Registration No. 333-24009
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 14 TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
(Exact name of registrant as specified in its charter)
NEW YORK
(State or other jurisdiction of incorporation or organization)
13-5570651
(I.R.S. Employer Identification No.)
1290 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK 10104
(212) 554-1234
(Address, including zip code, and telephone number,
including area code, of registrant's
principal executive offices)
ROBIN WAGNER
VICE PRESIDENT AND COUNSEL
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
1290 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK 10104
(212) 554-1234
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Please send copies of all communications to:
PETER E. PANARITES
FREEDMAN, LEVY, KROLL & SIMONDS
1050 CONNECTICUT AVENUE, N.W., SUITE 825
WASHINGTON, D.C. 20036
(202) 457-5100
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<PAGE>
Equitable Accumulator(SM)
A combination variable and fixed deferred
annuity contract
PROSPECTUS DATED MAY 1, 2000
Please read and keep this prospectus for future reference. It contains important
information that you should know before purchasing or taking any other action
under your contract. Also, at the end of this prospectus you will find attached
the prospectus for EQ Advisors Trust, which contains important information about
its portfolios.
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WHAT IS THE EQUITABLE ACCUMULATOR?
Equitable Accumulator is a deferred annuity contract issued by THE EQUITABLE
LIFE ASSURANCE SOCIETY OF THE UNITED STATES. It provides for the accumulation of
retirement savings and for income. The contract offers income and death benefit
protection. It also offers a number of payout and distribution options. The
distribution options available under the contract are the Assured Payment Option
and APO Plus. You invest to accumulate value on a tax-deferred basis in one or
more of our variable investment options, fixed maturity options, or the account
for special dollar cost averaging ("investment options"). This contract may not
currently be available in all states.
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VARIABLE INVESTMENT OPTIONS
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FIXED INCOME
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o Alliance High Yield o Alliance Money Market
o Alliance Intermediate Government Securities
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DOMESTIC STOCKS
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o EQ/Aggressive Stock(1) o EQ/Evergreen
o Alliance Common Stock o MFS Emerging Growth Companies
o Alliance Growth and Income o MFS Growth with Income
o EQ/Alliance Premier Growth o MFS Research
o Alliance Small Cap Growth o Mercury Basic Value Equity (3)
o EQ/Alliance Technology(2) o EQ/Putnam Growth & Income Value
o BT Equity 500 Index o T. Rowe Price Equity Income
o BT Small Company Index o Warburg Pincus Small Company Value
o Capital Guardian Research
o Capital Guardian U.S. Equity
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INTERNATIONAL STOCKS
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o Alliance Global o Morgan Stanley Emerging Markets Equity
o Alliance International o T. Rowe Price International Stock
o BT International Equity Index
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BALANCED/HYBRID
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o Alliance Conservative Investors o Mercury World Strategy(4)
o Alliance Growth Investors o EQ/Putnam Balanced
o EQ/Evergreen Foundation
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o Alliance Equity Index (Available only under APO Plus)
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(1) Formerly named "Alliance Aggressive Stock."
(2) May not be available in California.
(3) Formerly named "Merrill Lynch Basic Value Equity."
(4) Formerly named "Merrill Lynch World Strategy."
You may allocate amounts to any of the variable investment options. Each
variable investment option is a subaccount of our Separate Account No. 45. Each
variable investment option, in turn, invests in a corresponding securities
portfolio of EQ Advisors Trust. Your investment results in a variable investment
option will depend on the investment performance of the related portfolio.
FIXED MATURITY OPTIONS. You may allocate amounts to one or more fixed maturity
options. These amounts will receive a fixed rate of interest for a specified
period. Interest is earned at a guaranteed rate set by us. We make a market
value adjustment (up or down) if you make transfers or withdrawals from a fixed
maturity option before its maturity date.
ACCOUNT FOR SPECIAL DOLLAR COST AVERAGING. This account also pays fixed interest
at guaranteed rates.
TYPES OF CONTRACTS. We offer the contracts for use as:
o A nonqualified annuity ("NQ") for after-tax contributions only.
o An individual retirement annuity ("IRA"), either traditional IRA or Roth
IRA.
We offer two versions of the traditional IRA: "Rollover IRA" and "Flexible
Premium IRA." The Assured Payment Option and APO Plus are available under
Rollover IRA and Flexible Premium IRA contracts.
We also offer two versions of the Roth IRA: "Roth Conversion IRA" and
"Flexible Premium Roth IRA."
o An annuity that is an investment vehicle for a qualified defined
contribution or defined benefit plan ("QP").
o An Internal Revenue Code Section 403(b) Tax-Sheltered Annuity ("TSA") -
("Rollover TSA").
A contribution of at least $5,000 is required to purchase an NQ, Rollover IRA,
Roth Conversion IRA, QP or Rollover TSA contract. For Flexible Premium IRA or
Flexible Premium Roth IRA contracts, we require a contribution of $2,000 to
purchase a contract. Under Rollover IRA or Flexible Premium IRA contracts you
may elect the Assured Payment Option or APO Plus with a minimum initial
contribution of $10,000.
Registration statements relating to this offering have been filed with the
Securities and Exchange Commission ("SEC"). The statement of additional
information ("SAI") dated May 1, 2000 is a part of one of the registration
statements. The SAI is available free of charge. You may request one by writing
to our processing office or calling 1-800-789-7771. The SAI has been
incorporated by reference into this prospectus. This prospectus and the SAI can
also be obtained from the SEC's Web site at http://www.sec.gov. The table of
contents for the SAI appears at the back of this prospectus.
THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. THE CONTRACTS ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY.
THEY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE NOT BANK
GUARANTEED. THEY ARE SUBJECT TO INVESTMENT RISKS AND POSSIBLE LOSS OF PRINCIPAL.
72084
1999 portfolio
<PAGE>
Contents of this prospectus
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EQUITABLE ACCUMULATOR(SM)
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Index of key words and phrases 4
Who is Equitable Life? 5
How to reach us 6
Equitable Accumulator at a glance - key features 8
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FEE TABLE 12
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Examples 15
Condensed financial information 16
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1 CONTRACT FEATURES AND BENEFITS 17
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How you can purchase and contribute to your contract 17
Owner and annuitant requirements 24
How you can make your contributions 24
What are your investment options under the contract? 24
Allocating your contributions 31
Your benefit base 33
Annuity purchase factors 33
Our baseBUILDER option 33
Guaranteed minimum death benefit 36
Your right to cancel within a certain number of days 36
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2 DETERMINING YOUR CONTRACT'S VALUE 38
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Your account value and cash value 38
Your contract's value in the variable investment options 38
Your contract's value in the fixed maturity options 38
Your contract's value in the account for special dollar cost
averaging 38
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"We," "our," and "us" refer to Equitable Life. When we address the reader of
this prospectus with words such as "you" and "your," we mean the person who has
the right or responsibility that the prospectus is discussing at that point.
This is usually the contract owner.
When we use the word "contract" it also includes certificates that are issued
under group contracts in some states.
