<PAGE>
Registration No. 333-51033
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No.
_____
Post-Effective Amendment No. 1 [X]
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AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. _____ [ ]
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
(Exact Name of Registrant)
--------------------
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
(Name of Insurance Company)
1290 Avenue of the Americas, New York, New York 10104
(Address of Insurance Company's Principal Executive Offices)
Telephone Number, including Area Code: (212) 554-1234
--------------------
MARY JOAN HOENE
VICE PRESIDENT AND COUNSEL
The Equitable Life Assurance Society of the United States
1290 Avenue of the Americas, New York, New York 10104
(Name and Address of Agent for Service)
--------------------
Please send copies of all communications to:
PETER E. PANARITES
Freedman, Levy, Kroll & Simonds
1050 Connecticut Avenue, N.W., Washington, D.C. 20036
--------------------
Approximate Date of Proposed Public Offering: Continuous
It is proposed that this filing will become effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[X] on April 30, 1999 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Title of Securities Being Registered: Units of interest in separate account
under variable annuity contracts
Omit from the facing sheet reference to the other Act if the Registration
Statement or amendment is filed under only one of the Acts. Include the
"Approximate Date of Proposed Public Offering" and "Title of Securities Being
Registered" only where securities are being registered under the Securities
Act of 1933.
<PAGE>
Members Retirement Program
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[GRAPHIC OMITTED]
PROSPECTUS
MAY 1, 1999
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GROWTH EQUITY FUND
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AGGRESSIVE EQUITY FUND
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BALANCED FUND
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GLOBAL FUND
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CONSERVATIVE INVESTORS FUND
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GROWTH INVESTORS FUND
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MFS RESEARCH FUND
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WARBURG PINCUS
SMALL COMPANY VALUE FUND
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[GRAPHIC OMITTED]
T. ROWE PRICE
EQUITY INCOME FUND
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[GRAPHIC OMITTED]
MERRILL LYNCH
WORLD STRATEGY FUND
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[GRAPHIC OMITTED]
BT EQUITY 500
INDEX FUND
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GUARANTEED RATE ACCOUNTS
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[GRAPHIC OMITTED]
MONEY MARKET GUARANTEE ACCOUNT
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<PAGE>
MEMBERS RETIREMENT PROGRAM
PROSPECTUS DATED MAY 1, 1999
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Please read this prospectus and keep it for future reference. It contains
important information you should know before participating or taking any other
action under the Program.
ABOUT THE MEMBERS RETIREMENT PROGRAM
The Program provides members of certain groups and other eligible persons
several plans for the accumulation of retirement savings on a tax-deferred
basis. Fourteen investment options - eleven "investment funds" and three
"guaranteed options" are available under the plans. The investment funds and
guaranteed options comprise the "investment options" covered by this
prospectus. The investment funds, below, are offered by THE EQUITABLE LIFE
ASSURANCE SOCIETY OF THE UNITED STATES.
<TABLE>
<CAPTION>
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INVESTMENT FUNDS
- --------------------------------------------------------------------
<S> <C>
o Alliance Growth Equity Fund o MFS Research Fund
o Warburg Pincus Small
o Alliance Aggressive Equity Company Value Fund
Fund
o T. Rowe Price Equity Income
o Alliance Balanced Fund Fund
o Alliance Global Fund
o Merrill Lynch World Strategy
o Alliance Conservative Investors Fund
Fund
o BT Equity 500 Index Fund
o Alliance Growth Investors
Fund
- --------------------------------------------------------------------
</TABLE>
The Alliance Growth Equity, Alliance Aggressive Equity and
Alliance Balanced Funds are managed by Equitable Life.
The Alliance Global Fund, Alliance Conservative Investors Fund, and the
Alliance Growth Investors Fund invest in shares of a corresponding portfolio
(Portfolio) of The Hudson River Trust.
The MFS Research Fund, Warburg Pincus Small Company Value Fund, T. Rowe Price
Equity Income Fund, Merrill Lynch World Strategy Fund and BT Equity 500 Index
Fund each invest in shares of a corresponding portfolio (Portfolio) of the EQ
Advisors Trust. You should also read the attached prospectuses for The Hudson
River Trust and EQ Advisors Trust and keep them for future reference.
GUARANTEED OPTIONS. The guaranteed options we offer include a 3-year
Guaranteed Rate Account and 5-year Guaranteed Rate Account, and the Money
Market Guarantee Account.
We have filed registration statements relating to this offering with the
Securities and Exchange Commission. A Statement of Additional Information
("SAI"), dated May 1, 1999, which is part of the registration statements, is
available free of charge upon request by writing to us or calling us
toll-free. The SAI has been incorporated by reference into this prospectus.
The table of contents for the SAI and a request form to obtain the SAI appear
at the end of this prospectus. You may also obtain a copy of this prospectus
and the SAI through the SEC web site at http://www.sec.gov.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE SECURITIES 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>
CONTENTS OF THIS PROSPECTUS
MEMBERS RETIREMENT PROGRAM
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Index of key words and phrases 3
The Program at a glance - key features 4
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1 FEE TABLE 6
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Program expense charge and investment fund operating
expenses 6
Example 8
Condensed financial information 8
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2 PROGRAM INVESTMENT OPTIONS 9
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Investment options - the Equity Funds 9
The Trusts - Hudson River Trust and EQ Advisors Trust 12
Investment options - The Guaranteed Options 17
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3 HOW WE VALUE YOUR ACCOUNT BALANCE IN
THE INVESTMENT FUNDS 19
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When we use the words "we," "us" and "our," we mean Equitable Life.
Please see the index of key words and phrases used in this prospectus. The
index will refer you to the page where particular terms are defined or
explained.
When we address the reader of this prospectus with words such as "you" and
"your," we generally mean the individual participant in one or more of the
plans available in the Program unless otherwise explained. For example, "The
Program" section of the prospectus is primarily directed at the employer.
1 Contents of this prospectus
<PAGE>
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4 TRANSFERS AND ACCESS TO YOUR ACCOUNT 20
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Transfers among investment options 20
Our account investment management system 20
Participant loans 20
Choosing benefit payment options 20
Spousal consent 21
Benefits payable after the death of the participant 21
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5 THE PROGRAM 22
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Summary of plan choices 22
Getting started 23
How to make Program contributions 23
Allocating Program contributions 23
Distributions from the investment options 24
Rules applicable to participant distributions 24
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6 PERFORMANCE INFORMATION 26
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Annual percentage change fund unit value 28
Average annual percentage change in unit fund values 29
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7 CHARGES AND EXPENSES 30
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Charges based on amounts invested in the Program 30
Plan and transaction expenses 31
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8 TAX INFORMATION 32
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Income taxation of distribution to qualified plan
participants 32
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9 MORE INFORMATION 34
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About Program changes or termination 34
IRS qualification 34
About the separate accounts 34
About our Year 2000 progress 34
About legal proceedings 35
About our independent accountants 35
Reports we provide and available information 35
Acceptance 35
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APPENDIX I: CONDENSED FINANCIAL INFORMATION A-1
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TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL
INFORMATION S-1
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About Equitable Life fold-out
How to Reach Us back cover
Investment Option Characteristics fold-out
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2 Contents of this prospectus
<PAGE>
MEMBERS RETIREMENT PROGRAM
INDEX OF KEY WORDS AND PHRASES
Below is an index of key words and phrases used in this prospectus. The index
will refer you to the page where particular terms are defined or explained.
This index should help you locate more information on the terms used in this
prospectus.
Page
AIM System 20
beneficiary 21
benefit payment options 20
business day 20
Contributions 23
eligible rollover distributions 32
Equitable Life flip out
group annuity contract 22
GRAs 17
guaranteed options 17
individually designed plan 22
IRA 32
investment funds cover
investment options 9
The Hudson River Trust 12
The EQ Advisors Trust 13
Master Trust 22
Money Market Guarantee Account 18
Pooled Trust 22
Program 22
Self Directed Prototype Plan 22
separate accounts 34
Corresponding Portfolios cover
unit value 19
unit 19
3-year GRA 17
5-year GRA 17
3 Members Retirement Program
<PAGE>
THE PROGRAM AT A GLANCE - KEY FEATURES
EMPLOYER CHOICE OF RETIREMENT PLANS
Our Members Retirement Plan is a defined contribution master plan that can be
adopted as a profit-sharing plan (401(k), SIMPLE 401(k) and safe harbor 401(k)
features are available) and a defined contribution pension plan, or both. The
Plan is designed to comply with the requirements of Section 404(c) of the
Employee Retirement Income Security Act of 1974 ("ERISA"). The Program's
investment options are the only investment choices under the Members Retirement
Plan.
Our Self-Directed Prototype Plan gives added flexibility in choosing your
investments.
Our Pooled Trust for Individually Designed Plans allows you to use the
investment options in the Program through our Pooled Trust.
PLAN FEATURES
MEMBERS RETIREMENT PLAN:
o The Program investment options are the only investment choices.
o Plan-level and participant-level recordkeeping, benefit payments, tax
withholding and reporting provided.
o Use of our Master Trust.
o No minimum amount must be invested.
SELF-DIRECTED PROTOTYPE PLAN:
o You may combine Program investment options with individual stock and bond
investments.
o Employers must adopt our Pooled Trust for investment use only, and a minimum
of $25,000 must be maintained in the Trust.
o Recordkeeping services provided only for plan assets in Pooled Trust.
o Third party recordkeeping services can be arranged through us.
o Brokerage services can be arranged through us.
INVESTMENT ONLY:
o Our Pooled Trust is used for investment only.
o Recordkeeping services provided for plan assets in Pooled Trust.
CONTRIBUTIONS
o Can be allocated to any one option or divided among them.
o Must be made by check or money order payable to Equitable Life.
o Must be sent along with a Contribution Remittance Form.
o Are credited on the day of receipt if accompanied by properly completed forms.
TRANSFERS AMONG INVESTMENT OPTIONS
o Generally, amounts may be transferred among the investment options at any
time.
o Transfers may be made by telephone on our AIM System.
o There is no charge for transfers and no tax liability.
o Transfers from the Guaranteed Rate Accounts may not be made prior to maturity.
CHARGES AND EXPENSES
o Program expense charge assessed against combined value of Program assets.
o Investment management and accounting fees and other expenses charged on an
investment fund-by-fund basis, as applicable.
o Plan and transaction charges vary by type of plan adopted, or by specific
transaction.
o Indirectly, charges of underlying investment vehicles for investment
management, 12b-1 fees and other expenses.
4 Members Retirement Program
<PAGE>
<TABLE>
<CAPTION>
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MEMBERS POOLED TRUST FOR
RETIREMENT INDIVIDUALLY SELF-DIRECTED
PLAN DESIGNED PLANS PROTOTYPE PLAN
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<S> <C> <C> <C>
WHO SELECTS INVESTMENTS? Participant. Participant or Trustee, Participant or Trustee,
as specified under your as specified under your
Plan. Plan.
ARE LOANS AVAILABLE? Yes, if permitted under Yes, if permitted under Yes, if permitted under
your Plan. your Plan. your Plan.
WHEN ARE YOU ELIGIBLE FOR DISTRIBUTIONS? Upon retirement, Benefits depend upon Upon retirement,
death, disability or the terms of your Plan. death, disability or
termination of termination of
employment. employment.
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</TABLE>
PROFESSIONAL INVESTMENT MANAGEMENT
These professional investment managers advise or sponsor the different Funds:
o Alliance Capital Management L.P.
o Massachusetts Financial Services Company
o T. Rowe Price Associates, Inc.
o Warburg Pincus Asset Management, Inc.
o Merrill Lynch Asset Management, L.P.
o Bankers Trust Company
GUARANTEED OPTIONS
The three guaranteed options include two Guaranteed Rate Accounts and a Money
Market Guarantee Account.
TAX ADVANTAGES
o On earnings
o No tax on investment earnings until withdrawn.
o On transfer
o No tax on internal transfers.
Because you are buying a contract to fund a retirement plan that already
provides tax deferral under Federal income tax rules, you should do so for the
contract's features and benefits other than tax deferral. The tax deferral of
the contract does not provide additional benefits.
BENEFIT PAYMENT OPTIONS
o Lump sum.
o Installments on a time certain or dollar certain basis.
o Variety of annuity benefit payout options as available under your employer's
plan.
o Fixed or variable annuity options available.
ADDITIONAL FEATURES
o Toll-free number available for transfers and account information.
o Participant loans (if elected by your employer; some restrictions apply).
o Regular statements of account.
o Retirement Program Specialist and Account Executive support.
o Daily valuation of accounts.
o 5500 reporting.
o For Members Retirement Plan, automatic updates for law changes.
5 Members Retirement Program
<PAGE>
1 FEE TABLE
The fee tables and discussion below will help you understand the various
charges and expenses you will bear under the Program. The tables reflect
charges: (1) you will directly incur, including Program and investment fund
fees and charges, and (2) fees and expenses of The Hudson River Trust and EQ
Advisors Trust, and their Portfolios, you will indirectly incur. If you
annuitize your account, charges for premium or other applicable taxes and other
fees may apply.
WHEN YOU PURCHASE OR REDEEM UNITS OF ANY OF THE INVESTMENT FUNDS YOU WILL PAY
NO SALES LOAD, NO DEFERRED SALES CHARGE, NO SURRENDER FEES AND NO TRANSFER OR
EXCHANGE FEES.
PROGRAM EXPENSE CHARGE AND INVESTMENT FUND OPERATING EXPENSES
The Program expense charge and operating expenses of the investment funds are
paid out of each investment fund's assets. Certain investment funds pay us an
investment management fee that varies based on their respective assets. The
Program expense charge is based on the level of assets under the Program. Each
investment fund also incurs other expenses for services such as printing,
mailing, legal, and similar items. All of these operating expenses are
reflected in each investment fund's unit value. See "How We Value Your
Account."
The tables that follow summarize the charges, at annual percentage rates, that
apply to the investment funds. They do not include other charges which are
specific to the various plans, such as enrollment fees or record maintenance
and report fees. See "Charges and Expenses," for more details. The expenses
shown are based on the actual experience of the investment funds during the
year ended December 31, 1998, and reflect currently applicable fees.
ALLIANCE GROWTH EQUITY, AGGRESSIVE EQUITY AND BALANCED FUNDS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
INVESTMENT PROGRAM
MANAGEMENT EXPENSE
FEE CHARGE OTHER TOTAL
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Growth Equity Fund 0.50% 1.00% 0.18%(1) 1.68%
Alliance Aggressive Equity Fund 0.65% 1.00% 0.19%(1) 1.84%
Alliance Balanced Fund 0.50% 1.00% 0.15%(1) 1.65%
- ------------------------------------------------------------------------------------------
</TABLE>
ALLIANCE GLOBAL, CONSERVATIVE INVESTORS AND GROWTH INVESTORS FUNDS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
INVESTMENT PROGRAM
MANAGEMENT EXPENSE
FEE CHARGE OTHER TOTAL
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Global Fund 0.20%(2) 1.00% 0.20%(1) 1.40%
Hudson River Trust 0.64 - 0.07 0.71
TOTAL 0.84% 1.00% 0.27% 2.11%
Alliance Conservative Investors Fund 0.20%(2) 1.00% 0.18%(1) 1.38%
Hudson River Trust 0.48% - 0.05% 0.53%
TOTAL 0.68% 1.00% 0.23% 1.91%
Alliance Growth Investors Fund 0.20%(2) 1.00% 0.20%(1) 1.40%
Hudson River Trust 0.51 - 0.04 0.55
TOTAL 0.71% 1.00% 0.24% 1.95%
- -------------------------------------------------------------------------------------------------
</TABLE>
6 Fee table
<PAGE>
MFS RESEARCH, WARBURG PINCUS SMALL COMPANY VALUE, T. ROWE PRICE EQUITY INCOME,
MERRILL LYNCH WORLD STRATEGY AND BT EQUITY 500 INDEX FUNDS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
TRUST RELATED EXPENSES
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INVESTMENT
MGMT.
&
ADVISORY 12B1 TOTAL(4)
FEE OTHER(4) FEE(3) AS LIMITED
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MFS Research Fund 0.55% 0.05% 0.25% 0.85%
Warburg Pincus Small Company Value Fund 0.65% 0.10% 0.25% 1.00%
T. Rowe Price Equity Income Fund 0.55% 0.05% 0.25% 0.85%
Merrill Lynch World Strategy Fund 0.70% 0.25% 0.25% 1.20%
BT Equity 500 Index Fund 0.25% 0.05% 0.25% 0.55%
- -----------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------
TOTAL
PROGRAM RELATED EXPENSES EXPENSES
- -----------------------------------------------------------------------------------------
PROGRAM
EXPENSE TOTAL AS
CHARGE OTHER(1) LIMITED TOTAL
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MFS Research Fund 1.00% 0.40%(5) 1.40% 2.25%
Warburg Pincus Small Company Value Fund 1.00% 0.39%(5) 1.39% 2.39%
T. Rowe Price Equity Income Fund 1.00% 0.38%(5) 1.38% 2.23%
Merrill Lynch World Strategy Fund 1.00% 0.40%(5) 1.40% 2.60%
BT Equity 500 Index Fund 1.00% 0.14% 1.14% 1.69%
</TABLE>
(1) Reflects the amount deducted for the daily accrual of direct expenses.
See "How We Determine the Unit Value" in the SAI.
(2) The Alliance Global, Alliance Conservative Investors and Alliance Growth
Investors Funds invest through Equitable Life's Separate Account No. 51
in corresponding Portfolios of The Hudson River Trust. This charge
represents only financial accounting expenses for Separate Account No. 51.
(3) The Class IB shares of EQ Advisors Trust are subject to fees imposed
under distribution plans (herein, the "Rule 12b-1 Plans") adopted by EQ
Trust pursuant to Rule 12b-1 under the investment Company Act of 1940, as
amended. The Rule 12b-1 Plan provides that EQ Trust, on behalf of each
Portfolio, may pay annually up to 0.25% of the average daily net assets
of a Portfolio attributable to its Class IB shares in respect of
activities primarily intended to result in the sale of the Class IB
shares.
(4) The maximum investment management and advisory fees for each EQ Advisors
Trust Portfolio cannot be increased without a vote of that Portfolio's
shareholders. The amounts shown as "Other Expenses" will fluctuate from
year to year depending on actual expenses, however, EQ Financial
Consultants, Inc. ("EQ Financial"), EQ Advisors Trust's manager, has
entered into an expense limitation agreement with respect to each
Portfolio, ("Expense Limitation Agreement") pursuant to which EQ
Financial 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 to the respective average daily net assets of each
Portfolio as follows: 0.60% for MFS Research, 0.75% for Warburg Pincus
Small Company Value, 0.60% for T. Rowe Price Equity Income, 0.95% for
Merrill Lynch World Strategy and 0.30% for BT Equity 500 Index.
Absent the expense limitation, "Other Expenses" for 1998 on an annualized
basis for each of the Portfolios were as follows: 0.25% for MFS Research,
0.27% for Warburg Pincus Small Company Value; 0.24% for T. Rowe Price
Equity Income; 0.66% for Merrill Lynch World Strategy and 0.33% for BT
Equity 500 Index.
Each Portfolio may at a later date make a reimbursement to EQ Financial
for any of the management fees waived or limited and other expenses
assumed and paid by EQ Financial 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. See the EQAT
prospectus for more information.
(5) The amounts shown also reflect expenses of $19,329 which were initially
paid by us in connection with the organization of the MFS Research,
Warburg Pincus Small Company Value, T. Rowe Price Equity Income and
Merrill Lynch World Strategy Funds. These expenses are being reimbursed
by these Funds (equally amortized over the four EQAT Funds) over a five
year period that ends December 31, 2002.
7 Fee table
<PAGE>
EXAMPLE
A $1,000 investment in each Fund listed below would be subject to the expenses
indicated, assuming a 5% annual return. Applicable expenses are the same whether
or not you withdraw all or part of your Account Balance at the end of each time
period shown (1).
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Growth Equity $ 17.93 $ 55.51 $ 95.50 $ 207.08
Alliance Aggressive Equity 19.54 60.41 103.76 224.03
Alliance Balanced 17.63 54.59 93.94 203.87
Alliance Global 22.27 68.63 117.55 251.96
Alliance Conservative Investors 20.25 62.55 107.35 231.35
Alliance Growth Investors 20.65 63.77 109.40 235.51
MFS Research 23.67 72.86 124.62 266.13
Warburg Pincus Small Company Value 25.08 77.08 131.64 280.08
T. Rowe Price Equity Income 23.47 72.26 123.61 264.11
Merrill Lynch World Strategy 27.18 83.37 142.08 300.61
BT Equity 500 Index 18.03 55.82 96.02 208.15
- ---------------------------------------------------------------------------------
</TABLE>
(1) These calculations include all asset based charges plus a component for
record maintenance and report fees and enrollment fees. The component is
computed by aggregating such fees and dividing by the average assets for
the same period. See "Members Retirement Plan (Pension and Profit
Sharing), Prototype Self Directed Plan and Investment Only Fees" in this
prospectus.
If you elect an annuity payout option under which we deduct a $350
annuitization fee:
Assuming an annuity payout option could be issued, the
expenses shown in the above example would, in each case, be increased by $4.43
based on the average amount applied to annuity payout options in 1998.
CONDENSED FINANCIAL INFORMATION
Please see APPENDIX I at the end of this prospectus for condensed financial
information concerning (i) the Alliance Growth Equity Fund (Separate Account
No. 4 (Pooled)), the Alliance Aggressive Equity Fund (Separate Account No. 3
(Pooled)), and the Alliance Balanced Fund (Separate Account No. 10 (Pooled));
(ii) unit value information for the Alliance Global, Alliance Conservative
Investors, and Alliance Growth Investors Funds (Separate Account No. 51
(Pooled)); and (iii) unit value information for the MFS Research, Warburg
Pincus Small Company Value, T. Rowe Price Equity Income, Merrill Lynch World
Strategy and BT Equity 500 Index Funds (Separate Account No. 66 (Pooled)).
FINANCIAL STATEMENTS OF INVESTMENT FUNDS
Each of the investment funds is, or is part of, one of our separate accounts as
described in "About the Separate Accounts" under "More Information." The
financial statements of the Pooled Separate Accounts, Alliance Growth Equity
(Separate Account No. 4), Alliance Aggressive Equity (Separate Account No. 3)
and Alliance Balanced (Separate Account No. 10), Separate Account No. 51 and
Separate Account No. 66 as well as the financial statements of Equitable Life
are included in the SAI. The financial statements of the Hudson River Trust are
in the SAI for the Hudson River Trust, and the financial statements for EQ
Advisors Trust are in the SAI for EQ Advisors Trust.
8 Fee table
<PAGE>
2 PROGRAM INVESTMENT OPTIONS
INVESTMENT OPTIONS
We offer FOURTEEN INVESTMENT OPTIONS under the Program: Eleven investment
funds we call the "Funds" and the other three are Guaranteed Options.
THE FUNDS
Each Fund has a different investment objective. The Funds try to meet their
investment objectives by investing either in a portfolio of securities or by
holding mutual fund shares. We cannot assure you that any of the Funds will meet
their investment objectives.
THE ALLIANCE GROWTH EQUITY FUND
OBJECTIVE
The Alliance Growth Equity Fund seeks to achieve long-term growth of capital by
investing in the securities of companies that we believe will share in the
growth of our nation's economy - and those of other leading industrialized
countries - over a long period. The Fund maintains its own portfolio of
securities.
INVESTMENT STRATEGIES
The Alliance Growth Equity Fund invests primarily in common stocks. The Fund
generally invests in securities of intermediate and large sized companies, but
may invest in stocks of companies of any size. At times the Fund may invest its
equity holdings in a relatively small number of issuers, provided that no
investment causes more than 10% of the Growth Equity Fund's assets to be
invested in the securities of one issuer.
The Alliance Growth Equity Fund also may invest smaller amounts in other
equity-type securities, such as convertible preferred stocks or convertible debt
instruments. The Fund also may invest in non-equity investments, including
non-participating and non-convertible preferred stocks, bonds and debentures.
The Fund's non-equity investments could be substantial if we believe that the
Fund will not meet its investment objectives by buying common stock and other
equity-type securities. The Fund also may invest up to 10% of its total assets
in restricted securities (securities not freely traded) and up to 15% of its
total assets in foreign securities (securities of established foreign companies
without substantial business in the United States.)
As a defensive strategy, the Alliance Growth Equity Fund may make temporary
investments in government obligations, short-term commercial paper and other
money market instruments, either directly or through our Separate Account No.
2A, which invests in such securities. The Fund would not be pursuing its
investment objective when using this temporary defensive strategy.
RISKS OF INVESTMENT STRATEGIES
See "Risks of Investing in the Funds," below, for information on the risks
associated with an investment in the Funds generally, and in the Alliance Growth
Equity Fund specifically.
THE ALLIANCE AGGRESSIVE EQUITY FUND
OBJECTIVES
The Alliance Aggressive Equity Fund seeks to achieve long-term capital growth,
consistent with investment quality, by investing primarily in securities of
medium and smaller sized companies (with capitalization generally between $100
million and $5.0 billion) that we believe have greater growth potential than
larger companies. The Fund maintains its own portfolio of securities.
INVESTMENT STRATEGIES
The Alliance Aggressive Equity Fund invests primarily in common stocks of medium
and smaller sized companies. The Fund may also invest in securities not
generally defined as growth stocks, but with unusual value or earnings
potential. For example, the Fund may seek opportunities for capital growth by
investing in companies (a) believed to be in cyclical industries; (b) whose
securities are temporarily undervalued; (c) in special situations; (d) that are
younger but not widely known; or (e) doing business in countries whose economies
are expanding. The Fund may also invest in foreign companies without substantial
business in the
9 Program Investment Options
<PAGE>
United States. The Fund may invest in other equity-type investments, and may at
times be less diversified than a traditional equity portfolio.
The Fund may also invest in short-term debt securities such as corporate notes,
and temporarily invest in money market investments, including our Separate
Account No. 2A. Additionally, the Fund may invest up to 10% of its total assets
in restricted securities.
RISKS OF INVESTMENT STRATEGIES
See "Risks of Investing in the Funds", below, for information on the risks
associated with an investment in the Funds generally, and in the Alliance
Aggressive Equity Fund specifically. Note, however, that due to the Alliance
Aggressive Equity Fund's aggressive investment policies and less diversified
investments, this Fund provides greater growth potential and greater risk than
the Alliance Growth Equity and Alliance Balanced Funds. As a result, you should
consider limiting the amount allocated to this Fund, particularly as you near
retirement.
THE ALLIANCE BALANCED FUND
OBJECTIVES
The Alliance Balanced Fund seeks both appreciation of capital and current income
by investing in a diversified portfolio of common stocks, other equity-type
securities and longer-term fixed income securities. The Fund also seeks current
income by investing in publicly traded debt securities and short-term money
market instruments. The Fund maintains its own portfolio of securities.
INVESTMENT STRATEGIES
The Alliance Balanced Fund varies the portion of its assets invested in each
type of security in accordance with our evaluation of economic conditions, the
general level of common stock prices, anticipated interest rates and other
relevant considerations, including our assessment of the risks associated with
each investment medium.
In general, the Fund invests the greatest portion of it's assets in equity
securities. During each of the past ten years, the Fund invested between 43% and
86% of its assets in equity securities, including equity-type securities such as
convertible preferred stocks or convertible debt instruments.
The Fund's investment in non-money market debt securities consists primarily of
(a) publicly-traded securities issued or guaranteed by the United States
Government or its agencies or instrumentalities and (b) corporate fixed income
securities, including, but not limited to, bank obligations, notes, asset-backed
securities, mortgage pass-through obligations, collateralized mortgage
obligations, zero coupon bonds, and preferred stock. The Fund may also buy debt
securities with equity features such as conversion or exchange rights, warrants
for the acquisition of stock, or participations based on revenues, sales or
profits. The Fund only invests in investment grade non-money market debt
securities, i.e., those rated, at the time of acquisition, BBB or higher by
Standard & Poor's Corporation (S&P) or Baa or higher by Moody's Investors
Services, Inc. (Moody's) or, if unrated, are of comparable investment quality.
The average maturity of the debt securities held by the Fund varies according to
market conditions and the stage of interest rate cycles. The Fund may realize
gains on debt securities when such action is considered advantageous in light of
existing market conditions.
The Fund also may invest (a) up to 10% of its total assets in restricted
securities; (b) in foreign companies without substantial business in the United
States; (c) in repurchase agreements; and (d) in money market securities, either
directly or through our Separate Account No. 2A. The Fund may also purchase and
sell securities on a when-issued or delayed delivery basis.
Finally, the Fund may (a) invest in put and call options and (b) trade in stock
index or interest rate futures, and foreign currency forward contracts, for
hedging purposes only. In option transactions, the economic benefit will be
offset by the cost of the option, while any loss would be limited to such cost.
The Fund also enters into hedging transactions. These transactions are
undertaken only when any required regulatory procedures have been completed and
when
10 Program Investment Options
<PAGE>
economic and market conditions indicate that such transactions would serve the
best interests of the Fund.
RISKS OF INVESTMENT STRATEGIES
See "Risks of Investing in the Funds", below, for information on the risks
associated with an investment in the Funds generally, and in the Alliance
Balanced Fund specifically.
INVESTMENT MANAGER
We manage the Alliance Growth Equity, Alliance Aggressive Equity and Alliance
Balanced Funds. We currently use the personnel and facilities of Alliance
Capital Management L.P. ("Alliance") for portfolio management, securities
selection and transaction services. We are the indirect majority-owners of
Alliance, a publicly-traded limited partnership. We and Alliance are each
registered investment advisers under the Investment Advisers Act of 1940.
Alliance acts as investment adviser to various separate accounts of Equitable
Life and other affiliated insurance companies. Alliance also provides investment
management and advisory services to mutual funds, endowment funds, insurance
companies, foreign entities, qualified and non-tax qualified corporate funds,
public and private pension and profit-sharing plans, foundations and tax-exempt
organizations. As of December 31, 1998, Alliance had total assets under
management of $286 billion. Alliance's main office is located at 1345 Avenue of
the Americas, New York, New York 10105.
The Investment Committee of our Board of Directors must authorize or approve the
securities held in the Alliance Growth Equity, Alliance Aggressive Equity and
Alliance Balanced Funds. Subject to the Investment Committee's broad supervisory
authority, our investment officers and managers have complete discretion over
the assets of these Funds and have been given discretion as to sales and, within
specified limits, purchases of stocks, other equity securities and certain debt
securities. When an investment opportunity arises that is consistent with the
objectives of more than one account, we allocate investment opportunities among
accounts in an impartial manner based on certain factors such as investment
objective and current investment and cash positions.
We, together with Equitable Life's parent company, own 72.2% of the outstanding
common stock of Donaldson, Lufkin & Jenrette, Inc. (DLJ). A DLJ subsidiary,
Donaldson, Lufkin & Jenrette Securities Corporation, is one of the nation's
largest investment banking and securities firms. Another DLJ subsidiary,
Autranet, Inc., is a securities broker that markets independently originated
research to institutions. Through the Pershing Division of Donaldson, Lufkin &
Jenrette Securities Corporation, DLJ supplies correspondent services, including
order execution, securities clearance and other centralized financial services,
to numerous independent regional securities firms and banks.
To the extent permitted by law and consistent with the Fund transaction
practices discussed in the prospectus, and subject to the consent of Fund
contractholders, the Funds may engage in securities and other transactions with
the above entities or may invest in shares of the investment companies with
which those entities have affiliations. In 1998, there were no such transactions
through DLJ subsidiaries.
11 Program Investment Options
<PAGE>
THE HUDSON RIVER TRUST
The Hudson River Trust is an open-end, diversified management investment
company, more commonly called a mutual fund. As a "series" type of mutual fund,
it includes various Portfolios, three of which are offered through this Program.
The Hudson River Trust commenced operations in January 1987. The Hudson River
Trust does not impose a sales charge or "load" for buying and selling its
shares. The Alliance Global, Alliance Conservative Investors and Alliance Growth
Investors Funds invest in corresponding Portfolios of The Hudson River Trust.
Alliance is also the investment adviser of The Hudson River Trust. The
investment results you will experience in any one of those investment funds will
depend on the investment performance of the corresponding Portfolios. The table
below shows the names of the corresponding Portfolios, their investment
objectives, and their advisers.
- --------------------------------------------------------------------
PORTFOLIO
---------------------------------------------
INVESTMENT FUND NAME OBJECTIVE ADVISER
- --------------------------------------------------------------------
Alliance Global Alliance Long-term Alliance
Fund Global growth of
Portfolio capital
- --------------------------------------------------------------------
Alliance Alliance High total Alliance
Conservative Conservative return
Investors Fund Investors without
Portfolio undue risk
to principal
- --------------------------------------------------------------------
Alliance Growth Alliance High total Alliance
Investors Fund Growth return
Investors consistent
Portfolio with
reasonable
risk
- --------------------------------------------------------------------
PLEASE REFER TO THE PROSPECTUS AND SAI OF THE HUDSON RIVER TRUST FOR A MORE
DETAILED DISCUSSION OF INVESTMENT OBJECTIVES AND STRATEGIES, ADVISERS, RISK
FACTORS AND OTHER INFORMATION CONCERNING THE TRUST AND ITS PORTFOLIOS.
12 Program Investment Options
<PAGE>
THE EQ ADVISORS TRUST
The EQ Advisors Trust is a registered open-end management investment company
that offers a selection of professionally managed investment portfolios. The EQ
Advisors Trust commenced operations on May 1, 1997. As a "series" type of mutual
fund, the Trust issues shares of beneficial interest that are currently divided
among eighteen Portfolios. Each Portfolio is a separate series of the Trust with
its own objective and policies. The EQ Advisors Trust does not impose sales
charges or "loads" for buying and selling their shares.
EQ Financial Consultants, Inc. ("EQ Financial"), subject to the supervision and
direction of the Trustees of EQ Advisors Trust, manages and administers EQ
Advisors Trust. EQ Financial is an investment adviser registered under the
Investment Advisers Act of 1940, and a broker-dealer registered under the
Securities Exchange Act of 1934. EQ Financial currently furnishes specialized
investment advice to other clients, including individuals, pension and
profit-sharing plans, trusts, charitable organizations, corporations, and other
business entities. EQ Financial is a Delaware corporation and an indirect,
wholly owned subsidiary of Equitable Life.
EQ Financial is responsible for providing management and administrative services
to EQ Advisors Trust and selects the investment advisers for EQ Advisors Trust's
Portfolios, monitors the EQ Advisors Trust Advisers' investment programs and
results, reviews brokerage matters, oversees compliance by EQ Advisors Trust
with various federal and state statutes, and carries out the directives of its
Board of Trustees.
Pursuant to a service agreement, Chase Global Funds Services Company assists EQ
Financial in the performance of its administrative responsibilities to the EQ
Advisors Trust with other necessary administrative, fund accounting and
compliance services. EQ Financial's main office is located at 1290 Avenue of the
Americas, New York, NY 10104.
The MFS Research, Warburg Pincus Small Company Value, T. Rowe Price Equity
Income, Merrill Lynch World Strategy and BT Equity 500 Index Funds invest in
corresponding Portfolios of the EQ Advisors Trust. The investment results you
will experience in any one of those investment funds will depend on the
investment performance of the corresponding Portfolios. The table below shows
the names of the corresponding Portfolios, their investment objectives, and
their advisers.
- -----------------------------------------------------------------
PORTFOLIO
INVESTMENT ------------------------------------------------
FUND NAME OBJECTIVE ADVISER
- -----------------------------------------------------------------
T. Rowe Price T. Rowe Substantial T. Rowe Price
Equity Price Equity dividend Associates, Inc.
Income Fund Income income and
Portfolio capital
appreciation
- -----------------------------------------------------------------
MFS MFS Long-term Massachusetts
Research Research growth of Financial Services
Fund Portfolio capital and Company
future
income
- -----------------------------------------------------------------
Warburg Warburg Long-term Warburg Pincus
Pincus Small Pincus Small capital Asset
Company Company appreciation Management, Inc.
Value Fund Value
Portfolio
- -----------------------------------------------------------------
Merrill Lynch Merrill High total Merrill Lynch
World Lynch World investment Asset
Strategy Fund Strategy return Management, L.P.
Portfolio
- -----------------------------------------------------------------
BT Equity BT Equity Replicate Bankers Trust
500 Index 500 Index the total Company
Fund Portfolio return of
the S&P
500 Index
- -----------------------------------------------------------------
PLEASE REFER TO THE PROSPECTUS AND SAI OF THE EQ ADVISORS TRUST FOR A MORE
DETAILED DISCUSSION OF INVESTMENT OBJECTIVES AND STRATEGIES, ADVISERS, RISK
FACTORS AND OTHER INFORMATION CONCERNING THE TRUST AND ITS PORTFOLIOS.
13 Program Investment Options
<PAGE>
RISKS OF INVESTING IN THE FUNDS
All of the Funds invest in securities of one type or another. You should be
aware that any investment in securities carries with it a risk of loss, and you
could lose money investing in the Funds. The different investment objectives and
policies of each Fund may affect the return of each Fund and the risks
associated with an investment in that Fund.
Additionally, market and financial risks are inherent in any securities
investment. By market risks, we mean factors which do not necessarily relate to
a particular issuer, but affect the way markets, and securities within those
markets, perform. Market risks can be described in terms of volatility, that is,
the range and frequency of market value changes. Market risks include such
things as changes in interest rates, general economic conditions and investor
perceptions regarding the value of debt and equity securities. By financial
risks we mean factors associated with a particular issuer which may affect the
price of its securities, such as its competitive posture, its earnings and its
ability to meet its debt obligations.
The risk factors associated with an investment in the Alliance Growth Equity,
Alliance Aggressive Equity and Alliance Balanced Funds are described below. See
the SAI for additional information regarding certain investment techniques used
by these Funds. See The Hudson River Trust prospectus for risk factors and
investment techniques associated with an investment in the Alliance Global,
Alliance Conservative Investors and Alliance Growth Investors Funds. See the EQ
Advisors Trust prospectus for risks and factors and investment techniques
associated with an investment in the MFS Research, Warburg Pincus Small Company
Value, T. Rowe Price Equity Income, Merrill Lynch World Strategy and BT Equity
500 Index Funds.
Important factors associated with an investment in the Alliance Growth Equity,
Alliance Aggressive Equity and Alliance Balanced Funds are discussed below.
COMMON STOCK. Investing in common stocks and related securities involves the
risk that the value of the stocks or related securities purchased will
fluctuate. These fluctuations could occur for a single company, an industry, a
sector of the economy, or the stock market as a whole. These fluctuations could
cause the value of the Fund's investments - and, therefore, the value of the
Fund's units - to fluctuate.
SECURITIES OF MEDIUM AND SMALLER SIZED COMPANIES. The Alliance Aggressive Equity
Fund invests primarily in the securities of medium and smaller sized companies,
although the Alliance Growth Equity and Alliance Balanced Funds may also make
these investments. The securities of small and medium sized, less mature, lesser
known companies involves greater risks than those normally associated with
larger, more mature, well-known companies. Therefore, consistent earnings may
not be as likely in small companies as in large companies.
The Funds also run a risk of increased and more rapid fluctuations in the value
of its investments in securities of small or medium sized companies. This is due
to the greater business risks of small size and limited product lines, markets,
distribution channels, and financial and managerial resources. Historically, the
price of small (less than $2 billion) and medium (between $2 and $10 billion)
capitalization stocks and stocks of recently organized companies have fluctuated
more than the larger capitalization stocks and the overall stock market. One
reason is that small- and medium-sized companies have less certain prospects for
growth, a lower degree of liquidity in the markets for their stocks, and greater
sensitivity to changing economic conditions.
NON-EQUITY SECURITIES. Investing in non-equity securities, such as bonds and
debentures, involves the risk that the value of these securities held by the
Alliance Growth Equity, Alliance Aggressive Equity and Alliance Balanced Funds -
and, therefore, the value of the Fund's units - will fluctuate with changes in
interest rates (interest rate risk) and the perceived ability of the issuer to
make interest or principal payments on time (credit risk). Moreover, convertible
securities, such as convertible preferred stocks or convertible debt
instruments, contain both debt and equity features, and may lose significant
value in periods of extreme market volatility.
14 Program Investment Options
<PAGE>
FOREIGN INVESTING. Investing in securities of foreign companies that may not do
substantial business in the United States involves additional risks, including
risk of loss from changes in the political or economic climate of the countries
in which these companies do business. Foreign currency fluctuations, exchange
controls or financial instability could cause the value of the Alliance Growth
Equity, Aggressive Equity and Balanced Funds' foreign investments to fluctuate.
Additionally, foreign accounting, auditing and disclosure standards may differ
from domestic standards, and there may be less regulation in foreign countries
of stock exchanges, brokers, banks, and listed companies than in the United
States. As a result, the Fund's foreign investments may be less liquid and their
prices may be subject to greater fluctuations than comparable investments in
securities of U.S. issuers.
RESTRICTED SECURITIES. Investing in restricted securities involves additional
risks because these securities generally (1) are less liquid than non-restricted
securities and (2) lack readily available market quotations. Accordingly, the
Alliance Growth Equity, Alliance Aggressive Equity and Alliance Balanced Funds
may be unable to quickly sell its restricted security holdings at fair market
value.
The following discussion describes investment risks unique to either the
Alliance Growth Equity Fund, Alliance Aggressive Equity Fund or the Alliance
Balanced Fund.
INVESTMENT CONCENTRATION. Concentrating the Alliance Growth Equity Fund's equity
holdings in the stocks of a few companies increases the risk of loss, because a
decline in the value of one of these stocks would have a greater impact on the
Fund. As of December 31, 1998, the Fund held 27.4% of its net assets in the
stocks of four issuers. See Separate Account No. 4 (Pooled) Statement of
Investments and Net Assets in the SAI.
AGGRESSIVE INVESTMENT POLICIES. Due to the Alliance Aggressive Equity Fund's
aggressive investment policies and less diversified investments, this Fund
provides greater growth potential and greater risk than the Alliance Growth
Equity and Alliance Balanced Funds. As a result, you should consider limiting
the amount allocated to this Fund, particularly as you near retirement.
ASSET ALLOCATION POLICIES. The Alliance Balanced Fund varies the portion of it's
assets invested in equity and non-equity securities with our evaluation of
various factors. The Fund is subject to the risk that we may incorrectly predict
changes in the relative values of the stock and bond markets.
DEBT SECURITIES SUBJECT TO PREPAYMENT RISKS. Mortgage pass-through securities
and certain collateralized mortgage obligations, asset-backed securities and
other debt instruments in which the Alliance Balanced Fund may invest are
subject to prepayments prior to their stated maturity. The Fund, however, is
unable to accurately predict the rate at which prepayments will be made, as that
rate may be affected, among other things, by changes in generally prevailing
market interest rates. If prepayments occur, the Fund suffers the risk that it
will not be able to reinvest the proceeds at as high a rate of interest as it
had previously been receiving. Also, the Fund will incur a loss to the extent
that prepayments are made for an amount that is less than the value at which the
security was then being carried by the fund. Moreover, securities that may be
prepaid tend to increase in value less during times of declining interest rates,
and to decrease in value more during times of increasing interest rates, than do
securities that are not subject to prepayment.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. The Alliance Balanced Fund may
purchase and sell securities on a when-issued or delayed delivery basis. In
these transactions, securities are purchased or sold by a Fund with payment and
delivery taking place in the future in order to secure what is considered to be
an advantageous price or yield to the Fund at the time of entering into the
transaction. However, the market value of such securities at the time of
settlement may be more or less than the purchase price then payable. The Fund
will sell on a forward settlement basis only securities it owns or has the right
to acquire.
15 Program Investment Options
<PAGE>
DEBT INSTRUMENTS ISSUED BY SCHEDULE B BANKS. The Alliance Balanced Fund may
invest in debt instruments issued by Schedule B Banks, which are foreign
branches of United States banks. Schedule B Banks are not required to maintain
the same financial reserves which are required of United States banks, but
Schedule B Bank certificates of deposit are fully guaranteed by the U.S. parent
of the issuing bank. Debt instruments issued by Schedule B Banks may include
certificates of deposit and time deposits of London branches of United States
banks ("Eurodollars"). Eurodollar investments are subject to the types of risks
associated with foreign securities. London branches of the United States banks
have extensive government regulation which may limit both the amount and the
type of loans and interest rates. In addition, the banking industry's
profitability is closely linked to prevailing money market conditions for
financing lending operations. Both general economic conditions and credit risks
play an important part in the operations of the banking industry. United States
banks are required to maintain reserves, are limited in how much they can loan
to a single borrower and are subject to other regulations to promote financial
soundness. Not all of these laws and regulations apply to foreign branches of
United States banks.
HEDGING TRANSACTIONS. The Alliance Balanced Fund may engage in hedging
transactions which are designed to protect against anticipated adverse price
movements in securities owned or intended to be purchased by the Fund. When
interest rates go up, the market value of outstanding debt securities declines
and vice versa. In recent years the volatility of the market for debt securities
has increased significantly, and market prices of longer-term obligations have
been subject to wide fluctuations, particularly as contrasted with those of
short-term instruments. The Fund will take certain risks into consideration when
determining which, if any, options or financial futures contracts it will use.
If the price movements of hedged portfolio securities are in fact favorable to
the Fund, the hedging transactions will tend to reduce and may eliminate the
economic benefit to the Fund which otherwise would result. Also, the price
movements of options and futures used for hedging purposes may not correlate as
anticipated with price movements of the securities being hedged. This can make a
hedge transaction less effective than anticipated and could result in a loss.
The options and futures markets can sometimes become illiquid and the exchanges
on which such instruments are traded may impose trading halts or delays on the
exercise of options and liquidation of futures positions in certain
circumstances. This could in some cases operate to the Fund's detriment.
ADDITIONAL INFORMATION ABOUT THE FUNDS
CHANGE OF INVESTMENT OBJECTIVES
We can change the investment objectives of the Alliance Growth Equity, Alliance
Aggressive Equity and Alliance Balanced Funds if the New York State Insurance
Department approves the change.
The investment objectives of the Portfolios of The Hudson River Trust underlying
the Alliance Global, Alliance Conservative Investors and Alliance Growth
Investors Funds can only be changed by a majority vote of shareholders of those
Portfolios. See "Voting Rights." The investment objectives of the MFS Research,
Warburg Pincus Small Company Value, T. Rowe Price Equity Income, Merrill Lynch
World Strategy and BT Equity 500 Index Funds of the EQ Advisors Trust may be
changed by the Board of Trustees of the EQ Advisors Trust without the approval
of shareholders.
VOTING RIGHTS
No voting rights apply to any of the separate accounts or to the Guaranteed
Options. We do, however, have the right to vote shares of The Hudson River Trust
and the EQ Advisors Trust held by the funds.
If The Hudson River Trust or EQ Advisors Trust holds a meeting of shareholders,
we will vote shares The Hudson River Trust allocated to the Alliance Global,
Alliance Conservative Investors and Alliance Growth Investors Funds and the
shares of the EQ Advisors Trust allocated to the MFS Research, Warburg Pincus
Small Company Value, T. Rowe Price Equity Income, Merrill Lynch World Strategy
and BT Equity 500 Index Funds in accordance with instructions received from
employers, participants or trustees, as the case
16 Program Investment Options
<PAGE>
may be. Shares will be voted in proportion to the voter's interest in the Funds
holding the shares as of the record date for the shareholders meeting. We will
vote the shares for which no instructions have been received in the same
proportion as we vote shares for which we have received instructions. Employers,
participants or trustees will receive: (1) periodic reports relating to The
Hudson River Trust and the EQ Advisors Trust and (2) proxy materials, together
with a voting instruction form, in connection with shareholder meetings.
Currently, we control The Hudson River Trust and EQ Advisors Trust. These Trust
shares are held by other separate accounts of ours and by separate accounts of
insurance companies unaffiliated with us. We generally will vote shares held by
these separate accounts which will generally be voted according to the
instructions of the owners of insurance policies and contracts funded through
those separate accounts, thus diluting the effect of your voting instructions.
THE GUARANTEED OPTIONS
We offer three different Guaranteed Options:
o two Guaranteed Rate Accounts (GRAs), and
o our Money Market Guarantee Account.
We guarantee the amount of your contributions to the Guaranteed Options and the
interest credited. Contributions to the Guaranteed Options become part of our
general account, which supports all of our insurance and annuity guarantees as
well as our general obligations. The general account, as part of our insurance
and annuity operations, is subject to regulation and supervision by the
Insurance Department of the State of New York and to insurance laws and
regulations of all jurisdictions in which we are authorized to do business.
Your investment in a Guaranteed Option is not regulated by the Securities and
Exchange Commission, and the following discussion about the Guaranteed Options
has not been reviewed by the staff of the SEC. The discussion, however, is
subject to certain generally applicable provisions of the federal securities
laws relating to the accuracy and completeness of the statements made.
GUARANTEED RATE ACCOUNTS
We offer a GRA that matures in three years (3-year GRA) or a GRA that matures in
five years (5-year GRA). Your contributions to the GRAs earn the guaranteed
interest rate then in effect when your contribution is credited. The interest
rate is expressed as an effective annual rate, reflecting daily compounding and
the deduction of applicable asset-based fees. See "Charges and Expenses."
You can make new contributions or transfer amounts from other investment options
to a GRA at the current guaranteed rate at any time. New guaranteed rates are
offered each Wednesday and are available for a seven-day period. You may call
the AIM System to obtain our current GRA rates. You earn interest from the day
after your contribution or transfer is credited through the maturity date of the
GRA. See "Maturing GRAs" in the SAI for more information. The amount of your
contribution and interest that is guaranteed is subject to any penalties
applicable upon premature withdrawal. See "Premature Withdrawals and Transfers
from a GRA" in the SAI.
PREMATURE WITHDRAWALS AND TRANSFERS
o You may not transfer from one GRA to another or from a GRA to another
investment option except at maturity.
o You may transfer other amounts at any time to a GRA at the current
guaranteed rate.
o Withdrawals may be made from a GRA before maturity if: you are disabled; you
attain age 70 1/2; you die; or you are not self-employed and your
employment is terminated.
o You may not remove GRA funds before maturity to take a loan, hardship or
other in-service withdrawal, as a result of a trustee-to-trustee transfer,
or to receive benefits from a terminated plan.
17 Program Investment Options
<PAGE>
o Certain other withdrawals prior to maturity are permitted, but may be
subject to penalty. See "Procedures for Withdrawals, Distributions and
Transfers from a GRA" in the SAI.
MONEY MARKET GUARANTEE ACCOUNT
All contributions to the Money Market Guarantee Account earn the same rate of
interest. The rate changes monthly and is expressed as an effective annual rate,
reflecting daily compounding and the deduction of applicable asset-based fees
and charges. The rate will approximate current market rates for money market
mutual funds minus these fees. You may call the AIM System to obtain the current
monthly rate. On January 1 each year we set an annual minimum rate for this
Account. The minimum guaranteed interest rate for 1999 is 2.5% (before fees).
Contributions may be made at any time and will earn the current rate from the
day after the contribution is credited through the end of the month or, if
earlier, the day of transfer or withdrawal. Your balance in the Money Market
Guarantee Account at the end of the month automatically begins receiving
interest at the new rate until transferred or withdrawn.
DISTRIBUTIONS, WITHDRAWALS, AND TRANSFERS. You may effect distributions,
withdrawals and transfers, without penalty, at any time permitted under your
plan. We do not impose penalties on distributions, withdrawals or transfers.
18 Program Investment Options
<PAGE>
3 HOW WE VALUE YOUR ACCOUNT BALANCE IN THE FUNDS
When you invest in a Fund, your contribution or transfer is used to purchase
"units" of that Fund. The unit value on any day reflects the value of the Fund's
investments for the day and the charges and expenses we deduct from the Fund. We
calculate the number of units you purchase by dividing the amount you invest by
the unit value of the Fund as of the close of business on the day we receive
your contribution or transfer instruction.
On any given day, your account value in any Fund equals the number of the Fund's
units credited to your account, multiplied by that day's value for one Fund
unit. In order to take deductions from any Fund, we cancel units having a value
equal to the amount we need to deduct. Otherwise, the number of your Fund units
of any Fund does not change unless you make additional contributions, make a
withdrawal, effect a transfer, or request some other transaction that involves
moving assets into or out of that Fund option.
For a description of how Fund unit values are computed, see "How We Compute Unit
Values for the Funds" in the SAI.
19 How we value your account balance in the funds
<PAGE>
4 TRANSFERS AND ACCESS TO YOUR ACCOUNT
TRANSFERS AMONG INVESTMENT OPTIONS
You may transfer some or all of your amounts among the investment options if you
participate in the Members Retirement Plan. Participants in other plans may make
transfers as allowed by the plan.
No transfers from the GRAs to other investment options are permitted prior to
maturity. Transfers to the GRAs, and to or from the Money Market Guarantee
Account and the Alliance Growth Equity, Alliance Aggressive Equity and Alliance
Balanced Funds, are permitted at any time. Transfers from remaining Funds are
permitted at any time except if there is any delay in redemptions from the
corresponding Portfolio of The Hudson River Trust or the EQ Advisors Trust, as
applicable.
OUR ACCOUNT INVESTMENT MANAGEMENT SYSTEM
Participants may use our automated AIM System to transfer between investment
options, obtain account information, change the allocation of future
contributions and maturing GRAs and hear investment performance information. To
use the AIM System, you must have a touch-tone telephone. We assign a personal
security code ("PSC") number to you after we receive your completed enrollment
form.
We have established procedures to reasonably confirm the genuineness of
instructions communicated to us by telephone when using the AIM System. The
procedures require personal identification information, including your PSC
number, prior to acting on telephone instructions, and providing written
confirmation of the transfers. Thus, we will not be liable for following
telephone instructions we reasonably believe to be genuine.
A transfer request will be effective on the business day we receive the request.
We will confirm all transfers in writing.
[sidebar open]
A business day is any day on which both the New York Stock Exchange and we are
open, and generally ends at 4:00 p.m. Eastern Time. We may, however, close due
to emergency conditions.
[sidebar close]
PARTICIPANT LOANS
Participant loans are available if the employer plan permits them. Participants
must apply for a plan loan through the employer.
Loans are subject to restrictions under Federal tax laws and ERISA. Loan
packages containing all necessary forms, along with an explanation of how
interest rates are set, are available from our Account Executives. A loan may
not be taken from the Guaranteed Rate Accounts prior to maturity. If a
participant is married, written spousal consent will be required for a loan.
If you are a sole proprietor, 10% or more partner, or a shareholder-employee of
an S Corporation who owns more than 5% of the shares (or a family member of any
of the above as defined under Federal income tax laws), you presently may not
borrow from your vested account balance without first obtaining a prohibited
transaction exemption from the Department of Labor. Participants should consult
with their attorneys or tax advisors regarding the advisability and procedures
for obtaining such an exemption.
Generally, the loan amount will be transferred from the investment options into
a loan account. The participant must repay the amount borrowed with interest as
required by federal income tax rules. If you fail to repay the loan when due,
the amount of the unpaid balance may be taxable and subject to additional
penalty taxes. Interest paid on a retirement plan loan is not deductible.
CHOOSING BENEFIT PAYMENT OPTIONS
The Program offers a variety of benefit payment options. If you are a
participant in a self-directed or individually-designed plan, ask your employer
for details. Once you are eligible, your plan may allow you a choice of one or
more of the following forms of distribution:
o Qualified Joint and Survivor Annuity
o Joint and Survivor Annuity Options, some with optional Period Certain
o Lump Sum Payment
o Installment Payments
o Life Annuity
o Life Annuity - Period Certain
o Cash Refund Annuity
20 Transfers and access to your account
<PAGE>
All of these options can be either fixed or variable except for the Cash Refund
Annuity and the Qualified Joint and Survivor Annuity which are fixed options
only.
[sidebar open]
The amount of each payment in a fixed option remains the same. Variable option
payments change to reflect the investment performance of the Alliance Growth
Equity Fund.
[sidebar close]
See "Types of Benefits" in the SAI for detailed information regarding each of
the benefit payout options, and "Procedures for Withdrawals, Distributions and
Transfers" in the SAI.
We provide the fixed and variable annuity options. Payments under variable
annuity options reflect investment performance of the Alliance Growth Equity
Fund.
The minimum amount that can be used to purchase any type of annuity is $5,000.
In most cases an annuity administrative charge of $350 will be deducted from the
amount used to purchase an annuity. If we give any group pension client with a
qualified plan a better annuity purchase rate than those currently guaranteed
under the Program, we will also make those rates available to Program
participants. The annuity administrative charge may be greater than $350 in that
case.
SPOUSAL CONSENT
If a participant is married and has an account balance greater than $5,000,
federal law generally requires payment of a Qualified Joint and Survivor Annuity
payable to the participant for life and then to the surviving spouse for life,
unless you and your spouse have properly waived that form of payment in advance.
Please see "Spousal Consent Requirements" under "Types of Benefits" in the SAI.
Certain self-directed prototypes and individually designed plans are not subject
to these requirements.
BENEFITS PAYABLE AFTER THE DEATH OF A PARTICIPANT
o If you die before the entire benefit due you has been paid, the remainder of
your benefits will be paid to your beneficiary.
o If you die before you are required to begin receiving benefits, the law
requires your entire benefit to be distributed no more than five years after
your death. There are exceptions - (1) A beneficiary who is not your spouse
may elect payments over his/her life or a fixed period which does not exceed
the beneficiary's life expectancy, provided payments begin within one year of
your death. (2) If your benefit is payable to your spouse, your spouse may
elect to receive benefits over his/her life or a period certain which does not
exceed his or her life expectancy beginning any time up to the date you would
have attained age 70 1/2 or, if later, one year after your death, or (3) Your
spouse may be able to roll over all or part of the death benefit to a
traditional (not Roth) individual retirement arrangement.
o If at your death you were already receiving annuity benefits, your
beneficiary will receive the survivor benefits, if any, under the form of
the annuity selected. If an annuity benefit was not selected, your
beneficiary can continue to receive benefits based on the payment option
you selected or can select a different payment option so long as payments
are made at least as rapidly as with the payment option you originally
selected.
o To designate a beneficiary or to change an earlier designation, have your
employer send us your completed beneficiary designation form. Your spouse
must consent in writing to a designation of any non-spouse beneficiary, as
explained in "Procedures for Withdrawals, Distributions and Transfers -
Spousal Consent Requirements" in the SAI.
Under the Members Retirement Plan, on the day we receive proof of your death, we
automatically transfer your Account Balance in the Funds to the Money Market
Guarantee Account unless your beneficiary instructs otherwise. All amounts are
held until your beneficiary requests a distribution or transfer. Our Account
Executives can explain these and other requirements affecting death benefits.
21 Transfers and access to your account
<PAGE>
5 THE PROGRAM
The Members Retirement Program consists of several types of retirement plans and
two retirement plan Trusts, the Master Trust and the Pooled Trust. Each of the
Trusts invests exclusively in the group annuity contracts described in this
prospectus. The Program is sponsored by Equitable Life. The Program had 10,238
participants and approximately $200 million in assets at December 31, 1998.
This section explains the Program in further detail. It is intended for
employers who wish to enroll in the Program, but contains information of
interest to participants as well. You should, of course, understand the
provisions of your plan and the Participation Agreement that define the scope of
the Program in more specific terms. References to "you" and "your" in this
section are to you in your capacity as an employer.
Our Retirement Program Specialists are available to answer your questions about
joining the Program. Please contact us by using the telephone number or
addresses listed under "How To Reach Us - Information on Joining the Program" on
the back cover of the prospectus.
SUMMARY OF PLAN CHOICES
You have a choice of three retirement plan arrangements under the Program. You
can:
o Choose, the MEMBERS RETIREMENT PLAN - which automatically gives you a full
range of services from Equitable Life. These include your choice of the
Program investment options, plan-level and participant-level recordkeeping,
benefit payments and tax withholding and reporting. Under the Members
Retirement Plan employers adopt our Master Trust and your only investment
choices are from the Investment Options.
[sidebar open]
The Members Retirement Plan is a defined contribution master plan that can be
adopted as a profit sharing plan (including optional 401(k), SIMPLE 401(k) and
safe harbor 401(k) features), a defined contribution pension plan, or both.
[sidebar close]
o Choose the SELF-DIRECTED PROTOTYPE PLAN - which gives you added flexibility in
choosing investments. This is a defined contribution prototype plan which can
be used to combine the Program investment options with your own individual
investments such as stocks and bonds. With this plan you must adopt our Pooled
Trust and maintain a minimum balance of $25,000 at all times.
You must arrange separately for plan level accounting and brokerage services.
We provide recordkeeping services only for plan assets held in the Pooled
Trust. You can use any plan recordkeeper or you can arrange through us to hire
Trustar Retirement Services at a special rate. You can also arrange through us
brokerage services from our affiliate, DLJ Direct, at special rates or use the
services of any other broker.
[sidebar open]
The Pooled Trust is an investment vehicle used with individually designed
qualified retirement plans. It can be used for both defined contribution and
defined benefit plans. We provide recordkeeping services for plan assets held in
the Pooled Trust.
[sidebar close]
o Maintain our POOLED TRUST FOR INDIVIDUALLY DESIGNED PLANS - and use our Pooled
Trust for investment options in the Program and your own individual
investments. The Pooled Trust is for investment only and can be used for both
defined benefit and defined contribution plans. We provide participant-level
or plan-level recordkeeping services for plan assets in the Pooled Trust.
Choosing the right plan depends on your own set of circumstances. We recommend
that you review all plan, trust, participation and related agreements with
your legal and tax counsel.
22 The Program
<PAGE>
GETTING STARTED
If you choose the Members Retirement Plan, you as the employer or trustee must
complete a Participation Agreement.
If you choose the Self-Directed Prototype Plan, you must complete the Prototype
Plan adoption agreement as well as a Participation Agreement in order to use the
Pooled Trust.
As an employer, you are responsible for the administration of the plan you
choose. If you have a Self-Directed Prototype Plan, you are also responsible for
appointing a plan trustee. Please see "Your Responsibilities as Employer" in the
SAI.
HOW TO MAKE PROGRAM CONTRIBUTIONS
Contributions must be in the form of a check drawn on a bank in the U.S.
clearing through the Federal Reserve System, in U.S. dollars, and made payable
to Equitable Life. All contribution checks should be sent to Equitable Life at
the address shown "For Contribution Checks Only" in the "Information Once You
Join the Program" section under "How to Reach Us" in this prospectus. Third
party checks are not acceptable, except for rollover contributions, tax-free
exchanges or trustee checks that involve no refund. All checks are subject to
collection. We reserve the right to reject a payment if it is received in an
unacceptable form.
All contributions must be accompanied by a Contribution Remittance form which
designates the amount to be allocated to each participant by contribution type.
Contributions are normally credited on the business day that we receive them,
provided the remittance form is properly completed. Contributions are only
accepted from the employer. Employees may not send contributions directly to the
Program.
There is no minimum amount which must be contributed for investment if you adopt
the Members Retirement Plan, or if you have your own individually designed plan
that uses the Pooled Trust. If you adopt our self-directed prototype plan, you
must, as indicated above, keep at least $25,000 in the Pooled Trust at all
times.
ALLOCATING PROGRAM CONTRIBUTIONS
Under the Members Retirement Plan participants make all of the investment
decisions.
Investment decisions in the Self-Directed Prototype Plan and individually
designed plans are made either by the participant or by the plan trustees
depending on the terms of the plan.
Participants may allocate contributions among any number of Program investment
options. Allocation instructions can be changed at any time. You may allocate
employer contributions in different percentages than your employee
contributions. The allocation percentages you elect for employer contributions
will automatically apply to 401(k) qualified non-elective contributions,
qualified matching contributions and matching contributions. The allocation
percentages you elect for employee contributions will automatically apply to
both your post-tax employee contributions and your 401(k) salary deferral
contributions.
IF WE DO NOT RECEIVE ADEQUATE INSTRUCTIONS, WE WILL ALLOCATE YOUR CONTRIBUTIONS
TO THE MONEY MARKET GUARANTEE ACCOUNT UNTIL WE ARE PROPERLY INSTRUCTED
OTHERWISE.
