a representation of past or future
expenses for each 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
- -----------------------------------------------------------------------------------------------
CLASS IA SHARES
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock $76.33 $122.96 $169.99 $237.05
Alliance Balanced $75.24 $119.67 $164.12 $225.05
Alliance Common Stock $74.64 $117.86 $160.90 $218.45
Alliance Conservative Investors $75.93 $121.77 $167.86 $232.70
Alliance Equity Index $74.05 $116.06 $157.67 $211.81
Alliance Global $77.72 $127.15 $177.44 $252.12
Alliance Growth and Income $76.43 $123.26 $170.53 $238.13
Alliance Growth Investors $76.13 $122.37 $168.93 $234.87
Alliance High Yield $76.92 $124.76 $173.19 $243.53
Alliance Intermediate Government Securities $76.13 $122.37 $168.93 $234.87
Alliance International $81.19 $137.56 $195.85 $288.88
Alliance Money Market $74.44 $117.26 $159.82 $216.24
Alliance Quality Bond $76.33 $122.96 $169.99 $237.05
Alliance Small Cap Growth $80.20 $134.59 $190.62 $278.51
- -----------------------------------------------------------------------------------------------
<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
- -----------------------------------------------------------------------------------------------
CLASS IA SHARES
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock $20.75 $64.09 $109.99 $237.05
Alliance Balanced $19.59 $60.59 $104.12 $225.05
Alliance Common Stock $18.97 $58.68 $100.90 $218.45
Alliance Conservative Investors $20.33 $62.82 $107.86 $232.70
Alliance Equity Index $18.34 $56.77 $ 97.67 $211.81
Alliance Global $22.22 $68.52 $117.44 $252.12
Alliance Growth and Income $20.85 $64.40 $110.53 $238.13
Alliance Growth Investors $20.54 $63.45 $108.93 $234.87
Alliance High Yield $21.38 $65.99 $113.19 $243.53
Alliance Intermediate Government Securities $20.54 $63.45 $108.93 $234.87
Alliance International $25.89 $79.56 $135.85 $288.88
Alliance Money Market $18.76 $58.04 $ 99.82 $216.24
Alliance Quality Bond $20.75 $64.09 $109.99 $237.05
Alliance Small Cap Growth $24.84 $76.42 $130.62 $278.51
- -----------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
FEE TABLE 17
- --------------------------------------------------------------------------------
<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
- ------------------------------------------------------------------------------------------
CLASS IB SHARES
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EQ/Alliance Premier Growth $81.99 $139.93 -- --
Capital Guardian Research $80.00 $134.00 -- --
Capital Guardian U.S. Equity $80.00 $134.00 -- --
EQ/Evergreen $80.99 $136.97 -- --
EQ/Evergreen Foundation $80.00 $134.00 -- --
MFS Emerging Growth Companies $79.01 $131.03 $184.31 $265.93
MFS Growth with Income $79.01 $131.03 -- --
MFS Research $79.01 $131.03 $184.31 $265.93
Merrill Lynch Basic Value Equity $79.01 $131.03 $184.31 $265.93
Merrill Lynch World Strategy $82.48 $141.41 $202.62 $302.21
Morgan Stanley Emerging Markets Equity $87.94 $157.57 $229.58 $356.67
EQ/Putnam Balanced $79.51 $132.51 $186.94 $271.19
EQ/Putnam Growth & Income Value $79.01 $131.03 $184.31 $265.93
T. Rowe Price Equity Income $79.01 $131.03 $184.31 $265.93
T. Rowe Price International Stock $82.48 $141.41 $202.62 $302.21
Warburg Pincus Small Company Value $80.50 $135.49 $192.19 $281.64
- ------------------------------------------------------------------------------------------
<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
- ------------------------------------------------------------------------------------------
CLASS IB SHARES
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EQ/Alliance Premier Growth $26.73 $82.07 -- --
Capital Guardian Research $24.63 $75.79 -- --
Capital Guardian U.S. Equity $24.63 $75.79 -- --
EQ/Evergreen $25.68 $78.93 -- --
EQ/Evergreen Foundation $24.63 $75.79 -- --
MFS Emerging Growth Companies $23.58 $72.63 $124.31 $265.93
MFS Growth with Income $23.58 $72.63 -- --
MFS Research $23.58 $72.63 $124.31 $265.93
Merrill Lynch Basic Value Equity $23.58 $72.63 $124.31 $265.93
Merrill Lynch World Strategy $27.26 $83.64 $142.62 $302.21
Morgan Stanley Emerging Markets Equity $33.03 $100.77 $170.84 $356.67
EQ/Putnam Balanced $24.11 $74.21 $126.94 $271.19
EQ/Putnam Growth & Income Value $23.58 $72.63 $124.31 $265.93
T. Rowe Price Equity Income $23.58 $72.63 $124.31 $265.93
T. Rowe Price International Stock $27.26 $83.64 $142.62 $302.21
Warburg Pincus Small Company Value $25.16 $77.36 $132.19 $281.64
- ------------------------------------------------------------------------------------------
</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
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>
- --------------------------------------------------------------------------------
18 FEE TABLE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EXAMPLES: EQUI-VEST SERIES 500 CONTRACTS
For the series 500 Roth Advantage contract, the examples show the expenses that
a hypothetical contract owner would pay in the situations illustrated. We assume
a single contribution of $1,000 is invested in one of the variable investment
options listed and a 5% annual return is earned on assets in that option.(1) We
also assume there is no waiver of the withdrawal charge. We calculate the annual
administrative charge by using the total actual annual administrative charges
for 1998 under all EQUI-VEST contracts as a percentage of the total assets held
under all EQUI-VEST contracts.
These examples should not be considered a representation of past or future
expense 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
- -----------------------------------------------------------------------------------
CLASS IA SHARES
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock $77.32 $125.96 $175.32 $247.84
Alliance Balanced $76.23 $122.66 $169.46 $235.96
Alliance Common Stock $75.63 $120.87 $166.26 $229.43
Alliance Conservative Investors $77.02 $125.06 $173.72 $244.61
Alliance Equity Index $75.14 $119.37 $163.58 $223.95
Alliance Global $78.81 $130.43 $183.25 $263.82
Alliance Growth and Income $77.52 $126.55 $176.38 $249.98
Alliance Growth Investors $77.22 $125.66 $174.78 $246.76
Alliance High Yield $78.02 $128.05 $179.03 $255.32
Alliance Intermediate Government
Securities $77.22 $125.66 $174.78 $246.76
Alliance International $82.29 $140.82 $201.58 $300.17
Alliance Money Market $75.44 $120.27 $165.19 $227.24
Alliance Quality Bond $77.42 $126.25 $175.85 $248.91
Alliance Small Cap Growth $81.29 $137.86 $196.37 $289.92
- -----------------------------------------------------------------------------------
<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
- -----------------------------------------------------------------------------------
CLASS IA SHARES
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock $21.80 $67.26 $115.32 $247.84
Alliance Balanced $20.64 $63.77 $109.46 $235.96
Alliance Common Stock $20.01 $61.86 $106.26 $229.43
Alliance Conservative Investors $21.48 $66.31 $113.72 $244.61
Alliance Equity Index $19.49 $60.27 $103.58 $223.95
Alliance Global $23.37 $72.00 $123.25 $263.82
Alliance Growth and Income $22.01 $67.89 $116.38 $249.98
Alliance Growth Investors $21.69 $66.94 $114.78 $246.76
Alliance High Yield $22.53 $69.47 $119.03 $255.32
Alliance Intermediate Government
Securities $21.69 $66.94 $114.78 $246.76
Alliance International $27.05 $83.01 $141.58 $300.17
Alliance Money Market $19.80 $61.23 $105.19 $227.24
Alliance Quality Bond $21.90 $67.57 $115.85 $248.91
Alliance Small Cap Growth $26.00 $79.88 $136.37 $289.92
- -----------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
FEE TABLE 19
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<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
- ------------------------------------------------------------------------------------------
CLASS IB SHARES
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EQ/Alliance Premier Growth $83.08 $143.18 $205.73 $308.30
Capital Guardian Research $81.09 $137.27 $195.33 $287.85
Capital Guardian U.S. Equity $81.09 $137.27 $195.33 $287.85
EQ/Evergreen $82.09 $140.23 $200.54 $298.13
EQ/Evergreen Foundation $81.09 $137.27 $195.33 $287.85
MFS Emerging Growth Companies $80.10 $134.30 $190.09 $277.47
MFS Growth with Income $80.10 $134.30 $190.09 $277.47
MFS Research $80.10 $134.30 $190.09 $277.47
Merrill Lynch Basic Value Equity $80.10 $134.30 $190.09 $277.47
Merrill Lynch World Strategy $83.58 $144.66 $208.32 $313.35
Morgan Stanley Emerging Markets Equity $89.04 $160.78 $234.81 $367.20
EQ/Putnam Balanced $80.60 $135.78 $192.71 $282.67
EQ/Putnam Growth & Income Value $80.10 $134.30 $190.09 $277.47
T. Rowe Price Equity Income $80.10 $134.30 $190.09 $277.47
T. Rowe Price International Stock $83.58 $144.66 $208.32 $313.35
Warburg Pincus Small Company Value $81.59 $138.75 $197.94 $293.00
- ------------------------------------------------------------------------------------------
<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
- ------------------------------------------------------------------------------------------
CLASS IB SHARES
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EQ/Alliance Premier Growth $27.88 $85.52 $145.73 $308.30
Capital Guardian Research $25.79 $79.25 $135.33 $287.85
Capital Guardian U.S. Equity $25.79 $79.25 $135.33 $287.85
EQ/Evergreen $26.84 $82.39 $140.54 $298.13
EQ/Evergreen Foundation $25.79 $79.25 $135.33 $287.85
MFS Emerging Growth Companies $24.74 $76.10 $130.09 $277.47
MFS Growth with Income $24.74 $76.10 $130.09 $277.47
MFS Research $24.74 $76.10 $130.09 $277.47
Merrill Lynch Basic Value Equity $24.74 $76.10 $130.09 $277.47
Merrill Lynch World Strategy $28.41 $87.08 $148.32 $313.35
Morgan Stanley Emerging Markets Equity $34.18 $104.17 $176.40 $367.20
EQ/Putnam Balanced $25.26 $77.67 $132.71 $282.67
EQ/Putnam Growth & Income Value $24.74 $76.10 $130.09 $277.47
T. Rowe Price Equity Income $24.74 $76.10 $130.09 $277.47
T. Rowe Price International Stock $28.41 $87.08 $148.32 $313.35
Warburg Pincus Small Company Value $26.31 $80.82 $137.94 $293.00
- ------------------------------------------------------------------------------------------
</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
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>
- --------------------------------------------------------------------------------
20 FEE TABLE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EQUI-VEST SERIES 200 CONTRACTS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR VARIABLE INVESTMENT OPTIONS (SEPARATE ACCOUNT A) EXPRESSED AS AN
ANNUAL PERCENTAGE OF DAILY NET ASSETS
- --------------------------------------------------------------------------------------------------------------------------
ALLIANCE BALANCED,
ALLIANCE COMMON STOCK, AND
ALLIANCE MONEY MARKET OPTIONS
- --------------------------------------------------------------------------------------------------------------------------
<S> <C>
Mortality and expense risk(1) 1.15%
Other expenses(2) 0.25%
----
Total Separate Account A annual expenses(3)(4) 1.40%
- --------------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE ON EACH CONTRACT DATE ANNIVERSARY
- --------------------------------------------------------------------------------------------------------------------------
Annual administrative charges(5) $30
- --------------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE AT THE TIME YOU REQUEST CERTAIN TRANSACTIONS
- --------------------------------------------------------------------------------------------------------------------------
Maximum withdrawal charge(6) 6%
- --------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------
ALL OTHER VARIABLE
INVESTMENT OPTIONS
- ------------------------------------------------------------------------------------------------------
<S> <C>
Mortality and expense risk(1) 1.09%
Other expenses(2) 0.25%
----
Total Separate Account A annual expenses(3)(4) 1.34%
- ------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE ON EACH CONTRACT DATE ANNIVERSARY
- ------------------------------------------------------------------------------------------------------
Annual administrative charges(5) $30
- ------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE AT THE TIME YOU REQUEST CERTAIN TRANSACTIONS
- ------------------------------------------------------------------------------------------------------
Maximum withdrawal charge(6) 6%
- ------------------------------------------------------------------------------------------------------
</TABLE>
CLASS IA SHARES ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
Total
Annual
Management Other Expenses
Fees(7) Expenses(8) (After Expense Limitation)(4)(8)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Alliance Aggressive Stock 0.54% 0.03% 0.57%
Alliance Balanced 0.41% 0.05% 0.46%
Alliance Common Stock 0.36% 0.04% 0.40%
Alliance Conservative Investors 0.48% 0.06% 0.54%
Alliance Equity Index 0.31% 0.04% 0.35%
Alliance Global 0.64% 0.08% 0.72%
Alliance Growth and Income 0.55% 0.04% 0.59%
Alliance Growth Investors 0.51% 0.05% 0.56%
Alliance High Yield 0.60% 0.04% 0.64%
Alliance Intermediate Government Securities 0.50% 0.06% 0.56%
Alliance International 0.90% 0.17% 1.07%
Alliance Money Market 0.35% 0.03% 0.38%
Alliance Quality Bond 0.53% 0.05% 0.58%
Alliance Small Cap Growth 0.90% 0.07% 0.97%
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
FEE TABLE 21
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CLASS IB SHARES ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------
Management
Fees(7) 12b-1 Fee(9)
- ----------------------------------------------------------------------
<S> <C> <C>
EQ/Alliance Premier Growth 0.90% 0.25%
Capital Guardian Research 0.65% 0.25%
Capital Guardian U.S. Equity 0.65% 0.25%
EQ/Evergreen 0.75% 0.25%
EQ/Evergreen Foundation 0.63% 0.25%
MFS Emerging Growth Companies 0.55% 0.25%
MFS Growth with Income 0.55% 0.25%
MFS Research 0.55% 0.25%
Merrill Lynch Basic Value Equity 0.55% 0.25%
Merrill Lynch World Strategy 0.70% 0.25%
Morgan Stanley Emerging Markets Equity 1.15% 0.25%
EQ/Putnam Balanced 0.55% 0.25%
EQ/Putnam Growth & Income Value 0.55% 0.25%
T. Rowe Price Equity Income 0.55% 0.25%
T. Rowe Price International Stock 0.75% 0.25%
Warburg Pincus Small Company Value 0.65% 0.25%
- ----------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
Total
Other Annual
Expenses Expenses
(After Expense Limitation)(8) (After Expense Limitation)(7)(10)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
EQ/Alliance Premier Growth 0.00% 1.15%
Capital Guardian Research 0.05% 0.95%
Capital Guardian U.S. Equity 0.05% 0.95%
EQ/Evergreen 0.05% 1.05%
EQ/Evergreen Foundation 0.07% 0.95%
MFS Emerging Growth Companies 0.05% 0.85%
MFS Growth with Income 0.05% 0.85%
MFS Research 0.05% 0.85%
Merrill Lynch Basic Value Equity 0.05% 0.85%
Merrill Lynch World Strategy 0.25% 1.20%
Morgan Stanley Emerging Markets Equity 0.35% 1.75%
EQ/Putnam Balanced 0.10% 0.90%
EQ/Putnam Growth & Income Value 0.05% 0.85%
T. Rowe Price Equity Income 0.05% 0.85%
T. Rowe Price International Stock 0.20% 1.20%
Warburg Pincus Small Company Value 0.10% 1.00%
- -----------------------------------------------------------------------------------------------------------
</TABLE>
Notes:
(1) A portion of this charge is for providing the death benefit.
(2) This charge is for financial accounting and other administrative services
related to the contract.
(3) Total Separate Account A annual expenses of the variable investment
options (not including the EQ Advisors Trust fees and other expenses) are
guaranteed not to exceed a total annual rate of 1.40% for the Alliance
Balanced, Alliance Common Stock, and Alliance Money Market options and an
annual rate of 1.34% for all the other options.
(4) The total Separate Account A annual expenses of the variable investment
options and total annual expenses of EQ Advisors Trust fees when added
together are not permitted to exceed an annual rate of 1.75% for the
Alliance Aggressive Stock, Alliance Balanced, Alliance Common Stock, and
Alliance Money Market options. Without this expense limitation, the total
annual expenses deducted from the variable investment options plus EQ
Advisors Trust annual expenses for 1998 would have been 1.77% for the
Alliance Money Market option; 1.79% for the Alliance Common Stock option;
1.90% for the Alliance Aggressive Stock option; and 1.85% for the
Alliance Balanced option.
(5) 2% of your account value if less. Some contracts are exempt from this
charge.
(6) This charge applies to withdrawn contributions that were made in the
current and five prior years. This charge is deducted upon a withdrawal of
amounts in excess of the 10% free withdrawal amount. Important exceptions
and limitations may eliminate or reduce this charge.
(7) The management fees or the maximum management fees, if a maximum applies,
for each portfolio cannot be increased without a vote of that portfolio's
shareholders.
(8) The amounts shown as "Other Expenses" will fluctuate from year to year
depending on actual expenses. See footnote (10) for any expense limitation
agreements.
On October 18, 1999, the Alliance portfolios (other than EQ/Alliance
Premier Growth) became part of the portfolios of EQ Advisors Trust. The
"Other Expenses" for these portfolios have been restated to reflect the
estimated expenses that would have been incurred had these portfolios been
portfolios of EQ Advisors Trust for the year ended December 31, 1998. The
restated expenses reflect an increase of 0.01%.
<PAGE>
- --------------------------------------------------------------------------------
22 FEE TABLE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(9) The Class IB shares of EQ Advisors Trust are subject to fees imposed under
a distribution plan (the "Rule 12b-1 Plan") adopted by EQ Advisors Trust
pursuant to Rule 12b-1 under the Investment Company Act of 1940. The 12b-1
fee will not be increased for the life of the contracts.
(10) Equitable Life, EQ Advisors Trust's manager, has entered into an expense
limitation agreement with respect to each portfolio. Under this agreement
Equitable Life 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 as a percentage of 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; and
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; and on April 30, 1999 for the EQ/Alliance
Premier Growth, Capital Guardian Research, and Capital Guardian U.S. Equity
portfolios and therefore expenses have been estimated.
Each portfolio may at a later date make a reimbursement to Equitable Life
for any of the management fees waived or limited and other expenses assumed
and paid by Equitable Life 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.
<PAGE>
- --------------------------------------------------------------------------------
FEE TABLE 23
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EXAMPLES: EQUI-VEST SERIES 200 CONTRACTS
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) We also assume there is no waiver of the
withdrawal charge. We calculate the annual administrative charge by using the
total actual annual administrative charges for 1998 under all EQUI-VEST
contracts as a percentage of the total assets held under all EQUI-VEST
contracts.
These examples should not be considered a representation of past or future
expenses for each 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.
FOR IRA (TRADITIONAL, STANDARD ROTH AND CERTAIN QP IRA(2) CONTRACTS WHERE THE
FREE WITHDRAWAL AMOUNT APPLIES AFTER THE THIRD CONTRACT YEAR):
<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
- ---------------------------------------------------------------------------------------------------
CLASS IA SHARES
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock $80.83 $124.44 $163.81 $255.10
Alliance Balanced $80.83 $124.44 $163.81 $255.10
Alliance Common Stock $80.83 $124.44 $163.81 $255.10
Alliance Conservative Investors $82.11 $128.32 $170.36 $268.87
Alliance Equity Index $80.24 $122.65 $160.78 $248.69
Alliance Global $83.89 $133.66 $179.37 $287.63
Alliance Growth and Income $82.60 $129.80 $172.87 $274.12
Alliance Growth Investors $82.31 $128.91 $171.36 $270.97
Alliance High Yield $83.10 $131.29 $175.37 $279.34
Alliance Intermediate Government Securities $82.31 $128.91 $171.36 $270.97
Alliance International $87.34 $144.01 $196.68 $323.15
Alliance Money Market $80.83 $124.44 $163.81 $255.10
Alliance Quality Bond $82.50 $129.51 $172.37 $273.07
Alliance Small Cap Growth $86.35 $141.06 $191.76 $313.13
- ---------------------------------------------------------------------------------------------------
CLASS IB SHARES
- ---------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth $88.13 $146.36 -- --
Capital Guardian Research $86.15 $140.47 -- --
Capital Guardian U.S. Equity $86.15 $140.47 -- --
EQ/Evergreen $87.14 $143.42 -- --
EQ/Evergreen Foundation $86.15 $140.47 -- --
MFS Emerging Growth Companies $85.17 $137.51 $185.83 $300.97
MFS Growth with Income $85.17 $137.51 -- --
MFS Research $85.17 $137.51 $185.83 $300.97
Merrill Lynch Basic Value Equity $85.17 $137.51 $185.83 $300.97
Merrill Lynch World Strategy $88.62 $147.83 $203.05 $336.02
Morgan Stanley Emerging Markets Equity $94.05 $163.88 $229.58 $388.62
EQ/Putnam Balanced $85.66 $138.99 $188.30 $306.06
EQ/Putnam Growth & Income Value $85.17 $137.51 $185.83 $300.97
T. Rowe Price Equity Income $85.17 $137.51 $185.83 $300.97
T. Rowe Price International Stock $88.62 $147.83 $203.05 $336.02
Warburg Pincus Small Company Value $86.65 $141.94 $193.24 $316.15
- ---------------------------------------------------------------------------------------------------
</TABLE>
- ----------
See footnotes on page 26.
<PAGE>
- --------------------------------------------------------------------------------
24 FEE TABLE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOR QP IRA(3) CONTRACTS (WHERE THE FREE WITHDRAWAL AMOUNT APPLIES IN THE FIRST
CONTRACT YEAR):
<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
- -----------------------------------------------------------------------------------------------
CLASS IA SHARES
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock $74.64 $117.86 $163.81 $255.10
Alliance Balanced $74.64 $117.86 $163.81 $255.10
Alliance Common Stock $74.64 $117.86 $163.81 $255.10
Alliance Conservative Investors $75.93 $121.77 $170.36 $268.87
Alliance Equity Index $74.05 $116.06 $160.78 $248.69
Alliance Global $77.72 $127.15 $179.37 $287.63
Alliance Growth and Income $76.43 $123.26 $172.87 $274.12
Alliance Growth Investors $76.13 $122.37 $171.36 $270.97
Alliance High Yield $76.92 $124.76 $175.37 $279.34
Alliance Intermediate Government
Securities $76.13 $122.37 $171.36 $270.97
Alliance International $81.19 $137.56 $196.68 $323.15
Alliance Money Market $74.64 $117.86 $163.81 $255.10
Alliance Quality Bond $76.33 $122.96 $172.37 $273.07
Alliance Small Cap Growth $80.20 $134.59 $191.76 $313.13
- -----------------------------------------------------------------------------------------------
CLASS IB SHARES
- -----------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth $81.99 $139.93 -- --
Capital Guardian Research $80.00 $134.00 -- --
Capital Guardian U.S. Equity $80.00 $134.00 -- --
EQ/Evergreen $80.99 $136.97 -- --
EQ/Evergreen Foundation $80.00 $134.00 -- --
MFS Emerging Growth Companies $79.01 $131.03 $185.83 $300.97
MFS Growth with Income $79.01 $131.03 -- --
MFS Research $79.01 $131.03 $185.83 $300.97
Merrill Lynch Basic Value Equity $79.01 $131.03 $185.83 $300.97
Merrill Lynch World Strategy $82.48 $141.41 $203.05 $336.02
Morgan Stanley Emerging Markets
Equity $87.94 $157.57 $229.58 $388.62
EQ/Putnam Balanced $79.51 $132.51 $188.30 $306.06
EQ/Putnam Growth & Income Value $79.01 $131.03 $185.83 $300.97
T. Rowe Price Equity Income $79.01 $131.03 $185.83 $300.97
T. Rowe Price International Stock $82.48 $141.41 $203.05 $336.02
Warburg Pincus Small Company Value $80.50 $135.49 $193.24 $316.15
- -----------------------------------------------------------------------------------------------
</TABLE>
- ----------
See footnotes on page 26.