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3 TRANSFERRING YOUR MONEY AMONG INVESTMENT OPTIONS 39
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Transferring your account value 39
Market timing 39
Rebalancing your account value 39
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4 ACCESSING YOUR MONEY 41
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Assured Payment Option and APO Plus 41
Withdrawing your account value 45
How withdrawals are taken from your account value 47
How withdrawals affect your guaranteed minimum
income benefit and guaranteed minimum death
benefit 47
Loans under Rollover TSA contracts 48
Surrendering your contract to receive its cash value 49
When to expect payments 49
Your annuity payout options 49
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5 CHARGES AND EXPENSES 53
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Charges that Equitable Life deducts 53
Charges that EQ Advisors Trust deducts 55
Group or sponsored arrangements 55
Other distribution arrangements 56
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6 PAYMENT OF DEATH BENEFIT 57
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Your beneficiary and payment of benefit 57
How death benefit payment is made 58
Beneficiary continuation option 58
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7 TAX INFORMATION 60
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Overview 60
Transfers among investment options 60
Taxation of nonqualified annuities 60
Individual retirement arrangements (IRAs) 62
Special rules for nonqualified contracts in qualified plans 73
Tax-Sheltered Annuity contracts (TSAs) 73
Federal and state income tax withholding and
information reporting 77
Impact of taxes to Equitable Life 79
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8 MORE INFORMATION 80
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About our Separate Account No. 45 80
About EQ Advisors Trust 80
About our fixed maturity options 81
About the general account 82
About other methods of payment 82
Dates and prices at which contract events occur 83
About your voting rights 84
About legal proceedings 84
About our independent accountants 84
Financial statements 85
Transfers of ownership, collateral assignments, loans,
and borrowing 85
Distribution of the contracts 85
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9 INVESTMENT PERFORMANCE 86
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Benchmarks 86
Communicating performance data 97
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10 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 99
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APPENDICES
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I - Condensed financial information A-1
II - Purchase considerations for QP contracts B-1
III - Market value adjustment example C-1
IV - Guaranteed minimum death benefit example D-1
V - Example of payments under the Assured Payment
Option and APO Plus E-1
VI - Assured Payment Option and APO Plus contracts
issued in the state of Maryland F-1
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STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS
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Index of key words and phrases
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This index should help you locate more information on the terms used in this
prospectus.
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PAGE PAGE
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account for special dollar cost guaranteed minimum death benefit 36
averaging 25 guaranteed minimum income benefit 34
account value 33 IRA 62
annuitant 16 IRS 60
annuity payout options 44 investment options 24
APO Plus 38 loan reserve account 43
Assured Payment Option 41 market adjusted amount 28
baseBUILDER 33 market value adjustment 28
beneficiary 57 maturity value 28
benefit base 33 NQ cover
business day 83 participant 24
cash value 38 portfolio cover
conduit IRA 66 processing office 6
contract date 10 QP 73
contract date anniversary 10 rate to maturity 28
contract year 10 Required Beginning Date 68
contributions to Roth IRAs 70 Rollover IRA cover
regular contributions 70 Rollover TSA cover
rollovers and direct transfers 71 Roth Conversion IRA cover
conversion contributions 71 Roth IRA 70
contributions to traditional IRAs 63 SAI cover
regular contributions 63 SEC cover
rollovers and transfers 64 TOPS 6
EQAccess 6 TSA 73
ERISA 48 traditional IRA 63
fixed maturity options 28 unit 38
Flexible Premium IRA cover variable investment options 24
Flexible Premium Roth IRA cover
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To make this prospectus easier to read, we sometimes use different words than in
the contract or supplemental materials. This is illustrated below. Although we
use different words, they have the same meaning in this prospectus as in the
contract or supplemental materials. Your financial professional can provide
further explanation about your contract.
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PROSPECTUS CONTRACT OR SUPPLEMENTAL MATERIALS
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fixed maturity options Guarantee Periods (GIROs in Supplemental Materials)
variable investment options Investment Funds
account value Annuity Account Value
rate to maturity Guaranteed Rates
unit Accumulation Unit
baseBUILDER Guaranteed Minimum Income Benefit
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Who is Equitable Life?
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We are The Equitable Life Assurance Society of the United States ("Equitable
Life"), a New York stock life insurance corporation. We have been doing business
since 1859. Equitable Life is a wholly owned subsidiary of AXA Financial, Inc.
(previously, The Equitable Companies Incorporated). The majority shareholder of
AXA Financial, Inc. is AXA, a French holding company for an international group
of insurance and related financial services companies. As a majority
shareholder, and under its other arrangements with Equitable Life and Equitable
Life's parent, AXA exercises significant influence over the operations and
capital structure of Equitable Life and its parent. No company other than
Equitable Life, however, has any legal responsibility to pay amounts that
Equitable Life owes under the contract.
AXA Financial, Inc. and its consolidated subsidiaries managed approximately
$462.7 billion in assets as of December 31, 1999. For over 100 years Equitable
Life has been among the largest insurance companies in the United States. We are
licensed to sell life insurance and annuities in all fifty states, the District
of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our home office is
located at 1290 Avenue of the Americas, New York, N.Y. 10104.
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HOW TO REACH US
You may communicate with our processing office as listed below for any of the
following purposes:
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FOR CONTRIBUTIONS SENT BY REGULAR MAIL:
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Equitable Accumulator
P.O. Box 13014
Newark, NJ 07188-0014
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FOR CONTRIBUTIONS SENT BY EXPRESS DELIVERY:
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Equitable Accumulator
c/o Bank One, N.A.
300 Harmon Meadow Boulevard, 3rd Floor
Attn: Box 13014
Secaucus, NJ 07094
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FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANSFERS, WITHDRAWALS, OR
REQUIRED NOTICES) SENT BY REGULAR MAIL:
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Equitable Accumulator
P.O. Box 1547
Secaucus, NJ 07096-1547
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FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANSFERS, WITHDRAWALS, OR
REQUIRED NOTICES) SENT BY EXPRESS DELIVERY:
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Equitable Accumulator
200 Plaza Drive, 4th Floor
Secaucus, NJ 07094
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REPORTS WE PROVIDE:
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o written confirmation of financial transactions;
o statement of your contract values at the close of each
calendar quarter (four per year); and
o annual statement of your contract values as of
the close of the contract year.
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TELEPHONE OPERATED PROGRAM SUPPORT ("TOPS") AND EQACCESS SYSTEMS:
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TOPS is designed to provide you with up-to-date information via touch-tone
telephone. EQAccess is designed to provide this information through the
Internet. You can obtain information on:
o your current account value;
o your current allocation percentages (anticipated to be available through
EQAccess by the end of 2000);
o the number of units you have in the variable investment options;
o rates to maturity for the fixed maturity options;
o the daily unit values for the variable investment options; and
o performance information regarding the variable investment options (not
available through TOPS).
You can also:
o change your allocation percentages and/or transfer among the investment
options (anticipated to be available through EQAccess by the end of 2000);
o change your TOPS personal identification number (PIN); and
o change your EQAccess password (not available through TOPS)
TOPS and EQAccess are normally available seven days a week, 24 hours a day. You
may use TOPS by calling toll free 1-888-909-7770. You may use EQAccess by
visiting our Web site at http://www.equitable.com and clicking on EQAccess. Of
course, for reasons beyond our control, these services may sometimes be
unavailable.