WHEN TRANSACTION REQUESTS ARE EFFECTIVE. Contributions, as well as transfer
requests and allocation changes (not including GRA maturity allocation changes
discussed in the SAI), are effective on the business day they are received.
Distribution requests are also effective on the business day they are received
unless, as in the Members Retirement Plan, there are plan provisions to the
contrary. Transaction requests received after the end of a business day will be
credited the next business day. Processing of any transaction may be delayed if
a properly completed form is not received.
Trustee-to-trustee transfers of plan assets are effective the business day after
we receive all items we require, including check and instructions, and the new
or amended plan opinion letter.
23 The Program
<PAGE>
DISTRIBUTIONS FROM THE INVESTMENT OPTIONS
Keep in mind two sets of rules when considering distributions or withdrawals
from the Program. The first are rules and procedures that apply to the
investment options, exclusive of the provisions of your plan. We discuss those
in this section. The second are rules specific to your plan. We discuss those
"Rules Applicable to Participant Distributions" below. Certain plan
distributions may be subject to Federal income tax, and penalty taxes. See "Tax
Information."
AMOUNTS IN THE FUNDS AND MONEY MARKET GUARANTEE ACCOUNT. These are generally
available for distribution at any time, subject to the provisions of your plan.
Distributions from the Money Market Guarantee Account and the Alliance Growth
Equity, Alliance Aggressive Equity and Alliance Balanced Funds are permitted at
any time. Distributions from remaining Funds are permitted at any time except if
there is any delay in redemptions from the corresponding Portfolio of The Hudson
River Trust or the EQ Advisors Trust, as applicable.
GUARANTEED RATE ACCOUNTS. Withdrawals generally may not be taken from GRAs prior
to maturity. See "Guaranteed Rate Accounts."
Payments or withdrawals and application of proceeds to an annuity ordinarily
will be made promptly upon request in accordance with plan provisions. However,
we can defer payments, applications and withdrawals for any period during which
the New York Stock Exchange is closed for trading, sales of securities are
restricted or determination of the fair market value of assets is not reasonably
practicable because of an emergency.
IF YOUR PLAN IS AN EMPLOYER OR TRUSTEE-DIRECTED PLAN, YOU AS THE EMPLOYER ARE
RESPONSIBLE FOR ENSURING THAT THERE IS SUFFICIENT CASH AVAILABLE TO PAY
BENEFITS.
RULES APPLICABLE TO PARTICIPANT DISTRIBUTIONS
In addition to our own procedures, distribution and benefit payment options
under a tax qualified retirement plan are subject to complicated legal
requirements. A general explanation of the federal income tax treatment of
distributions and benefit payment options is provided in "Tax Information" in
this prospectus and the SAI. You should discuss your options with a qualified
financial advisor. Our Account Executives also can be of assistance.
In general, under the Members Retirement Plan or our Self-Directed Prototype
Plan, participants are eligible for benefits upon retirement, death or
disability, or upon termination of employment with a vested benefit.
Participants in an individually designed plan are eligible for retirement
benefits depending on the terms of their plan. See "Benefit Payment Options"
under "Transfers and Access to Your Money," and "Tax Information" for more
details. For participants who own more than 5% of the business, benefits must
begin no later than April 1 of the year after the participant reaches age
70 1/2. For all other participants, distribution must begin by April 1 of the
later of the year after attaining age 70 1/2 or retirement from the employer
sponsoring the plan.
o You may withdraw all or part of your Account Balance under the Members
Retirement Plan attributable to post-tax employee contributions at any time,
provided that you withdraw at least $300 at a time (or, if less, your entire
post-tax Account Balance).
o If you are married, your spouse must generally consent in writing before you
can make any type of withdrawal except to purchase a Qualified Joint or a
Survivor Annuity. Self-employed persons may generally not receive a
distribution prior to age 59 1/2.
o Employees may generally not receive a distribution prior to separation from
service.
o Hardship withdrawals before age 59 1/2 may be permitted under 401(k) and
certain other profit sharing plans.
Under an individually designed plan and our self-directed plan, the availability
of pre-retirement withdrawals depends on the terms of the plan. We suggest that
you ask your employer what types of withdrawals are available under your
24 The Program
<PAGE>
plan. See "Procedures for Withdrawals, Distributions and Transfers" in the SAI
for a more detailed discussion of these general rules.
Generally you may not make withdrawals from the Guaranteed Rate Accounts prior
to maturity. See "The Guaranteed Rate Accounts."
25 The Program
<PAGE>
6 PERFORMANCE INFORMATION
The investment performance of the Funds reflects changes in unit values
experienced over time. The unit value calculations for the Funds include all
earnings, including dividends and realized and unrealized capital gains. Unlike
the typical mutual fund, the Funds reinvest, rather than distribute, their
earnings.
The following tables show the annual percentage change in Fund unit values, and
the average annual percentage change in Fund unit values, for the periods ended
December 31, 1998. You may compare the performance results for each Fund with
the data presented for certain unmanaged market indices, or "benchmarks."
Performance data for the benchmarks do not reflect any deductions for investment
advisory, brokerage or other expenses of the type typically associated with an
actively managed investment fund. This overstates their rates of return and
limits the usefulness of the benchmarks in assessing the performance of the
Funds. The benchmark results have been adjusted to reflect reinvestment of
dividends and interest for greater comparability. The benchmarks are:
o Standard and Poor's 500 Index ("S&P 500") - a weighted index of the securities
of 500 companies widely regarded by investors as representative of the stock
market.
o Standard & Poor's MidCap 400 (Total Return) Index (S&P MidCap TR) - a
market-weighted index with each stock affecting the index in proportion to
its market value. It consists of 400 domestic stocks chosen for market
size (median market capitalization falls in the $200 million to $5 billion
range), liquidity, and industry group representation.
o Lehman Aggregate Index - a bond index which includes fixed rate debt issues
rated investment grade or higher by Moody's Investors Service, Standard
and Poor's Corporation, or Fitch Investor's Service, in that order. All
issues have at least one year to maturity and an outstanding par value of
at least $100 million for U.S. Government issues and $50 million for all
others.
o Lehman Government/Corporate Bond Index (Lehman) - an index widely regarded
by investors as representative of the bond market.
o Lehman Treasury Bond Index (Lehman Treasury) - a bond index which includes
all public obligations of the U.S. Treasury (excluding foreign targeted
issues).
o Morgan Stanley Capital International World Index (MSCI World) - an
arithmetical average weighted by market value of the performance of 1,520
companies listed on the stock exchanges of the United States, Europe,
Canada, Australia, New Zealand and the Far East.
o Consumer Price Index (Urban Consumers - not seasonally adjusted)(CPI) - an
index of inflation.
The annual percentage change in unit values represents the percentage increase
or decrease in unit values from the beginning of one year to the end of that
year. The average annual rates of return are time-weighted, assume an investment
at the beginning of each period, and include the reinvestment of investment
income.
Historical results are presented for the Funds for the periods during which the
Funds were available under the Program. Hypothetical results were calculated for
prior periods. The Alliance Global, Alliance Conservative Investors and Alliance
Growth Investors Funds became available under the Program on July 1, 1993. The
performance figures prior to that date for these Funds reflect (1) hypothetical
performance based on the actual performance of the Alliance Global, Alliance
Conservative Investors and Alliance Growth Investors Portfolios, respectively,
from the date each commenced operations and (2) the deduction of the Program
Expense Charge, the financial accounting fee and the daily accrual of direct
expenses attributable to the Alliance Growth Equity Fund. After July 1, 1993,
they reflect actual performance and, for 1993, annualized actual expenses. See:
"Deductions and Charges".
Historical results are presented for the Funds for the periods during which the
Funds were available under the Program. See the attached EQ Advisors Trust
prospectus for historical performance information regarding those portfolios.
Such
26 Performance information
<PAGE>
information does not reflect the Program Expense Charge that would reduce the
results shown in the EQ Advisors Trust prospectus. The MFS Research, Warburg
Pincus Small Company Value, T. Rowe Price Equity Income and Merrill Lynch World
Strategy Funds became available under the Program on August 1, 1997. The
respective Portfolios of the EQ Advisors Trust commenced operations on May 1,
1997. The BT Equity 500 Index Fund became available on July 1, 1998. The BT
Equity 500 Index Portfolio commenced operations on December 31, 1997.
The performance shown does not reflect any record maintenance and report or
enrollment fees. No provisions have been made for the effect of taxes on income
and gains or upon distribution. Past performance is not an indication of future
performance.
27 Performance information
<PAGE>
ANNUAL PERCENT CHANGES IN FUND UNIT VALUES*
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
ANNUAL PERIOD ENDING LAST BUSINESS DAY OF
- ------------------------------------------------------------------------------------
FUND 1989 1990 1991 1992 1993
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alliance Growth Equity 43.0 -12.3% 50.4% 0.1% 18.0%
Alliance Aggressive Equity 45.2 7.5 85.1 -4.2 13.1
Alliance Balanced 24.9 -1.9 39.7 -3.9 10.8
Alliance Global 25.4 -7.4 29.1 -1.9 30.8
Alliance Conservative Investors 1.7 5.0 18.4 4.3 9.4
Alliance Growth Investors 2.6 9.4 47.3 3.5 13.9
MFS Research - - - - -
Merrill Lynch World Strategy - - - - -
T. Rowe Price Equity Income - - - - -
Warburg Pincus Small Co. Value - - - - -
- ------------------------------------------------------------------------------------
COMPARATIVE INDICES
- ------------------------------------------------------------------------------------
S&P 500 31.7% -3.1% 30.5% 7.6% 10.1%
S&P Midcap TR 35.6 -5.1 50.1 11.9 13.9
S&P 500/Lehman Aggregate 23.1 2.9 23.2 7.5 9.9
(50%/50%)
MSCI World 16.6 -17.0 18.3 -5.2 22.5
S&P 500/Lehman Treasury (30%/70%) 19.6 5.1 19.8 7.3 10.5
S&P 500/Lehman (70%/30%) 26.5 0.3 26.2 7.6 10.3
CPI 4.6 6.2 3.0 2.9 2.7
Russell 2000 Value 12.4 -21.8 41.7 29.1 23.8
- ------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------
ANNUAL PERIOD ENDING LAST BUSINESS DAY OF
- ------------------------------------------------------------------------------------
FUND 1994 1995 1996 1997 1998
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alliance Growth Equity -2.8% 30.3% 16.4% 25.5% -3.8%
Alliance Aggressive Equity -5.1 29.6 20.9 10.6 -14.5
Alliance Balanced -9.2 18.9 10.0 12.1 18.0
Alliance Global 3.6 16.8 12.9 10.1 20.1
Alliance Conservative Investors -5.9 18.3 3.7 11.7 12.3
Alliance Growth Investors -4.8 24.2 11.0 15.2 17.5
MFS Research - - - - 22.4
Merrill Lynch World Strategy - - - - 5.3
T. Rowe Price Equity Income - - - - 7.6
Warburg Pincus Small Co. Value - - - - -11.3
- -----------------------------------------------------------------------------------
COMPARATIVE INDICES
- -----------------------------------------------------------------------------------
S&P 500 1.3% 37.6% 23.0% 33.4% 28.6%
S&P Midcap TR -3.6 30.9 19.2 32.3 19.1
S&P 500/Lehman Aggregate -0.8 28.0 13.3 21.5 18.6
(50%/50%)
MSCI World 5.1 20.7 13.5 15.8 24.3
S&P 500/Lehman Treasury (30%/70%) -2.0 24.1 8.8 16.7 15.6
S&P 500/Lehman (70%/30%) -0.1 32.1 16.9 26.3 22.9
CPI 2.7 2.9 3.3 1.9 1.6
Russell 2000 Value -1.6 25.7 21.4 31.8 -6.5
- ------------------------------------------------------------------------------------
</TABLE>
* Hypothetical performance shown in bold.
28 Performance information
<PAGE>
AVERAGE ANNUAL PERCENTAGE
CHANGE IN FUND UNIT VALUES -
YEARS ENDING DECEMBER 31, 1998*
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
FUND 10 YEARS 5 YEARS 3 YEARS 1 YEAR
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Growth Equity 14.7% 12.2% 12.0% -3.8%
Alliance Aggressive Equity 16.0 7.0 4.6 -14.5
Alliance Balanced 11.1 9.5 13.3 18.0
Alliance Global 13.3 12.6 14.3 20.1
Alliance Conservative Investors - 7.7 9.2 12.3
Alliance Growth Investors - 12.2 14.5 17.5
MFS Research - - - 22.4
Merrill Lynch World Strategy - - - 5.3
T. Rowe Price Equity Income - - - 7.6
Warburg Pincus Small Co. Value - - - -11.3
- ----------------------------------------------------------------------------------
COMPARATIVE INDICES
- ----------------------------------------------------------------------------------
S&P 500 19.2% 24.1% 28.2% 28.6%
S&P Midcap TR 19.3 18.8 23.4 19.1
S&P 500/Lehman Aggregate (50%/50%) 15.2 16.9 18.7 18.6
MSCI World 10.7 15.7 17.8 24.3
S&P 500/Lehman Treasury (30%/70%) 13.1 13.4 14.5 15.6
S&P 500/Lehman (70%/30%) 17.0 20.0 22.7 22.9
CPI 3.1 2.4 2.2 1.6
Russell 2000 Value 14.0 13.1 14.4 -6.5
</TABLE>
* Hypothetical performance shown in bold.
PAST PERFORMANCE IS NOT AN INDICATION OF FUTURE PERFORMANCE. NO PROVISIONS HAVE
BEEN MADE FOR THE EFFECT OF TAXES ON INCOME AND GAINS OR UPON DISTRIBUTION.
29 Performance information
<PAGE>
7 CHARGES AND EXPENSES
You will incur two general types of charges under the Program:
(1) Charges imposed on amounts invested in the Program - these apply to all
amounts invested in the Program (including installment payout option
payments), and do not vary by plan. These are, in general, reflected as
reductions in the unit values of the Funds or as reductions from the rates
credited to the Guaranteed Options.
(1) Plan and transaction charges - these vary by plan or are charged for
specific transactions, and are typically stated in a dollar amount.
Unless otherwise noted, these are deducted in fixed dollar amounts by
reducing the number of units in the appropriate Funds and the dollars in
the Guaranteed Options.
We deduct amounts for the 3-year or 5-year GRA from your most recent GRA.
We make no deduction from your contributions or withdrawals for sales expenses.
CHARGES BASED ON AMOUNTS INVESTED IN THE PROGRAM
PROGRAM EXPENSE CHARGE
We assess the Program expense charge as a daily charge at an annual rate of
1.00% of your account balance held in all the investment options. The purpose of
this charge is to cover the expenses that we incur in connection with the
Program.
We apply the Program expense charge toward the cost of maintenance of the
investment options, promotion of the Program, commissions, administrative costs,
such as enrollment and answering participant inquiries, and overhead expenses
such as salaries, rent, postage, telephone, travel, legal, actuarial and
accounting costs, office equipment and stationery. During 1998 we received
$1,933,379 under the Program expense charge then in effect.
INVESTMENT MANAGEMENT AND ACCOUNTING FEES
The computation of unit values for each of the Funds named below also reflects
fees charged for investment management and accounting. We receive fees for
investment management services for the Alliance Growth Equity, Alliance
Aggressive Equity and Alliance Balanced Funds. The investment management and
accounting fee covers the investment management and financial accounting
services we provide for these Funds, as well as a portion of our related
administrative costs. This fee is charged daily at an effective annual rate of
.50% of the net assets of the Alliance Growth Equity and Balanced Funds and an
effective annual rate of .65% for the Alliance Aggressive Equity Fund.
We receive fees for financial accounting services for the Alliance Global,
Alliance Conservative Investors and Alliance Growth Investors Funds. This fee is
charged daily at an effective annual rate of .20% of the net assets of these
Funds.
OTHER EXPENSES BORNE BY THE FUNDS
HUDSON RIVER TRUST ANNUAL EXPENSES. The Alliance Global, Alliance Conservative
Investors and Alliance Growth Investors Funds are indirectly subject to
investment advisory and other expenses charged against assets of the
corresponding Portfolios of The Hudson River Trust. These expenses are described
in The Hudson River Trust prospectus accompanying this prospectus.
EQ ADVISORS TRUST ANNUAL EXPENSES. The MFS Research, Warburg Pincus Small
Company Value, T. Rowe Price Equity Income, Merrill Lynch World Strategy and BT
Equity 500 Index Funds are subject to investment management and advisory fees,
12b-1 fees and other expenses charged against assets of the corresponding
Portfolios of the EQ Advisors Trust. These expenses are described in the EQ
Advisors Trust prospectus accompanying this prospectus.
OTHER EXPENSES. Certain costs and expenses are charged directly to the Funds.
These may include transfer taxes, SEC filing fees and certain related expenses
including printing of SEC filings, prospectuses and reports, proxy mailings,
other
30 Charges and expenses
<PAGE>
mailing costs, legal expenses and (for the Alliance Global, Alliance
Conservative Investors and Alliance Growth Investors Funds only) custodians'
fees and outside auditing expenses.
PLAN AND TRANSACTION EXPENSES
MEMBERS RETIREMENT PLAN, PROTOTYPE SELF-DIRECTED PLAN AND INVESTMENT ONLY FEES
RECORD MAINTENANCE AND REPORT FEE. At the end of each calendar quarter, we
deduct a record maintenance and report fee of $3.75 from your Account Balance.
We reserve the right to charge varying fees based on the requested special
mailings, reports and services given to your retirement plan.
ENROLLMENT FEE. We charge an employer a non-refundable enrollment fee of $25 for
each participant enrolled under its plan. If we do not maintain individual
participant records under an individually-designed plan, we instead charge the
employer $25 for each plan or trust. If the employer fails to pay these charges,
we may deduct the amount from subsequent contributions or from participants'
account balances.
PROTOTYPE SELF-DIRECTED PLAN FEES. Employers who participate in our Prototype
Self-Directed Plan incur additional fees not payable to us, such as brokerage
and administration fees.
INDIVIDUAL ANNUITY CHARGES
ANNUITY ADMINISTRATIVE CHARGE. If a participant elects an annuity payment
option, we deduct a $350 charge from the amount used to purchase the annuity.
This charge reimburses us for administrative expenses associated with processing
the application for the annuity and issuing each month's annuity payment.
CHARGE FOR APPLICABLE TAXES. In certain jurisdictions, amounts used to purchase
an annuity are subject to charges for premium or other applicable taxes (rates
currently range up to 5%). Taxes depend, among other things, on your place of
residence, applicable laws and the form of annuity benefit you select. We will
deduct such charges based on your place of residence at the time the annuity
payments begin.
FEES PAID TO ASSOCIATIONS. We may pay associations a fee for enabling the
Program to be made available to their memberships. The fee may be based on the
number of employers whom we solicit, the number who participate in the Program,
and/or the value of Program assets. We make these payments without any
additional deduction or charge under the Program.
GENERAL INFORMATION ON FEES AND CHARGES
We will give you written notice of any change in the fees and charges. We may
also establish a separate fee schedule for requested non-routine administrative
services. During 1998 we received total fees and charges under the Program of
$3,137,479.
31 Charges and expenses
<PAGE>
8 TAX INFORMATION
In this section, we briefly outline current federal income tax rules relating to
adoption of the Program, contributions to the Program and distributions to
participants under qualified retirement plans. Certain other information about
qualified retirement plans appears here and in the SAI. We do not discuss the
effect, if any, of state tax laws that may apply. For tax advice, we suggest
that you consult your tax advisor.
The United States Congress has in the past considered and may in the future
consider proposals for legislation that, if enacted, could change the tax
treatment of qualified retirement plans. In addition, the Treasury Department
may amend existing regulations, issue new regulations, or adopt new
interpretations of existing laws. State tax laws or, if you are not a United
States resident, foreign tax laws, may affect the tax consequences to you or the
beneficiary. These laws may change from time to time without notice and, as a
result, the tax consequences may also change. There is no way of predicting
whether, when or in what form any such change would be adopted.
Any such change could have retroactive effects regardless of the date of
enactment. We suggest you consult your legal or tax adviser.
Because you are buying a contract to fund a retirement plan that already
provides tax deferral under Federal income tax rules, you should do so for the
contract's features and benefits other than tax deferral. The tax deferral of
the contract does not provide additional benefits.
INCOME TAXATION OF DISTRIBUTIONS TO QUALIFIED PLAN PARTICIPANTS
In this section, the word "you" refers to the plan participant.
Amounts distributed to a participant from a qualified plan are generally subject
to federal income tax as ordinary income when benefits are distributed to you or
your beneficiary. Generally speaking, only your post-tax contributions, if any,
are not taxed when distributed.
LUMP SUM DISTRIBUTIONS. If we distribute your benefits to you in a lump sum
after you have participated in the plan for at least five taxable years, you may
be able to use five-year averaging. Under this method, you calculate the tax on
the lump sum distribution separately from taxes on any other income you may have
during the year. You calculate the tax at ordinary income tax rates in the year
of the distribution, but as if it were your only income in each of five years.
The tax payable is the sum of the five years' calculations. To qualify for
five-year averaging, the distribution must consist of your entire balance in the
plan and must occur in one taxable year after you have attained age 59 1/2.
Five-year averaging is available only for one lump sum distribution.
If you were born before 1936, you may elect to have special rules apply to one
lump sum distribution. You may elect either ten-year averaging using 1986 rates
or five-year averaging using then current rates. In addition, you may elect
separately to have the portion of your distribution attributable to pre-1974
contributions taxed at a flat 20% rate.
Effective January 1, 2000, you may no longer use five year averaging on lump sum
distributions.
ELIGIBLE ROLLOVER DISTRIBUTIONS. Many types of distributions from qualified
plans are "eligible rollover distributions" that can be transferred directly to
another qualified plan or traditional individual retirement arrangement ("IRA"),
or rolled over to another plan or IRA within 60 days of the receipt of the
distribution. If a distribution is an "eligible rollover distribution," 20%
mandatory federal income tax withholding will apply unless the distribution is
directly transferred to a qualified plan or IRA. See "Eligible Rollover
Distributions and Federal Income Tax Withholding" in the SAI for a more detailed
discussion.
ANNUITY OR INSTALLMENT PAYMENTS. Each payment you receive is ordinary income for
tax purposes, except where you have a "cost basis" in the benefit. Your cost
basis is equal to the amount of your post-tax employee contributions, plus any
employer contributions you had to include in gross income in prior years. You
may exclude from gross income a portion of each annuity or installment payment
you receive. If you (and your survivor) continue to receive payments after you
have received your cost basis in the contract, all amounts will be taxable.
32 Tax information
<PAGE>
IN SERVICE WITHDRAWALS. Some plans allow in-service withdrawals of after-tax
contributions. The portion of each withdrawal attributable to cost basis is not
taxable. The portion of each withdrawal attributable to earnings is taxable.
Withdrawals are taxable only after they exceed your cost basis if (a) they are
attributable to your pre-January 1, 1987 contributions under (b) plans that
permitted those withdrawals as of May 5, 1986. Amounts that you include in gross
income under this rule may also be subject to the additional 10% penalty tax on
premature distributions described below. In addition, 20% mandatory federal
income tax withholding may also apply.
PREMATURE DISTRIBUTIONS. You may be liable for an additional 10% penalty tax on
all taxable amounts distributed before age 59 1/2 unless the distribution falls
within a specified exception or is rolled over into an IRA or other qualified
plan.
The exceptions to the penalty tax include (a) distributions made on account of
your death or disability, (b) distributions beginning after separation from
service in the form of a life annuity or installments over your life expectancy
(or the joint lives or life expectancies of you and your beneficiary), (c)
distributions due to separation from active service after age 55 and (d)
distributions you use to pay deductible medical expenses.
WITHHOLDING. In almost all cases, 20% mandatory income tax withholding will
apply to all "eligible rollover distributions" that are not directly transferred
to a qualified plan or IRA. If a distribution is not an eligible rollover
distribution, the recipient may elect out of withholding. The rate of
withholding depENds on the type of distribution. See "Eligible Rollover
Distributions and Federal Income Tax Withholding" in the SAI. Under the Members
Retirement Plan, we will withhold the tax and send you the remaining amount.
Under an individually designed plan or our prototype self-directed plan we will
pay the full amount of the distribution to the plan's trustee. The trustee is
then responsible for withholding federal income tax upon distributions to you or
your beneficiary.
OTHER TAX CONSEQUENCES
Federal estate and gift and state and local estate, inheritance, and other tax
consequences of participation in the Program depend on the residence and the
circumstances of each participant or beneficiary. For complete information on
federal, state, local and other tax considerations, you should consult a
qualified tax advisor.
33 Tax information
<PAGE>
9 MORE INFORMATION
ABOUT PROGRAM CHANGES OR TERMINATIONS
AMENDMENTS. The group annuity contract has been amended in the past and we and
the Trustees may agree to amendments in the future. No future change can affect
annuity benefits in the course of payment. If certain conditions are met, we
may: (1) terminate the offer of any of the investment options and (2) offer new
investment options with different terms.
TERMINATION. We may terminate the contract at any time. If the contract is
terminated, we will not accept any further contributions. We will continue to
hold amounts allocated to the Guaranteed Rate Accounts until maturity. Amounts
already invested in the investment options may remain in the Program and you may
also elect payment of benefits through us.
IRS DISQUALIFICATION
If your plan is found not to qualify under the Internal Revenue Code, we may:
(1) return the plan's assets to the employer (in our capacity as the plan
administrator) or (2) prevent plan participants from investing in the separate
accounts.
ABOUT THE SEPARATE ACCOUNTS
Each Investment Fund is one, or part of one, of our separate accounts. We
established the separate accounts 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 investment funds for owners of
our variable annuity contracts, including our group annuity contracts. The
results of each separate account's operations are accounted for without regard
to Equitable Life's, or any other separate account's, operating results. We are
the legal owner of all of the assets in the separate accounts and may withdraw
any amounts we have in the separate accounts that exceed our reserves and other
liabilities under variable annuity contracts.
The separate accounts that we call the Alliance Growth Equity, Alliance
Aggressive Equity, and Alliance Balanced Funds commenced operations in 1968,
1969, and 1979 respectively. The separate account which holds the Alliance
Global, Alliance Conservative Investors and Alliance Growth Investors Funds was
established in 1993. The separate account which holds the MFS Research, Warburg
Pincus Small Company Value, T. Rowe Price Equity Income, Merrill Lynch World
Strategy and BT Equity 500 Index Funds was established in 1997. Because of
exclusionary provisions, none of the Funds are subject to regulation under the
Investment Company Act of 1940. Separate Account Nos. 51 and 66, however,
purchase shares of The Hudson River Trust (Class IA shares) and EQ Advisors
Trust (Class IB shares), respectively, and each trust is registered as an
open-end management investment company under the 1940 Act.
ABOUT OUR YEAR 2000 PROGRESS
Equitable Life relies upon various computer systems in order to administer your
policy 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 has identified those of its systems critical to business operations
that were not Year 2000 compliant. By year end 1998, the work of modifying or
replacing non-compliant systems was substantially completed. Equitable Life has
begun comprehensive testing of its Year 2000 compliance and expects that the
testing will be substantially completed by June 30, 1999. Equitable Life has
contacted third-party service providers to seek confirmations that they are
acting to address the Year 2000 issue with the goal of avoiding any material
adverse effect on services provided to policyowners and on operations of the
investment options. Most third-party service providers have provided Equitable
Life confirmations of their Year 2000 compliance. Equitable Life believes it is
on schedule for substantially all such systems and services, including those
considered to be mission-critical, to be confirmed as Year 2000 compliant,
renovated, replaced or the subject of contingency plans, by June 30, 1999,
except for one investment accounting system
34 More information
<PAGE>
which is scheduled to be replaced by August 31, 1999 and confirmed as Year 2000
compliant by September 30, 1999. Additionally, Equitable Life will be
supplementing 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. Year 2000 specific contingency plans are anticipated to
be in place by June 30, 1999.
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 policy 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, 15 U.S.C. Sec. 1 (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 the separate accounts, our ability to meet our obligations under the
Program, or the distribution of group annuity contract interests under the
Program.
ABOUT OUR INDEPENDENT ACCOUNTANTS
The following financial statements included in the SAI as well as the following
condensed financial information included in the prospectus have been so included
in reliance on the reports of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
o The financial statements for Separate Account Nos. 3, 4, 10, and 51 as of
December 31, 1998 and for each of the two years in the period then ended.
o The financial statements for Separate Account No. 66 as of December 31, 1998
and for the periods then ended.
o The financial statements for Equitable Life as of December 31, 1998 and 1997
and for each of the three years in the period ended December 31, 1998.
o The condensed financial information for Separate Account Nos. 3, 4, 10, and
51 for each of the six years in the period ended December 31, 1998.
o The condensed financial information for Separate Account No. 66 for each of
the periods ended December 31, 1998.
ABOUT THE TRUSTEE
As trustee, Chase Manhattan Bank serves as a party to the group annuity
contract. It has no responsibility for the administration of the Program or for
any distributions or duties under the group annuity contract.
REPORTS WE PROVIDE AND AVAILABLE INFORMATION
We send reports annually to employers showing the aggregate Account Balances of
all participants and information necessary to complete annual IRS filings.
As permitted by the SEC's rules, we omitted certain portions of the registration
statement filed with the SEC from this prospectus and the SAI. You may obtain
the omitted information by: (1) requesting a copy of the registration statement
from the SEC's principal office in Washington, D.C., and paying prescribed fees,
or (2) by accessing the EDGAR Database at the SEC's web site at
http://www.sec.gov.
ACCEPTANCE
The employer or plan sponsor, as the case may be: (1) is solely responsible for
determining whether the Program is a suitable funding vehicle and (2) should
carefully read the prospectus and other materials before entering into a
Participation Agreement.
35 More information
<PAGE>
APPENDIX I: CONDENSED FINANCIAL INFORMATION
These selected per unit data and ratios for the years ended December 31, 1998
through 1993 have been audited by PricewaterhouseCoopers LLP, independent
accountants, as stated in their reports included in the SAI. For years prior to
1993, the condensed financial information was audited by other independent
accountants. The financial statements of each of the Funds as well as the
consolidated financial statements of Equitable Life are contained in the SAI.
Information is provided for the period that each Fund has been available under
the Program, but not longer than ten years.
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
ALLIANCE GROWTH EQUITY FUND - INCOME, EXPENSES AND CAPITAL CHANGES PER UNIT
OUTSTANDING THROUGHOUT THE YEARS INDICATED AND OTHER SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------------------
1998 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Income $ 1.59 $ 1.53 $ 1.37 $ 1.84
Expenses (Note A) (5.01) (4.55) (3.82) (3.25)
Net income (loss) (3.42) (3.02) (2.45) (1.41)
Net realized and unrealized gain
(loss) on investments (Note B) (8.33) 65.28 36.80 50.16
Net increase (decrease) in Alliance Growth Equity
Fund Unit Value (11.75) 62.26 34.35 48.75
Alliance Growth Equity Fund Unit Value
(Note C):
Beginning of year 306.51 244.25 209.90 161.15
End of year 294.76 306.51 244.25 209.90
Ratio of expenses to average net assets
attributable to the Program 1.68% 1.65% 1.68% 1.74%
Ratio of net income (loss) to average net assets
attributable to the Program (1.15)% (1.10)% (1.08)% (0.76)%
Number of Alliance Growth Equity Fund Units
outstanding at end of year (000's) 228 241 228 214
Portfolio turnover rate (Note D) 71% 62% 105% 108%
- ----------------------------------------------------------------------------------------------------------
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------------
1994 1993* 1992 1991 1990 1989
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income $ 1.79 $ 1.75 $ 1.51 $ 1.37 $1.92 $ 1.70
Expenses (Note A) (2.76) (2.54) (2.22) (2.00) (1.56) (1.59)
Net income (loss) (.97) (.79) (.71) (.63) .36 .11
Net realized and unrealized gain
(loss) on investments (Note B) (3.76) 26.16 .77 47.67 (13.52) 31.92
Net increase (decrease) in Alliance Growth Equity
Fund Unit Value (4.73) 25.37 .06 47.04 (13.16) 32.03
Alliance Growth Equity Fund Unit Value
(Note C):
Beginning of year 165.88 140.51 140.45 93.41 106.57 74.54
End of year 161.15 165.88 140.51 140.45 93.41 106.57
Ratio of expenses to average net assets
attributable to the Program 1.72% 1.69% 1.65% 1.68% 1.64% 1.74%
Ratio of net income (loss) to average net assets
attributable to the Program (0.60)% (0.52)% (0.53)% (0.54)% 0.38% 0.11%
Number of Alliance Growth Equity Fund Units
outstanding at end of year (000's) 219 208 212 189 47 48
Portfolio turnover rate (Note D) 91% 82% 68% 66% 93% 113%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes following these tables.
A-1 Appendix I: Condensed financial information
<PAGE>
SEPARATE ACCOUNT NO. 3 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
ALLIANCE AGGRESSIVE EQUITY FUND - INCOME, EXPENSES AND CAPITAL CHANGES PER UNIT
OUTSTANDING THROUGHOUT THE YEARS INDICATED AND OTHER SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
---------------------------------------------------
1998 1997 1996 1995
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Income $ .34 $ .26 $ .33 $ .24
Expenses (Note A) (.97) (.97) (.86) (.69)
Net investment income (loss) (.63) (.71) (.53) (.45)
Net realized and unrealized gain (loss) on
investments (Note B) (7.48) 6.08 9.25 9.98
Net increase (decrease) in Alliance Aggressive
Equity Fund Unit Value (8.11) 5.37 8.72 9.53
Alliance Aggressive Equity Fund Unit Value
(Note C):
Beginning of year 55.83 50.46 41.74 32.21
End of year 47.72 55.83 50.46 41.74
Ratio of expenses to average net assets
attributable to the Program 1.84% 1.82% 1.80% 1.86%
Ratio of net investment income (loss) to average
net assets attributable to the Program (1.20)% (1.33)% (1.12)% (1.21)%
Number of Alliance Aggressive Equity Fund Units
outstanding at end of year (000's) 490 508 395 328
Portfolio turnover rate (Note D) 195% 176% 118% 137%
- -----------------------------------------------------------------------------------------------------
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------
1994 1993* 1992 1991 1990 1989
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income $ .18 $ .26 $ .31 $ .29 $ .28 $ .29
Expenses (Note A) (.60) (.57) (.50) (.41) (.27) (.24)
Net investment income (loss) (.42) (.31) (.19) (.12) .01 .05
Net realized and unrealized gain (loss) on
investments (Note B) (1.32) 4.25 (1.13) 14.52 1.17 4.85
Net increase (decrease) in Alliance Aggressive
Equity Fund Unit Value (1.74) 3.94 (1.32) 14.40 1.18 4.90
Alliance Aggressive Equity Fund Unit Value
(Note C):
Beginning of year 33.95 30.01 31.33 16.93 15.75 10.85
End of year 32.21 33.95 30.01 31.33 16.93 15.75
Ratio of expenses to average net assets
attributable to the Program 1.86% 1.84% 1.74% 1.59% 1.65% 1.74%
Ratio of net investment income (loss) to average
net assets attributable to the Program (1.31)% (1.02)% (0.66)% (0.48)% 0.07% 0.35%
Number of Alliance Aggressive Equity Fund Units
outstanding at end of year (000's) 283 249 229 150 13 5
Portfolio turnover rate (Note D) 94% 83% 71% 63% 48% 92%
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes following these tables.
A-2 Appendix I: Condensed financial information
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
ALLIANCE BALANCED FUND -INCOME, EXPENSES AND CAPITAL CHANGES PER UNIT
OUTSTANDING THROUGHOUT THE YEARS INDICATED AND OTHER SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------
1998 1997 1996 1995
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Income $ 1.30 $ 1.21 $ 1.00 $ .89
Expenses (Note A) (.58) (.52) (.48) (.43)
Net investment income .72 .69 .52 .46
Net realized and unrealized gain (loss) on
investments (Note B) 5.14 2.83 2.11 3.74
Net increase (decrease) in Alliance Balanced
Fund Unit Value 5.86 3.52 2.63 4.20
Alliance Balanced Fund Unit Value (Note C):
Beginning of year 32.54 29.02 26.39 22.19
End of year 38.40 32.54 29.02 26.39
Ratio of expenses to average net assets
attributable to the Program 1.65% 1.68% 1.73% 1.79%
Ratio of net investment income to average net
assets attributable to the Program 2.04% 2.25% 1.91% 1.90%
Number of Alliance Balanced Fund Units
outstanding at end of year (000's) 473 454 476 458
Portfolio turnover rate (Note D) 89% 165% 177% 170%
- ------------------------------------------------------------------------------------------
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------
1994 1993* 1992 1991 1990 1989
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income $ .74 $ .77 $ .79 $ .80 $ .94 $ .93
Expenses (Note A) (.40) (.39) (.35) (.32) (.27) (.25)
Net investment income .34 .38 .44 .48 .67 .68
Net realized and unrealized gain (loss) on
investments (Note B) (2.60) 2.00 (1.34) 6.04 (.98) 2.66
Net increase (decrease) in Alliance Balanced
Fund Unit Value (2.26) 2.38 (.90) 6.52 (.31) 3.34
Alliance Balanced Fund Unit Value (Note C):
Beginning of year 24.45 22.07 22.97 16.45 16.76 13.42
End of year 22.19 24.45 22.07 22.97 16.45 16.76
Ratio of expenses to average net assets
attributable to the Program 1.72 1.70% 1.65% 1.67% 1.66% 1.73%
Ratio of net investment income to average net
assets attributable to the Program 1.51% 1.61% 2.03% 2.47% 4.12% 4.38%
Number of Alliance Balanced Fund Units
outstanding at end of year (000's) 446 419 364 284 27 16
Portfolio turnover rate (Note D) 107% 102% 90% 114% 199% 175%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
* Prior to July 22, 1993, Equitable Life Capital Management Corporation
(Equitable Life Capital) served as the investment adviser to the Fund. On
July 22, 1993, Alliance Capital Management L.P. acquired the business and
substantially all of the assets of Equitable Life Capital and became the
investment adviser to the Fund.
A. Enrollment fees are not included above and did not affect the Alliance
Growth Equity, Alliance Aggressive Equity or Alliance Balanced Fund Unit
Values. Enrollment fees were generally deducted from contributions to the
Program.
B. See Note 2 to Financial Statements of Separate Account Nos. 3 (Pooled), 4
(Pooled) and 10 (Pooled), which may be found in the SAI.
C. The value for an Alliance Growth Equity Fund Unit was established at $10.00
on January 1, 1968 under the National Association of Realtors Members
Retirement Program (NAR Program). The NAR Program was merged into the
Members Retirement Program on December 27, 1984. The values for an
Alliance Aggressive Equity and an Alliance Balanced Fund Unit were
established at $10.00 on May 1, 1985, the date on which the Funds were
first made available under the Program.
D. The portfolio turnover rate includes all long-term U.S. Government
securities, but excludes all short-term U.S. Government securities and all
other securities whose maturities at the time of acquisition were one year
or less. Represents the annual portfolio turnover rate for the entire
separate account.
<PAGE>
Income, expenses, gains and losses shown above pertain only to participants'
accumulations attributable to the Program. Other plans also participate in the
Alliance Growth Equity, Alliance Aggressive Equity and Alliance Balanced Funds
and may have operating results and other supplementary data different from
those shown above.
A-3 Appendix I: Condensed financial information
<PAGE>
SEPARATE ACCOUNT NO. 51 (POOLED) UNIT VALUES
Unit values and number of units outstanding for these Funds, are shown below:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
FOR THE YEARS ENDING DECEMBER 31,
----------------------------------------------------------------------- INCEPTION
1993 1994 1995 1996 1997 1998 DATE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Alliance Global Fund 7/1/93
Unit Value $11.05 $11.45 $13.38 $15.11 $16.63 $19.97
Number of units outstanding (000's) 144 314 399 615 617 549
Alliance Conservative Investors Fund 7/1/93
Unit Value $10.22 $ 9.62 $11.39 $11.81 $13.19 $14.82
Number of units outstanding (000's) 206 185 224 848 738 333
Alliance Growth Investors Fund 7/1/93
Unit Value $10.49 $ 9.98 $12.40 $13.76 $15.85 $18.63
Number of units outstanding (000's) 148 208 242 290 333 357
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEPARATE ACCOUNT NO. 66 (POOLED) UNIT VALUES
Unit values and number of units outstanding for these Funds, are shown below:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
FOR THE YEARS ENDING
DECEMBER 31,
---------------------- INCEPTION
1997 1998 DATE
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
MFS Research Fund 8/1/97
Unit Value $ 10.34 $ 12.65
Number of units outstanding (000's) 75 184
Warburg Pincus Small Company Value Fund 8/1/97
Unit Value $ 10.62 $ 9.42
Number of units outstanding (000's) 176 217
T. Rowe Price Equity Income Fund 8/1/97
Unit Value $ 11.02 $ 11.85
Number of units outstanding (000's) 199 315
Merrill Lynch World Strategy Fund 8/1/97
Unit Value $ 9.47 $ 9.98
Number of units outstanding (000's) 38 63
BT Equity 500 Index Fund 7/1/98
Unit Value - $ 11.28
Number of units outstanding (000's) - 159
</TABLE>
A-4 Appendix I: Condensed financial information
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
Page
Funding of the Program ................................. SAI-2
Your Responsibilities as Employer ...................... SAI-2
Procedures for Withdrawals, Distributions
and Transfers ......................................... SAI-2
Types of Benefits ...................................... SAI-6
Provisions of the Members Retirement Plan .............. SAI-9
Investment Restrictions Applicable to the Alliance
Growth Equity, Alliance Aggressive Equity and
Alliance Balanced Funds ............................... SAI-13
How We Determine the Unit Value for the Funds .......... SAI-15
How We Value the Assets of the Funds ................... SAI-16
Fund Transactions ...................................... SAI-17
Investment Management and Accounting Fee ............... SAI-19
Underwriter ............................................ SAI-19
Our Management ......................................... SAI-20
Financial Statements ................................... SAI-22
CLIP AND MAIL TO US TO RECEIVE A STATEMENT OF ADDITIONAL INFORMATION
To: The Equitable Life Assurance Society
of the United States
Box 2486 G.P.O.
New York, NY 10116
Please send me a copy of the Statement of Additional Information for the Members
Retirement Program Prospectus dated May 1, 1999.
- -----------------------------------------------------------------------------
Name
- -----------------------------------------------------------------------------
Address
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
Copyright 1999 by The Equitable Life Assurance Society of the United States. All
rights reserved.
S-1 Statementof additional information
<PAGE>
ABOUT EQUITABLE LIFE
The Equitable Life Assurance Society of the United States ("Equitable Life") is
the issuer of a group annuity contract that funds the Program. Equitable Life
also makes forms of plans and trusts available, and offers recordkeeping and
participant services to facilitate the operation of the Program.
Equitable Life is a New York stock life insurance corporation and has been doing
business since 1859. We are a wholly-owned subsidiary of The Equitable
Companies, Inc., whose majority shareholder is AXA, a French insurance holding
company. 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.
Neither AXA nor Equitable Life's related companies, however, have any legal
responsibility to pay amounts that Equitable Life owes under its group annuity
contract that funds the Program. During 1999, The Equitable Life Companies
Incorporated plans to change its name to AXA Financial, Inc.
Equitable Life manages over $347.5 billion in assets as of December 31, 1998.
For more than 100 years we have been among the largest insurance companies in
the United States. We are licensed to sell life insurance and annuities in all
fifty states, the District of Columbia, Puerto Rico, and the U.S. Virgin
Islands. Our home office is located at 1290 Avenue of the Americas, New York, NY
10104.
<PAGE>
HOW TO REACH US.
You can reach us as indicated below to obtain:
o Copies of any plans, trusts, participation agreements, or enrollment or other
forms used in the Program.
o Unit values and other values under your plan,
o Any other information or materials that we provide in connection with the
Program.
INFORMATION ON JOINING THE PROGRAM
BY PHONE:
1-800-523-1125 (Retirement Program Specialists available weekdays 9 AM to
5 PM Eastern Time)
BY REGULAR MAIL:
The Members Retirement Program
c/o Equitable Life
Box 2011
Secaucus, NJ 07096
BY REGISTERED, CERTIFIED, OR OVERNIGHT DELIVERY:
The Members Retirement Program
c/o Equitable Life
200 Plaza Drive, Second Floor
Secaucus, NJ 07094
NO PERSON IS AUTHORIZED BY THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED
STATES TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS AND THE SAI, OR IN OTHER PRINTED OR WRITTEN
MATERIAL ISSUED BY EQUITABLE LIFE. YOU SHOULD NOT RELY ON ANY OTHER INFORMATION
OR REPRESENTATION.
INFORMATION ONCE YOU JOIN THE PROGRAM
BY PHONE:
1-800-526-2701 (Account Executives available weekdays 9 AM to
5 PM Eastern Time).
TOLL-FREE AIM SYSTEM:
By calling 1-800-526-2701 you may, with your assigned personal security code,
use our Automated Investment Management ("AIM") System to:
o Transfer between investment options and obtain account information.
o Change the allocation of future contributions and maturing guaranteed options.
o Hear investment performance information, including investment fund unit values
and current guaranteed option interest rates.
The AIM System operates 24 hours a day. You may speak with our Account
Executives during regular business hours about any matters covered by the AIM
System.
BY REGULAR MAIL:
(correspondence):
The Members Retirement Program
Box 2468 G.P.O.
New York, NY 10116
FOR CONTRIBUTION CHECKS ONLY:
The Members Retirement Program
P.O. Box 1599
Newark, NJ 07101-9764
FOR REGISTERED, CERTIFIED, OR OVERNIGHT DELIVERY:
The Members Retirement Program
c/o Equitable Life
200 Plaza Drive, 2B-55
Secaucus, NJ 07094
<PAGE>
INVESTMENT OPTION CHARACTERISTICS
<TABLE>
<CAPTION>
ALLIANCE
ALLIANCE GROWTH AGGRESSIVE ALLIANCE ALLIANCE
EQUITY FUND EQUITY FUND BALANCED FUND GLOBAL FUND
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DESIGNED FOR Long term growth of Long term growth of Competitive return Long term growth of
(OBJECTIVE) capital capital through a capital
combination of
growth of capital
and current income
----------------------------------------------------------------------------------------------
INVESTS PRIMARILY IN Common stocks and Common stocks and Common stocks and The Global Portfolio
other equity-type other equity-type other equity-type of the Hudson River
securities generally securities issued by securities, publicly Trust, which in turn,
issued by large and medium and smaller traded debt primarily invests in
intermediate-sized sized companies securities and equity securities of
companies with strong growth money market non-United States
potential instruments - mix as well as United
determined by States companies
portfolio manager
----------------------------------------------------------------------------------------------
RISK TO PRINCIPAL Average for a Greatest risk of all Somewhat lower Just below average
growth fund Alliance Funds than the Growth for a growth fund
Equity Fund
----------------------------------------------------------------------------------------------
PRIMARY GROWTH Capital appreciation Capital appreciation Capital Capital appreciation
POTENTIAL THROUGH and reinvested appreciation,
dividends reinvested dividends
and interest
----------------------------------------------------------------------------------------------
INCOME GUARANTEE No No No No
----------------------------------------------------------------------------------------------
VOLATILITY OF RETURN Somewhat more Highly volatile Generally lower Somewhat more
volatile than the than pure equity volatile than the
S&P 500 funds, but degree S&P 500
may vary depending
on market
conditions
----------------------------------------------------------------------------------------------
TRANSFERS TO OTHER Permitted daily Permitted daily Permitted daily Permitted daily
OPTIONS
----------------------------------------------------------------------------------------------
WITHDRAWAL PENALTIES No No No No
----------------------- ----------------------- ---------------------- -----------------------
[GRAPHIC OMITTED] [GRAPHIC OMITTED] [GRAPHIC OMITTED] [GRAPHIC OMITTED]
<CAPTION>
ALLIANCE ALLIANCE WARBURG PINCUS
CONSERVATIVE GROWTH INVESTORS MFS RESEARCH SMALL COMPANY
INVESTORS FUND FUND FUND VALUE FUND
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DESIGNED FOR High total return High total return Long term growth of Long term capital
(OBJECTIVE) without undue risk consistent with capital and future appreciation
to principal reasonable risk income
----------------------------------------------------------------------------------------------
INVESTS PRIMARILY IN The Conservative The Growth Common stocks or Portfolio of equity
Investors Portfolio Investors Portfolio securities securities of small
of the Hudson River of the Hudson River convertible into capitalization
Trust, which in turn, Trust, which in turn, common stock of companies that are
primarily invests in a primarily invests in a companies that considered relatively
diversified mix of diversified mix of possess better than undervalued
publicly-traded publicly-traded average prospects
securities. Asset mix securities. Asset mix for long-term
generally consists of generally consists of growth
30% equity and 30% fixed income
70% fixed income and 70% equity
securities but will securities but will
vary depending on vary depending on
market conditions. market conditions.
----------------------------------------------------------------------------------------------
RISK TO PRINCIPAL Lowest risk of all Below average for a Average for a fund Greater than the
equity options growth fund with moderate S&P 500
growth
----------------------------------------------------------------------------------------------
PRIMARY GROWTH Capital Capital Capital appreciation Long-term capital
POTENTIAL THROUGH appreciation, appreciation, and income appreciation with
reinvested dividends reinvested dividends current income
and interest and interest
----------------------------------------------------------------------------------------------
INCOME GUARANTEE No No No No
----------------------------------------------------------------------------------------------
VOLATILITY OF RETURN Very low volatility Somewhat less Generally equal to More volatile than
volatile than the S&P 500 the S&P 500
S&P 500
----------------------------------------------------------------------------------------------
TRANSFERS TO OTHER Permitted daily Permitted daily Permitted daily Permitted daily
OPTIONS
----------------------------------------------------------------------------------------------
WITHDRAWAL PENALTIES No No No No
----------------------------------------------------------------------------------------------
[GRAPHIC OMITTED] [GRAPHIC OMITTED] [GRAPHIC OMITTED] [GRAPHIC OMITTED]
<CAPTION>
T. ROWE PRICE MERRILL LYNCH BT EQUITY
EQUITY INCOME WORLD STRATEGY 500 INDEX GUARANTEED
FUND FUND FUND RATE ACCOUNTS
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DESIGNED FOR Substantial dividend High total Replicate, as closely Principal and
(OBJECTIVE) income and capital investment return as possible (before interest guaranteed
appreciation deduction of -
expenses) the total interest rates reflect
return of the S&P maturities
500 Index
----------------------------------------------------------------------------------------------
INVESTS PRIMARILY IN Dividend - Portfolio of equity The BT Equity 500 Contributions
paying common and fixed income Index Portfolio credited with fixed
stocks of securities, including invests in a rate of interest until
established convertible statistically selected the maturity date
companies securities of U.S. sample of the 500
and foreign issuers stocks in the
S&P 500.
----------------------------------------------------------------------------------------------
RISK TO PRINCIPAL Lower risk than a Greater risk than a Approximately equal Equitable Life
fund focusing on domestic bond fund. to the S&P 500 guarantees principal
growth stocks, but Investing in foreign index and interest
greater risk than a securities involves
bond fund. special
considerations.
----------------------------------------------------------------------------------------------
PRIMARY GROWTH Dividend income Capital appreciation Capital appreciation Interest income
POTENTIAL THROUGH and capital and reinvested and reinvested
appreciation dividends dividends
----------------------------------------------------------------------------------------------
INCOME GUARANTEE No No No Yes-subject to
withdrawal
penalties
----------------------------------------------------------------------------------------------
VOLATILITY OF RETURN Somewhat more Somewhat more Generally equal to Equitable Life
volatile than the volatile than the the S&P 500 Index guarantees interest
S&P 500 S&P 500. Investing rate until the
in foreign securities maturity date
involves special
considerations.
----------------------------------------------------------------------------------------------
TRANSFERS TO OTHER Permitted daily Permitted daily Permitted daily Permitted only at
OPTIONS maturity
----------------------------------------------------------------------------------------------
WITHDRAWAL PENALTIES No No No Prior to maturity,
withdrawals may
not be permitted or
may be subject to
penalty
----------------------------------------------------------------------------------------------
[GRAPHIC OMITTED] [GRAPHIC OMITTED] [GRAPHIC OMITTED] [GRAPHIC OMITTED]
<CAPTION>
MONEY
MARKET
GUARANTEE
ACCOUNT
---------------------
<S> <C>
DESIGNED FOR Principal and
(OBJECTIVE) interest guaranteed
- short term rates
---------------------
INVESTS PRIMARILY IN Contributions
credited with
guaranteed current
rate of interest
---------------------
RISK TO PRINCIPAL Equitable Life
guarantees principal
and interest
---------------------
PRIMARY GROWTH Interest income
POTENTIAL THROUGH
---------------------
INCOME GUARANTEE Yes
---------------------
VOLATILITY OF RETURN Equitable Life
guarantees monthly
interest rate
---------------------
TRANSFERS TO OTHER Permitted daily
OPTIONS
---------------------
WITHDRAWAL PENALTIES No
---------------------
[GRAPHIC OMITTED]
</TABLE>
<PAGE>
The Funds each have different investment objectives and policies that can affect
the returns of each Fund and the market and financial risks to which each is
subject. The Funds involve a greater potential for growth but involve risks that
are not present with the Guaranteed Options. There is no assurance that any of
the investment objectives of the Funds will be achieved or that the risk to
principal or volatility of return will be as indicated.
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
MAY 1, 1999
MEMBERS RETIREMENT PROGRAM
Funded primarily through a group annuity contract with THE EQUITABLE LIFE
ASSURANCE SOCIETY OF THE UNITED STATES, 1290 Avenue of the Americas, New York,
New York 10104. Toll-free telephone number 1-800-526-2701.
- --------------------------------------------------------------------------------
This Statement of Additional Information ("SAI") is not a prospectus. You
should read this SAI in conjunction with Equitable Life's prospectus dated May
1, 1999 for the Members Retirement Program.
A copy of the prospectus to which this SAI relates is available at no charge by
writing to Equitable Life at Box 2486 G.P.O., New York, New York 10116 or by
calling our toll-free telephone number. Definitions of special terms used in
this SAI are found in the prospectus.
Certain of the cross references in this SAI are contained in the prospectus
dated May 1, 1999 to which this SAI relates.
CONTENTS OF THIS SAI
PAGE IN SAI
------------
Funding of the Program .............................. SAI-2
Your Responsibilities as Employer ................... SAI-2
Procedures for Withdrawals, Distributions and
Transfers ........................................ SAI-2
Pre-Retirement Withdrawals ........................ SAI-2
Benefit Distributions ............................. SAI-3
Death Benefits .................................... SAI-4
Eligible Rollover Distributions and Federal
Income Tax Withholding ........................ SAI-4
Premature Withdrawals and Transfers from a
GRA ........................................... SAI-4
Maturing GRAs ..................................... SAI-6
Types of Benefits ................................... SAI-6
Provisions of the Members Retirement Plan ........... SAI-9
Plan Eligibility Requirements ..................... SAI-9
Contributions to Qualified Plans .................. SAI-9
PAGE IN SAI
------------
Contributions to the Members Retirement Plan ...... SAI-9
Allocation of Contributions ....................... SAI-11
The Members Retirement Plan and Section 404(c) of
ERISA ......................................... SAI-12
Vesting ........................................... SAI-12
Investment Restrictions and Certain Investment
Techniques Applicable to the Alliance Growth
Equity, Alliance Aggressive Equity and Alliance
Balanced Funds .................................... SAI-13
How We Determine the Unit Value for the Funds ....... SAI-15
How We Value the Assets of the Funds ................ SAI-16
Fund Transactions ................................... SAI-17
Investment Management and Accounting Fee ............ SAI-19
Underwriter ......................................... SAI-19
Our Management ...................................... SAI-20
Financial Statements ................................ SAI-22
- ----------
Copyright 1999 by The Equitable Life Assurance Society of The United States.
All rights reserved.
<PAGE>
- --------------------------------------------------------------------------------
FUNDING OF THE PROGRAM
The Program is primarily funded through a group annuity contract issued by
Equitable Life. The Trustee holds the contract for the benefit of employers and
participants in the Program.
YOUR RESPONSIBILITIES AS EMPLOYER
If you adopt the Members Retirement Plan, you as the employer and plan
administrator will have certain responsibilities, including:
o sending us your contributions at the proper time and in the proper
format;
o maintaining all personnel records necessary for administering your plan;
o determining who is eligible to receive benefits;
o forwarding to us all the forms your employees are required to submit;
o distributing summary plan descriptions and participant annual reports to
your employees and former employees;
o distributing our prospectuses and confirmation notices to your employees
and, in some cases, former employees;
o filing an annual information return for your plan with the Internal
Revenue Service, if required;
o providing us the information with which to run special non-discrimination
tests, if you have a 401(k) plan or your plan accepts post-tax employee
or employer matching contributions;
o determining the amount of all contributions for each participant in the
plan;
o forwarding salary deferral and post-tax employee contributions to us;
o selecting interest rates and monitoring default procedures if you elect
the loan provision in your plan; and
o providing us with written instructions for allocating amounts in the
plan's forfeiture account.
If you, as an employer, have an individually designed plan, your
responsibilities will not be increased in any way by adopting the Pooled Trust.
If you adopt our self-directed prototype plan, you will be completely
responsible for administering the plan and complying with all of the reporting
and disclosure requirements applicable to qualified plans, with the assistance
of the recordkeeper of your choice.
We can provide guidance and assistance in the performance of your
responsibilities. If you have questions about any of your obligations, you can
contact our Account Executives at 1-800-526-2701 or write to us at Box 2486
G.P.O., New York, New York 10116.
PROCEDURES FOR WITHDRAWALS, DISTRIBUTIONS AND TRANSFERS
PRE-RETIREMENT WITHDRAWALS. Under the Members Retirement Plan, self-employed
persons generally may not receive a distribution prior to age 59 1/2, and
employees generally may not receive a distribution prior to separation from
service. However, if the Members Retirement Plan is maintained as a profit
sharing plan, you may request distribution of benefits after you reach age
59 1/2 even if you are still working.
In addition, if your employer has elected to make hardship withdrawals
available under your plan, you may request distribution before age 59 1/2 in the
case of financial hardship (as defined in your plan). In a 401(k)
SAI-2
<PAGE>
- --------------------------------------------------------------------------------
plan, the plan's definition of hardship applies to employer contributions but
not to your 401(k) contributions--including employee pre-tax contributions,
employer qualified non-elective contributions and qualified matching
contributions. To withdraw your own 401(k) contributions, plus interest earned
on these amounts prior to 1989, you must demonstrate financial hardship within
the meaning of applicable Income Tax Regulations. Each withdrawal must be at
least $1,000 (or, if less, your entire Account Balance or the amount of your
hardship withdrawal under a profit sharing or 401(k) plan). If your employer
terminates the plan, all amounts (subject to GRA restrictions) may be
distributed to participants at that time.
You may withdraw all or part of your Account Balance under the Members
Retirement Plan attributable to post-tax employee contributions at any time,
subject to any withdrawal restrictions applicable to the Investment Options,
provided that you withdraw at least $300 at a time (or, if less, your Account
Balance attributable to post-tax employee contributions). See "Tax Information"
in the prospectus.
We pay all benefit payments (including withdrawals due to plan terminations) in
accordance with the rules described below in the "Benefit Distributions"
discussion. We effect all other participant withdrawals as of the close of the
business day we receive the properly completed form.
Under the self-directed prototype plan you may receive a distribution upon
attaining normal retirement age as specified in the plan, or upon separation
from service. If your employer maintains the self-directed prototype plan as a
profit sharing plan, an earlier distribution of funds that have accumulated
after two years is available if you incur a financial hardship, as defined in
the plan.
In addition, if you are married, your spouse may have to consent in writing
before you can make any type of withdrawal, except for the purchase of a
Qualified Joint and Survivor Annuity. See "Spousal Consent Requirement" below.
Under an individually designed plan, the availability of pre-retirement
withdrawals depends on the terms of the plan. We suggest that you ask your
employer what types of withdrawals are available under your plan.
Transfers and withdrawals from certain of the Investment Funds may be deferred
if there is any delay in redemption of shares of the respective mutual funds in
which the Funds invest. We generally do not expect any delays.
PLEASE NOTE THAT GENERALLY YOU MAY NOT MAKE WITHDRAWALS FROM THE GUARANTEED
RATE ACCOUNTS PRIOR TO MATURITY, EVEN IF THE EMPLOYER PLAN PERMITS WITHDRAWALS
PRIOR TO THAT TIME.
BENEFIT DISTRIBUTIONS. In order for you to begin receiving benefits under the
Members Retirement Plan, your employer must send us your properly completed
Election of Benefits form and, if applicable, Beneficiary Designation form.
Your benefits will commence according to the provisions of your plan.
Under an individually designed plan and our self-directed prototype plan, your
employer must send us a request for disbursement form. We will send single sum
payments to your plan's trustee as of the close of business on the day we
receive a properly completed form. If you wish to receive annuity payments,
your plan's trustee may purchase a variable annuity contract from us. We will
pay annuity payments directly to you and payments will commence according to
the provisions of your plan.
Please note that we use the value of your vested benefits at the close of the
business day payment is due to determine the amount of benefits you receive. We
will not, therefore, begin processing your check until
SAI-3
<PAGE>
- --------------------------------------------------------------------------------
the following business day. You should expect your check to be mailed within
five days after processing begins. Annuity checks can take longer. If you are
withdrawing more than $50,000 and you would like expedited delivery at your
expense, you may request it on your Election Of Benefits Form.
Distributions under a qualified retirement plan such as yours are subject to
extremely complicated legal requirements. When you are ready to retire, we
suggest that you discuss the available payment options with your employer or
financial advisor. Our Account Executives can provide you or your employer with
information.
DEATH BENEFITS. If a participant in the Members Retirement Plan dies without
designating a beneficiary, the vested benefit will automatically be paid to the
spouse or, if the participant is not married, to the first surviving class of
his or her (a) children, (b) parents and (c) brothers and sisters. If none of
them survive, the participant's vested benefit will be paid to the
participant's estate. If a participant in our prototype self-directed plan dies
without designating a beneficiary, the vested benefit will automatically be
paid to the spouse or, if the participant is not married, to the first
surviving class of his or her (a) children, (b) grandchildren, (c) parents, (d)
brothers and sisters and (e) nephews and nieces. If none of them survive, the
participant's vested benefit will be paid to the participant's estate.
ELIGIBLE ROLLOVER DISTRIBUTIONS AND FEDERAL INCOME TAX WITHHOLDING. All
"eligible rollover distributions" are subject to mandatory federal income tax
withholding of 20% unless the participant elects to have the distribution
directly rolled over to a qualified plan or traditional individual retirement
arrangement (IRA). An "eligible rollover distribution" is generally any
distribution that is not one of a series of substantially equal periodic
payments made (not less frequently than annually): (1) for the life (or life
expectancy) of the plan participant or the joint lives (or joint life
expectancies) of the plan participant and his or her designated beneficiary, or
(2) for a specified period of 10 years or more. Hardship distributions are not
eligible rollover distributions. In addition, the following are not subject to
mandatory 20% withholding:
o certain corrective distributions under Code Section 401(k) plans;
o loans that are treated as distributions; and
o a distribution to a beneficiary other than to a surviving spouse or a
current or former spouse under a qualified domestic relations order.
If we make a distribution to a participant's surviving spouse, or to a current
or former spouse under a qualified domestic relations order, the distribution
may be an eligible rollover distribution, subject to mandatory 20% withholding,
unless one of the exceptions described above applies.
If a distribution is not an "eligible rollover distribution," we will withhold
income tax from all taxable payments unless the recipient elects not to have
income tax withheld.