<PAGE>
- --------------------------------------------------------------------------------
FEE TABLE 25
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOR NQ CONTRACTS:
<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
- --------------------------------------------------------------------------------------------
CLASS IA SHARES
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock $74.64 $117.86 $160.90 $218.45
Alliance Balanced $74.64 $117.86 $160.90 $218.45
Alliance Common Stock $74.64 $117.86 $160.90 $218.45
Alliance Conservative Investors $75.93 $121.77 $167.86 $232.70
Alliance Equity Index $74.05 $116.06 $157.67 $211.81
Alliance Global $77.72 $127.15 $177.44 $252.12
Alliance Growth and Income $76.43 $123.26 $170.53 $238.13
Alliance Growth Investors $76.13 $122.37 $168.93 $234.87
Alliance High Yield $76.92 $124.76 $173.19 $243.53
Alliance Intermediate Government
Securities $76.13 $122.37 $168.93 $234.87
Alliance International $81.19 $137.56 $195.85 $288.88
Alliance Money Market $74.64 $117.86 $160.90 $218.45
Alliance Quality Bond $76.33 $122.96 $169.99 $237.05
Alliance Small Cap Growth $80.20 $134.59 $190.62 $278.51
- --------------------------------------------------------------------------------------------
CLASS IB SHARES
- --------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth $81.99 $139.93 -- --
Capital Guardian Research $80.00 $134.00 -- --
Capital Guardian U.S. Equity $80.00 $134.00 -- --
EQ/Evergreen $80.99 $136.97 -- --
EQ/Evergreen Foundation $80.00 $134.00 -- --
MFS Emerging Growth Companies $79.01 $131.03 $184.31 $265.93
MFS Growth with Income $79.01 $131.03 -- --
MFS Research $79.01 $131.03 $184.31 $265.93
Merrill Lynch Basic Value Equity $79.01 $131.03 $184.31 $265.93
Merrill Lynch World Strategy $82.48 $141.41 $202.62 $302.21
Morgan Stanley Emerging Markets
Equity $87.94 $157.57 $229.58 $356.67
EQ/Putnam Balanced $79.51 $132.51 $186.94 $271.19
EQ/Putnam Growth & Income Value $79.01 $131.03 $184.31 $265.93
T. Rowe Price Equity Income $79.01 $131.03 $184.31 $265.93
T. Rowe Price International Stock $82.48 $141.41 $202.62 $302.21
Warburg Pincus Small Company Value $80.50 $135.49 $192.19 $281.64
- --------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
26 FEE TABLE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOR ALL SERIES 200 CONTRACTS:
<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
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class IA shares
- -----------------------------------------------------------------------------------------------
Alliance Aggressive Stock $18.97 $58.68 $100.90 $218.45
Alliance Balanced $18.97 $58.68 $100.90 $218.45
Alliance Common Stock $18.97 $58.68 $100.90 $218.45
Alliance Conservative Investors $20.33 $62.82 $107.86 $232.70
Alliance Equity Index $18.34 $56.77 $97.67 $211.81
Alliance Global $22.22 $68.52 $117.44 $252.12
Alliance Growth and Income $20.85 $64.40 $110.53 $238.13
Alliance Growth Investors $20.54 $63.45 $108.93 $234.87
Alliance High Yield $21.38 $65.99 $113.19 $243.53
Alliance Intermediate Government
Securities $20.54 $63.45 $108.93 $234.87
Alliance International $25.89 $79.56 $135.85 $288.88
Alliance Money Market $18.97 $58.68 $100.90 $218.45
Alliance Quality Bond $20.75 $64.09 $109.99 $237.05
Alliance Small Cap Growth $24.84 $76.42 $130.62 $278.51
- -----------------------------------------------------------------------------------------------
Class IB shares
- -----------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth $26.73 $82.07 -- --
Capital Guardian Research $24.63 $75.79 -- --
Capital Guardian U.S. Equity $24.63 $75.79 -- --
EQ/Evergreen $25.68 $78.93 -- --
EQ/Evergreen Foundation $24.63 $75.79 -- --
MFS Emerging Growth Companies $23.58 $72.63 $124.31 $265.93
MFS Growth with Income $23.58 $72.63 -- --
MFS Research $23.58 $72.63 $124.31 $265.93
Merrill Lynch Basic Value Equity $23.58 $72.63 $124.31 $265.93
Merrill Lynch World Strategy $27.26 $83.64 $142.62 $302.21
Morgan Stanley Emerging Markets
Equity $33.03 $100.77 $170.84 $356.67
EQ/Putnam Balanced $24.11 $74.21 $126.94 $271.19
EQ/Putnam Growth & Income Value $23.58 $72.63 $124.31 $265.93
T. Rowe Price Equity Income $23.58 $72.63 $124.31 $265.93
T. Rowe Price International Stock $27.26 $83.64 $142.62 $302.21
Warburg Pincus Small Company Value $25.16 $77.36 $132.19 $281.64
- -----------------------------------------------------------------------------------------------
</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
payments under an annuity payout option. See "Accessing your money."
(2) These expenses also apply to a QP IRA with the number 11933I in the lower
left corner of the first page of your contract, or those QP IRA contracts
issued in Oregon.
(3) These expenses apply only to a QP IRA with the number 92QPI in the lower
left corner of the first page of your contract.
<PAGE>
- --------------------------------------------------------------------------------
FEE TABLE 27
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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."
EQUI-VEST SERIES 100 CONTRACTS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR VARIABLE INVESTMENT OPTIONS (SEPARATE ACCOUNT A) EXPRESSED AS AN
ANNUAL PERCENTAGE OF DAILY NET ASSETS
- ---------------------------------------------------------------------------------------------------------------------------
Alliance Balanced,
Alliance Common Stock, and
Alliance Money Market options
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C>
Mortality and expense risk(1) 0.65%
Other expenses(2) 0.84%
----
Total Separate Account A annual expenses(3)(4) 1.49%
- ---------------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE ON EACH CONTRACT DATE ANNIVERSARY
- ---------------------------------------------------------------------------------------------------------------------------
Annual administrative charge(5) $30
- ---------------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE AT THE TIME YOU REQUEST CERTAIN TRANSACTIONS
- ---------------------------------------------------------------------------------------------------------------------------
Maximum withdrawal charge(6) 6%
- ---------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
ALL OTHER VARIABLE
INVESTMENT OPTIONS
- -----------------------------------------------------------------------------------------------------------------------
<S> <C>
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) 0.50%
Other expenses(2) 0.84%
----
Total Separate Account A annual expenses(3)(4) 1.34%
- -----------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE ON EACH CONTRACT DATE ANNIVERSARY
- -----------------------------------------------------------------------------------------------------------------------
Annual administrative charge(5)
- -----------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE AT THE TIME YOU REQUEST CERTAIN TRANSACTIONS
- -----------------------------------------------------------------------------------------------------------------------
Maximum withdrawal charge(6)
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
CLASS IA SHARES ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
TOTAL
ANNUAL
MANAGEMENT OTHER EXPENSES
FEES(7) EXPENSES(8) (AFTER EXPENSE LIMITATION)(4)(8)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Alliance Aggressive Stock 0.54% 0.03% 0.57%
Alliance Balanced 0.41% 0.05% 0.46%
Alliance Common Stock 0.36% 0.04% 0.40%
Alliance Conservative Investors 0.48% 0.06% 0.54%
Alliance Equity Index 0.31% 0.04% 0.35%
Alliance Global 0.64% 0.08% 0.72%
Alliance Growth and Income 0.55% 0.04% 0.59%
Alliance Growth Investors 0.51% 0.05% 0.56%
Alliance High Yield 0.60% 0.04% 0.64%
Alliance Intermediate Government Securities 0.50% 0.06% 0.56%
Alliance International 0.90% 0.17% 1.07%
Alliance Money Market 0.35% 0.03% 0.38%
Alliance Quality Bond 0.53% 0.05% 0.58%
Alliance Small Cap Growth 0.90% 0.07% 0.97%
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
28 FEE TABLE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CLASS IB SHARES ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------
MANAGEMENT
FEES(7) 12B-1 FEE(9)
- ----------------------------------------------------------------------
<S> <C> <C>
EQ/Alliance Premier Growth 0.90% 0.25%
Capital Guardian Research 0.65% 0.25%
Capital Guardian U.S. Equity 0.65% 0.25%
EQ/Evergreen 0.75% 0.25%
EQ/Evergreen Foundation 0.63% 0.25%
MFS Emerging Growth Companies 0.55% 0.25%
MFS Growth with Income 0.55% 0.25%
MFS Research 0.55% 0.25%
Merrill Lynch Basic Value Equity 0.55% 0.25%
Merrill Lynch World Strategy 0.70% 0.25%
Morgan Stanley Emerging Markets Equity 1.15% 0.25%
EQ/Putnam Balanced 0.55% 0.25%
EQ/Putnam Growth & Income Value 0.55% 0.25%
T. Rowe Price Equity Income 0.55% 0.25%
T. Rowe Price International Stock 0.75% 0.25%
Warburg Pincus Small Company Value 0.65% 0.25%
- ----------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
TOTAL
OTHER ANNUAL
EXPENSES EXPENSES
(AFTER EXPENSE LIMITATION)(8) (AFTER EXPENSE LIMITATION)(7)(10)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
EQ/Alliance Premier Growth 0.00% 1.15%
Capital Guardian Research 0.05% 0.95%
Capital Guardian U.S. Equity 0.05% 0.95%
EQ/Evergreen 0.05% 1.05%
EQ/Evergreen Foundation 0.07% 0.95%
MFS Emerging Growth Companies 0.05% 0.85%
MFS Growth with Income 0.05% 0.85%
MFS Research 0.05% 0.85%
Merrill Lynch Basic Value Equity 0.05% 0.85%
Merrill Lynch World Strategy 0.25% 1.20%
Morgan Stanley Emerging Markets Equity 0.35% 1.75%
EQ/Putnam Balanced 0.10% 0.90%
EQ/Putnam Growth & Income Value 0.05% 0.85%
T. Rowe Price Equity Income 0.05% 0.85%
T. Rowe Price International Stock 0.20% 1.20%
Warburg Pincus Small Company Value 0.10% 1.00%
- -----------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) A portion of this charge is for providing the death benefit.
(2) This charge is for financial accounting and other administrative services
related to the contract.
(3) Total Separate Account A annual expenses of the variable investment options
(not including EQ Advisors Trust fees and other expenses) are guaranteed
not to exceed a total annual rate of 1.49% for the Alliance Balanced,
Alliance Common Stock, and Alliance Money Market options and an annual rate
of 1.34% for all the other options.
(4) The total Separate Account A annual expenses of the variable investment
options and total annual expenses of EQ Advisors Trust fees when added
together are not permitted to exceed an annual rate of 1.75% for the
Alliance Aggressive Stock, Alliance Balanced, Alliance Common Stock, and
Alliance Money Market options. Without this expense limitation, the total
annual expenses deducted from the variable investment options plus EQ
Advisors Trust annual expenses for 1998 would have been 1.86% for the
Alliance Money Market option; 1.88% for the Alliance Common Stock option;
1.90% for the Alliance Aggressive Stock option; and 1.94% for the Alliance
Balanced option.
(5) 2% of your account value if less. Some contracts are exempt from this
charge.
(6) This charge applies to withdrawn contributions that were made in the
current and five prior years. This charge is deducted upon a withdrawal of
amounts in excess of the 10% free withdrawal amount. Important exceptions
and limitations may eliminate or reduce this charge.
(7) The management fees or the maximum management fees, if a maximum applies,
for each portfolio cannot be increased without a vote of that portfolio's
shareholders.
(8) The amounts shown as "Other Expenses" will fluctuate from year to year
depending on actual expenses. See footnote (10) for any expense limitation
agreements.
On October 18, 1999, the Alliance portfolios (other than EQ/Alliance
Premier Growth) became part of the portfolios of EQ Advisors Trust. The
"Other Expenses" for these portfolios have been restated to reflect the
estimated expenses that would have been incurred had these portfolios been
portfolios of EQ Advisors Trust for the year ended December 31, 1998. The
restated expenses reflect an increase of 0.01%.
<PAGE>
- --------------------------------------------------------------------------------
FEE TABLE 29
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(9) The Class IB shares of EQ Advisors Trust are subject to fees imposed under
a distribution plan (the "Rule 12b-1 Plan") adopted by EQ Advisors Trust
pursuant to Rule 12b-1 under the Investment Company Act of 1940.
(10) Equitable Life, EQ Advisors Trust's manager, has entered into an expense
limitation agreement with respect to each portfolio. Under this agreement
Equitable Life 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 as a percentage of 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; and 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; and on April 30, 1999
for the EQ/Alliance Premier Growth, Capital Guardian Research, and Capital
Guardian U.S. Equity portfolios and therefore expenses have been estimated.
Each portfolio may at a later date make a reimbursement to Equitable Life
for any of the management fees waived or limited and other expenses assumed
and paid by Equitable Life 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.
<PAGE>
- --------------------------------------------------------------------------------
30 FEE TABLE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EXAMPLES: EQUI-VEST SERIES 100 CONTRACTS
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) We also assume there is no waiver of the
withdrawal charge. We calculate the annual administrative charge by using the
total actual annual administrative charges for 1998 under all EQUI-VEST
contracts as a percentage of the total assets held under all EQUI-VEST
contracts.
These examples should not be considered a representation of past or future
expenses for each 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.
FOR IRA (TRADITIONAL, STANDARD ROTH AND CERTAIN QP IRA(2) CONTRACTS WHERE THE
FREE WITHDRAWAL AMOUNT APPLIES AFTER THE THIRD CONTRACT YEAR):
<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
- --------------------------------------------------------------------------------------------
CLASS IA SHARES
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock $80.83 $124.44 $163.81 $255.10
Alliance Balanced $80.83 $124.44 $163.81 $255.10
Alliance Common Stock $80.83 $124.44 $163.81 $255.10
Alliance Conservative Investors $82.11 $128.32 $170.36 $268.87
Alliance Equity Index $80.24 $122.65 $160.78 $248.69
Alliance Global $83.89 $133.66 $179.37 $287.63
Alliance Growth and Income $82.60 $129.80 $172.87 $274.12
Alliance Growth Investors $82.31 $128.91 $171.36 $270.97
Alliance High Yield $83.10 $131.29 $175.37 $279.34
Alliance Intermediate Government Securities $82.31 $128.91 $171.36 $270.97
Alliance International $87.34 $144.01 $196.68 $323.15
Alliance Money Market $80.83 $124.44 $163.81 $255.10
Alliance Quality Bond $82.50 $129.51 $172.37 $273.07
Alliance Small Cap Growth $86.35 $141.06 $191.76 $313.13
- --------------------------------------------------------------------------------------------
CLASS IB SHARES
- --------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth $88.13 $146.36 -- --
Capital Guardian Research $86.15 $140.47 -- --
Capital Guardian U.S. Equity $86.15 $140.47 -- --
EQ/Evergreen $87.14 $143.42 -- --
EQ/Evergreen Foundation $86.15 $140.47 -- --
MFS Emerging Growth Companies $85.17 $137.51 $185.83 $300.97
MFS Growth with Income $85.17 $137.51 -- --
MFS Research $85.17 $137.51 $185.83 $300.97
Merrill Lynch Basic Value Equity $85.17 $137.51 $185.83 $300.97
Merrill Lynch World Strategy $88.62 $147.83 $203.05 $336.02
Morgan Stanley Emerging Markets Equity $94.05 $163.88 $229.58 $388.62
EQ/Putnam Balanced $85.66 $138.99 $188.30 $306.06
EQ/Putnam Growth & Income Value $85.17 $137.51 $185.83 $300.97
T. Rowe Price Equity Income $85.17 $137.51 $185.83 $300.97
T. Rowe Price International Stock $88.62 $147.83 $203.05 $336.02
Warburg Pincus Small Company Value $86.65 $141.94 $193.24 $316.15
- --------------------------------------------------------------------------------------------
</TABLE>
- ----------
See footnotes on page 33.
<PAGE>
- --------------------------------------------------------------------------------
FEE TABLE 31
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOR QP IRA(3) CONTRACTS (WHERE THE FREE WITHDRAWAL AMOUNT APPLIES STARTING IN
THE FIRST CONTRACT YEAR):
<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
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS IA SHARES
- --------------------------------------------------------------------------------------------------
Alliance Aggressive Stock $74.64 $117.86 $163.81 $255.10
Alliance Balanced $74.64 $117.86 $163.81 $255.10
Alliance Common Stock $74.64 $117.86 $163.81 $255.10
Alliance Conservative Investors $75.93 $121.77 $170.36 $268.87
Alliance Equity Index $74.05 $116.06 $160.78 $248.69
Alliance Global $77.72 $127.15 $179.37 $287.63
Alliance Growth and Income $76.43 $123.26 $172.87 $274.12
Alliance Growth Investors $76.13 $122.37 $171.36 $270.97
Alliance High Yield $76.92 $124.76 $175.37 $279.34
Alliance Intermediate Government Securities $76.13 $122.37 $171.36 $270.97
Alliance International $81.19 $137.56 $196.68 $323.15
Alliance Money Market $74.64 $117.86 $163.81 $255.10
Alliance Quality Bond $76.33 $122.96 $172.37 $273.07
Alliance Small Cap Growth $80.20 $134.59 $191.76 $313.13
- --------------------------------------------------------------------------------------------------
CLASS IB SHARES
- --------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth $81.99 $139.93 -- --
Capital Guardian Research $80.00 $134.00 -- --
Capital Guardian U.S. Equity $80.00 $134.00 -- --
EQ/Evergreen $80.99 $136.97 -- --
EQ/Evergreen Foundation $80.00 $134.00 -- --
MFS Emerging Growth Companies $79.01 $131.03 $185.83 $300.97
MFS Growth with Income $79.01 $131.03 -- --
MFS Research $79.01 $131.03 $185.83 $300.97
Merrill Lynch Basic Value Equity $79.01 $131.03 $185.83 $300.97
Merrill Lynch World Strategy $82.48 $141.41 $203.05 $336.02
Morgan Stanley Emerging Markets Equity $87.94 $157.57 $229.58 $388.62
EQ/Putnam Balanced $79.51 $132.51 $188.30 $306.06
EQ/Putnam Growth & Income Value $79.01 $131.03 $185.83 $300.97
T. Rowe Price Equity Income $79.01 $131.03 $185.83 $300.97
T. Rowe Price International Stock $82.48 $141.41 $203.05 $336.02
Warburg Pincus Small Company Value $80.50 $135.49 $193.24 $316.15
- --------------------------------------------------------------------------------------------------
</TABLE>
- ----------
See footnotes on page 33.
<PAGE>
- --------------------------------------------------------------------------------
32 FEE TABLE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOR NQ CONTRACTS:
<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
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS IA SHARES
- ---------------------------------------------------------------------------------------------------
Alliance Aggressive Stock $74.64 $117.86 $160.90 $218.45
Alliance Balanced $74.64 $117.86 $160.90 $218.45
Alliance Common Stock $74.64 $117.86 $160.90 $218.45
Alliance Conservative Investors $75.93 $121.77 $167.86 $232.70
Alliance Equity Index $74.05 $116.06 $157.67 $211.81
Alliance Global $77.72 $127.15 $177.44 $252.12
Alliance Growth and Income $76.43 $123.26 $170.53 $238.13
Alliance Growth Investors $76.13 $122.37 $168.93 $234.87
Alliance High Yield $76.92 $124.76 $173.19 $243.53
Alliance Intermediate Government Securities $76.13 $122.37 $168.93 $234.87
Alliance International $81.19 $137.56 $195.85 $288.88
Alliance Money Market $74.64 $117.86 $160.90 $218.45
Alliance Quality Bond $76.33 $122.96 $169.99 $237.05
Alliance Small Cap Growth $80.20 $134.59 $190.62 $278.51
- ---------------------------------------------------------------------------------------------------
CLASS IB SHARES
- ---------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth $81.99 $139.93 -- --
Capital Guardian Research $80.00 $134.00 -- --
Capital Guardian U.S. Equity $80.00 $134.00 -- --
EQ/Evergreen $80.99 $136.97 -- --
EQ/Evergreen Foundation $80.00 $134.00 -- --
MFS Emerging Growth Companies $79.01 $131.03 $184.31 $265.93
MFS Growth with Income $79.01 $131.03 -- --
MFS Research $79.01 $131.03 $184.31 $265.93
Merrill Lynch Basic Value Equity $79.01 $131.03 $184.31 $265.93
Merrill Lynch World Strategy $82.48 $141.41 $202.62 $302.21
Morgan Stanley Emerging Markets Equity $87.94 $157.57 $229.58 $356.67
EQ/Putnam Balanced $79.51 $132.51 $186.94 $271.19
EQ/Putnam Growth & Income Value $79.01 $131.03 $184.31 $265.93
T. Rowe Price Equity Income $79.01 $131.03 $184.31 $265.93
T. Rowe Price International Stock $82.48 $141.41 $202.62 $302.21
Warburg Pincus Small Company Value $80.50 $135.49 $192.19 $281.64
- ---------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
FEE TABLE 33
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOR ALL SERIES 100 CONTRACTS:
<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
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS IA SHARES
- ----------------------------------------------------------------------------------------
Alliance Aggressive Stock $18.97 $58.68 $100.90 $218.45
Alliance Balanced $18.97 $58.68 $100.90 $218.45
Alliance Common Stock $18.97 $58.68 $100.90 $218.45
Alliance Conservative Investors $20.33 $62.82 $107.86 $232.70
Alliance Equity Index $18.34 $56.77 $ 97.67 $211.81
Alliance Global $22.22 $68.52 $117.44 $252.12
Alliance Growth and Income $20.85 $64.40 $110.53 $238.13
Alliance Growth Investors $20.54 $63.45 $108.93 $234.87
Alliance High Yield $21.38 $65.99 $113.19 $243.53
Alliance Intermediate Government Securities $20.54 $63.45 $108.93 $234.87
Alliance International $25.89 $79.56 $135.85 $288.88
Alliance Money Market $18.97 $58.68 $100.90 $218.45
Alliance Quality Bond $20.75 $64.09 $109.99 $237.05
Alliance Small Cap Growth $24.84 $76.42 $130.62 $278.51
- ----------------------------------------------------------------------------------------
CLASS IB SHARES
- ----------------------------------------------------------------------------------------
EQ/Alliance Premier Growth $26.73 $82.07 -- --
Capital Guardian Research $24.63 $75.79 -- --
Capital Guardian U.S. Equity $24.63 $75.79 -- --
EQ/Evergreen $25.68 $78.93 -- --
EQ/Evergreen Foundation $24.63 $75.79 -- --
MFS Emerging Growth Companies $23.58 $72.63 $124.31 $265.93
MFS Growth with Income $23.58 $72.63 -- --
MFS Research $23.58 $72.63 $124.31 $265.93
Merrill Lynch Basic Value Equity $23.58 $72.63 $124.31 $265.93
Merrill Lynch World Strategy $27.26 $83.64 $142.62 $302.21
Morgan Stanley Emerging Markets Equity $33.03 $100.77 $170.84 $356.67
EQ/Putnam Balanced $24.11 $74.21 $126.94 $271.19
EQ/Putnam Growth & Income Value $23.58 $72.63 $124.31 $265.93
T. Rowe Price Equity Income $23.58 $72.63 $124.31 $265.93
T. Rowe Price International Stock $27.26 $83.64 $142.62 $302.21
Warburg Pincus Small Company Value $25.16 $77.36 $132.19 $281.64
- ----------------------------------------------------------------------------------------
</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
payments under an annuity payout option. See "Accessing your money."