We have established procedures to reasonably confirm that the instructions
communicated by telephone or Internet are
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genuine. For example, we will require certain personal identification
information before we will act on telephone or Internet instructions and we will
provide written confirmation of your transfers. If we do not employ reasonable
procedures to confirm the genuineness of telephone or Internet instructions, we
may be liable for any losses arising out of any act or omission that constitutes
negligence, lack of good faith or willful misconduct. In light of our
procedures, we will not be liable for following telephone or Internet
instructions we reasonably believe to be genuine.
We reserve the right to limit access to these services if we determine that you
are engaged in a market timing strategy (see "Market timing" in "Transferring
your money among investment options").
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CUSTOMER SERVICE REPRESENTATIVE:
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You may also use our toll-free number (1-800-789-7771) to
speak with one of our customer service representatives. Our
customer service representatives are available on any business
day from 8:30 a.m. until 5:30 p.m., Eastern Time.
WE REQUIRE THAT THE FOLLOWING TYPES OF COMMUNICATIONS BE ON SPECIFIC FORMS WE
PROVIDE FOR THAT PURPOSE:
(1) conversion of a traditional IRA to a Roth Conversion IRA or Flexible
Premium Roth IRA contract;
(2) election of the Assured Payment Option or APO Plus;
(3) election of the automatic investment program;
(4) election of the rebalancing program;
(5) requests for loans under Rollover TSA contracts;
(6) spousal consent for loans under Rollover TSA contracts;
(7) tax withholding election; and
(8) election of the beneficiary continuation option.
WE ALSO HAVE SPECIFIC FORMS THAT WE RECOMMEND YOU USE FOR THE FOLLOWING TYPES OF
REQUESTS:
(1) address changes;
(2) beneficiary changes;
(3) transfers between investment options; and
(4) contract surrender and withdrawal requests.
TO CANCEL OR CHANGE ANY OF THE FOLLOWING WE REQUIRE WRITTEN NOTIFICATION
GENERALLY AT LEAST SEVEN CALENDAR DAYS BEFORE THE NEXT SCHEDULED TRANSACTION:
(1) automatic investment program;
(2) general dollar cost averaging;
(3) rebalancing;
(4) special dollar cost averaging;
(5) Assured Payment Option or APO Plus;
(6) substantially equal withdrawals;
(7) systematic withdrawals; and
(8) the date annuity payments are to begin.
You must sign and date all these requests. Any written request that is not on
one of our forms must include your name and your contract number along with
adequate details about the notice you wish to give or the action you wish us to
take.
SIGNATURES:
The proper person to sign forms, notices and requests would normally be the
owner. If there are joint owners both must sign.
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Equitable Accumulator at a glance - key features
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PROFESSIONAL Equitable Accumulator's variable investment options
INVESTMENT invest in different portfolios managed by
MANAGEMENT professional investment advisers.
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FIXED MATURITY o 10 fixed maturity options with maturities ranging
from approximately 1 to 10 years.Under OPTIONS
the Assured Payment Option and APO Plus, 5
additional fixed maturity options with maturities
ranging from 11 to 15 years.
o Each fixed maturity option offers a guarantee of
principal and interest rate if you hold it to
maturity.
----------------------------------------------------
If you make withdrawals or transfers from a fixed
maturity option before maturity, there will be a
market value adjustment due to differences in
interest rates. This may increase or decrease any
value that you have left in that fixed maturity
option. If you surrender your contract, a market
value adjustment may also apply.
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ACCOUNT FOR SPECIAL DOLLAR Available for dollar cost averaging all or a
COST AVERAGING portion of your initial contribution.
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TAX ADVANTAGES o On earnings inside the No tax on any dividends,
contract interest or capital
gains until you make
withdrawals from your
contract or receive
annuity payments.
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o On transfers inside the No tax on transfers
contract among investment
options.
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If you are buying a contract to fund a retirement
plan that already provides tax deferral under
sections of the Internal Revenue Code, you should
do so for the contract's features and benefits
other than tax deferral. In such situations, the
tax deferral of the contract does not provide
necessary or additional benefits.
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BASEBUILDER(R) baseBUILDER combines a guaranteed minimum income
PROTECTION benefit with a guaranteed minimum death benefit
provided under the contract. The guaranteed minimum
income benefit provides income protection for you
while the annuitant lives. The guaranteed minimum
death benefit provides a death benefit for the
beneficiary should the annuitant die. For Rollover
IRA, Flexible Premium IRA and Rollover TSA
contracts, an additional guaranteed minimum death
benefit is available under baseBUILDER where the
annuitant is between ages 20 and 60 at contract
issue.
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CONTRIBUTION AMOUNTS o NQ, Rollover IRA, Roth Conversion IRA, QP, and
Rollover TSA contracts
o Initial minimum: $ 5,000
o Additional minimum: $ 1,000
$100 monthly and $300
quarterly under our
automatic investment
program (NQ contracts)
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o Flexible Premium IRA and Flexible Premium Roth
IRA contracts
o Initial minimum: $ 2,000
o Additional minimum: $50 ($50 under our
automatic investment
program)
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o Assured Payment Option and APO Plus under
Rollover IRA and Flexible Premium IRA contracts
o Initial minimum: $10,000
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o Additional minimum: $1,000
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Maximum contribution limitations may apply.
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ACCESS TO YOUR MONEY o Assured Payment Option
o APO Plus
o Lump sum withdrawals
o Several withdrawal options on a periodic basis
o Loans under Rollover TSA contracts
o Contract surrender
You may incur a withdrawal charge for certain withdrawals
or if you surrender your contract. You may also incur
income tax and a tax penalty.
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PAYOUT OPTIONS o Fixed annuity payout options
o Variable Immediate Annuity payout options
o Income Manager(R) payout options
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ADDITIONAL FEATURES o Guaranteed minimum death benefit even if you do not
elect baseBUILDER
o Dollar cost averaging
o Automatic investment program
o Account value rebalancing (quarterly, semiannually, and
annually)
o Free transfers
o Waiver of withdrawal charge for disability, terminal
illness, or confinement to a nursing home
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FEES AND CHARGES o Daily charges on amounts invested in the variable
investment options for mortality and expense risks and
administrative charges at a current annual rate of
1.35% (1.45% maximum).
o Annual 0.30% benefit base charge for the optional
baseBUILDER benefit until you exercise your guaranteed
minimum income benefit, elect another annuity payout
option or the contract date anniversary after the
annuitant reaches age 83, whichever occurs first. The
annual benefit base charge is 0.15% if the 5% roll up
to age 70 baseBUILDER benefit is elected. The benefit
base is described under "Your benefit base" in
"Contract features and benefits-Your guaranteed minimum
income benefit in baseBUILDER." If you do not elect
baseBUILDER, you still receive a guaranteed minimum
death benefit under your contract at no additional
charge.
o Under Flexible Premium IRA and Flexible Premium Roth
IRA contracts, if your account value at the end of the
contract year is less than $25,000, we deduct an annual
administrative charge equal to $30 or during the first
two contract years 2% of your account value, if less.