PREMATURE WITHDRAWALS AND TRANSFERS FROM A GRA. You may transfer amounts from
other investment options to a GRA at any time. Transfers may not be made from
one GRA to another or from a GRA to one of the other investment options until
the maturity date of the GRA. Likewise, you may not remove amounts from a GRA
prior to maturity in order to obtain a plan loan or make a hardship or
in-service withdrawal. If your plan's assets are transferred to another funding
vehicle from the Program or if your plan is terminated, we will continue to
hold your money in GRAs until maturity. All such GRAs will be held in the
Pooled Trust under the investment-only arrangement. See "Guaranteed Rate
Accounts" in the prospectus.
We do not permit withdrawals before maturity unless your plan permits them and
they are exempt or qualified, as we explain below. You may take exempt
withdrawals without penalty at any time. Qualified
SAI-4
<PAGE>
- --------------------------------------------------------------------------------
withdrawals are subject to a penalty. We do not permit qualified withdrawals
from a five-year GRA during the first two years after the end of its offering
period. This rule does not apply if the amount of the applicable penalty is
less than the interest you have accrued. If you have more than one GRA and you
are taking a partial withdrawal or installments, we will first use amounts held
in your most recently purchased three-year or five-year GRA that is available
under the withdrawal rules for exempt and qualified withdrawals.
Exempt Withdrawal. Amounts may be withdrawn without penalty from a GRA prior to
its maturity if:
o you are a professional age 59 1/2 or older and you elect an installment
payout of at least three years or an annuity benefit;
o you are not a professional and you attain age 59 1/2 or terminate
employment (including retirement);
o you are disabled;
o you attain age 70 1/2; or
o you die.
If you are a participant under a plan which was adopted by an employer which is
not a member of a professional association which makes the Program available as
a benefit of membership, the above rules will be applied substituting the term
"highly compensated" for "professional" and "non-highly compensated" for "not a
professional." For this purpose, "highly compensated" shall have the meaning
set forth under "Provisions of the Members Plans--Contributions to the Members
Retirement Plan" below.
Qualified Withdrawal. You may withdraw amounts with a penalty from a GRA prior
to its maturity if you are a Professional and are taking payments upon
retirement after age 59 1/2 under a distribution option of less than three years
duration. The interest paid to you upon withdrawal will be reduced by an amount
calculated as follows:
(i) the amount by which the three-year GRA rate being offered on the date
of withdrawal exceeds the GRA rate from which the withdrawal is made,
times
(ii) the years and/or fraction of a year until maturity, times
(iii) the amount withdrawn from the GRA.
We will make this calculation based on GRA rates without regard to deductions
for the applicable Program expense charge. If the three-year GRA is not being
offered at the time of withdrawal, the adjustment will be based on then current
rates on U.S. Treasury notes or for a comparable option under the Program.
We will never reduce your original contributions by this adjustment. We make no
adjustment if the current three-year GRA rate is equal to or less than the rate
for the GRA from which we make to the qualified withdrawal. We calculate a
separate adjustment for each GRA. If the interest accumulated in one GRA is
insufficient to recover the amount calculated under the formula, we may deduct
the excess as necessary from interest accumulated in other GRAs of the same
duration.
Example: You contribute $1,000 to a three-year GRA on January 1 with a rate of
4%. Two years later you make a qualified withdrawal. Your GRA balance is
$1,082. The current GRA rate is 6%; (i) 6%-4%=2%, (ii) 2% X 1 year=2%, (iii) 2%
X $1,082=$21.64. The withdrawal proceeds would be $1,082-$21.64=$1,060.36.
SAI-5
<PAGE>
- --------------------------------------------------------------------------------
MATURING GRAS
o Your confirmation notice lists the maturity date for each GRA you hold.
o You may arrange in advance for the reinvestment of your maturing GRAs by
using the AIM System. (GRA maturity allocation change requests received on
a business day before 4:00 P.M. Eastern Time are effective four days after
we receive them. GRA maturity allocation change requests received after
4:00 P.M. Eastern Time or on a non-business day are effective four days
after the next business day after we receive them.)
o The instructions you give us remain in effect until you change them
(again, your GRA maturity allocation change request will be processed as
described above).
o You may have different instructions for your GRAs attributable to
employer contributions than for your GRAs attributable to employee
contributions.
o If you have never provided GRA maturity instructions, your maturing GRAs
will be allocated to the Money Market Guarantee Account.
TYPES OF BENEFITS
Under the Members Retirement Plan, and under most self-directed prototype
plans, you may select one or more of the following forms of distribution once
you are eligible to receive benefits. If your employer has adopted an
individually designed plan or a self-directed prototype profit sharing plan
that does not offer annuity benefits, not all of these distribution forms may
be available to you. We suggest you ask your employer what types of benefits
are available under your plan.
QUALIFIED JOINT AND SURVIVOR ANNUITY. An annuity providing equal monthly
payments for your life and, after your death, for your surviving spouse's life.
No payments will be made after you and your spouse die, even if you have
received only one payment prior to the last death. THE LAW REQUIRES THAT IF THE
VALUE OF YOUR VESTED BENEFITS EXCEEDS $5,000, YOU MUST RECEIVE A QUALIFIED
JOINT AND SURVIVOR ANNUITY UNLESS YOUR SPOUSE CONSENTS IN WRITING TO A CONTRARY
ELECTION. Please see "Spousal Consent Requirements" below.
LUMP SUM PAYMENT. A single payment of all or part of your vested benefits. If
you take a lump sum payment of only part of your balance, it must be at least
$1,000. If you have more than one GRA, amounts held in your most recent GRA
will first be used to make payment. If your vested benefit is $5,000 or less,
you will receive a lump sum payment of the entire amount.
PERIODIC INSTALLMENTS. Monthly, quarterly, semi-annual or annual payments over
a period of at least three years, where the initial payment on a monthly basis
is at least $300. You can choose either a time-certain payout, which provides
variable payments over a specified period of time, or a dollar-certain payout,
which provides level payments over a variable period of time. During the
installment period, your remaining Account Balance will be invested in whatever
investment options you designate; each payment will be drawn pro rata from all
the investment options you have selected. You may not leave or place any assets
in the Real Estate Fund. If you have more than one GRA, amounts held in your
most recently purchased three-year or five-year GRA will first be used to make
installment payments. If you die before receiving all the installments, we will
make the remaining payments to your beneficiary. We do not offer installments
for benefits under individually designed plans or under our self-directed
prototype plan.
LIFE ANNUITY. An annuity providing monthly payments for your life. No payments
will be made after your death, even if you have received only one payment prior
to your death.
SAI-6
<PAGE>
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LIFE ANNUITY--PERIOD CERTAIN. An annuity providing monthly payments for your
life or, if longer, a specified period of time. If you die before the end of
that specified period, payments will continue to your beneficiary until the end
of the period. Subject to legal limitations, you may specify a minimum payment
period of 5, 10, 15 or 20 years. The longer the specified period, the smaller
the monthly payments will be.
JOINT AND SURVIVOR ANNUITY. An annuity providing monthly payments for your life
and that of your beneficiary. You may specify the percentage of the original
annuity payment to be made to your beneficiary. Subject to legal limitations,
that percentage may be 100%, 75%, 50%, or any other percentage you specify.
JOINT AND SURVIVOR ANNUITY--PERIOD CERTAIN. An annuity providing monthly
payments for your life and that of your beneficiary or, if longer, a specified
period of time. If you and your beneficiary both die before the end of the
specified period, payments will continue to your contingent beneficiary until
the end of the period. Subject to legal limitations, you may specify a minimum
payment period of 5, 10, 15 or 20 years and the percentage of the annuity
payment to be made to your beneficiary (as noted above under Joint and Survivor
Annuity). The longer the specified period, the smaller your monthly payments
will be.
CASH REFUND ANNUITY. An annuity providing equal monthly payments for your life
with a guarantee that the sum of those payments will be at least equal to the
portion of your vested benefits used to purchase the annuity. If upon your
death the sum of the monthly payments to you is less than that amount, your
beneficiary will receive a lump sum payment of the remaining guaranteed amount.
FIXED AND VARIABLE ANNUITY CHOICES
The cost of the fixed annuity is determined from tables in the group annuity
contract which show the amounts necessary to purchase each $1 of monthly
payment (after deduction of any applicable taxes and the annuity administrative
charge described below). Payments depend on the annuity selected, your age, and
the age of your beneficiary if you select a joint and survivor annuity. We may
change the tables in the contract no more than once every five years.
The minimum amount that can be used to purchase any type of annuity is $5,000.
Usually, an annuity administrative charge of $350 will be deducted from the
amount used to purchase the annuity. If we give any group pension client with a
qualified profit sharing plan a better annuity purchase rate than those
currently available for the Program, we will also make those rates available to
Program participants. The annuity administrative charge may be greater than
$350 in that case.
Under a Qualified Joint and Survivor Annuity or a Cash Refund Annuity, the
amount of the monthly payments is fixed at retirement and remains level
throughout the distribution period. Under the Life Annuity, Life
Annuity--Period Certain, Joint and Survivor Annuity and Joint and Survivor
Annuity--Period Certain, you may select either fixed or variable payments. The
variable payments reflect the investment performance of the Growth Equity Fund.
If you are interested in a variable annuity, when you are ready to select your
benefit please ask our Account Executives for our variable annuity prospectus
supplement.
The chart below shows the relative financial value of the different annuity
options, based on our current rates for fixed annuities. This chart is provided
as a sample. The numbers provided in the Rate per $1.00 of Annuity column,
which are used to calculate the monthly annuity provided, are subject to
change. The example assumes the annuitant's age is 65 1/2 years, the joint
annuitant's age is the same and the amount used
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to purchase the annuity is $100,000. The annuity administrative charge of $350
is deducted from the purchase price of $100,000, leaving a total of $99,650 to
be applied to purchase the annuity. Certain legal requirements may limit the
forms of annuity available to you.
<TABLE>
<CAPTION>
AMOUNT TO BE MONTHLY
APPLIED ON ANNUITY RATE PER $1.00 ANNUITY
ANNUITY FORM FORM ELECTED OF ANNUITY PROVIDED
- ------------ ------------ ---------- --------
<S> <C> <C> <C>
Life $99,650 $143.06 $696.56
Cash Refund 99,650 150.82 660.72
5 Year Certain Life 99,650 144.62 689.05
10 Year Certain Life 99,650 148.55 670.82
15 Year Certain Life 99,650 153.87 647.62
100% Joint & Survivor Life 99,650 168.01 593.12
75% Joint & Survivor Life 99,650 161.16 618.33*
50% Joint & Survivor Life 99,650 155.13 642.36*
100% Joint & Survivor--5 Year Certain Life** 99,650 168.04 593.01
100% Joint & Survivor--10 Year Certain Life** 99,650 168.27 592.20
100% Joint & Survivor--15 Year Certain Life** 99,650 168.91 589.96
100% Joint & Survivor--20 Year Certain Life** 99,650 170.10 585.83
</TABLE>
- ----------
* Represents the amount payable to the primary annuitant. A surviving joint
annuitant would receive the applicable percentage of the amount paid to
the primary annuitant.
** You may also elect a Joint and Survivor Annuity--Period Certain with a
monthly benefit payable to the surviving joint annuitant in any
percentage you specify.
SPOUSAL CONSENT REQUIREMENTS
Under the Members Retirement Plan and the self-directed prototype plan, you may
designate a non-spouse beneficiary any time after the earlier of: (1) the first
day of the plan year in which you attain age 35, or (2) the date on which you
separate from service with your employer. If you designate a beneficiary other
than your spouse prior to your reaching age 35, your spouse must consent to the
designation and, upon your reaching age 35, must again give his or her consent
or the designation will lapse. In order for you to make a withdrawal, elect a
form of benefit other than a Qualified Joint and Survivor Annuity or designate
a non-spouse beneficiary, your spouse must consent to your election in writing
within the 90 day period before your annuity starting date. To consent, your
spouse must sign on the appropriate line on your election of benefits or
beneficiary designation form. Your spouse's signature must be witnessed by a
notary public or plan representative.
If you change your mind, you may revoke your election and elect a qualified
Joint Survivor Annuity or designate your spouse as beneficiary, simply by
filing the appropriate form. Your spouse's consent is not required for this
revocation.
It is also possible for your spouse to sign a blanket consent form. By signing
this form, your spouse consents not just to a specific beneficiary or, with
respect to the waiver of the Qualified Joint and Survivor Annuity, the form of
distribution, but gives you the right to name any beneficiary, or if
applicable, form of
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distribution you want. Once you file such a form, you may change your election
whenever you want, even without spousal consent. No spousal consent to a
withdrawal or benefit in a form other than a Qualified Joint and Survivor
Annuity is required under certain self-directed prototype profit sharing plans
that do not offer life annuity benefits.
PROVISIONS OF THE MEMBERS RETIREMENT PLAN
PLAN ELIGIBILITY REQUIREMENTS. Under the Members Retirement Plan, the employer
specifies the eligibility requirements for its plan in the Participation
Agreement. The employer may exclude any employee who has not attained a
specified age (not to exceed 21) and completed a specified number of years (not
to exceed two) in each of which he completed 1,000 hours of service. No more
than one year of eligibility service may be required for a 401(k) arrangement.
The Members Retirement Plan provides that a sole proprietor, partner or
shareholder may, upon commencement of employment or upon first becoming
eligible to participate in any qualified plan of the employer, make a one-time
irrevocable election not to participate in the plan or to make a reduced
contribution. This election applies to all plans of the employer, now and in
the future, and should be discussed with your tax advisor.
CONTRIBUTIONS TO QUALIFIED PLANS. We outline below the current federal income
tax rules relating to contributions under qualified retirement plans. This
outline assumes that you are not a participant in any other qualified
retirement plan.
The employer deducts contributions to the plan in the year it makes them. As a
general rule, an employer must make contributions for any year by the due date
(including extensions) for filing its federal income tax return for that year.
However, Department of Labor ("DOL") rules generally require that the employer
contribute participants' salary deferrals under a 401(k) plan as soon as
practicable after the payroll period applicable to a deferral. In any event,
the employer must make these contributions no later than the 15th business day
of the month following the month in which the employer withholds or receives
participant contributions.
If the employer contributes more to the plan than it may deduct under the rules
we describe below, the employer (a) may be liable for a 10% penalty tax on that
nondeductible amount and (b) may risk disqualifying the plan.
CONTRIBUTIONS TO THE MEMBERS RETIREMENT PLAN. The employer makes annual
contributions to its plan based on the plan's provisions.
An employer that adopts the Members Retirement Plan as a profit sharing plan
makes discretionary contributions as it determines annually. The aggregate
employer contribution to the plan, including all participants' salary deferrals
under a 401(k) arrangement, may not exceed 15% of all participants'
compensation for the plan year. For plan purposes, compensation for
self-employed persons does not include deductible plan contributions on behalf
of the self-employed person.
A 401(k) arrangement is available as part of the profit sharing plan. Employees
may make pre-tax contributions to a plan under a 401(k) arrangement. The
maximum amount that highly compensated employees may contribute depends on (a)
the amount that non-highly compensated employees contribute and (b) the amount
the employer designates as a nonforfeitable 401(k) contribution. Different
rules apply to a SIMPLE 401(k) or safe harbor 401(k).
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For 1999, a "highly compensated" employee, for this purpose, is (a) an owner of
more than 5% of the business, or (b) anyone with earnings of more than $80,000
from the business in 1998. For (b), the employer may elect to include only
employees in the highest paid 20%. In any event, the maximum amount each
employee may defer is limited to $10,000 for 1999, reduced by that employee's
salary reduction contributions to simplified employee pension plans established
before 1997 (SARSEPs), SIMPLE plans, employee contributions to tax deferred
Section 403(b) arrangements, and contributions deductible by the employee under
a trust described under Section 501(c)(18) of the Internal Revenue Code. The
maximum amount a participant may defer in a SIMPLE 401(k) plan for 1999 is
$6,000.
Matching contributions to a 401(k) plan on behalf of a self-employed individual
are no longer treated as elective deferrals, and are the same as matching
contributions for other employees.
Effective January 1, 1999 employers may adopt a safe harbor 401(k) arrangement.
Under this arrangement, an employer agrees to offer a matching contribution
equal to (a) 100% of salary deferral contributions up to 3% of compensation and
(b) 50% of salary deferral contributions that exceed 3% but are less than 5% of
compensation or a 2% non-elective contribution to all eligible employees. These
contributions must be non-forfeitable. If the employer makes these
contributions and meets the notice requirements for safe harbor 401(k) plans,
the plan is not subject to non-discrimination testing on salary deferral and
matching or non-elective contributions described above.
If the employer adopts the Members Retirement Plan as a defined contribution
pension plan, its contribution is equal to the percentage of each participant's
compensation that the Participation Agreement specifies.
Under any type of plan, an employer must disregard compensation in excess of
$160,000 in 1999 in making contributions. An employer may integrate
contributions with Social Security. This means that contributions, for each
participant's compensation, that exceed the integration level may be greater
than contributions for compensation below the integration level. The Federal
tax law imposes limits on this excess. Your Account Executive can help you
determine the legally permissible contribution.
Except in the case of certain non-top heavy plans, contributions for non-key
employees must be at least 3% of compensation (or, under the profit sharing
plan, the percentage the employer contributes for key employees, if less than
3%). In 1999, "key employee" means (a) an owner of one of the ten largest (but
more than 1/2%) interests in the business with earnings of more than $30,000,
or (b) an officer of the business with earnings of more than $65,000 or (c) an
owner of more than 5% of the business, or (d) an owner of more than 1% of the
business with earnings of more than $150,000. For purposes of (b), no more than
50 employees (or, if less, the greater of three or 10% of the employees) shall
be treated as officers.
Certain plans may also permit participants to make post-tax contributions. We
will maintain a separate account to reflect each participant's post-tax
contributions and the earnings (or losses) on those contributions. Post-tax
contributions are subject to complex rules under which the maximum amount that
a highly compensated employee may contribute depends on the amount that
non-highly employees contribute. BEFORE PERMITTING ANY HIGHLY-COMPENSATED
EMPLOYEE TO MAKE POST-TAX CONTRIBUTIONS, THE EMPLOYER SHOULD VERIFY THAT IT HAS
PASSED ALL NON-DISCRIMINATION TESTS. If an employer employs only "highly
compensated" employees (as defined above), the plan will not accept post-tax
contributions. In addition, the employer may make matching contributions to
certain plans, i.e., contributions that based on the amount of post-tax or
pre-tax 401(k) contributions that plan participants make. Special non--
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discrimination rules apply to matching contributions. These rules may limit the
amount of matching contributions that an employer may make for highly
compensated employees. These non-discrimination rules for matching
contributions do not apply to SIMPLE and safe harbor 401(k) plans.
Contributions (including forfeiture amounts) for each participant may not
exceed the lesser of (a) $30,000 and (b) 25% of the participant's earnings
(excluding, in the case of self-employed persons, all deductible plan
contributions). The participant's post-tax contributions count toward this
limitation.
Each participant's Account Balance equals the sum of the amounts accumulated in
each investment option. We will maintain separate records of each participant's
interest in each of the Investment Options attributable to employer
contributions, 401(k) non-elective contributions, 401(k) elective
contributions, post-tax employee contributions and employer matching
contributions. We will also account separately for any amounts rolled over from
a previous employer's plan. Our records will also reflect each participant's
percentage of vesting (see below) in his Account Balance attributable to
employer contributions and employer matching contributions.
The participant will receive an individual confirmation of each transaction
(including the deduction of record maintenance and report fees). The
participant will also receive an annual statement showing the participant's
Account Balance in each investment option attributable to each type of
contribution. Based on information that you supply, we will run the required
special non-discrimination tests (Actual Deferral Percentage and Actual
Contribution Percentage) applicable to (a) 401(k) plans (other than SIMPLE
401(k) and (b) safe harbor 401(k)) and plans that accept post-tax employee
contributions or employer matching contributions.
Non-discrimination tests do not apply to SIMPLE 401(k) plans, if the employer
makes (a) a matching contribution equal to 100% of the amount each participant
deferred, up to 3% of compensation, or (b) a 2% non-elective contribution to
all eligible employees. The employer must also follow the notification and
filing requirements outlined in the SIMPLE 401(k) model amendment to the
Members Retirement Plan, to avoid non-discrimination tests.
Under a SIMPLE 401(k) the employer must offer all eligible employees the
opportunity to defer part of their salary into the plan and make either a
matching or non-elective contribution. The matching contribution must be 100%
of the salary deferral amount up to 3% of compensation. The non-elective
contribution is 2% of compensation, the employer must make it for all eligible
employees, even those not deferring. The matching or non-elective contribution
must be non-forfeitable. The employer must notify employees which contribution
the employer will make 60 days before the beginning of the year.
Elective deferrals to a 401(k) plan are subject to applicable FICA (social
security) and FUTA (unemployment) taxes.
ALLOCATION OF CONTRIBUTIONS. You, as employer or participant, may allocate
contributions among any number of the investment options. You may change
allocation instructions at any time, and as often as needed, by calling the AIM
System. New instructions become effective on the business day we receive them.
Employer contributions may be allocated in different percentages than employee
contributions. The allocation percentages elected for employer contributions
automatically apply to any 401(k) qualified non-elective contributions,
qualified matching contributions and matching contributions. Your allocation
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percentages for employee contributions automatically apply to any post-tax
employee contributions and 401(k) salary deferral contributions. IF WE HAVE NOT
RECEIVED VALID INSTRUCTIONS, WE WILL ALLOCATE CONTRIBUTIONS TO THE MONEY MARKET
GUARANTEE ACCOUNT. You may, of course, transfer to another investment option at
any time.
THE MEMBERS RETIREMENT PLAN AND SECTION 404(C) OF ERISA. The Members Retirement
Plan is a participant directed individual account plan designed to comply with
the requirements of Section 404(c) of ERISA. Section 404(c) of ERISA, and the
related Department of Labor (DOL) regulation, provide that if a participant or
beneficiary exercises control over the assets in his or her plan account, plan
fiduciaries will not be liable for any loss that is the direct and necessary
result of the participant's or beneficiary's exercise of control. This means
that if the employer plan complies with Section 404(c), participants can make
and are responsible for the results of their own investment decisions.
Section 404(c) plans must, among other things, (a) make a broad range of
investment choices available to participants and beneficiaries and (b) provide
them with adequate information to make informed investment decisions. The
Investment Options and documentation available under the Members Retirement
Plan provide the broad range of investment choices and information needed in
order to meet the requirements of Section 404(c). However, while our suggested
summary plan descriptions, annual reports, prospectuses, and confirmation
notices provide the required investment information, the employer is
responsible for distributing this information in a timely manner to
participants and beneficiaries. You should read this information carefully
before making your investment decisions.
VESTING. Vesting refers to the participant's rights with respect to that
portion of a participant's Account Balance attributable to employer
contributions under the Members Retirement Plan. If a participant is "vested,"
the amount or benefit in which the participant is vested belongs to the
participant, and may not be forfeited. The participant's Account Balance
attributable to (a) 401(k) contributions (including salary deferral, qualified
non-elective and qualified matching contributions), (b) post-tax employee
contributions and (c) rollover contributions always belongs to the participant,
and is nonforfeitable at all times.
A participant becomes fully vested in all benefits if still employed at death,
disability, attainment of normal retirement age or upon termination of the
plan. If the participant terminates employment before that time, any benefits
that have not yet vested under the plan's vesting schedule are forfeited. The
normal retirement age is 65 under the Members Retirement Plan.
Benefits must vest in accordance with any of the schedules below or one at
least as favorable to participants:
SCHEDULE A SCHEDULE B SCHEDULE C
YEARS OF VESTED VESTED VESTED
SERVICE PERCENTAGE PERCENTAGE PERCENTAGE
- ---------- ------------ ------------ -----------
1 0% 0% 0%
2 100 20 0
3 100 40 100
4 100 60 100
5 100 80 100
6 100 100 100
If the plan requires more than one year of service for participation in the
plan, the plan must use Schedule A or one at least as favorable to
participants.
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Provided the employer plan is not "top-heavy," within the meaning of Section
416 of the Code, and provided that the plan does not require more than one year
of service for participation, an employer may, in accordance with provisions of
the Members Retirement Plan, instead elect one of the following vesting
schedules or one at least as favorable to participants:
SCHEDULE F SCHEDULE G
YEARS OF VESTED VESTED
SERVICE PERCENTAGE PERCENTAGE
- --------------- ------------ -----------
less than 3 0% 0%
3 20 0
4 40 0
5 60 100
6 80 100
7 100 100
All contributions to a SIMPLE 401(k) plan are 100% vested and not subject to
the vesting schedule above. This rule, however, does not apply to employer and
matching contributions made to a plan before the plan is amended to become a
SIMPLE 401(k) plan. Non-elective and matching contributions required under a
safe harbor 401(k) arrangement are 100% vested and not subject to the vesting
schedule above.
INVESTMENT RESTRICTIONS AND CERTAIN INVESTMENT TECHNIQUES APPLICABLE TO THE
ALLIANCE GROWTH EQUITY, ALLIANCE AGGRESSIVE EQUITY AND ALLIANCE BALANCED FUNDS
For an explanation of the investment restrictions applicable to the Alliance
Global, Alliance Conservative Investors and Alliance Growth Investors Funds,
see Investment Restrictions in The Hudson River Trust prospectus which appears
behind the Members Retirement Program prospectus.
For an explanation of the investment restrictions applicable to the MFS
Research, Warburg Pincus Small Company Value, T. Rowe Price Equity Income,
Merrill Lynch World Strategy and BT Equity 500 Index Funds, see Investment
Restrictions in the EQ Advisors Trust Statement of Additional Information.
None of the Alliance Growth Equity, Alliance Aggressive Equity and Alliance
Balanced Funds will:
o trade in foreign exchange (except transactions incidental to the
settlement of purchases or sales of securities for a Fund);
o make an investment in order to exercise control or management over a
company;
o underwrite the securities of other companies, including purchasing
securities that are restricted under the 1933 Act or rules or regulations
thereunder (restricted securities cannot be sold publicly until they are
registered under the 1933 Act), except as stated below;
o make short sales, except when the Fund has, by reason of ownership of
other securities, the right to obtain securities of equivalent kind and
amount that will be held so long as they are in a short position;
o trade in commodities or commodity contracts (except the Alliance Balanced
Fund is not prohibited from entering into hedging transactions through the
use of stock index or interest rate future contracts, as described in the
prospectus);
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o purchase real estate or mortgages, except as stated below. The Funds may
buy shares of real estate investment trusts listed on stock exchanges or
reported on the National Association of Securities Dealers, Inc. automated
quotation system ("NASDAQ");
o have more than 5% of its assets invested in the securities of any one
registered investment company. A Fund may not own more than 3% of an
investment company's outstanding voting securities. Finally, total
holdings of investment company securities may not exceed 10% of the value
of the Fund's assets;
o purchase any security on margin or borrow money except for short-term
credits necessary for clearance of securities transactions;
o make loans, except loans through the purchase of debt obligations or
through entry into repurchase agreements; or
o invest more than 10% of its total assets in restricted securities, real
estate investments, or portfolio securities not readily marketable.
The Alliance Growth Equity and Alliance Balanced Funds will not make an
investment in an industry if that investment would make the Fund's holding in
that industry exceed 25% of its assets. The United States government, and its
agencies and instrumentalities, are not considered members of any industry.
The Alliance Growth Equity and Alliance Aggressive Equity Funds will not
purchase or write puts and calls (options).
The following investment techniques may be used by the Alliance Balanced Fund:
Mortgage Pass-Through Securities--The Alliance Balanced Fund may invest in
mortgage pass-through securities, which are securities representing interests
in pools of mortgages. Principal and interest payments made on the mortgages in
the pools are passed through to the holder of such securities.
Collateralized Mortgage Obligations--The Alliance Balanced Fund may invest in
collateralized mortgage obligations (CMOs). CMOs are debt securities
collateralized by underlying mortgage loans or pools of mortgage pass-through
securities and are generally issued by limited purpose finance subsidiaries of
U.S. Government instrumentalities. CMOs are not, however, mortgage pass-through
securities. Investors in CMOs are not owners of the underlying mortgages, but
are simply owners of a debt security backed by such pledged assets.
Asset-Backed Securities--The Alliance Balanced Fund may purchase asset-backed
securities that represent either fractional interests or participation in pools
of leases, retail installment loans or revolving credit receivables held by a
trust or limited purpose finance subsidiary. Such asset-backed securities may
be secured by the underlying assets or may be unsecured.
The Alliance Balanced Fund may invest in other asset-backed securities that may
be developed in the future.
Yankee Securities--The Alliance Balanced Fund may invest in Yankee securities.
Yankee securities are non-U.S. issuers that issue debt securities that are
denominated in U.S. dollars.
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Zero-Coupon Bonds--The Alliance Balanced Fund may invest in zero-coupon bonds.
Such bonds may be issued directly by agencies and instrumentalities of the U.S.
Government or by private corporations. Zero-coupon bonds do not make regular
interest payments. Instead, they are sold at a deep discount from their face
value. As a result, their price can be very volatile when interest rates
change.
Repurchase Agreements--In repurchase agreements, the Alliance Balanced Fund
buys securities from a seller, usually a bank or brokerage firm, with the
understanding that the seller will repurchase the securities at a higher price
at a future date. During the term of the repurchase agreement the Balanced Fund
retains the securities subject to the repurchase agreement as collateral. Such
transactions afford an opportunity for the Fund to earn a fixed rate of return
on available cash at minimal market risk, although the Fund may be subject to
various delays and risks or loss if the seller is unable to meet its obligation
to repurchase.
Foreign Currency Forward Contracts--The Alliance Balanced Fund may enter into
contracts for the purchase or sale of a specific foreign currency at a future
date at a price set at the time of the contract. The Fund will enter into such
forward contracts for hedging purposes only.
HOW WE DETERMINE UNIT VALUES FOR THE FUNDS
We determine the Unit Value at the end of each business day. The Unit Value for
each Fund is determined by first calculating a gross unit value reflecting only
investment performance and then adjusting it for Program expenses to obtain the
Fund Unit Value. We calculate the gross unit value by multiplying the gross
unit value for the preceding business day by the net investment factor for that
subsequent business day and, for the Alliance Growth Equity, Alliance
Aggressive Equity and Alliance Balanced Funds, then deducting audit and
custodial fees. We calculate the net investment factor as follows:
o First, we take the value of the Fund's assets at the close of business
on the preceding business day.
o Next, we add the investment income and capital gains, realized and
unrealized, that are credited to the assets of the Fund during the
business day for which we are calculating the net investment factor.
o Then we subtract the capital losses, realized and unrealized, charged to
the Fund during that business day.
o Finally, we divide this amount by the value of the Fund's assets at the
close of the preceding business day.
The Fund Unit Value is calculated on every business day by multiplying the Fund
Unit Value for the last business day of the previous month by the net change
factor for that business day. The net change factor for each business day is
equal to (a) minus (b) where:
(a) is the gross unit value for that business day divided by the gross unit
value for the last business day of the previous month; and
(b) is the charge to the Fund for that month for the daily accrual of fees and
expenses times the number of days since the end of the preceding month.
For information on the valuation of assets of the Funds, see "How We Value the
Assets of the Funds," below.
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The value of the investments of the Alliance Global, Alliance Conservative
Investors and Alliance Growth Investors Funds in the corresponding Hudson River
Trust Portfolios is calculated by multiplying the number of shares held by
Separate Account No. 51 in each Portfolio by the net asset value per share of
that Portfolio determined as of the close of business on the same day as the
respective Unit Values of the Alliance Global, Alliance Conservative Investors
and Alliance Growth Investors Funds are determined.
The value of the investments of the MFS Research, Warburg Pincus Small Company
Value, T. Rowe Price Equity Income, Merrill Lynch World Strategy and BT Equity
500 Index Funds in the corresponding EQ Advisors Trust Portfolios is calculated
by multiplying the number of shares held by Separate Account No. 66 in each
Portfolio by the net asset value per share of that Portfolio determined as of
the close of business on the same day as the respective Unit Values of the MFS
Research, Warburg Pincus Small Company Value, T. Rowe Price Equity Income,
Merrill Lynch World Strategy and BT Equity 500 Index Funds are determined.
HOW WE VALUE THE ASSETS OF THE FUNDS
The assets of the Alliance Growth Equity, Alliance Aggressive Equity and
Alliance Balanced Funds are valued as follows:
o STOCKS listed on national securities exchanges or traded on the NASDAQ
national market system are valued at the last sale price. If on a
particular day there is no sale, the stocks are valued at the latest
available bid price reported on a composite tape. Other unlisted
securities reported on the NASDAQ system are valued at inside (highest)
quoted bid prices.
o FOREIGN SECURITIES not traded directly, or in ADR form, in the United
States, are valued at the last sale price in the local currency on an
exchange in the country of origin. Foreign currency is converted into
dollars at current exchange rates.
o UNITED STATES TREASURY SECURITIES and other obligations issued or
guaranteed by the United States Government, its agencies or
instrumentalities are valued at representative quoted prices.
o LONG-TERM PUBLICLY TRADED CORPORATE BONDS (i.e., maturing in more than
one year) are valued at prices obtained from a bond pricing service of a
major dealer in bonds when such prices are available; however, in
circumstances where it is deemed appropriate to do so, an over-the-counter
or exchange quotation may be used. For those Funds that invest in
corresponding Portfolios of the Hudson River Trust or EQ Advisors Trust.
o CONVERTIBLE PREFERRED STOCKS listed on national securities exchanges are
valued at their last sale price or, if there is no sale, at the latest
available bid price.
o CONVERTIBLE BONDS and UNLISTED CONVERTIBLE PREFERRED STOCKS are valued at
bid prices obtained from one or more major dealers in such securities;
where there is a discrepancy between dealers, values may be adjusted based
on recent premium spreads to the underlying common stock.
o SHORT-TERM DEBT SECURITIES that mature in more than 60 days are valued at
representative quoted prices. Short-term debt securities that mature in 60
days or less are valued at amortized cost, which approximates market
value. The Growth Equity Fund, Aggressive Equity Fund and Balanced
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Fund as well as the Real Estate Fund, may also acquire short-term debt
securities through units in our Separate Account No. 2A. These unit values
are calculated in the same way as Fund Units. The assets of Separate
Account No. 2A are valued as described above.
o OPTION CONTRACTS, for the Balanced Fund only, listed on organized
exchanges are valued at last sale prices or closing asked prices, in the
case of calls, and at quoted bid prices, in the case of puts. The market
value of a put or call will usually reflect, among other factors, the
market price of the underlying security. When a Fund writes a call option,
an amount equal to the premium received by the Fund is included in the
Fund's financial statements as an asset and an equivalent liability. The
amount of the liability is subsequently marked-to-market to reflect the
current market value of the option written. The current market value of a
traded option is the last sale price or, in the absence of a sale, the
last offering price. When an option expires on its stipulated expiration
date or a Fund enters into a closing purchase or sales transaction, the
Fund realizes a gain or loss without regard to any unrealized gain or loss
on the underlying security, and the liability related to such option is
extinguished. When an option is exercised, the Fund realizes a gain or
loss from the sale of the underlying security, and the proceeds of the
sale are increased by the premium originally received, or reduced by the
price paid for the option.
Our investment officers determine in good faith the fair value of securities
and other assets that do not have a readily available market price in
accordance with accepted accounting practices and applicable laws and
regulations.
OTHER FUNDS. For those Funds that invest in corresponding Portfolios of The
Hudson River Trust or EQ Advisors Trust, the asset value of each Portfolio is
computed on a daily basis. See the prospectus for each Trust for information on
valuation methodology used by the corresponding Portfolios.
FUND TRANSACTIONS
The Alliance Growth Equity, Alliance Aggressive Equity and Alliance Balanced
Funds are charged for securities brokers' commission, transfer taxes and other
fees relating to securities transactions. Transactions in equity securities for
each of these Funds are executed primarily through brokers that receive a
commission paid by the Fund. The brokers, none of which are affiliates, are
selected by Alliance Capital Management L.P. ("Alliance"). For 1998, 1997 and
1996, the Alliance Growth Equity Fund paid $4,288,187, $3,698,148, and
$5,682,578, respectively, in brokerage commissions; the Alliance Aggressive
Equity Fund paid $2,020,464, $1,876,011, and $1,268,209, respectively, in
brokerage commissions; and the Alliance Balanced Fund paid $172,883, $424,352,
and $931,317, respectively, in brokerage commissions.
Alliance seeks to obtain the best price and execution of all orders it places,
considering all the circumstances. If transactions are executed in the
over-the-counter market, they will deal with the principal market makers,
unless more favorable prices or better execution is otherwise obtainable. There
are occasions on which portfolio transactions for the Funds may be executed as
part of concurrent authorizations to purchase or sell the same security for
certain other accounts or clients advised by Alliance and Equitable Life. These
concurrent authorizations potentially can be either advantageous or
disadvantageous to the Funds. When these concurrent authorizations occur, the
objective is to allocate the executions among the Funds and the other accounts
in a fair manner.
Alliance also considers the amount and quality of securities research services
provided by a broker. Typical research services include general economic
information and analyses and specific information on and
SAI-17
<PAGE>
- --------------------------------------------------------------------------------
analyses of companies, industries and markets. Factors in evaluating research
services include the diversity of sources used by the broker and the broker's
experience, analytical ability, and professional stature. The receipt of
research services from brokers tends to reduce the expenses in managing the
Funds. This is taken into account when setting the expense charges.
Brokers who provide research services may charge somewhat higher commissions
than those who do not. However, Alliance selects only brokers whose commissions
are believed to be reasonable in all the circumstances. Of the brokerage
commissions paid by the Alliance Growth Equity, Alliance Aggressive Equity and
Alliance Balanced Funds during 1998, $1,484,034, $807,098 and $56,428,
respectively, were paid to brokers providing research services on transactions
of $2,542,807,630, $906,530,372 and $154,126,661, respectively.
Alliance periodically evaluates the services provided by brokers and prepares
internal proposals for allocating among those various brokers business for all
the accounts Alliance manages or advises. That evaluation involves
consideration of the overall capacity of the broker to execute transactions,
its financial condition, its past performance and the value of research
services provided by the broker in servicing the various accounts advised or
managed by Alliance. Alliance has no binding agreements with any firm as to the
amount of brokerage business which the firm may expect to receive for research
services or otherwise. There may, however, be understandings with certain firms
that Alliance will continue to receive services from such firms only if such
firms are allocated a certain amount of brokerage business. Alliance may try to
allocate such amounts of business to such firms to the extent possible in
accordance with the policies described above.
Research information obtained by Alliance may be used in servicing all accounts
under their management, including Equitable Life's accounts. Similarly, not all
research provided by a broker or dealer with which the Funds transact business
will necessarily be used in connection with those Funds.
Transactions for the Funds in the over-the-counter market are normally executed
as principal transactions with a dealer that is a principal market-maker in the
security, unless a better price or better execution can be obtained from
another source. Under these circumstances, the Funds pay no commission.
Similarly, portfolio transactions in money market and debt securities will
normally be executed through dealers or underwriters under circumstances where
the Fund pays no commission.
When making securities transactions for Funds that do not involve paying a
brokerage commission (such as the purchase of short-term debt securities),
Alliance seeks to obtain prompt execution in an effective manner at the best
price. Subject to this general objective, Alliance may give orders to dealers
or underwriters who provide investment research. None of the Funds will pay a
higher price, however, and the fact that we or Alliance may benefit from such
research is not considered in setting the expense charges.
In addition to using brokers and dealers to execute portfolio securities
transactions for accounts Alliance manages, we or Alliance may enter into other
types of business transactions with brokers or dealers. These other
transactions will be unrelated to allocation of the Funds' portfolio
transactions.
OTHER FUNDS. For those Funds that invest in corresponding Portfolios of The
Hudson River Trust or EQ Advisors Trust, see the statement of additional
information for each Trust for information concerning the portfolio
transactions of the Portfolios.
SAI-18
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT MANAGEMENT AND ACCOUNTING FEE
The table below shows the amount we received under the investment management
and financial accounting fee under the Program during each of the last three
years. See Deductions and Charges in the prospectus.
<TABLE>
<CAPTION>
FUND 1998 1997 1996
---- ---- ---- ----
<S> <C> <C> <C>
Alliance Growth Equity .................... $354,167 $331,600 $256,818
Alliance Aggressive Equity ................ 170,470 176,278 119,359
Alliance Balanced ......................... 79,456 75,436 64,630
Alliance Global* .......................... 20,708 20,762 14,005
Alliance Conservative Investors* .......... 11,581 19,781 21,570
Alliance Growth Investors* ................ 11,570 9,140 7,186
</TABLE>
* Represents only financial accounting fees for these Funds.
UNDERWRITER
EQ Financial Consultants, Inc. ("EQ Financial"), a wholly-owned subsidiary of
Equitable Life, may be deemed to be the principal underwriter of separate
account units under the group annuity contract. EQ Financial is registered with
the SEC as a broker-dealer under the Securities Exchange Act of 1934 and is a
members of the National Association of Securities Dealers, Inc. EQ Financial's
principal business address is 1290 Avenue of the Americas, New York, NY 10104.
The offering of the units under the contract is continuous. We have paid no
underwriting commissions during any of the last three fiscal years with respect
to units of interest under the contract. See "Charges and Expenses" in the
prospectus. During May 1999 EQ Financial will change its name to AXA
Financials, Inc.
SAI-19
<PAGE>
- --------------------------------------------------------------------------------
OUR MANAGEMENT
We are managed by a Board of Directors which is elected by our shareholder. Our
directors and certain of our executive officers and their principal occupations
are as follows:
<TABLE>
<CAPTION>
DIRECTORS
NAME PRINCIPAL OCCUPATION
- --------- --------------------
<S> <C>
Francoise Colloc'h Senior Executive Vice President, Human Resources and
Communications, AXA-UAP
Henri de Castries Senior Executive Vice President, Financial Services and Life Insurance
Activities, AXA-UAP
Joseph L. Dionne Chairman and Chief Executive Officer, The McGraw-Hill Companies
Denis Duverne Senior Vice President, International, AXA-UAP
Jean-Rene Fourtou Chairman and Chief Executive Officer, Rhone Poulenc, S.A.
Norman C. Francis President, Xavier University of Louisiana
Donald J. Greene Counselor-at-Law, Partner, Le Boeuf, Lamb, Greene & MacRae
John T. Hartley Director and retired Chairman and Chief Executive Officer, Harris
Corporation
John H. F. Haskell, Jr. Director and Managing Director, SBC Warburg Dillon Read, Inc.
Mary R. (Nina) Henderson President, Best Foods Grocery; Vice President, Best Foods
W. Edwin Jarmain President, Jarmain Group Inc.
George T. Lowy Counselor-at-Law, Partner, Cravath, Swaine & Moore
Didier Pineau-Valencienne Chairman and Chief Executive Officer, Schneider S.A.
George J. Sella, Jr. Retired Chairman and Chief Executive Officer, American Cyanamid
Company
Dave H. Williams Chairman and Chief Executive Officer, Alliance Capital Management
Corporation
</TABLE>
SAI-20
<PAGE>
- --------------------------------------------------------------------------------
Unless otherwise indicated, the following persons have been involved in the
management of Equitable Life in various executive positions during the last
five years.
<TABLE>
<CAPTION>
OFFICER-DIRECTORS
NAME PRINCIPAL OCCUPATION
- ----------------- --------------------
<S> <C>
Edward D. Miller Chairman of the Board and Chief Executive Officer; formerly, Senior
Vice Chairman, Chase Manhattan Corp., and prior thereto, President
and Vice Chairman, Chemical Bank.
Stanley B. Tulin Vice Chairman of the Board and Chief Financial Officer; formerly,
Chairman, Insurance Consulting and Actuarial Practice, Coopers &
Lybrand.
Michael Hegarty President and Chief Operating Officer; formerly, Vice Chairman, Chase
Manhattan Corporation.
</TABLE>
<TABLE>
<CAPTION>
OTHER OFFICERS*
NAME PRINCIPAL OCCUPATION
- --------------- --------------------
<S> <C>
Leon B. Billis Executive Vice President and Chief Information Officer
Jose Suquet Senior Executive Vice President and Chief Distribution Officer
Robert E. Garber Executive Vice President and General Counsel
Jerome S. Golden Executive Vice President; formerly with JG Resources and BT Variable
Peter D. Noris Executive Vice President and Chief Investment Officer; formerly, Vice
President/Manager, Insurance Companies Investment Strategies Group,
Salomon Brothers, Inc.
Harvey Blitz Senior Vice President and Deputy Chief Financial Officer
Kevin R. Byrne Senior Vice President and Treasurer
Alvin H. Fenichel Senior Vice President and Controller
Paul J. Flora Senior Vice President and Auditor
Mark A. Hug Senior Vice President; formerly, Vice President, Aetna
Michael S. Martin Senior Vice President and Chief Marketing Officer
Douglas Menkes Senior Vice President and Corporate Actuary; formerly, Milliman &
Robertson, Inc.
Anthony C. Pasquale Senior Vice President
Donald R. Kaplan Vice President and Chief Compliance Officer
Pauline Sherman Vice President, Secretary and Associate General Counsel
</TABLE>
- ------------------
* Current positions listed are with Equitable Life unless otherwise
specified.
SAI-21
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
The financial statements of Equitable Life included in this Statement of
Additional Information should be considered only as bearing upon the ability of
Equitable Life to meet its obligations under the group annuity contract. They
should not be considered as bearing upon the investment experience of the
Funds. The financial statements of Separate Account Nos. 3 (Pooled), 4
(Pooled), 10 (Pooled), 51 (Pooled) and 66 (Pooled) reflect applicable fees,
charges and other expenses under the Program as in effect during the periods
covered, as well as the charges against the accounts made in accordance with
the terms of all other contracts participating in the respective separate
accounts, if applicable.
<TABLE>
<CAPTION>
<S> <C>
Separate Account Nos. 3 (Pooled), 4 (Pooled), and 10 (Pooled):
Report of Independent Accountants -- PricewaterhouseCoopers LLP ....................... SAI-23
Separate Account No. 3 (Pooled) (The Alliance Aggressive Equity Fund):
Statement of Assets and Liabilities, December 31, 1998 ................................ SAI-24
Statements of Operations and Changes in Net Assets for the Years Ended
December 31, 1998 and 1997 ........................................................... SAI-25
Portfolio of Investments, December 31, 1998 ........................................... SAI-26
Separate Account No. 4 (Pooled) (The Alliance Growth Equity Fund):
Statement of Assets and Liabilities, December 31, 1998 ................................ SAI-32
Statements of Operations and Changes in Net Assets for the Years Ended
December 31, 1998 and 1997 ........................................................... SAI-33
Portfolio of Investments, December 31, 1998 ........................................... SAI-34
Separate Account No. 10 (Pooled) (The Alliance Balanced Fund):
Statement of Assets and Liabilities, December 31, 1998 ................................ SAI-40
Statements of Operations and Changes in Net Assets for the Years Ended
December 31, 1998 and 1997 ........................................................... SAI-41
Portfolio of Investments, December 31, 1998 ........................................... SAI-42
Separate Account No. 51 (Pooled)
Report of Independent Accountants -- PricewaterhouseCoopers LLP ....................... SAI-57
Separate Account No. 51 (Pooled) (The Alliance Global, Alliance Conservative Investors
and Alliance Growth Investors Funds):
Statements of Assets and Liabilities, December 31, 1998 ............................... SAI-58
Statements of Operations and Changes in Net Assets for the year ended December 31, 1998
and 1997 ............................................................................. SAI-59
Separate Account No. 66 (Pooled)
Report of Independent Accountants -- PricewaterhouseCoopers LLP ....................... SAI-60
Separate Account No. 66 (Pooled) (The MFS Research, Warburg Pincus Small Company Value,
T. Rowe Price Equity Income and Merrill Lynch World Strategy Funds):
Statements of Assets and Liabilities, December 31, 1998 ............................... SAI-61
Statements of Operations and Changes in Net Assets for the year
ended December 31, 1998 and 1997 ..................................................... SAI-62
Separate Account Nos. 3 (Pooled), 4 (Pooled), 10 (Pooled), 51 (Pooled) and 66 (Pooled):
Notes to Financial Statements ......................................................... SAI-67
The Equitable Life Assurance Society of the United States:
Report of Independent Accountants -- PricewaterhouseCoopers LLP ....................... SAI-72
Consolidated Balance Sheets, December 31, 1998 and 1997 ............................... SAI-73
Consolidated Statements of Earnings Years Ended December 31, 1998, 1997 and 1996 ...... SAI-74
Consolidated Statement of Shareholder's Equity Years Ended December 31, 1998, 1997
and 1996 ............................................................................ SAI-75
Consolidated Statements of Cash Flows for the Years Ended December 31, 1998, 1997
and 1996 ............................................................................ SAI-76
Notes to Consolidated Financial Statements ............................................ SAI-77
</TABLE>
SAI-22
<PAGE>
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
The Equitable Life Assurance Society of the United States
and the Contractowners of Separate Account Nos. 3, 4 and 10
of The Equitable Life Assurance Society of the United States
In our opinion, the accompanying statements of assets and liabilities,
including the portfolio of investments, and the related statements of
operations and changes in net assets and the selected per unit data (included
under Condensed Financial Information in the prospectus of the Members
Retirement Program) present fairly, in all material respects, the financial
position of Separate Account Nos. 3 (Pooled)(Alliance Aggressive Equity Fund),
4 (Pooled)(Alliance Growth Equity Fund) and 10 (Pooled)(Alliance Balanced Fund)
of the Equitable Life Assurance Society of the United States ("Equitable Life")
at December 31, 1998 and each of their results of operations, the changes in
net assets for each of the two years in the period then ended and the selected
per unit data for the periods presented, in conformity with generally accepted
accounting principles. These financial statements and the selected per unit
data (hereafter referred to as "financial statements") are the responsibility
of Equitable Life's management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our audits of
these financial statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at December 31, 1998 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
New York, New York
February 8, 1999
SAI-23
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO.3 (POOLED)
(THE ALLIANCE AGGRESSIVE EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments (Notes 2 and 3):
Common stocks -- at market value (cost: $227,495,826) ................................... $268,307,075
Participation in Separate Account No.2A -- at amortized cost, which approximates market
value, equivalent to 67,331 units at $285.54 ............................................. 19,225,442
Cash ..................................................................................... 21,240
Receivables:
Securities sold ......................................................................... 1,245,685
Dividends ............................................................................... 146,626
- ----------------------------------------------------------------------------------------------------------
Total assets ........................................................................... 288,946,068
- ----------------------------------------------------------------------------------------------------------
LIABILITIES:
Payables:
Securities purchased .................................................................... 3,872,390
Due to Equitable Life's General Account ................................................. 8,601,995
Investment Management fees payable ...................................................... 2,036
Accrued expenses ......................................................................... 107,821
- ----------------------------------------------------------------------------------------------------------
Total liabilities ...................................................................... 12,584,242
- ----------------------------------------------------------------------------------------------------------
NET ASSETS ............................................................................... $276,361,826
==========================================================================================================
</TABLE>
See Notes to Financial Statements.
SAI-24
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 3 (POOLED)
(THE ALLIANCE AGGRESSIVE EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
1998 1997
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FROM OPERATIONS:
INVESTMENT INCOME (NOTE 2):
Dividends ................................................................ $ 1,872,213 $ 1,728,486
Interest ................................................................. 380,443 456,291
- -----------------------------------------------------------------------------------------------------------------
Total .................................................................... 2,252,656 2,184,777
EXPENSES (NOTE 4) ........................................................ (4,477,510) (5,757,007)
- -----------------------------------------------------------------------------------------------------------------
NET INVESTMENT LOSS ...................................................... (2,224,854) (3,572,230)
- -----------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 2):
Realized gain (loss) from security and foreign currency transactions ..... (70,824,652) 93,937,473
- -----------------------------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of investments:
Beginning of year ....................................................... 15,093,634 56,470,533
End of year ............................................................. 40,811,249 15,093,634
- -----------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation/depreciation ........................... 25,717,615 (41,376,899)
- -----------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ................... (45,107,037) 52,560,574
- -----------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets attributable to operations ............. (47,331,891) 48,988,344
- -----------------------------------------------------------------------------------------------------------------
FROM CONTRIBUTIONS AND WITHDRAWALS:
Contributions ............................................................ 227,181,913 229,831,666
Withdrawals .............................................................. (321,651,183) (304,183,883)
- -----------------------------------------------------------------------------------------------------------------
Decrease in net assets attributable to contributions and withdrawals ..... (94,469,270) (74,352,217)
- -----------------------------------------------------------------------------------------------------------------
DECREASE IN NET ASSETS ................................................... (141,801,161) (25,363,873)
NET ASSETS -- BEGINNING OF YEAR .......................................... 418,162,987 443,526,860
- -----------------------------------------------------------------------------------------------------------------
NET ASSETS -- END OF YEAR ................................................ $ 276,361,826 $ 418,162,987
================================================================================================================
</TABLE>
See Notes to Financial Statements.
SAI-25
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 3 (POOLED)
(THE ALLIANCE AGGRESSIVE EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE OF THE UNITED STATES
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
----------- ---------------
<S> <C> <C>
COMMON STOCKS:
BASIC MATERIALS
CHEMICALS (0.4%)
Georgia Gulf Corp. ............................. 60,000 $ 963,750
------------
CHEMICALS -- SPECIALTY (0.6%)
Great Lakes Chemical Corp. ..................... 25,000 1,000,000
Solutia, Inc. .................................. 30,000 671,250
------------
1,671,250
------------
TOTAL BASIC MATERIALS (1.0%) ................... 2,635,000
------------
BUSINESS SERVICES
PRINTING, PUBLISHING & BROADCASTING (8.9%)
CBS Corp. ...................................... 91,900 3,009,725
Cablevision System Corp.* ...................... 42,500 2,132,968
Comcast Corp. (Class A) ........................ 165,800 9,730,387
Infinity Broadcasting Corp. (Class A)* ......... 103,200 2,825,100
King World Productions, Inc.* .................. 50,400 1,483,650
R.H. Donnelley Corp. ........................... 40,000 582,500
USA Networks, Inc.* ............................ 146,500 4,852,813
------------
24,617,143
------------
PROFESSIONAL SERVICES (1.3%)
Century Business Services, Inc.* ............... 79,000 1,135,625
Nielsen Media Research, Inc. ................... 40,200 723,600
Young & Rubicam, Inc.* ......................... 54,300 1,757,963
------------
3,617,188
------------
TRUCKING, SHIPPING (1.1%)
OMI Corp.* ..................................... 154,900 503,425
Teekay Shipping Corp. .......................... 129,100 2,428,694
------------
2,932,119
------------
TOTAL BUSINESS SERVICES (11.3%) ................ 31,166,450
------------
CAPITAL GOODS
AEROSPACE (0.2%)
Loral Space & Communications Ltd.* ............. 30,000 534,375
------------
BUILDING MATERIALS & FOREST PRODUCTS (1.3%)
Louisiana Pacific Corp. ........................ 60,000 1,098,750
Martin Marietta Materials, Inc. ................ 40,000 2,487,500
------------
3,586,250
------------
</TABLE>
SAI-26
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 3 (POOLED)
(THE ALLIANCE AGGRESSIVE EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
----------- ---------------
<S> <C> <C>
MACHINERY (1.4%)
United Rentals, Inc.* ............................. 120,800 $ 4,001,500
------------
TOTAL CAPITAL GOODS (2.9%) ........................ 8,122,125
------------
CONSUMER CYCLICALS
AIRLINES (3.4%)
Continental Airlines, Inc. (Class B)* ............. 206,200 6,907,700
Northwest Airlines Corp. (Class A)* ............... 100,800 2,576,700
------------
9,484,400
------------
APPAREL, TEXTILE (5.5%)
Mohawk Industries, Inc.* .......................... 177,500 7,466,093
Tommy Hilfiger Corp.* ............................. 78,000 4,680,000
Unifi, Inc. ....................................... 161,100 3,151,519
------------
15,297,612
------------
AUTO RELATED (4.8%)
Circuit City Stores, Inc. - CarMax Group* ......... 302,300 1,643,756
Federal Mogul Corp. ............................... 25,000 1,487,500
Hertz Corp. (Class A) ............................. 80,100 3,654,562
Republic Industries, Inc.* ........................ 427,700 6,308,575
------------
13,094,393
------------
FOOD SERVICES, LODGING (2.1%)
Extended Stay America, Inc.* ...................... 99,900 1,048,950
Florida Panthers Holdings* ........................ 125,200 1,165,925
Meristar Hospitality Corp. ........................ 94,700 1,757,869
Starbucks Corp.* .................................. 32,800 1,840,900
------------
5,813,644
------------
HOUSEHOLD FURNITURE, APPLIANCES (1.4%)
Industrie Natuzzi Spa (ADR) ....................... 150,900 3,753,637
------------
LEISURE RELATED (5.3%)
Brass Eagle, Inc.* ................................ 1,500 23,063
Callaway Golf Company ............................. 63,400 649,850
Mattel, Inc. ...................................... 27,700 631,906
MGM Grand, Inc.* .................................. 16,700 452,988
Premier Parks, Inc.* .............................. 246,400 7,453,600
Royal Caribbean Cruises Ltd. ...................... 142,600 5,276,200
------------
14,487,607
------------
</TABLE>
SAI-27
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 3 (POOLED)
(THE ALLIANCE AGGRESSIVE EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
----------- ---------------
<S> <C> <C>
RETAIL -- GENERAL (8.7%)
Bed Bath & Beyond, Inc.* .............................. 46,900 $ 1,600,463
Genesis Direct, Inc.* ................................. 150,000 1,171,875
Gucci Group NV - NY ................................... 30,900 1,502,512
Limited, Inc. ......................................... 35,000 1,019,375
Ross Stores, Inc. ..................................... 47,200 1,858,500
Saks Incorporated* .................................... 110,400 3,484,500
Tandy Corp. ........................................... 32,500 1,338,594
Tiffany & Co. ......................................... 132,600 6,878,625
TJX Cos., Inc. ........................................ 77,600 2,250,400
Venator Group, Inc.* .................................. 472,200 3,039,787
------------
24,144,631
------------
TOTAL CONSUMER CYCLICALS (31.2%) ...................... 86,075,924
------------
CONSUMER NONCYCLICALS
DRUGS (2.1%)
Algos Pharmaceuticals Corp.* .......................... 45,000 1,170,000
Barr Laboratories, Inc.* .............................. 10,500 504,000
Forest Laboratories, Inc.* ............................ 17,000 904,188
MedImmune, Inc.* ...................................... 23,500 2,336,781
Mylan Laboratories, Inc. .............................. 25,000 787,500
------------
5,702,469
------------
HOSPITAL SUPPLIES & SERVICES (8.1%)
Biomet, Inc. .......................................... 17,250 694,313
Columbia/HCA Healthcare Corp. ......................... 239,200 5,920,200
Guidant Corp. ......................................... 15,400 1,697,850
Health Management Associates, Inc. (Class A)* ......... 66,500 1,438,063
HEALTHSOUTH Corp.* .................................... 536,600 8,283,763
Hooper Holmes, Inc. ................................... 14,300 414,700
Saint Jude Medical, Inc.* ............................. 43,100 1,193,331
Steris Corp.* ......................................... 55,000 1,564,063
Sun International Hotels Ltd.* ........................ 27,200 1,235,900
------------
22,442,183
------------
RETAIL -- FOOD (1.4%)
Food Lion, Inc. (Class A) ............................. 140,000 1,487,500
Kroger Co.* ........................................... 10,000 605,000
Whole Foods Market, Inc.* ............................. 37,100 1,794,713
------------
3,887,213
------------
TOTAL CONSUMER NONCYCLICALS (11.6%) ................... 32,031,865
------------
</TABLE>
SAI-28
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 3 (POOLED)
(THE ALLIANCE AGGRESSIVE EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
----------- ---------------
<S> <C> <C>
CREDIT-SENSITIVE
BANKS (1.6%)
Greenpoint Financial Corp. ................. 82,700 $ 2,904,838
Sovereign Bancorp, Inc. .................... 110,000 1,567,500
------------
4,472,338
------------
FINANCIAL SERVICES (4.7%)
CMAC Investment Corp. ...................... 36,600 1,681,313
Capital One Financial Corp. ................ 16,600 1,909,000
Edwards (A.G.), Inc. ....................... 59,700 2,223,825
Merrill Lynch & Co., Inc. .................. 36,500 2,436,375
Newcourt Credit Group, Inc. ................ 48,100 1,680,494
Newhall Land & Farming Co. ................. 35,000 910,000
Paine Webber, Inc. ......................... 55,300 2,135,963
------------
12,976,970
------------
INSURANCE (7.2%)
Ace Ltd. ................................... 43,800 1,508,360
AFLAC, Inc. ................................ 60,300 2,653,200
CNA Financial Corp.* ....................... 263,500 10,605,875
Everest Reinsurance Holdings, Inc. ......... 50,000 1,946,875
Gallagher (Arthur J.) & Co. ................ 20,000 882,500
Providian Financial Corp. .................. 18,750 1,406,250
Reliastar Financial Corp. .................. 22,500 1,037,810
------------
20,040,870
------------
REAL ESTATE (3.7%)
Boston Properties, Inc. .................... 83,200 2,537,600
Crescent Real Estate Equities Co. .......... 96,000 2,208,000
Equity Office Properties Trust ............. 87,700 2,104,800
Vornado Realty Trust ....................... 97,300 3,283,875
------------
10,134,275
------------
UTILITY -- TELEPHONE (0.7%)
Frontier Corp. ............................. 55,000 1,870,000
------------
TOTAL CREDIT-SENSITIVE (17.9%) ............. 49,494,453
------------
ENERGY
OIL -- DOMESTIC (0.8%)
Atlantic Richfield Co. ..................... 14,100 920,025
Louis Dreyfus Natural Gas Corp.* ........... 90,000 1,282,500
------------
2,202,525
------------
</TABLE>
SAI-29
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 3 (POOLED)
(THE ALLIANCE AGGRESSIVE EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
----------- ---------------
<S> <C> <C>
OIL -- INTERNATIONAL (0.4%)
Vastar Resources, Inc. ........................ 25,000 $ 1,079,688
------------
OIL -- SUPPLIES & CONSTRUCTION (0.7%)
Diamond Offshore Drilling, Inc. ............... 85,700 2,030,019
------------
RAILROADS (0.8%)
Kansas City Southern Industries, Inc. ......... 46,000 2,262,625
------------
TOTAL ENERGY (2.7%) ........................... 7,574,857
------------
TECHNOLOGY
ELECTRONICS (7.3%)
Altera Corp.* ................................. 31,800 1,935,825
Citrix Systems, Inc.* ......................... 15,200 1,475,350
Hearst-Argyle Television, Inc.* ............... 35,000 1,155,000
Keane, Inc.* .................................. 29,100 1,162,181
Micron Technology, Inc.* ...................... 23,600 1,193,275
Network Associates, Inc.* ..................... 51,850 3,435,062
Parametric Technology Corp.* .................. 81,700 1,337,837
Sanmina Corp.* ................................ 41,000 2,562,500
Seagate Technology, Inc.* ..................... 28,400 859,100
Sterling Commerce, Inc.* ...................... 69,500 3,127,500
Synopsys, Inc.* ............................... 34,900 1,893,325
------------
20,136,955
------------
OFFICE EQUIPMENT (1.9%)
Ceridian Corp.* ............................... 38,500 2,687,781
Policy Management Systems Corp.* .............. 40,000 2,020,000
Sterling Software, Inc.* ...................... 25,000 676,563
------------
5,384,344
------------
OFFICE EQUIPMENT SERVICES (2.8%)
Cadence Design Systems, Inc.* ................. 35,600 1,059,100
Comverse Technology, Inc.* .................... 42,700 3,031,700
Intuit, Inc.* ................................. 10,000 725,000
Novell, Inc.* ................................. 165,000 2,990,625
------------
7,806,425
------------
TELECOMMUNICATIONS (6.5%)
Amdocs Ltd.* .................................. 42,700 731,238
America Online, Inc. .......................... 7,000 1,120,000
American Satellite Network -- Rights* ......... 9,550 0
FORE Systems, Inc.* ........................... 15,000 274,688
Global TeleSystems Group, Inc.* ............... 59,000 3,289,250
</TABLE>
SAI-30
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 3 (POOLED)
(THE ALLIANCE AGGRESSIVE EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
PORTFOLIO OF INVESTMENTS (CONCLUDED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
----------- ---------------
<S> <C> <C>
Hyperion Telecommunications, Inc. (Class A)* ......... 105,000 $ 1,588,125
Millicom International Cellular S.A.* ................ 117,200 4,087,350
Nextel Communications, Inc. (Class A)* ............... 167,300 3,952,463
NTL Incorporated* .................................... 15,000 846,563
Winstar Communications, Inc.* ........................ 51,000 1,989,000
-------------
17,878,677
-------------
TOTAL TECHNOLOGY (18.5%) ............................. 51,206,401
-------------
TOTAL COMMON STOCKS (97.1%)
(Cost $227,495,826) ................................. 268,307,075
-------------
PARTICIPATION IN SEPARATE ACCOUNT NO. 2A,
at amortized cost, which approximates
market value, equivalent to 67,331 units
at $285.54 each (6.9%) .............................. 19,225,442
-------------
TOTAL INVESTMENTS (104.0%)
(Cost/Amortized Cost $246,721,268)................... 287,532,517
OTHER ASSETS LESS LIABILITIES (-4.0%) ................ (11,170,691)
-------------
NET ASSETS (100.0%) .................................. $ 276,361,826
=============
</TABLE>
* Non-income Producing.