(2) These expenses also apply to a QP IRA with the number 11933I in the lower
left hand corner of the first page of your contract, or those QP IRA
contracts issued in Oregon.
(3) These expenses apply only to a QP IRA with the number 92QPI in the lower
left corner of the first page of your contract.
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>
- --------------------------------------------------------------------------------
34 FEE TABLE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CONDENSED FINANCIAL INFORMATION
Please see Appendix II at the end of this prospectus, for the unit values and
number of units outstanding as of the periods shown for each of the variable
investment options available as of December 31, 1998.
<PAGE>
- --------------------------------------------------------------------------------
CONTRACT FEATURES AND BENEFITS 35
- --------------------------------------------------------------------------------
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 for each type and
series 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" in "More information" later in
this prospectus. The following table summarizes our rules regarding
contributions to your 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 ANNUITANT MINIMUM SOURCE OF LIMITATIONS ON
TYPE ISSUE AGES* CONTRIBUTIONS CONTRIBUTIONS CONTRIBUTIONS
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NQ 0-79 o $1,000 (initial), o After-tax money. Not applicable.
$50 (additional) o Paid to us by check
(all series) 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.
- ------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
36 CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
CONTRACT ANNUITANT MINIMUM SOURCE OF LIMITATIONS ON
TYPE ISSUE AGES* CONTRIBUTIONS CONTRIBUTIONS CONTRIBUTIONS
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Traditional IRA 0-70 o $20 (initial and o "Regular" traditional o For all types of IRAs,
additional) (series IRA contributions regular IRA
100 and 200) either made by you contributions may
o $50 (initial and or paid to us by an not exceed $2,000
additional) (series employer who for a year.
300 and 400) establishes a payroll o No additional regular
deduction program. IRA contributions in
o Rollovers from a the year you turn age
qualified plan. 70 1/2 and thereafter.
o Rollovers from a o Rollover and direct
TSA. transfer contributions
o Rollovers from after age 70 1/2 must
another traditional be net of required
individual retirement minimum
arrangement. distributions.
o Direct
custodian-to-custodian
transfers from other
traditional individual
retirement
arrangements.
-----------------------------------------------------------------------------
Although we accept rollover and direct transfer contributions under the
Traditional IRA contracts, we intend that these contracts be used for ongoing
regular contributions.
- -----------------------------------------------------------------------------------------------------------------
Standard Roth IRA 0-79 o $20 (initial and o Regular after-tax o For all types of IRAs,
and Roth Advantage additional) (series contributions either regular IRA
100 and 200) made by you or paid contributions may
o $50 (initial and to us by an employer not exceed $2,000
additional) (series who establishes a for a year.
300, 400, and 500) payroll deduction o Contributions are
program. subject to income
o Rollovers from limits and other tax
another Roth IRA. rules. See "Tax
o Conversion rollovers information --
from a Traditional Contributions to
IRA. Roth IRAs."
o Direct transfers from
another Roth IRA.
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
CONTRACT FEATURES AND BENEFITS 37
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
CONTRACT ANNUITANT MINIMUM SOURCE OF LIMITATIONS ON
TYPE ISSUE AGES* CONTRIBUTIONS CONTRIBUTIONS CONTRIBUTIONS
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
QP traditional IRA 0-79 o $1,000 (series 100 o Rollovers from a o Rollover
and 200) qualified plan. contributions after
o $2,500 (series 300 o Rollovers from a age 70 1/2 must be
and 400) TSA. net of required
o The EQUIVEST QP minimum
Traditional IRA distributions.
contract is intended o "Regular" after-tax
to be a conduit IRA. contributions are not
Only rollovers permitted.
from a qualified
plan or TSA are
permitted.
- --------------------------------------------------------------------------------------------------------------
</TABLE>
* For Traditional IRAs, the maximum issue age is 70, but we will issue up to
age 79 if the contribution 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>
- --------------------------------------------------------------------------------
38 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 financial professional
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>
- --------------------------------------------------------------------------------
CONTRACT FEATURES AND BENEFITS 39
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIOS OF EQ ADVISORS 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 EQ Advisors 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 and 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>
- --------------------------------------------------------------------------------
40 CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<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 capital growth 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 prospectus
for EQ Advisors Trust attached at the end of this prospectus.
<PAGE>
- --------------------------------------------------------------------------------
CONTRACT FEATURES AND BENEFITS 41
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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. A 4% minimum may apply under some contracts.
Current interest rates will never be less than the yearly guaranteed interest
rate.
For series 500 contracts, however, the guaranteed interest rate generally will
be 0.10% lower than the rates we set for the other contract series.
FIXED MATURITY OPTIONS
(series 400 and 500 contracts only)
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.
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Fixed maturity options range from one to ten years to maturity.
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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
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42 CONTRACT FEATURES AND BENEFITS
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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. Such a case is the State of New York where a
different rule applies. See "Series 400 and 500 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 III 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 options 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.
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CONTRACT FEATURES AND BENEFITS 43
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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.
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INVESTMENT OPTIONS
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A
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o Guaranteed Interest Option
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DOMESTIC EQUITY INTERNATIONAL EQUITY
- --------------------------------------------------------------------------------
o Alliance Common Stock o Alliance Global
o Alliance Equity Index o Alliance International
o Alliance Growth and 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
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ASSET ALLOCATION AGGRESSIVE EQUITY
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o Alliance Balanced o Alliance Aggressive Stock
o Alliance Growth Investors o Alliance Small Cap Growth
o EQ/Evergreen Foundation o EQ/Evergreen
o Merrill Lynch World Strategy o MFS Emerging Growth
o EQ/Putnam Balanced Companies
o Warburg Pincus Small
Company Value
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B
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AGGRESSIVE FIXED INCOME
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o Alliance High Yield
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DOMESTIC FIXED INCOME ASSET ALLOCATION
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o Alliance Intermediate o Alliance Conservative
Government Securities Investors
o Alliance Money Market
o Alliance Quality Bond
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FIXED MATURITY OPTIONS
- --------------------------------------------------------------------------------
The fixed maturity options are only available under series 400 and 500
contracts.
Transfer restrictions apply as indicated above under "Fixed maturity options and
maturity dates."
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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.
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44 CONTRACT FEATURES AND BENEFITS
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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
Standard Roth IRA or Roth Advantage contract, you may cancel your Standard Roth
IRA or Roth Advantage contract and return to a Traditional IRA contract. Our
processing office, or your financial professional, can provide you with the
cancellation instructions. Ask for the form entitled "EQUI-VEST Roth IRA
Re-Characterization Form."
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DETERMINING YOUR CONTRACT'S VALUE 45
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2
Determining your contract's value
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YOUR ACCOUNT VALUE
Your "account value" is the total of the values you have allocated to the
variable investment options, and the guaranteed interest option, plus 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, less the total amount or a pro rata portion of
the annual administrative change. 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.
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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 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.
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46 TRANSFERRING YOUR MONEY AMONG INVESTMENT OPTIONS
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3
Transferring your money among investment options
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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.
See Appendix I for transfer restrictions under original contracts.
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.
See Appendix I for transfer restrictions under original contracts.
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
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TRANSFERRING YOUR MONEY AMONG INVESTMENT OPTIONS 47
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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.
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. Your
entire account value in the variable investment options must be included in the
rebalancing program.
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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 financial professional before
electing the program.
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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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48 ACCESSING YOUR MONEY
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4
Accessing your money
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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."
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METHOD OF WITHDRAWAL
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MINIMUM
CONTRACT LUMP SUM SYSTEMATIC DISTRIBUTION
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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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Standard Roth IRA Yes Yes No
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Roth Advantage Yes Yes No
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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
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
withdrawal 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 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 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
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ACCESSING YOUR MONEY 49
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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 calendar year, based on the
method you choose.
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We will send to Traditional IRA and QP IRA owners a form outlining the minimum
distribution options available before you reach age 70 1/2 (if you have not
begun your annuity payments before that time).
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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 financial professional 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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50 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 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.
<PAGE>
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ACCESSING YOUR MONEY 51
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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)
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 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. EQ Advisors 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 financial professional
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. We require you to return your
contract before annuity payments begin. Unless you choose a different payout
option, we will pay annuity payments under a life annuity with a period certain
of 10 years. You choose whether these payments will be either fixed or variable.
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 85th
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% of
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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52 CHARGES AND EXPENSES
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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 (series 300, 400, and 500 only)
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. The charges differ depending
on which contract series you purchase.
CHARGES UNDER SERIES 300, 400, AND 500 CONTRACTS
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:
o 1.10% of the net assets in each variable investment option under series 300
and 400 contracts.
o 1.20% of the net assets in each variable investment option for series 500
contracts.
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 the net assets in each variable investment option. Currently, the charge we
deduct for variable investment options other than the Alliance Money Market,
Alliance Common Stock and Alliance Balanced options, is 0.24% of the net assets.
We may, upon advance notice to you, increase the charge to 0.25% of the net
assets for all variable investment options.
SERIES 500 -- MAXIMUM TOTAL CHARGES. Under series 500 contracts, the total
annual rate for the above charges is 1.45%. We may increase or decrease this
total annual rate, but we may not increase it above a maximum rate of 2.00%. We
will only make any increase after we have sent you advance notice. Any increase
or decrease will apply only
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CHARGES AND EXPENSES 53
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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 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 for series 300, 400, and 500 contracts.
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 for series 400 and 500 contracts. 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 (except for series 300
contracts issued in Florida) 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."
For series 300 and 400 contracts, we reserve the right to change the amount of
the withdrawal charge, but it will not exceed 6% of the contributions withdrawn.
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54 CHARGES AND EXPENSES
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For series 500 contracts, we reserve the right to change the amount of the
withdrawal charge, but it will not exceed 8% 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.
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.
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 financial professional can provide more information or you
may contact our processing office.
For Traditional IRA, QP IRA, and Standard 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.
For Roth Advantage contracts the withdrawal charge also does not apply:
o after five contract years and the annuitant is at least age 59 1/2; or
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CHARGES AND EXPENSES 55
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o if you withdraw an amount which is less than or equal to 25% of the account
value at the time the withdrawal is requested, minus any amount previously
withdrawn during that contract year, and you use the withdrawal to pay
specified higher education expenses as defined in the federal income tax
rules. We must receive evidence satisfactory to us that such withdrawal is in
fact for such purpose; or
o after five contract years and the withdrawal is a "qualified first-time
homebuyer distribution" (special federal income tax definition; $10,000
lifetime total limit). We must receive evidence satisfactory to us that such
withdrawal is in fact for such purpose; or
o if you request a refund of a contribution in excess of amounts allowed to be
contributed under federal income tax rules within one month of the date on
which you made the contribution.
SERIES 400 AND 500 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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DECLINING SCALE ALTERNATIVE SCALE
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Year of investment 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.
- -----------------------------------------------------------
* 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 series 400 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 series 400 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
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CHARGES AND EXPENSES 56
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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.
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.
CHARGES UNDER SERIES 100 AND 200 CONTRACTS
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 minimum death
benefit. The daily charge is a percentage of the net assets in each of the
variable investment options. Under series 100 contracts the
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57 CHARGES AND EXPENSES
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percentage is equivalent to an annual rate that will not exceed 0.65%, and 1.15%
under series 200 contracts for the Alliance Money Market, Alliance Balanced and
Alliance Common Stock options. The daily charge for all other variable
investment options is equivalent to an annual rate not to exceed 0.50% under
series 100 contracts and 1.09% under series 200 contracts.
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. 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 to be 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 0.84%
of the net assets in each variable investment option under series 100 contracts.
0.60% of this charge is designed to reimburse us for research and development
costs and for administrative expenses that are not covered by the annual
administrative charge described below. The remaining 0.24% is to reimburse us
for the cost of financial accounting services we provide under the contracts.
Under series 200 contracts, the charge for expenses and financial accounting is
0.25% of the net asset value in each variable investment option.
LIMITATION ON CHARGES. For the Alliance Money Market, Alliance Balanced,
Alliance Common Stock and Alliance Aggressive Stock options, the combined amount
of the variable investment option charges and EQ Advisors Trust charges for
investment advisory fees and direct operating expenses may not exceed a total
annual rate of 1.75% of the value of the assets held in each of those variable
investment options.
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. The charge is equal to $30 or, if less, 2% of the
current account value plus any amount previously withdrawn during that contract
year.
The charge is deducted pro rata from each investment option in which you have
account value.
TRADITIONAL IRA, QP IRA, AND ROTH IRA. At the end of any contract year that your
account value is at least $10,000, we will waive the annual administrative
charge.
WITHDRAWAL CHARGE
FOR NQ CONTRACTS. A withdrawal charge may apply in three circumstances: (1) if
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. The amount
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58 CHARGES AND EXPENSES
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of the withdrawal and the applicable withdrawal charge are deducted pro rata
from your account value.
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 or terminations, 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. If the
annuitant is age 59 or older when the contract is issued, this percentage will
be 95% in the fifth contract year and 96% in the sixth contract year. There is a
reduction in the withdrawal charge for older annuitants in the fifth and sixth
contract year.
For purposes of calculating the withdrawal charge, 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, the federal income tax rules treat
earnings under most NQ contracts as withdrawn first. See "Tax information."
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.
For NQ contracts the withdrawal charge does not apply if:
o the annuitant dies and a death benefit is payable to the beneficiary; or
o we receive a properly completed election form providing for the account value
to be used to buy a life annuity payout option.
TRADITIONAL IRA, QP IRA, AND STANDARD ROTH IRA.
The withdrawal charge equals a percentage of the amount withdrawn. The
percentage that applies depends on the contract year in which the withdrawal is
made, according to the following table:
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Contract
Year(s) Charge
- ---------------------------------------
1 through 5 6%*
6 through 8 5
9 4
10 3
11 2
12 1
13 and later 0
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* This percentage may be reduced at older ages for certain contract series. Your
Equitable associate can provide further details about the contract series you
own.
The total of all withdrawal charges assessed will not exceed 8% of all
contributions made during the current contract year and the nine contract years
before the withdrawal is made.
---------------------------------
We reserve the right to reduce or waive the withdrawal charge including
transfers to a Traditional IRA, QP IRA, and, Standard Roth IRA from another
EQUI-VEST contract. Any such charge will not be unfairly discriminatory. The
withdrawal charge may be reduced in order to comply with any state law
requirement.
The withdrawal charge does not apply in the circumstances described below.
10% FREE WITHDRAWAL AMOUNT FOR A TRADITIONAL IRA, QP IRA, STANDARD ROTH IRA.
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.
For existing contract owners, if you have QP IRA contract number 11933I, the
free withdrawal amount became available after the third contract year. If you
have QP IRA
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CHARGES AND EXPENSES 59
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contract number 92QPI, the free withdrawal amount was available in the first
contract year.
No withdrawal charge applies:
o after five contract years and the annuitant is at least age 59 1/2; or
o if you request a refund of an excess contribution within one month of the date
on which the contribution is made; or
o the annuitant dies and the death benefit is made available to the beneficiary;
or
o after five contract years and the annuitant is at least age 55 and the amount
withdrawn is used to purchase from us a period certain annuity that extends
beyond the annuitant's age 59 1/2 and allows no prepayment; or
o after three contract years and the amount withdrawn is used to purchase from
us a period certain annuity for a term of at least 10 years and allows no
prepayment; or
o if the amount withdrawn is applied to the election of a life contingent
annuity payout option.
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.
CHARGES THAT EQ ADVISORS TRUST DEDUCTS
EQ Advisors Trust 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% for Class IB shares.
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 EQ Advisors 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 prospectus for 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 initial
contribution requirements. We also may change the minimum death benefit. Group
arrangements include those in which a trustee or an employer, for example,
purchases contracts covering a group of individuals on a group basis. Group
arrangements are not available for Traditional IRA, Roth IRA and Roth Advantage
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
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60 CHARGES AND EXPENSES
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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.
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PAYMENT OF DEATH BENEFIT 61
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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 agreement for the change is received
in our processing office. We are not responsible for any beneficiary change that
we do not receive. We will send you a written confirmation when we received your
request.
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 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.
Under NQ contracts when the owner dies the person designated as successor owner
becomes the new owner.
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
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62 PAYMENT OF DEATH BENEFIT
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under federal income tax rules, the beneficiary may elect to apply the death
benefit to one or more annuity payout 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.
SUCCESSOR OWNER AND ANNUITANT
SERIES 300 AND 400 CONTRACTS ONLY. If you are both the contract owner and the
annuitant, your surviving spouse can automatically become both the successor
annuitant and contract owner if you elect to have your spouse be the sole
primary beneficiary, as well as the successor annuitant and contract owner. In
such a case, no death benefit is payable until your surviving spouse's death.
SERIES 400 TRADITIONAL IRA, QP IRA, AND ROTH IRA CONTRACTS. If your spouse is
the sole primary beneficiary, then upon your death, your spouse may elect to
receive the death benefit or continue the contract as the successor annuitant
and contract owner.
BENEFICIARY CONTINUATION OPTION UNDER SERIES 400 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 withdrawals 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. The death benefit will be
paid to the beneficiary according to our standard procedures, unless an
election is made within 30 days to: (1) receive the death benefit; (2)
continue the contract and take annual withdrawals as described above; or (3)
defer payment of the account value for five years.
(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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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, Standard Roth IRA, or Roth Advantage. 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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64 TAX INFORMATION
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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"
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 personal situation and the timing of
the different tax liabilities, you may not be able to take full advantage of
this credit.
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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; and
o Roth IRAs, first available in 1998, funded on an after-tax basis.
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
in 1999. 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, Standard Roth IRA or Roth Advantage) by following the directions under
"Your right to cancel within a certain number of days" under "Contract feature
and benefits" earlier in the prospectus. You can cancel an EQUI-VEST Standard
Roth IRA or a Roth Advantage contract issued as a result of a full or partial
conversion of an 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, Standard Roth IRA or a Roth Advantage 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
o tax-free "rollover" contributions; or
o direct custodian-to-custodian transfers from other traditional IRAs ("direct
transfers").
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66 TAX INFORMATION
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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
(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 contribution 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. 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
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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:
($10,000-excess AGI) times $2,000 (or earned Equals the adjusted
---------------------- x income, if less) = deductible
divided by $10,000 = contribution
limit
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
Amounts that have been contributed as traditional IRA funds may subsequently be
treated as Roth IRA funds. Special federal income tax rules allow you to change
your mind again and have amounts that are subsequently treated as Roth IRA
funds, once again treated as traditional IRA funds. You do this by using 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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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 first annual minimum
distribution, then you will have to take two minimum distributions in that year
-- the delayed one
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70 TAX INFORMATION
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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 required minimum distribution from any one
or more Traditional IRAs that you own.
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TAX INFORMATION 71
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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.
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
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72 TAX INFORMATION
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entirely to the guaranteed interest option under series 300 and 400 contracts.
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 73
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TABLE I
ACCOUNT VALUES AND CASH VALUES
(assuming $1,000 contributions made annually
at the beginning of the contract year)
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3% MINIMUM GUARANTEE
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CONTRACT ACCOUNT CASH
YEAR END VALUE VALUE
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1 $ 1,009.40 $ 954.89
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2 $ 2,039.68 $ 1,929.54
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3 $ 3,100.87 $ 2,933.43
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4 $ 4,193.90 $ 3,967.43
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5 $ 5,319.72 $ 5,032.45
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6 $ 6,479.31 $ 6,129.42
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7 $ 7,673.69 $ 7,313.69
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8 $ 8,903.90 $ 8,543.90
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9 $10,171.01 $ 9,811.01
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10 $11,476.14 $11,116.14
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11 $12,820.43 $12,460.43
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12 $14,205.04 $13,845.04
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13 $15,631.19 $15,271.19
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14 $17,100.13 $16,740.13
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15 $18,613.13 $18,253.13
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16 $20,201.53 $19,841.53
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17 $21,837.57 $21,477.57
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18 $23,522.70 $23,162.70
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19 $25,258.38 $24,898.38
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20 $27,046.13 $26,686.13
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21 $28,887.52 $28,527.52
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22 $30,784.14 $30,424.14
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23 $32,737.67 $32,377.67
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24 $34,749.80 $34,389.80
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25 $36,822.29 $36,462.29
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3% MINIMUM GUARANTEE
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CONTRACT ACCOUNT CASH
YEAR END VALUE VALUE
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26 $ 38,956.96 $ 38,596.96
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27 $ 41,155.67 $ 40,795.67
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28 $ 43,420.34 $ 43,060.34
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29 $ 45,752.95 $ 45,392.95
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30 $ 48,155.53 $ 47,795.53
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31 $ 50,630.20 $ 50,270.20
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32 $ 53,179.11 $ 52,819.11
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33 $ 55,804.48 $ 55,444.48
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34 $ 58,508.61 $ 58,148.61
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35 $ 61,293.87 $ 60,933.87
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36 $ 64,162.69 $ 63,802.69
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37 $ 67,117.57 $ 66,757.57
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38 $ 70,161.10 $ 69,801.10
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39 $ 73,295.93 $ 72,935.93
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40 $ 76,524.81 $ 76,164.81
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41 $ 79,850.55 $ 79,490.55
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42 $ 83,276.07 $ 82,916.07
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43 $ 86,804.35 $ 86,444.35
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44 $ 90,438.48 $ 90,078.48
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45 $ 94,181.64 $ 93,821.64
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46 $ 98,037.08 $ 97,677.08
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47 $102,008.20 $101,648.20
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48 $106,098.44 $105,738.44
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49 $110,311.40 $109,951.40
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50 $114,650.74 $114,290.74
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74 TAX INFORMATION
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TABLE II
ACCOUNT VALUES AND CASH VALUES
(assuming a single contribution of $1,000 and
no further contribution)
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3% MINIMUM GUARANTEE
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CONTRACT ACCOUNT CASH
YEAR END VALUE VALUE
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1 $1,009.40 $ 954.89
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2 $1,018.89 $ 963.87
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3 $1,019.46 $ 964.40
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4 $1,020.04 $ 964.96
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5 $1,020.64 $ 965.53
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6 $1,021.26 $ 966.11
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7 $1,021.90 $1,021.90
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8 $1,022.55 $1,022.55
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9 $1,023.23 $1,023.23
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10 $1,023.93 $1,023.93
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11 $1,024.65 $1,024.65
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12 $1,025.38 $1,025.38
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13 $1,026.15 $1,026.15
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14 $1,026.93 $1,026.93
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15 $1,027.74 $1,027.74
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16 $1,028.57 $1,028.57
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17 $1,029.43 $1,029.43
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18 $1,030.31 $1,030.31
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19 $1,031.22 $1,031.22
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20 $1,032.16 $1,032.16
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21 $1,033.12 $1,033.12
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22 $1,034.11 $1,034.11
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23 $1,035.14 $1,035.14
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24 $1,036.19 $1,036.19
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25 $1,037.28 $1,037.28
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3% MINIMUM GUARANTEE
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CONTRACT ACCOUNT CASH
YEAR END VALUE VALUE
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26 $1,038.40 $1,038.40
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27 $1,039.55 $1,039.55
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28 $1,040.73 $1,040.73
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29 $1,041.96 $1,041.96
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30 $1,043.22 $1,043.22
- --------------------------------------------------------------------------------
31 $1,044.51 $1,044.51
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32 $1,045.85 $1,045.85
- --------------------------------------------------------------------------------
33 $1,047.22 $1,047.22
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34 $1,048.64 $1,048.64
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35 $1,050.10 $1,050.10
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36 $1,051.60 $1,051.60
- --------------------------------------------------------------------------------
37 $1,053.15 $1,053.15
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38 $1,054.74 $1,054.74
- --------------------------------------------------------------------------------
39 $1,056.39 $1,056.39
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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
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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
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TAX INFORMATION 75
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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 Standard 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 Standard Roth IRA and Roth Advantage 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
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76 TAX INFORMATION
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Code, or a TSA under Section 403(b) of the Internal Revenue 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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TAX INFORMATION 77
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The following distributions from Roth IRAs are free of income tax:
o Rollover from a Roth IRA to another Roth IRA;
o Direct transfer from a Roth IRA to another Roth IRA;
o Qualified distributions from 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).