If your account value is $25,000 or more, we will not
deduct the charge.
o No sales charge deducted at the time you make
contributions.
o During the first seven contract years following a
contribution, a charge will be deducted from amounts
that you withdraw that exceed 15% of your account
value. We use the account value on the most recent
contract date anniversary to calculate the 15% amount
available. The charge begins at 7% in the first
contract year following a contribution. It declines by
1% each year to 1% in the seventh contract year. There
is no withdrawal charge in the eighth and later
contract years following a contribution.
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The "contract date" is the effective date of a contract.
This usually is the business day we receive the properly
completed and signed application, along with any other
required documents, and your initial contribution. Your
contract date will be shown in your contract. The
12-month period beginning on your contract date and each
12-month period after that date is a "contract year." The
end of each 12-month period is your "contract date
anniversary."
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o We deduct a charge designed to approximate certain
taxes that may be imposed on us, such as premium taxes
in your state. This charge is generally deducted from
the amount applied to an annuity payout option.
o We deduct a $350 annuity administrative fee from
amounts applied to purchase the Variable Immediate
Annuity payout options.
o Annual expenses of EQ Advisors Trust portfolios are
calculated as a percentage of the average daily net
assets invested in each portfolio. These expenses
include management fees ranging from 0.25% to 1.15%
annually, 12b-1 fees of 0.25% annually, and other
expenses.
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ANNUITANT ISSUE AGES NQ: 0-83
Rollover IRA, Roth Conversion IRA, Flexible Premium Roth
IRA, and Rollover TSA: 20-83
Flexible Premium IRA: 20-70
Assured Payment Option and APO
Plus: 53 1/2-83
QP: 20-75
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THE ABOVE IS NOT A COMPLETE DESCRIPTION OF ALL MATERIAL PROVISIONS OF THE
CONTRACT. IN SOME CASES RESTRICTIONS OR EXCEPTIONS APPLY. ALSO, ALL FEATURES OF
THE CONTRACT ARE NOT NECESSARILY AVAILABLE IN YOUR STATE OR AT CERTAIN AGES.
For more detailed information we urge you to read the contents of this
prospectus, as well as your contract. Please feel free to speak with your
financial professional, or call us, if you have any questions.
OTHER CONTRACTS
We offer a variety of fixed and variable annuity contracts. They may offer
features, including investment options, fee and/or charges that are different
from those in the contracts offered by this prospectus. Not every contract is
offered through the same distributor. Upon request, your financial professional
can show you information regarding other Equitable Life annuity contracts that
he or she distributes. You can also contact us to find out more about any of the
Equitable Life annuity contracts.
<PAGE>
Fee table
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The fee table below will help you understand the various charges and expenses
that apply to your contract. The table reflects charges you will directly incur
under the contract, as well as charges and expenses of the Portfolios that you
will bear indirectly. Charges designed to approximate certain taxes that may be
imposed on us, such as premium taxes in your state, may also apply. Also, an
annuity administrative fee may apply when your annuity payments are to begin.
Each of the charges and expenses is more fully described under "Charges and
expenses" later in this prospectus.
The fixed maturity options and the account for special dollar cost averaging are
not covered by the fee table and examples. However, the annual administrative
charge and the withdrawal charge do apply to the fixed maturity options and the
account for special dollar cost averaging. A market value adjustment (up or
down) may apply as a result of a withdrawal, transfer, or surrender of amounts
from a fixed maturity option.
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CHARGES WE DEDUCT FROM YOUR VARIABLE INVESTMENT OPTIONS EXPRESSED AS AN
ANNUAL PERCENTAGE OF DAILY NET ASSETS
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Mortality and expense risks (1) 1.10%
Administrative 0.25% current (0.35% maximum)
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Total annual expenses 1.35% current (1.45% maximum)
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FLEXIBLE PREMIUM IRA AND FLEXIBLE PREMIUM ROTH IRA CONTRACTS ONLY:
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE ON EACH CONTRACT DATE ANNIVERSARY
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Maximum annual administrative charge
If your account value on a contract date anniversary is less than $25,000(2) $30
If your account value on a contract date anniversary is $25,000 or more $0
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CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE AT THE TIME YOU REQUEST CERTAIN TRANSACTIONS
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WITHDRAWAL CHARGE AS A PERCENTAGE OF CONTRIBUTIONS (deducted if you surrender Contract
your contract or make certain withdrawals. The withdrawal charge percentage we use is year
determined by the contract year in which you make the withdrawal or surrender your 1..... 7.00%
contract. For each contribution, we consider the contract year in which we receive that 2..... 6.00%
contribution to be "contract year 1")(3) 3..... 5.00%
4..... 4.00%
5..... 3.00%
6..... 2.00%
7..... 1.00%
8+.... 0.00%
Charge if you elect a Variable Immediate Annuity payout option $350
- --------------------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE EACH YEAR IF YOU ELECT THE OPTIONAL BENEFIT
- --------------------------------------------------------------------------------------------------------------------------------
BASEBUILDER BENEFITS CHARGE (calculated as a percentage of the benefit base.
Deducted annually on each contract date anniversary)(4) 0.30%
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
13
- --------------------------------------------------------------------------------
EQ ADVISORS TRUST ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL
OTHER ANNUAL
EXPENSES EXPENSES
MANAGEMENT (AFTER EXPENSE (AFTER EXPENSE
FEES(5) 12b-1 FEE(6) LIMITATION)(7) LIMITATION)(8)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock 0.60% 0.25% 0.04% 0.89%
Alliance Common Stock 0.46% 0.25% 0.04% 0.75%
Alliance Conservative Investors 0.60% 0.25% 0.07% 0.92%
Alliance Equity Index 0.25% 0.25% 0.05% 0.55%
Alliance Global 0.73% 0.25% 0.09% 1.07%
Alliance Growth and Income 0.59% 0.25% 0.05% 0.89%
Alliance Growth Investors 0.57% 0.25% 0.05% 0.87%
Alliance High Yield 0.60% 0.25% 0.05% 0.90%
Alliance Intermediate Government Securities 0.50% 0.25% 0.07% 0.82%
Alliance International 0.85% 0.25% 0.20% 1.30%
Alliance Money Market 0.34% 0.25% 0.05% 0.64%
EQ/Alliance Premier Growth 0.90% 0.25% 0.00% 1.15%
Alliance Small Cap Growth 0.75% 0.25% 0.07% 1.07%
EQ/Alliance Technology 0.90% 0.25% 0.00% 1.15%
BT Equity 500 Index 0.25% 0.25% 0.10% 0.60%
BT International Equity Index 0.35% 0.25% 0.40% 1.00%
BT Small Company Index 0.25% 0.25% 0.25% 0.75%
Capital Guardian Research 0.65% 0.25% 0.05% 0.95%
Capital Guardian U.S. Equity 0.65% 0.25% 0.05% 0.95%
EQ/Evergreen 0.65% 0.25% 0.05% 0.95%
EQ/Evergreen Foundation 0.60% 0.25% 0.10% 0.95%
Mercury Basic Value Equity 0.60% 0.25% 0.10% 0.95%
Mercury World Strategy 0.70% 0.25% 0.25% 1.20%
MFS Emerging Growth Companies 0.65% 0.25% 0.10% 1.00%
MFS Growth with Income 0.60% 0.25% 0.10% 0.95%
MFS Research 0.65% 0.25% 0.05% 0.95%
Morgan Stanley Emerging Markets Equity 1.15% 0.25% 0.35% 1.75%
EQ/Putnam Balanced 0.60% 0.25% 0.05% 0.90%
EQ/Putnam Growth & Income Value 0.60% 0.25% 0.10% 0.95%
T. Rowe Price Equity Income 0.60% 0.25% 0.10% 0.95%
T. Rowe Price International Stock 0.85% 0.25% 0.15% 1.25%
Warburg Pincus Small Company Value 0.75% 0.25% 0.10% 1.10%
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
Notes:
(1) A portion of this charge is for providing the guaranteed minimum death
benefit.