See Notes to Financial Statements.
SAI-31
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO.4 (POOLED)
(THE ALLIANCE GROWTH EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
<TABLE>
<S> <C>
ASSETS:
Investments (Notes 2 and 3):
Common stocks -- at market value (cost: $1,914,414,699) ................................. $2,098,464,735
Preferred stocks -- at market value (cost: $841,125) .................................... 934,875
Participation in Separate Account No.2A -- at amortized cost, which approximates market
value,
equivalent to 8,358 units at $285.54 ................................................... 2,386,642
Receivables:
Securities sold ......................................................................... 22,404,246
Dividends ............................................................................... 1,027,478
- ------------------------------------------------------------------------------------------- --------------
Total assets ........................................................................... 2,125,217,976
- ------------------------------------------------------------------------------------------- --------------
LIABILITIES:
Payables:
Securities purchased .................................................................... 3,784,147
Due to Equitable Life's General Account ................................................. 7,913,160
Custodian fee payable ................................................................... 27,461
Investment management fees payable ...................................................... 5,210
Accrued expenses ......................................................................... 440,812
Amount retained by Equitable Life in Separate Account No. 4 (Note 1) ..................... 1,271,958
- ------------------------------------------------------------------------------------------- --------------
Total liabilities ...................................................................... 13,442,748
- ------------------------------------------------------------------------------------------- --------------
NET ASSETS (NOTE 1):
Net assets attributable to participants' accumulations ................................... 2,072,991,897
Reserves and other liabilities attributable to annuity benefits .......................... 38,783,331
- ------------------------------------------------------------------------------------------- --------------
NET ASSETS ............................................................................... $2,111,775,228
=========================================================================================== ==============
</TABLE>
See Notes to Financial Statements.
SAI-32
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
(THE ALLIANCE GROWTH EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1998 1997
------------------ ------------------
<S> <C> <C>
FROM OPERATIONS:
INVESTMENT INCOME (NOTE 2):
Dividends (net of foreign taxes withheld -1998: $199,170 and 1997: $2,138) ..... $ 12,224,979 $ 13,385,197
Interest ....................................................................... 477,732 845,517
- --------------------------------------------------------------------------------- -------------- --------------
Total .......................................................................... 12,702,711 14,230,714
EXPENSES (NOTE 4) .............................................................. (18,036,108) (19,783,932)
- --------------------------------------------------------------------------------- -------------- --------------
NET INVESTMENT LOSS ............................................................ (5,333,397) (5,553,218)
- --------------------------------------------------------------------------------- -------------- --------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 2):
Realized gain from security and foreign currency transactions .................. 424,897,105 372,430,956
- --------------------------------------------------------------------------------- -------------- --------------
Unrealized appreciation (depreciation) of investments and foreign currency
transactions:
Beginning of year ............................................................. 690,125,231 448,580,808
End of year ................................................................... 184,143,786 690,125,231
- --------------------------------------------------------------------------------- -------------- --------------
Change in unrealized appreciation/depreciation ................................. (505,981,445) 241,544,423
- --------------------------------------------------------------------------------- -------------- --------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ......................... (81,084,340) 613,975,379
- --------------------------------------------------------------------------------- -------------- --------------
Increase (decrease) in net assets attributable to operations ................... (86,417,737) 608,422,161
- --------------------------------------------------------------------------------- -------------- --------------
FROM CONTRIBUTIONS AND WITHDRAWALS:
Contributions .................................................................. 451,738,195 546,890,479
Withdrawals .................................................................... (897,373,357) (969,496,108)
- --------------------------------------------------------------------------------- -------------- --------------
Decrease in net assets attributable to contributions and withdrawals ........... (445,635,162) (422,605,629)
- --------------------------------------------------------------------------------- -------------- --------------
(Increase) in accumulated amount retained by Equitable Life in Separate
Account No. 4 (Note 1) ........................................................ (153,300) (360,863)
- --------------------------------------------------------------------------------- -------------- --------------
INCREASE (DECREASE) IN NET ASSETS .............................................. (532,206,199) 185,455,669
NET ASSETS -- BEGINNING OF YEAR ................................................ 2,643,981,427 2,458,525,758
- --------------------------------------------------------------------------------- -------------- --------------
NET ASSETS -- END OF YEAR ...................................................... $2,111,775,228 $2,643,981,427
================================================================================= ============== ==============
</TABLE>
See Notes to Financial Statements.
SAI-33
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
(THE ALLIANCE GROWTH EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
----------- -----------------
<S> <C> <C>
COMMON STOCKS :
BASIC MATERIALS
CHEMICALS -- SPECIALTY (0.1%)
Crompton & Knowles Corp. ....................... 97,800 $ 2,023,238
--------------
TOTAL BASIC MATERIALS (0.1%) ................... 2,023,238
--------------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (3.2%)
United States Filter Corp.* .................... 3,000,000 68,625,000
--------------
PRINTING, PUBLISHING & BROADCASTING (1.6%)
CBS Corp. ...................................... 1,000,000 32,750,000
--------------
PROFESSIONAL SERVICES (0.1%)
Nielsen Media Research, Inc. ................... 163,100 2,935,800
--------------
TRUCKING, SHIPPING (0.2%)
Knightsbridge Tankers Ltd. ..................... 150,000 3,121,875
Marine Transport Corp.* ........................ 50,000 112,500
OMI Corp.* ..................................... 500,000 1,625,000
--------------
4,859,375
--------------
TOTAL BUSINESS SERVICES (5.1%) ................. 109,170,175
--------------
CAPITAL GOODS
AEROSPACE (0.2%)
Loral Space & Communications Ltd.* ............. 250,000 4,453,125
--------------
TOTAL CAPITAL GOODS (0.2%) ..................... 4,453,125
--------------
CONSUMER CYCLICALS
AIRLINES (8.6%)
Alaska Air Group, Inc.* ........................ 200,000 8,850,000
America West Holdings Corp. (Class B)* ......... 350,000 5,950,000
Continental Airlines, Inc. (Class B)* .......... 3,399,997 113,899,900
Northwest Airlines Corp. (Class A)* ............ 2,100,000 53,681,250
--------------
182,381,150
--------------
APPAREL, TEXTILE (2.2%)
Nautica Enterprises, Inc.* ..................... 114,200 1,713,000
Tommy Hilfiger Corp.* .......................... 650,000 39,000,000
Unifi, Inc. .................................... 200,000 3,912,500
Wolverine World Wide, Inc. ..................... 154,600 2,048,450
--------------
46,673,950
--------------
</TABLE>
SAI-34
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
(THE ALLIANCE GROWTH EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
----------- -----------------
<S> <C> <C>
AUTO RELATED (7.7%)
Budget Group, Inc.* ............................. 250,000 $ 3,968,750
Circuit City Stores, Inc.-CarMax Group* ......... 490,200 2,665,462
Dana Corp. ...................................... 300,000 12,262,500
Dollar Thrifty Automotive Group, Inc.* .......... 841,700 10,836,887
Republic Industries, Inc.* ...................... 9,000,000 132,750,000
--------------
162,483,599
--------------
FOOD SERVICES, LODGING (0.9%)
Extended Stay America, Inc.* .................... 1,660,000 17,430,000
Suburban Lodges of America, Inc.* ............... 35,000 286,563
--------------
17,716,563
--------------
HOUSEHOLD FURNITURE, APPLIANCES (1.6%)
Industrie Natuzzi Spa (ADR) ..................... 1,011,000 25,148,625
Newell Co. ...................................... 200,000 8,250,000
--------------
33,398,625
--------------
LEISURE RELATED (9.0%)
Carnival Corp. .................................. 2,000,000 96,000,000
Cendant Corporation* ............................ 506,000 9,645,625
Mirage Resorts, Inc.* ........................... 707,600 10,569,771
Royal Caribbean Cruises Ltd. .................... 2,000,000 74,000,000
--------------
190,215,396
--------------
RETAIL -- GENERAL (1.0%)
Circuit City Stores-Circuit City Group .......... 76,500 3,820,219
Dickson Concepts International, Inc. ............ 357,000 276,473
Genesis Direct, Inc.* ........................... 215,000 1,679,688
Limited, Inc. ................................... 100,000 2,912,500
Tandy Corp. ..................................... 50,000 2,059,375
Tiffany & Co. ................................... 200,000 10,375,000
--------------
21,123,255
--------------
TOTAL CONSUMER CYCLICALS (31.0%) ................ 653,992,538
--------------
CONSUMER NONCYCLICALS
DRUGS (2.5%)
Geltex Pharmaceuticals, Inc.* ................... 700,000 15,837,500
MedImmune, Inc.* ................................ 361,600 35,956,600
--------------
51,794,100
--------------
</TABLE>
SAI-35
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
(THE ALLIANCE GROWTH EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
----------- -----------------
<S> <C> <C>
FOODS (0.3%)
Tysons Foods, Inc. ..................................... 350,000 $ 7,437,500
--------------
HOSPITAL SUPPLIES & SERVICES (1.3%)
HEALTHSOUTH Corp.* ..................................... 1,800,000 27,787,500
--------------
TOTAL CONSUMER NONCYCLICALS (4.1%) ..................... 87,019,100
--------------
CREDIT-SENSITIVE
BANKS (0.8%)
Citigroup, Inc. ........................................ 300,000 14,850,000
Washington Mutual, Inc. ................................ 84,000 3,207,750
--------------
18,057,750
--------------
FINANCIAL SERVICES (13.8%)
Edwards (A.G.), Inc. ................................... 760,000 28,310,000
Legg Mason, Inc. ....................................... 2,500,000 78,906,250
MBNA Corp. ............................................. 6,900,000 172,068,750
Newcourt Credit Group, Inc. ............................ 100,000 3,493,750
PMI Group, Inc. ........................................ 200,000 9,875,000
--------------
292,653,750
--------------
INSURANCE (8.9%)
Ace Ltd. ............................................... 100,000 3,443,750
CNA Financial Corp.* ................................... 3,530,100 142,086,525
IPC Holdings Ltd. ...................................... 207,400 4,809,088
NAC Re Corp. ........................................... 600,000 28,162,500
Travelers Property Casualty (Class A) .................. 300,000 9,300,000
--------------
187,801,863
--------------
REAL ESTATE (0.1%)
Excel Legacy Corp.* .................................... 140,000 560,000
Prime Retail, Inc. ..................................... 60,000 588,750
--------------
1,148,750
--------------
UTILITY -- ELECTRIC (0.1%)
AES Corp.* ............................................. 30,000 1,421,250
--------------
UTILITY -- TELEPHONE (7.0%)
Embratel Participacoes (ADR)* .......................... 220,000 3,066,250
Tele Celular Sul Participacoes (ADR)* .................. 22,000 383,625
Tele Centro Oeste Celular Participacoes (ADR)* ......... 73,333 215,416
Tele Centro Sul Participacoes (ADR)* ................... 44,000 1,839,750
Tele Leste Celular Participacoes (ADR)* ................ 4,400 124,850
</TABLE>
SAI-36
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
(THE ALLIANCE GROWTH EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
----------- -----------------
<S> <C> <C>
Telemig Celular Participacoes (ADR)* ...................... 11,000 $ 233,750
Tele Nordeste Celular Participacoes (ADR)* ................ 11,000 203,500
Tele Norte Celular Participacoes (ADR)* ................... 4,400 99,275
Tele Norte Leste Participacoes (ADR)* ..................... 220,000 2,736,250
Telephone & Data Systems, Inc. ............................ 2,930,000 131,666,875
Telesp Celular Participacoes (ADR)* ....................... 88,000 1,540,000
Telesp Participacoes S.A. (ADR)* .......................... 220,000 4,867,500
Tele Sudeste Celular Participacoes (ADR)* ................. 44,000 910,250
--------------
147,887,291
--------------
TOTAL CREDIT-SENSITIVE (30.7%) ............................ 648,970,654
--------------
ENERGY
OIL -- DOMESTIC (0.4%)
Kerr McGee Corp. .......................................... 220,000 8,415,000
--------------
OIL -- INTERNATIONAL (0.1%)
IRI International Corporation* ............................ 305,000 1,220,000
--------------
OIL -- SUPPLIES & CONSTRUCTION (4.9%)
BJ Services Co.* .......................................... 440,000 6,875,000
Halliburton Co. ........................................... 1,000,000 29,625,000
Lukoil Holdings -- Spons (ADR) ............................ 15,000 232,520
Lukoil Holdings -- Spons (ADR) (Preferred Shares) ......... 40,000 134,684
Noble Drilling Corp.* ..................................... 2,200,000 28,462,500
Oceaneering International, Inc.* .......................... 300,000 4,500,000
Parker Drilling Corp.* .................................... 3,756,100 11,972,569
Rowan Cos., Inc.* ......................................... 1,684,800 16,848,000
Stolt Comex Seaway S.A.* .................................. 14,000 94,500
Stolt Comex Seaway S.A. (ADR) (Class A)* .................. 880,000 4,950,000
--------------
103,694,773
--------------
TOTAL ENERGY (5.4%) ....................................... 113,329,773
--------------
TECHNOLOGY
ELECTRONICS (8.8%)
Altera Corp.* ............................................. 460,000 28,002,500
Cisco Systems, Inc.* ...................................... 400,000 37,125,000
DBT Online, Inc.* ......................................... 160,000 3,990,000
Micron Technology, Inc.* .................................. 300,000 15,168,750
Motorola, Inc. ............................................ 50,000 3,053,125
Network Associates, Inc.* ................................. 550,000 36,437,500
Sanmina Corp.* ............................................ 305,600 19,100,000
</TABLE>
SAI-37
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
(THE ALLIANCE GROWTH EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
----------- -----------------
<S> <C> <C>
Sterling Commerce, Inc.* ...................... 250,000 $ 11,250,000
Xilinx, Inc.* ................................. 479,300 31,214,413
--------------
185,341,288
--------------
OFFICE EQUIPMENT SERVICES (3.4%)
First Data Corp. .............................. 600,000 19,012,500
HBO & Co. ..................................... 1,752,500 50,274,844
Novell, Inc.* ................................. 100,000 1,812,500
--------------
71,099,844
--------------
TELECOMMUNICATIONS (10.6%)
American Satellite Network -- Rights* ......... 70,000 0
Esprit Telecom Group PLC (ADR)* ............... 50,000 2,337,500
Global TeleSystems Group, Inc.* ............... 1,290,000 71,917,500
Millicom International Cellular S.A.* ......... 1,550,000 54,056,250
NTL Incorporated* ............................. 100,000 5,643,750
United States Cellular Corp.* ................. 2,345,000 89,110,000
--------------
223,065,000
--------------
TOTAL TECHNOLOGY (22.8%) ...................... 479,506,132
--------------
TOTAL COMMON STOCKS (99.4%)
(Cost $1,914,414,699) ........................ 2,098,464,735
--------------
PREFERRED STOCKS:
CONSUMER CYCLICALS
AIRLINES (0.0%)
Continental Airlines Financial Trust
8.5% Conv. ................................... 13,500 934,875
--------------
TOTAL CONSUMER CYCLICALS (0.0%) ............... 934,875
--------------
TOTAL PREFERRED STOCKS (0.0%)
(Cost $841,125) .............................. 934,875
--------------
PARTICIPATION IN SEPARATE ACCOUNT NO. 2A,
at amortized cost, which approximates
market value, equivalent to 8,358 units
at $285.54 each (0.1%)........................ 2,386,642
--------------
</TABLE>
SAI-38
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
(THE ALLIANCE GROWTH EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
PORTFOLIO OF INVESTMENTS (CONCLUDED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
MARKET
VALUE
-----------------
<S> <C>
TOTAL INVESTMENTS (99.5%)
(Cost $1,917,642,466) .................................................. $2,101,786,252
OTHER ASSETS LESS LIABILITIES (0.5%) .................................... 11,260,934
AMOUNTS RETAINED BY EQUITABLE LIFE IN
SEPARATE ACCOUNT NO. 4 (0.0%) (NOTE 1) ................................. (1,271,958)
--------------
NET ASSETS (100.0%) ..................................................... $2,111,775,228
==============
Reserves attributable to participants' accumulations .................... $2,072,991,897
Reserves and other contract liabilities attributable to annuity benefits 38,783,331
--------------
NET ASSETS .............................................................. $2,111,775,228
==============
</TABLE>
* Non-income producing.
See Notes to Financial Statements.
SAI-39
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 10 (POOLED)
(THE ALLIANCE BALANCED FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments (Notes 2 and 3):
Common stocks -- at market value (cost: $80,844,071) .................................... $107,359,442
Preferred stocks -- at market value (cost: $1,785,352) .................................. 1,935,623
Long-term debt securities -- at value (amortized cost: $82,022,026)...................... 84,941,069
Participation in Separate Account No.2A -- at amortized cost, which approximates market
value,
equivalent to 17,084 units at $285.54 ................................................. 4,878,062
Cash ..................................................................................... 472,482
Receivables:
Securities sold ......................................................................... 888,963
Interest ................................................................................ 1,086,917
Dividends ............................................................................... 156,829
Other ................................................................................... 49,527
Unrealized appreciation of forward currency contracts .................................... 9,001
- ------------------------------------------------------------------------------------------- ------------
Total assets .......................................................................... 201,777,915
- ------------------------------------------------------------------------------------------- ------------
LIABILITIES:
Payables:
Securities purchased .................................................................... 2,398,400
Due to Equitable Life's General Account ................................................. 1,936,063
Investment management fees payable ...................................................... 2,142
Accrued expenses ......................................................................... 129,628
- ------------------------------------------------------------------------------------------- ------------
Total liabilities ..................................................................... 4,466,233
- ------------------------------------------------------------------------------------------- ------------
NET ASSETS ............................................................................... $197,311,682
=========================================================================================== ============
</TABLE>
See Notes to Financial Statements.
SAI-40
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 10 (POOLED)
(THE ALLIANCE BALANCED FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1998 1997
----------------- -----------------
<S> <C> <C>
FROM OPERATIONS:
INVESTMENT INCOME (NOTE 2):
Interest ........................................................................ $ 6,569,338 $ 9,248,201
Dividends (net of foreign taxes withheld -- 1998: $65,626 and 1997: $109,690 1,602,361 1,765,490
- ---------------------------------------------------------------------------------- -------------- --------------
Total ........................................................................... 8,171,699 11,013,691
EXPENSES (NOTE 4) ............................................................... (3,177,863) (3,985,252)
- ---------------------------------------------------------------------------------- -------------- --------------
NET INVESTMENT INCOME ........................................................... 4,993,836 7,028,439
- ---------------------------------------------------------------------------------- -------------- --------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 2):
Realized gain from security and foreign currency transactions ................... 23,827,974 30,478,147
- ---------------------------------------------------------------------------------- -------------- --------------
Unrealized appreciation (depreciation) of investments and foreign currency
transactions:
Beginning of year .............................................................. 20,366,672 24,115,275
End of year .................................................................... 29,598,154 20,366,672
- ---------------------------------------------------------------------------------- -------------- --------------
Change in unrealized appreciation/depreciation .................................. 9,231,482 (3,748,603)
- ---------------------------------------------------------------------------------- -------------- --------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS ................................. 33,059,456 26,729,544
- ---------------------------------------------------------------------------------- -------------- --------------
Increase in net assets attributable to operations ............................... 38,053,292 33,757,983
- ---------------------------------------------------------------------------------- -------------- --------------
FROM CONTRIBUTIONS AND WITHDRAWALS:
Contributions ................................................................... 41,418,954 50,198,862
Withdrawals ..................................................................... (125,416,483) (153,851,256)
- ---------------------------------------------------------------------------------- -------------- --------------
Decrease in net assets attributable to contributions and withdrawals ............ (83,997,529) (103,652,394)
- ---------------------------------------------------------------------------------- -------------- --------------
DECREASE IN NET ASSETS .......................................................... (45,944,237) (69,894,411)
NET ASSETS -- BEGINNING OF YEAR ................................................. 243,255,919 313,150,330
- ---------------------------------------------------------------------------------- -------------- --------------
NET ASSETS -- END OF YEAR ....................................................... $ 197,311,682 $ 243,255,919
================================================================================== ============== ==============
</TABLE>
See Notes to Financial Statements.
SAI-41
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 10 (POOLED)
(THE ALLIANCE BALANCED FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER OF VALUE
SHARES (NOTE 3)
----------- ------------
<S> <C> <C>
COMMON STOCKS:
BASIC MATERIALS
CHEMICALS (0.9%)
Akzo Nobel N.V. ........................................ 2,800 $ 127,434
Bayer AG ............................................... 3,000 125,866
Ciba Specialty Chemicals AG ............................ 500 41,900
Dow Chemical Co. ....................................... 2,800 254,625
Dupont (E.I.) de Nemours & Co. ......................... 10,800 573,075
Hitachi Chemical Co. Ltd. .............................. 31,000 233,330
Monsanto Co. ........................................... 7,000 332,500
Nippon Chemi-Con Corp. ................................. 12,000 39,104
Toagosei Co. Ltd. ...................................... 29,000 54,441
----------
1,782,275
----------
CHEMICALS -- SPECIALTY (0.1%) ..........................
NGK Insulators ......................................... 10,000 129,018
Praxair, Inc. .......................................... 3,900 137,475
----------
266,493
----------
METALS & MINING (0.2%)
Aluminum Co. of America ................................ 1,500 111,844
Freeport-McMoran Copper & Gold, Inc. (Class B) ......... 8,500 88,719
Newmont Mining Corp. ................................... 2,900 52,381
Phelps Dodge Corp. ..................................... 1,200 61,050
Toho Titanium .......................................... 1,000 5,499
----------
319,493
----------
PAPER (0.1%)
Buhrmann N.V. .......................................... 3,200 57,234
Georgia Pacific (Georgia-Pacific Group) ................ 800 46,850
UPM-Kymmene Oy ......................................... 5,010 140,363
----------
244,447
----------
STEEL (0.1%)
Koninklijke Hoogovens N.V. ............................. 1,000 27,680
NatSteel Ltd. .......................................... 41,000 44,976
Pohang Iron & Steel Co. Ltd. (ADR) * ................... 4,000 67,500
USX-U.S. Steel Group, Inc. ............................. 4,600 105,800
----------
245,956
----------
TOTAL BASIC MATERIALS (1.4%) ........................... 2,858,664
----------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (0.3%)
Waste Management, Inc. ................................. 10,620 495,158
----------
PRINTING, PUBLISHING & BROADCASTING (1.6%)
CBS Corp. .............................................. 14,200 465,050
Donnelley (R.R.) & Sons Co. ............................ 9,200 403,075
Gannett Co. ............................................ 7,700 509,644
Grupo Televisa SA (ADR) * .............................. 2,400 59,250
Liberty Media Group (Class A) * ........................ 12,375 570,023
New Straits Times Press BHD ............................ 13,000 6,392
Reed International PLC ................................. 5,000 39,774
</TABLE>
SAI-42
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 10 (POOLED)
(THE ALLIANCE BALANCED FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER OF VALUE
SHARES (NOTE 3)
----------- ------------
<S> <C> <C>
Scripps (E.W.) Co. (Class A) .................. 4,300 $ 213,925
Seat-Pagine Gialle Spa * ...................... 220,000 207,923
Tele-Communications, Inc. (Class A) * ......... 12,500 691,406
Tokyo Broadcasting System, Inc. ............... 2,000 22,368
United News & Media PLC ....................... 7,000 60,571
----------
3,249,401
----------
PROFESSIONAL SERVICES (0.1%)
Cordiant Communications Group PLC * ........... 20,000 35,576
Marlborough International PLC * ............... 5,700 16,980
Meitec ........................................ 900 22,474
Vedior N.V. CVA ............................... 888 17,489
WPP Group PLC ................................. 6,000 36,308
----------
128,827
----------
TRUCKING, SHIPPING (0.2%)
Bergesen Dy As (A Shares) ..................... 5,000 60,177
CNF Transportation, Inc. ...................... 9,400 353,088
Frontline Ltd.* ............................... 9,790 18,775
Frontline Ltd. -- Warrants * .................. 5,706 0
----------
432,040
----------
TOTAL BUSINESS SERVICES (2.2%) ................ 4,305,426
----------
CAPITAL GOODS
AEROSPACE (0.3%)
British Aerospace ............................. 11,000 93,355
Gulfstream Aerospace Corp.* ................... 8,500 452,625
Senior Engineering Group PLC .................. 16,000 30,589
----------
576,569
----------
BUILDING & CONSTRUCTION (0.3%)
ABB AG ........................................ 40 46,929
Beazer Group PLC .............................. 36,000 90,969
Bouygues ...................................... 1,000 206,045
Daito Trust Construction Co. Ltd. ............. 300 2,601
Groupe GTM .................................... 1,000 103,738
National House Industrial Co. ................. 10,000 85,097
Societe Technip ............................... 600 56,448
Toda Corp. .................................... 1,000 4,844
----------
596,671
----------
BUILDING MATERIALS & FOREST PRODUCTS (0.4%)
BPB Industries PLC ............................ 20,500 73,272
Fujikura Ltd. ................................. 4,000 21,465
Holderbank Financiere Glarus AG ............... 150 177,731
Matsushita Electric Works Ltd. ................ 22,000 225,007
Nichiha Corp. ................................. 700 6,391
PPG Industries, Inc. .......................... 2,300 133,975
Rugby Group PLC ............................... 45,000 70,322
Unidare PLC ................................... 26,000 67,772
----------
775,935
----------
</TABLE>
SAI-43
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 10 (POOLED)
(THE ALLIANCE BALANCED FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER OF VALUE
SHARES (NOTE 3)
----------- ------------
<S> <C> <C>
ELECTRICAL EQUIPMENT (1.9%)
Daikin Industries Ltd. ................................. 10,000 $ 99,176
General Electric Co. ................................... 33,600 3,429,300
Schneider SA ........................................... 1,000 60,633
Sumitomo Electric Industries ........................... 11,000 123,802
----------
3,712,911
----------
MACHINERY (1.0%)
Allied Signal, Inc. .................................... 11,800 522,888
FKI Babcock PLC ........................................ 10,000 22,360
Fujitec Co. Ltd. ....................................... 18,000 116,036
IHC Caland ............................................. 1,400 58,128
Keyence Corp. .......................................... 100 12,309
KSB AG ................................................. 300 50,922
Nitta Corp. ............................................ 1,000 5,703
Schindler Holding AG Participating Certificate ......... 35 56,110
Schindler Holding AG Registered ........................ 100 170,517
Siebe PLC .............................................. 20,000 78,468
SMC Corp. .............................................. 700 55,911
Stork N.V. ............................................. 3,600 82,209
TI Group PLC ........................................... 10,000 53,905
United Technologies Corp. .............................. 5,200 565,500
Valmet Oy .............................................. 6,200 83,181
Vestas Wind Systems A/S * .............................. 350 18,796
----------
1,952,943
----------
TOTAL CAPITAL GOODS (3.9%) ............................. 7,615,029
----------
CONSUMER CYCLICALS
AIRLINES (0.3%)
Continental Airlines, Inc. (Class B) * ................. 3,800 127,300
Delta Air Lines, Inc. .................................. 4,300 223,600
KLM .................................................... 1,600 48,376
Northwest Airlines Corp. (Class A) * ................... 5,300 135,481
Virgin Express Holdings PLC (ADR) * .................... 18,000 144,000
----------
678,757
----------
APPAREL, TEXTILE (0.2%)
Nautica Enterprises, Inc. * ............................ 8,800 132,000
Onward Kashiyama Co. Ltd. .............................. 15,000 201,629
----------
333,629
----------
AUTO RELATED (0.1%)
Continental AG ......................................... 3,000 83,311
Minebea Co. Ltd. ....................................... 3,000 34,375
NGK Spark Plug Co. Ltd. ................................ 2,000 20,384
Sumitomo Rubber, Inc. .................................. 33,000 157,505
----------
295,575
----------
AUTOS & TRUCKS (0.5%)
Bajaj Auto Ltd. (GDR) .................................. 1,500 22,688
Ford Motor Co. ......................................... 9,600 563,400
</TABLE>
SAI-44
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 10 (POOLED)
(THE ALLIANCE BALANCED FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER OF VALUE
SHARES (NOTE 3)
----------- ------------
<S> <C> <C>
General Motors Corp. ........................... 4,900 $ 350,656
Honda Motor Co. Ltd. ........................... 2,000 65,704
Volkswagen AG .................................. 1,000 80,852
----------
1,083,300
----------
FOOD SERVICES, LODGING (0.1%)
Accor SA ....................................... 200 43,284
Choice Hotels Scandinavia ASA .................. 20,000 28,303
Compass Group PLC .............................. 10,000 114,377
Sanyo Pax Co. Ltd. ............................. 1,000 6,907
----------
192,871
----------
HOUSEHOLD FURNITURE, APPLIANCES (0.3%)
AIWA Co. Ltd. .................................. 1,000 26,388
Hunter Douglas N.V. ............................ 2,500 82,774
Industrie Natuzzi Spa (ADR) .................... 600 14,925
Philips Electronics ............................ 100 6,707
Rubbermaid, Inc. ............................... 13,000 408,688
Sony Corp. ..................................... 900 65,589
----------
605,071
----------
LEISURE RELATED (1.0%)
Amer Group Ltd. * .............................. 2,000 20,795
Berjaya Sports Toto BHD ........................ 27,000 23,569
Canal Plus ..................................... 200 54,552
Carnival Corp. ................................. 9,400 451,200
Disney (Walt) Co. .............................. 12,299 368,970
Granada Group PLC .............................. 8,000 141,840
Harley Davidson, Inc. .......................... 9,100 431,113
Ladbroke Group PLC ............................. 30,000 119,696
Mirage Resorts, Inc. * ......................... 9,400 140,413
Nintendo Co. Ltd. .............................. 1,100 106,659
Nippon Broadcasting System ..................... 1,000 40,025
Shimano, Inc. .................................. 1,000 25,812
Thomson Travel Group PLC ....................... 20,000 54,861
VTech Holdings Ltd. * .......................... 10,000 43,626
----------
2,023,131
----------
PHOTO & OPTICAL (0.1%)
Fuji Photo Film Co. ............................ 2,000 74,382
Gretag Imaging Group * ......................... 1,000 85,987
----------
160,369
----------
RETAIL -- GENERAL (3.0%)
Ahold N.V. ..................................... 1,000 36,942
Aldeasa SA ..................................... 3,000 118,026
Best Buy Co., Inc. * ........................... 6,000 368,250
Boots Co. PLC .................................. 10,000 169,819
British Airport Author PLC ..................... 13,300 154,332
Carrefour SA ................................... 50 37,730
Circuit City Stores-Circuit City Group ......... 9,200 459,425
</TABLE>
SAI-45
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 10 (POOLED)
(THE ALLIANCE BALANCED FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER OF VALUE
SHARES (NOTE 3)
----------- -------------
<S> <C> <C>
Costco Companies, Inc. * ................... 7,200 $ 519,750
Dixons Group PLC ........................... 1,000 13,990
Home Depot, Inc. ........................... 20,700 1,266,581
Japan Airport Terminal Co. Ltd. ............ 6,000 36,926
Kingfisher PLC ............................. 8,000 86,447
Paris Miki, Inc. ........................... 800 18,418
Sato Corp. ................................. 2,000 35,420
Smith (W.H.) Group PLC ..................... 2,700 21,545
Staples, Inc. * ............................ 8,300 362,606
Wal-Mart Stores, Inc. ...................... 25,200 2,052,225
-----------
5,758,432
-----------
TOTAL CONSUMER CYCLICALS (5.6%) ............ 11,131,135
-----------
CONSUMER NONCYCLICALS
BEVERAGES (1.4%)
Anheuser Busch, Inc. ....................... 2,600 170,625
Coca-Cola Co. .............................. 27,200 1,819,000
Coca-Cola Enterprises, Inc. ................ 8,900 318,175
Diageo PLC ................................. 9,000 101,069
Mercian Corp.* ............................. 4,000 16,329
Pepsico, Inc. .............................. 6,000 245,625
Scottish & Newcastle PLC ................... 5,000 56,648
Whitbread PLC .............................. 5,000 63,672
-----------
2,791,143
-----------
CONTAINERS (0.3%)
Sealed Air Corp. * ......................... 10,800 551,475
-----------
DRUGS (5.0%)
American Home Products Corp. ............... 12,400 698,275
Amgen, Inc. * .............................. 4,400 460,075
Bristol-Myers Squibb Co. ................... 12,600 1,686,038
Daiichi Pharmaceutical Co. ................. 10,000 169,043
Genzyme Corporation * ...................... 8,400 417,900
Genzyme-Molecular Oncology * ............... 929 3,019
Lilly (Eli) & Co. .......................... 5,900 524,363
MedImmune, Inc. * .......................... 6,500 646,344
Merck & Co., Inc. .......................... 8,200 1,211,038
Novartis AG ................................ 40 78,700
Orion-Yhtyma Oy (B Shares) ................. 7,800 188,366
Pfizer, Inc. ............................... 16,240 2,037,105
Sankyo Co. Ltd. ............................ 1,000 21,872
Sanofi SA .................................. 800 131,640
Santen Pharmaceutical Co. Ltd. ............. 4,000 76,862
Schering Plough Corp. ...................... 20,400 1,127,100
Warner Lambert Co. ......................... 3,200 240,600
Yamanouchi Pharmaceutical Co. Ltd. ......... 2,000 64,465
-----------
9,782,805
-----------
</TABLE>
SAI-46
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 10 (POOLED)
(THE ALLIANCE BALANCED FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER OF VALUE
SHARES (NOTE 3)
----------- -------------
<S> <C> <C>
FOODS (0.9%)
Barry Callebaut AG .......................... 200 $ 45,471
Campbell Soup Co. ........................... 11,600 638,000
Huhtamaki Oy Series I ....................... 1,000 38,276
Orkla ASA 'A' ............................... 4,000 60,045
Parmalat Finanziaria Spa .................... 10,000 19,144
Rite Aid Corp. .............................. 9,800 485,713
Sara Lee Corp. .............................. 5,200 146,575
Tysons Foods, Inc. .......................... 18,200 386,750
Yakult Honsha Co. ........................... 1,000 6,243
-----------
1,826,217
-----------
HOSPITAL SUPPLIES & SERVICES (1.0%)
Abbott Laboratories ......................... 5,000 245,000
Boston Scientific Corp. * ................... 4,800 128,700
Johnson & Johnson ........................... 4,200 352,275
Medtronic, Inc. ............................. 10,700 794,475
PT Tempo Scan Pacific * ..................... 40,000 2,125
Tenet Healthcare Corp. * .................... 17,600 462,000
-----------
1,984,575
-----------
RETAIL -- FOOD (0.4%)
Delhaize Le Lion SA ......................... 1,000 88,402
Familymart Co. .............................. 1,400 69,919
Kroger Co. * ................................ 9,200 556,600
-----------
714,921
-----------
SOAPS & TOILETRIES (1.9%)
Avon Products, Inc. ......................... 10,900 482,325
Colgate Palmolive Co. ....................... 6,500 603,688
Estee Lauder Cos. (Class A) ................. 4,500 384,750
Gillette Corp. .............................. 15,800 763,338
KAO Corp. ................................... 5,000 112,902
Procter & Gamble Co. ........................ 15,600 1,424,475
-----------
3,771,478
-----------
TOBACCO (1.0%)
Austria Tabakwerke AG ....................... 1,600 122,631
Japan Tobacco, Inc. ......................... 17 170,105
Philip Morris Cos., Inc. .................... 29,030 1,553,105
Seita ....................................... 2,000 125,201
Swedish Match AB ............................ 4,200 15,318
Tabacalera SA (A Shares) .................... 6,400 161,542
-----------
2,147,902
-----------
TOTAL CONSUMER NONCYCLICALS (11.9%) ......... 23,570,516
-----------
CREDIT-SENSITIVE
BANKS (4.0%)
Allied Irish Bank ........................... 18,000 322,534
Argentaria SA ............................... 1,000 25,911
Banca Nazionale del Lavoro * ................ 11,100 31,069
</TABLE>
SAI-47
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 10 (POOLED)
(THE ALLIANCE BALANCED FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER OF VALUE
SHARES (NOTE 3)
----------- ------------
<S> <C> <C>
Banco Central Hispanoamericano SA .................. 5,000 $ 59,401
Banco Santander SA ................................. 4,000 79,530
Bangkok Bank * ..................................... 1,000 2,063
Bank Austria AG .................................... 1,050 53,370
Bank Dagang Nasional Indonesia Tbk * ............... 234,000 2,194
Bank of Ireland * .................................. 10,000 222,678
Bank of Tokyo-Mitsubishi Ltd. ...................... 2,000 20,721
Bank One Corp. ..................................... 18,232 930,972
BankAmerica Corp. .................................. 22,142 1,331,288
Banque National de Paris ........................... 1,000 82,311
BCO Bilbao Vizcaya ................................. 6,000 94,125
Chase Manhattan Corp. .............................. 15,514 1,055,922
Citigroup, Inc. .................................... 29,550 1,462,725
Dao Heng Bank Group Ltd. ........................... 5,000 15,456
Den Norske Bank ASA ................................ 3,000 10,435
Erste Bank Oesterreichischen Sparkassen AG ......... 1,090 58,312
Forenings Sparbanken (A Shares) .................... 1,200 31,155
National Bank of Canada ............................ 3,000 48,564
San Paolo-IMI Spa .................................. 10,450 184,865
Seventy-Seven Bank Ltd. ............................ 23,000 230,143
Shizuoka Bank ...................................... 3,000 37,058
Skandinaviska Enskilda Banken (Series A) ........... 4,400 46,510
Societe Generale ................................... 200 32,373
State Bank of India (GDR) .......................... 4,800 40,200
Suncorp Metway Ltd. ................................ 6,571 14,295
Thai Farmers Bank-Warrants * ....................... 750 101
Toho Bank .......................................... 1,000 4,144
Unicredito Italiano Spa ............................ 9,500 56,375
Wells Fargo Co. .................................... 26,100 1,042,369
Wing Hang Bank Ltd. ................................ 31,000 77,224
Yamaguchi Bank ..................................... 14,000 132,153
----------
7,838,546
----------
FINANCIAL SERVICES (2.7%)
Aiful Co. .......................................... 2,000 121,491
Associates First Capital Corp. (Class A) ........... 16,642 705,205
Credit Saison Co. .................................. 2,000 49,323
Daiwa Securities Co. Ltd. .......................... 2,000 6,836
Fleet Financial Group, Inc. ........................ 14,500 647,969
Garban PLC * ....................................... 666 2,558
Household International, Inc. ...................... 12,800 507,200
Legg Mason, Inc. ................................... 10,700 337,719
MBNA Corp. ......................................... 24,412 608,774
Merrill Lynch & Co., Inc. .......................... 9,800 654,150
Morgan Stanley Dean Witter & Co. ................... 11,800 837,800
Nichiei Co. Ltd. ................................... 420 33,472
Peregrine Investment Holdings * .................... 90,000 0
Sanyo Shinpan Finance .............................. 400 14,522
Schwab Charles Corp. ............................... 7,500 421,406
</TABLE>
SAI-48
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 10 (POOLED)
(THE ALLIANCE BALANCED FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER OF VALUE
SHARES (NOTE 3)
----------- ------------
<S> <C> <C>
PMI Group, Inc. ....................................... 5,700 $ 281,438
Worms Et Compagnie .................................... 300 17,439
----------
5,247,302
----------
INSURANCE (2.0%)
Allstate Corp. ........................................ 3,400 131,325
American International Group, Inc. .................... 13,500 1,304,438
AMEV N.V. ............................................. 1,200 99,392
ASR Verzekeringsgroep N.V. ............................ 1,500 135,738
Catalana Occidente SA ................................. 3,000 78,261
CGU PLC ............................................... 9,864 154,063
Cia de Seguros Imperio SA * ........................... 9,000 73,253
Corporacion Mapfre .................................... 2,200 59,718
Hartford Financial Services Group, Inc. ............... 9,700 532,288
Hartford Life, Inc. ................................... 7,000 407,750
ING Groep N.V. ........................................ 2,000 121,898
Irish Life PLC ........................................ 12,000 113,254
Kingsway Financial Services * ......................... 2,000 15,666
Royal & Sun Alliance Insurance Group PLC .............. 4,000 32,351
SunAmerica, Inc. ...................................... 2,800 227,150
Travelers Property & Casualty Corp. (Class A) ......... 9,200 285,200
Trygg Hansa AB (B Shares) * ........................... 6,800 205,127
United Assurance Group PLC ............................ 5,000 45,510
----------
4,022,382
----------
MORTGAGE RELATED (0.4%)
Fannie Mae ............................................ 8,400 621,600
Freddie Mac ........................................... 3,500 225,531
----------
847,131
----------
REAL ESTATE (0.0%)
Daibiru Corp. ......................................... 1,000 6,376
Green Property PLC * .................................. 10,000 56,601
Sumitomo Realty & Development Co. Ltd. ................ 2,000 6,500
----------
69,477
----------
UTILITY -- ELECTRIC (1.1%)
AES Corp. * ........................................... 10,800 511,650
Central & South West Corp. ............................ 5,400 148,163
CIA Paranaense de Energia-Copel (ADR) ................. 10,000 71,250
CMS Energy Corp. ...................................... 9,600 465,000
Consolidated Edison, Inc. ............................. 9,300 491,738
Duke Power Co. ........................................ 2,900 185,781
Electricidade de Portugal SA .......................... 500 10,998
Fortum Oyj * .......................................... 4,964 30,361
FPL Group, Inc. ....................................... 3,300 203,363
Hongkong Electric Holdings Ltd. ....................... 34,000 103,129
----------
2,221,433
----------
</TABLE>
SAI-49
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 10 (POOLED)
(THE ALLIANCE BALANCED FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER OF VALUE
SHARES (NOTE 3)
----------- -------------
<S> <C> <C>
UTILITY -- GAS (0.2%)
Anglian Water PLC .......................... 5,599 $ 77,629
ENRON Corp. ................................ 2,600 148,363
Scottish Power PLC ......................... 10,000 102,324
-----------
328,316
-----------
UTILITY -- TELEPHONE (3.2%)
Ameritech Corp. ............................ 18,400 1,166,100
AT&T Corp. ................................. 14,423 1,085,331
Bell Atlantic Corp. ........................ 6,200 328,616
BellSouth Corp. ............................ 28,400 1,416,450
British Telecommunications PLC ............. 4,000 60,147
Cable & Wireless PLC ....................... 4,000 49,175
Frontier Corp. ............................. 1,400 47,600
Nippon Telegraph & Telephone Corp. ......... 10 77,216
SBC Communications, Inc. ................... 22,400 1,201,200
Sprint Corp. ............................... 3,600 302,850
Swisscom AG * .............................. 400 167,602
Telecom Italia Spa ......................... 7,000 59,796
Telecom Italia Spa * ....................... 10,600 66,787
Telefonica de Espana ....................... 3,060 136,136
Telekom Malaysia BHD ....................... 7,000 12,891
Telekomunikacja Polska SA (GDR) * .......... 12,900 65,790
-----------
6,243,687
-----------
TOTAL CREDIT-SENSITIVE (13.6%) ............. 26,818,274
-----------
ENERGY
COAL & GAS PIPELINES (0.0%)
OMV AG ..................................... 300 28,262
-----------
OIL -- DOMESTIC (0.5%)
Amoco Corp. ................................ 6,000 362,250
Atlantic Richfield Co. ..................... 2,200 143,550
USX-Marathon Group ......................... 14,400 433,800
-----------
939,600
-----------
OIL -- INTERNATIONAL (1.9%)
British Petroleum Co. PLC .................. 5,000 74,561
Chevron Corp. .............................. 3,300 273,694
Exxon Corp. ................................ 21,400 1,564,875
Gulf Indonesia Resources Ltd. * ............ 800 5,200
Mobil Corp. ................................ 6,500 566,313
Oil Search Ltd. ............................ 550 556
Repsol SA .................................. 1,000 53,373
Royal Dutch Petroleum Co. .................. 18,000 861,750
Shell Transport & Trading Co. PLC .......... 10,000 61,178
Texaco, Inc. ............................... 4,500 237,938
Total SA-B ................................. 1,000 101,234
-----------
3,800,672
-----------
</TABLE>
SAI-50
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 10 (POOLED)
(THE ALLIANCE BALANCED FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER OF VALUE
SHARES (NOTE 3)
----------- ------------
<S> <C> <C>
OIL -- SUPPLIES & CONSTRUCTION (0.5%)
BJ Services Co. * ............................. 8,600 $ 134,375
Fracmaster Ltd. * ............................. 14,300 41,113
Fugro N.V. .................................... 3,000 70,264
Halliburton Co. ............................... 4,000 118,500
Noble Drilling Corp. * ........................ 44,100 570,544
----------
934,796
----------
TOTAL ENERGY (2.9%) ........................... 5,703,330
----------
TECHNOLOGY
ELECTRONICS (4.0%)
Altera Corp. * ................................ 7,409 451,023
AMP, Inc. ..................................... 10,300 536,244
Cisco Systems, Inc. * ......................... 19,975 1,853,930
Disco Corp. ................................... 400 11,689
Fujimi, Inc. .................................. 620 21,521
Intel Corp. ................................... 19,286 2,286,596
Micronics Japan Co. Ltd. ...................... 2,000 29,222
Motorola, Inc. ................................ 10,300 628,944
Nikon Corp. ................................... 5,000 48,703
Rohm Co. Ltd. ................................. 1,000 91,118
Sanmina Corp. * ............................... 16,622 1,038,875
Solectron Corp. * ............................. 4,100 381,044
The Swatch Group AG ........................... 800 119,945
TOWA Corp. .................................... 20 505
Uniphase Corp. * .............................. 5,000 346,875
----------
7,846,234
----------
OFFICE EQUIPMENT (2.2%)
Barco N.V. .................................... 300 84,622
Canon, Inc. ................................... 1,000 21,385
Compaq Computer Corp. ......................... 25,750 1,079,891
Dell Computer Corp. * ......................... 17,200 1,258,825
International Business Machines Corp. ......... 10,800 1,995,300
----------
4,440,023
----------
OFFICE EQUIPMENT SERVICES (2.5%)
Computer Sciences Corp. ....................... 3,900 251,306
Data Communication System Co. ................. 1,080 22,044
First Data Corp. .............................. 6,000 190,125
Frontec AB (B Shares) * ....................... 10,000 42,900
Fuji Soft ABC, Inc. ........................... 800 40,733
HBO & Co. ..................................... 10,400 298,350
Intuit, Inc. * ................................ 6,300 456,750
Microsoft Corp. * ............................. 25,750 3,571,187
Nippon System Development ..................... 2,200 68,184
----------
4,941,579
----------
</TABLE>
SAI-51
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 10 (POOLED)
(THE ALLIANCE BALANCED FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER OF VALUE
SHARES (NOTE 3)
----------- --------------
<S> <C> <C>
TELECOMMUNICATIONS (3.0%)
AirTouch Communications, Inc. * ......................... 11,000 $ 793,375
America Online, Inc. .................................... 3,900 624,000
Asia Satellite Telecommunications Holdings Ltd. ......... 34,000 60,561
DDI Corp. ............................................... 18 66,944
Energis PLC * ........................................... 4,000 89,440
FORE Systems, Inc. * .................................... 11,900 217,919
Helsinki Telephone Corp. * .............................. 1,500 89,673
Keppel Telecommunications & Transportation Ltd. ......... 15,000 9,909
Lucent Technologies, Inc. ............................... 16,900 1,859,000
MCI WorldCom, Inc. * .................................... 23,224 1,666,322
Mobistar SA * ........................................... 800 40,363
Orange PLC * ............................................ 6,600 76,531
PT Indosat .............................................. 73,000 95,128
PT Telekomunikasi Indonesia ............................. 60,000 20,250
Sprint Corp. (PCS Group) * .............................. 1,850 42,781
Videsh Sanchar Nigam Ltd. (ADR) * ....................... 4,800 58,800
Vodafone Group PLC ...................................... 6,500 105,250
Winstar Communications, Inc. * .......................... 295 11,505
------------
5,927,751
------------
TOTAL TECHNOLOGY (11.7%) ................................ 23,155,587
------------
DIVERSIFIED
MISCELLANEOUS (1.2%)
BTR PLC (B Shares) ...................................... 32,000 18,353
Citic Pacific Ltd. ...................................... 11,000 23,711
First Pacific Co. ....................................... 75,289 35,956
Hagemeyer N.V. .......................................... 2,000 73,032
Honeywell, Inc. ......................................... 5,500 414,219
Smith (Howard) Ltd. ..................................... 8,000 52,926
Suez Lyonnaise des Eaux ................................. 300 61,599
Montedison Spa .......................................... 60,000 79,789
Tyco International Ltd. ................................. 5,300 399,819
U.S. Industries, Inc. ................................... 24,400 454,450
Viad Corp. .............................................. 9,100 276,413
Vivendi ................................................. 1,200 311,214
------------
TOTAL DIVERSIFIED (1.2%) ................................ 2,201,481
------------
TOTAL COMMON STOCKS (54.4%)
(Cost $80,844,071) ..................................... 107,359,442
------------
PREFERRED STOCKS:
BUSINESS SERVICES
PRINTING, PUBLISHING & BROADCASTING (0.0%)
ProSieben Media AG ...................................... 1,500 71,795
------------
TRUCKING, SHIPPING (0.1%)
CNF Trust I
5.0% Conv. Series A .................................... 2,700 153,563
------------
TOTAL BUSINESS SERVICES (0.1%) .......................... 225,358
------------
</TABLE>
SAI-52
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 10 (POOLED)
(THE ALLIANCE BALANCED FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER OF VALUE
SHARES (NOTE 3)
------------------ ------------
<S> <C> <C>
CONSUMER CYCLICALS
LEISURE RELATED (0.1%)
Royal Caribbean Cruises Ltd.
7.25% Conv. Series A ...................... 2,000 $ 236,375
----------
RETAIL -- GENERAL (0.0%)
Hornbach Holding AG ........................ 600 35,807
----------
TOTAL CONSUMER CYCLICALS (0.1%) ............ 272,182
----------
CREDIT-SENSITIVE
UTILITY -- ELECTRIC (0.1%)
AES Trust
$2.6875 Conv. Series A..................... 3,500 243,250
----------
TOTAL CREDIT-SENSITIVE (0.1%) .............. 243,250
----------
TECHNOLOGY
ELECTRONICS (0.1%)
Learnout & Hauspie Capital Trust I
4.75% Conv. ............................... 2,900 92,800
Times Mirror Co.
4.25% Conv. ............................... 800 44,600
----------
137,400
----------
TELECOMMUNICATIONS (0.6%)
AirTouch Communications, Inc.
4.25% Conv. Series C ...................... 500 51,500
ICG Communications, Inc.
6.75% Conv. ............................... 1,400 74,550
IXC Communications, Inc.
$3.375 Conv................................ 3,100 102,688
Intermedia Communications, Inc.:
7.0% Conv. ................................ 900 23,006
7.0% Conv. Series D ....................... 2,600 66,462
Nokia Oyi (A Shares) ....................... 3,000 366,977
Nextel Strypes Trust
7.25% Conv. ............................... 7,500 153,750
Winstar Communications, Inc.
7.0% Conv. ................................ 4,600 218,500
----------
1,057,433
----------
TOTAL TECHNOLOGY (0.7%) .................... 1,194,833
----------
TOTAL PREFERRED STOCKS (1.0%)
(Cost $1,785,352).......................... 1,935,623
----------
PRINCIPAL
AMOUNT
--------
LONG-TERM DEBT SECURITIES:
BUSINESS SERVICES
PRINTING, PUBLISHING & BROADCASTING (0.1%)
Mail-Well, Inc.
5.0% Conv., 2002 .......................... $ 55,000 49,500
</TABLE>
SAI-53
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 10 (POOLED)
(THE ALLIANCE BALANCED FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 3)
------------ ------------
<S> <C> <C>
P-Com, Inc.
4.25% Conv., 2002 ......................... $ 155,000 $ 72,850
Tele Communications International, Inc.
4.5% Conv., 2006 .......................... 155,000 166,625
----------
288,975
----------
PROFESSIONAL SERVICES (0.1%)
Personnel Group of America
5.75% Conv., 2004 ......................... 75,000 86,813
----------
TOTAL BUSINESS SERVICES (0.2%) ............. 375,788
----------
CAPITAL GOODS
AEROSPACE (0.1%)
Orbital Sciences Corp.
5.0% Conv., 2002 .......................... 75,000 126,750
----------
TOTAL CAPITAL GOODS (0.1%) ................. 126,750
----------
CONSUMER CYCLICALS
RETAIL -- GENERAL (0.1%)
Office Depot, Inc.
Zero Coupon Conv., 2008 ................... 175,000 151,375
----------
TOTAL CONSUMER CYCLICALS (0.1%) ............ 151,375
----------
CONSUMER NONCYCLICALS
DRUGS (0.4%)
MedImmune, Inc.
7.0% Conv., 2003 .......................... 100,000 505,500
Quintiles Transnational Corp.
4.25% Conv., 2000 ......................... 150,000 205,125
----------
710,625
----------
HOSPITAL SUPPLIES & SERVICES (0.1%)
Alternative Living Services, Inc.
5.25% Conv., 2002 ......................... 85,000 108,375
Res-Care, Inc.
6.0% Conv., 2004 .......................... 115,000 159,491
Sunrise Assisted Living, Inc.
5.5% Conv., 2002 .......................... 55,000 82,088
----------
349,954
----------
MEDIA & CABLE (1.8%)
Turner Broadcasting System, Inc.
8.375%, 2013 .............................. 3,000,000 3,585,840
----------
TOTAL CONSUMER NONCYCLICALS (2.3%) ......... 4,646,419
----------
CREDIT-SENSITIVE
ASSET BACKED (0.8%)
Chase Credit Card Master Trust
6.0%, 2005 ................................ 1,625,000 1,661,969
----------
</TABLE>
SAI-54
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 10 (POOLED)
(THE ALLIANCE BALANCED FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
PORTFOLIO OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 3)
------------- -------------
<S> <C> <C>
BANKS (2.8%)
Chase Manhattan Corp.
6.375%, 2008 ........................... $2,470,000 $ 2,562,378
St. George Bank Ltd.
7.15%, 2005 ............................ 2,850,000 2,961,635
-----------
5,524,013
-----------
MORTGAGE RELATED (14.5%)
Federal Home Loan Mortgage Corp.:
7.5%, 2028 ............................. 1,075,687 1,104,261
7.0%, 2011 ............................. 3,230,601 3,301,271
Federal National Mortgage Association:
6.5%, 2011 ............................. 6,906,356 6,999,164
7.0%, 2026 ............................. 1,032,596 1,052,603
6.5%, 2028 ............................. 2,466,847 2,480,725
7.0%, 2028 ............................. 1,217,813 1,241,409
8.0%, 2028 ............................. 1,700,000 1,760,032
Government National Mortgage Association:
7.0%, 2027 ............................. 883,050 903,193
6.5%, 2028 ............................. 1,576,313 1,591,588
7.0%, 2028 ............................. 7,949,054 8,130,375
-----------
28,564,621
-----------
UTILITY -- ELECTRIC (1.8%)
Texas Utilities
6.375%, 2008 ........................... 3,525,000 3,605,892
-----------
U.S. GOVERNMENT (18.1%)
U.S. Treasury Notes:
6.0%, 2000 ............................. 3,180,000 3,245,588
6.75%, 2000 ............................ 340,000 348,925
6.5%, 2001 ............................. 7,700,000 8,048,910
6.5%, 2002 ............................. 5,650,000 5,966,050
4.25%, 2003 ............................ 5,015,000 4,949,171
5.75%, 2003 ............................ 3,915,000 4,086,281
5.625%, 2008 ........................... 1,320,000 1,408,275
U.S. Treasury Bonds:
6.125%, 2027 ........................... 5,070,000 5,678,400
5.25%, 2028 ............................ 1,865,000 1,911,625
-----------
35,643,225
-----------
TOTAL CREDIT-SENSITIVE (38.0%) .......... 74,999,720
-----------
TECHNOLOGY
ELECTRONICS (2.1%)
America Online, Inc.
4.0% Conv., 2002 ....................... 75,000 461,344
Amkor Technologies, Inc.
5.75% Conv., 2003 ...................... 245,000 242,550
EMC Corp.
3.25% Conv., 2002 ...................... 45,000 169,538
</TABLE>
SAI-55
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 10 (POOLED)
(THE ALLIANCE BALANCED FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
PORTFOLIO OF INVESTMENTS (CONCLUDED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 3)
------------ ---------------
<S> <C> <C>
HNC Software, Inc.
4.75% Conv., 2003 ............................. $ 100,000 $ 110,000
Hutchinson Technology, Inc.
6.0% Conv., 2005 .............................. 125,000 174,219
Level One Communications, Inc.
4.0% Conv., 2004 .............................. 135,000 196,763
Micron Technology, Inc.
7.0% Conv., 2004 .............................. 60,000 64,200
Motorola, Inc.
6.5%, 2028 .................................... 1,500,000 1,515,345
Network Associates, Inc.
Zero Coupon Conv., 2018 ....................... 260,000 159,575
Photronics, Inc.
6.0% Conv., 2004 .............................. 195,000 207,188
SCI Systems, Inc.
5.0% Conv., 2006 .............................. 160,000 380,600
Solectron Corp.
6.0% Conv., 2006 .............................. 155,000 426,638
------------
4,107,960
------------
TELECOMMUNICATIONS (0.2%)
Comverse Technology, Inc.:
5.75% Conv. Sub, 2006 ......................... 155,000 251,294
5.75% Conv., 2006 ............................. 10,000 16,213
Global TeleSystems Group, Inc.
5.75% Conv., 2010 ............................. 235,000 265,550
------------
533,057
------------
TOTAL TECHNOLOGY (2.3%) ........................ 4,641,017
------------
TOTAL LONG-TERM DEBT SECURITIES (43.0%)
(Amortized Cost $82,022,026)................... 84,941,069
------------
PARTICIPATION IN SEPARATE ACCOUNT NO. 2A,
at amortized cost, which approximates
market value, equivalent to 17,084 units
at $285.54 each (2.5%)......................... 4,878,062
------------
TOTAL INVESTMENTS (100.9%)
(Cost/Amortized Cost $169,529,511)............. 199,114,196
OTHER ASSETS LESS LIABILITIES (--0.9%) ......... (1,802,514)
------------
NET ASSETS (100.0%) ............................ $197,311,682
============
</TABLE>
* Non-income producing.
See Notes to Financial Statements.
SAI-56
<PAGE>
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
The Equitable Life Assurance Society of the United States
and Contractowners of Separate Account No. 51
of The Equitable Life Assurance Society of the United States
In our opinion, the accompanying statements of assets and liabilities and the
related statements of operations and changes in net assets and the selected per
unit data (included under Condensed Financial Information in the Prospectus of
the Members Retirement Program) present fairly, in all material respects, the
financial position of the Alliance Global Fund, Alliance Conservative Investors
Fund and Alliance Growth Investors Fund ("Hudson River Trust funds"), separate
investment funds of The Equitable Life Assurance Society of the United States
("Equitable Life") Separate Account No. 51 at December 31, 1998 and the results
of each of their operations, the changes in each of their net assets for the
periods indicated and the per unit data for the periods presented, in
conformity with generally accepted accounting principles. These financial
statements and the selected per unit data (hereafter referred to as "financial
statements") are the responsibility of Equitable Life's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of shares owned in The
Hudson River Trust at December 31, 1998 with the transfer agent, provide a
reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
New York, New York
February 8, 1999
SAI-57
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 51 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
<TABLE>
<CAPTION>
ALLIANCE ALLIANCE
ALLIANCE CONSERVATIVE GROWTH
GLOBAL INVESTORS INVESTORS
FUND FUND FUND
-------------- -------------- --------------
<S> <C> <C> <C>
ASSETS:
Investments in shares of The Hudson River Trust, at value (Cost: Alliance
Global Portfolio -- $41,373,705; Alliance Conservative Investors Portfolio --
$6,718,429; Alliance Growth Investors Portfolio -- $58,947,215) (Note 3) ...... $46,687,138 $7,000,207 $64,460,581
Receivable for The Hudson River Trust shares sold .............................. 484,216 14,505 40,259
- --------------------------------------------------------------------------------- ----------- ---------- -----------
Total assets ................................................................ 47,171,354 7,014,712 64,500,840
- --------------------------------------------------------------------------------- ----------- ---------- -----------
LIABILITIES:
Due to Equitable Life's General Account ........................................ 470,330 14,129 19,116
Accrued expenses ............................................................... 18,506 6,051 23,362
- --------------------------------------------------------------------------------- ----------- ---------- -----------
Total liabilities ........................................................... 488,836 20,180 42,478
- --------------------------------------------------------------------------------- ----------- ---------- -----------
NET ASSETS ..................................................................... $46,682,518 $6,994,532 $64,458,362
================================================================================= =========== ========== ===========
</TABLE>
See Notes to Financial Statements.