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.
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78 TAX INFORMATION
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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% 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 IA or Class IB shares, respectively, issued by the
corresponding portfolios of 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 EQ ADVISORS TRUST
EQ Advisors Trust is registered under the Investment Company Act of 1940. It is
classified as an "open-end management investment company," more commonly called
a mutual fund. EQ Advisors Trust issues different shares relating to each
portfolio.
Equitable Life serves as the investment manager of EQ Advisors Trust. As such,
Equitable Life oversees the activities of the investment advisers with respect
to EQ Advisors Trust and is responsible for retaining or discontinuing the
services of those advisers. (Prior to September 1999, EQ Financial Consultants,
Inc. the predecessors to AXA Advisors, LLC and a subsidiary of Equitable Life
served as investment manager to EQ Advisors Trust.)
EQ Advisors Trust commenced operations on May 1, 1997. Prior to October 18,
1999 the Alliance portfolios (other than EQ/Alliance Premier Growth) were part
of The Hudson River Trust. On October 18, 1999, the assets of these portfolios
became the assets of corresponding portfolios on EQ Advisors Trust.
EQ Advisors Trust does not impose sales charges or "loads" for buying and
selling its shares. All dividends and other distributions on shares are
reinvested in full. The Board of Trustees of EQ Advisors Trust may establish
additional portfolios or eliminate existing portfolios at any time. More
detailed information about EQ Advisors Trust, its investment objectives,
policies, restrictions, risks, expenses, the
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Rule 12b-1 plan relating to its Class IB shares, and other aspects of its
operations, appears in the prospectus for EQ Advisors Trust, attached at the
end of this prospectus, or in its SAI which is available upon request.
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 August 2, 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 AUGUST 2, 1999 MATURITY VALUE
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2000 4.15% 96.53
2001 5.05% 91.21
2002 5.45% 85.88
2003 5.70% 80.70
2004 5.75% 76.17
2005 5.90% 71.43
2006 5.95% 67.23
2007 6.00% 63.22
2008 6.05% 59.40
2009 6.10% 55.75
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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:
(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.
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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.
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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 III 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
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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.
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 require 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, STANDARD ROTH IRA AND
ROTH ADVANTAGE 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
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additional contribution into an NQ, Traditional IRA, Standard Roth IRA, and
Roth Advantage contracts 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 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., 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 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.
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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 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 EQ Advisors Trust;
or
o any other matters described in the prospectus for EQ Advisors Trust 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 EQ Advisors Trust. EQ Advisors Trust shares are sold to
our separate accounts and an affiliated qualified plan trust. In addition, EQ
Advisors Trust shares are held by separate accounts of insurance companies both
affiliated and unaffiliated with us. Shares held by these separate accounts
will probably be voted according to the instructions of the owners of insurance
policies and contracts issued by those insurance companies. While this will
dilute the effect of the voting instructions of the contract owners, we
currently do not foresee any disadvantages because of this. The Board of
Trustees of EQ Advisors Trust 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
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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. If confirmation is not received from any of the remaining
non-critical vendors or service providers, the vendor or service provider will
be replaced, eliminated, or be 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 years ended December 31, 1998, have been so included 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 "Beneficiary
continuation option under series 400 Traditional IRA and QP IRA contracts" in
"Payment of death benefit" earlier in this prospectus. 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
AXA Advisors, LLC ("AXA Advisors"), the successor to Equitable Financial
Consultants, Inc., an indirect subsidiary of Equitable Life, is the distributor
of the contracts and has responsibility for sales and marketing functions for
Separate Account A. AXA Advisors serves as the principal underwriter of
Separate Account A. AXA Advisors is registered with the
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SEC as a broker-dealer and is a member of the National Association of
Securities Dealers, Inc. AXA Advisors' principal business address is 1290
Avenue of the Americas, New York, NY 10104. Under a Distribution and Servicing
Agreement between AXA Advisors, Equitable Life, and certain of Equitable Life's
separate accounts, including Separate Account A, Equitable Life paid AXA
Advisors 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, AXA Advisors will no longer be
a subsidiary of Equitable Life, but will remain an indirect subsidiary of AXA
Financial, Inc., Equitable Life's parent.
The contracts will be sold by financial professionals who are registered
representatives of AXA Advisors, and are also our licensed insurance agents.
AXA Advisors may also receive compensation and reimbursement for its marketing
services under the terms of its distribution agreement with Equitable Life. The
offering of the contracts is intended to be continuous.
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86 INVESTMENT PERFORMANCE
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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 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.
Since charges under the contracts vary, we have assumed, for each charge, the
highest that might apply which is 1.45% for mortality and expense risks and
other expenses.
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.
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999 the Alliance portfolios (other than EQ/Alliance Premier
Growth) were part of the Hudson River Trust. On October 18, 1999, these
portfolios became corresponding portfolios of EQ Advisors Trust. In each case,
the performance shown is for the indicated EQ Advisors Trust portfolio and any
predecessors that it may have had.
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 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:
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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.
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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TABLE 1
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 1998
<TABLE>
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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 (8.37)% 5.17% 6.68% 15.83% 14.68% 14.68%
- -------------------------------------------------------------------------------------------------------------------------------
Alliance Balanced 8.07% 9.08% 5.96% 8.81% 9.00% 9.00%
- -------------------------------------------------------------------------------------------------------------------------------
Alliance Common Stock 18.31% 21.76% 17.26% 14.96% 14.87% 10.30%
- -------------------------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors 4.04% 5.07% 4.60% -- 4.69% 6.09%
- -------------------------------------------------------------------------------------------------------------------------------
Alliance Equity Index 17.14% 21.81% -- -- 21.38% 19.74%
- -------------------------------------------------------------------------------------------------------------------------------
Alliance Global 11.41% 10.01% 9.42% 11.11% 9.39% 8.73%
- -------------------------------------------------------------------------------------------------------------------------------
Alliance Growth and Income 10.55% 16.64% 13.10% -- 13.20% 12.14%
- -------------------------------------------------------------------------------------------------------------------------------
Alliance Growth Investors 8.18% 10.23% 9.04% -- 9.22% 9.16%
- -------------------------------------------------------------------------------------------------------------------------------
Alliance High Yield (13.34)% 5.69% 5.17% 7.41% 5.12% 6.73%
- -------------------------------------------------------------------------------------------------------------------------------
Alliance Intermediate Government Securities (1.56)% 0.74% 0.66% -- 1.84% 2.93%
- -------------------------------------------------------------------------------------------------------------------------------
Alliance International 1.02% 0.10% -- -- 1.10% 1.32%
- -------------------------------------------------------------------------------------------------------------------------------
Alliance Money Market (3.76)% (0.11)% 0.45% 1.80% 3.09% 3.09%
- -------------------------------------------------------------------------------------------------------------------------------
Alliance Quality Bond (0.70)% 2.15% 2.04% -- 2.09% 1.66%
- -------------------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth (12.54)% -- -- -- (1.33)% 4.97%
- -------------------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies 23.04% -- -- -- 21.32% 26.35%
- -------------------------------------------------------------------------------------------------------------------------------
MFS Research 13.51% -- -- -- 12.93% 16.37%
- -------------------------------------------------------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity (0.04)% -- -- -- 4.28% 8.62%
- -------------------------------------------------------------------------------------------------------------------------------
Merrill Lynch World Strategy (2.40)% (3.07)% (0.09)%
- -------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity (33.32)% -- -- -- (37.56)% (37.51)%
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Balanced 2.16% -- -- -- 6.57% 8.44%
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value 3.08% -- -- -- 7.30% 10.01%
- -------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income (0.35)% -- -- -- 8.55% 11.06%
- -------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock 3.88% -- -- -- ( 2.17)% (0.02)%
- -------------------------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Value (17.78)% -- -- -- ( 6.50)% (2.60)%
- -------------------------------------------------------------------------------------------------------------------------------
</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 variable investment options
that became available on or after 12/31/98 and are therefore not shown in
this table are: EQ/Evergreen, EQ/Evergreen Foundation, MFS Growth with
Income, EQ/Alliance Premiere Growth, Capital Guardian Research, and
Capital Guardian U.S. Equity (8/30/99).
** The inception dates for the portfolios underlying the Alliance variable
investment options shown in the tables are for portfolios of The Hudson
River Trust, the assets of which became assets of corresponding
portfolios of EQ Advisors Trust on 10/18/99. 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 and 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 12/31/98 and
are therefore not shown in the tables are: EQ/Evergreen, EQ/Evergreen
Foundation, and MFS Growth with Income (12/31/98), EQ/Alliance Premier
Growth, Capital Guardian Research, and Capital Guardian U.S. Equity
(4/30/99).
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE 89
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 $ 916.26 $1,163.21 $1,381.52 $4,347.57 $ 7,647.86
- --------------------------------------------------------------------------------------------------------------------------
Alliance Balanced $1,080.72 $1,297.77 $1,335.75 $2,326.22 $ 3,604.89
- --------------------------------------------------------------------------------------------------------------------------
Alliance Common Stock $1,183.15 $1,805.17 $2,217.34 $4,031.95 $19,745.89
- --------------------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors $1,040.45 $1,159.86 $1,252.10 -- $ 1,727.45
- --------------------------------------------------------------------------------------------------------------------------
Alliance Equity Index $1,171.42 $1,807.49 -- -- $ 2,390.38
- --------------------------------------------------------------------------------------------------------------------------
Alliance Global $1,114.06 $1,331.21 $1,568.49 $2,868.34 $ 2,682.62
- --------------------------------------------------------------------------------------------------------------------------
Alliance Growth and Income $1,105.50 $1,586.70 $1,850.98 -- $ 1,825.29
- --------------------------------------------------------------------------------------------------------------------------
Alliance Growth Investors $1,081.83 $1,339.33 $1,541.49 -- $ 2,947.24
- --------------------------------------------------------------------------------------------------------------------------
Alliance High Yield $ 866.58 $1,180.55 $1,286.90 $2,044.10 $ 2,270.97
- --------------------------------------------------------------------------------------------------------------------------
Alliance Intermediate Government Securities $ 984.41 $1,022.25 $1,033.41 -- $ 1,251.19
- --------------------------------------------------------------------------------------------------------------------------
Alliance International $1,010.19 $1,003.00 -- -- $ 1,083.76
- --------------------------------------------------------------------------------------------------------------------------
Alliance Money Market $ 962.41 $ 996.69 $1,022.63 $1,195.40 $ 1,720.50
- --------------------------------------------------------------------------------------------------------------------------
Alliance Quality Bond $ 993.00 $1,065.78 $1,106.28 -- $ 1,090.26
- --------------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth $ 874.57 -- -- -- $ 1,084.35
- --------------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies $1,230.38 -- -- -- $ 1,477.97
- --------------------------------------------------------------------------------------------------------------------------
MFS Research $1,135.14 -- -- -- $ 1,288.14
- --------------------------------------------------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity $ 999.57 -- -- -- $ 1,148.15
- --------------------------------------------------------------------------------------------------------------------------
Merrill Lynch World Strategy $ 975.98 -- -- -- $ 998.55
- --------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity $ 666.76 -- -- -- $ 525.40
- --------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Balanced $1,021.57 -- -- -- $ 1,144.83
- --------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value $1,030.77 -- -- -- $ 1,172.64
- --------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income $ 996.54 -- -- -- $ 1,191.39
- --------------------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock $1,038.79 -- -- -- $ 999.69
- --------------------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Value $ 822.21 -- -- -- $ 957.02
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Portfolio inception dates are shown in Table 1.
<PAGE>
- --------------------------------------------------------------------------------
90 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 (1.17)% 9.13% 9.83% 17.17% -- 15.91%
- -------------------------------------------------------------------------------------------------------------------------
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 6.40% 13.23% 9.20% 10.96% -- 10.71%
- -------------------------------------------------------------------------------------------------------------------------
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 27.51% 25.75% 20.15% 16.96% 17.08% 11.96%
- -------------------------------------------------------------------------------------------------------------------------
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 12.23% 9.09% 7.80% -- -- 8.40%
- -------------------------------------------------------------------------------------------------------------------------
Lipper Income 14.20% 15.62% 14.31% -- -- 12.55%
- -------------------------------------------------------------------------------------------------------------------------
Benchmark 15.59% 14.45% 13.37% -- -- 12.08%
- -------------------------------------------------------------------------------------------------------------------------
ALLIANCE EQUITY INDEX 26.22% 25.75% -- -- -- 22.53%
- -------------------------------------------------------------------------------------------------------------------------
Lipper S&P 500 Index Funds 28.05% 27.67% -- -- -- 24.31%
- -------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% 28.23% -- -- -- 24.79%
- -------------------------------------------------------------------------------------------------------------------------
ALLIANCE GLOBAL 20.03% 14.22% 12.59% 13.14% -- 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 AND INCOME 19.11% 20.75% 16.10% -- -- 15.15%
- -------------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.61% 21.25% 18.35% -- -- 17.89%
- -------------------------------------------------------------------------------------------------------------------------
Benchmark 20.10% 23.99% 21.07% -- -- 20.48%
- -------------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS 16.51% 14.16% 12.08% -- -- 14.31%
- -------------------------------------------------------------------------------------------------------------------------
Lipper Flexible Portfolio 14.20% 15.62% 14.31% -- -- 12.55%
- -------------------------------------------------------------------------------------------------------------------------
Benchmark 22.85% 22.69% 19.96% -- -- 15.55%
- -------------------------------------------------------------------------------------------------------------------------
ALLIANCE HIGH YIELD (6.53)% 9.74% 8.39% 9.55% -- 8.89%
- -------------------------------------------------------------------------------------------------------------------------
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 6.18% 4.71% 3.86% -- -- 5.54%
- -------------------------------------------------------------------------------------------------------------------------
Lipper U.S. Government 7.68% 6.21% 5.91% -- -- 7.25%
- -------------------------------------------------------------------------------------------------------------------------
Benchmark 8.49% 6.74% 6.45% -- -- 7.60%
- -------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERNATIONAL 8.96% 4.05% -- -- -- 5.77%
- -------------------------------------------------------------------------------------------------------------------------
Lipper International 13.02% 9.94% -- -- -- 10.74%
- -------------------------------------------------------------------------------------------------------------------------
Benchmark 20.00% 9.00% -- -- -- 9.68%
- -------------------------------------------------------------------------------------------------------------------------
ALLIANCE MONEY MARKET 3.81% 3.83% 3.64% 4.07% -- 5.24%
- -------------------------------------------------------------------------------------------------------------------------
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 7.11% 6.15% 5.23% -- -- 4.80%
- -------------------------------------------------------------------------------------------------------------------------
Lipper Corporate Bond A-Rated 7.47% 6.38% 6.54% -- -- 6.21%
- -------------------------------------------------------------------------------------------------------------------------
Benchmark 8.69% 7.29% 7.27% -- -- 6.92%
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
91 INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 SMALL CAP GROWTH (5.66)% -- -- -- -- 10.63%
- --------------------------------------------------------------------------------------------------------------------------
Lipper Small-Cap (0.33)% -- -- -- -- 16.72%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark 1.23% -- -- -- -- 16.58%
- --------------------------------------------------------------------------------------------------------------------------
MFS EMERGING GROWTH COMPANIES 32.57% -- -- -- -- 32.93%
- --------------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap 15.97% -- -- -- -- 22.72%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark (2.54)% -- -- -- -- 14.53%
- --------------------------------------------------------------------------------------------------------------------------
MFS RESEARCH 22.31% -- -- -- -- 22.66%
- --------------------------------------------------------------------------------------------------------------------------
Lipper Growth 25.82% -- -- -- -- 28.73%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% -- -- -- -- 31.63%
- --------------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH BASIC VALUE EQUITY 7.82% -- -- -- -- 14.29%
- --------------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.54% -- -- -- -- 21.32%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% -- -- -- -- 31.63%
- --------------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH WORLD STRATEGY 5.27% -- -- -- -- 5.40%
- --------------------------------------------------------------------------------------------------------------------------
Lipper Global Flexible Portfolio 9.34% -- -- -- -- 11.15%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark 19.55% -- -- -- -- 20.00%
- --------------------------------------------------------------------------------------------------------------------------
MORGAN STANLEY EMERGING MARKETS
EQUITY (28.08)% -- -- -- -- (33.65)%
- --------------------------------------------------------------------------------------------------------------------------
Lipper Emerging Markets (30.50)% -- -- -- -- (36.28)%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark (25.34)% -- -- -- -- (28.92)%
- --------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM BALANCED 10.19% -- -- -- -- 14.28%
- --------------------------------------------------------------------------------------------------------------------------
Lipper Balanced 14.61% -- -- -- -- 17.83%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark 21.36% -- -- -- -- 23.48%
- --------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME VALUE 11.19% -- -- -- -- 15.94%
- --------------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.54% -- -- -- -- 21.32%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% -- -- -- -- 31.63%
- --------------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE EQUITY INCOME 7.49% -- -- -- -- 17.04%
- --------------------------------------------------------------------------------------------------------------------------
Lipper Equity Income 10.76% -- -- -- -- 19.07%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% -- -- -- -- 31.63%
- --------------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE INTERNATIONAL STOCK 2.05% -- -- -- -- 5.47%
- --------------------------------------------------------------------------------------------------------------------------
Lipper International 12.17% -- -- -- -- 9.06%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark 20.00% -- -- -- -- 13.43%
- --------------------------------------------------------------------------------------------------------------------------
WARBURG PINCUS SMALL COMPANY
VALUE (11.31)% -- -- -- -- 2.75%
- --------------------------------------------------------------------------------------------------------------------------
Lipper Small-Cap 1.53% -- -- -- -- 16.77%
- --------------------------------------------------------------------------------------------------------------------------
Benchmark (2.54)% -- -- -- -- 14.53%
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Portfolio inception dates are shown in Table 1.
<PAGE>
- --------------------------------------------------------------------------------
92 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 (1.17)% 29.96% 59.83% 387.81% -- 772.65%
- ----------------------------------------------------------------------------------------------------------------------------
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 16.40% 45.16% 55.30% 183.04% -- 344.57%
- ----------------------------------------------------------------------------------------------------------------------------
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 27.51% 98.85% 150.34% 378.95% 2,242.69% 3,003.56%
- ----------------------------------------------------------------------------------------------------------------------------
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 12.23% 29.83% 45.61% -- -- 110.82%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Income 14.20% 55.28% 97.15% -- -- 202.48%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 15.59% 49.92% 87.28% -- -- 187.40%
- ----------------------------------------------------------------------------------------------------------------------------
ALLIANCE EQUITY INDEX 26.22% 98.86% -- -- -- 167.12%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper S&P 500 Index Funds 28.05% 108.12% -- -- -- 186.34%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% 110.85% -- -- -- 192.17%
- ----------------------------------------------------------------------------------------------------------------------------
ALLIANCE GLOBAL 20.03% 49.01% 80.96% 243.69% -- 224.10%
- ----------------------------------------------------------------------------------------------------------------------------
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 AND INCOME 19.11% 76.07% 110.97% -- -- 109.67%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.61% 79.05% 133.95% -- -- 139.10%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 20.10% 90.62% 160.09% -- -- 166.00%
- ----------------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS 16.51% 48.79% 76.88% -- -- 244.44%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Flexible Portfolio 14.20% 55.28% 97.15% -- -- 202.45%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 22.85% 84.68% 148.41% -- -- 280.88%
- ----------------------------------------------------------------------------------------------------------------------------
ALLIANCE HIGH YIELD (6.53)% 32.15% 49.63% 148.97% -- 177.76%
- ----------------------------------------------------------------------------------------------------------------------------
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 6.18% 14.81% 20.85% -- -- 51.92%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper U.S. Government 7.68% 19.84% 33.36% -- -- 72.35%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 8.49% 21.61% 36.71% -- -- 76.55%
- ----------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERNATIONAL 8.96% 12.65% -- -- -- 23.37%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper International 13.02% 33.62% -- -- -- 47.74%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 20.00% 29.52% -- -- -- 41.40%
- ----------------------------------------------------------------------------------------------------------------------------
ALLIANCE MONEY MARKET 3.81% 11.94% 19.59% 49.04% -- 133.76%
- ----------------------------------------------------------------------------------------------------------------------------
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 93
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 QUALITY BOND 7.11% 19.61% 29.02% -- -- 27.90%
- ----------------------------------------------------------------------------------------------------------------------------
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 (5.66)% -- -- -- -- 18.35%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Small-Cap (0.33)% -- -- -- -- 28.98%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 1.23% -- -- -- -- 29.23%
- ----------------------------------------------------------------------------------------------------------------------------
MFS EMERGING GROWTH COMPANIES 32.57% -- -- -- -- 60.74%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap 15.97% -- -- -- -- 42.16%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark (2.54)% -- -- -- -- 25.40%
- ----------------------------------------------------------------------------------------------------------------------------
MFS RESEARCH 22.31% -- -- -- -- 40.56%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Growth 25.82% -- -- -- -- 52.86%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% -- -- -- -- 57.60%
- ----------------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH BASIC VALUE EQUITY 7.82% -- -- -- -- 24.95%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.54% -- -- -- -- 15.59%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% -- -- -- -- 57.60%
- ----------------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH WORLD STRATEGY 5.27% -- -- -- -- 9.17%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Global Flexible Portfolio 9.34% -- -- -- -- 19.41%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 19.55% -- -- -- -- 33.33%
- ----------------------------------------------------------------------------------------------------------------------------
MORGAN STANLEY EMERGING MARKETS
EQUITY (28.08)% -- -- -- -- (42.91)%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Emerging Markets (30.50)% -- -- -- -- (45.67)%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark (25.34)% -- -- -- -- (36.71)%
- ----------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM BALANCED 10.19% -- -- -- -- 24.93%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Balanced 14.61% -- -- -- -- 31.59%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 21.36% -- -- -- -- 42.22%
- ----------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME VALUE 11.19% -- -- -- -- 27.96%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 15.54% -- -- -- -- 38.49%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% -- -- -- -- 57.60%
- ----------------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE EQUITY INCOME 7.49% -- -- -- -- 30.01%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Equity Income 10.76% -- -- -- -- 33.92%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 28.58% -- -- -- -- 57.60%
- ----------------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE INTERNATIONAL STOCK 12.05% -- -- -- -- 9.29%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper International 12.17% -- -- -- -- 15.88%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark 20.00% -- -- -- -- 23.42%
- ----------------------------------------------------------------------------------------------------------------------------
WARBURG PINCUS SMALL COMPANY
VALUE (11.31)% -- -- -- -- 4.63%
- ----------------------------------------------------------------------------------------------------------------------------
Lipper Small-Cap 1.53% -- -- -- -- 29.95%
- ----------------------------------------------------------------------------------------------------------------------------
Benchmark (2.54)% -- -- -- -- 25.40%
</TABLE>
* Portfolio inception dates are shown in Table 1.