(2) For Flexible Premium IRA and Flexible Premium Roth IRA contracts, during
the first two contract years this charge is equal to the lesser of $30 or
2% of your account value if it applies. Thereafter, the charge is $30 for
each contract year.
(3) Deducted upon a withdrawal of amounts in excess of the 15% free withdrawal
amount and upon surrender of a contract.
<PAGE>
- ------
14
- --------------------------------------------------------------------------------
(4) This charge is for providing a guaranteed minimum income benefit in
combination with the guaranteed minimum death benefit available under the
contract. The charge for the 5% roll up to age 70 baseBUILDER benefit is
0.15%. The benefit base is described under "Your benefit base" in
"Contract features and benefits."
(5) The management fees shown reflect revised management fees, effective on or
about May 1, 2000 which were approved by shareholders. The management fees
shown for EQ/Putnam Balanced, EQ/Putnam Growth & Income Value, Warburg
Pincus Small Company Value and T. Rowe Price International Stock do not
reflect the waiver of a portion of each of these portfolio's investment
management fees that are currently in effect. The management fee for each
portfolio cannot be increased without a vote of that portfolio's
shareholders.
(6) Portfolio shares are all subject to fees imposed under the distribution
plan (the "Rule 12b-1 Plan") adopted by EQ Advisors Trust pursuant to Rule
12b-1 under the Investment Company Act of 1940. The 12b-1 fee will not be
increased for the life of the contracts. Prior to October 18, 1999, the
total annual expenses for the Alliance Small Cap Growth portfolio were
limited to 1.20% under an expense limitation arrangement related to that
portfolio's Rule 12b-1 Plan. The arrangement is no longer in effect. The
amounts shown have been restated to reflect the expenses that would have
been incurred in 1999, absent the expense limitation arrangement.
(7) The amounts shown as "Other Expenses" will fluctuate from year to year
depending on actual expenses. See footnote (8) for any expense limitation
agreements.
On October 18, 1999 the Alliance portfolios (other than EQ/Alliance
Premier Growth and EQ/Alliance Technology) became part of the portfolios
of EQ Advisors Trust. The "Other Expenses" for these portfolios have been
restated to reflect the estimated expenses that would have been incurred
had these portfolios been portfolios of EQ Advisors Trust for the entire
year ended December 31, 1999. The restated expenses reflect an increase of
0.01% for each of these portfolios.
(8) Equitable Life, EQ Advisors Trust's manager, has entered into an expense
limitation agreement with respect to certain portfolios. Under this
agreement Equitable Life has agreed to waive or limit its fees and assume
other expenses. Under the expense limitation agreement, total annual
operating expenses of certain portfolios (other than interest, taxes,
brokerage commissions, capitalized expenditures, extraordinary expenses,
and 12b-1 fees) are limited as a percentage of the average daily net
assets of each of the following portfolios: 1.75% for Morgan Stanley
Emerging Markets Equity; 1.25% for T. Rowe Price International Stock;
1.20% for Mercury World Strategy; 1.15% for EQ/Alliance Premier Growth and
EQ/Alliance Technology; 1.10% for Warburg Pincus Small Company Value;
1.00% for BT International Equity Index and MFS Emerging Growth Companies;
0.95% for Capital Guardian U.S. Equity, Capital Guardian Research,
EQ/Evergreen, EQ/Evergreen Foundation, MFS Growth with Income, MFS
Research, Mercury Basic Value Equity; EQ/Putnam Growth & Income Value and
T. Rowe Price Equity Income; 0.90% for EQ/Putnam Balanced; 0.75% for BT
Small Company Index; and 0.60% for BT Equity 500 Index. The expense
limitations for the EQ/Alliance Premier Growth, BT Equity 500 Index, MFS
Growth with Income, MFS Research, MFS Emerging Growth Companies and
Mercury Basic Value Equity portfolios reflect an increase effective on May
1, 2000. The expense limitation for the EQ/Evergreen portfolio reflects a
decrease effective on May 1, 2000.
Absent the expense limitation, the "Other Expenses" for 1999 on an
annualized basis for each of the portfolios would have been as follows:
1.00% for Morgan Stanley Emerging Markets Equity; 0.10% for EQ/Alliance
Technology; 0.23% for EQ/Alliance Premier Growth; 0.30% for T. Rowe Price
International Stock; 0.46% for Mercury World Strategy; 0.24% for Warburg
Pincus Small Company Value; 0.49% for BT International Equity Index; 0.17%
for MFS Emerging Growth Companies; 0.34% for Capital Guardian U.S. Equity;
0.47% for Capital Guardian Research; 1.87% for EQ/Evergreen; 1.07% for
EQ/Evergreen Foundation; 0.37% for MFS Growth with Income; 0.17% for MFS
Research and Mercury Basic Value Equity; 0.16% for EQ/Putnam Growth &
Income Value; 0.28% for EQ/Putnam Balanced; 0.21% for T. Rowe Price Equity
Income; 0.71% for BT Small Company Index; and 0.18% for BT Equity 500
Index. Initial seed capital was invested on April 30, 1999 for the
EQ/Alliance Premier Growth, Capital Guardian U.S. Equity and Capital
Guardian Research portfolios and will be invested on or about May 1, 2000
for the EQ/Alliance Technology portfolio and therefore expenses have been
estimated.
Each portfolio may at a later date make a reimbursement to Equitable Life
for any of the management fees waived or limited and other expenses
assumed and paid by Equitable Life pursuant to the expense limitation
agreement provided
<PAGE>
- ------
15
- --------------------------------------------------------------------------------
that, among other things, such portfolio has reached sufficient size to
permit such reimbursement to be made and provided that the portfolio's
current annual operating expenses do not exceed the operating expense
limit determined for such portfolio. For more information see the
prospectus for EQ Advisors Trust.
EXAMPLES
The examples below show the expenses that a hypothetical contract owner who has
purchased a Flexible Premium IRA or Flexible Premium Roth IRA contract would pay
in the situations illustrated. The examples show the expenses if (1) baseBUILDER
is elected with a 5% roll up to age 80 or annual ratchet to age 80 guaranteed
minimum death benefit and (2) APO Plus is elected. We assume that a $1,000
contribution is invested in one of the variable investment options listed and a
5% annual return is earned on the assets in that option.(1) The annual
administrative charge is based on charges that apply to a mix of estimated
contract sizes, resulting in an estimated administrative charge for the purpose
of these examples of $0.14 per $1,000. Since the annual administrative charge
only applies under Flexible Premium IRA and Flexible Premium Roth IRA contracts,
the charges shown in the examples would be lower for NQ, Rollover IRA, Roth
Conversion IRA, QP, and Rollover TSA contracts. Other than as indicated above,
the charges used in the examples are the maximum charges rather than the lower
current charges.