SAI-58
<PAGE>
SEPARATE ACCOUNT NO. 51 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
ALLIANCE
GLOBAL FUND
---------------------------------
YEAR ENDED
DECEMBER 31,
1998 1997
---------------- ----------------
<S> <C> <C>
FROM OPERATIONS:
INVESTMENT INCOME (NOTE 2) -- Dividends from
The Hudson River Trust .............................. $ 565,825 $ 928,674
EXPENSES (NOTE 4) .................................... (466,158) (450,382)
- ------------------------------------------------------ -------------- --------------
NET INVESTMENT INCOME ................................ 99,667 478,292
- ------------------------------------------------------ -------------- --------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 2):
Realized gain from share transactions ................ 2,863,179 2,804,530
Realized gain distribution from The Hudson
River Trust ......................................... 3,009,797 2,994,309
- ------------------------------------------------------ -------------- --------------
NET REALIZED GAIN .................................... 5,872,976 5,798,839
- ------------------------------------------------------ -------------- --------------
Unrealized appreciation (depreciation) of
investments:
Beginning of year ................................... 2,818,773 4,189,776
End of year ......................................... 5,313,433 2,818,773
- ------------------------------------------------------ -------------- --------------
Change in unrealized appreciation/depreciation ....... 2,494,660 (1,371,003)
- ------------------------------------------------------ -------------- --------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS ......................................... 8,367,636 4,427,836
- ------------------------------------------------------ -------------- --------------
Increase in net assets attributable to operations 8,467,303 4,906,128
- ------------------------------------------------------ -------------- --------------
FROM C0NTRIBUTIONS AND WITHDRAWALS:
Contributions ........................................ 12,922,064 17,302,173
Withdrawals .......................................... (20,514,776) (20,267,132)
- ------------------------------------------------------ -------------- --------------
Increase (decrease) in net assets attributable to
contributions and withdrawals ....................... (7,592,712) (2,964,959)
- ------------------------------------------------------ -------------- --------------
INCREASE (DECREASE) IN NET ASSETS .................... 874,591 1,941,169
NET ASSETS -- BEGINNING OF YEAR ...................... 45,807,927 43,866,758
- ------------------------------------------------------ -------------- --------------
NET ASSETS -- END OF YEAR ............................ $ 46,682,518 $ 45,807,927
====================================================== ============== ==============
<CAPTION>
ALLIANCE ALLIANCE
CONSERVATIVE INVESTORS FUND GROWTH INVESTORS FUND
------------------------------- ---------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1998 1997 1998 1997
--------------- --------------- ---------------- ----------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
INVESTMENT INCOME (NOTE 2) -- Dividends from
The Hudson River Trust .............................. $ 302,637 $ 480,979 $ 1,251,845 $ 1,344,234
EXPENSES (NOTE 4) .................................... (106,749) (156,313) (450,621) (391,031)
- ------------------------------------------------------- ------------- ------------ -------------- --------------
NET INVESTMENT INCOME ................................ 195,888 324,666 801,224 953,203
- ------------------------------------------------------- ------------- ------------ -------------- --------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 2):
Realized gain from share transactions ................ 600,961 55,228 1,848,022 1,579,084
Realized gain distribution from The Hudson
River Trust ......................................... 374,377 346,019 5,216,022 3,055,814
- ------------------------------------------------------- ------------- ------------ -------------- --------------
NET REALIZED GAIN .................................... 975,338 401,247 7,064,044 4,634,898
- ------------------------------------------------------- ------------- ------------ -------------- --------------
Unrealized appreciation (depreciation) of
investments:
Beginning of year ................................... 445,991 (138,527) 3,359,461 1,130,615
End of year ......................................... 281,778 445,991 5,513,366 3,359,461
- ------------------------------------------------------- ------------- ------------ -------------- --------------
Change in unrealized appreciation/depreciation ....... (164,213) 584,518 2,153,905 2,228,846
- ------------------------------------------------------- ------------- ------------ -------------- --------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS ......................................... 811,125 985,765 9,217,949 6,863,744
- ------------------------------------------------------- ------------- ------------ -------------- --------------
Increase in net assets attributable to operations 1,007,013 1,310,431 10,019,173 7,816,947
- ------------------------------------------------------- ------------- ------------ -------------- --------------
FROM C0NTRIBUTIONS AND WITHDRAWALS:
Contributions ........................................ 2,732,417 2,492,189 12,894,395 16,373,146
Withdrawals .......................................... (8,197,701) (5,233,231) (16,348,446) (12,914,616)
- ------------------------------------------------------- ------------- ------------ -------------- --------------
Increase (decrease) in net assets attributable to
contributions and withdrawals ....................... (5,465,284) (2,741,042) (3,454,051) 3,458,530
- ------------------------------------------------------- ------------- ------------ -------------- --------------
INCREASE (DECREASE) IN NET ASSETS .................... (4,458,271) (1,430,611) 6,565,122 11,275,477
NET ASSETS -- BEGINNING OF YEAR ...................... 11,452,803 12,883,414 57,893,240 46,617,763
- ------------------------------------------------------- ------------- ------------ -------------- --------------
NET ASSETS -- END OF YEAR ............................ $ 6,994,532 $ 11,452,803 $ 64,458,362 $ 57,893,240
======================================================= ============= ============ ============== ==============
</TABLE>
See Notes to Financial Statements.
SAI-59
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
The Equitable Life Assurance Society of the United States
and Contractowners of Separate Account No. 66
of The Equitable Life Assurance Society of the United States
In our opinion, the accompanying statements of assets and liabilities and the
related statements of operations and changes in net assets and the selected per
unit data (included under Condensed Financial Information in the Prospectus of
the Members Retirement Program) present fairly, in all material respects, the
financial position of the T. Rowe Price Equity Income Fund, MFS Research Fund,
Warburg Pincus Small Company Value Fund, Merrill Lynch World Strategy Fund and
BT Equity 500 Index Fund ("EQ Advisor Trust funds"), separate investment funds
of The Equitable Life Assurance Society of the United States ("Equitable Life")
Separate Account No. 66 at December 31, 1998 and the results of each of their
operations, the changes in each of their net assets for the periods indicated
and the per unit data for the periods presented, in conformity with generally
accepted accounting principles. These financial statements and the selected per
unit data (hereafter referred to as "financial statements") are the
responsibility of Equitable Life's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of shares owned in The EQ Advisors Trust at
December 31, 1998 with the transfer agent, provide a reasonable basis for the
opinion expressed above.
PricewaterhouseCoopers LLP
New York, New York
February 8, 1999
SAI-60
<PAGE>
SEPARATE ACCOUNT NO. 66 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
<TABLE>
<CAPTION>
WARBURG
PINCUS BT
T. ROWE PRICE MFS SMALL COMPANY MERRILL LYNCH EQUITY 500
EQUITY INCOME RESEARCH VALUE WORLD STRATEGY INDEX
FUND FUND FUND FUND FUND
--------------- ------------- --------------- ---------------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments in shares of the EQ Advisors Trust --
at value (Note 1)
Cost: $3,655,667 .............................. $3,792,564
2,582,397 ................................. . $2,898,853
2,508,107 ................................. . $2,292,578
643,556 ................................... . $652,743
1,619,304 ................................. . $1,807,011
Receivable for Trust shares purchased ........... -- 400 328 27 --
Due from Equitable's General Account ............ 6,772 -- -- -- 20,928
- ------------------------------------------------- ---------- ---------- ---------- -------- ----------
Total Assets .................................. 3,799,336 2,899,253 2,292,906 652,770 1,827,939
- ------------------------------------------------- ---------- ---------- ---------- -------- ----------
LIABILITIES:
Payable for Trust shares purchased .............. 8,421 -- -- -- --
Due to Equitable's General Account .............. -- 1,149 1,848 1,027 --
Amount retained by Equitable Life in Separate
Account No. 66 ................................. 1,500 1,500 1,500 1,500 --
- ------------------------------------------------- ---------- ---------- ---------- -------- ----------
Total liabilities ............................. 9,921 2,649 3,348 2,527 --
- ------------------------------------------------- ---------- ---------- ---------- -------- ----------
NET ASSETS ...................................... $3,789,415 $2,896,604 $2,289,558 $650,243 $1,827,939
================================================= ========== ========== ========== ======== ==========
</TABLE>
See Notes to Financial Statements.
SAI-61
<PAGE>
SEPARATE ACCOUNT NO. 66 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
T. ROWE PRICE
EQUITY INCOME FUND
---------------------------------
YEAR ENDED AUGUST 1, 1997*
DECEMBER 31, TO DECEMBER 31,
1998 1997
-------------- ----------------
<S> <C> <C>
FROM OPERATIONS:
INVESTMENT INCOME (NOTE 2) -- Dividends from The EQ Advisors Trust ........ $ 60,980 $ 22,858
EXPENSES (NOTE 4) ......................................................... (40,369) (4,613)
- ---------------------------------------------------------------------------- ------------ ----------
NET INVESTMENT INCOME ..................................................... 20,611 18,245
- ---------------------------------------------------------------------------- ------------ ----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTE 2):
Realized gain from share transactions ..................................... 77,584 1,154
Realized gain distribution from The EQ Advisors Trust ..................... 78,496 --
- ---------------------------------------------------------------------------- ------------ ----------
Net Realized Gain ......................................................... 156,080 1,154
- ---------------------------------------------------------------------------- ------------ ----------
Unrealized appreciation of investments:
Beginning of period ...................................................... 81,747 --
End of period ............................................................ 136,897 81,747
- ---------------------------------------------------------------------------- ------------ ----------
Change in unrealized appreciation ......................................... 55,150 81,747
- ---------------------------------------------------------------------------- ------------ ----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS ........................... 211,230 82,901
- ---------------------------------------------------------------------------- ------------ ----------
Net increase in net assets attributable to operations ..................... 231,841 101,146
- ---------------------------------------------------------------------------- ------------ ----------
FROM C0NTRIBUTIONS AND WITHDRAWALS:
Contributions ............................................................ 2,818,502 2,203,292
Withdrawals .............................................................. (1,448,711) (116,655)
- ---------------------------------------------------------------------------- ------------ ----------
Increase in net assets attributable to contributions and withdrawals ..... 1,369,791 2,086,637
- ---------------------------------------------------------------------------- ------------ ----------
INCREASE IN NET ASSETS .................................................... 1,601,632 2,187,783
- ---------------------------------------------------------------------------- ------------ ----------
NET ASSETS -- BEGINNING OF PERIOD ......................................... 2,187,783 --
- ---------------------------------------------------------------------------- ------------ ----------
NET ASSETS -- END OF PERIOD ............................................... $ 3,789,415 $2,187,783
============================================================================ ============ ==========
</TABLE>
* Commencement of operations.
See Notes to Financial Statements.
SAI-62
<PAGE>
SEPARATE ACCOUNT NO. 66 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
MFS RESEARCH FUND
---------------------------------
YEAR ENDED AUGUST 1, 1997*
DECEMBER 31, TO DECEMBER 31,
1998 1997
-------------- ----------------
<S> <C> <C>
FROM OPERATIONS:
INVESTMENT INCOME (NOTE 2) -- Dividends from The EQ Advisors Trust ........ $ 7,211 $ 8,097
EXPENSES (NOTE 4) ......................................................... 19,528 (2,181)
- ---------------------------------------------------------------------------- ---------- ----------
NET INVESTMENT INCOME (LOSS) .............................................. (12,317) 5,916
- ---------------------------------------------------------------------------- ---------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 2):
Realized gain from share transactions ..................................... 24,718 2,181
- ---------------------------------------------------------------------------- ---------- ----------
Unrealized appreciation/(depreciation) of investments:
Beginning of period ...................................................... (12,691) --
End of period ............................................................ 316,456 (12,691)
- ---------------------------------------------------------------------------- ---------- ----------
Change in unrealized appreciation (depreciation) .......................... 329,147 (12,691)
- ---------------------------------------------------------------------------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS .................... 353,865 (10,510)
- ---------------------------------------------------------------------------- ---------- ----------
Net increase (decrease) in net assets attributable to operations .......... 341,548 (4,594)
- ---------------------------------------------------------------------------- ---------- ----------
FROM C0NTRIBUTIONS AND WITHDRAWALS:
Contributions ............................................................ 2,488,519 946,609
Withdrawals .............................................................. (704,182) (171,296)
- ---------------------------------------------------------------------------- ---------- ----------
Increase in net assets attributable to contributions and withdrawals ..... 1,784,337 775,313
- ---------------------------------------------------------------------------- ---------- ----------
INCREASE IN NET ASSETS .................................................... 2,125,885 770,719
- ---------------------------------------------------------------------------- ---------- ----------
NET ASSETS -- BEGINNING OF PERIOD ......................................... 770,719 --
- ---------------------------------------------------------------------------- ---------- ----------
NET ASSETS -- END OF PERIOD ............................................... $2,896,604 $ 770,719
============================================================================ ========== ==========
</TABLE>
* Commencement of operations.
See Notes to Financial Statements.
SAI-63
<PAGE>
SEPARATE ACCOUNT NO. 66 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
WARBURG PINCUS SMALL
COMPANY VALUE FUND
---------------------------------
YEAR ENDED AUGUST 1, 1997*
DECEMBER 31, TO DECEMBER 31,
1998 1997
-------------- ----------------
<S> <C> <C>
FROM OPERATIONS:
INVESTMENT INCOME (NOTE 2) -- Dividends from The EQ Advisors Trust ........ $ 10,601 $ 10,134
EXPENSES (NOTE 4) ......................................................... (27,022) (4,266)
- ---------------------------------------------------------------------------- ------------ ----------
NET INVESTMENT INCOME (LOSS) .............................................. (16,421) 5,868
- ---------------------------------------------------------------------------- ------------ ----------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS (NOTE 2):
Realized loss from share transactions ..................................... (45,570) (579)
- ---------------------------------------------------------------------------- ------------ ----------
Unrealized depreciation of investments:
Beginning of period ...................................................... (67,503) --
End of period ............................................................ (215,529) (67,503)
- ---------------------------------------------------------------------------- ------------ ----------
Change in unrealized depreciation ......................................... (148,026) (67,503)
- ---------------------------------------------------------------------------- ------------ ----------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS ........................... (193,596) (68,082)
- ---------------------------------------------------------------------------- ------------ ----------
Net decrease in net assets attributable to operations ..................... (210,017) (62,214)
- ---------------------------------------------------------------------------- ------------ ----------
FROM C0NTRIBUTIONS AND WITHDRAWALS:
Contributions ............................................................ 2,015,611 2,090,710
Withdrawals .............................................................. (1,379,775) (171,757)
- ---------------------------------------------------------------------------- ------------ ----------
Increase in net assets attributable to contributions and withdrawals ..... 635,836 1,918,953
- ---------------------------------------------------------------------------- ------------ ----------
INCREASE IN NET ASSETS .................................................... 425,819 1,863,739
- ---------------------------------------------------------------------------- ------------ ----------
NET ASSETS -- BEGINNING OF PERIOD ......................................... 1,863,739 --
- ---------------------------------------------------------------------------- ------------ ----------
NET ASSETS -- END OF PERIOD ............................................... $ 2,289,558 $1,863,739
============================================================================ ============ ==========
</TABLE>
* Commencement of operations.
See Notes to Financial Statements.
SAI-64
<PAGE>
SEPARATE ACCOUNT NO. 66 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
MERRILL LYNCH WORLD
STRATEGY FUND
---------------------------------
YEAR ENDED AUGUST 1, 1997*
DECEMBER 31, TO DECEMBER 31,
1998 1997
-------------- ----------------
<S> <C> <C>
FROM OPERATIONS:
INVESTMENT INCOME (NOTE 2) -- Dividends from The EQ Advisors Trust ........ $ 4,633 $ 5,419
EXPENSES (NOTE 4) ......................................................... (6,716) (846)
- ---------------------------------------------------------------------------- ---------- ---------
NET INVESTMENT INCOME (LOSS) .............................................. (2,083) 4,573
- ---------------------------------------------------------------------------- ---------- ---------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 2):
Realized loss from share transactions ..................................... (2,611) (53)
- ---------------------------------------------------------------------------- ---------- ---------
Unrealized appreciation (depreciation) of investments:
Beginning of period ...................................................... (22,184) --
End of period ............................................................ 9,187 (22,184)
- ---------------------------------------------------------------------------- ---------- ---------
Change in unrealized appreciation/(depreciation) .......................... 31,371 (22,184)
- ---------------------------------------------------------------------------- ---------- ---------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS .................... 28,760 (22,237)
- ---------------------------------------------------------------------------- ---------- ---------
Net increase (decrease) in net assets attributable to operations .......... 26,677 (17,664)
- ---------------------------------------------------------------------------- ---------- ---------
FROM C0NTRIBUTIONS AND WITHDRAWALS:
Contributions ............................................................ 444,857 391,483
Withdrawals .............................................................. (182,473) (12,637)
- ---------------------------------------------------------------------------- ---------- ---------
Increase in net assets attributable to contributions and withdrawals ..... 262,384 378,846
- ---------------------------------------------------------------------------- ---------- ---------
INCREASE IN NET ASSETS .................................................... 289,061 361,182
- ---------------------------------------------------------------------------- ---------- ---------
NET ASSETS -- BEGINNING OF PERIOD ......................................... 361,182 --
- ---------------------------------------------------------------------------- ---------- ---------
NET ASSETS -- END OF PERIOD ............................................... $ 650,243 $ 361,182
============================================================================ ========== =========
</TABLE>
* Commencement of operations.
See Notes to Financial Statements.
SAI-65
<PAGE>
SEPARATE ACCOUNT NO. 66 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS (CONCLUDED)
<TABLE>
<CAPTION>
BT EQUITY 500
INDEX FUND
----------------
JULY 1, 1998*
TO DECEMBER 31,
1998
----------------
<S> <C>
FROM OPERATIONS:
INVESTMENT INCOME (NOTE 2) -- Dividends from The EQ Advisors Trust ............ $ 8,842
EXPENSES (NOTE 4) ............................................................. (5,754)
- -------------------------------------------------------------------------------- ----------
NET INVESTMENT INCOME ......................................................... 3,088
- -------------------------------------------------------------------------------- ----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTE 2):
Realized loss from share transactions ......................................... (9,944)
- -------------------------------------------------------------------------------- ----------
Unrealized appreciation of investments:
Beginning of period .......................................................... --
End of period ................................................................ 187,707
- -------------------------------------------------------------------------------- ----------
Change in unrealized appreciation ............................................. 187,707
- -------------------------------------------------------------------------------- ----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS ............................... 177,763
- -------------------------------------------------------------------------------- ----------
Net increase in net assets attributable to operations ......................... 180,851
- -------------------------------------------------------------------------------- ----------
FROM C0NTRIBUTIONS AND WITHDRAWALS:
Contributions ................................................................ 1,830,110
Withdrawals .................................................................. (183,022)
- -------------------------------------------------------------------------------- ----------
Net increase in net assets attributable to contributions and withdrawals ..... 1,647,088
- -------------------------------------------------------------------------------- ----------
INCREASE IN NET ASSETS ........................................................ 1,827,939
- -------------------------------------------------------------------------------- ----------
NET ASSETS -- BEGINNING OF PERIOD ............................................. --
- -------------------------------------------------------------------------------- ----------
NET ASSETS -- END OF PERIOD ................................................... $1,827,939
================================================================================ ==========
</TABLE>
* Commencement of operations.
See Notes to Financial Statements.
SAI-66
<PAGE>
SEPARATE ACCOUNT NOS. 3 (POOLED), 4 (POOLED), 10 (POOLED), 51 (POOLED) AND 66
(POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO FINANCIAL STATEMENTS
1. Separate Account Nos. 3 (Pooled) (the Alliance Aggressive Equity Fund),
4 (Pooled) (the Alliance Growth Equity Fund), 10 (Pooled) (the Alliance
Balanced Fund), 51 (Pooled) (the Alliance Global, Conservative Investors and
Growth Investors Funds) and 66 (Pooled) (T. Rowe Price Equity Income Fund, MFS
Research Fund, Warburg Pincus Small Company Value Fund, Merrill Lynch World
Strategy Fund and BT Equity 500 Index Funds) (the Funds) of The Equitable Life
Assurance Society of the United States (Equitable Life), a wholly-owned
subsidiary of The Equitable Companies Incorporated, were established in
conformity with the New York State Insurance Law. Pursuant to such law, to the
extent provided in the applicable contracts, the net assets in the Funds are
not chargeable with liabilities arising out of any other business of Equitable
Life. The excess of assets over reserves and other contract liabilities, if
any, in Separate Account Nos. 4 and 66 may be transferred to Equitable Life's
general account. These financial statements reflect the total net assets and
results of operations for the Separate Account Nos. 3, 4, 10, 51 and 66. The
Members Retirement Program is one of the many contract owners participating in
these funds.
Interests of retirement and investment plans for Equitable Life employees,
managers, and agents in Separate Account Nos. 3 (Pooled), 4 (Pooled) and 10
(Pooled) aggregated $88,549,620 (32.1%), $323,953,589 (15.3%) and $-0- (0.0%),
respectively, at December 31, 1998 and $124,230,736 (29.7%), $384,471,790
(14.5%) and $26,718,437 (11.0%), respectively, at December 31, 1997, of the net
assets in these Funds.
Equitable Life is the investment manager for the Funds. Alliance Capital
Management L.P. (Alliance) serves as the investment adviser to Equitable Life
with respect to the management of Separate Account Nos. 3, 4 and 10 (the
Equitable Funds). Alliance is a publicly-traded limited partnership which is
indirectly majority-owned by Equitable Life.
Separate Account No. 51 has eleven investment funds which invest in Class
IA shares of corresponding portfolios of The Hudson River Trust (HR Trust).
Alliance is the investment adviser to the HR Trust. The Association Members
Retirement Plan and Trusts invest in the following portfolios of the Trust:
Alliance Global, Alliance Conservative Investors and Alliance Growth Investors.
Separate Account No. 66 has five investment funds which invest in Class IB
shares of corresponding portfolios of EQ Advisors Trust (EQ Trust). EQ
Financial Consultants, Inc. is the investment manager for each portfolio. The
Association Members Retirement Plan and Trusts invest in the following
portfolios of the Trust: T. Rowe Price Equity Income Fund, MFS Research Fund,
Warburg Pincus Small Company Value Fund, Merrill Lynch World Strategy Fund and
BT Equity 500 Index Fund. Class IB shares are offered at net asset values and
are subject to distribution fees imposed under a distribution plan adopted
pursuant to Rule 12b-1 under the 1940 Act. HR Trust and EQ Advisors Trust
(Trusts) are open-end, diversified investment management companies used as
funding vehicles for separate account assets of insurance companies.
Equitable Life, Alliance and EQ Financial Consultants seek to obtain the
best price and execution of all orders placed for the portfolios of the
Equitable Funds considering all circumstances. In addition to using brokers and
dealers to execute portfolio security transactions for accounts under their
management, Equitable Life, Alliance and EQ Financial Consultants may also
enter into other types of business and securities transactions with brokers and
dealers, which will be unrelated to allocation of the Equitable Funds'
portfolio transactions.
The accompanying financial statements are prepared in conformity with
generally accepted accounting principles (GAAP). The preparation of financial
statements in conformity with GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and
SAI-67
<PAGE>
SEPARATE ACCOUNT NOS. 3 (POOLED), 4 (POOLED), 10 (POOLED), 51 (POOLED) AND 66
(POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
2. Security transactions are recorded on the trade date. Amortized cost of
debt securities consists of cost adjusted, where applicable, for amortization
of premium or accretion of discount. Dividend income is recorded on the
ex-dividend date; interest income (including amortization of premium and
discount on securities using the effective yield method) is accrued daily.
Realized gains and losses on the sale of investments are computed on the basis
of the identified cost of the related investments sold. Separate Account No. 51
invests in shares of HR Trust and are valued at the net asset value per share
of the respective funds. Separate Account No. 66 invests in the shares of EQ
Advisors Trust and are valued at the net asset value per share of the
respective funds. The net asset value is determined by the Trust using the
market or fair value of the underlying assets of the Portfolios. For Separate
Account Nos. 51 and 66, realized gains and losses on investments include gains
and losses on redemptions of the Trust's shares (determined on the identified
cost basis) and capital gain distributions from the Trust. Dividends are
recorded by HR Trust at the end of each quarter and by EQ Trust in the fourth
quarter on the ex-dividend date. Capital gains are distributed by the Trusts at
the end of each year.
Transactions denominated in foreign currencies are recorded at the rate
prevailing at the date of such transactions. Asset and liability accounts that
are denominated in a foreign currency are adjusted to reflect the current
exchange rate at the end of period. Transaction gains or losses resulting from
changes in the exchange rate during the reporting period or upon settlement of
the foreign currency transactions are reflected under "Realized and Unrealized
Gain (Loss) on Investments" in the Statements of Operations and Changes in Net
Assets.
Futures and forward contracts are agreements to buy or sell a security for
a set price in the future. Initial margin deposits are made upon entering into
futures contracts and can be either in cash or treasury securities. Separate
Accounts (Accounts) may buy or sell futures contracts for the purpose of
protecting their Accounts' securities against anticipated future changes in
interest rates that might adversely affect the value of an Accounts' securities
or the price of securities that an Account intends to purchase at a later date.
During the period the futures and forward contracts are open, changes in the
value of the contract are recognized as unrealized gains or losses by
"marking-to-market" on a daily basis to reflect the market value of the
contract at the end of each trading day. Variation margin payments for futures
contracts are received or made, depending upon whether unrealized gains or
losses are incurred. When the contract is closed, the Accounts record a
realized gain or loss equal to the difference between the proceeds from (or
cost of) the closing transactions and the Accounts' basis in the contract.
Should interest rates move unexpectedly, the Accounts may not achieve the
anticipated benefits of the financial futures contracts and may incur a loss.
The use of futures and forward transactions involves the risk of imperfect
correlation in movements in the price of futures and forward contracts,
interest rates and the underlying hedged assets.
Futures and forward contracts involve elements of both market and credit
risk in excess of the amounts reflected in the Statement of Assets and
Liabilities. The contract amounts of these futures and forward contracts
reflect the extent of the Accounts' exposure to off-balance sheet risk. The
Accounts bear the market risk which arises from any changes in security values.
The credit risk for futures contracts is limited to failure of the exchange or
board of trade that acts as the counterparty of the Accounts' futures
transactions. Forward contracts are done directly with the
SAI-68
<PAGE>
SEPARATE ACCOUNT NOS. 3 (POOLED), 4 (POOLED), 10 (POOLED), 51 (POOLED) AND 66
(POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
counterparty and not through an exchange and can be terminated only by
agreement of both parties to the contract. There is no daily margin settlement
and the portfolio is exposed to the risk of default by the counterparty.
Separate Account No. 10 may enter into forward currency contracts in order
to hedge its exposure to changes in foreign currency exchange rates on its
foreign security holdings. A forward contract is a commitment to purchase or
sell a foreign currency at a future date at a negotiated forward rate. The gain
or loss arising from the difference between the original contracts and the
closing of such contracts is included in realized gains or losses from foreign
currency transactions. At December 31, 1998, Separate Account No. 10 had
outstanding forward currency contracts to buy/sell foreign currencies as
follows:
<TABLE>
<CAPTION>
CONTRACT COST ON U.S. $ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION
(000'S) DATE VALUE (DEPRECIATION)
---------- ------------- ------------- ---------------
<S> <C> <C> <C> <C>
SEPARATE ACCOUNT NO. 10
FOREIGN CURRENCY BUY CONTRACTS:
Japanese Yen, settling
01/04/99 .................... 180,000 $1,332,840 $1,593,908 $ 261,068
FOREIGN CURRENCY SALE CONTRACTS:
Japanese Yen, settling
01/04/99 .................... 180,329 1,344,754 1,596,821 (252,067)
----------
$ 9,001
==========
</TABLE>
Equitable Life's internal short-term investment account, Separate Account
No. 2A, was established to provide a more flexible and efficient vehicle to
combine and invest temporary cash positions of certain eligible accounts
(Participating Funds) under Equitable Life's management. Separate Account No.
2A invests in debt securities maturing in sixty days or less from the date of
acquisition. At December 31, 1998, the amortized cost of investments held in
Separate Account No. 2A consist of the following:
<TABLE>
<CAPTION>
AMORTIZED COST %
---------------- ----------
<S> <C> <C>
Commercial Paper, 5.10%-5.35% due 01/04/99 through 02/18/99 ......... $ 230,335,099 97.7%
U.S. Government Agency, 4.28% due 01/04/99 .......................... 5,198,145 2.2
- ---------------------------------------------------------------------- ------------- -----
Total Investments ................................................... 235,533,244 99.9
Other Assets less Liabilities ....................................... 215,649 0.1
- ---------------------------------------------------------------------- ------------- -----
Net Assets of Separate Account No. 2A ............................... $ 235,748,893 100.0%
====================================================================== ============= =====
Units Outstanding ................................................... 825,639
Unit Value .......................................................... $ 285.54
- ---------------------------------------------------------------------- -------------
</TABLE>
Participating Funds purchase or redeem units depending on each
participating account's excess cash availability or cash needs to meet its
liabilities. Separate Account No. 2A is not subject to investment management
fees. Short-term debt securities may also be purchased directly by the
Equitable Funds.
SAI-69
<PAGE>
SEPARATE ACCOUNT NOS. 3 (POOLED), 4 (POOLED), 10 (POOLED), 51 (POOLED) AND 66
(POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
For 1998 and 1997, investment security transactions, excluding short-term
debt securities, were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
------------------------------------- ------------------------------------
STOCKS AND U.S. GOVERNMENT STOCKS AND U.S. GOVERNMENT
DEBT SECURITIES AND AGENCIES DEBT SECURITIES AND AGENCIES
----------------- ----------------- ----------------- ----------------
<S> <C> <C> <C> <C>
Fund
- ---------------------------
Alliance Aggressive Equity:
1998 .................... $ 681,887,865 $ -- $ 780,385,761 $ --
1997 .................... 780,418,511 -- 850,626,915 --
Alliance Growth Equity:
1998 .................... 1,692,067,102 -- 2,151,023,546 --
1997 .................... 1,569,991,103 -- 1,988,739,298 --
Alliance Balanced:
1998 .................... 87,857,736 98,200,986 144,791,496 122,149,180
1997 .................... 224,848,109 215,172,356 290,379,457 228,848,176
</TABLE>
No activity is shown for Separate Account No. 51 and No. 66 since they
trade exclusively in shares of corresponding portfolios of The HR Trust and EQ
Advisors Trust.
3. Investment securities for the Equitable Funds are valued as follows:
Stocks listed on national securities exchanges and certain
over-the-counter issues traded on the National Association of Securities
Dealers, Inc. Automated Quotation (NASDAQ) national market system are valued at
the last sale price, or, if no sale, at the latest available bid price.
Foreign securities not traded directly, or in American Depository Receipt
(ADR) form in the United States are valued at the last sale price in the local
currency on an exchange in the country of origin. Foreign currency is converted
into its U.S. dollar equivalent at current exchange rates.
Futures and forward contracts are valued at their last sale price or, if
there is no sale, at the latest available bid price.
United States Treasury securities and other obligations issued or
guaranteed by the United States Government, its agencies or instrumentalities
are valued at representative quoted prices.
Long-term publicly traded corporate bonds are valued at prices obtained
from a bond pricing service of a major dealer in bonds when such prices are
available; however, in circumstances where Equitable Life and Alliance deem it
appropriate to do so, an over-the-counter or exchange quotation may be used.
Convertible preferred stocks listed on national securities exchanges are
valued at their last sale price or, if there is no sale, at the latest
available bid price.
Convertible bonds and unlisted convertible preferred stocks are valued at
bid prices obtained from one or more major dealers in such securities; where
there is a discrepancy between dealers, values may be adjusted based on recent
premium spreads to the underlying common stock.
Other assets that do not have a readily available market price, are valued
at fair value as determined in good faith by Equitable Life's investment
officers.
SAI-70
<PAGE>
SEPARATE ACCOUNT NOS. 3 (POOLED), 4 (POOLED), 10 (POOLED), 51 (POOLED) AND 66
(POOLED) OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
Investment valuations for HR Trust and EQ Advisors Trust are as follows:
The value of the investments in Separate Account Nos. 51 and 66 held in
the corresponding HR Trust and EQ Advisors Trust Portfolios is calculated by
multiplying the number of shares held in each Portfolio by the net asset value
per share of that Portfolio determined as of the close of business each day.
Separate Account No. 2A is valued daily at amortized cost, which
approximates market value. Short-term debt securities purchased directly by the
Equitable Funds which mature in 60 days or less are valued at amortized cost.
Short-term debt securities which mature in more than 60 days are valued at
representative quoted prices.
4. Charges and fees relating to the Funds are deducted in accordance with
the terms of the various contracts which participate in the Funds. With respect
to the Members Retirement Plan and Trusts, these expenses consist of investment
management and accounting fees, program expense charge, direct expenses and
record maintenance and report fees. These charges and fees are paid to
Equitable Life and are recorded as expenses in the accompanying Statements of
Operations and Changes in Net Assets.
Investments in Separate Account Nos. 51 and 66 are also subject to the
expenses incurred in the underlying Portfolios of the Trusts, which are
reflected through the Portfolios' net asset values.
5. No Federal income tax based on net income or realized and unrealized
capital gains was applicable to contracts participating in the Funds by reason
of applicable provisions of the Internal Revenue Code and no Federal income tax
payable by Equitable Life will affect such contracts. Accordingly, no provision
for Federal income tax is required.
SAI-71
<PAGE>
February 8, 1999
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholder of
The Equitable Life Assurance Society of the United States
In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of earnings, of shareholder's equity and
comprehensive income and of cash flows present fairly, in all material
respects, the financial position of The Equitable Life Assurance Society of the
United States and its subsidiaries ("Equitable Life") at December 31, 1998 and
1997, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 1998, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of Equitable Life's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
As discussed in Note 2 to the consolidated financial statements, Equitable
Life changed its method of accounting for long-lived assets in 1996.
PricewaterhouseCoopers LLP
New York, New York
SAI-72
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
---------- ---------
(IN MILLIONS)
<S> <C> <C>
ASSETS
Investments:
Fixed maturities:
Available for sale, at estimated fair value ........................ $18,993.7 $19,630.9
Held to maturity, at amortized cost ................................ 125.0 --
Mortgage loans on real estate ........................................ 2,809.9 2,611.4
Equity real estate ................................................... 1,676.9 2,495.1
Policy loans ......................................................... 2,086.7 2,422.9
Other equity investments ............................................. 713.3 951.5
Investment in and loans to affiliates ................................ 928.5 731.1
Other invested assets ................................................ 808.2 612.2
--------- ---------
Total investments ................................................. 28,142.2 29,455.1
Cash and cash equivalents ............................................. 1,245.5 300.5
Deferred policy acquisition costs ..................................... 3,563.8 3,236.6
Amounts due from discontinued operations .............................. 2.7 572.8
Other assets .......................................................... 3,051.9 2,687.4
Closed Block assets ................................................... 8,632.4 8,566.6
Separate Accounts assets .............................................. 43,302.3 36,538.7
--------- ---------
TOTAL ASSETS .......................................................... $87,940.8 $81,357.7
========= =========
LIABILITIES
Policyholders' account balances ....................................... $20,889.7 $21,579.5
Future policy benefits and other policyholders' liabilities ........... 4,694.2 4,553.8
Short-term and long-term debt ......................................... 1,181.7 1,716.7
Other liabilities ..................................................... 3,474.3 3,267.2
Closed Block liabilities .............................................. 9,077.0 9,073.7
Separate Accounts liabilities ......................................... 43,211.3 36,306.3
--------- ---------
Total liabilities ................................................. 82,528.2 76,497.2
--------- ---------
Commitments and contingencies (Notes 11, 13, 14, 15 and 16)
SHAREHOLDER'S EQUITY
Common stock, $1.25 par value 2.0 million shares authorized, issued and
outstanding .......................................................... 2.5 2.5
Capital in excess of par value ........................................ 3,110.2 3,105.8
Retained earnings ..................................................... 1,944.1 1,235.9
Accumulated other comprehensive income ................................ 355.8 516.3
--------- ---------
Total shareholder's equity ........................................ 5,412.6 4,860.5
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY ............................ $87,940.8 $81,357.7
========= =========
</TABLE>
See Notes to Consolidated Financial Statements.
SAI-73
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF EARNINGS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- ---------
(IN MILLIONS)
<S> <C> <C> <C>
REVENUES
Universal life and investment-type product policy fee income .......... $1,056.2 $ 950.6 $ 874.0
Premiums .............................................................. 588.1 601.5 597.6
Net investment income ................................................. 2,228.1 2,282.8 2,203.6
Investment gains (losses), net ........................................ 100.2 (45.2) (9.8)
Commissions, fees and other income .................................... 1,503.0 1,227.2 1,081.8
Contribution from the Closed Block .................................... 87.1 102.5 125.0
-------- -------- --------
Total revenues ..................................................... 5,562.7 5,119.4 4,872.2
-------- -------- --------
BENEFITS AND OTHER DEDUCTIONS
Interest credited to policyholders' account balances .................. 1,153.0 1,266.2 1,270.2
Policyholders' benefits ............................................... 1,024.7 978.6 1,317.7
Other operating costs and expenses .................................... 2,201.2 2,203.9 2,075.7
-------- -------- --------
Total benefits and other deductions ................................ 4,378.9 4,448.7 4,663.6
-------- -------- --------
Earnings from continuing operations before Federal income taxes,
minority interest and cumulative effect of accounting change ......... 1,183.8 670.7 208.6
Federal income taxes .................................................. 353.1 91.5 9.7
Minority interest in net income of consolidated subsidiaries .......... 125.2 54.8 81.7
-------- -------- --------
Earnings from continuing operations before cumulative effect of
accounting change .................................................... 705.5 524.4 117.2
Discontinued operations, net of Federal income taxes .................. 2.7 (87.2) (83.8)
Cumulative effect of accounting change, net of Federal income
taxes ................................................................ -- -- (23.1)
-------- -------- --------
Net Earnings .......................................................... $ 708.2 $ 437.2 $ 10.3
======== ======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
SAI-74
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY AND
COMPREHENSIVE INCOME
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
<TABLE>
<CAPTION>
1998 1997 1996
-------- --------- --------
(IN MILLIONS)
<S> <C> <C> <C>
Common stock, at par value, beginning and end of year ............. $ 2.5 $ 2.5 $ 2.5
-------- -------- --------
Capital in excess of par value, beginning of year ................. 3,105.8 3,105.8 3,105.8
Additional capital in excess of par value ......................... 4.4 -- --
-------- -------- --------
Capital in excess of par value, end of year ....................... 3,110.2 3,105.8 3,105.8
Retained earnings, beginning of year .............................. 1,235.9 798.7 788.4
Net earnings ...................................................... 708.2 437.2 10.3
-------- -------- --------
Retained earnings, end of year .................................... 1,944.1 1,235.9 798.7
-------- -------- --------
Accumulated other comprehensive income, beginning of year ......... 516.3 177.0 361.4
Other comprehensive income ........................................ (160.5) 339.3 (184.4)
-------- -------- --------
Accumulated other comprehensive income, end of year ............... 355.8 516.3 177.0
-------- -------- --------
TOTAL SHAREHOLDER'S EQUITY, END OF YEAR ........................... $5,412.6 $4,860.5 $4,084.0
======== ======== ========
COMPREHENSIVE INCOME
Net earnings ...................................................... $ 708.2 $ 437.2 $ 10.3
-------- -------- --------
Change in unrealized gains (losses), net of reclassification
adjustment ....................................................... (149.5) 343.7 (206.6)
Minimum pension liability adjustment .............................. (11.0) (4.4) 22.2
-------- -------- --------
Other comprehensive income ........................................ (160.5) 339.3 (184.4)
-------- -------- --------
COMPREHENSIVE INCOME .............................................. $ 547.7 $ 776.5 $ (174.1)
======== ======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
SAI-75
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
<TABLE>
<CAPTION>
1998 1997 1996
---------- ---------- ----------
(IN MILLIONS)
<S> <C> <C> <C>
Net earnings .......................................................... $ 708.2 $ 437.2 $ 10.3
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Interest credited to policyholders' account balances ................. 1,153.0 1,266.2 1,270.2
Universal life and investment-type product policy fee income ......... (1,056.2) (950.6) (874.0)
Investment (gains) losses ............................................ (100.2) 45.2 9.8
Change in Federal income tax payable ................................. 123.1 (74.4) (197.1)
Other, net ........................................................... (324.9) 169.4 330.2
---------- ---------- ----------
Net cash provided by operating activities ............................. 503.0 893.0 549.4
---------- ---------- ----------
Cash flows from investing activities:
Maturities and repayments ............................................ 2,289.0 2,702.9 2,275.1
Sales ................................................................ 16,972.1 10,385.9 8,964.3
Purchases ............................................................ (18,578.5) (13,205.4) (12,559.6)
Decrease (increase) in short-term investments ........................ 102.4 (555.0) 450.3
Decrease in loans to discontinued operations ......................... 660.0 420.1 1,017.0
Sale of subsidiaries ................................................. -- 261.0 --
Other, net ........................................................... (341.8) (612.6) (281.0)
---------- ---------- ----------
Net cash provided (used) by investing activities ...................... 1,103.2 (603.1) (133.9)
---------- ---------- ----------
Cash flows from financing activities:
Policyholders' account balances:
Deposits .......................................................... 1,508.1 1,281.7 1,925.4
Withdrawals ....................................................... (1,724.6) (1,886.8) (2,385.2)
Net (decrease) increase in short-term financings ..................... (243.5) 419.9 (.3)
Repayments of long-term debt ......................................... (24.5) (196.4) (124.8)
Payment of obligation to fund accumulated deficit of
discontinued operations ............................................ (87.2) (83.9) --
Other, net ........................................................... (89.5) (62.7) (66.5)
---------- ---------- ----------
Net cash used by financing activities ................................. (661.2) (528.2) (651.4)
---------- ---------- ----------
Change in cash and cash equivalents ................................... 945.0 (238.3) (235.9)
Cash and cash equivalents, beginning of year .......................... 300.5 538.8 774.7
---------- ---------- ----------
Cash and Cash Equivalents, End of Year ................................ $ 1,245.5 $ 300.5 $ 538.8
========== ========== ==========
Supplemental cash flow information ....................................
Interest Paid ........................................................ $ 130.7 $ 217.1 $ 109.9
========== ========== ==========
Income Taxes Paid (Refunded) ......................................... $ 254.3 $ 170.0 $ (10.0)
========== ========== ==========
</TABLE>
See Notes to Consolidated Financial Statements.
SAI-76
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1) ORGANIZATION
The Equitable Life Assurance Society of the United States ("Equitable
Life") is a wholly owned subsidiary of The Equitable Companies Incorporated
(the "Holding Company"). Equitable Life's insurance business is conducted
principally by Equitable Life and its wholly owned life insurance subsidiaries,
Equitable of Colorado ("EOC"), and, prior to December 31, 1996, Equitable
Variable Life Insurance Company ("EVLICO"). Effective January 1, 1997, EVLICO
was merged into Equitable Life, which continues to conduct the Company's
insurance business. Equitable Life's investment management business, which
comprises the Investment Services segment, is conducted principally by Alliance
Capital Management L.P. ("Alliance"), in which Equitable Life has a 57.7%
ownership interest, and Donaldson, Lufkin & Jenrette, Inc. ("DLJ"), an
investment banking and brokerage affiliate in which Equitable Life has a 32.5%
ownership interest. AXA ("AXA"), a French holding company for an international
group of insurance and related financial services companies, is the Holding
Company's largest shareholder, owning approximately 58.5% at December 31, 1998
(53.4% if all securities convertible into, and options on, common stock were to
be converted or exercised).
The Insurance segment offers a variety of traditional, variable and
interest-sensitive life insurance products, disability income, annuity
products, mutual fund and other investment products to individuals and small
groups. It also administers traditional participating group annuity contracts
with conversion features, generally for corporate qualified pension plans, and
association plans which provide full service retirement programs for
individuals affiliated with professional and trade associations. This segment
includes Separate Accounts for individual insurance and annuity products.
The Investment Services segment includes Alliance, the results of DLJ
which are accounted for on an equity basis, and, through June 10, 1997,
Equitable Real Estate Investment Management, Inc. ("EREIM"), a real estate
investment management subsidiary which was sold. Alliance provides diversified
investment fund management services to a variety of institutional clients,
including pension funds, endowments, and foreign financial institutions, as
well as to individual investors, principally through a broad line of mutual
funds. This segment includes institutional Separate Accounts which provide
various investment options for large group pension clients, primarily deferred
benefit contribution plans, through pooled or single group accounts. DLJ's
businesses include securities underwriting, sales and trading, merchant
banking, financial advisory services, investment research, venture capital,
correspondent brokerage services, online interactive brokerage services and
asset management. DLJ serves institutional, corporate, governmental and
individual clients both domestically and internationally. EREIM provided real
estate investment management services, property management services, mortgage
servicing and loan asset management, and agricultural investment management.
2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The accompanying consolidated financial statements are prepared in
conformity with generally accepted accounting principles ("GAAP") which require
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from
those estimates.
SAI-77
<PAGE>
The accompanying consolidated financial statements include the accounts of
Equitable Life and its wholly owned life insurance subsidiary (collectively,
the "Insurance Group"); non-insurance subsidiaries, principally Alliance and
EREIM (see Note 5); and those partnerships and joint ventures in which
Equitable Life or its subsidiaries has control and a majority economic interest
(collectively, including its consolidated subsidiaries, the "Company"). The
Company's investment in DLJ is reported on the equity basis of accounting.
Closed Block assets, liabilities and results of operations are presented in the
consolidated financial statements as single line items (see Note 7). Unless
specifically stated, all other footnote disclosures contained herein exclude
the Closed Block related amounts.
All significant intercompany transactions and balances except those with
the Closed Block and discontinued operations (see Note 8) have been eliminated
in consolidation. The years "1998," "1997" and "1996" refer to the years ended
December 31, 1998, 1997 and 1996, respectively. Certain reclassifications have
been made in the amounts presented for prior periods to conform these periods
with the 1998 presentation.
Closed Block
On July 22, 1992, Equitable Life established the Closed Block for the
benefit of certain individual participating policies which were in force on
that date. The assets allocated to the Closed Block, together with anticipated
revenues from policies included in the Closed Block, were reasonably expected
to be sufficient to support such business, including provision for payment of
claims, certain expenses and taxes, and for continuation of dividend scales
payable in 1991, assuming the experience underlying such scales continues.
Assets allocated to the Closed Block inure solely to the benefit of the
Closed Block policyholders and will not revert to the benefit of the Holding
Company. No reallocation, transfer, borrowing or lending of assets can be made
between the Closed Block and other portions of Equitable Life's General
Account, any of its Separate Accounts or any affiliate of Equitable Life
without the approval of the New York Superintendent of Insurance (the
"Superintendent"). Closed Block assets and liabilities are carried on the same
basis as similar assets and liabilities held in the General Account. The excess
of Closed Block liabilities over Closed Block assets represents the expected
future post-tax contribution from the Closed Block which would be recognized in
income over the period the policies and contracts in the Closed Block remain in
force.
Discontinued Operations
Discontinued operations include the Group Non-Participating Wind-Up
Annuities ("Wind-Up Annuities") and the Guaranteed Interest Contract ("GIC")
lines of business. An allowance was established for the premium deficiency
reserve for Wind-Up Annuities and estimated future losses of the GIC line of
business. Management reviews the adequacy of the allowance each quarter and
believes the allowance for future losses at December 31, 1998 is adequate to
provide for all future losses; however, the quarterly allowance review
continues to involve numerous estimates and subjective judgments regarding the
expected performance of Discontinued Operations Investment Assets. There can be
no assurance the losses provided for will not differ from the losses ultimately
realized. To the extent actual results or future projections of the
discontinued operations differ from management's current best estimates and
assumptions underlying the allowance for future losses, the difference would be
reflected in the consolidated statements of earnings in discontinued
operations. In particular, to the extent income, sales proceeds and holding
periods for equity real estate differ from management's previous assumptions,
periodic adjustments to the allowance are likely to result (see Note 8).
SAI-78
<PAGE>
Accounting Changes
In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 131, "Disclosures
about Segments of an Enterprise and Related Information". SFAS No. 131
establishes standards for public companies to report information about
operating segments in annual and interim financial statements issued to
shareholders. It also specifies related disclosure requirements for products
and services, geographic areas and major customers. Generally, financial
information must be reported using the basis management uses to make operating
decisions and to evaluate business performance. The Company implemented SFAS
No. 131 effective December 31, 1998 and continues to identify two operating
segments to reflect its major businesses: Insurance and Investment Services.
While the segment descriptions are the same as those previously reported,
certain amounts have been reattributed between the two reportable segments.
Prior period comparative segment information has been restated.
In March 1998, the American Institute of Certified Public Accountants
("AICPA") issued Statement of Position ("SOP") 98-1, "Accounting for the Costs
of Computer Software Developed or Obtained for Internal Use," which requires
capitalization of external and certain internal costs incurred to obtain or
develop internal-use computer software during the application development
stage. The Company applied the provisions of SOP 98-1 prospectively effective
January 1, 1998. The adoption of SOP 98-1 did not have a material impact on the
Company's consolidated financial statements. Capitalized internal-use software
is amortized on a straight-line basis over the estimated useful life of the
software.
The Company implemented SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," as of January
1, 1996. SFAS No. 121 requires long-lived assets and certain identifiable
intangibles be reviewed for impairment whenever events or changes in
circumstances indicate the carrying value of such assets may not be
recoverable. Effective with SFAS No. 121's adoption, impaired real estate is
written down to fair value with the impairment loss being included in
investment gains (losses), net. Before implementing SFAS No. 121, valuation
allowances on real estate held for the production of income were computed using
the forecasted cash flows of the respective properties discounted at a rate
equal to the Company's cost of funds. Adoption of the statement resulted in the
release of valuation allowances of $152.4 million and recognition of impairment
losses of $144.0 million on real estate held for production of income. Real
estate which management intends to sell or abandon is classified as real estate
held for sale. Valuation allowances on real estate held for sale continue to be
computed using the lower of depreciated cost or estimated fair value, net of
disposition costs. Initial adoption of the impairment requirements of SFAS No.
121 to other assets to be disposed of resulted in a charge for the cumulative
effect of an accounting change of $23.1 million, net of a Federal income tax
benefit of $12.4 million, due to the writedown to fair value of building
improvements relating to facilities vacated in 1996.
New Accounting Pronouncements
In October 1998, the FASB issued SFAS No. 134, "Accounting for
Mortgage-Backed Securities Retained after the Securitization of Mortgage Loans
Held for Sale by a Mortgage Banking Enterprise," which amends existing
accounting and reporting standards for certain activities of mortgage banking
enterprises and other enterprises that conduct operations that are
substantially similar to the primary operations of a mortgage banking
enterprise. This statement is effective for the first fiscal quarter beginning
after December 15, 1998. This statement is not expected to have a material
impact on the Company's consolidated financial statements.
SAI-79
<PAGE>
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which establishes accounting and reporting
standards for derivative instruments, including certain derivatives embedded in
other contracts, and for hedging activities. It requires all derivatives to be
recognized on the balance sheet at fair value. The accounting for changes in
the fair value of a derivative depends on its intended use. Derivatives not
used in hedging activities must be adjusted to fair value through earnings.
Changes in the fair value of derivatives used in hedging activities will,
depending on the nature of the hedge, either be offset in earnings against the
change in fair value of the hedged item attributable to the risk being hedged
or recognized in other comprehensive income until the hedged item affects
earnings. For all hedging activities, the ineffective portion of a derivative's
change in fair value will be immediately recognized in earnings.
SFAS No. 133 requires adoption in fiscal years beginning after June 15,
1999 and permits early adoption as of the beginning of any fiscal quarter
following issuance of the statement. Retroactive application to financial
statements of prior periods is prohibited. The Company expects to adopt SFAS
No. 133 effective January 1, 2000. Adjustments resulting from initial adoption
of the new requirements will be reported in a manner similar to the cumulative
effect of a change in accounting principle and will be reflected in net income
or accumulated other comprehensive income based upon existing hedging
relationships, if any. Management currently is assessing the impact of
adoption. However, Alliance's adoption is not expected to have a significant
impact on the Company's consolidated balance sheet or statement of earnings.
Also, since most of DLJ's derivatives are carried at fair values, the Company's
consolidated earnings and financial position are not expected to be
significantly affected by DLJ's adoption of the new requirements.
In late 1998, the AICPA issued SOP 98-7, "Deposit Accounting: Accounting
for Insurance and Reinsurance Contracts that Do Not Transfer Insurance Risk".
This SOP, effective for fiscal years beginning after June 15, 1999, provides
guidance to both the insured and insurer on how to apply the deposit method of
accounting when it is required for insurance and reinsurance contracts that do
not transfer insurance risk. The SOP does not address or change the
requirements as to when deposit accounting should be applied. SOP 98-7 applies
to all entities and all insurance and reinsurance contracts that do not
transfer insurance risk except for long-duration life and health insurance
contracts. This SOP is not expected to have a material impact on the Company's
consolidated financial statements.
In December 1997, the AICPA issued SOP 97-3, "Accounting by Insurance and
Other Enterprises for Insurance-Related Assessments". SOP 97-3 provides
guidance for assessments related to insurance activities and requirements for
disclosure of certain information. SOP 97-3 is effective for financial
statements issued for periods beginning after December 31, 1998. Restatement of
previously issued financial statements is not required. SOP 97-3 is not
expected to have a material impact on the Company's consolidated financial
statements.
Valuation of Investments
Fixed maturities identified as available for sale are reported at
estimated fair value. Fixed maturities, which the Company has both the ability
and the intent to hold to maturity, are stated principally at amortized cost.
The amortized cost of fixed maturities is adjusted for impairments in value
deemed to be other than temporary.
Valuation allowances are netted against the asset categories to which they
apply.
Mortgage loans on real estate are stated at unpaid principal balances, net
of unamortized discounts and valuation allowances. Valuation allowances are
based on the present value of expected future cash flows discounted at the
loan's original effective interest rate or the collateral value if the loan is
collateral dependent. However, if foreclosure is or becomes probable, the
measurement method used is collateral value.
SAI-80
<PAGE>
Real estate, including real estate acquired in satisfaction of debt, is
stated at depreciated cost less valuation allowances. At the date of
foreclosure (including in-substance foreclosure), real estate acquired in
satisfaction of debt is valued at estimated fair value. Impaired real estate is
written down to fair value with the impairment loss being included in
investment gains (losses), net. Valuation allowances on real estate held for
sale are computed using the lower of depreciated cost or current estimated fair
value, net of disposition costs. Depreciation is discontinued on real estate
held for sale. Prior to the adoption of SFAS No. 121, valuation allowances on
real estate held for production of income were computed using the forecasted
cash flows of the respective properties discounted at a rate equal to the
Company's cost of funds.
Policy loans are stated at unpaid principal balances.
Partnerships and joint venture interests in which the Company does not
have control or a majority economic interest are reported on the equity basis
of accounting and are included either with equity real estate or other equity
investments, as appropriate.
Common stocks are carried at estimated fair value and are included in
other equity investments.
Short-term investments are stated at amortized cost which approximates
fair value and are included with other invested assets.
Cash and cash equivalents includes cash on hand, amounts due from banks
and highly liquid debt instruments purchased with an original maturity of three
months or less.
All securities are recorded in the consolidated financial statements on a
trade date basis.
Net Investment Income, Investment Gains, Net and Unrealized Investment Gains
(Losses)
Net investment income and realized investment gains (losses)
(collectively, "investment results") related to certain participating group
annuity contracts which are passed through to the contractholders are reflected
as interest credited to policyholders' account balances.
Realized investment gains (losses) are determined by specific
identification and are presented as a component of revenue. Changes in
valuation allowances are included in investment gains (losses).
Unrealized investment gains and losses on equity securities and fixed
maturities available for sale held by the Company are accounted for as a
separate component of accumulated comprehensive income, net of related deferred
Federal income taxes, amounts attributable to discontinued operations,
participating group annuity contracts and deferred policy acquisition costs
("DAC") related to universal life and investment-type products and
participating traditional life contracts.
Recognition of Insurance Income and Related Expenses
Premiums from universal life and investment-type contracts are reported as
deposits to policyholders' account balances. Revenues from these contracts
consist of amounts assessed during the period against policyholders' account
balances for mortality charges, policy administration charges and surrender
charges. Policy benefits and claims that are charged to expense include benefit
claims incurred in the period in excess of related policyholders' account
balances.
Premiums from participating and non-participating traditional life and
annuity policies with life contingencies generally are recognized as income
when due. Benefits and expenses are matched with such income so as to result in
the recognition of profits over the life of the contracts. This match is
accomplished by means of the provision for liabilities for future policy
benefits and the deferral and subsequent amortization of policy acquisition
costs.
SAI-81
<PAGE>
For contracts with a single premium or a limited number of premium
payments due over a significantly shorter period than the total period over
which benefits are provided, premiums are recorded as income when due with any
excess profit deferred and recognized in income in a constant relationship to
insurance in force or, for annuities, the amount of expected future benefit
payments.
Premiums from individual health contracts are recognized as income over
the period to which the premiums relate in proportion to the amount of
insurance protection provided.
Deferred Policy Acquisition Costs
The costs of acquiring new business, principally commissions,
underwriting, agency and policy issue expenses, all of which vary with and are
primarily related to the production of new business, are deferred. DAC is
subject to recoverability testing at the time of policy issue and loss
recognition testing at the end of each accounting period.
For universal life products and investment-type products, DAC is amortized
over the expected total life of the contract group (periods ranging from 25 to
35 years and 5 to 17 years, respectively) as a constant percentage of estimated
gross profits arising principally from investment results, mortality and
expense margins and surrender charges based on historical and anticipated
future experience, updated at the end of each accounting period. The effect on
the amortization of DAC of revisions to estimated gross profits is reflected in
earnings in the period such estimated gross profits are revised. The effect on
the DAC asset that would result from realization of unrealized gains (losses)
is recognized with an offset to accumulated other comprehensive income in
consolidated shareholder's equity as of the balance sheet date.
For participating traditional life policies (substantially all of which
are in the Closed Block), DAC is amortized over the expected total life of the
contract group (40 years) as a constant percentage based on the present value
of the estimated gross margin amounts expected to be realized over the life of
the contracts using the expected investment yield. At December 31, 1998, the
expected investment yield, excluding policy loans, generally ranged from 7.29%
grading to 6.5% over a 20 year period. Estimated gross margin includes
anticipated premiums and investment results less claims and administrative
expenses, changes in the net level premium reserve and expected annual
policyholder dividends. The effect on the amortization of DAC of revisions to
estimated gross margins is reflected in earnings in the period such estimated
gross margins are revised. The effect on the DAC asset that would result from
realization of unrealized gains (losses) is recognized with an offset to
accumulated comprehensive income in consolidated shareholder's equity as of the
balance sheet date.
For non-participating traditional life and annuity policies with life
contingencies, DAC is amortized in proportion to anticipated premiums.
Assumptions as to anticipated premiums are estimated at the date of policy
issue and are consistently applied during the life of the contracts. Deviations
from estimated experience are reflected in earnings in the period such
deviations occur. For these contracts, the amortization periods generally are
for the total life of the policy.
For individual health benefit insurance, DAC is amortized over the
expected average life of the contracts (10 years for major medical policies and
20 years for disability income ("DI") products) in proportion to anticipated
premium revenue at time of issue.
Policyholders' Account Balances and Future Policy Benefits
Policyholders' account balances for universal life and investment-type
contracts are equal to the policy account values. The policy account values
represents an accumulation of gross premium payments plus credited interest
less expense and mortality charges and withdrawals.
SAI-82
<PAGE>
For participating traditional life policies, future policy benefit
liabilities are calculated using a net level premium method on the basis of
actuarial assumptions equal to guaranteed mortality and dividend fund interest
rates. The liability for annual dividends represents the accrual of annual
dividends earned. Terminal dividends are accrued in proportion to gross margins
over the life of the contract.
For non-participating traditional life insurance policies, future policy
benefit liabilities are estimated using a net level premium method on the basis
of actuarial assumptions as to mortality, persistency and interest established
at policy issue. Assumptions established at policy issue as to mortality and
persistency are based on the Insurance Group's experience which, together with
interest and expense assumptions, includes a margin for adverse deviation. When
the liabilities for future policy benefits plus the present value of expected
future gross premiums for a product are insufficient to provide for expected
future policy benefits and expenses for that product, DAC is written off and
thereafter, if required, a premium deficiency reserve is established by a
charge to earnings. Benefit liabilities for traditional annuities during the
accumulation period are equal to accumulated contractholders' fund balances and
after annuitization are equal to the present value of expected future payments.
Interest rates used in establishing such liabilities range from 2.25% to 11.5%
for life insurance liabilities and from 2.25% to 13.5% for annuity liabilities.
During the fourth quarter of 1996 a loss recognition study of
participating group annuity contracts and conversion annuities ("Pension Par")
was completed which included management's revised estimate of assumptions, such
as expected mortality and future investment returns. The study's results
prompted management to establish a premium deficiency reserve which decreased
earnings from continuing operations and net earnings by $47.5 million ($73.0
million pre-tax).
Individual health benefit liabilities for active lives are estimated using
the net level premium method and assumptions as to future morbidity,
withdrawals and interest. Benefit liabilities for disabled lives are estimated
using the present value of benefits method and experience assumptions as to
claim terminations, expenses and interest.
During the fourth quarter of 1996, the Company completed a loss
recognition study of the DI business which incorporated management's revised
estimates of future experience with regard to morbidity, investment returns,
claims and administration expenses and other factors. The study indicated DAC
was not recoverable and the reserves were not sufficient. Earnings from
continuing operations and net earnings decreased by $208.0 million ($320.0
million pre-tax) as a result of strengthening DI reserves by $175.0 million and
writing off unamortized DAC of $145.0 million related to DI products issued
prior to July 1993. The determination of DI reserves requires making
assumptions and estimates relating to a variety of factors, including morbidity
and interest rates, claims experience and lapse rates based on then known facts
and circumstances. Such factors as claim incidence and termination rates can be
affected by changes in the economic, legal and regulatory environments and work
ethic. While management believes its Pension Par and DI reserves have been
calculated on a reasonable basis and are adequate, there can be no assurance
reserves will be sufficient to provide for future liabilities.
Claim reserves and associated liabilities for individual DI and major
medical policies were $938.6 million and $886.7 million at December 31, 1998
and 1997, respectively. Incurred benefits (benefits paid plus changes in claim
reserves) and benefits paid for individual DI and major medical policies
(excluding reserve strengthening in 1996) are summarized as follows:
SAI-83
<PAGE>
<TABLE>
<CAPTION>
1998 1997 1996
------------ ----------- -----------
(IN MILLIONS)
<S> <C> <C> <C>
Incurred benefits related to current year ......... $ 202.1 $ 190.2 $ 189.0
Incurred benefits related to prior years .......... 22.2 2.1 69.1
--------- -------- --------
Total Incurred Benefits ........................... $ 224.3 $ 192.3 $ 258.1
========= ======== ========
Benefits paid related to current year ............. $ 17.0 $ 28.8 $ 32.6
Benefits paid related to prior years .............. 155.4 146.2 153.3
--------- -------- --------
Total Benefits Paid ............................... $ 172.4 $ 175.0 $ 185.9
========= ======== ========
</TABLE>
Policyholders' Dividends
The amount of policyholders' dividends to be paid (including those on
policies included in the Closed Block) is determined annually by Equitable
Life's board of directors. The aggregate amount of policyholders' dividends is
related to actual interest, mortality, morbidity and expense experience for the
year and judgment as to the appropriate level of statutory surplus to be
retained by Equitable Life.
At December 31, 1998, participating policies, including those in the
Closed Block, represent approximately 19.9% ($49.3 billion) of directly written
life insurance in force, net of amounts ceded.
Federal Income Taxes
The Company files a consolidated Federal income tax return with the
Holding Company and its consolidated subsidiaries. Current Federal income taxes
are charged or credited to operations based upon amounts estimated to be
payable or recoverable as a result of taxable operations for the current year.
Deferred income tax assets and liabilities are recognized based on the
difference between financial statement carrying amounts and income tax bases of
assets and liabilities using enacted income tax rates and laws.
Separate Accounts
Separate Accounts are established in conformity with the New York State
Insurance Law and generally are not chargeable with liabilities that arise from
any other business of the Insurance Group. Separate Accounts assets are subject
to General Account claims only to the extent the value of such assets exceeds
Separate Accounts liabilities.
Assets and liabilities of the Separate Accounts, representing net deposits
and accumulated net investment earnings less fees, held primarily for the
benefit of contractholders, and for which the Insurance Group does not bear the
investment risk, are shown as separate captions in the consolidated balance
sheets. The Insurance Group bears the investment risk on assets held in one
Separate Account; therefore, such assets are carried on the same basis as
similar assets held in the General Account portfolio. Assets held in the other
Separate Accounts are carried at quoted market values or, where quoted values
are not available, at estimated fair values as determined by the Insurance
Group.
The investment results of Separate Accounts on which the Insurance Group
does not bear the investment risk are reflected directly in Separate Accounts
liabilities. For 1998, 1997 and 1996, investment results of such Separate
Accounts were $4,591.0 million, $3,411.1 million and $2,970.6 million,
respectively.
Deposits to Separate Accounts are reported as increases in Separate
Accounts liabilities and are not reported in revenues. Mortality, policy
administration and surrender charges on all Separate Accounts are included in
revenues.
SAI-84
<PAGE>
Employee Stock Option Plan
The Company accounts for stock option plans sponsored by the Holding
Company, DLJ and Alliance in accordance with the provisions of Accounting
Principles Board Opinion ("APB") No. 25, "Accounting for Stock Issued to
Employees," and related interpretations. In accordance with the Statement,
compensation expense is recorded on the date of grant only if the current
market price of the underlying stock exceeds the option price. See Note 22 for
the pro forma disclosures for the Holding Company, DLJ and Alliance required by
SFAS No. 123, "Accounting for Stock-Based Compensation".