<PAGE>
- --------------------------------------------------------------------------------
94 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 42.73% 5.62% 84.38% (4.57)% 15.06%
- ------------------------------------------------------------------------------------------------------------
Alliance Balanced 24.60% (1.46)% 40.02% (4.25)% 10.68%
- ------------------------------------------------------------------------------------------------------------
Alliance Common Stock 24.07% (9.27)% 35.81% 1.72% 23.02%
- ------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors 2.72%+ 4.86% 18.11% 4.26% 9.16%
- ------------------------------------------------------------------------------------------------------------
Alliance Equity Index -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------
Alliance Global 24.90% (7.42)% 28.66% (1.96)% 30.21%
- ------------------------------------------------------------------------------------------------------------
Alliance Growth and Income -- -- -- -- (0.62)%+
- ------------------------------------------------------------------------------------------------------------
Alliance Growth Investors 3.62%+ 9.01% 46.75% 3.41% 13.59%
- ------------------------------------------------------------------------------------------------------------
Alliance High Yield 3.61% (2.53)% 22.66% 10.68% 21.36%
- ------------------------------------------------------------------------------------------------------------
Alliance Intermediate Government
Securities -- -- 10.85%+ 4.06% 8.98%
- ------------------------------------------------------------------------------------------------------------
Alliance International -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------
Alliance Money Market 7.67% 6.78% 4.67% 2.06% 1.47%
- ------------------------------------------------------------------------------------------------------------
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 -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------
EQ/Putnam Balanced -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------
EQ/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 (5.21)% 29.73% 20.42% 9.20% (1.17)%
- ------------------------------------------------------------------------------------------------------------
Alliance Balanced (9.35)% 18.02% 10.05% 13.33% 16.40%
- ------------------------------------------------------------------------------------------------------------
Alliance Common Stock (3.56)% 30.54% 22.46% 27.34% 27.51%
- ------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors (5.49)% 18.66% 3.67% 11.59% 12.23%
- ------------------------------------------------------------------------------------------------------------
Alliance Equity Index (0.14)%+ 34.51% 20.60% 30.65% 26.22%
- ------------------------------------------------------------------------------------------------------------
Alliance Global 3.71% 17.10% 12.93% 9.93% 20.03%
- ------------------------------------------------------------------------------------------------------------
Alliance Growth and Income (2.01)% 22.28% 18.34% 24.92% 19.11%
- ------------------------------------------------------------------------------------------------------------
Alliance Growth Investors (4.55)% 24.54% 10.96% 15.08% 16.51%
- ------------------------------------------------------------------------------------------------------------
Alliance High Yield (4.19)% 18.18% 21.09% 16.75% (6.53)%
- ------------------------------------------------------------------------------------------------------------
Alliance Intermediate Government
Securities (5.76)% 11.69% 2.26% 5.74% 6.18%
- ------------------------------------------------------------------------------------------------------------
Alliance International -- 9.51%+^ 8.21% (4.46)% 8.96%
- ------------------------------------------------------------------------------------------------------------
Alliance Money Market 2.51% 4.22% 3.79% 3.89% 3.81%
- ------------------------------------------------------------------------------------------------------------
Alliance Quality Bond (6.47)% 15.33% 3.82% 7.56% 7.11%
- ------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth -- -- -- 25.46%+ (5.66)%
- ------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies -- -- -- 21.25%+ 32.57%
- ------------------------------------------------------------------------------------------------------------
MFS Research -- -- -- 14.93%+ 22.31%
- ------------------------------------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity -- -- -- 15.89%+ 7.82%
- ------------------------------------------------------------------------------------------------------------
Merrill Lynch World Strategy -- -- -- 3.70%+ 5.27%
- ------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets
Equity -- -- -- (20.62)%+ (28.08)%
- ------------------------------------------------------------------------------------------------------------
EQ/Putnam Balanced -- -- -- 13.37%+ 10.19%
- ------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value -- -- -- 15.09%+ 11.19%
- ------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income -- -- -- 20.95%+ 7.49%
- ------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock -- -- -- (2.46)%+ 12.05%
- ------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company
Value -- -- -- 17.97%+ (11.31)%
- ------------------------------------------------------------------------------------------------------------S
</TABLE>
+ Returns for these portfolios represent less than 12 months of performance.
The returns are as of each portfolio's inception date as shown in Table 1
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE 95
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 current yields
and effective yields assume the deduction
<PAGE>
- --------------------------------------------------------------------------------
96 INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
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 yield information" and
"Other yield information" in the SAI.
<PAGE>
- --------------------------------------------------------------------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 97
- --------------------------------------------------------------------------------
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 September 1, 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: ORIGINAL CONTRACTS A-1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Appendix I: Original contracts
- --------------------------------------------------------------------------------
Original Contracts are EQUI-VEST contracts under which the contract owner has
not elected to add Alliance Intermediate Government Securities, Alliance Quality
Bond, Alliance High Yield, Alliance Growth and Income, Alliance Equity Index,
Alliance Global, Alliance International, Alliance Small Cap Growth, Alliance
Conservative Investors, and Alliance Growth Investors options, and any of the
other EQ Advisors Trust variable investment options as investment options when
they first became available.
SELECTING YOUR INVESTMENT METHOD. If you own an original contract, only the
guaranteed interest option and the Alliance Money Market, Alliance Balanced,
Alliance Common Stock and Alliance Aggressive Stock options are available. In
most cases, you may request that we add additional variable investment options
to your original contract. We reserve the right to deny your request.
TRANSFERRING YOUR ACCOUNT VALUE. If you own an original contract, including
original contract owners who elect to amend their contract by selecting maximum
transfer flexibility, the Alliance Money Market option is always available.
However, we will not permit transfers into the Alliance Money Market option from
any other investment option. There will not be any other transfer limitations
under your original contract.
<PAGE>
- --------------------------------------------------------------------------------
APPENDIX II: CONDENSED FINANCIAL INFORMATION B-1
- --------------------------------------------------------------------------------
Appendix II: Condensed financial information
- --------------------------------------------------------------------------------
The following tables show the accumulation unit values and the number of
outstanding units for each variable investment option under each contract series
at the last business day of the periods shown. The information presented is
shown for the past ten years, or from the first year the particular contracts
were offered if less than ten years ago.
SERIES 300 AND 400 CONTRACTS
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING FOR EACH VARIABLE INVESTMENT OPTION
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
DECEMBER 31,
--------------------------------------------------------------
1994 1995 1996 1997 1998
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ALLIANCE AGGRESSIVE STOCK
- -------------------------------------------------------------------------------------------------------
Unit value $ 95.45 $123.95 $149.41 $163.33 $161.59
- -------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 664 1,310 2,468 3,226 3,342
- -------------------------------------------------------------------------------------------------------
ALLIANCE BALANCED
- -------------------------------------------------------------------------------------------------------
Unit value $ 91.64 $108.26 $119.26 $135.29 $157.63
- -------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 289 386 548 655 752
- -------------------------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK
- -------------------------------------------------------------------------------------------------------
Unit value $ 97.03 126.78 $155.42 $198.12 $252.88
- -------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 948 1,989 3,457 4,765 5,808
- -------------------------------------------------------------------------------------------------------
ALLIANCE CONSERVATIVE INVESTORS
- -------------------------------------------------------------------------------------------------------
Unit value $ 95.10 $112.97 $117.25 $130.98 $147.17
- -------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 325 491 567 553 661
- -------------------------------------------------------------------------------------------------------
ALLIANCE EQUITY INDEX
- -------------------------------------------------------------------------------------------------------
Unit value $100.95 $135.94 $164.12 $214.66 $271.24
- -------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 47 592 1,486 2,686 3,805
- -------------------------------------------------------------------------------------------------------
ALLIANCE GLOBAL
- -------------------------------------------------------------------------------------------------------
Unit value $104.12 $122.06 $138.00 $151.87 $182.50
- -------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 1,305 2,121 2,995 3,369 3,395
- -------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH AND INCOME
- -------------------------------------------------------------------------------------------------------
Unit value $ 98.86 $121.02 $143.37 $179.30 $213.81
- -------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 210 498 975 1,800 2,475
- -------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS
- -------------------------------------------------------------------------------------------------------
Unit value $ 96.31 $120.08 $133.40 $153.69 $180.63
- -------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 1,023 2,113 3,325 3,704 3,962
- -------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
B-2 APPENDIX II: CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SERIES 300 AND 400 CONTRACTS
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING FOR EACH VARIABLE INVESTMENT OPTION
(CONTINUED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
DECEMBER 31,
---------------------------------------------------------------
1994 1995 1996 1997 1998
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ALLIANCE HIGH YIELD
- ------------------------------------------------------------------------------------------------------
Unit value $ 95.88 $113.44 $137.53 $160.74 $150.42
- ------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 99 209 444 831 1,164
- ------------------------------------------------------------------------------------------------------
ALLIANCE INTERMEDIATE GOVERNMENT
SECURITIES
- ------------------------------------------------------------------------------------------------------
Unit value $ 98.19 $109.80 $112.40 $118.98 $126.48
- ------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 32 89 146 202 314
- ------------------------------------------------------------------------------------------------------
ALLIANCE INTERNATIONAL
- ------------------------------------------------------------------------------------------------------
Unit value -- $104.15 $112.83 $107.92 $117.72
- ------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- 141 763 968 971
- ------------------------------------------------------------------------------------------------------
ALLIANCE MONEY MARKET
- ------------------------------------------------------------------------------------------------------
Unit value $102.61 $107.04 $111.21 $115.66 $120.19
- ------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 63 81 165 146 262
- ------------------------------------------------------------------------------------------------------
ALLIANCE QUALITY BOND
- ------------------------------------------------------------------------------------------------------
Unit value $ 93.87 $108.38 $112.65 $121.30 $130.07
- ------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 53 135 196 283 557
- ------------------------------------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH
- ------------------------------------------------------------------------------------------------------
Unit value -- -- -- $125.55 $118.57
- ------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- 488 1,101
- ------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
APPENDIX II: CONDENSED FINANCIAL INFORMATION B-3
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SERIES 300 AND 400 CONTRACTS
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING FOR EACH VARIABLE INVESTMENT OPTION
(CONTINUED)
- --------------------------------------------------------------------------------
DECEMBER 31 DECEMBER 31,
1997 1998
- --------------------------------------------------------------------------------
MFS EMERGING GROWTH COMPANIES
- --------------------------------------------------------------------------------
Unit value $ 121.34 $ 161.04
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 256 1,090
- --------------------------------------------------------------------------------
MFS RESEARCH
- --------------------------------------------------------------------------------
Unit value $ 115.01 $ 140.83
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 236 720
- --------------------------------------------------------------------------------
MERRILL LYNCH BASIC VALUE EQUITY
- --------------------------------------------------------------------------------
Unit value $ 115.97 $ 127.67
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 145 444
- --------------------------------------------------------------------------------
MERRILL LYNCH WORLD STRATEGY
- --------------------------------------------------------------------------------
Unit value $ 103.77 $ 109.37
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 52 84
- --------------------------------------------------------------------------------
MORGAN STANLEY EMERGING MARKETS EQUITY
- --------------------------------------------------------------------------------
Unit value $ 79.41 $ 57.18
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 109 217
- --------------------------------------------------------------------------------
EQ/PUTNAM BALANCED
- --------------------------------------------------------------------------------
Unit value $ 113.46 $ 125.16
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 109 275
- --------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME VALUE
- --------------------------------------------------------------------------------
Unit value $ 115.17 $ 128.20
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 250 581
- --------------------------------------------------------------------------------
T. ROWE PRICE EQUITY INCOME
- --------------------------------------------------------------------------------
Unit value $ 121.04 $ 130.25
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 475 1,070
- --------------------------------------------------------------------------------
T. ROWE PRICE INTERNATIONAL STOCK
- --------------------------------------------------------------------------------
Unit value $ 97.61 $ 109.49
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 387 671
- --------------------------------------------------------------------------------
WARBURG PINCUS SMALL COMPANY VALUE
- --------------------------------------------------------------------------------
Unit value $ 118.06 $ 104.82
- --------------------------------------------------------------------------------
Number of units outstanding (000's) 577 859
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
B-4 APPENDIX II: CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SERIES 500 CONTRACTS
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING FOR EACH VARIABLE INVESTMENT OPTION
- -----------------------------------------------------------------------
DECEMBER 31,
1998
- -----------------------------------------------------------------------
ALLIANCE AGGRESSIVE STOCK
- -----------------------------------------------------------------------
Unit value $ 90.25
- -----------------------------------------------------------------------
Number of units outstanding (000's) 1
- -----------------------------------------------------------------------
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) 5
- -----------------------------------------------------------------------
ALLIANCE CONSERVATIVE INVESTORS
- -----------------------------------------------------------------------
Unit value $102.74
- -----------------------------------------------------------------------
Number of units outstanding (000's) --
- -----------------------------------------------------------------------
ALLIANCE EQUITY INDEX
- -----------------------------------------------------------------------
Unit value $103.68
- -----------------------------------------------------------------------
Number of units outstanding (000's) 2
- -----------------------------------------------------------------------
ALLIANCE GLOBAL
- -----------------------------------------------------------------------
Unit value $ 98.37
- -----------------------------------------------------------------------
Number of units outstanding (000's) --
- -----------------------------------------------------------------------
ALLIANCE GROWTH AND INCOME
- -----------------------------------------------------------------------
Unit value $102.73
- -----------------------------------------------------------------------
Number of units outstanding (000's) 1
- -----------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS
- -----------------------------------------------------------------------
Unit value $101.93
- -----------------------------------------------------------------------
Number of units outstanding (000's) 1
- -----------------------------------------------------------------------
ALLIANCE HIGH YIELD
- -----------------------------------------------------------------------
Unit value $ 89.20
- -----------------------------------------------------------------------
Number of units outstanding (000's) --
- -----------------------------------------------------------------------
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES
- -----------------------------------------------------------------------
Unit value $103.22
- -----------------------------------------------------------------------
Number of units outstanding (000's) --
- -----------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
B-5 APPENDIX II: CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SERIES 500 CONTRACTS
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING FOR EACH VARIABLE INVESTMENT OPTION
(CONTINUED)
- -----------------------------------------------------------------------
DECEMBER 31,
1998
- -----------------------------------------------------------------------
ALLIANCE INTERNATIONAL
- -----------------------------------------------------------------------
Unit value $ 93.00
- -----------------------------------------------------------------------
Number of units outstanding (000's) 1
- -----------------------------------------------------------------------
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 $ 86.93
- -----------------------------------------------------------------------
Number of units outstanding (000's) 1
- -----------------------------------------------------------------------
MFS EMERGING GROWTH COMPANIES
- -----------------------------------------------------------------------
Unit value $103.41
- -----------------------------------------------------------------------
Number of units outstanding (000's) 1
- -----------------------------------------------------------------------
MFS RESEARCH
- -----------------------------------------------------------------------
Unit value $ 98.99
- -----------------------------------------------------------------------
Number of units outstanding (000's) 1
- -----------------------------------------------------------------------
MERRILL LYNCH BASIC VALUE EQUITY
- -----------------------------------------------------------------------
Unit value $ 97.80
- -----------------------------------------------------------------------
Number of units outstanding (000's) --
- -----------------------------------------------------------------------
MERRILL LYNCH WORLD STRATEGY
- -----------------------------------------------------------------------
Unit value $ 94.86
- -----------------------------------------------------------------------
Number of units outstanding (000's) --
- -----------------------------------------------------------------------
MORGAN STANLEY EMERGING MARKETS EQUITY
- -----------------------------------------------------------------------
Unit value $ 81.40
- -----------------------------------------------------------------------
Number of units outstanding (000's) --
- -----------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
B-6 APPENDIX II: CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SERIES 500 CONTRACTS
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING FOR EACH VARIABLE INVESTMENT OPTION
(CONTINUED)
- -----------------------------------------------------------------------
DECEMBER 31,
1998
- -----------------------------------------------------------------------
EQ/PUTNAM BALANCED
- -----------------------------------------------------------------------
Unit value $101.05
- -----------------------------------------------------------------------
Number of units outstanding (000's) --
- -----------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME VALUE
- -----------------------------------------------------------------------
Unit value $100.48
- -----------------------------------------------------------------------
Number of units outstanding (000's) --
- -----------------------------------------------------------------------
T. ROWE PRICE EQUITY INCOME
- -----------------------------------------------------------------------
Unit value $101.00
- -----------------------------------------------------------------------
Number of units outstanding (000's) --
- -----------------------------------------------------------------------
T. ROWE PRICE INTERNATIONAL STOCK
- -----------------------------------------------------------------------
Unit value $ 94.04
- -----------------------------------------------------------------------
Number of units outstanding (000's) --
- -----------------------------------------------------------------------
WARBURG PINCUS SMALL COMPANY VALUE
- -----------------------------------------------------------------------
Unit value $ 82.78
- -----------------------------------------------------------------------
Number of units outstanding (000's) --
- -----------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
APPENDIX II: CONDENSED FINANCIAL INFORMATION B-7
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SERIES 100 AND 200 CONTRACTS
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING FOR EACH VARIABLE INVESTMENT OPTION
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
DECEMBER 31,
-------------------------------------------------------------------------------------------------
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ALLIANCE AGGRESSIVE STOCK
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 25.86 $ 27.36 $ 50.51 $ 48.30 $ 55.68 $ 52.88 $ 68.73 $ 82.91 $ 90.75 $ 89.92
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 8,134 9,545 12,962 17,986 21,496 24,787 25,821 27,945 28,030 25,634
- ------------------------------------------------------------------------------------------------------------------------------------
ALLIANCE BALANCED
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 19.69 $ 19.40 $ 27.17 $ 26.04 $ 28.85 $ 26.18 $ 30.92 $ 34.06 $ 38.66 $ 45.07
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 16,810 19,423 21,100 25,975 31,259 32,664 30,212 28,319 26,036 24,361
- ------------------------------------------------------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value $ 83.40 $ 75.67 $102.76 $104.63 $128.81 $124.32 $162.42 $199.05 $253.68 $323.75
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 8,645 9,670 10,292 11,841 13,917 15,749 16,292 16,933 17,386 17,231
- ------------------------------------------------------------------------------------------------------------------------------------
ALLIANCE CONSERVATIVE INVESTORS
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value -- -- -- - -- $ 95.10 $112.97 $117.25 $130.98 $147.17
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- - -- 325 491 567 553 661
- ------------------------------------------------------------------------------------------------------------------------------------
ALLIANCE EQUITY INDEX
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value -- -- -- - -- $100.95 $135.94 $164.12 $214.66 $271.24
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- - -- 47 592 1,486 2,686 3,805
- ------------------------------------------------------------------------------------------------------------------------------------
ALLIANCE GLOBAL
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value -- -- -- - -- $104.12 $122.06 $138.00 $151.87 $182.50
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- - -- 1,305 2,121 2,995 3,369 3,395
- ------------------------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH AND INCOME
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value -- -- -- - -- $ 98.86 $121.02 $143.37 $179.30 $213.81
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- - -- 210 498 975 1,800 2,475
- ------------------------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value -- -- -- - -- $ 96.31 $120.08 $133.40 $153.69 $180.63
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- - -- 1,023 2,113 3,325 3,704 3,962
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
B-8 APPENDIX II: CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SERIES 100 AND 200 CONTRACTS
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING FOR EACH VARIABLE INVESTMENT OPTION
(CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
DECEMBER 31,
- ------------------------------------------------------------------------------------------------------------------------------------
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ALLIANCE HIGH YIELD
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value -- -- -- -- -- $ 95.88 $113.44 $137.53 $160.74 $150.42
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- -- 99 209 444 831 1,164
- ------------------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERMEDIATE GOVERNMENT
SECURITIES
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value -- -- -- -- -- $ 98.19 $109.80 $112.40 $118.98 $126.48
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- -- 32 89 146 202 314
- ------------------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERNATIONAL
- ------------------------------------------------------------------------------------------------------------------------------------
UNIT VALUE -- -- -- -- -- -- $ 104.15 $ 112.83 $ 107.92 $ 117.72
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's -- -- -- -- -- -- 141 763 968 971
- ------------------------------------------------------------------------------------------------------------------------------------
ALLIANCE MONEY MARKET
Unit value $ 21.89 $ 23.38 $ 24.48 $ 25.01 $ 25.41 $ 26.08 $ 27.22 $ 28.28 $ 29.41 $ 30.55
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) 1,045 1,307 1,325 1,201 1,065 1,000 1,021 1,013 973 1,261
- ------------------------------------------------------------------------------------------------------------------------------------
ALLIANCE QUALITY BOND
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value -- -- -- -- -- $ 93.87 $ 108.38 $ 112.65 $ 121.30 $ 130.07
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- -- 53 135 196 283 557
- ------------------------------------------------------------------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value -- -- -- -- -- -- -- -- $ 125.55 $ 118.57
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- -- -- -- -- 448 1,101
- ------------------------------------------------------------------------------------------------------------------------------------
MFS EMERGING GROWTH COMPANIES
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value -- -- -- -- -- -- -- -- $ 161.04 $ 121.34
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- -- -- -- -- 1,090 256
- ------------------------------------------------------------------------------------------------------------------------------------
MFS RESEARCH
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value -- -- -- -- -- -- -- -- $ 140.83 $ 115.01
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- -- -- -- -- 720 236
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
B-9 APPENDIX II: CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
DECEMBER 31,
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MERRILL LYNCH BASIC VALUE EQUITY
Unit value -- -- -- -- -- -- -- -- $ 127.67 $ 115.97
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- -- -- -- -- 444 145
- ------------------------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH WORLD STRATEGY
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value -- -- -- -- -- -- -- -- $ 109.37 $ 103.77
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- -- -- -- -- 84 52
- ------------------------------------------------------------------------------------------------------------------------------------
MORGAN STANLEY EMERGING MARKETS
EQUITY
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value -- -- -- -- -- -- -- -- $ 57.18 $ 79.41
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- -- -- -- -- 217 109
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM BALANCED
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value -- -- -- -- -- -- -- -- $ 125.16 $ 113.46