These examples should not be considered a representation of past or future
expenses for each option. Actual expenses may be greater or less than those
shown. Similarly, the annual rate of return assumed in the examples is not an
estimate or guarantee of future investment performance.
<TABLE>
<CAPTION>
(1) EXPENSES REFLECTING BASEBUILDER ELECTION
IF YOU SURRENDER YOUR CONTRACT AT THE END
OF EACH PERIOD SHOWN, THE EXPENSES
WOULD BE:
-------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ------------ ------------ -----------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock $ 94.61 $ 131.94 $ 172.20 $ 306.66
Alliance Common Stock $ 93.14 $ 127.53 $ 164.87 $ 292.16
Alliance Conservative Investors $ 95.03 $ 133.19 $ 174.28 $ 310.76
Alliance Global $ 96.60 $ 137.89 $ 182.07 $ 326.00
Alliance Growth and Income $ 94.71 $ 132.25 $ 172.72 $ 307.69
Alliance Growth Investors $ 94.50 $ 131.62 $ 171.67 $ 305.63
Alliance High Yield $ 94.71 $ 132.25 $ 172.72 $ 307.69
Alliance Intermediate Government Securities $ 93.98 $ 130.05 $ 169.06 $ 300.47
Alliance International $ 99.02 $ 145.07 $ 193.91 $ 348.92
Alliance Money Market $ 91.98 $ 124.06 $ 159.09 $ 280.62
EQ/Alliance Premier Growth $ 98.49 $ 143.51 $ 191.34 $ 343.99
Alliance Small Cap Growth $ 96.50 $ 137.58 $ 181.55 $ 325.00
EQ/Alliance Technology $ 97.44 $ 140.39 $ 186.20 $ 334.04
BT Equity 500 Index $ 91.67 $ 123.12 $ 157.50 $ 277.45
BT International Equity Index $ 95.87 $ 135.70 $ 178.44 $ 318.92
BT Small Company Index $ 93.24 $ 127.85 $ 165.40 $ 293.20
Capital Guardian Research $ 95.34 $ 134.13 $ 175.84 $ 313.83
<CAPTION>
IF YOU DO NOT SURRENDER YOUR CONTRACT AT
THE END OF EACH PERIOD SHOWN, THE
EXPENSES WOULD BE:
------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock $ 24.61 $ 81.94 $ 142.20 $ 306.66
Alliance Common Stock $ 23.14 $ 77.53 $ 134.87 $ 292.16
Alliance Conservative Investors $ 25.03 $ 83.19 $ 144.28 $ 310.76
Alliance Global $ 26.60 $ 87.89 $ 152.07 $ 326.00
Alliance Growth and Income $ 24.71 $ 82.25 $ 142.72 $ 307.69
Alliance Growth Investors $ 24.50 $ 81.62 $ 141.67 $ 305.63
Alliance High Yield $ 24.71 $ 82.25 $ 142.72 $ 307.69
Alliance Intermediate Government Securities $ 23.98 $ 80.05 $ 139.06 $ 300.47
Alliance International $ 29.02 $ 95.07 $ 163.91 $ 348.92
Alliance Money Market $ 21.98 $ 74.06 $ 129.09 $ 280.62
EQ/Alliance Premier Growth $ 28.49 $ 93.51 $ 161.34 $ 343.99
Alliance Small Cap Growth $ 26.50 $ 87.58 $ 151.55 $ 325.00
EQ/Alliance Technology $ 27.44 $ 90.39 $ 156.20 $ 334.04
BT Equity 500 Index $ 21.67 $ 73.12 $ 127.50 $ 277.45
BT International Equity Index $ 25.87 $ 85.70 $ 148.44 $ 318.92
BT Small Company Index $ 23.24 $ 77.85 $ 135.40 $ 293.20
Capital Guardian Research $ 25.34 $ 84.13 $ 145.84 $ 313.83
</TABLE>
<PAGE>
- ------
16
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
IF YOU SURRENDER YOUR CONTRACT AT THE END
OF EACH PERIOD SHOWN, THE EXPENSES
WOULD BE:
-------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ------------ ------------ -----------
<S> <C> <C> <C> <C>
Capital Guardian U.S. Equity $ 95.34 $ 134.13 $ 175.84 $ 313.83
EQ/Evergreen $ 95.34 $ 134.13 $ 175.84 $ 313.83
EQ/Evergreen Foundation $ 95.34 $ 134.13 $ 175.84 $ 313.83
MFS Emerging Growth Companies $ 95.87 $ 135.70 $ 178.44 $ 318.92
MFS Growth with Income $ 95.34 $ 134.13 $ 175.84 $ 313.83
MFS Research $ 95.34 $ 134.13 $ 175.84 $ 313.83
Mercury Basic Value Equity $ 95.34 $ 134.13 $ 175.84 $ 313.83
Mercury World Strategy $ 97.97 $ 141.96 $ 188.77 $ 339.03
Morgan Stanley Emerging Markets Equity $ 103.74 $ 159.02 $ 216.73 $ 392.23
EQ/Putnam Balanced $ 94.82 $ 132.57 $ 173.24 $ 308.71
EQ/Putnam Growth & Income Value $ 95.34 $ 134.13 $ 175.84 $ 313.83
T. Rowe Price Equity Income $ 95.34 $ 134.13 $ 175.84 $ 313.83
T. Rowe Price International Stock $ 98.49 $ 143.51 $ 191.34 $ 343.99
Warburg Pincus Small Company Value $ 96.92 $ 138.83 $ 183.62 $ 329.03
<CAPTION>
IF YOU DO NOT SURRENDER YOUR CONTRACT AT
THE END OF EACH PERIOD SHOWN, THE
EXPENSES WOULD BE:
------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
Capital Guardian U.S. Equity $ 25.34 $ 84.13 $ 145.84 $ 313.83
EQ/Evergreen $ 25.34 $ 84.13 $ 145.84 $ 313.83
EQ/Evergreen Foundation $ 25.34 $ 84.13 $ 145.84 $ 313.83
MFS Emerging Growth Companies $ 25.87 $ 85.70 $ 148.44 $ 318.92
MFS Growth with Income $ 25.34 $ 84.13 $ 145.84 $ 313.83
MFS Research $ 25.34 $ 84.13 $ 145.84 $ 313.83
Mercury Basic Value Equity $ 25.34 $ 84.13 $ 145.84 $ 313.83
Mercury World Strategy $ 27.97 $ 91.96 $ 158.77 $ 339.03
Morgan Stanley Emerging Markets Equity $ 33.74 $ 109.02 $ 186.73 $ 392.23
EQ/Putnam Balanced $ 24.82 $ 82.57 $ 143.24 $ 308.71
EQ/Putnam Growth & Income Value $ 25.34 $ 84.13 $ 145.84 $ 313.83
T. Rowe Price Equity Income $ 25.34 $ 84.13 $ 145.84 $ 313.83
T. Rowe Price International Stock $ 28.49 $ 93.51 $ 161.34 $ 343.99
Warburg Pincus Small Company Value $ 26.92 $ 88.83 $ 153.62 $ 329.03
</TABLE>
<TABLE>
<CAPTION>
(2) EXPENSES REFLECTING APO PLUS ELECTION
IF YOU SURRENDER YOUR CONTRACT AT THE END IF YOU DO NOT SURRENDER YOUR CONTRACT AT
OF EACH PERIOD SHOWN, THE EXPENSES THE END OF EACH PERIOD SHOWN, THE
WOULD BE: EXPENSES WOULD BE:
------------------------------------------------- ------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ------------ ------------ ----------- ----------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Alliance Common Stock $ 93.00 $ 120.86 $ 151.35 $ 260.00 $ 23.00 $ 70.86 $ 121.35 $ 260.00
Alliance Equity Index $ 91.00 $ 114.84 $ 141.27 $ 239.64 $ 21.00 $ 64.84 $ 111.27 $ 239.64
</TABLE>
- ----------
(1) The amount accumulated from the $1,000 contribution could not be paid in
the form of an annuity payout option at the end of any of the periods
shown in the examples. This is because if the amount applied to purchase
an annuity payout option is less than $2,000, or the initial payment is
less than $20, we may pay the amount to you in a single sum instead of
payments under an annuity payout option. See "Accessing your money."