3) INVESTMENTS
The following tables provide additional information relating to fixed
maturities and equity securities:
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED ESTIMATED
COST GAINS LOSSES FAIR VALUE
---------- ----------- ------------ ----------
(IN MILLIONS)
<S> <C> <C> <C> <C>
DECEMBER 31, 1998
Fixed Maturities:
Available for Sale:
Corporate .................................. $14,520.8 $793.6 $379.6 $14,934.8
Mortgage-backed ............................ 1,807.9 23.3 .9 1,830.3
U.S. Treasury securities and U.S. government
and agency securities ..................... 1,464.1 107.6 .7 1,571.0
States and political subdivisions .......... 55.0 9.9 -- 64.9
Foreign governments ........................ 363.3 20.9 30.0 354.2
Redeemable preferred stock ................. 242.7 7.0 11.2 238.5
--------- ------ ------ ---------
Total Available for Sale ...................... $18,453.8 $962.3 $422.4 $18,993.7
========= ====== ====== =========
Held to Maturity: Corporate .................. $ 125.0 $ -- $ -- $ 125.0
========= ====== ====== =========
Equity Securities:
Common stock ................................. $ 58.3 $114.9 $ 22.5 $ 150.7
========= ====== ====== =========
DECEMBER 31, 1997
Fixed Maturities:
Available for Sale:
Corporate .................................. $14,850.5 $785.0 $ 74.5 $15,561.0
Mortgage-backed ............................ 1,702.8 23.5 1.3 1,725.0
U.S. Treasury securities and U.S. government
and agency securities ..................... 1,583.2 83.9 .6 1,666.5
States and political subdivisions .......... 52.8 6.8 .1 59.5
Foreign governments ........................ 442.4 44.8 2.0 485.2
Redeemable preferred stock ................. 128.0 6.7 1.0 133.7
--------- ------ ------ ---------
Total Available for Sale ...................... $18,759.7 $950.7 $ 79.5 $19,630.9
========= ====== ====== =========
Equity Securities:
Common stock ................................. $ 408.4 $ 48.7 $ 15.0 $ 442.1
========= ====== ====== =========
</TABLE>
SAI-85
<PAGE>
For publicly traded fixed maturities and equity securities, estimated fair
value is determined using quoted market prices. For fixed maturities without a
readily ascertainable market value, the Company determines an estimated fair
value using a discounted cash flow approach, including provisions for credit
risk, generally based on the assumption such securities will be held to
maturity. Estimated fair values for equity securities, substantially all of
which do not have a readily ascertainable market value, have been determined by
the Company. Such estimated fair values do not necessarily represent the values
for which these securities could have been sold at the dates of the
consolidated balance sheets. At December 31, 1998 and 1997, securities without
a readily ascertainable market value having an amortized cost of $3,539.9
million and $3,759.2 million, respectively, had estimated fair values of
$3,748.5 million and $3,903.9 million, respectively.
The contractual maturity of bonds at December 31, 1998 is shown below:
<TABLE>
<CAPTION>
AVAILABLE FOR SALE
-----------------------------
AMORTIZED ESTIMATED
COST FAIR VALUE
------------- -------------
(IN MILLIONS)
<S> <C> <C>
Due in one year or less ............... $ 324.8 $ 323.4
Due in years two through five ......... 3,778.2 3,787.9
Due in years six through ten .......... 6,543.4 6,594.1
Due after ten years ................... 5,756.8 6,219.5
Mortgage-backed securities ............ 1,807.9 1,830.3
---------- ----------
Total ................................. $ 18,211.1 $ 18,755.2
========== ==========
</TABLE>
Corporate bonds held to maturity with an amortized cost and estimated fair
value of $125.0 million are due in one year or less.
Bonds not due at a single maturity date have been included in the above
table in the year of final maturity. Actual maturities will differ from
contractual maturities because borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.
The Insurance Group's fixed maturity investment portfolio includes
corporate high yield securities consisting of public high yield bonds,
redeemable preferred stocks and directly negotiated debt in leveraged buyout
transactions. The Insurance Group seeks to minimize the higher than normal
credit risks associated with such securities by monitoring concentrations in
any single issuer or a particular industry group. Certain of these corporate
high yield securities are classified as other than investment grade by the
various rating agencies, i.e., a rating below Baa or National Association of
Insurance Commissioners ("NAIC") designation of 3 (medium grade), 4 or 5 (below
investment grade) or 6 (in or near default). At December 31, 1998,
approximately 15.1% of the $18,336.1 million aggregate amortized cost of bonds
held by the Company was considered to be other than investment grade.
In addition, the Insurance Group is an equity investor in limited
partnership interests which primarily invest in securities considered to be
other than investment grade.
Fixed maturity investments with restructured or modified terms are not
material.
SAI-86
<PAGE>
Investment valuation allowances and changes thereto are shown below:
<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- -----------
(IN MILLIONS)
<S> <C> <C> <C>
Balances, beginning of year .............................. $ 384.5 $ 137.1 $ 325.3
SFAS No. 121 release ..................................... -- -- (152.4)
Additions charged to income .............................. 86.2 334.6 125.0
Deductions for writedowns and asset dispositions ......... (240.1) (87.2) (160.8)
-------- -------- --------
Balances, End of Year .................................... $ 230.6 $ 384.5 $ 137.1
======== ======== ========
Balances, end of year comprise:
Mortgage loans on real estate ........................... $ 34.3 $ 55.8 $ 50.4
Equity real estate ...................................... 196.3 328.7 86.7
-------- -------- --------
Total .................................................... $ 230.6 $ 384.5 $ 137.1
======== ======== ========
</TABLE>
At December 31, 1998, the carrying value of fixed maturities which are
non-income producing for the twelve months preceding the consolidated balance
sheet date was $60.8 million.
At December 31, 1998 and 1997, mortgage loans on real estate with
scheduled payments 60 days (90 days for agricultural mortgages) or more past
due or in foreclosure (collectively, "problem mortgage loans on real estate")
had an amortized cost of $7.0 million (0.2% of total mortgage loans on real
estate) and $23.4 million (0.9% of total mortgage loans on real estate),
respectively.
The payment terms of mortgage loans on real estate may from time to time
be restructured or modified. The investment in restructured mortgage loans on
real estate, based on amortized cost, amounted to $115.1 million and $183.4
million at December 31, 1998 and 1997, respectively. Gross interest income on
restructured mortgage loans on real estate that would have been recorded in
accordance with the original terms of such loans amounted to $10.3 million,
$17.2 million and $35.5 million in 1998, 1997 and 1996, respectively. Gross
interest income on these loans included in net investment income aggregated
$8.3 million, $12.7 million and $28.2 million in 1998, 1997 and 1996,
respectively.
Impaired mortgage loans (as defined under SFAS No. 114) along with the
related provision for losses were as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------
1998 1997
----------- -----------
(IN MILLIONS)
<S> <C> <C>
Impaired mortgage loans with provision for losses ............ $ 125.4 $ 196.7
Impaired mortgage loans without provision for losses ......... 8.6 3.6
-------- --------
Recorded investment in impaired mortgage loans ............... 134.0 200.3
Provision for losses ......................................... (29.0) (51.8)
-------- --------
Net Impaired Mortgage Loans .................................. $ 105.0 $ 148.5
======== ========
</TABLE>
Impaired mortgage loans without provision for losses are loans where the
fair value of the collateral or the net present value of the expected future
cash flows related to the loan equals or exceeds the recorded investment.
Interest income earned on loans where the collateral value is used to measure
impairment is recorded on a cash basis. Interest income on loans where the
present value method is used to measure
SAI-87
<PAGE>
impairment is accrued on the net carrying value amount of the loan at the
interest rate used to discount the cash flows. Changes in the present value
attributable to changes in the amount or timing of expected cash flows are
reported as investment gains or losses.
During 1998, 1997 and 1996, respectively, the Company's average recorded
investment in impaired mortgage loans was $161.3 million, $246.9 million and
$552.1 million. Interest income recognized on these impaired mortgage loans
totaled $12.3 million, $15.2 million and $38.8 million ($.9 million, $2.3
million and $17.9 million recognized on a cash basis) for 1998, 1997 and 1996,
respectively.
The Insurance Group's investment in equity real estate is through direct
ownership and through investments in real estate joint ventures. At December
31, 1998 and 1997, the carrying value of equity real estate held for sale
amounted to $836.2 million and $1,023.5 million, respectively. For 1998, 1997
and 1996, respectively, real estate of $7.1 million, $152.0 million and $58.7
million was acquired in satisfaction of debt. At December 31, 1998 and 1997,
the Company owned $552.3 million and $693.3 million, respectively, of real
estate acquired in satisfaction of debt.
Depreciation of real estate held for production of income is computed
using the straight-line method over the estimated useful lives of the
properties, which generally range from 40 to 50 years. Accumulated depreciation
on real estate was $374.8 million and $541.1 million at December 31, 1998 and
1997, respectively. Depreciation expense on real estate totaled $30.5 million,
$74.9 million and $91.8 million for 1998, 1997 and 1996, respectively.
SAI-88
<PAGE>
4) JOINT VENTURES AND PARTNERSHIPS
Summarized combined financial information for real estate joint ventures
(25 and 29 individual ventures as of December 31, 1998 and 1997, respectively)
and for limited partnership interests accounted for under the equity method, in
which the Company has an investment of $10.0 million or greater and an equity
interest of 10% or greater, is as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------
1998 1997
------------ -------------
(IN MILLIONS)
<S> <C> <C>
BALANCE SHEETS
Investments in real estate, at depreciated cost ...................... $ 913.7 $ 1,700.9
Investments in securities, generally at estimated fair value ......... 636.9 1,374.8
Cash and cash equivalents ............................................ 85.9 105.4
Other assets ......................................................... 279.8 584.9
--------- ----------
Total Assets ......................................................... $ 1,916.3 $ 3,766.0
========= ==========
Borrowed funds -- third party ........................................ $ 367.1 $ 493.4
Borrowed funds -- the Company ........................................ 30.1 31.2
Other liabilities .................................................... 197.2 284.0
--------- ----------
Total liabilities .................................................... 594.4 808.6
--------- ----------
Partners' capital .................................................... 1,321.9 2,957.4
--------- ----------
Total Liabilities and Partners' Capital .............................. $ 1,916.3 $ 3,766.0
========= ==========
Equity in partners' capital included above ........................... $ 312.9 $ 568.5
Equity in limited partnership interests not included above ........... 442.1 331.8
Other ................................................................ .7 4.3
--------- ----------
Carrying Value ....................................................... $ 755.7 $ 904.6
========= ==========
</TABLE>
<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- -----------
(IN MILLIONS)
<S> <C> <C> <C>
STATEMENTS OF EARNINGS
Revenues of real estate joint ventures .................... $ 246.1 $ 310.5 $ 348.9
Revenues of other limited partnership interests ........... 128.9 506.3 386.1
Interest expense -- third party ........................... (33.3) (91.8) (111.0)
Interest expense -- the Company ........................... (2.6) (7.2) (30.0)
Other expenses ............................................ (197.0) (263.6) (282.5)
-------- -------- --------
Net Earnings .............................................. $ 142.1 $ 454.2 $ 311.5
======== ======== ========
Equity in net earnings included above ..................... $ 59.6 $ 76.7 $ 73.9
Equity in net earnings of limited partnership interests not
included above ........................................... 22.7 69.5 35.8
Other ..................................................... -- (.9) .9
-------- -------- --------
Total Equity in Net Earnings .............................. $ 82.3 $ 145.3 $ 110.6
======== ======== ========
</TABLE>
SAI-89
<PAGE>
5) NET INVESTMENT INCOME AND INVESTMENT GAINS (LOSSES)
The sources of net investment income are summarized as follows:
<TABLE>
<CAPTION>
1998 1997 1996
------------- ------------- -------------
(IN MILLIONS)
<S> <C> <C> <C>
Fixed maturities ...................... $ 1,489.0 $ 1,459.4 $ 1,307.4
Mortgage loans on real estate ......... 235.4 260.8 303.0
Equity real estate .................... 356.1 390.4 442.4
Other equity investments .............. 83.8 156.9 122.0
Policy loans .......................... 144.9 177.0 160.3
Other investment income ............... 185.7 181.7 217.4
---------- ---------- ----------
Gross investment income .............. 2,494.9 2,626.2 2,552.5
Investment expenses .................. (266.8) (343.4) (348.9)
---------- ---------- ----------
Net Investment Income ................. $ 2,228.1 $ 2,282.8 $ 2,203.6
========== ========== ==========
</TABLE>
Investment gains (losses), net, including changes in the valuation
allowances, are summarized as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------- ------------ ----------
(IN MILLIONS)
<S> <C> <C> <C>
Fixed maturities .............................. $ (24.3) $ 88.1 $ 60.5
Mortgage loans on real estate ................. (10.9) (11.2) (27.3)
Equity real estate ............................ 74.5 (391.3) (79.7)
Other equity investments ...................... 29.9 14.1 18.9
Sale of subsidiaries .......................... (2.6) 252.1 --
Issuance and sales of Alliance Units .......... 19.8 -- 20.6
Issuance and sale of DLJ common stock ......... 18.2 3.0 --
Other ......................................... (4.4) -- (2.8)
-------- -------- -------
Investment Gains (Losses), Net ................ $ 100.2 $ (45.2) $ (9.8)
======== ======== =======
</TABLE>
Writedowns of fixed maturities amounted to $101.6 million, $11.7 million
and $29.9 million for 1998, 1997 and 1996, respectively, and writedowns of
equity real estate subsequent to the adoption of SFAS No. 121 amounted to
$136.4 million for 1997. In the fourth quarter of 1997, the Company
reclassified $1,095.4 million depreciated cost of equity real estate from real
estate held for the production of income to real estate held for sale.
Additions to valuation allowances of $227.6 million were recorded upon these
transfers. Additionally, in fourth quarter 1997, $132.3 million of writedowns
on real estate held for production of income were recorded.
For 1998, 1997 and 1996, respectively, proceeds received on sales of fixed
maturities classified as available for sale amounted to $15,961.0 million,
$9,789.7 million and $8,353.5 million. Gross gains of $149.3 million, $166.0
million and $154.2 million and gross losses of $95.1 million, $108.8 million
and $92.7 million, respectively, were realized on these sales. The change in
unrealized investment gains (losses) related to fixed maturities classified as
available for sale for 1998, 1997 and 1996 amounted to $(331.7) million, $513.4
million and $(258.0) million, respectively.
SAI-90
<PAGE>
For 1998, 1997 and 1996, investment results passed through to certain
participating group annuity contracts as interest credited to policyholders'
account balances amounted to $136.9 million, $137.5 million and $136.7 million,
respectively.
On June 10, 1997, Equitable Life sold EREIM (other than its interest in
Column Financial, Inc.) ("ERE") to Lend Lease Corporation Limited ("Lend
Lease"), a publicly traded, international property and financial services
company based in Sydney, Australia. The total purchase price was $400.0 million
and consisted of $300.0 million in cash and a $100.0 million note which was
paid in 1998. The Company recognized an investment gain of $162.4 million, net
of Federal income tax of $87.4 million as a result of this transaction.
Equitable Life entered into long-term advisory agreements whereby ERE continues
to provide substantially the same services to Equitable Life's General Account
and Separate Accounts, for substantially the same fees, as provided prior to
the sale.
Through June 10, 1997 and for the year ended December 31, 1996,
respectively, the businesses sold reported combined revenues of $91.6 million
and $226.1 million and combined net earnings of $10.7 million and $30.7
million.
In 1996, Alliance acquired the business of Cursitor Holdings L.P. and
Cursitor Holdings Limited (collectively, "Cursitor") for approximately $159.0
million. The purchase price consisted of $94.3 million in cash, 1.8 million of
Alliance's publicly traded units ("Alliance Units"), 6% notes aggregating $21.5
million payable ratably over four years, and additional consideration to be
determined at a later date but currently estimated to not exceed $10.0 million.
The excess of the purchase price, including acquisition costs and minority
interest, over the fair value of Cursitor's net assets acquired resulted in the
recognition of intangible assets consisting of costs assigned to contracts
acquired and goodwill of approximately $122.8 million and $38.3 million,
respectively. The Company recognized an investment gain of $20.6 million as a
result of the issuance of Alliance Units in this transaction. On June 30, 1997,
Alliance reduced the recorded value of goodwill and contracts associated with
Alliance's acquisition of Cursitor by $120.9 million. This charge reflected
Alliance's view that Cursitor's continuing decline in assets under management
and its reduced profitability, resulting from relative investment
underperformance, no longer supported the carrying value of its investment. As
a result, the Company's earnings from continuing operations before cumulative
effect of accounting change for 1997 included a charge of $59.5 million, net of
a Federal income tax benefit of $10.0 million and minority interest of $51.4
million. The remaining balance of intangible assets is being amortized over its
estimated useful life of 20 years. At December 31, 1998, the Company's
ownership of Alliance Units was approximately 56.7%.
SAI-91
<PAGE>
Net unrealized investment gains (losses), included in the consolidated
balance sheets as a component of accumulated comprehensive income and the
changes for the corresponding years, are summarized as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- -----------
(IN MILLIONS)
<S> <C> <C> <C>
Balance, beginning of year ..................................... $ 533.6 $ 189.9 $ 396.5
Changes in unrealized investment gains (losses) ................ (242.4) 543.3 (297.6)
Changes in unrealized investment losses (gains) attributable to:
Participating group annuity contracts ......................... (5.7) 53.2 --
DAC ........................................................... 13.2 (89.0) 42.3
Deferred Federal income taxes ................................. 85.4 (163.8) 48.7
-------- -------- --------
Balance, End of Year ........................................... $ 384.1 $ 533.6 $ 189.9
======== ======== ========
Balance, end of year comprises:
Unrealized investment gains on:
Fixed maturities ............................................ $ 539.9 $ 871.2 $ 357.8
Other equity investments .................................... 92.4 33.7 31.6
Other, principally Closed Block ............................. 111.1 80.9 53.1
-------- -------- --------
Total ...................................................... 743.4 985.8 442.5
Amounts of unrealized investment gains attributable to:
Participating group annuity contracts ....................... (24.7) (19.0) (72.2)
DAC ......................................................... (127.8) (141.0) (52.0)
Deferred Federal income taxes ............................... (206.8) (292.2) (128.4)
-------- -------- --------
Total .......................................................... $ 384.1 $ 533.6 $ 189.9
======== ======== ========
</TABLE>
SAI-92
<PAGE>
6) ACCUMULATED OTHER COMPREHENSIVE INCOME
Accumulated other comprehensive income represents cumulative gains and
losses on items that are not reflected in earnings. The balances for the years
1998, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- -----------
(IN MILLIONS)
<S> <C> <C> <C>
Unrealized gains on investments ....................... $ 384.1 $ 533.6 $ 189.9
Minimum pension liability ............................. (28.3) (17.3) (12.9)
-------- -------- --------
Total Accumulated Other Comprehensive Income .......... $ 355.8 $ 516.3 $ 177.0
======== ======== ========
</TABLE>
The components of other comprehensive income for the years 1998, 1997 and
1996 are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
------------ ----------- ------------
(IN MILLIONS)
<S> <C> <C> <C>
Net unrealized gains (losses) on investment securities:
Net unrealized gains (losses) arising during the period ......... $ (186.1) $ 564.0 $ (249.8)
Reclassification adjustment for (gains) losses included in net
earnings ...................................................... (56.3) (20.7) (47.8)
-------- -------- --------
Net unrealized gains (losses) on investment securities ........... (242.4) 543.3 (297.6)
Adjustments for policyholder liabilities, DAC and deferred
Federal income taxes ............................................ 92.9 (199.6) 91.0
-------- -------- --------
Change in unrealized gains (losses), net of reclassification and
adjustments ..................................................... (149.5) 343.7 (206.6)
Change in minimum pension liability .............................. (11.0) (4.4) 22.2
-------- -------- --------
Total Other Comprehensive Income ................................. $ (160.5) $ 339.3 $ (184.4)
======== ======== ========
</TABLE>
SAI-93
<PAGE>
7) CLOSED BLOCK
Summarized financial information for the Closed Block follows:
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------
1998 1997
------------- -------------
(IN MILLIONS)
<S> <C> <C>
Assets
Fixed Maturities:
Available for sale, at estimated fair value (amortized cost,
$4,149.0 and $4,059.4) .......................................... $ 4,373.2 $ 4,231.0
Mortgage loans on real estate ...................................... 1,633.4 1,341.6
Policy loans ....................................................... 1,641.2 1,700.2
Cash and other invested assets ..................................... 86.5 282.0
DAC ................................................................ 676.5 775.2
Other assets ....................................................... 221.6 236.6
---------- ----------
Total Assets ....................................................... $ 8,632.4 $ 8,566.6
========== ==========
Liabilities
Future policy benefits and policyholders' account balances ......... $ 9,013.1 $ 8,993.2
Other liabilities .................................................. 63.9 80.5
---------- ----------
Total Liabilities .................................................. $ 9,077.0 $ 9,073.7
========== ==========
</TABLE>
<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- -----------
(IN MILLIONS)
<S> <C> <C> <C>
Revenues
Premiums and other revenue .................................. $ 661.7 $ 687.1 $ 724.8
Investment income (net of investment expenses of $15.5, $27.0
and $27.3) ................................................. 569.7 574.9 546.6
Investment losses, net ...................................... .5 (42.4) (5.5)
-------- -------- --------
Total revenues ............................................. 1,231.9 1,219.6 1,265.9
-------- -------- --------
Benefits and Other Deductions
Policyholders' benefits and dividends ....................... 1,082.0 1,066.7 1,106.3
Other operating costs and expenses .......................... 62.8 50.4 34.6
-------- -------- --------
Total benefits and other deductions ........................ 1,144.8 1,117.1 1,140.9
-------- -------- --------
Contribution from the Closed Block .......................... $ 87.1 $ 102.5 $ 125.0
======== ======== ========
</TABLE>
At December 31, 1998 and 1997, problem mortgage loans on real estate had
an amortized cost of $5.1 million and $8.1 million, respectively, and mortgage
loans on real estate for which the payment terms have been restructured had an
amortized cost of $26.0 million and $70.5 million, respectively.
SAI-94
<PAGE>
Impaired mortgage loans (as defined under SFAS No. 114) along with the
related provision for losses were as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1998 1997
---------- -----------
(IN MILLIONS)
<S> <C> <C>
Impaired mortgage loans with provision for losses ............ $ 55.5 $ 109.1
Impaired mortgage loans without provision for losses ......... 7.6 .6
------- --------
Recorded investment in impaired mortgages .................... 63.1 109.7
Provision for losses ......................................... (10.1) (17.4)
------- --------
Net Impaired Mortgage Loans .................................. $ 53.0 $ 92.3
======= ========
</TABLE>
During 1998, 1997 and 1996, the Closed Block's average recorded investment
in impaired mortgage loans was $85.5 million, $110.2 million and $153.8
million, respectively. Interest income recognized on these impaired mortgage
loans totaled $4.7 million, $9.4 million and $10.9 million ($1.5 million, $4.1
million and $4.7 million recognized on a cash basis) for 1998, 1997 and 1996,
respectively.
Valuation allowances amounted to $11.1 million and $18.5 million on
mortgage loans on real estate and $15.4 million and $16.8 million on equity
real estate at December 31, 1998 and 1997, respectively. As of January 1, 1996,
the adoption of SFAS No. 121 resulted in the recognition of impairment losses
of $5.6 million on real estate held for production of income. Writedowns of
fixed maturities amounted to $3.5 million and $12.8 million for 1997 and 1996,
respectively. Writedowns of equity real estate subsequent to the adoption of
SFAS No. 121 amounted to $28.8 million for 1997.
In the fourth quarter of 1997, $72.9 million depreciated cost of equity
real estate held for production of income was reclassified to equity real
estate held for sale. Additions to valuation allowances of $15.4 million were
recorded upon these transfers. Additionally, in fourth quarter 1997, $28.8
million of writedowns on real estate held for production of income were
recorded.
Many expenses related to Closed Block operations are charged to operations
outside of the Closed Block; accordingly, the contribution from the Closed
Block does not represent the actual profitability of the Closed Block
operations. Operating costs and expenses outside of the Closed Block are,
therefore, disproportionate to the business outside of the Closed Block.
SAI-95
<PAGE>
8) DISCONTINUED OPERATIONS
Summarized financial information for discontinued operations follows:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1998 1997
------------ -----------
(IN MILLIONS)
<S> <C> <C>
Assets
Mortgage loans on real estate ................ $ 553.9 $ 635.2
Equity real estate ........................... 611.0 874.5
Other equity investments ..................... 115.1 209.3
Other invested assets ........................ 24.9 152.4
--------- ---------
Total investments ........................... 1,304.9 1,871.4
Cash and cash equivalents .................... 34.7 106.8
Other assets ................................. 219.0 243.8
--------- ---------
Total Assets ................................. $ 1,558.6 $ 2,222.0
========= =========
Liabilities
Policyholders' liabilities ................... $ 1,021.7 $ 1,048.3
Allowance for future losses .................. 305.1 259.2
Amounts due to continuing operations ......... 2.7 572.8
Other liabilities ............................ 229.1 341.7
--------- ---------
Total Liabilities ............................ $ 1,558.6 $ 2,222.0
========= =========
</TABLE>
<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- -----------
(IN MILLIONS)
<S> <C> <C> <C>
Revenues
Investment income (net of investment expenses of $63.3, $97.3
and $127.5) ........................................................... $ 160.4 $ 188.6 $ 245.4
Investment gains (losses), net ......................................... 35.7 (173.7) (18.9)
Policy fees, premiums and other income ................................. (4.3) .2 .2
-------- -------- --------
Total revenues ......................................................... 191.8 15.1 226.7
Benefits and other deductions .......................................... 141.5 169.5 250.4
Earnings added (losses charged) to allowance for future losses ......... 50.3 (154.4) (23.7)
-------- -------- --------
Pre-tax loss from operations ........................................... -- -- --
Pre-tax earnings from releasing (loss from strengthening) of the
allowance for future losses ........................................... 4.2 (134.1) (129.0)
Federal income tax (expense) benefit ................................... (1.5) 46.9 45.2
-------- -------- --------
Earnings (Loss) from Discontinued Operations ........................... $ 2.7 $ (87.2) $ (83.8)
======== ======== ========
</TABLE>
The Company's quarterly process for evaluating the allowance for future
losses applies the current period's results of the discontinued operations
against the allowance, re-estimates future losses and adjusts the allowance, if
appropriate. Additionally, as part of the Company's annual planning process
which takes
SAI-96
<PAGE>
place in the fourth quarter of each year, investment and benefit cash flow
projections are prepared. These updated assumptions and estimates resulted in a
release of allowance in 1998 and strengthening of allowance in 1997 and 1996.
In the fourth quarter of 1997, $329.9 million depreciated cost of equity
real estate was reclassified from equity real estate held for production of
income to real estate held for sale. Additions to valuation allowances of $79.8
million were recognized upon these transfers. Additionally, in fourth quarter
1997, $92.5 million of writedowns on real estate held for production of income
were recognized.
Benefits and other deductions includes $26.6 million, $53.3 million and
$114.3 million of interest expense related to amounts borrowed from continuing
operations in 1998, 1997 and 1996, respectively.
Valuation allowances amounted to $3.0 million and $28.4 million on
mortgage loans on real estate and $34.8 million and $88.4 million on equity
real estate at December 31, 1998 and 1997, respectively. As of January 1, 1996,
the adoption of SFAS No. 121 resulted in a release of existing valuation
allowances of $71.9 million on equity real estate and recognition of impairment
losses of $69.8 million on real estate held for production of income.
Writedowns of equity real estate subsequent to the adoption of SFAS No. 121
amounted to $95.7 million and $12.3 million for 1997 and 1996, respectively.
At December 31, 1998 and 1997, problem mortgage loans on real estate had
amortized costs of $1.1 million and $11.0 million, respectively, and mortgage
loans on real estate for which the payment terms have been restructured had
amortized costs of $3.5 million and $109.4 million, respectively.
Impaired mortgage loans (as defined under SFAS No. 114) along with the
related provision for losses were as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
1998 1997
--------- -----------
(IN MILLIONS)
<S> <C> <C>
Impaired mortgage loans with provision for losses ............ $ 6.7 $ 101.8
Impaired mortgage loans without provision for losses ......... 8.5 .2
------ --------
Recorded investment in impaired mortgages .................... 15.2 102.0
Provision for losses ......................................... (2.1) (27.3)
------ --------
Net Impaired Mortgage Loans .................................. $ 13.1 $ 74.7
====== ========
</TABLE>
During 1998, 1997 and 1996, the discontinued operations' average recorded
investment in impaired mortgage loans was $73.3 million, $89.2 million and
$134.8 million, respectively. Interest income recognized on these impaired
mortgage loans totaled $4.7 million, $6.6 million and $10.1 million ($3.4
million, $5.3 million and $7.5 million recognized on a cash basis) for 1998,
1997 and 1996, respectively.
At December 31, 1998 and 1997, discontinued operations had carrying values
of $50.0 million and $156.2 million, respectively, of real estate acquired in
satisfaction of debt.
SAI-97
<PAGE>
9) SHORT-TERM AND LONG-TERM DEBT
Short-term and long-term debt consists of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------
1998 1997
----------- -----------
(IN MILLIONS)
<S> <C> <C>
Short-term debt ............................................ $ 179.3 $ 422.2
--------- ---------
Long-term debt:
Equitable Life:
6.95% surplus notes scheduled to mature 2005 .............. 399.4 399.4
7.70% surplus notes scheduled to mature 2015 .............. 199.7 199.7
Other ..................................................... .3 .3
--------- ---------
Total Equitable Life .................................... 599.4 599.4
--------- ---------
Wholly Owned and Joint Venture Real Estate:
Mortgage notes, 5.91% -- 12.00%, due through 2017 ......... 392.2 676.6
--------- ---------
Alliance:
Other ..................................................... 10.8 18.5
--------- ---------
Total long-term debt ....................................... 1,002.4 1,294.5
--------- ---------
Total Short-term and Long-term Debt ........................ $ 1,181.7 $ 1,716.7
========= =========
</TABLE>
Short-term Debt
Equitable Life has a $350.0 million bank credit facility available to fund
short-term working capital needs and to facilitate the securities settlement
process. The credit facility consists of two types of borrowing options with
varying interest rates and expires in September 2000. The interest rates are
based on external indices dependent on the type of borrowing and at December
31, 1998 range from 5.23% to 7.75%. There were no borrowings outstanding under
this bank credit facility at December 31, 1998.
Equitable Life has a commercial paper program with an issue limit of
$500.0 million. This program is available for general corporate purposes used
to support Equitable Life's liquidity needs and is supported by Equitable
Life's existing $350.0 million bank credit facility. At December 31, 1998,
there were no borrowings outstanding under this program.
During July 1998, Alliance entered into a $425.0 million five-year
revolving credit facility with a group of commercial banks which replaced a
$250.0 million revolving credit facility. Under the facility, the interest
rate, at the option of Alliance, is a floating rate generally based upon a
defined prime rate, a rate related to the London Interbank Offered Rate
("LIBOR") or the Federal Funds Rate. A facility fee is payable on the total
facility. During September 1998, Alliance increased the size of its commercial
paper program from $250.0 million to $425.0 million. Borrowings from these two
sources may not exceed $425.0 million in the aggregate. The revolving credit
facility provides backup liquidity for commercial paper issued under Alliance's
commercial paper program and can be used as a direct source of borrowing. The
revolving credit facility contains covenants which require Alliance to, among
other things, meet certain financial ratios. As of December 31, 1998, Alliance
had commercial paper outstanding totaling $179.5 million at an effective
interest rate of 5.5% and there were no borrowings outstanding under Alliance's
revolving credit facility.
SAI-98
<PAGE>
Long-term Debt
Several of the long-term debt agreements have restrictive covenants
related to the total amount of debt, net tangible assets and other matters. The
Company is in compliance with all debt covenants.
The Company has pledged real estate, mortgage loans, cash and securities
amounting to $640.2 million and $1,164.0 million at December 31, 1998 and 1997,
respectively, as collateral for certain short-term and long-term debt.
At December 31, 1998, aggregate maturities of the long-term debt based on
required principal payments at maturity for 1999 and the succeeding four years
are $322.8 million, $6.9 million, $1.7 million, $1.8 million and $2.0 million,
respectively, and $668.0 million thereafter.
10) FEDERAL INCOME TAXES
A summary of the Federal income tax expense in the consolidated statements
of earnings is shown below:
<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- ----------
(IN MILLIONS)
<S> <C> <C> <C>
Federal income tax expense (benefit):
Current ............................ $ 283.3 $ 186.5 $ 97.9
Deferred ........................... 69.8 (95.0) (88.2)
-------- -------- -------
Total ............................... $ 353.1 $ 91.5 $ 9.7
======== ======== =======
</TABLE>
The Federal income taxes attributable to consolidated operations are
different from the amounts determined by multiplying the earnings before
Federal income taxes and minority interest by the expected Federal income tax
rate of 35%. The sources of the difference and the tax effects of each are as
follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- ----------
(IN MILLIONS)
<S> <C> <C> <C>
Expected Federal income tax expense ........... $ 414.3 $ 234.7 $ 73.0
Non-taxable minority interest ................. (33.2) (38.0) (28.6)
Adjustment of tax audit reserves .............. 16.0 (81.7) 6.9
Equity in unconsolidated subsidiaries ......... (39.3) (45.1) (32.3)
Other ......................................... (4.7) 21.6 (9.3)
-------- -------- -------
Federal Income Tax Expense .................... $ 353.1 $ 91.5 $ 9.7
======== ======== =======
</TABLE>
SAI-99
<PAGE>
The components of the net deferred Federal income taxes are as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1998 DECEMBER 31, 1997
--------------------------- --------------------------
ASSETS LIABILITIES ASSETS LIABILITIES
----------- ------------- ----------- ------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Compensation and related benefits ......... $ 235.3 $ -- $ 257.9 $ --
Other ..................................... 27.8 -- 30.7 --
DAC, reserves and reinsurance ............. -- 231.4 -- 222.8
Investments ............................... -- 364.4 -- 405.7
-------- ------ -------- ------
Total ..................................... $ 263.1 $ 595.8 $ 288.6 $ 628.5
======== ======= ======== =======
</TABLE>
The deferred Federal income taxes impacting operations reflect the net tax
effects of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for income
tax purposes. The sources of these temporary differences and the tax effects of
each are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
---------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
DAC, reserves and reinsurance ......................... $ (7.7) $ 46.2 $ (156.2)
Investments ........................................... 46.8 (113.8) 78.6
Compensation and related benefits ..................... 28.6 3.7 22.3
Other ................................................. 2.1 (31.1) (32.9)
------- -------- --------
Deferred Federal Income Tax Expense (Benefit) ......... $ 69.8 $ (95.0) $ (88.2)
======= ======== ========
</TABLE>
The Internal Revenue Service (the "IRS") is in the process of examining
the Holding Company's consolidated Federal income tax returns for the years
1992 through 1996. Management believes these audits will have no material
adverse effect on the Company's results of operations.
SAI-100
<PAGE>
11) REINSURANCE AGREEMENTS
The Insurance Group assumes and cedes reinsurance with other insurance
companies. The Insurance Group evaluates the financial condition of its
reinsurers to minimize its exposure to significant losses from reinsurer
insolvencies. Ceded reinsurance does not relieve the originating insurer of
liability. The effect of reinsurance (excluding group life and health) is
summarized as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- -----------
(IN MILLIONS)
<S> <C> <C> <C>
Direct premiums .................................................... $ 438.8 $ 448.6 $ 461.4
Reinsurance assumed ................................................ 203.6 198.3 177.5
Reinsurance ceded .................................................. (54.3) (45.4) (41.3)
-------- -------- --------
Premiums ........................................................... $ 588.1 $ 601.5 $ 597.6
======== ======== ========
Universal Life and Investment-type Product Policy Fee Income
Ceded ............................................................. $ 75.7 $ 61.0 $ 48.2
======== ======== ========
Policyholders' Benefits Ceded ...................................... $ 85.9 $ 70.6 $ 54.1
======== ======== ========
Interest Credited to Policyholders' Account Balances Ceded ......... $ 39.5 $ 36.4 $ 32.3
======== ======== ========
</TABLE>
Beginning in May 1997, the Company began reinsuring on a yearly renewal
term basis 90% of the mortality risk on new issues of certain term, universal
and variable life products. During 1996, the Company's retention limit on joint
survivorship policies was increased to $15.0 million. Effective January 1,
1994, all in force business above $5.0 million was reinsured. The Insurance
Group also reinsures the entire risk on certain substandard underwriting risks
as well as in certain other cases.
The Insurance Group cedes 100% of its group life and health business to a
third party insurance company. Premiums ceded totaled $1.3 million, $1.6
million and $2.4 million for 1998, 1997 and 1996, respectively. Ceded death and
disability benefits totaled $15.6 million, $4.3 million and $21.2 million for
1998, 1997 and 1996, respectively. Insurance liabilities ceded totaled $560.3
million and $593.8 million at December 31, 1998 and 1997, respectively.
12) EMPLOYEE BENEFIT PLANS
The Company sponsors qualified and non-qualified defined benefit plans
covering substantially all employees (including certain qualified part-time
employees), managers and certain agents. The pension plans are
non-contributory. Equitable Life's benefits are based on a cash balance formula
or years of service and final average earnings, if greater, under certain
grandfathering rules in the plans. Alliance's benefits are based on years of
credited service, average final base salary and primary social security
benefits. The Company's funding policy is to make the minimum contribution
required by the Employee Retirement Income Security Act of 1974 ("ERISA").
SAI-101
<PAGE>
Components of net periodic pension cost (credit) for the qualified and
non-qualified plans are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
------------ ---------- ----------
(IN MILLIONS)
<S> <C> <C> <C>
Service cost ........................................... $ 33.2 $ 32.5 $ 33.8
Interest cost on projected benefit obligations ......... 129.2 128.2 120.8
Actual return on assets ................................ (175.6) (307.6) (181.4)
Net amortization and deferrals ......................... 6.1 166.6 43.4
-------- -------- --------
Net Periodic Pension Cost (Credit) ..................... $ (7.1) $ 19.7 $ 16.6
======== ======== ========
</TABLE>
The plan's projected benefit obligation under the qualified and
non-qualified plans was comprised of:
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------
1998 1997
------------- -------------
(IN MILLIONS)
<S> <C> <C>
Benefit obligation, beginning of year ......... $ 1,801.3 $ 1,765.5
Service cost .................................. 33.2 32.5
Interest cost ................................. 129.2 128.2
Actuarial (gains) losses ...................... 108.4 (15.5)
Benefits paid ................................. (138.7) (109.4)
---------- ----------
Benefit Obligation, End of Year ............... $ 1,933.4 $ 1,801.3
========== ==========
</TABLE>
The funded status of the qualified and non-qualified pension plans is as
follows:
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------
1998 1997
------------- -------------
(IN MILLIONS)
<S> <C> <C>
Plan assets at fair value, beginning of year .......................... $ 1,867.4 $ 1,626.0
Actual return on plan assets .......................................... 338.9 307.5
Contributions ......................................................... -- 30.0
Benefits paid and fees ................................................ (123.2) (96.1)
---------- ----------
Plan assets at fair value, end of year ................................ 2,083.1 1,867.4
Projected benefit obligations ......................................... 1,933.4 1,801.3
---------- ----------
Projected benefit obligations less than plan assets ................... 149.7 66.1
Unrecognized prior service cost ....................................... (7.5) (9.9)
Unrecognized net loss from past experience different from that assumed 38.7 95.0
Unrecognized net asset at transition .................................. 1.5 3.1
---------- ----------
Prepaid Pension Cost .................................................. $ 182.4 $ 154.3
========== ==========
</TABLE>
The discount rate and rate of increase in future compensation levels used
in determining the actuarial present value of projected benefit obligations
were 7.0% and 3.83%, respectively, at December 31, 1998 and 7.25% and 4.07%,
respectively, at December 31, 1997. As of January 1, 1998 and 1997, the
expected long-term rate of return on assets for the retirement plan was 10.25%.
SAI-102
<PAGE>
The Company recorded, as a reduction of shareholders' equity an additional
minimum pension liability of $28.3 million and $17.3 million, net of Federal
income taxes, at December 31, 1998 and 1997, respectively, primarily
representing the excess of the accumulated benefit obligation of the qualified
pension plan over the accrued liability.
The pension plan's assets include corporate and government debt
securities, equity securities, equity real estate and shares of group trusts
managed by Alliance.
Prior to 1987, the qualified plan funded participants' benefits through
the purchase of non-participating annuity contracts from Equitable Life.
Benefit payments under these contracts were approximately $31.8 million, $33.2
million and $34.7 million for 1998, 1997 and 1996, respectively.
The Company provides certain medical and life insurance benefits
(collectively, "postretirement benefits") for qualifying employees, managers
and agents retiring from the Company (i) on or after attaining age 55 who have
at least 10 years of service or (ii) on or after attaining age 65 or (iii)
whose jobs have been abolished and who have attained age 50 with 20 years of
service. The life insurance benefits are related to age and salary at
retirement. The costs of postretirement benefits are recognized in accordance
with the provisions of SFAS No. 106. The Company continues to fund
postretirement benefits costs on a pay-as-you-go basis and, for 1998, 1997 and
1996, the Company made estimated postretirement benefits payments of $28.4
million, $18.7 million and $18.9 million, respectively.
The following table sets forth the postretirement benefits plan's status,
reconciled to amounts recognized in the Company's consolidated financial
statements:
<TABLE>
<CAPTION>
1998 1997 1996
--------- --------- ---------
(IN MILLIONS)
<S> <C> <C> <C>
Service cost ............................................................ $ 4.6 $ 4.5 $ 5.3
Interest cost on accumulated postretirement benefits obligation ......... 33.6 34.7 34.6
Net amortization and deferrals .......................................... .5 1.9 2.4
------ ------ ------
Net Periodic Postretirement Benefits Costs .............................. $ 38.7 $ 41.1 $ 42.3
====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------
1998 1997
----------- -----------
(IN MILLIONS)
<S> <C> <C>
Accumulated postretirement benefits obligation, beginning of year ........ $ 490.8 $ 388.5
Service cost ............................................................. 4.6 4.5
Interest cost ............................................................ 33.6 34.7
Contributions and benefits paid .......................................... (28.4) 72.1
Actuarial (gains) losses ................................................. (10.2) (9.0)
-------- --------
Accumulated postretirement benefits obligation, end of year .............. 490.4 490.8
Unrecognized prior service cost .......................................... 31.8 40.3
Unrecognized net loss from past experience different from that assumed
and from changes in assumptions ......................................... (121.2) (140.6)
-------- --------
Accrued Postretirement Benefits Cost ..................................... $ 401.0 $ 390.5
======== ========
</TABLE>
Since January 1, 1994, costs to the Company for providing these medical
benefits available to retirees under age 65 are the same as those offered to
active employees and medical benefits will be limited to 200% of 1993 costs for
all participants.
SAI-103
<PAGE>
The assumed health care cost trend rate used in measuring the accumulated
postretirement benefits obligation was 8.0% in 1998, gradually declining to
2.5% in the year 2009, and in 1997 was 8.75%, gradually declining to 2.75% in
the year 2009. The discount rate used in determining the accumulated
postretirement benefits obligation was 7.0% and 7.25% at December 31, 1998 and
1997, respectively.
If the health care cost trend rate assumptions were increased by 1%, the
accumulated postretirement benefits obligation as of December 31, 1998 would be
increased 4.83%. The effect of this change on the sum of the service cost and
interest cost would be an increase of 4.57%. If the health care cost trend rate
assumptions were decreased by 1% the accumulated postretirement benefits
obligation as of December 31, 1998 would be decreased by 5.6%. The effect of
this change on the sum of the service cost and interest cost would be a
decrease of 5.4%.
13) DERIVATIVES AND FAIR VALUE OF FINANCIAL INSTRUMENTS
Derivatives
The Insurance Group primarily uses derivatives for asset/liability risk
management and for hedging individual securities. Derivatives mainly are
utilized to reduce the Insurance Group's exposure to interest rate
fluctuations. Accounting for interest rate swap transactions is on an accrual
basis. Gains and losses related to interest rate swap transactions are
amortized as yield adjustments over the remaining life of the underlying hedged
security. Income and expense resulting from interest rate swap activities are
reflected in net investment income. The notional amount of matched interest
rate swaps outstanding at December 31, 1998 and 1997, respectively, was $880.9
million and $1,353.4 million. The average unexpired terms at December 31, 1998
ranged from 1 month to 4.3 years. At December 31, 1998, the cost of terminating
swaps in a loss position was $8.0 million. Equitable Life has implemented an
interest rate cap program designed to hedge crediting rates on
interest-sensitive individual annuities contracts. The outstanding notional
amounts at December 31, 1998 of contracts purchased and sold were $8,450.0
million and $875.0 million, respectively. The net premium paid by Equitable
Life on these contracts was $54.8 million and is being amortized ratably over
the contract periods ranging from 1 to 5 years. Income and expense resulting
from this program are reflected as an adjustment to interest credited to
policyholders' account balances.
Substantially all of DLJ's activities related to derivatives are, by their
nature trading activities which are primarily for the purpose of customer
accommodations. DLJ enters into certain contractual agreements referred to as
derivatives or off-balance-sheet financial instruments involving futures,
forwards and options. DLJ's derivative activities consist of writing
over-the-counter ("OTC") options to accommodate its customer needs, trading in
forward contracts in U.S. government and agency issued or guaranteed securities
and in futures contracts on equity-based indices, interest rate instruments and
currencies and issuing structured products based on emerging market financial
instruments and indices. DLJ's involvement in swap contracts and commodity
derivative instruments is not significant.
Fair Value of Financial Instruments
The Company defines fair value as the quoted market prices for those
instruments that are actively traded in financial markets. In cases where
quoted market prices are not available, fair values are estimated using present
value or other valuation techniques. The fair value estimates are made at a
specific point in time, based on available market information and judgments
about the financial instrument, including estimates of the timing and amount of
expected future cash flows and the credit standing of counterparties. Such
estimates do not reflect any premium or discount that could result from
offering for sale at one time
SAI-104
<PAGE>
the Company's entire holdings of a particular financial instrument, nor do they
consider the tax impact of the realization of unrealized gains or losses. In
many cases, the fair value estimates cannot be substantiated by comparison to
independent markets, nor can the disclosed value be realized in immediate
settlement of the instrument.
Certain financial instruments are excluded, particularly insurance
liabilities other than financial guarantees and investment contracts. Fair
market value of off-balance-sheet financial instruments of the Insurance Group
was not material at December 31, 1998 and 1997.
Fair values for mortgage loans on real estate are estimated by discounting
future contractual cash flows using interest rates at which loans with similar
characteristics and credit quality would be made. Fair values for foreclosed
mortgage loans and problem mortgage loans are limited to the estimated fair
value of the underlying collateral if lower.
Fair values of policy loans are estimated by discounting the face value of
the loans from the time of the next interest rate review to the present, at a
rate equal to the excess of the current estimated market rates over the current
interest rate charged on the loan.
The estimated fair values for the Company's association plan contracts,
supplementary contracts not involving life contingencies ("SCNILC") and
annuities certain, which are included in policyholders' account balances, and
guaranteed interest contracts are estimated using projected cash flows
discounted at rates reflecting expected current offering rates.
The estimated fair values for variable deferred annuities and single
premium deferred annuities ("SPDA"), which are included in policyholders'
account balances, are estimated by discounting the account value back from the
time of the next crediting rate review to the present, at a rate equal to the
excess of current estimated market rates offered on new policies over the
current crediting rates.
Fair values for long-term debt are determined using published market
values, where available, or contractual cash flows discounted at market
interest rates. The estimated fair values for non-recourse mortgage debt are
determined by discounting contractual cash flows at a rate which takes into
account the level of current market interest rates and collateral risk. The
estimated fair values for recourse mortgage debt are determined by discounting
contractual cash flows at a rate based upon current interest rates of other
companies with credit ratings similar to the Company. The Company's carrying
value of short-term borrowings approximates their estimated fair value.
SAI-105
<PAGE>
The following table discloses carrying value and estimated fair value for
financial instruments not otherwise disclosed in Notes 3, 7 and 8:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------------------------------
1998 1997
---------------------------- -----------------------------
CARRYING ESTIMATED CARRYING ESTIMATED
VALUE FAIR VALUE VALUE FAIR VALUE
------------- ------------ ------------- -------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Consolidated Financial Instruments:
Mortgage loans on real estate ........................ $ 2,809.9 $ 2,961.8 $ 2,611.4 $ 2,822.8
Other limited partnership interests .................. 562.6 562.6 509.4 509.4
Policy loans ......................................... 2,086.7 2,370.7 2,422.9 2,493.9
Policyholders' account balances - investment contracts 12,892.0 13,396.0 12,611.0 12,714.0
Long-term debt ....................................... 1,002.4 1,025.2 1,294.5 1,257.0
Closed Block Financial Instruments:
Mortgage loans on real estate ........................ 1,633.4 1,703.5 1,341.6 1,420.7
Other equity investments ............................. 56.4 56.4 86.3 86.3
Policy loans ......................................... 1,641.2 1,929.7 1,700.2 1,784.2
SCNILC liability ..................................... 25.0 25.0 27.6 30.3
Discontinued Operations Financial Instruments:
Mortgage loans on real estate ........................ 553.9 599.9 655.5 779.9
Fixed maturities ..................................... 24.9 24.9 38.7 38.7
Other equity investments ............................. 115.1 115.1 209.3 209.3
Guaranteed interest contracts ........................ 37.0 34.0 37.0 34.0
Long-term debt ....................................... 147.1 139.8 296.4 297.6
</TABLE>
14) COMMITMENTS AND CONTINGENT LIABILITIES
The Company has provided, from time to time, certain guarantees or
commitments to affiliates, investors and others. These arrangements include
commitments by the Company, under certain conditions: to make capital
contributions of up to $142.9 million to affiliated real estate joint ventures;
and to provide equity financing to certain limited partnerships of $287.3
million at December 31, 1998, under existing loan or loan commitment
agreements.
Equitable Life is the obligor under certain structured settlement
agreements which it had entered into with unaffiliated insurance companies and
beneficiaries. To satisfy its obligations under these agreements, Equitable
Life owns single premium annuities issued by previously wholly owned life
insurance subsidiaries. Equitable Life has directed payment under these
annuities to be made directly to the beneficiaries under the structured
settlement agreements. A contingent liability exists with respect to these
agreements should the previously wholly owned subsidiaries be unable to meet
their obligations. Management believes the satisfaction of those obligations by
Equitable Life is remote.
The Insurance Group had $24.7 million of letters of credit outstanding at
December 31, 1998.
SAI-106
<PAGE>
15) LITIGATION
Major Medical Insurance Cases
Equitable Life agreed to settle, subject to court approval, previously
disclosed cases involving lifetime guaranteed renewable major medical insurance
policies issued by Equitable Life in five states. Plaintiffs in these cases
claimed that Equitable Life's method for determining premium increases breached
the terms of certain forms of the policies and was misrepresented. In certain
cases plaintiffs also claimed that Equitable Life misrepresented to
policyholders that premium increases had been approved by insurance
departments, and that it determined annual rate increases in a manner that
discriminated against the policyholders.
In December 1997, Equitable Life entered into a settlement agreement,
subject to court approval, which would result in creation of a nationwide class
consisting of all persons holding, and paying premiums on, the policies at any
time since January 1, 1988 and the dismissal with prejudice of the pending
actions and the resolution of all similar claims on a nationwide basis. Under
the terms of the settlement, which involves approximately 127,000 former and
current policyholders, Equitable Life would pay $14.2 million in exchange for
release of all claims and will provide future relief to certain current
policyholders by restricting future premium increases, estimated to have a
present value of $23.3 million. This estimate is based upon assumptions about
future events that cannot be predicted with certainty and accordingly the
actual value of the future relief may vary. In October 1998, the court entered
a judgment approving the settlement agreement and, in November, a member of the
national class filed a notice of appeal of the judgment. In January 1999, the
Court of Appeals granted Equitable Life's motion to dismiss the appeal.
Life Insurance and Annuity Sales Cases
A number of lawsuits are pending as individual claims and purported class
actions against Equitable Life and its subsidiary insurance companies Equitable
Variable Life Insurance Company ("EVLICO," which was merged into Equitable Life
effective January 1, 1997) and The Equitable of Colorado, Inc. ("EOC"). These
actions involve, among other things, sales of life and annuity products for
varying periods from 1980 to the present, and allege, among other things, sales
practice misrepresentation primarily involving: the number of premium payments
required; the propriety of a product as an investment vehicle; the propriety of
a product as a replacement of an existing policy; and failure to disclose a
product as life insurance. Some actions are in state courts and others are in
U.S. District Courts in varying jurisdictions, and are in varying stages of
discovery and motions for class certification.
In general, the plaintiffs request an unspecified amount of damages,
punitive damages, enjoinment from the described practices, prohibition against
cancellation of policies for non-payment of premium or other remedies, as well
as attorneys' fees and expenses. Similar actions have been filed against other
life and health insurers and have resulted in the award of substantial
judgments, including material amounts of punitive damages, or in substantial
settlements. Although the outcome of litigation cannot be predicted with
certainty, particularly in the early stages of an action, The Equitable's
management believes that the ultimate resolution of these cases should not have
a material adverse effect on the financial position of The Equitable. The
Equitable's management cannot make an estimate of loss, if any, or predict
whether or not any such litigation will have a material adverse effect on The
Equitable's results of operations in any particular period.
Discrimination Case
Equitable Life is a defendant in an action, certified as a class action in
September 1997, in the United States District Court for the Northern District
of Alabama, Southern Division, involving alleged discrimination on the basis of
race against African-American applicants and potential applicants in hiring
SAI-107
<PAGE>
individuals as sales agents. Plaintiffs seek a declaratory judgment and
affirmative and negative injunctive relief, including the payment of back-pay,
pension and other compensation. Although the outcome of litigation cannot be
predicted with certainty, The Equitable's management believes that the ultimate
resolution of this matter should not have a material adverse effect on the
financial position of The Equitable. The Equitable's management cannot make an
estimate of loss, if any, or predict whether or not such matter will have a
material adverse effect on The Equitable's results of operations in any
particular period.
Alliance Capital
In July 1995, a class action complaint was filed against Alliance North
American Government Income Trust, Inc. (the "Fund"), Alliance and certain other
defendants affiliated with Alliance, including the Holding Company, alleging
violations of Federal securities laws, fraud and breach of fiduciary duty in
connection with the Fund's investments in Mexican and Argentine securities. The
original complaint was dismissed in 1996; on appeal, the dismissal was
affirmed. In October 1996, plaintiffs filed a motion for leave to file an
amended complaint, alleging the Fund failed to hedge against currency risk
despite representations that it would do so, the Fund did not properly disclose
that it planned to invest in mortgage-backed derivative securities and two Fund
advertisements misrepresented the risks of investing in the Fund. In October
1998, the U.S. Court of Appeals for the Second Circuit issued an order granting
plaintiffs' motion to file an amended complaint alleging that the Fund
misrepresented its ability to hedge against currency risk and denying
plaintiffs' motion to file an amended complaint containing the other
allegations. Alliance believes that the allegations in the amended complaint,
which was filed in February 1999, are without merit and intends to defend
itself vigorously against these claims. While the ultimate outcome of this
matter cannot be determined at this time, Alliance's management does not expect
that it will have a material adverse effect on Alliance's results of operations
or financial condition.
DLJSC
DLJSC is a defendant along with certain other parties in a class action
complaint involving the underwriting of units, consisting of notes and warrants
to purchase common shares, of Rickel Home Centers, Inc. ("Rickel"), which filed
a voluntary petition for reorganization pursuant to Chapter 11 of the
Bankruptcy Code. The complaint seeks unspecified compensatory and punitive
damages from DLJSC, as an underwriter and as an owner of 7.3% of the common
stock, for alleged violation of Federal securities laws and common law fraud
for alleged misstatements and omissions contained in the prospectus and
registration statement used in the offering of the units. DLJSC is defending
itself vigorously against all the allegations contained in the complaint.
Although there can be no assurance, DLJ's management does not believe that the
ultimate outcome of this litigation will have a material adverse effect on
DLJ's consolidated financial condition. Due to the early stage of this
litigation, based on the information currently available to it, DLJ's
management cannot predict whether or not such litigation will have a material
adverse effect on DLJ's results of operations in any particular period.
DLJSC is a defendant in a purported class action filed in a Texas State
Court on behalf of the holders of $550 million principal amount of subordinated
redeemable discount debentures of National Gypsum Corporation ("NGC"). The
debentures were canceled in connection with a Chapter 11 plan of reorganization
for NGC consummated in July 1993. The litigation seeks compensatory and
punitive damages for DLJSC's activities as financial advisor to NGC in the
course of NGC's Chapter 11 proceedings. Trial is expected in early May 1999.
DLJSC intends to defend itself vigorously against all the allegations contained
in the complaint. Although there can be no assurance, DLJ's management does not
believe that the
SAI-108
<PAGE>
ultimate outcome of this litigation will have a material adverse effect on
DLJ's consolidated financial condition. Based upon the information currently
available to it, DLJ's management cannot predict whether or not such litigation
will have a material adverse effect on DLJ's results of operations in any
particular period.
DLJSC is a defendant in a complaint which alleges that DLJSC and a number
of other financial institutions and several individual defendants violated
civil provisions of RICO by inducing plaintiffs to invest over $40 million in
The Securities Groups, a number of tax shelter limited partnerships, during the
years 1978 through 1982. The plaintiffs seek recovery of the loss of their
entire investment and an approximately equivalent amount of tax-related
damages. Judgment for damages under RICO are subject to trebling. Discovery is
complete. Trial has been scheduled for May 17, 1999. DLJSC believes that it has
meritorious defenses to the complaints and will continue to contest the suits
vigorously. Although there can be no assurance, DLJ's management does not
believe that the ultimate outcome of this litigation will have a material
adverse effect on DLJ's consolidated financial condition. Based upon the
information currently available to it, DLJ's management cannot predict whether
or not such litigation will have a material adverse effect on DLJ's results of
operations in any particular period.
DLJSC is a defendant along with certain other parties in four actions
involving Mid-American Waste Systems, Inc. ("Mid-American"), which filed a
voluntary petition for reorganization pursuant to Chapter 11 of the Bankruptcy
Code in January 1997. Three actions seek rescission, compensatory and punitive
damages for DLJSC's role in underwriting notes of Mid-American. The other
action, filed by the Plan Administrator for the bankruptcy estate of
Mid-American, alleges that DLJSC is liable as an underwriter for alleged
misrepresentations and omissions in the prospectus for the notes, and liable as
financial advisor to Mid-American for allegedly failing to advise Mid-American
about its financial condition. DLJSC believes that it has meritorious defenses
to the complaints and will continue to contest the suits vigorously. Although
there can be no assurance, DLJ's management does not believe that the ultimate
outcome of this litigation will have a material adverse effect on DLJ's
consolidated financial condition. Based upon information currently available to
it, DLJ's management cannot predict whether or not such litigation will have a
material adverse effect on DLJ's results of operations in any particular
period.
Other Matters
In addition to the matters described above, the Holding Company and its
subsidiaries are involved in various legal actions and proceedings in
connection with their businesses. Some of the actions and proceedings have been
brought on behalf of various alleged classes of claimants and certain of these
claimants seek damages of unspecified amounts. While the ultimate outcome of
such matters cannot be predicted with certainty, in the opinion of management
no such matter is likely to have a material adverse effect on the Company's
consolidated financial position or results of operations.
16) LEASES
The Company has entered into operating leases for office space and certain
other assets, principally data processing equipment and office furniture and
equipment. Future minimum payments under noncancelable leases for 1999 and the
succeeding four years are $98.7 million, $92.7 million, $73.4 million, $59.9
million, $55.8 million and $550.1 million thereafter. Minimum future sublease
rental income on these noncancelable leases for 1999 and the succeeding four
years is $7.6 million, $5.6 million, $4.6 million, $2.3 million, $2.3 million
and $25.4 million thereafter.
At December 31, 1998, the minimum future rental income on noncancelable
operating leases for wholly owned investments in real estate for 1999 and the
succeeding four years is $189.2 million, $177.0 million, $165.5 million, $145.4
million, $122.8 million and $644.7 million thereafter.
SAI-109
<PAGE>
17) OTHER OPERATING COSTS AND EXPENSES
Other operating costs and expenses consisted of the following:
<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- -----------
(IN MILLIONS)
<S> <C> <C> <C>
Compensation costs ................................. $ 772.0 $ 721.5 $ 704.8
Commissions ........................................ 478.1 409.6 329.5
Short-term debt interest expense ................... 26.1 31.7 8.0
Long-term debt interest expense .................... 84.6 121.2 137.3
Amortization of policy acquisition costs ........... 292.7 287.3 405.2
Capitalization of policy acquisition costs ......... ( 609.1) ( 508.0) ( 391.9)
Rent expense, net of sublease income ............... 100.0 101.8 113.7
Cursitor intangible assets writedown ............... -- 120.9 --
Other .............................................. 1,056.8 917.9 769.1
--------- --------- ---------
Total .............................................. $ 2,201.2 $ 2,203.9 $ 2,075.7
========= ========= =========
</TABLE>
During 1997 and 1996, the Company restructured certain operations in
connection with cost reduction programs and recorded pre-tax provisions of
$42.4 million and $24.4 million, respectively. The amounts paid during 1998,
associated with cost reduction programs, totaled $22.6 million. At December 31,
1998, the liabilities associated with cost reduction programs amounted to $39.4
million. The 1997 cost reduction program included costs related to employee
termination and exit costs. The 1996 cost reduction program included
restructuring costs related to the consolidation of insurance operations'
service centers. Amortization of DAC in 1996 included a $145.0 million writeoff
of DAC related to DI contracts.
18) INSURANCE GROUP STATUTORY FINANCIAL INFORMATION
Equitable Life is restricted as to the amounts it may pay as dividends to
the Holding Company. Under the New York Insurance Law, the Superintendent has
broad discretion to determine whether the financial condition of a stock life
insurance company would support the payment of dividends to its shareholders.
For 1998, 1997 and 1996, statutory net income (loss) totaled $384.4 million,
$(351.7) million and $(351.1) million, respectively. Statutory surplus, capital
stock and Asset Valuation Reserve ("AVR") totaled $4,728.0 million and $3,907.1
million at December 31, 1998 and 1997, respectively. No dividends have been
paid by Equitable Life to the Holding Company to date.
At December 31, 1998, the Insurance Group, in accordance with various
government and state regulations, had $25.6 million of securities deposited
with such government or state agencies.
The differences between statutory surplus and capital stock determined in
accordance with Statutory Accounting Principles ("SAP") and total shareholders'
equity on a GAAP basis are primarily attributable to: (a) inclusion in SAP of
an AVR intended to stabilize surplus from fluctuations in the value of the
investment portfolio; (b) future policy benefits and policyholders' account
balances under SAP differ from GAAP due to differences between actuarial
assumptions and reserving methodologies; (c) certain policy acquisition costs
are expensed under SAP but deferred under GAAP and amortized over future
periods to achieve a matching of revenues and expenses; (d) Federal income
taxes are generally accrued under SAP based upon revenues and expenses in the
Federal income tax return while under GAAP deferred taxes are provided for
timing differences between recognition of revenues and expenses for financial
reporting and income tax purposes; (e) valuation of assets under SAP and GAAP
differ due to different investment
SAI-110
<PAGE>
valuation and depreciation methodologies, as well as the deferral of
interest-related realized capital gains and losses on fixed income investments;
and (f) differences in the accrual methodologies for post-employment and
retirement benefit plans.