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- -- -- -- -- 275 109
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value -- -- -- -- -- -- -- -- $ 115.17 $ 128.20
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- -- -- -- -- 250 581
- ------------------------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE EQUITY INCOME
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value -- -- -- -- -- -- -- -- $ 121.04 $ 130.25
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- -- -- -- -- 475 1,070
- ------------------------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE INTERNATIONAL STOCK
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value -- -- -- -- -- -- -- -- $ 109.49 $ 97.61
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- -- -- -- -- 671 387
- ------------------------------------------------------------------------------------------------------------------------------------
WARBURG PINCUS SMALL COMPANY
VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
Unit value -- -- -- -- -- -- -- -- $ 104.82 $ 118.06
- ------------------------------------------------------------------------------------------------------------------------------------
Number of units outstanding (000's) -- -- -- -- -- -- -- -- 859 577
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
APPENDIX III: MARKET VALUE ADJUSTMENT EXAMPLE C-1
- --------------------------------------------------------------------------------
Appendix III: 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%
- --------------------------------------------------------------------------------------------------
AS OF JUNE 15, 2003 (BEFORE WITHDRAWAL)
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
(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
Accumulation unit values 2
Calculation of annuity payments 2
The reorganization 4
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 9
Financial statements 11
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 October
18, 1999. (Combination variable and fixed deferred annuity)
- ------------------------------------------------------------------------------
Name:
- ------------------------------------------------------------------------------
Address:
- ------------------------------------------------------------------------------
City State Zip
888-1224
<PAGE>
EQUI-VEST(Reg. TM) Express(SM)
A combination variable and fixed deferred
annuity contract
PROSPECTUS DATED OCTOBER 18, 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 prospectus for EQ Advisors Trust which contains important information
about its portfolios.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
VARIABLE INVESTMENT OPTIONS
- --------------------------------------------------------------------------------
FIXED INCOME OPTIONS:
- --------------------------------------------------------------------------------
DOMESTIC FIXED INCOME AGGRESSIVE FIXED INCOME
- --------------------------------------------------------------------------------
o Alliance Intermediate o Alliance High Yield
Government Securities
o Alliance Money Market
o Alliance Quality Bond
- --------------------------------------------------------------------------------
EQUITY OPTIONS:
- --------------------------------------------------------------------------------
DOMESTIC EQUITY
- --------------------------------------------------------------------------------
o Alliance Common Stock o MFS Growth with Income
o Alliance Equity Index o MFS Research
o Alliance Growth and o Merrill Lynch Basic Value
Income Equity
o EQ/Alliance Premier Growth o EQ/Putnam Growth & Income Value
o Capital Guardian Research o T. Rowe Price Equity Income
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 MFS Emerging Growth Companies
o Alliance Small Cap Growth o Warburg Pincus Small
o EQ/Evergreen Company Value Companies
- --------------------------------------------------------------------------------
ASSET ALLOCATION OPTIONS:
- --------------------------------------------------------------------------------
o Alliance Balanced o EQ/Evergreen Foundation
o Alliance Conservative o Merrill Lynch World Strategy
Investors o EQ/Putnam Balanced
o Alliance Growth Investors
- --------------------------------------------------------------------------------
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 of 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 set by us. 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 October 18, 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
- --------------------------------------------------------------------------------
2
Contents of this prospectus
- --------------------------------------------------------------------------------
EQUI-VEST(Reg. TM) EXPRESS(SM)
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
FEE TABLE 11
- --------------------------------------------------------------------------------
Examples 14
- --------------------------------------------------------------------------------
1
CONTRACT FEATURES AND BENEFITS 16
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
2
DETERMINING YOUR CONTRACT'S VALUE 23
- --------------------------------------------------------------------------------
Your account value 23
Your contract's value in the variable investment options 23
Your contract's value in the fixed maturity options 23
- --------------------------------------------------------------------------------
"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 24
- --------------------------------------------------------------------------------
Transferring your account value 24
Automatic transfer options 24
- --------------------------------------------------------------------------------
4
ACCESSING YOUR MONEY 26
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
5
CHARGES AND EXPENSES 30
- --------------------------------------------------------------------------------
Charges that Equitable Life deducts 30
Charges that EQ Advisors Trust deducts 32
Group or sponsored arrangements 32
Other distribution arrangements 32
- --------------------------------------------------------------------------------
6
PAYMENT OF DEATH BENEFIT 34
- --------------------------------------------------------------------------------
Your beneficiary and payment of benefit 34
How death benefit payment is made 35
Beneficiary continuation option under Traditional
IRA and QP IRA contracts 35
- --------------------------------------------------------------------------------
7
TAX INFORMATION 36
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
8
MORE INFORMATION 50
- --------------------------------------------------------------------------------
About our Separate Account A 50
About EQ Advisors Trust 50
About our fixed maturity options 51
About the general account 52
About other methods of payment 52
Dates and prices at which contract events occur 53
About your voting rights 53
About our year 2000 progress 54
About legal proceedings 55
About our independent accountants 55
Transfers of ownership, collateral assignments, loans,
and borrowing 55
Distribution of the contracts 55
- --------------------------------------------------------------------------------
9
INVESTMENT PERFORMANCE 57
- --------------------------------------------------------------------------------
Benchmarks 57
Communicating performance data 67
- --------------------------------------------------------------------------------
10
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE 68
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
APPENDIX
- --------------------------------------------------------------------------------
Market value adjustment example A-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 PAGE
account value 23 IRA cover
annuitant 16 IRS 36
annuity payout options 28 investment options 18
beneficiary 34 market adjusted amount 21
business day 53 market value adjustment 21
cash value 23 maturity value 21
conduit IRA 42 NQ cover
contract date 10 portfolio cover
contract date anniversary 10 processing office 6
contract year 10 QP IRAs cover
contributions 16 rate to maturity 21
contributions to Roth IRAs recharacterized 41
regular contribution 45 regular contribution 39
rollover contributions 45 Required Beginning Date 42
conversion contributions 46 Roth IRA cover
direct custodian-to-custodian SAI cover
transfers 46 SEC cover
contributions to Traditional IRAs TOPS 6
regular contributions 39 Traditional IRA cover
rollover contributions 41 TSA cover
direct custodian-to-custodian unit 23
transfers 41 unit investment trust 50
financial professional 56 variable investment options 18
fixed maturity amount 21
fixed maturity options 21
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 financial professional 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
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 AXA
Financial, Inc. (previously, The Equitable Companies Incorporated). The
majority shareholder of AXA Financial, Inc. 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.
AXA Financial, Inc. 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 Express
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 Bank One, N.A.
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 Express
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 Express
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 Express
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 Bank One, N.A.
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; and
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;
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.
- --------------------------------------------------------------------------------
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 contract to a Roth IRA contract;
(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.
<PAGE>
- --------------------------------------------------------------------------------
8 WHO IS EQUITABLE LIFE?
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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>
- --------------------------------------------------------------------------------
EQUI-VEST EXPRESS AT A GLANCE -- KEY FEATURES 9
- --------------------------------------------------------------------------------
EQUI-VEST Express at a glance -- key features
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
PROFESSIONAL EQUI-VEST Express variable investment options invest in 30 different portfolios managed by
INVESTMENT professional investment advisers.
MANAGEMENT
- ------------------------------------------------------------------------------------------------------------------------------------
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.
- ------------------------------------------------------------------------------------------------------------------------------------
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 (for example, 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 $50 ($20 under our automatic investment program)
AMOUNTS Maximum contribution limits may apply.
- ------------------------------------------------------------------------------------------------------------------------------------
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 General dollar-cost averaging
o Automatic investment program
o Account value rebalancing (quarterly, semiannually, and annually)
o No charge on transfers among investment options
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
10 EQUI-VEST EXPRESS AT A GLANCE -- KEY FEATURES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
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
insurance 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.
-------------------------------------------------------------------------------------------------------
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. 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."
-------------------------------------------------------------------------------------------------------
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 EQ Advisors Trust portfolios are calculated as a percentage of the
average daily net assets invested in each portfolio. These expenses include management 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
----------------------------------------------------------------------------------------------------
For Traditional IRAs, the maximum issue age is 70, but we will issue up to age 79 if the
contribution is a rollover contribution. For all other IRAs we will issue contracts up to
annuitant ages 80-83 with our prior approval.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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. 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
financial professional, or call us, if you have any questions.
<PAGE>
- --------------------------------------------------------------------------------
FEE TABLE 11
- --------------------------------------------------------------------------------
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 prospectus for 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 annuity 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) 0.70%
Other expenses 0.25%
-----
Total Separate Account A annual expenses(2) 0.95%
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
Withdrawal charge as a percentage of contributions Contract
(deducted if you surrender your contract or make year
certain withdrawals. The withdrawal charge percentage 1 7.00%
we use is determined by the contract year in which 2 6.00%
you make the withdrawal or surrender your contract. 3 5.00%
For each contribution, we consider the contract year 4 4.00%
in which we receive that contribution to be 5 3.00%
"contract year 1")(4) 6 2.00%
7 1.00%
8+ 0.00%
Charge for third-party transfer or exchange(5) $25 for each occurrence
Charge if you elect a life annuity payout option $350
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
12 FEE TABLE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EQ ADVISORS TRUST ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL
OTHER ANNUAL
EXPENSES EXPENSES
MANAGEMENT (AFTER EXPENSE (AFTER EXPENSE
FEES(6) 12B-1 FEE(7) LIMITATION)(8) LIMITATION)(7)(9)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock 0.54% 0.25% 0.04% 0.83%
Alliance Balanced 0.41% 0.25% 0.05% 0.71%
Alliance Common Stock 0.36% 0.25% 0.04% 0.65%
Alliance Conservative Investors 0.48% 0.25% 0.06% 0.79%
Alliance Equity Index 0.31% 0.25% 0.04% 0.60%
Alliance Global 0.64% 0.25% 0.08% 0.97%
Alliance Growth and Income 0.55% 0.25% 0.04% 0.84%
Alliance Growth Investors 0.51% 0.25% 0.05% 0.81%
Alliance High Yield 0.60% 0.25% 0.04% 0.89%
Alliance Intermediate Government Securities 0.50% 0.25% 0.06% 0.81%
Alliance International 0.90% 0.25% 0.17% 1.32%
Alliance Money Market 0.35% 0.25% 0.03% 0.63%
Alliance Quality Bond 0.53% 0.25% 0.04% 0.82%
Alliance Small Cap Growth 0.90% 0.25% 0.06% 1.21%
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>
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FEE TABLE 13
- --------------------------------------------------------------------------------
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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 management fees or the maximum management fees, if a maximum applies,
for each portfolio cannot be increased without a vote of that portfolio's
shareholders.
(7) Portfolio shares are all subject to fees imposed under the distribution
plan (the "Rule 12b-1 Plan") adopted by EQ Advisors Trust pursuant to Rule
12b-1 under the Investment Company Act of 1940. The 12b-1 fee will not be
increased for the life of the contracts. Prior to October 18, 1999 the
total annual expenses for the Alliance Small Cap Growth portfolio were
limited to 1.20% under an expense limitation arrangement related to that
portfolio's Rule 12b-1 Plan. The arrangement is no longer in effect. The
amounts shown have been restated to reflect the expenses that would have
been incurred in 1998, absent the expense limitation arrangement.
(8) The amounts shown as "Other Expenses" will fluctuate from year to year
depending on actual expenses. See footnote (9) for any expense limitation
agreements.
On October 18, 1999, the Alliance portfolios (other than EQ/Alliance
Premier Growth) became part of the portfolios of EQ Advisors Trust. The
"Other Expenses" for these portfolios have been restated to reflect the
estimated expenses that would have been incurred had these portfolios been
portfolios of EQ Advisors Trust for the year ended December 31, 1998. The
restated expenses reflect an increase of 0.01%.
(9) Equitable Life, EQ Advisors Trust's manager, has entered into an expense
limitation agreement with respect to certain portfolios. Under this
agreement Equitable Life 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 as a percentage of the average daily net assets of the
following portfolios: 0.60% for Merrill Lynch Basic Value Equity, MFS
Emerging Growth Companies, MFS Growth with Income, MFS Research,EQ/Putnam
Growth & Income Value, 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; and on April 30, 1999 for the EQ/Alliance
Premier Growth, Capital Guardian U.S. Equity, and Capital Guardian Research
portfolios, and therefore expenses have been estimated.
<PAGE>
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14 FEE TABLE
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- --------------------------------------------------------------------------------
Each portfolio may at a later date make a reimbursement to Equitable Life
for any of the management fees waived or limited and other expenses assumed
and paid by Equitable Life 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 IF YOU DO NOT SURRENDER YOUR CONTRACT AT
OF EACH PERIOD SHOWN, THE EXPENSES WOULD THE END OF EACH PERIOD SHOWN, THE
BE: EXPENSES WOULD BE
------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
VARIABLE INVESTMENT OPTION
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Alliance Aggressive Stock $89.28 $109.63 $132.51 $221.76 $19.28 $59.63 $102.51 $221.76
Alliance Balanced $88.02 $105.81 $126.05 $208.48 $18.02 $55.81 $ 96.05 $208.48
Alliance Common Stock $87.39 $103.89 $122.81 $201.78 $17.39 $53.89 $ 92.81 $201.78
Alliance Conservative Investors $88.86 $108.36 $130.36 $217.35 $18.86 $58.36 $100.36 $217.35
Alliance Equity Index $86.87 $102.29 $120.11 $196.17 $16.87 $52.29 $ 90.11 $196.17
Alliance Global $90.75 $114.09 $139.99 $237.05 $20.75 $64.09 $109.99 $237.05
Alliance Growth and Income $89.38 $109.95 $133.04 $222.86 $19.38 $59.95 $103.04 $222.86
Alliance Growth Investors $89.07 $109.00 $131.43 $219.56 $19.07 $59.00 $101.43 $219.56
Alliance High Yield $89.91 $111.54 $135.72 $228.34 $19.91 $61.54 $105.72 $228.34
Alliance Intermediate Government Securities $89.07 $109.00 $131.43 $219.56 $19.07 $59.00 $101.43 $219.56
Alliance International $94.42 $125.16 $158.52 $274.34 $24.42 $75.16 $128.52 $274.34
Alliance Money Market $87.18 $103.25 $121.73 $199.54 $17.18 $53.25 $ 91.73 $199.54
Alliance Quality Bond $89.17 $109.32 $131.97 $220.66 $19.17 $59.32 $101.97 $220.66
Alliance Small Cap Growth $93.27 $121.69 $152.73 $262.76 $23.27 $71.69 $122.73 $262.76
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
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FEE TABLE 15
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
IF YOU SURRENDER YOUR CONTRACT AT THE END IF YOU DO NOT SURRENDER YOUR CONTRACT AT
OF EACH PERIOD SHOWN, THE EXPENSES WOULD THE END OF EACH PERIOD SHOWN, THE
BE: EXPENSES WOULD BE:
----------------------------------------- ----------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
EQ/Alliance Premier Growth $92.64 $119.79 -- -- $22.64 $69.79 -- --
Capital Guardian Research $90.54 $113.45 -- -- $20.54 $63.45 -- --
Capital Guardian U.S. Equity $90.54 $113.45 -- -- $20.54 $63.45 -- --
EQ/Evergreen $91.59 $116.62 -- -- $21.59 $66.62 -- --
EQ/Evergreen Foundation $90.54 $113.45 -- -- $20.54 $63.45 -- --
MFS Emerging Growth Companies $89.49 $110.27 $133.58 $223.95 $19.49 $60.27 $103.58 $223.95
MFS Growth with Income $89.49 $110.27 -- -- $19.49 $60.27 -- --
MFS Research $89.49 $110.27 $133.58 $223.95 $19.49 $60.27 $103.58 $223.95
Merrill Lynch Basic Value Equity $89.49 $110.27 $133.58 $223.95 $19.49 $60.27 $103.58 $223.95
Merrill Lynch World Strategy $93.16 $121.37 $152.20 $261.70 $23.16 $71.37 $122.20 $261.70
Morgan Stanley Emerging Markets Equity $98.93 $138.64 $180.90 $318.37 $28.93 $88.64 $150.90 $318.37
EQ/Putnam Balanced $90.01 $111.86 $136.26 $229.43 $20.01 $61.86 $106.26 $229.43
EQ/Putnam Growth & Income Value $89.49 $110.27 $133.58 $223.95 $19.49 $60.27 $103.58 $223.95
T. Rowe Price Equity Income $89.49 $110.27 $133.58 $223.95 $19.49 $60.27 $103.58 $223.95
T. Rowe Price International Stock $93.16 $121.37 $152.20 $261.70 $23.16 $71.37 $122.20 $261.70
Warburg Pincus Small Company Value $91.06 $115.04 $141.59 $240.29 $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>
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16 CONTRACT FEATURES AND BENEFITS
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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, regular IRA
contributions either made by contributions may not exceed
you or paid to us by an $2,000 for a year.
employer who establishes a
payroll deduction program. o No regular IRA contributions in
the year you turn age 70 1/2 and
o Rollovers from a qualified plan. thereafter.
o Rollovers from a TSA. o Rollover and direct transfer
contributions after age 70 1/2
o Rollovers from another must be net of required
must be net of required minimum distributions.
traditional individual retirement
minimum distributions.
o Direct custodian-to-custodian
transfers from other traditional
individual retirement
arrangements.
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</TABLE>
<PAGE>
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CONTRACT FEATURES AND BENEFITS 17
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
CONTRACT AVAILABLE FOR SOURCE OF LIMITATIONS ON
TYPE ANNUITANT ISSUE AGES* CONTRIBUTIONS CONTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
17
Roth IRA 0 through 79 o Regular after-tax contributions o For all types of IRAs, regular IRA
either made by you or paid to us contributions may not exceed
by an employer who establishes $2,000 for a year.
a payroll deduction program.
o Contributions are subject to
o Rollovers from another Roth income limits and other tax
IRA. rules. See "Tax information --
Contributions to Roth IRAs."
o Conversion rollovers from a
traditional IRA.
o Direct transfers from another
Roth IRA.
- ------------------------------------------------------------------------------------------------------------------------------------
QP Traditional 0 through 79 o Rollovers from a qualified plan. o Rollover contributions after age
IRA 70 1/2 must be net of required
o Rollovers from a TSA. minimum distributions.
o The EQUI-VEST QP Traditional
IRA contract is intended to be a o Regular after-tax contributions
conduit IRA. Only rollovers from are not permitted.
a qualified plan or TSA are
permitted.
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</TABLE>
* For Traditional IRAs, the maximum issue age is 70, but we will issue up to
age 79 if the contribution 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
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- --------------------------------------------------------------------------------
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 financial professional
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>
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CONTRACT FEATURES AND BENEFITS 19
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIOS OF EQ ADVISORS 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 EQ Advisors 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 and 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 capital growth 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 prospectus
for EQ Advisors Trust attached at the end of this prospectus.
<PAGE>
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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
turity 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>
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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 financial
professional, can provide you with the cancellation instructions. Ask for the
form entitled "EQUI-VEST Roth IRA Re-Characterization Form."
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DETERMINING YOUR CONTRACT'S VALUE 23
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2
Determining your contract's value
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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, 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. The number of
units you own 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.
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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
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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. Your entire account value in the variable investment options must be
included in the rebalancing program.
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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 financial professional
and/or financial adviser before electing the program.
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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.
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26 ACCESSING YOUR MONEY
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4
Accessing your money
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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."
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METHOD OF WITHDRAWAL
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MINIMUM
CONTRACT LUMP SUM SYSTEMATIC DISTRIBUTION
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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
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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.
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We will send to Traditional IRA and QP IRA owners a form outlining the minimum
distribution options available before you reach age 70 1/2 (if you have not
begun your annuity payments before that time).
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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.
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:
(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.
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28 ACCESSING YOUR MONEY
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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 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)
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 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 "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
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ACCESSING YOUR MONEY 29
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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. EQ Advisors 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 financial
professional 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. We require you to
return your contract before annuity payments begin. Unless you choose a
different payout option, we will pay annuity payments under a life annuity
with a period certain of 10 years. You choose whether these payments will be
fixed or variable.
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 base rate of 5% to
calculate the level of payments. However, in states where that rate is not
permitted the assumed base rate will be 3 1/2%. 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
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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 At the time annuity payments are to begin -- charges for any state premium or
other applicable taxes. An annuity administrative fee, if you choose a life
annuity
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 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 the required amounts from the fixed
maturity options to the extent you have value in those options, unless you
tell us otherwise.
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CHARGES AND EXPENSES 31
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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:
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CONTRACT YEAR
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1 2 3 4 5 6 7 8+
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Percentage of
contribution 7% 6% 5% 4% 3% 2% 1% 0%
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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. See "About our fixed maturity options"
under "More information."
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
imposed varies by state and ranges from 0% to 3.5% (1% in Puerto Rico and 5%
in the U.S. Virgin Islands).
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32 CHARGES AND EXPENSES
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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 EQ ADVISORS TRUST DEDUCTS
EQ Advisors Trust 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 EQ Advisors 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 prospectus for 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 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, 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
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CHARGES AND EXPENSES 33
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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. We will send you a written confirmation
when we receive your request.
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, if you
are the owner and the annuitant and your spouse is the sole primary
beneficiary the contract can be continued as follows:
For an NQ contract, if you elected your spouse to be the successor
owner/annuitant, your surviving spouse automatically continues the contract
and no death benefit is payable until the surviving spouse's death.
For Traditional IRA, Roth IRA, and QP IRA contracts, your spouse can elect
upon your death to continue the contract as the owner/annuitant and no death
benefit is payable until the surviving spouse's death.
Also, 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.
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PAYMENT OF DEATH BENEFIT 35
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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 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. The death benefit will be
paid to the beneficiary according to our standard procedures, unless an
election is made within 30 days to: (1) receive the death benefit; (2)
continue the contract and take annual withdrawals as described above; or (3)
defer payment of the account value for five years.
(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"
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 personal situation and the timing of
the different tax liabilities, you may not be able to take full advantage of
this credit.
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38 TAX INFORMATION
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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 financial professional. 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
o tax-free "rollover" contributions; or
o direct custodian-to-custodian transfers from other traditional IRAs ("direct
transfers").