IF YOU ELECT A VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION:
Assuming an annuity payout option could be issued (see note (1) above), and you
elect a Variable Immediate Annuity payout option, the expenses shown in the
example for "if you do not surrender your contract" would, in each case, be
increased by $4.34 based on the average amount applied to annuity payout options
in 1999. See "Annuity administrative fee" in "Charges and expenses."
CONDENSED FINANCIAL INFORMATION
Please see Appendix I at the end of this prospectus for the unit values and the
number of units outstanding as of the end of the periods shown for each of the
variable investment options available as of December 31, 1999.
<PAGE>
1 Contract features and benefits
- ------
17
- --------------------------------------------------------------------------------
HOW YOU CAN PURCHASE AND CONTRIBUTE TO YOUR CONTRACT
You may purchase a contract by making payments to us that we call
"contributions." We require a minimum contribution amount for each type of
contract purchased. The following table summarizes our rules regarding
contributions to your contract. All ages in the table refer to the age of the
annuitant named in the contract.
- ------------------------------------------------------------------------------
The "annuitant" is the person who is the measuring life for determining contract
benefits. The annuitant is not necessarily the contract owner.
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
AVAILABLE
CONTRACT FOR ANNUITANT MINIMUM LIMITATIONS ON
TYPE ISSUE AGES CONTRIBUTIONS SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NQ 0 through 83 o $5,000 (initial) o After-tax money. o No additional
contributions after
o $1,000 (additional) o Paid to us by check or age 84.
transfer of contract
value in a tax-deferred
exchange under Section
1035 of the Internal
Revenue Code.
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -------
18
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
AVAILABLE
CONTRACT FOR ANNUITANT MINIMUM LIMITATIONS ON
TYPE ISSUE AGES CONTRIBUTIONS SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Rollover IRA 20 through 83 o $5,000 (initial) o Rollovers from a o No rollover or direct
qualified plan. transfer contributions
o $1,000 (additional) after age 84
o Rollovers from a TSA.
o Contributions after
o Rollovers from another age 70 1/2 must be net
traditional individual of required minimum
retirement distributions.
arrangement.
o Regular IRA
o Direct contributions limited to
custodian-to-custodian $2,000 per year.
transfers from another
traditional individual o Although we accept
retirement regular IRA
arrangement. contributions under the
Rollover IRA contracts,
o Regular IRA we intend that this
contributions contract be used for
rollover and direct
transfer contributions.
Please refer to
"Withdrawals, payments
and transfers of funds
out of traditional IRAs"
in "Tax information" for
a discussion of conduit
IRAs.
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- ------
19
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
AVAILABLE
CONTRACT FOR ANNUITANT MINIMUM LIMITATIONS ON
TYPE ISSUE AGES CONTRIBUTIONS SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Roth 20 through 83 o $5,000 (initial) o Rollovers from another o No additional rollover
Conversion IRA Roth IRA. or direct transfer
o $1,000 (additional) contributions after
o Conversion rollovers age 84.
from a traditional IRA.
o Conversion rollovers
o Direct transfers from after age 70 1/2 must be
another Roth IRA. net of required minimum
distributions for the
traditional IRA you are
rolling over.
o You cannot roll over funds
from a traditional IRA if
your adjusted gross
income is $100,000 or
more.
o Regular contributions are
not permitted.
o Only rollover and direct
transfer contributions
are permitted.
- ---------------------------------------------------------------------------------------------------------------------------------
Rollover TSA 20 through 83 o $5,000 (initial) o Rollovers from another o No additional rollover
TSA contract or or direct transfer
o $1,000 (additional) arrangement. contributions after
age 84.
o Rollovers from a
traditional IRA which o Contributions after age
was a "conduit" for 70 1/2 must be net of
TSA funds previously required minimum
rolled over. distributions.
o Direct transfers from o Employer-remitted
another contract or contributions are not
arrangement under permitted.
Section 403(b) of the
Internal Revenue Code,
complying with IRS
Revenue Ruling 90-24.
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -------
20
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
AVAILABLE
CONTRACT FOR ANNUITANT MINIMUM LIMITATIONS ON
TYPE ISSUE AGES CONTRIBUTIONS SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
QP 20 through 75 o $5,000 (initial) o Only transfer o Regular ongoing
contributions from an payroll contributions
o $1,000 (additional) existing qualified plan are not permitted.
trust as a change of o Only one additional
investment vehicle contribution may be
under the plan. made during a contract
o The plan must be year.
qualified under Section o No additional transfer
401(a) of the Internal contributions after
Revenue Code. age 76.
o For 401(k) plans, o For defined benefit
transferred plans, employee
contributions may only contributions are not
include employee permitted.
pre-tax contributions. o Contributions after
age 70 1/2 must be
net of any required
minimum distributions.
Please refer to Appendix II for a discussion of purchase considerations of QP contracts.
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
21
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
AVAILABLE
CONTRACT FOR ANNUITANT MINIMUM LIMITATIONS ON
TYPE ISSUE AGES CONTRIBUTIONS SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Flexible 20 through 70 o $2,000 (initial) o "Regular" traditional o No regular IRA
Premium IRA IRA contributions. contributions in the
o $50 (additional after calendar year you turn
the first contract year) o Rollovers from a age 70 1/2 and
qualified plan. thereafter.
o Rollovers from a TSA. o Total regular
contributions may
o Rollovers from another not exceed $2,000 for
traditional individual a year.
retirement
arrangement.
o No additional rollover
o Direct custodian- or direct transfer
to-custodian transfers contributions after
from another age 71.
traditional individual
retirement o Rollover and direct
arrangement. transfer contributions
after age 70 1/2 must
be net of required
minimum distributions.
o Although we accept
rollover and direct
transfer contributions
under the Flexible
Premium IRA contract,
we intend that this
contract be used for
ongoing regular
contributions. Please
refer to "Withdrawals,
payments and transfers
of funds out of
traditional IRAs" in
"Tax information" for
discussion of conduit
IRAs.