19) BUSINESS SEGMENT INFORMATION
The Company's operations consist of Insurance and Investment Services. The
Company's management evaluates the performance of each of these segments
independently and allocates resources based on current and future requirements
of each segment. Management evaluates the performance of each segment based
upon operating results adjusted to exclude the effect of unusual or
non-recurring events and transactions and certain revenue and expense
categories not related to the base operations of the particular business net of
minority interest. Information for all periods is presented on a comparable
basis.
Intersegment investment advisory and other fees of approximately $61.8
million, $84.1 million and $129.2 million for 1998, 1997 and 1996,
respectively, are included in total revenues of the Investment Services
segment. These fees, excluding amounts related to discontinued operations of
$.5 million, $4.2 million and $13.3 million for 1998, 1997 and 1996,
respectively, are eliminated in consolidation.
The following tables reconcile each segment's revenues and operating
earnings to total revenues and earnings from continuing operations before
Federal income taxes and cumulative effect of accounting change as reported on
the consolidated statements of earnings and the segments' assets to total
assets on the consolidated balance sheets, respectively.
SAI-111
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT
INSURANCE SERVICES ELIMINATION TOTAL
------------- ------------- ----------- ----------
(IN MILLIONS)
<S> <C> <C> <C> <C>
1998
Segment revenues ....................................... $ 4,029.8 $ 1,438.4 $ (5.7) $ 5,462.5
Investment gains ....................................... 64.8 35.4 -- 100.2
---------- ---------- ------- ----------
Total Revenues ......................................... $ 4,094.6 $ 1,473.8 $ (5.7) $ 5,562.7
========== ========== ======= ==========
Pre-tax operating earnings ............................. $ 688.6 $ 284.3 $ -- $ 972.9
---------- ---------- ------- ----------
Investment gains, net of DAC and other charges ......... 41.7 27.7 -- 69.4
Pre-tax minority interest .............................. -- 141.5 -- 141.5
---------- ---------- ------- ----------
Earnings from Continuing Operations .................... $ 730.3 $ 453.5 $ -- $ 1,183.8
========== ========== ======= ==========
Total Assets ........................................... $ 75,626.0 $ 12,379.2 $ (64.4) $ 87,940.8
========== ========== ======= ==========
1997
Segment revenues ....................................... $ 3,990.8 $ 1,200.0 $ (7.7) $ 5,183.1
Investment gains (losses) .............................. (318.8) 255.1 -- (63.7)
---------- ---------- ------- ----------
Total Revenues ......................................... $ 3,672.0 $ 1,455.1 $ (7.7) $ 5,119.4
========== ========== ======= ==========
Pre-tax operating earnings ............................. $ 507.0 $ 258.3 $ -- $ 765.3
Investment gains (losses), net of DAC and other
charges ............................................... (292.5) 252.7 -- (39.8)
Non-recurring costs and expenses ....................... (41.7) (121.6) -- (163.3)
Pre-tax minority interest .............................. -- 108.5 -- 108.5
---------- ---------- ------- ----------
Earnings from Continuing Operations .................... $ 172.8 $ 497.9 $ -- $ 670.7
========== ========== ======= ==========
Total Assets ........................................... $ 67,762.4 $ 13,691.4 $ (96.1) $ 81,357.7
========== ========== ======= ==========
1996
Segment revenues ....................................... $ 3,789.1 $ 1,105.5 $ (12.6) $ 4,882.0
Investment gains (losses) .............................. (30.3) 20.5 -- (9.8)
---------- ---------- ------- ----------
Total Revenues ......................................... $ 3,758.8 $ 1,126.0 $ (12.6) $ 4,872.2
========== ========== ======= ==========
Pre-tax operating earnings ............................. $ 337.1 $ 224.6 $ -- $ 561.7
Investment gains (losses), net of DAC and other
charges ............................................... (37.2) 16.9 -- (20.3)
Reserve strengthening and DAC writeoff ................. (393.0) -- -- (393.0)
Non-recurring costs and expenses ....................... (22.3) (1.1) -- (23.4)
Pre-tax minority interest .............................. -- 83.6 -- 83.6
---------- ---------- ------- ----------
Earnings (Loss) from Continuing Operations ............. $ (115.4) $ 324.0 $ -- $ 208.6
=========== ========== ======= ==========
</TABLE>
SAI-112
<PAGE>
20) QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The quarterly results of operations for 1998 and 1997 are summarized
below:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
------------- ------------- --------------- -------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
1998
Total Revenues ............................... $ 1,470.2 $ 1,422.9 $ 1,297.6 $ 1,372.0
========= ========= ========= =========
Earnings from Continuing Operations before
Cumulative Effect of Accounting Change ...... $ 212.8 $ 197.0 $ 136.8 $ 158.9
========= ========= ========= =========
Net Earnings ................................. $ 213.3 $ 198.3 $ 137.5 $ 159.1
========= ========= ========= =========
1997
Total Revenues ............................... $ 1,266.0 $ 1,552.8 $ 1,279.0 $ 1,021.6
========= ========= ========= =========
Earnings from Continuing Operations before
Cumulative Effect of Accounting Change ...... $ 117.4 $ 222.5 $ 145.1 $ 39.4
========= ========= ========= =========
Net Earnings (Loss) .......................... $ 114.1 $ 223.1 $ 144.9 $ (44.9)
========= ========= ========= ==========
</TABLE>
Net earnings for the three months ended December 31, 1997 includes a
charge of $212.0 million related to additions to valuation allowances on and
writeoffs of real estate of $225.2 million, and reserve strengthening on
discontinued operations of $84.3 million offset by a reversal of prior years
tax reserves of $97.5 million.
21) INVESTMENT IN DLJ
At December 31, 1998, the Company's ownership of DLJ interest was
approximately 32.5%. The Company's ownership interest will be further reduced
upon the issuance of common stock after the vesting of forfeitable restricted
stock units acquired by and/or the exercise of options granted to certain DLJ
employees. DLJ restricted stock units represents forfeitable rights to receive
approximately 5.2 million shares of DLJ common stock through February 2000.
The results of operations of DLJ are accounted for on the equity basis and
are included in commissions, fees and other income in the consolidated
statements of earnings. The Company's carrying value of DLJ is included in
investment in and loans to affiliates in the consolidated balance sheets.
SAI-113
<PAGE>
Summarized balance sheets information for DLJ, reconciled to the Company's
carrying value of DLJ, are as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------
1998 1997
-------------- --------------
(IN MILLIONS)
<S> <C> <C>
Assets:
Trading account securities, at market value ........................ $ 13,195.1 $ 16,535.7
Securities purchased under resale agreements ....................... 20,063.3 22,628.8
Broker-dealer related receivables .................................. 34,264.5 28,159.3
Other assets ....................................................... 4,759.3 3,182.0
----------- -----------
Total Assets ....................................................... $ 72,282.2 $ 70,505.8
=========== ===========
Liabilities:
Securities sold under repurchase agreements ........................ $ 35,775.6 $ 36,006.7
Broker-dealer related payables ..................................... 26,161.5 26,127.2
Short-term and long-term debt ...................................... 3,997.6 3,249.5
Other liabilities .................................................. 3,219.8 2,860.9
----------- -----------
Total liabilities .................................................. 69,154.5 68,244.3
DLJ's company-obligated mandatorily redeemed preferred securities of
subsidiary trust holding solely debentures of DLJ ................. 200.0 200.0
Total shareholders' equity ......................................... 2,927.7 2,061.5
----------- -----------
Total Liabilities, Cumulative Exchangeable Preferred Stock and
Shareholders' Equity .............................................. $ 72,282.2 $ 70,505.8
=========== ===========
DLJ's equity as reported ........................................... $ 2,927.7 $ 2,061.5
Unamortized cost in excess of net assets acquired in 1985 and other
adjustments ....................................................... 23.7 23.5
The Holding Company's equity ownership in DLJ ...................... (1,002.4) (740.2)
Minority interest in DLJ ........................................... (1,118.2) (729.3)
----------- -----------
The Company's Carrying Value of DLJ ................................ $ 830.8 $ 615.5
=========== ===========
</TABLE>
SAI-114
<PAGE>
Summarized statements of earnings information for DLJ reconciled to the
Company's equity in earnings of DLJ is as follows:
<TABLE>
<CAPTION>
1998 1997
------------- -------------
(IN MILLIONS)
<S> <C> <C>
Commission, fees and other income ..................................... $ 3,184.7 $ 2,430.7
Net investment income ................................................. 2,189.1 1,652.1
Dealer, trading and investment gains, net ............................. 33.2 557.7
---------- ----------
Total revenues ........................................................ 5,407.0 4,640.5
Total expenses including income taxes ................................. 5,036.2 4,232.2
---------- ----------
Net earnings .......................................................... 370.8 408.3
Dividends on preferred stock .......................................... 21.3 12.2
---------- ----------
Earnings Applicable to Common Shares .................................. $ 349.5 $ 396.1
========== ==========
DLJ's earnings applicable to common shares as reported ................ $ 349.5 $ 396.1
Amortization of cost in excess of net assets acquired in 1985 ......... (.8) (1.3)
The Holding Company's equity in DLJ's earnings ........................ (136.8) (156.8)
Minority interest in DLJ .............................................. (99.5) (109.1)
---------- ----------
The Company's Equity in DLJ's Earnings ................................ $ 112.4 $ 128.9
========== ==========
</TABLE>
22) ACCOUNTING FOR STOCK-BASED COMPENSATION
The Holding Company sponsors a stock option plan for employees of
Equitable Life. DLJ and Alliance each sponsor their own stock option plans for
certain employees. The Company has elected to continue to account for
stock-based compensation using the intrinsic value method prescribed in APB No.
25. Had compensation expense for the Holding Company, DLJ and Alliance Stock
Option Incentive Plan options been determined based on SFAS No. 123's fair
value based method, the Company's pro forma net earnings for 1998, 1997 and
1996 would have been:
<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- ----------
(IN MILLIONS)
<S> <C> <C> <C>
Net Earnings:
As reported ......... $ 708.2 $ 437.2 $ 10.3
Pro forma ........... 678.4 426.3 3.3
</TABLE>
SAI-115
<PAGE>
The fair values of options granted after December 31, 1994, used as a
basis for the above pro forma disclosures, were estimated as of the dates of
grant using the Black-Scholes option pricing model. The option pricing
assumptions for 1998, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
HOLDING COMPANY DLJ
-------------------------------- --------------------------------
1998 1997 1996 1998 1997 1996
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Dividend yield .................. 0.32% 0.48% 0.80% 0.69% 0.86% 1.54%
Expected volatility ............. 28% 20% 20% 40% 33% 25%
Risk-free interest rate ......... 5.48% 5.99% 5.92% 5.53% 5.96% 6.07%
Expected life in years .......... 5 5 5 5 5 5
Weighted average fair
value per option at
grant-date ..................... $22.64 $12.25 $6.94 $16.27 $10.81 $4.03
<CAPTION>
ALLIANCE
--------------------------------
1998 1997 1996
---------- ---------- ----------
<S> <C> <C> <C>
Dividend yield .................. 6.50% 8.00% 8.00%
Expected volatility ............. 29% 26% 23%
Risk-free interest rate ......... 4.40% 5.70% 5.80%
Expected life in years .......... 7.2 7.2 7.4
Weighted average fair
value per option at
grant-date ..................... $3.86 $2.18 $1.35
</TABLE>
A summary of the Holding Company, DLJ and Alliance's option plans is as
follows:
<TABLE>
<CAPTION>
HOLDING COMPANY DLJ ALLIANCE
----------------------------- ----------------------------- ----------------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
PRICE OF PRICE OF PRICE OF
SHARES OPTIONS SHARES OPTIONS UNITS OPTIONS
(IN MILLIONS) OUTSTANDING (IN MILLIONS) OUTSTANDING (IN MILLIONS) OUTSTANDING
--------------- ------------- --------------- ------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Balance as of January 1, 1996 ........... 6.7 $20.27 18.4 $13.50 9.6 $ 8.86
Granted ................................ .7 $24.94 4.2 $16.27 1.4 $12.56
Exercised .............................. (.1) $19.91 -- -- (.8) $ 6.82
Expired ................................ -- -- --
Forfeited .............................. (.6) $20.21 (.4) $13.50 (.2) $ 9.66
----- ----- -----
Balance as of December 31, 1996 ......... 6.7 $20.79 22.2 $14.03 10.0 $ 9.54
Granted ................................ 3.2 $41.85 6.4 $30.54 2.2 $18.28
Exercised .............................. (1.6) $20.26 (.2) $16.01 (1.2) $ 8.06
Forfeited .............................. (.4) $23.43 (.2) $13.79 (.4) $10.64
----- ----- -----
Balance as of December 31, 1997 ......... 7.9 $29.05 28.2 $17.78 10.6 $11.41
Granted ................................ 4.3 $66.26 1.5 $38.59 2.8 $26.28
Exercised .............................. (1.1) $21.18 (1.4) $14.91 (.9) $ 8.91
Forfeited .............................. (.4) $47.01 (.1) $17.31 (.2) $13.14
----- ----- -----
Balance as of December 31, 1998 ......... 10.7 $44.00 28.2 $19.04 12.3 $14.94
===== ===== =====
</TABLE>
SAI-116
<PAGE>
Information about options outstanding and exercisable at December 31, 1998 is
as follows:
<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
-------------------------------------------- ---------------------------
WEIGHTED
AVERAGE WEIGHTED WEIGHTED
RANGE OF NUMBER REMAINING AVERAGE NUMBER AVERAGE
EXERCISE OUTSTANDING CONTRACTUAL EXERCISE EXERCISABLE EXERCISE
PRICES (IN MILLIONS) LIFE (YEARS) PRICE (IN MILLIONS) PRICE
-------- ------------- ------------ --------- ------------- --------
<S> <C> <C> <C> <C> <C>
HOLDING
COMPANY
-------
$18.125-$27.75 ......... 3.7 5.19 $ 20.97 3.0 $ 20.33
$28.50 -$45.25 ......... 3.0 8.68 $ 41.79 --
$50.63 -$66.75 ......... 2.1 9.21 $ 52.73 --
$81.94 -$82.56 ......... 1.9 9.62 $ 82.56 --
---- ----
$18.125-$82.56 ......... 10.7 7.75 $ 44.00 3.0 $ 20.33
==== ==== ======= ==== =======
DLJ
---
$13.50-$25.99 .......... 22.3 7.1 $ 14.59 21.4 $ 15.05
$26.00-$38.99 .......... 5.0 8.8 $ 33.94 --
$39.00-$52.875 ......... .9 9.4 $ 44.65 --
---- ----
$13.50-$52.875 ......... 28.2 7.5 $ 19.04 21.4 $ 15.05
==== ==== ======= ==== =======
ALLIANCE
--------
$ 3.03-$ 9.69 .......... 3.1 4.5 $ 8.03 2.4 $ 7.57
$ 9.81-$10.69 .......... 2.0 5.3 $ 10.05 1.6 $ 10.07
$11.13-$13.75 .......... 2.4 7.5 $ 11.92 1.0 $ 11.77
$18.47-$18.78 .......... 2.0 9.0 $ 18.48 .4 $ 18.48
$22.50-$26.31 .......... 2.8 9.9 $ 26.28 -- --
---- ----
$ 3.03-$26.31 .......... 12.3 7.2 $ 14.94 5.4 $ 9.88
==== ==== ======= ==== =======
</TABLE>
SAI-117
<PAGE>
Supplement dated May 1, 1999 to Prospectus dated May 1, 1999
------------------------------------------------------------------------
MEMBERS RETIREMENT PROGRAMS
funded under contracts with
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
1290 Avenue of the Americas, New York, New York 10104
Toll-Free Telephone 800-223-5790
----------------------------------
VARIABLE ANNUITY BENEFITS
----------------------------------
This Prospectus Supplement should be read and retained for
future reference by Participants in the Members Retirement
Programs who are considering variable
annuity payment benefits after retirement.
This Prospectus Supplement is not authorized for
distribution unless accompanied or preceded by
the Prospectus dated May 1, 1999 for the
appropriate Members Retirement Program.
- ------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS: ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- ------------------------------------------------------------------------------
<PAGE>
RETIREMENT BENEFITS
When you become eligible to receive benefits under a Members
Retirement Program, you may select one or more of the following forms of
distribution, which are available in variable or fixed form. The law requires
that if the value of your Account Balance is more than $5,000, you must receive
a Qualified Joint and Survivor Annuity unless your Spouse consents to a
different election.
Life Annuity - annuity providing monthly payments for your life. No
payments will be made after your death, even if you have received only one
payment.
Life Annuity Period Certain - an annuity providing monthly payments
for your life or, if longer, a specified period of time. If you die before the
end of that specified period, payments will continue to your beneficiary until
the end of the period. Subject to legal limitations, you may specify a minimum
payment period of 5, 10, 15 or 20 years; the longer the specified period, the
smaller the monthly payments will be.
Joint and Survivor Annuity - Period Certain - an annuity providing
monthly payments for your life and that of your beneficiary or, if longer, a
specified period of time. If you and your beneficiary both die before the end
of the specified period, payments will continue to your contingent beneficiary
until the end of the period. Subject to legal limitations, you may specify a
minimum payment period of 5, 10, 15 or 20 years; the longer the specified
period, the smaller the monthly payments will be.
How Annuity Payments are Made
When your distribution of benefits under an annuity begins, your Units
in the Funds are redeemed. Part or all of the proceeds, plus part or all of
your Account Balance in the General Account Options, may be used to purchase an
annuity. The minimum amount that can be used to purchase any type of annuity is
$5,000. Usually, a $350 charge will be deducted from the amount used to
purchase the annuity to reimburse us for administrative expenses associated
with processing the application and with issuing each month's annuity payment.
Applicable premium taxes will also be deducted.
Annuity payments may be fixed or variable.
FIXED ANNUITY PAYMENTS. Fixed annuity payments are determined from our
annuity rate tables in effect at the time the first annuity payment is
made. The minimum amount of the fixed payments is determined from
tables in our contract with the Trustees, which show the amount of
proceeds necessary to purchase each $1 of monthly annuity payments
(after deduction of any applicable taxes and the annuity
administrative charge). These tables are designed to determine the
amounts required to pay for the annuity selected, taking into account
our administrative and investment expenses and mortality and expense
risks. The size of your payment will depend upon the form of annuity
chosen, your age and the
2
<PAGE>
age of your beneficiary if you select a joint and survivor annuity.
If our current group annuity rates for payment of proceeds would
produce a larger payment, those rates will apply instead of the
minimums in the contract tables. If we give any group pension client
with a qualified plan a better annuity rate than those currently
available for the Program, we will also make those rates available to
Program participants. The annuity administrative charge may be
greater than $350 in that case. Under our contract with the Trustees,
we may change the tables but not more frequently than once every five
years. Fixed annuity payments will not fluctuate during the payment
period.
VARIABLE ANNUITY PAYMENTS. Variable annuity payments are funded
through our Separate Account No. 4 (Pooled) (the "Fund"), through the
purchase of Annuity Units. The number of Annuity Units purchased is
equal to the amount of the first annuity payment divided by the
Annuity Unit Value for the due date of the first annuity payment. The
amount of the first annuity payment is determined in the same manner
for a variable annuity as it is for a fixed annuity. The number of
Annuity Units stays the same throughout the payment period for the
variable annuity but the Annuity Unit Value changes to reflect the
investment income and the realized and unrealized capital gains and
losses of the Fund, after adjustment for an assumed base rate of
return of 5-3/4%, described below.
The amounts of variable annuity payments are determined as follows:
Payments normally start as of the first day of the second calendar month
following our receipt of the proper forms. The first two monthly payments are
the same.
Payments after the first two will vary according to the investment
performance of the Fund. Each monthly payment will be calculated by multiplying
the number of Annuity Units credited to you by the Annuity Unit Value for the
first business day of the calendar month before the due date of the payment.
The Annuity Unit Value was set at $1.1553 as of July 1, 1969, the
first day that Separate Account No. 4 (Pooled) was operational. For any month
after that date, it is the Annuity Unit Value for the preceding month
multiplied by the change factor for the current month. The change factor gives
effect to the assumed annual base rate of return of 4-3/4% and to the actual
investment experience of the Fund.
Because of the adjustment for the assumed base rate of return, the
Annuity Unit Value rises and falls depending on whether the actual rate of
investment return is higher or lower than 5-3/4%.
Illustration of Changes in Annuity Payments. To show how we determine
variable annuity payments from month to month, assume that the amount you
applied to purchase an annuity is enough to fund an annuity with a monthly
payment of $363 and that the Annuity Unit Value for the due date of the first
annuity payment is $1.05. The number of annuity units credited under your
certificate would be 345.71 (363 divided by 1.05 = 345.71). If the
3
<PAGE>
third monthly payment is due on March 1, and the Annuity Unit Value for
February was $1.10, the annuity payment for March would be the number of units
(345.71) times the Annuity Unit Value ($1.10), or $380.28. If the Annuity Unit
Value was $1.00 on March 1, the annuity payment for April would be 345.71 times
$1.00 or $345.71.
Summary of Annuity Unit Values for the Fund
This table shows the Annuity Unit Values with an assumed based rate of
return of 5 3/4%.
First Business Day of Annuity Unit Value
--------------------- ------------------
October 1987 $4.3934
October 1988 $3.5444
October 1989 $4.8357
October 1990 $3.8569
October 1991 $5.4677
October 1992 $5.1818
October 1993 $6.3886
October 1994 $6.1563
October 1995 $7.4970
October 1996 $8.0828
October 1997 $11.0300
October 1998 $7.5963
THE FUND
The Fund (Separate Account No. 4 (Pooled)) was established pursuant to
the Insurance law of the State of New York in 1969. It is an investment account
used to fund benefits under group annuity contracts and other agreements for
tax-deferred retirement programs administered by us.
For a full description of the Fund, its investment policies, the risks
of an investment in the Fund and information relating to the valuation of Fund
assets, see the description of the Fund in our May 1, 1999 prospectus and the
Statement of Additional Information.
INVESTMENT MANAGER
The Manager
We, Equitable Life, act as Investment Manager to the Fund. As such, we
have complete discretion over Fund assets and we invest and reinvest these
assets in accordance with the investment policies described in our May 1, 1999
prospectus and Statement of Additional Information.
4
<PAGE>
We are a New York stock life insurance company with our Home Office at
1290 Avenue of the Americas, New York, New York 10104. Founded in 1859, we are
one of the largest insurance companies in the United States. Equitable Life,
our sole stockholder Equitable Companies, Inc., and their subsidiaries managed
assets of approximately $347.5 billion as of December 31, 1998, including third
party assets of $262.5 billion.
Investment Management
In providing investment management to the Fund, we currently use the
personnel and facilities of our majority owned subsidiary, Alliance Capital
Management L.P. ("Alliance"), for portfolio selection and transaction services.
For a description of Alliance, see our May 1, 1999 Members Retirement Program
prospectus.
Fund Transactions
The Fund is charged for securities brokers commissions, transfer taxes
and other fees relating to securities transactions. Transactions in equity
securities for the Fund are executed primarily through brokers which are
selected by Alliance/Equitable Life and receive commissions paid by the Fund.
For 1998, 1997 and 1996, the Fund paid $4,288,187, $3,698,148 and $5,682,578,
respectively, in brokerage commissions. For a full description of our policies
relating to the selection of brokers, see the description of the fund in our
May 1, 1999 Statement of Additional Information.
5
<PAGE>
FINANCIAL STATEMENTS
The financial statements of the Fund reflect applicable fees,
charges and other expenses under the Members Retirement Programs as in effect
during the periods covered, as well as the charges against the account made in
accordance with the terms of all other contracts participating in the account.
Separate Account No. 4 (Pooled): Page
Report of Independent Accountants - PricewaterhouseCoopers LLP 7
Statement of Assets and Liabilities,
December 31, 1998 8
Statement of Operations and Changes in Net Assets
for the Years Ended December 31, 1998 and 1997 9
Portfolio of Investments
December 31, 1998 10
Notes to Financial Statements 15
6
<PAGE>
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
The Equitable Life Assurance Society of the United States
and the Contractowners of Separate Account No. 4
of The Equitable Life Assurance Society of the United States
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and
changes in net assets present fairly, in all material respects, the financial
position of Separate Account No. 4 (Pooled) (The Growth Equity Fund) of The
Equitable Life Assurance Society of the United States ("Equitable Life") at
December 31, 1998, its results of operations and changes in net assets for each
of the two years in the period then ended in conformity with generally accepted
accounting principles. These financial statements are the responsibility of
Equitable Life's management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at December 31, 1998 by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion expressed
above.
PricewaterhouseCoopers LLP
New York, New York
February 8, 1999
7
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO.4 (POOLED)
(THE ALLIANCE GROWTH EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statement of Assets and Liabilities
December 31, 1998
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments (Notes 2 and 3):
Common stocks -- at market value (cost: $1,914,414,699) ................................. $2,098,464,735
Preferred stocks -- at market value (cost: $841,125) .................................... 934,875
Participation in Separate Account No.2A -- at amortized cost, which approximates market
value, equivalent to 8,358
units at $285.54 ....................................................................... 2,386,642
Receivables:
Securities sold ......................................................................... 22,404,246
Dividends ............................................................................... 1,027,478
- -------------------------------------------------------------------------------------------------------------
Total assets ........................................................................... 2,125,217,976
- -------------------------------------------------------------------------------------------------------------
LIABILITIES:
Payables:
Securities purchased .................................................................... 3,784,147
Due to Equitable Life's General Account ................................................. 7,913,160
Custodian fee payable ................................................................... 27,461
Investment management fees payable ...................................................... 5,210
Accrued expenses ......................................................................... 440,812
Amount retained by Equitable Life in Separate Account No. 4 (Note 1) ..................... 1,271,958
- -------------------------------------------------------------------------------------------------------------
Total liabilities ...................................................................... 13,442,748
- -------------------------------------------------------------------------------------------------------------
NET ASSETS (NOTE 1):
Net assets attributable to participants' accumulations ................................... 2,072,991,897
Reserves and other liabilities attributable to annuity benefits .......................... 38,783,331
- -------------------------------------------------------------------------------------------------------------
NET ASSETS ............................................................................... $2,111,775,228
=============================================================================================================
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statements of Operations and Changes in Net Assets
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
1998 1997
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FROM OPERATIONS:
INVESTMENT INCOME (NOTE 2):
Dividends (net of foreign taxes withheld -- 1998: $199,170 and 1997: $2,138) ............. $ 12,224,979 $ 13,385,197
Interest ................................................................................. 477,732 845,517
- --------------------------------------------------------------------------------------------------------------------------------
Total .................................................................................... 12,702,711 14,230,714
EXPENSES (NOTE 4) ........................................................................ (18,036,108) (19,783,932)
- --------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT LOSS ...................................................................... (5,333,397) (5,553,218)
- --------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 2):
Realized gain from security and foreign currency transactions ............................ 424,897,105 372,430,956
- --------------------------------------------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of investments and foreign currency transactions:
Beginning of year ....................................................................... 690,125,231 448,580,808
End of year ............................................................................. 184,143,786 690,125,231
- --------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation/depreciation ........................................... (505,981,445) 241,544,423
- --------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ................................... (81,084,340) 613,975,379
- --------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets attributable to operations ............................. (86,417,737) 608,422,161
- --------------------------------------------------------------------------------------------------------------------------------
FROM CONTRIBUTIONS AND WITHDRAWALS:
Contributions ............................................................................ 451,738,195 546,890,479
Withdrawals .............................................................................. (897,373,357) (969,496,108)
- --------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets attributable to contributions and withdrawals ..................... (445,635,162) (422,605,629)
- --------------------------------------------------------------------------------------------------------------------------------
(Increase) in accumulated amount retained by Equitable Life in Separate Account No. 4
(Note 1) ................................................................................ (153,300) (360,863)
- --------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS ........................................................ (532,206,199) 185,455,669
NET ASSETS -- BEGINNING OF YEAR .......................................................... 2,643,981,427 2,458,525,758
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSETS -- END OF YEAR ................................................................ $2,111,775,228 $2,643,981,427
==============================================================================================================================
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
NUMBER OF MARKET
SHARES VALUE
- -------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS:
BASIC MATERIALS
CHEMICALS -- SPECIALTY (0.1%)
Crompton & Knowles Corp. ............................ 97,800 $ 2,023,238
------------
TOTAL BASIC MATERIALS (0.1%) ........................ 2,023,238
------------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (3.2%)
United States Filter Corp. * ........................ 3,000,000 68,625,000
------------
PRINTING, PUBLISHING & BROADCASTING (1.6%)
CBS Corp. ........................................... 1,000,000 32,750,000
------------
PROFESSIONAL SERVICES (0.1%)
Nielsen Media Research, Inc. ........................ 163,100 2,935,800
------------
TRUCKING, SHIPPING (0.2%)
Knightsbridge Tankers Ltd. .......................... 150,000 3,121,875
Marine Transport Corp. * ............................ 50,000 112,500
OMI Corp. * ......................................... 500,000 1,625,000
------------
4,859,375
------------
TOTAL BUSINESS SERVICES (5.1%) ...................... 109,170,175
------------
CAPITAL GOODS
AEROSPACE (0.2%)
Loral Space & Communications Ltd. * ................. 250,000 4,453,125
------------
TOTAL CAPITAL GOODS (0.2%) .......................... 4,453,125
------------
CONSUMER CYCLICALS
AIRLINES (8.6%)
Alaska Air Group, Inc. * ............................ 200,000 8,850,000
America West Holdings Corp. (Class B) * ............. 350,000 5,950,000
Continental Airlines, Inc. (Class B) * .............. 3,399,997 113,899,900
Northwest Airlines Corp. (Class A) * ................ 2,100,000 53,681,250
------------
182,381,150
------------
APPAREL, TEXTILE (2.2%)
Nautica Enterprises, Inc. * ......................... 114,200 1,713,000
Tommy Hilfiger Corp. * .............................. 650,000 39,000,000
Unifi, Inc. ......................................... 200,000 3,912,500
Wolverine World Wide, Inc. .......................... 154,600 2,048,450
------------
46,673,950
------------
AUTO RELATED (7.7%)
Budget Group, Inc. * ................................ 250,000 3,968,750
Circuit City Stores, Inc. -- CarMax Group * ......... 490,200 2,665,462
Dana Corp. .......................................... 300,000 12,262,500
</TABLE>
10
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments -- (Continued)
December 31, 1998
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
NUMBER OF MARKET
SHARES VALUE
- -------------------------------------------------------------------------------------
<S> <C> <C>
Dollar Thrifty Automotive Group, Inc. * ......... 841,700 $ 10,836,887
Republic Industries, Inc. * ..................... 9,000,000 132,750,000
------------
162,483,599
------------
FOOD SERVICES, LODGING (0.9%)
Extended Stay America, Inc. * ................... 1,660,000 17,430,000
Suburban Lodges of America, Inc. * .............. 35,000 286,563
------------
17,716,563
------------
HOUSEHOLD FURNITURE, APPLIANCES (1.6%)
Industrie Natuzzi Spa (ADR) ..................... 1,011,000 25,148,625
Newell Co. ...................................... 200,000 8,250,000
------------
33,398,625
------------
LEISURE RELATED (9.0%)
Carnival Corp. .................................. 2,000,000 96,000,000
Cendant Corporation * ........................... 506,000 9,645,625
Mirage Resorts, Inc. * .......................... 707,600 10,569,771
Royal Caribbean Cruises Ltd. .................... 2,000,000 74,000,000
------------
190,215,396
------------
RETAIL -- GENERAL (1.0%)
Circuit City Stores-Circuit City Group .......... 76,500 3,820,219
Dickson Concepts International, Inc. ............ 357,000 276,473
Genesis Direct, Inc. * .......................... 215,000 1,679,688
Limited, Inc. ................................... 100,000 2,912,500
Tandy Corp. ..................................... 50,000 2,059,375
Tiffany & Co. ................................... 200,000 10,375,000
------------
21,123,255
------------
TOTAL CONSUMER CYCLICALS (31.0%) ................ 653,992,538
------------
CONSUMER NONCYCLICALS
DRUGS (2.5%)
Geltex Pharmaceuticals, Inc. * .................. 700,000 15,837,500
MedImmune, Inc. * ............................... 361,600 35,956,600
------------
51,794,100
------------
FOODS (0.3%)
Tysons Foods, Inc. .............................. 350,000 7,437,500
------------
HOSPITAL SUPPLIES & SERVICES (1.3%)
HEALTHSOUTH Corp. * ............................. 1,800,000 27,787,500
------------
TOTAL CONSUMER NONCYCLICALS (4.1%) .............. 87,019,100
------------
</TABLE>
11
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments -- (Continued)
December 31, 1998
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
NUMBER OF MARKET
SHARES VALUE
- -------------------------------------------------------------------------------------
<S> <C> <C>
CREDIT-SENSITIVE
BANKS (0.8%)
Citigroup, Inc. ......................................... 300,000 $ 14,850,000
Washington Mutual, Inc. ................................. 84,000 3,207,750
------------
18,057,750
------------
FINANCIAL SERVICES (13.8%)
Edwards (A.G.), Inc. .................................... 760,000 28,310,000
Legg Mason, Inc. ........................................ 2,500,000 78,906,250
MBNA Corp. .............................................. 6,900,000 172,068,750
Newcourt Credit Group, Inc. ............................. 100,000 3,493,750
PMI Group, Inc. ......................................... 200,000 9,875,000
------------
292,653,750
------------
INSURANCE (8.9%)
Ace Ltd. ................................................ 100,000 3,443,750
CNA Financial Corp. * ................................... 3,530,100 142,086,525
IPC Holdings Ltd. ....................................... 207,400 4,809,088
NAC Re Corp. ............................................ 600,000 28,162,500
Travelers Property Casualty (Class A) ................... 300,000 9,300,000
------------
187,801,863
------------
REAL ESTATE (0.1%)
Excel Legacy Corp. * .................................... 140,000 560,000
Prime Retail, Inc. ...................................... 60,000 588,750
------------
1,148,750
------------
UTILITY -- ELECTRIC (0.1%)
AES Corp. * ............................................. 30,000 1,421,250
------------
UTILITY -- TELEPHONE (7.0%)
Embratel Participacoes (ADR) * .......................... 220,000 3,066,250
Tele Celular Sul Participacoes (ADR) * .................. 22,000 383,625
Tele Centro Oeste Celular Participacoes (ADR) * ......... 73,333 215,416
Tele Centro Sul Participacoes (ADR) * ................... 44,000 1,839,750
Tele Leste Celular Participacoes (ADR) * ................ 4,400 124,850
Telemig Celular Participacoes (ADR) * ................... 11,000 233,750
Tele Nordeste Celular Participacoes (ADR) * ............. 11,000 203,500
Tele Norte Celular Participacoes (ADR) * ................ 4,400 99,275
Tele Norte Leste Participacoes (ADR) * .................. 220,000 2,736,250
Telephone & Data Systems, Inc. .......................... 2,930,000 131,666,875
Telesp Celular Participacoes (ADR) * .................... 88,000 1,540,000
Telesp Participacoes S.A. (ADR) * ....................... 220,000 4,867,500
Tele Sudeste Celular Participacoes (ADR) * .............. 44,000 910,250
------------
147,887,291
------------
TOTAL CREDIT-SENSITIVE (30.7%) .......................... $648,970,654
------------
</TABLE>
12
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments -- (Continued)
December 31, 1998
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
NUMBER OF MARKET
SHARES VALUE
- -----------------------------------------------------------------------------------------
<S> <C> <C>
ENERGY
OIL -- DOMESTIC (0.4%)
Kerr McGee Corp. .......................................... 220,000 $ 8,415,000
------------
OIL -- INTERNATIONAL (0.1%)
IRI International Corporation * ........................... 305,000 1,220,000
------------
OIL -- SUPPLIES & CONSTRUCTION (4.9%)
BJ Services Co. * ......................................... 440,000 6,875,000
Halliburton Co. ........................................... 1,000,000 29,625,000
Lukoil Holdings -- Spons (ADR) ............................ 15,000 232,520
Lukoil Holdings -- Spons (ADR) (Preferred Shares) ......... 40,000 134,684
Noble Drilling Corp. * .................................... 2,200,000 28,462,500
Oceaneering International, Inc. * ......................... 300,000 4,500,000
Parker Drilling Corp. * ................................... 3,756,100 11,972,569
Rowan Cos., Inc. * ........................................ 1,684,800 16,848,000
Stolt Comex Seaway S.A. * ................................. 14,000 94,500
Stolt Comex Seaway S.A. (ADR) (Class A) * ................. 880,000 4,950,000
------------
103,694,773
------------
TOTAL ENERGY (5.4%) ....................................... 113,329,773
------------
TECHNOLOGY
ELECTRONICS (8.8%)
Altera Corp. * ............................................ 460,000 28,002,500
Cisco Systems, Inc. * ..................................... 400,000 37,125,000
DBT Online, Inc. * ........................................ 160,000 3,990,000
Micron Technology, Inc. * ................................. 300,000 15,168,750
Motorola, Inc. ............................................ 50,000 3,053,125
Network Associates, Inc. * ................................ 550,000 36,437,500
Sanmina Corp. * ........................................... 305,600 19,100,000
Sterling Commerce, Inc. * ................................. 250,000 11,250,000
Xilinx, Inc. * ............................................ 479,300 31,214,413
------------
185,341,288
------------
OFFICE EQUIPMENT SERVICES (3.4%)
First Data Corp. .......................................... 600,000 19,012,500
HBO & Co. ................................................. 1,752,500 50,274,844
Novell, Inc. * ............................................ 100,000 1,812,500
------------
71,099,844
------------
TELECOMMUNICATIONS (10.6%)
American Satellite Network -- Rights * .................... 70,000 0
Esprit Telecom Group PLC (ADR) * .......................... 50,000 2,337,500
Global TeleSystems Group, Inc. * .......................... 1,290,000 71,917,500
</TABLE>
13
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments -- (Concluded)
December 31, 1998
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
NUMBER OF MARKET
SHARES VALUE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Millicom International Cellular S.A. * .................................. 1,550,000 $ 54,056,250
NTL Incorporated * ...................................................... 100,000 5,643,750
United States Cellular Corp. * .......................................... 2,345,000 89,110,000
--------------
223,065,000
--------------
TOTAL TECHNOLOGY (22.8%) ................................................ 479,506,132
--------------
TOTAL COMMON STOCKS (99.4%)
(Cost $1,914,414,699)................................................... 2,098,464,735
--------------
PREFERRED STOCKS:
CONSUMER CYCLICALS
AIRLINES (0.0%)
Continental Airlines Financial Trust
8.5% Conv. ............................................................. 13,500 934,875
--------------
TOTAL CONSUMER CYCLICALS (0.0%) ......................................... 934,875
--------------
TOTAL PREFERRED STOCKS (0.0%)
(Cost $841,125)......................................................... 934,875
--------------
PARTICIPATION IN SEPARATE ACCOUNT NO. 2A,
at amortized cost, which approximates
market value, equivalent to 8,358 units
at $285.54 each (0.1%).................................................. 2,386,642
--------------
TOTAL INVESTMENTS (99.5%)
(Cost $1,917,642,466)................................................... 2,101,786,252
OTHER ASSETS LESS LIABILITIES (0.5%) .................................... 11,260,934
AMOUNTS RETAINED BY EQUITABLE LIFE IN
SEPARATE ACCOUNT NO. 4 (0.0%) (NOTE 1) ................................. (1,271,958)
--------------
NET ASSETS (100.0%) ..................................................... $2,111,775,228
==============
Reserves attributable to participants' accumulations .................... 2,072,991,897
Reserves and other contract liabilities attributable to annuity benefits 38,783,331
--------------
NET ASSETS .............................................................. $2,111,775,228
==============
</TABLE>
- ----------
* Non-income producing.
See Notes to Financial Statements.
14
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
of The Equitable Life Assurance Society of the United States
Notes to Financial Statements
1. Separate Account No. 4 (Pooled) (the Alliance Growth Equity Fund) (the Fund)
of The Equitable Life Assurance Society of the United States (Equitable
Life), a wholly-owned subsidiary of The Equitable Life Companies
Incorporated, was established in conformity with the New York State
Insurance Law. Pursuant to such law, to the extent provided in the
applicable contracts, the net assets in the Fund are not chargeable with
liabilities arising out of any other business of Equitable Life. The
excess of assets over reserves and other contract liabilities amounting to
$1,271,958 as shown in the Statement of Assets and Liabilities in Separate
Account No. 4 may be transferred to Equitable Life's General Account.
These financial statements reflect the total net assets and results of
operations for Separate Account No. 4. The Members Retirement Programs
constitute, among many others, contract owners participating in this Fund.
Interests of retirement and investment plans for Equitable Life employees,
managers, and agents in Separate Account No. 4 aggregated $323,953,589
(15.3%), at December 31, 1998 and $384,471,790 (14.5%), at December 31,
1997, of the net assets in the Fund.
Equitable Life is the investment manager for the Fund. Alliance Capital
Management L.P. (Alliance) serves as the investment adviser to Equitable
Life with respect to the management of the Fund. Alliance is a
publicly-traded limited partnership which is indirectly majority-owned by
Equitable Life.
Equitable Life and Alliance seek to obtain the best price and execution of
all orders placed for the Fund considering all circumstances. In addition
to using brokers and dealers to execute portfolio security transactions for
accounts under their management, Equitable Life and Alliance may also enter
into other types of business and securities transactions with brokers and
dealers, which will be unrelated to allocation of the Fund's portfolio
transactions.
The accompanying financial statements are prepared in conformity with
generally accepted accounting principles (GAAP). The preparation of
financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
2. Security transactions are recorded on the trade date. Amortized cost of debt
securities consists of cost adjusted, where applicable, for amortization
of premium or accretion of discount. Dividend income is recorded on the
ex-dividend date; interest income (including amortization of premium and
discount on securities using the effective yield method) is accrued daily.
Realized gains and losses on the sale of investments are computed on the
basis of the identified cost of the related investments sold.
Transactions denominated in foreign currencies are recorded at the rate
prevailing at the date of such transactions. Asset and liability accounts
that are denominated in a foreign currency are adjusted to reflect the
current exchange rate at the end of the period. Transaction gains or losses
resulting from changes in the exchange rate during the reporting period or
upon settlement of the foreign currency transactions are reflected under
"Realized and Unrealized Gain (Loss) on Investments" in the Statements of
Operations and Changes in Net Assets.
Equitable Life's internal short-term investment account, Separate Account
No. 2A, was established to provide a more flexible and efficient vehicle to
combine and invest temporary cash positions of certain eligible accounts
15
<PAGE>
- --------------------------------------------------------------------------------
(Participating Funds) under Equitable Life's management. Separate Account
No. 2A invests in debt securities maturing in sixty days or less from the
date of acquisition. At December 31, 1998, the amortized cost of
investments held in Separate Account No. 2A consist of the following:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
AMORTIZED COST %
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Commercial Paper, 5.10% - 5.35% due 01/04/99 through 02/18/99 $ 230,335,099 97.7%
U.S. Government Agency, 4.28% due 01/04/99 ................... 5,198,145 2.2
- ---------------------------------------------------------------------------------------------
Total Investments ............................................ 235,533,244 99.9
Other Assets less Liabilities ................................ 215,649 0.1
- ---------------------------------------------------------------------------------------------
Net Assets of Separate Account No. 2A ........................ $ 235,748,893 100.0%
=============================================================================================
Units Outstanding ............................................ 825,639
Unit Value ................................................... $ 285.54
- ---------------------------------------------------------------------------------------------
</TABLE>
Participating Funds purchase or redeem units depending on each participating
account's excess cash availability or cash needs to meet its liabilities.
Separate Account No. 2A is not subject to investment management fees. Separate
Account No. 2A is valued daily at amortized cost, which approximates market
value.
For 1998 and 1997, investment security transactions, excluding short-term debt
securities, were as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
COST OF NET PROCEEDS
PURCHASES OF SALES
- --------------------------------------------------------------------------------------
Stocks and long-term corporate debt securities:
<S> <C> <C>
1998 ........................................ $1,692,067,102 $2,151,023,546
1997 ........................................ 1,569,991,103 1,988,739,298
U.S. Government obligations:
1998 ........................................ -- --
1997 ........................................ -- --
- ------------------------------------------------- -------------- --------------
</TABLE>
3. Investment securities are valued as follows:
Stocks listed on national securities exchanges and certain over-the-counter
issues traded on the National Association of Securities Dealers, Inc.
Automated Quotation (NASDAQ) national market system are valued at the last
sale price, or, if no sale, at the latest available bid price.
Foreign securities not traded directly, or in American Depository Receipt
(ADR) form in the United States, are valued at the last sale price in the
local currency on an exchange in the country of origin. Foreign currency is
converted into its U.S. dollar equivalent at current exchange rates.
United States Treasury securities and other obligations issued or
guaranteed by the United States Government, its agencies or
instrumentalities are valued at representative quoted prices.
Long-term publicly traded corporate bonds are valued at prices obtained
from a bond pricing service of a major dealer in bonds when such prices are
available; however, in circumstances where Equitable Life and Alliance deem
it appropriate to do so, an over-the-counter or exchange quotation may be
used.
Convertible preferred stocks listed on national securities exchanges are
valued at their last sale price or, if there is no sale, at the latest
available bid price.
Convertible bonds and unlisted convertible preferred stock are valued at
bid prices obtained from one or more
16
<PAGE>
- --------------------------------------------------------------------------------
major dealers in such securities; where there is a discrepancy between
dealers, values may be adjusted based on recent premium spreads to the
underlying common stock.
Other assets that do not have a readily available market price are valued
at fair value as determined in good faith by Equitable Life's Investment
officers.
Separate Account No. 2A is valued daily at amortized cost, which
approximates market value. Short-term debt securities purchased directly by
the Funds which mature in 60 days or less are valued at amortized cost.
Short-term debt securities which mature in more than 60 days are valued at
representative quoted prices.
4. Charges and fees are deducted in accordance with the terms of the various
contracts which participate in the Fund. With respect to the Members
Retirement Programs, these expenses consist of investment management and
accounting fees, program expense charge, direct expenses and record
maintenance and report fees. These charges and fees are paid to Equitable
Life by the Fund and are recorded as expenses in the accompanying Statements
of Operations and Changes in Net Assets.
5. No Federal income tax based on net income or realized and unrealized capital
gains was applicable to contracts participating in the Fund for the two
years ended December 31, 1998, by reason of applicable provisions of the
Internal Revenue Code and no Federal income tax payable by Equitable Life
for such years will affect such contracts. Accordingly, no Federal income
tax provision is required.
17
<PAGE>
Part C
OTHER INFORMATION
Item 28. Financial Statements and Exhibits
(a) Financial Statements included in Part B.
The following are included in the Statement of Additional Information:
1. Separate Account Nos. 3 (Pooled), 4 (Pooled),
10 (Pooled), 51 (Pooled), and 66 (Pooled) (The Alliance
Aggressive Equity, Alliance Growth Equity, Alliance
Balanced and Alliance Global, Alliance Conservative
Investors and Alliance Growth Investors, and the MFS
Research, Warburg Pincus Small Company Value, T. Rowe
Price Equity Income and Merrill Lynch World Strategy
Accounts):
- Report of Independent Accountants -
PriceWaterhouseCoopers, LLP
2. Separate Account No. 3 (Pooled):
- Statement of Assets and Liabilities, December 31,
1998
- Statements of Operations and Changes in Net Assets for
the Years Ended December 31, 1998, and 1997
- Portfolio of Investments, December 31, 1998
3. Separate Account No. 4 (Pooled):
- Statement of Assets and Liabilities, December 31, 1998
- Statements of Operations and Changes in Net Assets for
the Years Ended December 31, 1998 and 1997
- Portfolio of Investments, December 3l, 1998
4 Separate Account No. 10 (Pooled):
- Statement of Assets and Liabilities, December 31,
1998
- Statements of Operations and Changes in Net Assets for
the Years Ended December 31, 1998, and 1997
- Portfolio of Investments, December 31, 1998
5. Separate Account No. 51 (Pooled):
- Statements of Assets and Liabilities, December 31,
l998
- Statements of Operations and Changes in Net Assets
for the Years Ended December 31, 1998 and 1997.
6. Separate Account No. 66 (Pooled):
- Statements of Assets and Liabilities, December 31,
l998
- Statements of Operations and Changes in Net Assets
from August 1, 1998 through December 31, 1998.
7. Separate Account Nos. 3 (Pooled), 4 (Pooled), 10 (Pooled),
51 (Pooled) and 66 (Pooled):
- Notes to Financial Statements
8. The Equitable Life Assurance Society of the United States:
- Report of Independent Accountants - Price Waterhouse
LLP
- Consolidated Balance Sheets, December 31, 1998 and
1997
- Consolidated Statements of Earnings for the Years
Ended December 31, 1998, 1997 and 1996
- Consolidated Statements of Equity for the Years
Ended December 31, 1998 and 1997 and 1996
- Consolidated Statements of Cash Flows for the
Years Ended December 31, 1998, 1997 and 1996
- Notes to Consolidated Financial Statements
b) Exhibits.
The following Exhibits are filed herewith:
1. Resolutions of the Board of Directors of The Equitable
Life Assurance Society of the United States
("Equitable") authorizing the establishment of the
Registrant, incorporated by reference to Post-Effective
Amendment No. 1 on Form N-3 to Registration Statement
33-46995, filed July 22, 1992.
C-1
<PAGE>
2. Not Applicable.
3. Not Applicable.
4. (a) Distribution Agreement dated as of January 1, 1995
by and between The Hudson River Trust and Equico
Securities, Inc., incorporated by reference to
Registration Statement No. 33-91588 on Form N-3
of Registrant, filed on April 26, 1995.
(b) Sales Agreement dated as of January 1, 1995 by and
among Equico Securities, Inc., Equitable, and
Separate Account A, Separate Account No. 301 and
Separate Account No. 51, incorporated by
reference to Registration Statement No. 33-91588
on Form N-3 of Registrant, filed on April 26,
1995.
5. Form of Sales Agreement between Equitable Variable Life
Insurance Company and The Equitable Life Assurance
Society of the United States for itself and on behalf of
its Separate Account No. 51, incorporated by reference to
Post-Effective Amendment No. 2 to Registration No.
33-46995 on Form N-3 of Registrant, filed March 2, 1993.
6. (a) Exhibit 6(e) (Copy of Group Annuity Contract
AC 6059, effective August 30, 1984, among the
United States Trust Company of New York and The
Equitable Life Assurance Society of the United
States), incorporated by reference to
Registration No. 33-21417 on Form N-3 of
Registrant, filed April 26, 1988.
(b) Exhibit 6(f) (Form of Rider No. 1 to Group Annuity
Contract AC 6059 between the United States Trust
Company of New York and The Equitable Life
Assurance Society of the United States),
incorporated by reference to Registration No.
33-34554 on Form N-3 of Registrant, filed April
26, 1990.
(c) Exhibit 6(g) (Form of Rider No. 2 to Group Annuity
Contract AC 6059 between the United States Trust
Company of New York and The Equitable Life
Assurance Society of the United States),
incorporated by reference to Registration No.
33-34554 on Form N-3 of Registrant, filed April
26, 1990.
(d) Form of Rider No. 3 to Group Annuity Contract AC
6059 between the United States Trust Company of
New York and The Equitable Life Assurance Society
of the United States, incorporated by reference to
Registration No. 33-46995 on Form N-3 of
Registrant, filed April 8, 1992.
(e) Form of Rider No. 4 to Group Annuity Contract AC
6059 between the United States Trust Company of
New York and The Equitable Life Assurance Society
of the United States, incorporated by reference to
Post-Effective Amendment No. 2 to Registration No.
33-46995 on Form N-3 of Registrant, filed March 2,
1993.
(f) Form of Rider No. 5 to Group Annuity Contract AC
6059 between The Chase Manhattan Bank, N.A. and
The Equitable Life Assurance Society of the United
States, incorporated by reference to Post-
Effective Amendment No. 2 to Registration
Statement No. 33-91588 on Form N-3 of Registrant,
filed April 29, 1997.
(g) Exhibit 7(k) (Form of Participation Agreement for
the standardized profit-sharing Plan under the
Association Members Program), incorporated by
reference to Post-Effective Amendment No. 1 on
Form N-3 to Registration Statement on Form S-1 of
Registrant, filed April 16, 1986.
C-2
<PAGE>
(h) Exhibit 7(l) (Form of Participation Agreement for
the non-standardized Profit-Sharing Plan under
the Association Members Program), incorporated by
reference to Post-Effective Amendment No. 1 on
Form N-3 to Registration Statement on Form S-1 of
Registrant, filed April 16, 1986.
(i) Exhibit 7(m) (Form of Participation Agreement for
the standardized Defined Contribution Pension
Plan under the Association Members Program),
incorporated by reference to Post-Effective
Amendment No. 1 on Form N-3 to Registration
Statement on Form S-1 of Registrant, filed April
16, 1986.
(j) Exhibit 7(n) (Form of Participation Agreement for
the non-standardized Defined Contribution Pension
Plan under the Association Members Program),
incorporated by reference to Post-Effective
Amendment No. 1 on Form N-3 to Registration
Statement on Form S-1 of Registrant, filed April
16, 1986.
(k) Exhibit 7(r) (Copy of Attachment to Profit
Sharing Participation Agreement under the
Association Members Retirement Plan of the
Equitable Life Assurance Society of the United
States), incorporated by reference to
Registration No. 33-21417 on Form N-3 of
Registrant, filed April 26, 1988.
(l) Exhibit 7(0)(2) (Form of Participant Enrollment
Form under the Association Members Program),
incorporated by reference to Post-Effective
Amendment No. 2 in Form N-3 to Registration
Statement on Form S-1 of Registrant, filed April
21, 1987.
(m) Exhibit 7(t) (Form of Standardized Participation
Agreement under the Association Members Defined
Benefit Pension Plan), incorporated by reference
to Registration No. 33-21417 on Form N-3 of
Registrant, filed April 26, 1988.
(n) Exhibit 7(ee) (Form of Standardized Participation
Agreement for the Defined Contribution Pension
Plan under the Association Members Program, as
filed with the Internal Revenue Service on April
18, 1989), incorporated by reference to
Post-Effective Amendment No. 2 to Registration
No. 33-21417 on Form N-3 of Registrant, filed
April 26, 1989.
(o) Exhibit 7(ff) (Form of Non-Standardized
Participation Agreement for the Defined
Contribution Pension Plan under the Association
Members Program, as filed with the Internal
Revenue Service on April 18, 1989), incorporated
by reference to Post-Effective Amendment No. 2 to
Registration No. 33-21417 on Form N-3 of
Registrant, filed April 26, 1989.
(p) Exhibit 7(gg) (Form of Standardized Participation
Agreement for the Profit-Sharing Plan under the
Association Members Program, as filed with the
Internal Revenue Service on April 18, 1989),
incorporated by reference to Post-Effective
Amendment No. 2 to Registration No. 33-21417 on
Form N-3 of Registrant, filed April 26, 1989.
C-3
<PAGE>
(q) Exhibit 7(hh) (Form of Non-Standardized
Participation Agreement for the Profit-Sharing
Plan under the Association Members Program, as
filed with the Internal Revenue Service on April
18, 1989), incorporated by reference to
Post-Effective Amendment No. 2 to Registration
No. 33-21417 on Form N-3 of Registrant, filed
April 26, 1989.
(r) Exhibit 7 (ii) (Form of Simplified Participation
Agreement for the Defined Contribution Pension
Plan under the Association Members Program, as
filed with the Internal Revenue Service on April
18, 1989), incorporated by reference to
Post-Effective Amendment No. 2 to Registration
No. 33-21417 on Form N-3 of Registrant, filed
April 26, 1989.
(s) Exhibit 7(jj) (Form of Simplified Participation
Agreement for the Profit-Sharing Plan under the
Association Members Program, as filed with the
Internal Revenue Service on April 18, 1989),
incorporated by reference to Post Effective
Amendment No. 2 to Registration No. 33-21417 on
Form N-3 of Registrant, filed April 26, 1989.
(t) Exhibit 7(kk) (Form of Standardized (and
non-integrated) Participation Agreement for the
Defined Benefit Pension Plan under the
Association Members Program, as filed with the
Internal Revenue Service on April 18, 1989),
incorporated by reference to Post-Effective
Amendment No. 2 to Registration No. 33-21417 on
Form N-3 of Registrant, filed April 26, 1989.
(u) Exhibit 7(11) (Form of Standardized (and
integrated) Participation Agreement for the
Defined Benefit Pension Plan under the
Association Members Program, as filed with the
Internal Revenue Service on April 18, 1989),
incorporated by reference to Post-Effective
Amendment No. 2 to Registration No. 33-21417 on
Form N-3 of Registrant, filed April 26, 1989.
(v) Exhibit 7 (mm) (Form of Non-Standardized (and
nonintegrated) Participation Agreement for the
Defined Benefit Pension Plan under the
Association Members Program, as filed with the
Internal Revenue Service on April 18, 1989),
incorporated by reference to PostEffective
Amendment No. 2 to Registration No. 33-21417 on
Form N-3 of Registrant, filed April 26, 1989.
(w) Exhibit 7(nn) (Form of Non-Standardized (and
integrated) Participation Agreement for the
Defined Benefit Pension Plan under the
Association Members Program, as filed with the
Internal Revenue Service on April 18, 1989),
incorporated by reference to Post-Effective
Amendment No. 2 to Registration No. 33-21417 on
Form N-3 of Registrant, filed April 26, 1989.
(x) Form of First Amendment to the Members Retirement
Plan of m e Equitable Life Assurance Society of
the United States Participation Agreement, as
filed with the
C-4
<PAGE>
Internal Revenue Service on December 23, 1991,
incorporated by reference to Registration No.
33-46995 on Form N-3 of Registrant, filed April 8,
1992.
8. (a) Copy of the Restated Charter of The Equitable Life
Assurance Society of the United States, as amended
January 1, 1997, incorporated by reference to
Post-Effective Amendment No. 2 to Registration
Statement No. 33-91588 on Form N-3 of Registrant,
filed April 29, 1997.
(b) By-Laws of The Equitable Life Assurance Society of
the United States, as amended November 21, 1996,
incorporated by reference to Post-Effective
Amendment No. 2 to Registration Statement
No. 33-91588 on Form N-3 of Registrant, filed
April 29, 1997.
9. Not Applicable.
10. Not Applicable.
11. (a) Exhibit 11(e)(2) (Form of Association Members
Retirement Plan, as filed with the Internal
Revenue Service on April 18, 1989), incorporated
by reference to Post-Effective Amendment No. 2 to
Registration No. 33-21417 on Form N-3 of
Registrant, filed April 26, 1989.
(b) Exhibit 11(j)(2) (Form of Association Members
Retirement Trust, as filed with the Internal
Revenue Service on April 18, 1989), incorporated
by reference to Post-Effective Amendment No. 2 to
Registration No. 33-21417 on Form N-3 of
Registrant, filed April 26, 1989.
(c) Exhibit 11(k) (Copy of the Association Members
Pooled Trust for Retirement Plans, as submitted
to the Internal Revenue Service on March 3,
1987), incorporated by reference to
Post-Effective Amendment No. 2 to Registration on
Form S-1 of Registrant, filed April 21, 1987.
(d) Exhibit 11(o) (Form of Association Members Defined
Benefit Pension Plan, as filed with the Internal
Revenue Service on April 18, 1989), incorporated
by reference to Post-Effective Amendment No. 2 to
Registration No. 3321417 on Form N-3 of
Registrant, filed April 26, 1989.
(e) Form of First Amendment to the Pooled Trust for
Association Members Retirement Plans of The
Equitable Life Assurance Society of the United
States, as filed with the Internal Revenue
Service on December 23,
C-5
<PAGE>
1991, incorporated by reference to Registration
No. 33-46995 on Form N-3 of Registrant, filed
April 8, 1992.
(f) Form of First Amendment to the Association
Members Retirement Plan of The Equitable Life
Assurance Society of the United States, as filed
with the Internal Revenue Service on December 23,
1991, incorporated by reference to Registration
No. 33-46995 on Form N-3 of Registrant, filed
April 8, 1992.
(g) Form of First Amendment to the Association
Members Retirement Trust of The Equitable Life
Assurance Society of the United States, as filed
with the Internal Revenue Service on December 23,
1991, incorporated by reference to Registration
No. 33-46995 on Form N-3 of Registrant, filed
April 8, 1992.
12. (a) Opinion and Consent of Melvin S. Altman, Esq.,
Vice President and Associate General Counsel of
The Equitable Life Assurance Society of the United
States, incorporated by reference to Registration
No. 33-46995 on Form N-3 of Registrant, filed
April 8, 1992.
(b) Opinion and Consent of Anthony A. Dreyspool, Vice
President and Senior Counsel of The Equitable Life
Assurance Society of the United States,
incorporated by reference to Post-Effective
Amendment No. 3 to Registration No. 33-46995 on
Form N-3 of Registrant, filed April 21, 1993.
(c) Opinion and Consent of Anthony A. Dreyspool, Vice
President and Senior Counsel of The Equitable Life
Assurance Society of the United States
incorporated by reference to Registration No.
33-61978 on Form N-3 of Registrant, filed May 3,
1993.
(d) Opinion and Consent of Anthony A. Dreyspool, Vice
President and Senior Counsel of The Equitable Life
Assurance Society of the United States,
incorporated by reference to Registration No.
33-61978 on Form N-3 of Registrant, filed November
16, 1993.
(e) Opinion and Consent of Anthony A. Dreyspool, Vice
President and Senior Counsel of The Equitable Life
Assurance Society of the United States,
incorporated by reference to Registration No.
33-91588 on Form N-3 of Registrant, filed April
26, 1995.
(f) Opinion and Consent of Mary P. Breen, Vice
President and Associate General Counsel of The
Equitable Life Assurance Society of the United
States, incorporated herein by reference to
Registration No. 333-51033, filed April 24, 1998.
13. (a) Consent of Melvin S. Altman (included within
Exhibit 12(a)), incorporated by reference to
Registration No. 3346995 on Form N-3 of
Registrant, filed April 8, 1992.
(b) Consent of Anthony A. Dreyspool (included within
Exhibit 12(b)), incorporated by reference to
Post-Effective Amendment No. 3 to Registration No.
33-46995 on Form N-3 of Registrant, filed April
21, 1993.
(c) Consent of Anthony A. Dreyspool (included within
Exhibit 12(c)) incorporated by reference to
Registration No. 3361978 on Form N-3 of
Registrant, filed May 3, 1993.
C-6
<PAGE>
(d) Consent of Anthony A. Dreyspool (included within
Exhibit 12(d)), incorporated by reference to
Registration No. 33 61978 on Form N-3 of
Registrant, filed November 16, 1993.
(e) Consent of Anthony A. Dreyspool (included within
Exhibit 12(e)), incorporated by reference to
Registration Statement No. 33-91588 on Form N-3 of
Registrant, filed April 26, 1995.
(f) Consent of Mary P. Breen (included within Exhibit
12(f)).
(g) Consent of PricewaterhouseCoopers, LLP.
(h) Powers of Attorney.
27. Financial Data Schedule.
C-7
<PAGE>
Item 29: Directors and Officers of Equitable.
Set forth below is information regarding the directors and principal
officers of Equitable. Equitable's address is 1290 Avenue of the Americas,
New York, New York 10104. The business address of the persons whose names are
preceded by an asterisk is that of Equitable.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME AND PRINCIPAL POSITIONS AND OFFICES (AND OTHER POSITIONS)
BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS
- ------------------------------------ -------------------------- ----------------------------------------------------
<S> <C> <C>
DIRECTORS
- -----------
Francoise Colloc'h Director Senior Executive Vice President, Human Resources and
AXA Communications, AXA and various positions with
23, Avenue Matignon AXA affiliated companies. Director, The Equitable
75008 Paris, France Companies Incorporated ("EQ").
Henri de Castries Director Senior Executive Vice President, Financial Services
AXA and Life Insurance Activities of AXA and various
23, Avenue Matignon positions with AXA affiliated companies; Director
75008 Paris, France and Chairman, EQ (April 1998 to present), and prior
thereto, Director and Vice Chairman (February 1996 to
April 1998); Director, Equitable Real Estate
Investment Management, Inc. ("Equitable Real Estate")
(until June 1997), Donaldson Lufkin & Jenrette
("DLJ") and Alliance Capital Management Corporation
("Alliance").