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TAX INFORMATION 39
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REGULAR CONTRIBUTIONS TO TRADITIONAL IRAS
The EQUI-VEST Express 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. 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
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40 TAX INFORMATION
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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:
($10,000-excess AGI) times $2,000 (or earned Equals the adjusted
- ------------------- x income, if less) = deductible
divided by $10,000 contribution
limit
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
Amounts that have been contributed as traditional IRA funds may subsequently
be treated as Roth IRA funds. Special federal income tax rules allow you to
change your mind again and have amounts that are subsequently treated as Roth
IRA funds, once again treated as traditional IRA funds. You do this by using
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 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 required minimum distribution from any one
or more traditional IRAs that you own.
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44 TAX INFORMATION
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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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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 portfolio of 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 EQ ADVISORS TRUST
EQ Advisors Trust is registered under the Investment Company Act of 1940. It
is classified as an "open-end management investment company," more commonly
called a mutual fund. EQ Advisors Trust issues different shares relating to
each of its portfolios.
Equitable Life serves as the investment manager of EQ Advisors Trust. As such,
Equitable Life oversees the activities of the investment advisors with respect
to EQ Advisors Trust and is responsible for retaining or discontinuing the
services of those advisors. (Prior to September 1999, EQ Financial
Consultants, Inc. the predecessor to AXA Advisors, LLC and a subsidiary of
Equitable Life served as investment manager to EQ Advisors Trust.)
EQ Advisors Trust commenced operations on May 1, 1997. Prior to October 18,
1999 the Alliance portfolios (other than EQ/Alliance Premier Growth) were part
of The Hudson River Trust. On October 18, 1999, the assets of these portfolios
became the assets of corresponding portfolios of EQ Advisors Trust.
EQ Advisors Trust does not impose sales charges or "loads" for buying and
selling their shares. All dividends and other distributions on shares are
reinvested in full. The Board of Trustees of EQ Advisors Trust may establish
additional portfolios or eliminate existing portfolios at any time. More
detailed information about EQ Advisors Trust, its investment objectives,
policies, restrictions, risks, expenses, the Rule 12b-1 plan, and other
aspects of its operations, appears in the prospectus for EQ Advisors Trust,
attached at the end of this prospectus, or in its SAI which is available upon
request.
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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 August 2, 1999 and the related
price per $100 of maturity value were as follows:
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FIXED MATURITY
OPTIONS
WITH JUNE 15
MATURITY DATE RATE TO MATURITY AS PRICE
OF OF PER $100 OF
MATURITY YEAR AUGUST 2, 1999 MATURITY VALUE
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2000 4.15% $96.53
2001 5.05% $91.21
2002 5.45% $85.88
2003 5.70% $80.70
2004 5.75% $76.17
2005 5.90% $71.43
2006 5.95% $67.23
2007 6.00% $63.22
2008 6.05% $59.40
2009 6.10% $55.75
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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:
(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.
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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.
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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
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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.
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
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MORE INFORMATION 53
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$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 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 EQ Advisors Trust we have the right to vote on
certain matters involving the portfolios, such as:
o the election of trustees; or
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54 MORE INFORMATION
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o the formal approval of independent auditors selected for EQ Advisors Trust; or
o any other matters described in the prospectus for EQ Advisors Trust 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 EQ Advisors Trust. EQ Advisors Trust shares are sold to
our separate accounts and an affiliated qualified plan trust. In addition, EQ
Advisors Trust shares are held 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 Board of Trustees of EQ
Advisors Trust 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, 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. If such confirmation is not received from any of the remaining
non-critical vendors or service providers the vendor or service provider will
be replaced, eliminated or be the subject of contingency plans. Additionally,
Equitable Life has supplemented its existing business continuity and disaster
<PAGE>
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MORE INFORMATION 55
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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 years ended December 31, 1998, have been so included 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 "Beneficiary
continuation option under Traditional IRA and QP IRA contracts" in "Payment of
death benefit" earlier in this prospectus. 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
AXA Advisors, LLC ("AXA Advisors"), the successor to Equitable Financial
Consultants, Inc., an affiliate of Equitable Life, is the distributor of the
contracts and has responsibility for sales and marketing functions for Separate
Account A. AXA Advisors serves as the principal underwriter of Separate Account
A. AXA Advisors is registered with the SEC as a broker-dealer and is a member of
the National Association of Securities Dealers, Inc. AXA Advisors' principal
business address is 1290 Avenue of the Americas, New York, NY 10104. Under a
Distribution and Servicing Agreement between AXA Advisors, Equitable Life, and
certain of Equitable Life's separate accounts, including Separate Account A,
Equitable Life paid AXA Advisors 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, AXA
Advisors will no longer be a subsidiary of Equitable Life, but will remain an
indirect subsidiary of AXA Financial, Inc., Equitable Life's parent.
The contracts are sold by financial professionals who are registered
representatives of AXA Advisors, and are also our licensed insurance agents.
AXA Advisors may also receive compensation and reimbursement for its marketing
services
<PAGE>
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56 MORE INFORMATION
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under the terms of its distribution agreement with Equitable Life. The offering
of the contracts is intended to be continuous.
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INVESTMENT PERFORMANCE 57
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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 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.
For the "Alliance" portfolios (other than EQ/Alliance Premier Growth), we have
adjusted the results prior to October 1996, when Class IB shares for these
portfolios were not available, to reflect the 12b-1 fees currently imposed.
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.
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999 the Alliance portfolios (other than EQ/Alliance Premier
Growth) were part of The Hudson River Trust. On October 18, 1999, those
portfolios became corresponding portfolios of EQ Advisors Trust. In each case,
the performance shown is for the indicated EQ Advisors Trust portfolio and any
predecessors that it may have had.
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
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58 INVESTMENT PERFORMANCE
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select its holdings. Benchmark data reflect the reinvestment of dividend income.
The benchmarks include:
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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 AND 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 WORLD 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.
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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% 14.83% 14.83%
- --------------------------------------------------------------------------------------------------------------------------
Alliance Balanced 7.39% 9.86% 6.61% 9.34% 9.30% 9.30%
- --------------------------------------------------------------------------------------------------------------------------
Alliance Common Stock 18.32% 22.69% 18.03% 15.44% 15.10% 10.08%
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Alliance Conservative Investors 3.28% 5.59% 5.16% -- 5.26% 6.42%
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Alliance Equity Index 17.04% 22.71% -- -- 22.12% 20.47%
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Alliance Global 10.97% 10.87% 10.21% 11.57% 10.12% 9.02%
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Alliance Growth and Income 10.04% 17.57% 13.86% -- 13.97% 12.89%
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Alliance Growth Investors 7.50% 10.82% 9.67% -- 9.86% 12.86%
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Alliance High Yield (15.15)% 6.27% 5.97% 7.79% 5.93% 7.06%
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Alliance Intermediate Government
Securities (2.66)% 1.04% 0.99% -- 2.26% 3.35%
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Alliance International 0.08% 0.34% -- -- 1.44% 2.57%
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Alliance Money Market (5.00)% 0.12% 0.79% 1.81% 3.43% 3.43%
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Alliance Quality Bond (1.75)% 2.54% 2.45% -- 2.51% 2.04%
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Alliance Small Cap Growth (14.34)% -- -- -- (1.34)% 5.25%
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MFS Emerging Growth Companies 23.58% -- -- -- 22.80% 27.93%
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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%
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Morgan Stanley Emerging Markets
Equity (36.16)% -- -- -- (39.83)% (39.83)%
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EQ/Putnam Balanced 1.54% -- -- -- 7.19% 9.18%
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EQ/Putnam Growth & Income Value 2.51% -- -- -- 7.97% 10.84%
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T. Rowe Price Equity Income (1.12)% -- -- -- 9.29% 11.95%
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T. Rowe Price International Stock 3.37% -- -- -- (1.95)% 0.34%
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Warburg Pincus Small Company
Value (19.64%) -- -- -- (6.57)% (2.40)%
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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 and 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 variable
investment options that became available after 12/31/98 and are therefore not
shown in this table are: EQ/Evergreen, EQ/Evergreen Foundation, MFS Growth
with Income, EQ/Alliance Premier Growth, Capital Guardian Research, and
Capital Guardian U.S. Equity (8/30/99).
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60 INVESTMENT PERFORMANCE
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** The inception dates for portfolios underlying the Alliance variable
investment options shown in the tables are for portfolios of The Hudson River
Trust, the assets of which became assets of corresponding portfolios of EQ
Advisors Trust on 10/18/99. 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 and 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 12/31/98 and are
therefore not shown in the tables are: EQ/Evergreen, EQ/Evergreen Foundation,
and MFS Growth with Income (12/31/98), EQ/Alliance Premier Growth, Capital
Guardian Research, and Capital Guardian U.S. Equity (4/30/99).
<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>
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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 $ 7,603.76
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Alliance Balanced $1,073.88 $1,325.78 $1,376.99 $2,442.53 $ 3,688.07
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Alliance Common Stock $1,183.17 $1,846.96 $2,290.48 $4,201.72 $18,554.80
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors $1,032.85 $1,177.13 $1,285.99 -- $ 1,777.49
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Alliance Equity Index $1,170.40 $1,847.65 -- -- $ 2,462.10
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Alliance Global $1,109.66 $1,362.88 $1,625.93 $2,989.23 $ 2,665.48
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Alliance Growth and Income $1,100.45 $1,625.20 $1,913.69 -- $ 1,890.30
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Alliance Growth Investors $1,075.00 $1,360.86 $1,586.82 -- $ 3,060.62
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Alliance High Yield $ 848.52 $1,200.12 $1,336.27 $2,118.07 $ 2,266.37
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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 $ 1,751.80
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Quality Bond $ 982.49 $1,078.07 $1,128.85 -- $ 1,111.64
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth $ 856.56 -- -- -- $ 1,089.22
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MFS Emerging Growth Companies $1,235.75 -- -- -- $ 1,509.32
- ----------------------------------------------------------------------------------------------------------------------------
MFS Research $1,134.68 -- -- -- $ 1,310.64
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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
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EQ/Putnam Balanced $1,015.36 -- -- -- $ 1,158.15
- ----------------------------------------------------------------------------------------------------------------------------
EQ/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 AND 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 AND 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 and 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 -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Balanced -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company
Value -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<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 and 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)%
- ----------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Balanced -- -- -- 13.76% 10.75%
- ----------------------------------------------------------------------------------------------------------------------------
EQ/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 current 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 yield information" 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 September 1, 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%
- ------------------------------------------------------------------------------------------------------------------------------
AS OF JUNE 15, 2003 (BEFORE WITHDRAWAL)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
(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) $ 12,968 $ (11,593)
- ------------------------------------------------------------------------------------------------------------------------------
(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
October 18, 1999. (Combination variable and fixed deferred annuity)
- --------------------------------------------------------------------------------
Name:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
City State Zip
888-1226
<PAGE>
EQUI-VEST(Registered Trademark)
A combination variable and fixed deferred
annuity contract
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 prospectus for EQ Advisors Trust which contain
important information about their portfolios.
PROSPECTUS DATED OCTOBER 20, 1999
- --------------------------------------------------------------------------------
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 Intermediate o Alliance High Yield
Government Securities
o Alliance Money Market
o Alliance Quality Bond
- --------------------------------------------------------------------------------
EQUITY OPTIONS:
- --------------------------------------------------------------------------------
DOMESTIC EQUITY
- --------------------------------------------------------------------------------
o Alliance Common Stock o MFS Growth with Income
o Alliance Equity Index o MFS Research
o Alliance Growth and Income o Merrill Lynch Basic Value Equity
o EQ/Alliance Premier Growth o EQ/Putnam Growth & Income Value
o Capital Guardian Research o T. Rowe Price Equity Income
o Capital Guardian U.S. Equity
- --------------------------------------------------------------------------------
INTERNATIONAL EQUITY
- --------------------------------------------------------------------------------
o Alliance Global o Morgan Stanley Emerging Markets Equity
o Alliance International o T. Rowe Price International Stock
- --------------------------------------------------------------------------------
AGGRESSIVE EQUITY
- --------------------------------------------------------------------------------
o Alliance Aggressive Stock o MFS Emerging Growth Companies
o Alliance Small Cap Growth o Warburg Pincus Small Company Value
o EQ/Evergreen
- --------------------------------------------------------------------------------
ASSET ALLOCATION OPTIONS:
- --------------------------------------------------------------------------------
o Alliance Balanced o EQ/Evergreen Foundation
o Alliance Conservative Investors o Merrill Lynch World Strategy
o Alliance Growth Investors o EQ/Putnam Balanced
- --------------------------------------------------------------------------------
You allocate amounts to 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 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 set by us. 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 October 20, 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(Registered Trademark)
- --------------------------------------------------------------------------------
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 EQ Advisors Trust deducts 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 40
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 EQ Advisors Trust 58
About our fixed maturity options 59
About the general account 60
About other methods of payment 60
Dates and prices at which contract events occur 61
About your voting rights 62
About our year 2000 progress 62
About legal proceedings 63
About our independent accountants 63
Transfers of ownership, collateral assignments, loans,
and borrowing 63
Distribution of the contracts 63
- --------------------------------------------------------------------------------
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 PAGE
account value 26 guaranteed interest option 22
annuitant 18 IRA cover
annuity payout options 31 IRS 41
beneficiary 39 investment options 19
business day 61 market adjusted amount 23
cash value 26 market value adjustment 23
conduit IRA 47 maturity value 22
contract date 10 NQ cover
contract date anniversary 10 portfolio cover
contract year 10 processing office 6
contributions 17 QP IRAs cover
Contributions to Roth IRAs ratcheted death benefit 25
Regular contribution 53 rate to maturity 22
Rollover contributions 53 recharacterized 46
Conversion contributions 54 regular contribution 45
Direct custodian-to-custodian Required Beginning Date 47
transfers 53 Roth IRA cover
Contributions to Traditional IRAs SAI cover
Regular contributions 44 SEC cover
Rollover contributions 46 TOPS 6
Direct custodian-to-custodian Traditional IRA cover
transfers 46 TSA cover
financial professional 65 unit 26
fixed maturity amount 22 unit investment trust 58
fixed maturity options 22 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 financial professional 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 AXA
Financial, Inc. (previously, The Equitable Companies Incorporated). The
majority shareholder of AXA Financial, Inc. 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.
AXA Financial, Inc. 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 Bank One, N.A.
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 Bank One, N.A.
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; and
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 contract to a Roth IRA contract;
(2) cancellation of your Roth IRA contract 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 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.
---------------------------------------------------------------------------------------------
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 PROTECITON 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 "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. 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."
---------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
EQUI-VEST AT A GLANCE -- KEY FEATURES 11
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FEES AND CHARGES o We deduct an annual charge equal to 0.15% of
(CONTINUED) the account 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
o We generally deduct a $350 annuity
administrative fee from amounts applied to
purchase certain life annuity payout options.
o Annual expenses of EQ Advisors Trust
portfolios are calculated as a percentage of
the average daily net assets invested in each
portfolio. These expenses include management
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
---------------------------------------------
For Traditional IRAs, the maximum issue age
is 70, but we will issue up to age 79 if the
contribution is a rollover contribution. For
all other IRAs we will issue contracts up to
annuitant ages 80-83 with our prior approval.
- --------------------------------------------------------------------------------
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. 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
financial professional, 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 prospectus for 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 annuity 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
Charge if you elect a life annuity payout option $350
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EQ ADVISORS TRUST ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
OTHER TOTAL ANNUAL
EXPENSES (AFTER EXPENSES
MANAGEMENT EXPENSE (AFTER EXPENSE
FEES(6) 12B-1 FEE(7) LIMITATIONS)(8) LIMITATION)(7)(9)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Aggressive Stock 0.54% 0.25% 0.04% 0.83%
Alliance Balanced 0.41% 0.25% 0.05% 0.71%
Alliance Common Stock 0.36% 0.25% 0.04% 0.65%
Alliance Conservative Investors 0.48% 0.25% 0.06% 0.79%
Alliance Equity Index 0.31% 0.25% 0.04% 0.60%
Alliance Global 0.64% 0.25% 0.08% 0.97%
Alliance Growth and Income 0.55% 0.25% 0.04% 0.84%
Alliance Growth Investors 0.51% 0.25% 0.05% 0.81%
Alliance High Yield 0.60% 0.25% 0.04% 0.89%
Alliance Intermediate Government Securities 0.50% 0.25% 0.06% 0.81%
Alliance International 0.90% 0.25% 0.17% 1.32%
Alliance Money Market 0.35% 0.25% 0.03% 0.63%
Alliance Quality Bond 0.53% 0.25% 0.04% 0.82%
Alliance Small Cap Growth 0.90% 0.25% 0.06% 1.21%
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>
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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 contribution withdrawn within six contract years
of the date of the contribution. 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 management fees or the maximum management fees, if a maximum applies,
for each portfolio cannot be increased without a vote of that portfolio's
shareholders.
(7) Portfolio shares are all subject to fees imposed under the distribution
plan (the "Rule 12b-1 Plan") adopted by EQ Advisors Trust pursuant to Rule
12b-1 under the Investment Company Act of 1940. The 12b-1 fee will not be
increased for the life of the contracts. Prior to October 18, 1999 the
total annual expenses for the Alliance Small Cap Growth portfolio were
limited to 1.20% under an expense limitation arrangement related to that
portfolio's Rule 12b-1 Plan. The arrangement is no longer in effect. The
amounts shown have been restated to reflect the expenses that would have
been incurred in 1998, absent the expense limitation arrangement.
(8) The amounts shown as "Other Expenses" will fluctuate from year to year
depending on actual expenses. See footnote (9) for any expense limitation
agreements.
On October 18, 1999, the Alliance portfolios (other than EQ/Alliance
Premier Growth) became part of the portfolios of EQ Advisors Trust. The
"Other Expenses" for these portfolios have been restated to reflect the
estimated expenses that would have been incurred had these portfolios been
portfolios of EQ Advisors Trust for the year ended December 31, 1998. The
restated expenses reflect an increase of 0.01%.
(9) Equitable Life, EQ Advisors Trust's manager, has entered into an expense
limitation agreement with respect to certain portfolios. Under this
agreement Equitable Life 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 as a percentage of the average daily net assets of the
following portfolios: 0.60% for Merrill Lynch Basic Value Equity, MFS
Emerging Growth Companies, MFS Growth with Income, MFS Research,EQ/Putnam
Growth & Income Value, 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; and on April 30, 1999 for the EQ/Alliance
Premier Growth, Capital Guardian U.S. Equity, and Capital Guardian Research
portfolios, and therefore expenses have been estimated.
<PAGE>
- --------------------------------------------------------------------------------
FEE TABLE 15
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- --------------------------------------------------------------------------------
Each portfolio may at a later date make a reimbursement to Equitable Life
for any of the management fees waived or limited and other expenses assumed
and paid by Equitable Life 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) We also assume that the optional
ratcheted death benefit is not elected and there is no waiver of the withdrawal
charge. 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 IF YOU DO NOT SURRENDER YOUR CONTRACT AT
OF EACH PERIOD SHOWN, THE EXPENSES THE END OF EACH PERIOD SHOWN, THE
WOULD BE: EXPENSES WOULD BE:
---------------------------------------- ---------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
VARIABLE INVESTMENT OPTION
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Alliance Aggressive Stock $74.34 $122.99 $174.43 $248.91 $21.90 $67.57 $115.85 $248.91
Alliance Balanced $73.14 $119.39 $168.40 $235.96 $20.64 $63.77 $109.46 $235.96
Alliance Common Stock $72.54 $117.59 $165.38 $229.43 $20.01 $61.86 $106.26 $229.43
Alliance Conservative Investors $73.94 $121.79 $172.42 $244.61 $21.48 $66.31 $113.72 $244.61
Alliance Equity Index $72.05 $116.08 $162.85 $223.95 $19.49 $60.27 $103.58 $223.95
Alliance Global $75.73 $127.18 $181.42 $263.82 $23.37 $72.00 $123.25 $263.82
Alliance Growth and Income $74.44 $123.29 $174.93 $249.98 $22.01 $67.89 $116.38 $249.98
Alliance Growth Investors $74.14 $122.39 $173.42 $246.76 $21.69 $66.94 $114.78 $246.76
Alliance High Yield $74.93 $124.79 $177.43 $255.32 $22.53 $69.47 $119.03 $255.32
Alliance Intermediate Government Securities $74.14 $122.39 $173.42 $246.76 $21.69 $66.94 $114.78 $246.76
Alliance International $79.22 $137.61 $198.71 $300.17 $27.05 $83.01 $141.58 $300.17
Alliance Money Market $72.34 $116.99 $164.37 $227.24 $19.80 $61.23 $105.19 $227.24
Alliance Quality Bond $74.24 $122.69 $173.92 $247.84 $21.80 $67.26 $115.32 $247.84
Alliance Small Cap Growth $78.12 $134.34 $193.30 $288.88 $25.89 $79.56 $135.85 $288.88
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
16 FEE TABLE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
IF YOU SURRENDER YOUR CONTRACT AT THE END IF YOU DO NOT SURRENDER YOUR CONTRACT AT
OF EACH PERIOD SHOWN, THE EXPENSES THE END OF EACH PERIOD SHOWN, THE
WOULD BE: EXPENSES WOULD BE:
----------------------------------------- ----------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
EQ/Alliance Premier Growth $77.52 $132.55 -- -- $25.26 $77.67 -- --
Capital Guardian Research $75.53 $126.59 -- -- $23.16 $71.37 -- --
Capital Guardian U.S. Equity $75.53 $126.59 -- -- $23.16 $71.37 -- --
EQ/Evergreen $76.53 $129.57 -- -- $24.21 $74.53 -- --
EQ/Evergreen Foundation $75.53 $126.59 -- -- $23.16 $71.37 -- --
MFS Emerging Growth Companies $74.54 $123.59 $175.43 $251.05 $22.11 $68.21 $116.91 $251.05
MFS Growth with Income $74.54 $123.59 -- -- $22.11 $68.21 -- --
MFS Research $74.54 $123.59 $175.43 $251.05 $22.11 $68.21 $116.91 $251.05
Merrill Lynch Basic Value Equity $74.54 $123.59 $175.43 $251.05 $22.11 $68.21 $116.91 $251.05
Merrill Lynch World Strategy $78.02 $134.04 $192.81 $287.85 $25.79 $79.25 $135.33 $287.85
Morgan Stanley Emerging Markets Equity $83.50 $150.30 $219.60 $343.10 $31.56 $96.43 $163.72 $343.10
EQ/Putnam Balanced $75.03 $125.09 $177.93 $256.39 $22.64 $69.79 $119.56 $256.39
EQ/Putnam Growth & Income Value $74.54 $123.59 $175.43 $251.05 $22.11 $68.21 $116.91 $251.05
T. Rowe Price Equity Income $74.54 $123.59 $175.43 $251.05 $22.11 $68.21 $116.91 $251.05
T. Rowe Price International Stock $78.02 $134.04 $192.81 $287.85 $25.79 $79.25 $135.33 $287.85
Warburg Pincus Small Company Value $76.03 $128.08 $182.91 $266.98 $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, $1.74
in the third year, $1.91 in the fifth year and $2.44 in the tenth 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
- --------------------------------------------------------------------------------
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 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 ISSUE MINIMUM SOURCE OF
TYPE AGES* CONTRIBUTIONS CONTRIBUTIONS LIMITATIONS ON 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
made by you or paid to contributions may not
us by an employer who exceed $2,000 for 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
transfer contributions
o Rollovers from another after age 70 1/2 must be
traditional individual net of required minimum
retirement arrangement. distributions.
o Direct custodian-to-
custodian transfer from
other traditional individual
retirement arrangements.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
18 CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
AVAILABLE FOR
CONTRACT ANNUITANT ISSUE MINIMUM SOURCE OF
TYPE AGES* CONTRIBUTIONS CONTRIBUTIONS LIMITATIONS ON 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 contributions
made by your or paid to may not exceed $2,000 for a
us by an employer who year.
establishes a payroll
deduction program. o Contributions are
subject to income limits
o Rollovers from another and other tax rules. See
Roth IRA. "Tax information --
Contributions to Roth
o Conversion rollovers IRAs."
from a traditional IRA.
o Direct transfer from
another Roth IRA.
- ------------------------------------------------------------------------------------------------------------------------------------
QP Traditional IRA 0-79 $2,500 o Rollovers from a o Rolloever contributions
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
or 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 financial professional
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 EQ ADVISORS 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 income Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors High total return without, in the adviser's Alliance Capital Management L.P.
opinoin, undue risk to principal
- ------------------------------------------------------------------------------------------------------------------------------------
Alliance Equity Index Total return (before EQ Advisors 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 and Income High total return through a combination of Alliance Capital Management L.P.
current 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 Government High current income consistent with relative Alliance Capital Management L.P.
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 Companies Long-term capital growth Massachusetts Financial Services
Company
- ------------------------------------------------------------------------------------------------------------------------------------
MFS Growth with Income Company Reasonable current income and long-term growth Massachusetts Financial Services
of capital and income Company
- ------------------------------------------------------------------------------------------------------------------------------------
MFS Research Company 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 Markets Long-term capital appreciation Morgan Stanley Asset Management
Equity
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Balanced Balanced investment Putnam Investment Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value Capital growth, current income is a secondary Putnam Investment Management, Inc.
objective
- ------------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income Substantial dividend income and also capital T. Rowe Price Associates, Inc.
appreciation
- ------------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock Long-term growth of capital Rowe Price-Fleming International, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Value Long-term capital appreciation Warburg Pincus Asset Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Other important information about the portfolios is included in the prospectus
for EQ Advisors Trust attached at the end of this prospectus.
<PAGE>
- --------------------------------------------------------------------------------
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>
- --------------------------------------------------------------------------------
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 must choose one of the following two methods for selecting your investment
options. Once you have made your election, you may not change it.
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 options 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.
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24 CONTRACT FEATURES AND BENEFITS
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INVESTMENT OPTIONS
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A
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o Guaranteed Interest Option
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DOMESTIC EQUITY INTERNATIONAL EQUITY
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o Alliance Common Stock o Alliance Global
o Alliance Equity Index o Alliance International
o Alliance Growth and Income o Morgan Stanley Emerging Markets Equity
o EQ/Alliance Premier Growth o T. Rowe Price International Stock
o Capital Guardian Research
o Capital Guardian U.S. Equity
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
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ASSET ALLOCATION AGGRESSIVE EQUITY
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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 Companies
o EQ/Putnam Balanced o Warburg Pincus Small Company Value
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B
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AGGRESSIVE FIXED INCOME
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o Alliance High Yield
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DOMESTIC FIXED INCOME ASSET ALLOCATION
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o Alliance Intermediate o Alliance Conservative Investors
Government Securities
o Alliance Money Market
o Alliance Quality Bond
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FIXED MATURITY OPTIONS
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Transfer restrictions apply as indicated above under "Fixed maturity options and
maturity dates."
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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 financial
professional, can provide
<PAGE>
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CONTRACT FEATURES AND BENEFITS 25
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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>
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26 DETERMINING YOUR CONTRACT'S VALUE
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2
Determining your contract's value
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YOUR ACCOUNT VALUE
Your "account value" is the total of the values you have in the variable
investment options, and the guaranteed interest option, plus 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, 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. The number of units you own 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, 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>
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TRANSFERRING YOUR MONEY AMONG INVESTMENT OPTIONS 27
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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.
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
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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. Your entire account value in the variable investment options must be
included in the rebalancing program.
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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 financial professional 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
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4
Accessing your money
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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."
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METHOD OF WITHDRAWAL
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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
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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 70 1/2 (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 financial professional 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
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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 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 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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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 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. EQ Advisors 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 financial professional
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. We require you to return your
contract before annuity payments begin. Unless you choose a different payout
option, we will pay annuity payments under a life annuity with a period certain
of 10 years. You choose whether these payments will be fixed or variable.
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 5% to calculate
the level of payments. However, in states where that rate is not permitted
the assumed base rate will be 3 1/2%. 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, if you choose a life
annuity
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 contracts
and $20,000 under
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34 CHARGES AND EXPENSES
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IRA and 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.
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. See "About
our fixed maturity options" under "More information."
The amount of the withdrawal charge we deduct is equal to 6% of any contribution
withdrawn within six contract years of the date of the contribution. 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 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 financial professional 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 investment 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 if we deduct the charge from the fixed
maturity options.
CHARGES THAT EQ ADVISORS TRUST DEDUCTS
EQ Advisors Trust 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 EQ Advisors 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 prospectus for 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 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.
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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.
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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 will send you a written confirmation when we receive
your request.
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, if you
are the owner and the annuitant and your spouse is the sole primary beneficiary
the contract can be continued as follows:
For an NQ contract, if you elected your spouse to be the successor
owner/annuitant, your surviving spouse automatically continues the contract and
no death benefit is payable until the surviving spouse's death.
For Traditional IRA, Roth IRA, and QP IRA contracts, your spouse can elect upon
your death to continue the contract as the owner/annuitant and no death benefit
is payable until the surviving spouse's death.
Also, 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.
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40 PAYMENT OF DEATH BENEFIT
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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
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. The death benefit will
be paid to the beneficiary according to our standard procedures, unless an
election is made within 30 days to: (1) receive the death benefit; (2)
continue the contract and take annual withdrawals as described above; (3)
defer payment of the account value for five years.
(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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42 TAX INFORMATION
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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"
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 financial professional.
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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44 TAX INFORMATION
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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:
the adjusted
($10,000-excess AGI) times $2,000 (or earned Equals deductible
- -------------------- x income, if less) = contribution
divided by $10,000 limit
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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46 TAX INFORMATION
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RECHARACTERIZATIONS
Amounts that have been contributed as traditional IRA funds may subsequently be
treated as Roth IRA funds. Special federal income tax rules allow you to change
your mind again and have amounts that are subsequently treated as Roth IRA
funds, once again treated as traditional IRA funds. You do this by using 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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TAX INFORMATION 47
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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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48 TAX INFORMATION
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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.
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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. In Table II we assume a single initial contribution of $1,000, and no
additional contributions. The 3% guaranteed interest rate is in the contract.
The account values shown reflect no withdrawal charges. The cash values shown
reflect the withdrawal charge that applies if you surrender your contract for
its cash value. In all cases we assume no transfers.
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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TABLE I
ACCOUNT VALUES AND CASH VALUES
(assuming $1,000 contributions made annually
at the beginning of the contract year)
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3% MINIMUM GUARANTEE
- ---------------------------------------------------------
CONTRACT ACCOUNT CASH
YEAR END VALUE VALUE
- ---------------------------------------------------------
1 $1,009.40 $954.89
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2 $2,039.68 $1,929.54
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3 $3,100.87 $2,933.43
- ---------------------------------------------------------
4 $4,193.90 $3,967.43
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5 $5,319.72 $5,032.45
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6 $6,479.31 $6,129.42
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7 $7,673.69 $7,313.69
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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
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13 $15,631.19 $15,271.19
- ---------------------------------------------------------
14 $17,100.13 $16,740.13
- ---------------------------------------------------------
15 $18,613.13 $18,253.13
- ---------------------------------------------------------
16 $20,201.53 $19,841.53
- ---------------------------------------------------------
17 $21,837.57 $21,477.57
- ---------------------------------------------------------
18 $23,522.70 $23,162.70
- ---------------------------------------------------------
19 $25,258.38 $24,898.38
- ---------------------------------------------------------
20 $27,046.13 $26,686.13
- ---------------------------------------------------------
21 $28,887.52 $28,527.52
- ---------------------------------------------------------
22 $30,784.14 $30,424.14
- ---------------------------------------------------------
23 $32,737.67 $32,377.67
- ---------------------------------------------------------
24 $34,749.80 $34,389.80
- ---------------------------------------------------------
25 $36,822.29 $36,462.29
- ---------------------------------------------------------
26 $38,956.96 $38,596.96
- ---------------------------------------------------------
27 $41,155.67 $40,795.67
- ---------------------------------------------------------
28 $43,420.34 $43,060.34
- ---------------------------------------------------------
29 $45,752.95 $45,392.95
- ---------------------------------------------------------
30 $48,155.53 $47,795.53
- ---------------------------------------------------------
31 $50,630.20 $50,270.20
- ---------------------------------------------------------
32 $53,179.11 $52,819.11
- ---------------------------------------------------------
33 $55,804.48 $55,444.48
- ---------------------------------------------------------
34 $58,508.61 $58,148.61
- ---------------------------------------------------------
35 $61,293.87 $60,933.87
- ---------------------------------------------------------
36 $64,162.69 $63,802.69
- ---------------------------------------------------------
37 $67,117.57 $66,757.57
- ---------------------------------------------------------
38 $70,161.10 $69,801.10
- ---------------------------------------------------------
39 $73,295.93 $72,935.93
- ---------------------------------------------------------
40 $76,524.81 $76,164.81
- ---------------------------------------------------------
41 $79,850.55 $79,490.55
- ---------------------------------------------------------
42 $83,276.07 $82,916.07
- ---------------------------------------------------------
43 $86,804.35 $86,444.35
- ---------------------------------------------------------
44 $90,438.48 $90,078.48
- ---------------------------------------------------------
45 $94,181.64 $93,821.64
- ---------------------------------------------------------
46 $98,037.08 $97,677.08
- ---------------------------------------------------------
47 $102,008.20 $101,648.20
- ---------------------------------------------------------
48 $106,098.44 $105,738.44
- ---------------------------------------------------------
49 $110,311.40 $109,951.40
- ---------------------------------------------------------
50 $114,650.74 $114,290.74
- ---------------------------------------------------------
<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
- ---------------------------------------------------------
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%
<PAGE>
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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
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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 portfolio of 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 EQ ADVISORS TRUST
EQ Advisors Trust is registered under the Investment Company Act of 1940. It is
classified as an "open-end management investment company," more commonly called
a mutual fund. EQ Advisors Trust issues different shares relating to each of its
portfolios.
Equitable Life serves as the investment manager of EQ Advisors Trust. As such
Equitable Life oversees the activities of the investment advisors with respect
to EQ Advisors Trust and is responsible for retaining or discontinuing the
services of those advisors. (Prior to September 1999, EQ Financial Consultants
Inc. the predecessor to AXA Advisors, LLC and a subsidiary of Equitable Life
served as investment manager to EQ Advisors Trust).
EQ Advisors Trust commenced operations on May 1, 1997. Prior to October 18, 1999
the Alliance portfolios (other than EQ/Alliance Premier Growth) were part of The
Hudson River Trust. On October 18, 1999, the assets of these portfolios became
the assets of corresponding portfolios of EQ Advisors Trust.
EQ Advisors Trust does not impose sales charges or "loads" for buying and
selling their shares. All dividends and other distributions on shares are
reinvested in full. The Board of Trustees of EQ Advisors Trust may establish
additional portfolios or eliminate existing portfolios at any time. More
detailed information about EQ Advisors Trust, its investment objectives,
policies, restrictions, risks, expenses, the Rule 12b-1 plan, and other aspects
of its operations, appears in the EQ Advisors Trust prospectus attached at the
end of this prospectus, or in its SAI which is available upon request.
<PAGE>
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MORE INFORMATION 59
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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 August 2, 1999 and the related
price per $100 of maturity value were as follows:
- --------------------------------------------------------------------------------
FIXED MATURITY
OPTIONS
WITH JUNE 15TH
MATURITY DATE RATE TO MATURITY AS PRICE
OF OF PER $100 OF
MATURITY YEAR AUGUST 2, 1999 MATURITY VALUE
- --------------------------------------------------------------------------------
2000 4.15% $96.53
2001 5.05% $91.21
2002 5.45% $85.88
2003 5.70% $80.70
2004 5.75% $76.17
2005 5.90% $71.43
2006 5.95% $67.23
2007 6.00% $63.22
2008 6.05% $59.40
2009 6.10% $55.75
- --------------------------------------------------------------------------------
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:
(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
<PAGE>
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60 MORE INFORMATION
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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.
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.
<PAGE>
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MORE INFORMATION 61
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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 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 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.
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62 MORE INFORMATION
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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 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 EQ Advisors Trust;
or
o any other matters described in the prospectus for EQ Advisors Trust 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 EQ Advisors Trust. EQ Advisors Trust shares are sold to
our separate accounts and an affiliated qualified plan trust. In addition, EQ
Advisors Trust shares are held 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 Board of Trustees of EQ Advisors Trust
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
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MORE INFORMATION 63
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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. If such confirmation is not
received from any of the remaining non-critical vendors or service providers the
vendor or service provider will be replaced, eliminated or be 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 years ended December 31, 1998, have been so included 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 "Beneficiary
continuation option under Traditional IRA and QP IRA contracts" in "Payment of
death benefit" earlier in this prospectus. 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
AXA Advisors, LLC ("AXA Advisors"), the successor to Equitable Financial
Consultants, Inc., an indirect subsidiary of Equitable Life, is the distributor
of the contracts and has responsibility for sales and marketing functions for
Separate Account A. AXA Advisors serves as the principal underwriter of Separate
Account A. AXA Advisors is registered with the SEC as a broker-dealer and is a
member of the National Association of Securities Dealers, Inc. AXA Advisors'
principal business address is 1290 Avenue of the Americas, New York, NY 10104.
Under a Distribution and Servicing Agreement between AXA Advisors, Equitable
Life, and certain of Equitable Life's separate accounts, including Separate
Account A, Equitable Life paid AXA Advisors fees
<PAGE>
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64 MORE INFORMATION
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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, AXA Advisors will no longer be a subsidiary of
Equitable Life, but will remain an indirect subsidiary of AXA Financial, Inc.,
Equitable Life's parent.
The contracts are sold by financial professionals who are registered
representatives of AXA Advisors, and are also our licensed insurance agents. AXA
Advisors may also receive compensation and reimbursement for its marketing
services under the terms of its distribution agreement with Equitable Life. The
offering of the contracts is intended to be continuous.
<PAGE>
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INVESTMENT PERFORMANCE 65
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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, 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.
For the "Alliance" portfolios (other than EQ/Alliance Premier Growth), we have
adjusted the results prior to October 1996, when Class IB shares for these
portfolios were not available, to reflect the 12b-1 fees currently imposed. 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.
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999 the Alliance portfolios (other than EQ/Alliance Premier Growth)
were part of The Hudson River Trust. On October 18, 1999, those portfolios
became corresponding portfolios of EQ Advisors Trust. In each case, the
performance shown is for the indicated EQ Advisors Trust portfolio and any
predecessors that it may have had.
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 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
<PAGE>
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66 INVESTMENT PERFORMANCE
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- --------------------------------------------------------------------------------
from which each portfolio is likely to select its holdings. Benchmark data
reflect the reinvestment of dividend income. The benchmarks include:
- --------------------------------------------------------------------------------
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 WORLD 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.
- --------------------------------------------------------------------------------
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.
<PAGE>
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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
----------------------------------------------------------------------
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 (8.11)% 5.01% 6.70% 15.83% 14.56% 14.56%
- --------------------------------------------------------------------------------------------------------------------------
Alliance Balanced 8.28% 9.28% 5.84% 9.04% 9.00% 9.00%
- --------------------------------------------------------------------------------------------------------------------------
Alliance Common Stock 19.00% 22.14% 17.40% 15.12% 14.81% 10.23%
- --------------------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors 4.40% 5.00% 4.37% -- 4.47% 6.12%
- --------------------------------------------------------------------------------------------------------------------------
Alliance Equity Index 17.73% 22.16% -- -- 21.48% 19.84%
- --------------------------------------------------------------------------------------------------------------------------
Alliance Global 11.67% 10.30% 9.50% 11.27% 9.41% 8.73%
- --------------------------------------------------------------------------------------------------------------------------
Alliance Growth and Income 10.80% 17.02% 13.19% -- 13.31% 12.12%
- --------------------------------------------------------------------------------------------------------------------------
Alliance Growth Investors 8.39% 10.25% 8.96% -- 9.14% 12.55%
- --------------------------------------------------------------------------------------------------------------------------
Alliance High Yield (13.05)% 5.69% 5.20% 7.50% 5.15% 6.76%
- --------------------------------------------------------------------------------------------------------------------------
Alliance Intermediate Government
Securities (1.24)% 0.61% 0.23% -- 1.42% 3.06%
- --------------------------------------------------------------------------------------------------------------------------
Alliance International 1.36% (0.06)% -- -- 0.72% 1.85%
- --------------------------------------------------------------------------------------------------------------------------
Alliance Money Market (3.44)% (0.26)% 0.04% 1.51% 3.11% 3.11%
- --------------------------------------------------------------------------------------------------------------------------
Alliance Quality Bond (0.37)% 2.03% 1.65% -- 1.70% 1.09%
- --------------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth (12.29)% -- -- -- (1.14)% 5.06%
- --------------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies 24.25% -- -- -- 22.47% 27.59%
- --------------------------------------------------------------------------------------------------------------------------
MFS Research 14.16% -- -- -- 13.63% 17.26%
- --------------------------------------------------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity 2.53% -- -- -- 6.00% 10.26%
- --------------------------------------------------------------------------------------------------------------------------
Merrill Lynch World Strategy (1.84)% -- -- -- (2.62)% 0.35%
- --------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity (32.94)% -- -- -- (37.24)% (37.24)%
- --------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Balanced 2.74% -- -- -- 6.92% 8.89%
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EQ/Putnam Growth & Income Value 3.67% -- -- -- 7.68% 10.55%
- --------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income 0.22% -- -- -- 9.00% 11.66%
- --------------------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock 4.47% -- -- -- (1.72)% 0.42%
- --------------------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Value (17.31)% -- -- -- (6.07)% (2.16)%
- --------------------------------------------------------------------------------------------------------------------------
</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 variable investment options that became available after 12/31/98 and
are therefore not shown in this table are; EQ/Evergreen, EQ/Evergreen
Foundation, MFS Growth with Income, EQ/Alliance Premier Growth, Capital
Guardian Research, and Capital Guardian U.S. Equity (8/30/99).
** The inception dates for portfolios underlying the Alliance variable
investment options shown in the tables are for portfolios of The Hudson
River Trust, the assets of which became assets of corresponding portfolios
of EQ Advisors Trust on 10/18/99.
<PAGE>
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68 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 and 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 12/31/98 and are
therefore not shown in the tables are; EQ/Evergreen, EQ/Evergreen
Foundation, and MFS Growth with Income (12/31/98), EQ/Alliance Premier
Growth, Capital Guardian Research, and Capital Guardian U.S. Equity
(4/30/99.)
<PAGE>
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INVESTMENT PERFORMANCE 69
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TABLE 2
GROWTH OF $1,000 UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 1998
<TABLE>
<CAPTION>
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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 $7,344.05
- ---------------------------------------------------------------------------------------------------------------------------
Alliance Balanced $1,082.81 $1,305.16 $1,328.30 $2,376.23 $3,540.12
- ---------------------------------------------------------------------------------------------------------------------------
Alliance Common Stock $1,190.01 $1,822.21 $2,230.22 $4,089.48 $19,340.55
- ---------------------------------------------------------------------------------------------------------------------------
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 $2,585.33
- ---------------------------------------------------------------------------------------------------------------------------
Alliance Growth and 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 $2,192.34
- ---------------------------------------------------------------------------------------------------------------------------
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 $1,666.02
- ---------------------------------------------------------------------------------------------------------------------------
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
- ---------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Balanced $1,027.41 -- -- -- $1,153.02
- ---------------------------------------------------------------------------------------------------------------------------
EQ/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>
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70 INVESTMENT PERFORMANCE
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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 AND 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 AND 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 1994 1995 1996 1997 1998
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ALLIANCE AGGRESSIVE STOCK 42.82% 5.52% 84.47% (4.61)% 15.08% (5.24)% 29.81% 20.44% 9.20% (1.19)%
- ----------------------------------------------------------------------------------------------------------------------------------
ALLIANCE BALANCED 24.66% (1.45)% 40.11% (4.26)% 10.71% (9.38)% 18.07% 10.07% 13.35% 16.43%
- ----------------------------------------------------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK 24.12% (9.36)% 35.86% 1.72% 23.07% (3.58)% 30.61% 22.50% 27.37% 27.55%
- ----------------------------------------------------------------------------------------------------------------------------------
ALLIANCE CONSERVATIVE INVESTORS 2.73%+ 4.88% 18.16% 4.27% 9.18% (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 24.95% (7.49)% 28.72% (1.96)% 30.27% 3.71% 17.14% 12.96% 9.93% 20.07%
- ----------------------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH AND INCOME -- -- -- -- (0.62)%+ (2.02)% 22.34% 18.37% 24.95% 19.13%
- ----------------------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS 3.63%+ 9.01% 46.85% 3.42% 13.63% (4.56)% 24.61% 10.99% 15.11% 16.54%
- ----------------------------------------------------------------------------------------------------------------------------------
ALLIANCE HIGH YIELD 3.62% (2.54)% 22.72% 10.72% 21.42% (4.20)% 18.24% 21.15% 16.79% (6.51)%
- ----------------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERMEDIATE GOVERNMENT
SECURITIES -- -- 10.88%+ 4.08% 9.01% (5.77)% 11.73% 2.27% 5.76% 6.20%
- ----------------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERNATIONAL -- -- -- -- -- -- 9.54%+ 8.23% (4.49)% 8.99%
- ----------------------------------------------------------------------------------------------------------------------------------
ALLIANCE MONEY MARKET 7.70% 6.80% 4.69% 2.07% 1.48% 2.53% 4.23% 3.81% 3.91% 3.82%
- ----------------------------------------------------------------------------------------------------------------------------------
ALLIANCE QUALITY BOND -- -- -- -- (0.87)%+ 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)%
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM BALANCED -- -- -- -- -- -- -- -- 13.56%+ 10.47%
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/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:
- ---------------------------------------------------------------------
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 current 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 yield information" 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 September 1, 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, as of December 31, 1998, 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
- --------------------------------------------------------------------------------
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 AND 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) --
- --------------------------------------------------------------------------------
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: GUARANTEED MINIMUM 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
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 October
20, 1999. (Combination variable and fixed deferred annuity)
................................................................................
Name:
................................................................................
Address:
................................................................................
City State Zip
888-1227