C-8
<PAGE>
PRINCIPAL OCCUPATION
NAME AND PRINCIPAL POSITIONS AND OFFICES (AND OTHER POSITIONS)
BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS
- ------------------------------------ -------------------------- ----------------------------------------------------
Joseph L. Dionne Director Chairman and former Chief Executive Officer (until
The McGraw-Hill Companies April 1998) The McGraw-Hill Companies; Director, EQ
1221 Avenue of the Americas (Director, Harris Corporation, and Ryder System, Inc.)
New York, NY 10020
Denis Duverne Director Senior Vice President--International (US-UK-Benelux),
AXA AXA; Director, Alliance and DLJ.
23, Avenue Matignon
75008 Paris, France
Jean-Rene Fourtou Director Chairman and Chief Executive Officer Rhone-Poulenc,
Rhone-Poulenc, S.A. S.A.; Director, EQ; (Director, Societe Generale,
25, Quai Paul Doumer Schneider S.A. and Groupe Pernod-Ricard (July 1997 to
92408 Courvbevoie Cedex, present); Member, Supervisory Board, AXA, European
France Advisory Board of Bankers Trust Company and Consulting
Council of Banque de France.
Norman C. Francis Director President, Xavier University of Louisiana (Chairman,
Xavier University of Louisiana Liberty Bank and Trust, New Orleans, LA; Director,
7325 Palmetto Street First National Bank of Commerce, New Orleans, LA,
New Orleans, LA 70125 Piccadilly Cafeterias, Inc., and Entergy Corporation).
C-9
<PAGE>
PRINCIPAL OCCUPATION
NAME AND PRINCIPAL POSITIONS AND OFFICES (AND OTHER POSITIONS)
BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS
- ------------------------------------ -------------------------- ----------------------------------------------------
Donald J. Greene Director Counselor-at-Law; Partner, LeBoeuf, Lamb, Greene &
LeBoeuf, Lamb, Greene & MacRae MacRae; Director, EQ.
125 West 55th Street
New York, NY 10019-4513
John T. Hartley Director Retired Chairman and Chief Executive Officer, Harris
Harris Corporation Corporation; Director, EQ; (Director, Harris
1025 NASA Boulevard Corporation and The McGraw-Hill Companies).
Melbourne, FL 32919
John H.F. Haskell, Jr. Director Director and Managing Director, Warburg Dillon
Warburg Dillon Read LLC Read LLC; Director, EQ; Chairman Supervisory
535 Madison Avenue Board, Dillon Read (France) Gestion; Director,
New York, NY 10028 Dillon Read Limited; (Director, Pall Corporation
(November 1998 to present) and Kaydon Corporation
(until March 1998)).
Mary R. (Nina) Henderson Director President, Bestfoods Grocery; Vice President,
Bestfoods Grocery BESTFOODS; (Director, Hunt Corporation).
BESTFOODS
International Plaza
700 Sylvan Avenue
Englewood Cliffs, NJ 07632-9976
W. Edwin Jarmain Director President, Jarmain Group, Inc. and an officer or
Jarmain Group, Inc. director of several affiliated companies; Chairman,
121 King Street West FCA International, Ltd. (until May 1998); Director,
Suite 2525 EQ, DLJ, Anglo Canada General Insurance Company, AXA
Toronto, Ontario M5H 3T9, Insurance (Canada), AXA Pacific Insurance Company
Canada and National Mutual Holdings Limited (July 1998 to
present); Alternate Director, The National Mutual Life
Association of Australasia Limited (until 1998),
National Mutual Asia Limited and National Mutual
Insurance Company Limited, Hong Kong)(February 1997
to present).
C-10
<PAGE>
PRINCIPAL OCCUPATION
NAME AND PRINCIPAL POSITIONS AND OFFICES (AND OTHER POSITIONS)
BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS
- ------------------------------------ -------------------------- ----------------------------------------------------
George T. Lowy Director Counselor-at-Law; Partner, Cravath, Swaine & Moore.
Cravath, Swaine & Moore (Director, Eramet).
825 Eighth Avenue
New York, NY 10019
Didier Pineau-Valencienne Director Chairman and Chief Executive Officer, Schneider S.A.
Schneider S.A. and various positions with Schneider affiliated
64/70 Avenue Jean-Baptiste Clement companies; Chairman and Chief Executive Officer,
92646 Boulogne-Billancourt Cedex Square D; Director, EQ; Member, Supervisory Board,
France AXA and Lagardere ERE, Director, CGIP, Sema Group plc,
and Rhone-Poulenc; member of Supervisory Board of
Banque Paribas (until 1998) and Advisory Boards of
Bankers Trust Company, Booz Allen & Hamilton (USA)
and Banque de France).
George J. Sella, Jr. Director Retired Chairman, President and Chief Executive
P.O. Box 397 Officer, American Cyanamid Company; Director, EQ
Newton, NJ 07860 (Director, Bush, Boake, Allen Inc., Coulter
Pharmaceutical (May 1997 to present), and Union Camp
Peter J. Tobin Director Dean, College of Business, St. Johns University
St. John's University (August 1998 to present), Chief Financial Officer,
8,000 Utopia Parkway Chase Manhattan Corp. (1996-1997)
Jamaica, NY 11439 Corporation).
Dave H. Williams Director Chairman and former Chief Executive Officer (until
Alliance Capital Management January 1999), Alliance and various positions with
Corporation Alliance affiliated companies; Director, EQ; Senior Executive
1345 Avenue of the Americas Vice President and Member of Executive Committee of AXH.
New York, NY 10105
C-11
<PAGE>
PRINCIPAL OCCUPATION
NAME AND PRINCIPAL POSITIONS AND OFFICES (AND OTHER POSITIONS)
BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS
- ------------------------------------ -------------------------- ----------------------------------------------------
OFFICERS AND DIRECTORS
- ----------------------
*Michael Hegarty Director and President See Column 2; prior thereto Vice Chairman, Chase
(January 1998 to present) Manhattan Corporation (1996 to 1997); Director
and Chief Operating (February 1998 to present), Vice Chairman (April 1998
Officer (February 1998 to to present) and Chief Operating Officer (February 1998
present) to present), EQ; Senior Executive Vice President, EQ
(January 1998 to April 1998); Executive Vice
President, Chief Operating Officer and Director,
Equitable Investment Corporation ("EIC") (March 1998
to present); ACMC, Inc. (March 1998 to present),
Director, Equitable Capital Management Corporation
("ECMC") (March 1998 to present), Alliance (May 1998 to
present) and DLJ (May 1998 to present).
*Edward D. Miller Director (August 1997 to See Column 2; prior thereto, Director, President and
present), Chairman of the Chief Executive Officer (August 1997); Senior Vice
Board (January 1998 to Chairman, Chase Manhattan Corporation (March 1996 to
present) and Chief April 1997); Director, President and Chief Executive
Executive Officer (August Officer, EQ (August 1997 to present); Senior Executive
1997 to present) Vice President and Member of the Executive Committee,
AXA; Director, Alliance (August 1997 to present), DLJ
(November 1997 to present), ECMC (March 1998 to present),
ACMC, Inc. (March 1998 to present), and AXA Canada
(September 1998 to present); Director, Chairman,
President and Chief Executive Officer, EIC (March
1998 to present); (Director, KeySpan Energy).
*Stanley B. Tulin Director and Vice See Column 2; prior thereto, Senior Executive
Chairman of the Board President (until February 1998) and Chief Financial
(both February 1998 to Officer; Executive Vice President and Chief Financial
present) and Chief Officer (May 1997 to present), EQ; Director, Alliance
Financial Officer (May (July 1997 to present) and DLJ (June 1997 to present);
1996 to present) Director, Executive Vice President and Chief Financial
Officer, EIC (June 1997 to present); Director, Chairman,
President and Chief Executive Officer, ACMC, Inc. (July 1997
to present) and ECMC (July 1997 to present); Vice President,
EQ Advisors Trust ("EQAT") (until 1998).
C-12
<PAGE>
PRINCIPAL OCCUPATION
NAME AND PRINCIPAL POSITIONS AND OFFICES (AND OTHER POSITIONS)
BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS
- ------------------------------------ -------------------------- ----------------------------------------------------
OTHER OFFICERS
*Leon B. Billis Executive Vice President See Column 2; prior thereto, Senior Vice President
(February 1998 to present) (until February 1998) and Chief Information Officer;
and Chief Information Director, J.M.R. Realty Services, Inc.
Officer
C-13
<PAGE>
PRINCIPAL OCCUPATION
NAME AND PRINCIPAL POSITIONS AND OFFICES (AND OTHER POSITIONS)
BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS
- ------------------------------------ -------------------------- ----------------------------------------------------
*Harvey Blitz Senior Vice President See Column 2; Senior Vice President, EQ; Director,
The Equitable of Colorado, Inc. ("Colorado");
Director and Chairman, Frontier Trust Company
("Frontier"); Executive Vice President and Director,
EQ Financial Consultants, Inc. ("EQF"); Director and
Senior Vice President, EquiSource of New York, Inc.
and its subsidiaries ("EquiSource"); Director,
Equitable Realty Assets Corporation ("ERAC")
(December 1996 to March 1998); Vice President
and Chief Financial Officer, EQAT (since March 1997).
*Kevin R. Byrne Senior Vice President and See Column 2; prior thereto Vice President and
Treasurer Treasurer (until July 1997); Senior Vice President
and Treasurer, EQ; Treasurer, EIC (June 1997 to
present), EquiSource and Frontier; President and
Chief Executive Officer (September 1997 to present),
and prior thereto, Vice President and Treasurer,
Equitable Casualty Insurance Company ("ECIC"); Director,
Chairman, President and Chief Executive Officer,
Equitable JV Holdings Corporation (August 1997 to
present); Director (July 1997 to present) and Senior Vice
President and Chief Financial Officer (April 1998 to
present), ACMC and ECMC; Treasurer,; Vice President and
Treasurer, EQAT (March 1997 to present).
C-14
<PAGE>
PRINCIPAL OCCUPATION
NAME AND PRINCIPAL POSITIONS AND OFFICES (AND OTHER POSITIONS)
BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS
- ------------------------------------ -------------------------- ----------------------------------------------------
*Alvin H. Fenichel Senior Vice President and See Column 2; Senior Vice President and Controller,
Controller EQ; Senior Vice President and Chief Financial
Officer, Colorado (March 1997 to present).
C-15
<PAGE>
PRINCIPAL OCCUPATION
NAME AND PRINCIPAL POSITIONS AND OFFICES (AND OTHER POSITIONS)
BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS
- ------------------------------------ -------------------------- ----------------------------------------------------
*Paul J. Flora Senior Vice President and See Column 2; Vice President and Auditor, EQ.
Auditor
*Jerome S. Golden Executive Vice President See Column 2; Executive Vice President, EQ
(November 1997 to present); Chairman and Chief
Executive Officer, Equitable Distributors, Inc.
("EDI") (until December 1997).
*Mark A. Hug Senior Vice President See Column 2; prior thereto, Vice President, Aetna
(until April 1997).
*Robert E. Garber Executive Vice President See Column 2; Executive Vice President and General
and General Counsel Counsel, EQ.
*Donald R. Kaplan Vice President and Chief See Column 2; prior thereto, Vice President and
Compliance Officer and Acting Chief Compliance Officer.
Associate General Counsel
*Michael S. Martin Executive Vice President See Column 2; prior thereto, Senior Vice President
(September 1998 to and Chief Marketing Officer; Chairman and Chief
present) and Chief Executive Officer, EQF; Vice President, EQAT (until
Marketing Officer 1998) and Hudson River Trust ("HRT"); Director,
Equitable Underwriting and Sales Agency (Bahamas),
Ltd. and EquiSource; Director and Executive Vice
President (December 1998 to present), Colorado,
prior thereto, Director and Senior Vice President.
*Douglas Menkes Senior Vice President and See Column 2; prior thereto, Consulting Actuary,
Corporate Actuary Milliman & Robertson, Inc. (until June 1997).
*Peter D. Noris Executive Vice President See Column 2; Executive Vice President and Chief
and Chief Investment Investment Officer, EQ; Executive Vice President, EQF;
Officer Director, Alliance and Equitable Real Estate (July 1995
to June 1997); Director, EREIM Managers Corp. ("EMC")
(July 1997 to present) and EREIM LP Corp. ("ELPC")
(October 1997 to present); Trustee, HRT; Trustee,
Chairman and President, EQAT (March 1997 to present).
C-16
<PAGE>
PRINCIPAL OCCUPATION
NAME AND PRINCIPAL POSITIONS AND OFFICES (AND OTHER POSITIONS)
BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS
- ------------------------------------ -------------------------- ----------------------------------------------------
*Anthony C. Pasquale Senior Vice President See Column 2; Director, Chairman and Chief Operating
Officer, ECIC (September 1997 to present);
Director, Equitable Agri-Business, Inc. (until
June 1997), EMC (June 1997 to present), and ELPC
(October 1997 to present).
*Pauline Sherman Senior Vice President See Column 2, prior thereto, Vice President, Secretary
(February 1999 to and Associate General Counsel.
present), Secretary
and Associate General
Counsel
*Samuel B. Shlesinger Senior Vice President See Column 2; Chairman, President and Chief Executive
Officer, Colorado; Vice President, HRT (until 1998);
Director, ERAC (December 1996 to March 1998).
*Richard V. Silver Senior Vice President and See Column 2; Director, EQF; Senior Vice President
Deputy General Counsel and General Counsel, EIC (June 1997 to March 1998).
*Jose Suquet Senior Executive Vice See Column 2; prior thereto, Executive Vice President
President (February 1998 and Chief Agency Officer (until December 1997); Executive
to present) and Chief Vice President, EQ; Vice President, HRT (March 1998 to
Distribution Officer present)
(December 1997 to present)
*Maureen K. Wolfson Vice President See Column 2.
</TABLE>
C-17
<PAGE>
Item 30. Persons Controlled by or Under Common Control with the Insurance
Company or Registrant
Separate Account Nos. 3, 4, 10, 51, and 66 of The Equitable Life
Assurance Society of the United States (the "Separate Accounts") are separate
accounts of Equitable. Equitable, a New York stock life insurance company is a
wholly owned subsidiary of The Equitable Companies Incorporated (the "Holding
Company"), a publicly traded company.
The largest stockholder of the Holding Company is AXA. As of
March 31, 1999, AXA beneficially owned 58.3% of the outstanding common
stock of the Holding Company. Under its investment arrangements with Equitable
Life and the Holding Company, AXA is able to exercise significant
influence over the operations and capital structure of the Holding Company and
its subsidiaries, including Equitable Life. AXA, a French company, is the
holding company for an international group of insurance and related financial
services companies.
C-18
<PAGE>
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
The Equitable Companies Incorporated (l991) (Delaware)
Donaldson, Lufkin & Jenrette, Inc. (1993) (Delaware) (41.8%) (See
Addendum B(1) for subsidiaries)
The Equitable Life Assurance Society of the United States (1859)
(New York) (a)(b)
The Equitable of Colorado, Inc. (l983) (Colorado)
EVLICO, INC. (1995) (Delaware)
EVLICO East Ridge, Inc. (1995) (California)
GP/EQ Southwest, Inc. (1995) (Texas)
Franconom, Inc. (1985) (Pennsylvania)
Frontier Trust Company (1987) (North Dakota)
Gateway Center Buildings, Garage, and Apartment Hotel, Inc.
(inactive) (pre-l970) (Pennsylvania)
Equitable Deal Flow Fund, L.P.
Equitable Managed Assets (Delaware)
EREIM LP Associates (99%)
EML Associates, L.P. (19.8%)
Alliance Capital Management L.P. (2.7% limited partnership
interest)
ACMC, Inc. (1991) (Delaware)(s)
Alliance Capital Management L.P. (1988) (Delaware)
(39.3% limited partnership interest)
EVCO, Inc. (1991) (New Jersey)
EVSA, Inc. (1992) (Pennsylvania)
Prime Property Funding, Inc. (1993) (Delaware)
Wil Gro, Inc. (1992) (Pennsylvania)
Equitable Underwriting and Sales Agency (Bahamas) Limited (1993)
(Bahamas)
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-19
<PAGE>
The Equitable Companies Incorporated (cont.)
Donaldson Lufkin & Jenrette, Inc.
The Equitable Life Assurance Society of the United States (cont.)
Fox Run, Inc. (1994) (Massachusetts)
STCS, Inc. (1992) (Delaware)
CCMI Corporation (1994) (Maryland)
FTM Corporation (1994) (Maryland)
Equitable BJVS, Inc. (1992) (California)
Equitable Rowes Wharf, Inc. (1995) (Massachusetts)
Camelback JVS, Inc. (1995) (Arizona)
ELAS Realty, Inc. (1996) (Delaware)
100 Federal Street Realty Corporation (Massachusetts)
Equitable Structured Settlement Corporation (1996) (Delaware)
Prime Property Funding II, Inc. (1997) (Delaware)
Sarasota Prime Hotels, Inc. (1997) (Florida)
ECLL, Inc. (1997) (Michigan)
Equitable Holdings LLC (1997) (New York) (into which Equitable Holding
Corporation was merged in 1997)
EQ Financial Consultants, Inc. (l97l) (Delaware) (a) (b)
ELAS Securities Acquisition Corp. (l980) (Delaware)
100 Federal Street Funding Corporation (Massachusetts)
EquiSource of New York, Inc. (1986) (New York) (See
Addendum A for subsidiaries)
Equitable Casualty Insurance Company (l986) (Vermont)
EREIM LP Corp. (1986) (Delaware)
EREIM LP Associates (1%)
EML Associates (.02%)
Six-Pac G.P., Inc. (1990) (Georgia)
Equitable Distributors, Inc. (1988) (Delaware) (a)
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-20
<PAGE>
The Equitable Companies Incorporated (cont.)
Donaldson Lufkin & Jenrette, Inc.
The Equitable Life Assurance Society of the United States (cont.)
Equitable Holdings, LLC (cont.)
Equitable JVS, Inc. (1988) (Delaware)
Astor/Broadway Acquisition Corp. (1990) (New York)
Astor Times Square Corp. (1990) (New York)
PC Landmark, Inc. (1990) (Texas)
Equitable JVS II, Inc. (1994) (Maryland)
EJSVS, Inc. (1995) (New Jersey)
Donaldson, Lufkin & Jenrette, Inc. (1985 by EIC; 1993 by EQ and
EHC) (Delaware) (34.4%) (See Addendum B(1) for
subsidiaries)
JMR Realty Services, Inc. (1994) (Delaware)
Equitable Investment Corporation (l97l) (New York)
Stelas North Carolina Limited Partnership (50% limited
partnership interest) (l984)
Equitable JV Holding Corporation (1989) (Delaware)
Alliance Capital Management Corporation (l991) (Delaware) (b)
(See Addendum B(2) for subsidiaries)
Equitable Capital Management Corporation (l985)
(Delaware) (b)
Alliance Capital Management L.P. (1988)
(Delaware) (14.8% limited partnership interest)
EQ Services, Inc. (1992) (Delaware)
EREIM Managers Corp. (1986) (Delaware)
ML/EQ Real Estate Portfolio, L.P.
EML Associates, L.P.
(a) Registered Broker/Dealer (b) Registered Investment
Advisor
C-21
<PAGE>
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
ADDENDUM A - SUBSIDIARY
OF EQUITABLE HOLDINGS, LLC
HAVING MORE THAN FIVE SUBSIDIARIES
-------------------------------------------------------
EquiSource of New York, Inc. (formerly Traditional Equinet Business Corporation
of New York) has the following subsidiaries that are brokerage companies to
make available to Equitable Agents within each state traditional (non-equity)
products and services not manufactured by Equitable:
EquiSource of Alabama, Inc. (1986) (Alabama)
EquiSource of Arizona, Inc. (1986) (Arizona)
EquiSource of Arkansas, Inc. (1987) (Arkansas)
EquiSource Insurance Agency of California, Inc. (1987) (California)
EquiSource of Colorado, Inc. (1986) (Colorado)
EquiSource of Delaware, Inc. (1986) (Delaware)
EquiSource of Hawaii, Inc. (1987) (Hawaii)
EquiSource of Maine, Inc. (1987) (Maine)
EquiSource Insurance Agency of Massachusetts, Inc. (1988)
(Massachusetts)
EquiSource of Montana, Inc. (1986) (Montana)
EquiSource of Nevada, Inc. (1986) (Nevada)
EquiSource of New Mexico, Inc. (1987) (New Mexico)
EquiSource of Pennsylvania, Inc. (1986) (Pennsylvania)
EquiSource of Puerto Rico, Inc. (1997) (Puerto Rico)
EquiSource Insurance Agency of Utah, Inc. (1986) (Utah)
EquiSource of Washington, Inc. (1987) (Washington)
EquiSource of Wyoming, Inc. (1986) (Wyoming)
C-22
<PAGE>
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
ADDENDUM B - INVESTMENT SUBSIDIARIES
HAVING MORE THAN FIVE SUBSIDIARIES
------------------------------------
Donaldson, Lufkin & Jenrette, Inc. has the following subsidiaries, and
approximately 150 other subsidiaries, most of which are special purpose
subsidiaries (the number fluctuates according to business needs):
Donaldson, Lufkin & Jenrette, Securities Corporation (1985)
(Delaware) (a) (b)
Wood, Struthers & Winthrop Management Corp. (1985)
(Delaware) (b)
Autranet, Inc. (1985) (Delaware) (a)
DLJ Real Estate, Inc.
DLJ Capital Corporation (b)
DLJ Mortgage Capital, Inc. (1988) (Delaware)
Column Financial, Inc. (1993) (Delaware) (50%)
Alliance Capital Management Corporation (as general partner) (b) has the
following subsidiaries:
Alliance Capital Management L.P. (1988) (Delaware) (b)
Alliance Capital Management Corporation of Delaware, Inc.
(Delaware)
Alliance Fund Services, Inc. (Delaware) (a)
Alliance Fund Distributors, Inc. (Delaware) (a)
Alliance Capital Oceanic Corp. (Delaware)
Alliance Capital Management Australia Pty. Ltd.
(Australia)
Meiji - Alliance Capital Corp. (Delaware) (50%)
Alliance Capital (Luxembourg) S.A. (99.98%)
Alliance Eastern Europe Inc. (Delaware)
Alliance Barra Research Institute, Inc. (Delaware)
(50%)
Alliance Capital Management Canada, Inc. (Canada)
(99.99%)
Alliance Capital Management (Brazil) Llda
Alliance Capital Global Derivatives Corp. (Delaware)
Alliance International Fund Services S.A.
(Luxembourg)
Alliance Capital Management (India) Ltd. (Delaware)
Alliance Capital Mauritius Ltd.
Alliance Corporate Finance Group, Incorporated
(Delaware)
Equitable Capital Diversified Holdings, L.P. I
Equitable Capital Diversified Holdings, L.P. II
Curisitor Alliance L.L.C. (Delaware)
Curisitor Holdings Limited (UK)
Alliance Capital Management (Japan), Inc.
Alliance Capital Management (Asia) Ltd.
Alliance Capital Management (Turkey), Ltd.
Cursitor Alliance Management Limited (UK)
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-23
<PAGE>
AXA GROUP CHART
The information listed below is dated as of January 1, 1999; percentages
shown represent voting power. The name of the owner is noted when AXA
indirectly controls the company.
AXA INSURANCE AND REINSURANCE BUSINESS HOLDING
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
AXA Assurances IARD France 100% by AXA France Assurance
AXA Assurances Vie France 88.1% by AXA France Assurance
and 11.9% by AXA Collectives
AXA Courtage IARD France 100% by AXA France Assurance
and AXA Global Risks
AXA Conseil Vie France 100% by AXA France Assurance
AXA Conseil IARD France 100% by AXA France Assurance
AXA Direct France 100% by AXA
Direct Assurances IARD France 100% by AXA Direct
Direct Assurance Vie France 100% by AXA Direct
Tellit Vie Germany 100% by AKA-CKAG
Axiva France 100% by AXA France Assurance
and AXA Conseil Vie
Juridica France 100% by AXA France Assurance
AXA Assistance France France 100% by AXA Assistance SA
AXA Collectives France AXA France Assurance, AXA
Assurances IARD and AXA
Courtage IARD Mutuelle
Societe Beaujon France 100% by AXA
Lor Finance France 99.3% by AXA
Jour Finance France 100% by AXA Conseil IARD and
by AXA Assurances IARD
Financiere 45 France 99.8% by AXA
Mofipar France 99.9% by AXA
NSM Vie France 40.1% by AXA France Assurance
Saint Georges Re France 100% by France Assurance
AXA Global Risks France 100% owned by AXA France
Assurance, AXA Courtage
Assurance Mutuelle and AXA
Assurances IARD Mutuelle
Argovie France 94% by Axiva
AXA Assistance SA France 76.8% by AXA and 23.2% by AXA
France Assurance
S.P.S Reassurance France 69.9% by AXA Reassurance
AXA Participations France 50% by AXA, 25% by AXA Global
Risks and 25% by AXA Courtage
IARD
Colisee Excellence France 100% by Finunciere Mermoz
Financiere Mermoz France 100% by AXA
C-24
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
AXA France Assurance France 100% by AXA
Thema Vie France 99.6% Axiva Vie
AXA-Colonia Konzern AG (AXA-
CKAG) Germany 39.7% by Vinci BV, 25.6% by
Kolnische Verwaltungs and
9.4% by AXA
Finaxa Belgium Belgium 100% by AXA
AXA Belgium Belgium 86.1% by Royale Belge and 13.9%
by Parcolvi
De Kortrijske Verzekering Belgium 99.8% by AXA Belgium
Juris Belgium 100% owned by AXA Belgium
Royale Belge Belgium 51.2% by AXA Holdings Belgium,
44.5% AXA and 3.2% AKA Global
Risks
Royale Belge 1994 Belgium 97.8% by Royale Belge and 2%
by UAB
UAB Belgium 100% by Royale Belge
Ardenne Prevoyante Belgium 99.4% by Royale Belge
GB Lex Belgium 55% by Royale Belge, 25% by
Royale Belge 1994, 10% by
Juridica and 10% by AXA
Conseil IARD
Royale Belge Re Belgium 100% by Royale Belge
Parcolvi Belgium 100% by Vinci Belgium
Holding BV
Vinci Belgium Belgium 99.5% by Vinci BV
Finaxa Luxembourg Luxembourg 100%
AXA Assurance IARD Luxembourg Luxembourg 100% by AXA Holding Luxembourg
AXA Assurance Vie Luxembourg Luxembourg 100% by AXA Holding Luxembourg
Royale UAP Luxembourg 100% by AXA Holding Luxembourg
Paneurolife Luxembourg 90% by different companies of
the AXA Group
Paneurore Luxembourg 100% by different companies of
the AXA Group
C-25
<PAGE>
Crealux Luxembourg 100% by Royale Belge
Futur Re Luxembourg 100% by AXA Global Risks
AXA Holding Luxembourg Luxembourg 100% by Royale Beige
AXA Aurora Spain 30% owned by AXA and 40%
by AXA Participations
Aurora Vida SA de Seguros y Spain 97% owned by Aurora Iberica SA
Reaseguros de Seguros y Reaseguros
1.5% by AXA
Hilo Direct Seguros y Reaseguros Spain 71.4% by AXA Aurora
Ayuda Legal Spain 88% AXA Aurora Iberica SA de
Seguros y Reaseguros and 12%
by Aurora Vida
AXA Aurora Iberica SA Spain 99.8% by AXA Aurora
de Seguros y Reaseguros
AXA Assicurazioni Italy 83.7% owned by AXA, 12% by
Grupo UAP Italiana, 2.2% by AXA
Conseil Vie and 2.1% by AXA
Collectives
Eurovita Italy 30% owned by AXA Assicurazioni
19% by AXA Conseil Vie and 19%
by AXA Collectives
Gruppo UAP Italia (GUI) Italy 97% by AXA Participants and 3%
by AXA Collectives
UAP Vita Italy 62% by AXA
Allsecures Vita Italy 100% by AXA
AXA Equity & Law plc U.K. 99.9% by AXA
AXA Equity & Law Life U.K. 100% by Sun Life Holdings Plc
Assurance Society
Sun Life lle de Man U.K. 100% owned by Sun Life
Assurance
AXA Global Risks U.K. 51% owned by AXA Global
Risks (France) and 49% by
AXA Courtage IARD
Sun Life and Provincial U.K. 71.6% by AXA and AXA
Holdings (SLPH) Equity & Law Plc
Sun Life Corporation Plc U.K. 100% by AXA Sun Life Holdings
Plc
Sun Life Assurance Society Plc U.K. 100% by AXA Sun Life Holdings
Plc
AXA Provincial Insurance U.K. 100% by SLPH
English & Scottish U.K. 100% by AXA UK
AXA UK U.K. 100% by AXA
Servco U.K. 100% by AXA Sun Life Holdings
Plc
AXA Sun Life Plc U.K. 100% by AXA Sun Life Holdings
Plc
AXA Leven The Nether- 100% by Nieuw Rotterdam
lands Verzekeringen
AXA Nederland BV The Nether- 55.4% by Royale Belge and 38.9%
lands by Gelderland BV
UNIROBE Groep BV The Nether- 100% by UAP Nieuw Rotterdam
lands Holding
C-26
<PAGE>
AXA Levensverzekeringen The Nether- 100% by UAP Nieuw Rotterdam
lands Verzekeringen
AXA Schade The Nether- 100% by UAP Nieuw Rotterdam
lands Verzekeringen
Societe Generale d'Assistance The Nether- 100% by AXA Assistance Holding
lands
Gelderland BV The Nether- 100% by Royale Belge
lands
AXA Zorg The Nether- 108% by UAP Nieuw Rotterdam
lands Verzekeringen
Vinci BV The Nether- 100% by AXA
lands
AXA Portugal Companhia de Portugal 96.2% by different companies
Serguros SA of the AXA Group
AXA Portugal Companhia de Portugal 87.6% by AXA Counseil Vie and
Serguros de Vida SA 7.5% AXA Participations
AXA Compagnie d'Assurances Switzerland 100% by AXA Participations
AXA Compagnie d'Assurances Switzerland 95% by AXA Participations
sur la vie
AXA Al Amane Assurances Morocco 52% by AXA Participations and
15% by Empargne Croissance
AXA Canada Inc. Canada 100% by AXA
Empargne Croissance Morocco 99.3% by AXA Al Amane
Assurances
Colonia Nordstern Leben Germany 50% by AXA - CKAG and 50% by
Colonia Nordstein Versicherungs
Kolnische Verwaltungs Germany 67.7% by Vinci BV, 23% by AXA
Colonia Konzern AG and 8.8% by
AXA
Sicher Direkt Versicherung Germany 50% by AXA Direct and 50% by
AXA - CKAG
AXA Colonia Krankenversicherung Germany 51% by AXA - CKAG, 39.6% by AXA
Colonia Lebenversicherung and
12% by Deutsche
Arzleversicherung
Colonia Nordstern Versicherungs Germany 100% by AXA - CKAG
C-27
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
AXA non life Insurance Cy. Ltd Japan 100% by AXA Direct
AXA Life Insurance Japan 100% by AXA
Dongbu AXA Life Korea 50% by AXA
Insurance Co. Ltd.
Sime AXA Berhad Malaysia 30% owned by AXA and
AXA Reassurance
AXA Insurance Investment Singapore 88.7% by AXA and 11.4% by AXA
Holdings Pte Ltd Courtage IARD
AXA Life Insurance Singapore 100% owned by AXA
AXA Insurance Hong Kong 82.5% owned by AXA Investment
Holdings Pte Ltd and 17.5% by
AXA
National Mutual Asia Ltd Hong Kong 53.8% by National Mutual
Holdings, Ltd and 20% by Detura
The Equitable Companies U.S.A. 43% by AXA, Financiere 45,
Incorporated 3.2%, Lorfinance 6.4%, AXA
Equity & Law Life Association
Society 4.1% and AXA
Reassurance 2.9% and 0.4% by
Societe Beaujon
The Equitable Life Assurance U.S.A. 100% owned by The Equitable
Society of the United States Companies Incorporated
(ELAS)
National Mutual Holdings Ltd Australia 42.1% by AXA and 8.9% by AXA
Equity & Law Life Assurance
Society
The National Mutual Life Australia 100% owned by National Mutual
Association of Australasia Holdings Ltd
National Mutual International Australia 100% owned by National Mutual
Holdings Ltd
Australian Casualty & Life Ltd Australia 100% owned by National Mutual
Holdings Ltd
National Mutual Health Australia 100% owned by National Mutual
Insurance Pty Ltd Holdings Ltd
Detura Hong Kong 75% by National Mutual Holdings
AXA Insurance Pte Ltd Singapore 100% by AXA Insurance
Investment Holdings Pte Ltd
AXA Reinsurance Asia Pte Ltd Singapore 100% by AXA Reassurance
C-28
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
AXA Reassurance France 100% owned by AXA, AXA
Assurances IARD and AXA Global
Risks
AXA Re Finance France 79% owned by AXA Reassurance
AXA Cessions France 100% by AXA
AXA Reinsurance U.K. Plc U.K. 100% owned by AXA Re U.K.
Holding
AXA Re U.K. Company Limited U.K. 100% owned by AXA Reassurance
AXA Reinsurance Company U.S.A. 100% owned by AXA America
AXA America U.S.A. 100% owned by AXA Reassurance
AXA Global Risks US U.S.A. 96.4% by AXA Global Risks and
3.6% by Colonia Nordstern
Versicherungs AG
AXA Re Life Insurance Company U.S.A. 100% owned by AXA America
C.G.R.M. Monaco 100% owned by AXA Reassurance
Nordstern Colonia Osterreich Austria 88.5% by Colonia Nordstern
Versicherungs and 11.5% by
Colonia Nordstern Leben
Royale Belge International Belgium 100% by Royale Belge
Investissement
AXA Holding Belgium Belgium 75% by AXA, 17.7% by AXA Global
Risks and 7.4% by various
companies of the Group
Assurances de la Poste Belgium 50% by Royale Belge
Assurances de la Poste Vie Belgium 50% by Royale Belge
AXA Asset Management LTD U.K. 91% by AXA Investment Managers
and 9% by National Mutual Funds
Management
AXA Sun Life Holdings Plc U.K. 100% by SLPH
C-29
<PAGE>
AXA FINANCIAL BUSINESS
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Compagnie Financiere de Paris France 100% AXA and the Mutuelles
(C.F.P.)
AXA Banque France 98.7% owned by Compagnie
Financiere de Paris
AXA Credit France 65% owned by Compagnie
Financiere de Paris
AXA Gestion FCP France 100% owned by AXA Investment
Managers Paris
Sofapi France 100% owned by Compagnie
Financiere de Paris
Soffim Holding France 100% owned by Compagnie
Financiere de Paris
Sofinad France 100% by Compagnie
Financiere de Paris
Banque des Tuileries France 100% by Compagnie
Financiere de Paris
Banque de marches et France 18.5% by AXA and 8.2% by AXA
d' arbitrage Courtage, IARD
AXA Investment Managers France 100% by various companies
AXA Investment Managers Paris France 100% owned by AXA Investment
Managers
Colonia Bausbykasse Germany 66.7% by AXA-CKAG and 31.1% by
Colonia Nordstern Leben
Banque IPPA Belgium 99.9% by Royale Belge
Royal Belge Investissement Belgium 100% by Royale Belge
ANHYP Belgium 98.8% by Royale Belge
AXA Sun Life Asset Management U.K. 66.7% owned by SLPH and 33.3%
by AXA Asset Management Ltd.
C-30
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Alliance Capital Management U.S.A. 57.7% held by ELAS
Donaldson Lufkin & Jenrette U.S.A. 70.9% owned by Equitable
Holdings Corp. and ELAS
National Mutual Funds Australia 100% owned by National
Management (Global) Ltd Mutual Holdings Ltd
C-31
<PAGE>
AXA REAL ESTATE BUSINESS
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
S.G.C.I. France 100% by AXA
Transaxim France 100% owned by Compagnie
Parisienne de Participations
Compagnie Parisienne de France 100% owned by Sofinad
Participations (C.P.P.)
Monte Scopeto France 100% owned by Compagnie
Parisienne de Participations
Colisee Jeuneurs France 99.9% by Colisee Suresnes
Colisee Delcasse France 100% by Colisee Suresnes
Colisee Victorie France 99.7% by S.G.C.I.
Colisee Suresnes France 100% by Various Companies and
the Mutuelle
Colisee 21 Matignon France 99.4% by SGCI and 0.6% by AXA
C-32
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Colisee Saint Georges France 100% by SGCI
AXA Millesimes France 92.9% owned by AXA and the
Mutuelles
AXA Immobiller France 100% by AXA
C-33
<PAGE>
OTHER AXA BUSINESS
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
C-34
<PAGE>
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
NOTES
-----
1. The year of formation or acquisition and state or country of incorporation
of each affiliate is shown.
2. The chart omits certain relatively inactive special purpose real estate
subsidiaries, partnerships, and joint ventures formed to operate or
develop a single real estate property or a group of related properties,
and certain inactive name-holding corporations.
3. All ownership interests on the chart are 100% common stock ownership
except: (a) The Equitable Companies Incorporated's 41.8% interest in
Donaldson, Lufkin & Jenrette, Inc. and Equitable Holdings, LLC's
34.4% interest in same; (b) as noted for certain partnership interests; (c)
Equitable Life's ACMC, Inc.'s and Equitable Capital Management
Corporation's limited partnership interests in Alliance Capital Management
L.P.; and (d) as noted for certain subsidiaries of Alliance Capital
Management Corp. of Delaware, Inc.
4. The following entities are not included in this chart because, while they
have an affiliation with The Equitable, their relationship is not the
ongoing equity-based form of control and ownership that is characteristic
of the affiliations on the chart, and, in the case of the first two
entities, they are under the direction of at least a majority of "outside"
trustees:
The Hudson River Trust
EQ Advisors Trust
Separate Accounts
5. This chart was last revised on March 15, 1999.
C-35
<PAGE>
Item 31. Number of Contractowners
As of March 31, 1999, the number of participants in the
Association Members Program offered by the Registrant was 10,235.
Item 32. Indemnification of Directors and Officers
To the extent permitted by the laws of the State of New York
and subject to all applicable requirements thereof, Equico Securities, Inc.
("Equico") undertook by resolution to indemnify each Director and Officer of
Equitable who is made or threatened to be made a party to any action or
proceeding, whether civil or criminal, by reason of the fact that he or she,
is or was a Director or Officer of Equico.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to Directors and Officers pursuant to
the undertaking described above, or otherwise, Equitable has been advised that
in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in that Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by Equitable of expenses incurred or paid
by a Director or Officer in the successful defense of any action, suit or
proceeding) is asserted by such Director or Officer in connection with the
interests, Equitable will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in that Act and will be governed by the final adjudication
of such issue.
Item 33. Business and Other Connections of Investment Adviser
The Equitable Life Assurance Society of the United States
("Equitable") acts as the investment manager for Separate Account Nos. 3, 4,
10, 190 and 191. With respect to Separate Account No. 191, Equitable acts as
investment manager within guidelines established by the Trustees of the
American Dental Association Members Retirement Trusts. Alliance Capital
Management L.P. ("Alliance"), a publicly-traded limited partnership, is
indirectly majority-owned by Equitable, provides personnel and facilities for
portfolio selection and transaction services. Alliance recommends the
securities investments to be purchased and sold for Separate Account Nos. 3,
4, 10 and 190 and the portion of Separate Account No. 191 which is invested in
its Separate Account No. 2A, and arranges for the execution of portfolio
transactions. Alliance coordinates related accounting and bookkeeping
functions with Equitable. Both Equitable and Alliance are registered
investment advisers under the Investment Advisers Act of 1940.
Information regarding the directors and principal officers of
Equitable is provided in Item 29 of this Part C and is incorporated herein by
reference.
C-36
<PAGE>
Set forth below is certain information regarding the directors and
principal officers of Alliance Capital Management Corporation. The business
address of the Alliance persons whose names are preceded by an asterisk is 1345
Avenue of the Americas, New York, New York 10105.
<TABLE>
<CAPTION>
POSITIONS AND PRINCIPAL OCCUPATION
NAME AND PRINCIPAL OFFICES WITH (AND OTHER POSITIONS)
BUSINESS ADDRESS ALLIANCE WITHIN PAST 2 YEARS
- ---------------- -------- -------------------
<S> <C> <C>
Directors
*Dave H. Willams Director and Chairman See Column 2; Chief
of the Board Executive Officer (until
January 1999); Director
- The Equitable Life
Assurance Society of the
United States
("Equitable Life") and
The Equitable Companies
Incorporated ("EQ").
Senior Executive Vice
President and Memeber of
Executive Committee -
AXA (January 1997 to
present).
Luis Javier Bastida Director Chief Financial Officer
Banco Bilbao Vizcaya and Member of the
Gran Via 1 Executive Committee -
Planta 16 48001 Banco Bilbao Vizcaya,
Bilbao, Spain S.A.
C-37
<PAGE>
POSITIONS AND PRINCIPAL OCCUPATION
NAME AND PRINCIPAL OFFICES WITH (AND OTHER POSITIONS)
BUSINESS ADDRESS ALLIANCE WITHIN PAST 2 YEARS
- ---------------- -------- -------------------
*Donald H. Brydon Director Chairman and Chief
Executive Officer -
AXA Investment Managers
S.A.
*Bruce W. Calvert Director, Vice Chairman, See Column 2; Chief
and Chief Executive Investment Officer
Officer (January 1999 until January 1999)
to present)
C-38
<PAGE>
POSITIONS AND PRINCIPAL OCCUPATION
NAME AND PRINCIPAL OFFICES WITH (AND OTHER POSITIONS)
BUSINESS ADDRESS ALLIANCE WITHIN PAST 2 YEARS
- ---------------- -------- -------------------
*John D. Carifa Director, President and See Column 2.
Chief Operating Officer
Henri de Castries Director Senior Executive Vice
AXA President, Financial
23, Avenue Matignon Services and Life
75008, Paris, France Insurance Activities -
AXA and various
positions with AXA
affiliated companies;
Director, Vice Chairman
(February 1996 to April
1998), and Chairman
(April 1998 to present) -
EQ; Director - Equitable
Real Estate Investment
Management, Inc.
("Equitable Real
Estate")(June 1993 to
June 1997), Donaldson
Lufkin & Jenrette, Inc.
("DLJ"), and Equitable
Life.
Kevin C. Dolan Director Senior Vice President -
AXA AXA; Chief Executive
23, Avenue Matignon Officer - AXA Investment
75008, Paris, France Managers Paris;
Director, Alliance
Capital Management, L.P.
Denis Duverne Director Senior Vice President
AXA International (US-UK-
23, Avenue Matignon Benelux) - AXA; Director
75008, Paris, France - Equitable Life
(February 1998 to
present) and DLJ.
Alfred Harrison Director, Vice Chairman See Column 2.
Alliance Capital
Management L.P.
3600 Piper Jaffray Tower
Minneapolis, MN 55402
Herve Hatt Director Senior Vice President,
AXA
Michael Hegarty Director President and Director
(January 1998 to
present), Chief
Operating Officer
(February 1998 to
present) Equitable;
prior thereto Vice
Chairman Chase Manhattan
Corporation.
C-39
<PAGE>
POSITIONS AND PRINCIPAL OCCUPATION
NAME AND PRINCIPAL OFFICES WITH (AND OTHER POSITIONS)
BUSINESS ADDRESS ALLIANCE WITHIN PAST 2 YEARS
- ---------------- -------- -------------------
Jean-Pierre Hellebuyck Director Chairman - AXA
AXA - Gestion des Actifs Investment Managers S.A.;
40, rue de Colisee Chief Investment Officer
Paris, France 75008 - AXA; Director - AXA
Reassurance France, AXA
Reinsurance UK Plc, AXA
Reinsurance Company,
Equity & Law Plc, Equity
& Law Investment
Managers Ltd., Equity &
Law Fondsmanagement
GmbH, Europhenix
Management Company and
Societe Des Bourses
Francaises.
Benjamin D. Holloway Director Consultant to
Continental Companies Tishman/Speyer, Edward
3250 Mary Street Debartolo and The
Miami, Florida 33133 Continental Companies.
Director - Rockefeller
Center Properties, Inc.;
Chairman - Duke
University Management
Corporation.
Edward D. Miller Director Chairman (January 1998
The Edward Life Assurance to present) and Chief
Society of the United States Executive Officer
1290 Avenue of the Americas (August 1997 to present)
New York, NY 10104 - Equitable Life and
prior thereto, President
(August 1997 to January
1998); Director,
President and Chief
Executive Officer - EQ
(all August 1997 to
present); Senior
Executive Vice President
and Member of Executive
Committee - AXA
(September 1997 to
present); Director - DLJ
(November 1997 to
present), AXA Canada
(September 1998 to
present), ACMC, Inc.
(March 1998 to present),
Equitable Capital
Management Corporation
("ECMC") (March 1998 to
present); Chairman,
President and Chief
Executive Officer,
Equitable Investment
Corporation ("EIC")
(March 1998 to present);
Director - KeySpan
Energy; Senior Vice
Chairman - Chase
Manhattan Corporation
(March 1996
to April 1997).
C-40
<PAGE>
POSITIONS AND PRINCIPAL OCCUPATION
NAME AND PRINCIPAL OFFICES WITH (AND OTHER POSITIONS)
BUSINESS ADDRESS ALLIANCE WITHIN PAST 2 YEARS
- ---------------- -------- -------------------
Peter D. Noris Director Executive Vice President
The Equitable Life and Chief Investment
Assurance Society Officer - Equitable
of the United States Life and EQ; Director,
1290 Avenue of the Americas Equitable Real Estate
New York, NY 10104 (July 1995 to June
1997), EREIM Managers
Corp. (July 1997 to
present), and EREIM LP
Corp. (October 1997 to
present).
C-41
<PAGE>
POSITIONS AND PRINCIPAL OCCUPATION
NAME AND PRINCIPAL OFFICES WITH (AND OTHER POSITIONS)
BUSINESS ADDRESS ALLIANCE WITHIN PAST 2 YEARS
- ---------------- -------- -------------------
*Frank Savage Director Chairman - Alliance
Capital Management
International;
Director - ACFG; Vice-
Chairman - ECMC;
Director - Lockheed
Martin Corporation, and
ARCO Chemical
Corporation and Qualcomm
Incorporated.
C-42
<PAGE>
POSITIONS AND PRINCIPAL OCCUPATION
NAME AND PRINCIPAL OFFICES WITH (AND OTHER POSITIONS)
BUSINESS ADDRESS ALLIANCE WITHIN PAST 2 YEARS
- ---------------- -------- -------------------
Stanley B. Tulin Director Director and Vice
The Equitable Life Chairman (both February
Assurance Society of 1998 to present) and
the United States Chief Financial Officer
1290 Avenue of the Americas (May 1996 to present) -
New York, NY 10104 Equitable Life, Senior
Executive Vice President
(May 1996 to February
1998); Executive Vice
President (May 1996 to
present) and Chief
Financial Officer (May
1997 to present) - EQ;
Director - DLJ (June
1997 to present);
Director, Chairman,
President and Chief
Executive Officer (July
1997 to present) - ACMC,
Inc.; Director,
Chairman, President and
Chief Executive Officer
(July 1997 to present)
- ECMC; Director,
Executive Vice President
and Chief Financial
Officer (June 1997 to
present) - EIC.
*Reba White Williams Director Director of Special
Projects.
Robert B. Zoellick Director Professor - The U.S.
Fannie Mae Naval Academy (December
3900 Washington Avenue, NW 1997 to present);
Washington, DC 20016 Executive Vice President
- Federal National
Mortgage Association
(May 1993 to December
1997).
OFFICERS
*David R. Brewer, Jr. Senior Vice President See Column 2.
and General Counsel
and Secretary
*Robert H. Joseph, Jr. Senior Vice President & See Column 2.
Chief Financial Officer
</TABLE>
Item 34. Principal Underwriters
(a) EQ Financial Consultants, Inc. ("EQ Financial"), a wholly-owned
subsidiary of Equitable, is the principal underwriter and depositor
for its Separate Account A, Separate Account No. 301, Separate
Account I and Separate Account FP. EQ Financial's principal business
address is 1290 Avenue of the Americas, New York, NY 10104.
(b) See Item 29 of this Part C, which is incorporated herein by
reference.
Item 35. Location of Accounts and Records
The Equitable Life Assurance Society of the United States
135 West 50th Street
New York, New York 10020
1290 Avenue of the Americas
New York, New York 10104
200 Plaza Drive
Secaucus, New Jersey 07094
Item 36. Management Services
Not applicable.
C-43
<PAGE>
Item 37. Undertakings
The Registrant hereby undertakes the following:
(a) to file a post-effective amendment to this registration
statement as frequently as is necessary to ensure that
the audited financial statements in the registration
statement are never more than sixteen months old for so
long as payments under the variable annuity contracts may
be accepted;
(b) to include (1) as part of its applications to purchase
any contract offered by the prospectus, a space that an
applicant can check to request a Statement of Additional
Information, or (2) a postcard or similar written
communication affixed to or included in the prospectus
that the applicant can remove to send for a Statement of
Additional Information;
(c) to deliver any Statement of Additional Information and
any financial statements required to be made available
under this form promptly upon written or oral request.
C-44
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, the Registrant certifies
that it meets The requirements of securities Act Rule 485(b) for effectiveness
of this amendment to the Registration Statement and has caused this Registration
Statement to be signed on its behalf in the City and State of New York, on the
29th day of April , 1999.
THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES
(Registrant)
By: The Equitable Life Assurance
Society of the United States
By: /s/ Maureen K. Wolfson
----------------------
Maureen K. Wolfson
Vice President
C-45
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, the Registrant has caused
this Registration Statement to be signed on its behalf, in the City and State
of New York, on the 29th day of April, 1999.
THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES
(Registrant)
By: /s/ Maureen K. Wolfson
------------------------------------
Maureen K. Wolfson
Vice President
As required by the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on
the date indicated:
PRINCIPAL EXECUTIVE OFFICERS:
*Edward D. Miller Chairman of the Board, Chief Executive Officer
and Director
*Michael Hegarty President, Chief Operating Officer and
Director
PRINCIPAL FINANCIAL OFFICER
*Stanley B. Tulin Vice Chairman of the Board, Chief Financial
Officer and Director
PRINCIPAL ACCOUNTING OFFICER:
/s/ Alvin H. Fenichel
- -----------------------------
Alvin H. Fenichel Senior Vice President and
April 29, 1999 Controller
*DIRECTORS:
Francoise Colloc'h John T. Hartley Didier Pineau-Valencienne
Henri de Castries John H.F. Haskell, Jr. George J. Sella, Jr.
Joseph L. Dionne Mary R. (Nina) Henderson Peter J. Tobin
Denis Duverne W. Edwin Jarmain Stanley B. Tulin
Jean-Rene Fourtou George T. Lowy Dave H. Williams
Norman C. Francis Edward D. Miller
Donald J. Greene
*By: /s/ Maureen K. Wolson
---------------------------
Maureen K. Wolson
Attorney-in-Fact
April 29, 1999
C-46
<PAGE>
EXHIBIT INDEX
Exhibit No. Page No.
13(g) Consent of PricewaterhouseCoopers, LLP.
13(h) Powers of Attorney.
27 Financial Data Schedule.
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statement of Additional Information
constituting part of this Registration Statement on Form N-3 (the "Registration
Statement") of (1) our reports dated February 8, 1999 relating to the
financial statements of Separate Account Nos. 3, 4, 10, 51, and 66 of The
Equitable Life Assurance Society of the United States for the year ended
December 31, 1998, and (2) our report dated February 8, 1999 relating to the
consolidated financial statements of The Equitable Life Assurance Society of
the United States for the year ended December 31, 1998, which reports appear
in such Statement of Additional Information, and to the incorporation by
reference of our reports into the Prospectus which constitutes part of this
Registration Statement. We also consent to the use in the Prospectus
Supplement constituting part of this Registration Statement of our report
dated February 8, 1999 relating to the financial statements of Separate
Account No. 4 of The Equitable Life Assurance Society of the United States for
the year ended December 31, 1998, which report appears in such Prospectus
Supplement. We also consent to the references to us under the headings
"Condensed Financial Information" and "About our independent accountants" in the
Prospectus.
PricewaterhouseCoopers, LLP
New York, New York
April 29, 1999
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Jerome S. Golden, Mark A. Hug, James D. Goodwin, Pauline Sherman,
Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred Oliver, Mary
P. Breen and each of them (with full power to each of them to act alone), his or
her true and lawful attorney-in-fact and agent, with full power of substitution
to each, for him or her and on his or her behalf and in his or her name, place
and stead, to execute and file any of the documents referred to below relating
to registrations under the Securities Act of 1933, the Securities Exchange Act
of 1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 16th day
of February, 1999.
/s/ Henri de Castries
---------------------
Henri de Castries
59838v2
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Jerome S. Golden, Mark A. Hug, James D. Goodwin, Pauline Sherman,
Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred Oliver, Mary
P. Breen and each of them (with full power to each of them to act alone), his or
her true and lawful attorney-in-fact and agent, with full power of substitution
to each, for him or her and on his or her behalf and in his or her name, place
and stead, to execute and file any of the documents referred to below relating
to registrations under the Securities Act of 1933, the Securities Exchange Act
of 1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 10th day
of February, 1999.
/s/ Joseph L. Dionne
--------------------
Joseph L. Dionne
59838v2
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Jerome S. Golden, Mark A. Hug, James D. Goodwin, Pauline Sherman,
Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred Oliver, Mary
P. Breen and each of them (with full power to each of them to act alone), his or
her true and lawful attorney-in-fact and agent, with full power of substitution
to each, for him or her and on his or her behalf and in his or her name, place
and stead, to execute and file any of the documents referred to below relating
to registrations under the Securities Act of 1933, the Securities Exchange Act
of 1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 6th day
of February, 1999.
/s/ Denis Duverne
-----------------
Denis Duverne
59838v2
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Jerome S. Golden, Mark A. Hug, James D. Goodwin, Pauline Sherman,
Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred Oliver, Mary
P. Breen and each of them (with full power to each of them to act alone), his or
her true and lawful attorney-in-fact and agent, with full power of substitution
to each, for him or her and on his or her behalf and in his or her name, place
and stead, to execute and file any of the documents referred to below relating
to registrations under the Securities Act of 1933, the Securities Exchange Act
of 1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 18th day
of February, 1999.
/s/ F. COLLOC'H
---------------
F. COLLOC'H
59838v2
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Jerome S. Golden, Mark A. Hug, James D. Goodwin, Pauline Sherman,
Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred Oliver, Mary
P. Breen and each of them (with full power to each of them to act alone), his or
her true and lawful attorney-in-fact and agent, with full power of substitution
to each, for him or her and on his or her behalf and in his or her name, place
and stead, to execute and file any of the documents referred to below relating
to registrations under the Securities Act of 1933, the Securities Exchange Act
of 1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 8th day
of February, 1999.
/s/ Jean Rene Fourtou
---------------------
Jean Rene Fourtou
59838v2
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Jerome S. Golden, Mark A. Hug, James D. Goodwin, Pauline Sherman,
Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred Oliver, Mary
P. Breen and each of them (with full power to each of them to act alone), his or
her true and lawful attorney-in-fact and agent, with full power of substitution
to each, for him or her and on his or her behalf and in his or her name, place
and stead, to execute and file any of the documents referred to below relating
to registrations under the Securities Act of 1933, the Securities Exchange Act
of 1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 8th day
of February, 1999.
/s/ Norman C. Francis
---------------------
Norman C. Francis
59838v2
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Jerome S. Golden, Mark A. Hug, James D. Goodwin, Pauline Sherman,
Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred Oliver, Mary
P. Breen and each of them (with full power to each of them to act alone), his or
her true and lawful attorney-in-fact and agent, with full power of substitution
to each, for him or her and on his or her behalf and in his or her name, place
and stead, to execute and file any of the documents referred to below relating
to registrations under the Securities Act of 1933, the Securities Exchange Act
of 1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 15th day
of February, 1999.
/s/ Donald J. Greene
--------------------
Donald J. Greene
59838v2
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Jerome S. Golden, Mark A. Hug, James D. Goodwin, Pauline Sherman,
Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred Oliver, Mary
P. Breen and each of them (with full power to each of them to act alone), his or
her true and lawful attorney-in-fact and agent, with full power of substitution
to each, for him or her and on his or her behalf and in his or her name, place
and stead, to execute and file any of the documents referred to below relating
to registrations under the Securities Act of 1933, the Securities Exchange Act
of 1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 11th day
of February, 1999.
/s/ John T. Hartley
-------------------
John T. Hartley
59838v2
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Jerome S. Golden, Mark A. Hug, James D. Goodwin, Pauline Sherman,
Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred Oliver, Mary
P. Breen and each of them (with full power to each of them to act alone), his or
her true and lawful attorney-in-fact and agent, with full power of substitution
to each, for him or her and on his or her behalf and in his or her name, place
and stead, to execute and file any of the documents referred to below relating
to registrations under the Securities Act of 1933, the Securities Exchange Act
of 1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 10th day
of February, 1999.
/s/ John H.F. Haskell, Jr.
--------------------------
John H.F. Haskell, Jr.
59838v2
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Jerome S. Golden, Mark A. Hug, James D. Goodwin, Pauline Sherman,
Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred Oliver, Mary
P. Breen and each of them (with full power to each of them to act alone), his or
her true and lawful attorney-in-fact and agent, with full power of substitution
to each, for him or her and on his or her behalf and in his or her name, place
and stead, to execute and file any of the documents referred to below relating
to registrations under the Securities Act of 1933, the Securities Exchange Act
of 1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 10th day
of February, 1999.
/s/ Michael Hegarty
-------------------
Michael Hegarty
59838v2
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Jerome S. Golden, Mark A. Hug, James D. Goodwin, Pauline Sherman,
Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred Oliver, Mary
P. Breen and each of them (with full power to each of them to act alone), his or
her true and lawful attorney-in-fact and agent, with full power of substitution
to each, for him or her and on his or her behalf and in his or her name, place
and stead, to execute and file any of the documents referred to below relating
to registrations under the Securities Act of 1933, the Securities Exchange Act
of 1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 10th day
of February, 1999.
/s/ Mary R. (Nina) Henderson
----------------------------
Mary R. (Nina) Henderson
59838v2
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Jerome S. Golden, Mark A. Hug, James D. Goodwin, Pauline Sherman,
Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred Oliver, Mary
P. Breen and each of them (with full power to each of them to act alone), his or
her true and lawful attorney-in-fact and agent, with full power of substitution
to each, for him or her and on his or her behalf and in his or her name, place
and stead, to execute and file any of the documents referred to below relating
to registrations under the Securities Act of 1933, the Securities Exchange Act
of 1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 5th day
of February, 1999.
/s/ W. Edwin Jarmain
--------------------
W. Edwin Jarmain
59838v2
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Jerome S. Golden, Mark A. Hug, James D. Goodwin, Pauline Sherman,
Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred Oliver, Mary
P. Breen and each of them (with full power to each of them to act alone), his or
her true and lawful attorney-in-fact and agent, with full power of substitution
to each, for him or her and on his or her behalf and in his or her name, place
and stead, to execute and file any of the documents referred to below relating
to registrations under the Securities Act of 1933, the Securities Exchange Act
of 1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 5th day
of February, 1999.
/s/ George T. Lowy
------------------
George T. Lowy
59838v2
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Jerome S. Golden, Mark A. Hug, James D. Goodwin, Pauline Sherman,
Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred Oliver, Mary
P. Breen and each of them (with full power to each of them to act alone), his or
her true and lawful attorney-in-fact and agent, with full power of substitution
to each, for him or her and on his or her behalf and in his or her name, place
and stead, to execute and file any of the documents referred to below relating
to registrations under the Securities Act of 1933, the Securities Exchange Act
of 1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 10th day
of February, 1999.
/s/ Edward D. Miller
--------------------
Edward D. Miller
59838v2
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Jerome S. Golden, Mark A. Hug, James D. Goodwin, Pauline Sherman,
Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred Oliver, Mary
P. Breen and each of them (with full power to each of them to act alone), his or
her true and lawful attorney-in-fact and agent, with full power of substitution
to each, for him or her and on his or her behalf and in his or her name, place
and stead, to execute and file any of the documents referred to below relating
to registrations under the Securities Act of 1933, the Securities Exchange Act
of 1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 22th day
of February, 1999.
/s/ Didier Pineau Valencienne
-----------------------------
Didier Pineau Valencienne
59838v2
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Jerome S. Golden, Mark A. Hug, James D. Goodwin, Pauline Sherman,
Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred Oliver, Mary
P. Breen and each of them (with full power to each of them to act alone), his or
her true and lawful attorney-in-fact and agent, with full power of substitution
to each, for him or her and on his or her behalf and in his or her name, place
and stead, to execute and file any of the documents referred to below relating
to registrations under the Securities Act of 1933, the Securities Exchange Act
of 1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 5th day
of February, 1999.
/s/ George J. Sella, Jr.
------------------------
George J. Sella, Jr.
59838v2
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Jerome S. Golden, Mark A. Hug, James D. Goodwin, Pauline Sherman,
Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred Oliver, Mary
P. Breen and each of them (with full power to each of them to act alone), his or
her true and lawful attorney-in-fact and agent, with full power of substitution
to each, for him or her and on his or her behalf and in his or her name, place
and stead, to execute and file any of the documents referred to below relating
to registrations under the Securities Act of 1933, the Securities Exchange Act
of 1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 25th day
of March, 1999.
/s/ Peter J. Tobin
------------------
Peter J. Tobin
58017/36
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Jerome S. Golden, Mark A. Hug, James D. Goodwin, Pauline Sherman,
Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred Oliver, Mary
P. Breen and each of them (with full power to each of them to act alone), his or
her true and lawful attorney-in-fact and agent, with full power of substitution
to each, for him or her and on his or her behalf and in his or her name, place
and stead, to execute and file any of the documents referred to below relating
to registrations under the Securities Act of 1933, the Securities Exchange Act
of 1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 10th day
of February, 1999.
/s/ Stanley B. Tulin
--------------------
Stanley B. Tulin
59838v2
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Jerome S. Golden, Mark A. Hug, James D. Goodwin, Pauline Sherman,
Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred Oliver, Mary
P. Breen and each of them (with full power to each of them to act alone), his or
her true and lawful attorney-in-fact and agent, with full power of substitution
to each, for him or her and on his or her behalf and in his or her name, place
and stead, to execute and file any of the documents referred to below relating
to registrations under the Securities Act of 1933, the Securities Exchange Act
of 1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 7th day
of February, 1999.
/s/ Dave H. Williams
--------------------
Dave H. Williams
59838v2
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<NAME> SEP ACCT. NO. 10 (MRP)
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<ARTICLE> 6
<CIK> 0000727920
<NAME> SEP ACCT. NO 4 (MRP)
<SERIES>
<NUMBER> 02
<NAME> THE ALLIANCE GROWTH EQUITY FUND
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
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<INVESTMENTS-AT-COST> 1,917,642,466
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<NET-ASSETS> 2,111,775,228
<DIVIDEND-INCOME> 12,224,979
<INTEREST-INCOME> 477,732
<OTHER-INCOME> 0
<EXPENSES-NET> (18,036,108)
<NET-INVESTMENT-INCOME> (5,333,397)
<REALIZED-GAINS-CURRENT> 424,897,105
<APPREC-INCREASE-CURRENT> (505,981,445)
<NET-CHANGE-FROM-OPS> (86,417,737)
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<ARTICLE> 6
<CIK> 0000727920
<NAME> SEP ACCT. NO. 3 (MRP)
<SERIES>
<NUMBER> 03
<NAME> THE ALLIANCE AGGRESSIVE EQUITY FUND
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<CURRENCY> U.S. DOLLARS
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<PERIOD-TYPE> 12-MOS
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