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -------
22
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
AVAILABLE
CONTRACT FOR ANNUITANT MINIMUM LIMITATIONS ON
TYPE ISSUE AGES CONTRIBUTIONS SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Flexible 20 through 83 o $2,000 (initial) o Regular after-tax o No additional regular
Premium contributions. after-tax contributions
Roth IRA o $50 (additional after after age 84.
the first contract year) o Rollovers from another
Roth IRA. o No additional rollover
or direct transfer
o Conversion rollovers contributions after
from a traditional IRA. age 84.
o Direct transfers from o Contributions are
another Roth IRA. subject to income
limits and other tax
rules. See "Tax
information -
Contributions to Roth
IRAs."
o Although we accept
rollover and direct
transfer contributions
under the Flexible
Premium Roth IRA
contract, we intend
that this contract be
used for ongoing
regular contributions.
- ---------------------------------------------------------------------------------------------------------------------------------
Rollover 53 1/2 through 83 o $10,000 (initial) o Rollovers from a o Additional rollover or
IRA or qualified plan. direct transfer
Flexible o $1,000 (additional) contributions may be
Premium o Rollovers from a TSA. made until the earlier
IRA with of age 84 or within
Assured o Rollovers from another seven years from the
Payment traditional individual end of the fixed period.
Option or retirement
APO Plus arrangement. o Contributions after age
70 1/2 must be net of
o Direct required minimum
custodian-to-custodian distributions.
transfers from another
traditional individual
retirement
arrangement.
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
23
- --------------------------------------------------------------------------------
See "Tax information" for a more detailed discussion of sources of contributions
and certain contribution limitations. We may refuse to accept any contribution
if the sum of all contributions under all Equitable Accumulator contracts with
the same annuitant would then total more than $1,500,000. We reserve the right
to limit aggregate contributions made after the first contract year to 150% of
first-year contributions. We may also refuse to accept any contribution if the
sum of all contributions under all Equitable Life annuity accumulation contracts
that you own would then total more than $2,500,000.
For information on when contributions are credited under your contract see
"Dates and prices at which contract events occur" in "More information" later in
this prospectus.
<PAGE>
- -------
24
- -------------------------------------------------------------------------------
OWNER AND ANNUITANT REQUIREMENTS
Under NQ contracts, the annuitant can be different than the owner. A joint owner
may also be named. Only natural persons can be joint owners. This means that an
entity such as a corporation cannot be a joint owner.
Under all IRA and Rollover TSA contracts, the owner and annuitant must be the
same person.
Under QP contracts, the owner must be the trustee of the qualified plan and the
annuitant must be the plan participant/employee. See Appendix II for more
information on QP contracts.
- --------------------------------------------------------------------------------
A participant is an individual who is currently, or was formerly, participating
in an eligible employer's QP or TSA plan.
- --------------------------------------------------------------------------------
HOW YOU CAN MAKE YOUR CONTRIBUTIONS
Except as noted below, contributions must be by check drawn on a U.S. bank, in
U.S. dollars, and made payable to Equitable Life. We do not accept third-party
checks endorsed to us except for rollover contributions, tax-free exchanges or
trustee checks that involve no refund. All checks are subject to our ability to
collect the funds. We reserve the right to reject a payment if it is received in
an unacceptable form.
Additional contributions may also be made under our automatic investment
program. This method of payment is discussed in detail under "More information"
later in this prospectus.
Your initial contribution must generally be accompanied by an application and
any other form we need to process the payments. If any information is missing or
unclear, we will try to obtain that information. If we are unable to obtain all
of the information we require within five business days after we receive an
incomplete application or form, we will inform the financial professional
submitting the application on your behalf. We will then return the contribution
to you unless you specifically direct us to keep your contribution until we
receive the required information.
- --------------------------------------------------------------------------------
Our "business day" is any day the New York Stock Exchange is open for trading,
and generally ends at 4:00 p.m. Eastern Time. We may, however, close due to
emergency conditions.
- --------------------------------------------------------------------------------
SECTION 1035 EXCHANGES
You may apply the value of an existing nonqualified deferred annuity contract
(or life insurance or endowment contract) to purchase an Equitable Accumulator
NQ contract in a tax-free exchange if you follow certain procedures as shown in
the form that we require you to use. Also see "Tax information" later in this
prospectus.
WHAT ARE YOUR INVESTMENT OPTIONS UNDER THE CONTRACT?
Your investment options are the variable investment options, the fixed maturity
options, and the account for special dollar cost averaging.
VARIABLE INVESTMENT OPTIONS
Your investment results in any one of the variable investment options will
depend on the investment performance of the underlying portfolios. Listed below
are the currently available portfolios, their investment objectives, and their
advisers.
- --------------------------------------------------------------------------------
You can choose from among the variable investment options.
- --------------------------------------------------------------------------------
<PAGE>
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25
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<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
PORTFOLIOS OF EQ ADVISORS TRUST
- ------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
EQ/Aggressive Stock Long-term growth of capital Alliance Capital Management L.P.,
Massachusetts Financial Services Company
- ------------------------------------------------------------------------------------------------------------------------------
Alliance Common Stock Long-term growth of capital and increasing Alliance Capital Management L.P.
income
- ------------------------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors High total return without, in the adviser's Alliance Capital Management L.P.
opinion, undue risk to principal
- ------------------------------------------------------------------------------------------------------------------------------
Alliance Equity Index Total return (before deduction of portfolio Alliance Capital Management L.P.
(available only under APO Plus) expenses) that approximates the total return
performance of the Standard & Poor's 500
Composite Index
- ------------------------------------------------------------------------------------------------------------------------------
Alliance Global Long-term growth of capital Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------
Alliance Growth and Income High total return through a combination of Alliance Capital Management L.P.
current income and capital appreciation
- ------------------------------------------------------------------------------------------------------------------------------
Alliance Growth Investors High total return consistent with the adviser's Alliance Capital Management L.P.
determination of reasonable risk
- ------------------------------------------------------------------------------------------------------------------------------
Alliance High Yield High return by maximizing current income and, Alliance Capital Management L.P.
to the extent consistent with that objective,
capital appreciation
- ------------------------------------------------------------------------------------------------------------------------------
Alliance Intermediate High current income consistent with relative Alliance Capital Management L.P.
Government Securities stability of principal
- ------------------------------------------------------------------------------------------------------------------------------
Alliance International Long-term growth of capital Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------
Alliance Money Market High level of current income while preserving Alliance Capital Management L.P.
assets and maintaining liquidity
- ------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth Long-term growth of capital Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth Long-term growth of capital Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Technology Long-term growth of capital Alliance Capital Management, L.P.
- ------------------------------------------------------------------------------------------------------------------------------
BT Equity 500 Index Replicate as closely as possible (before Bankers Trust Company
deduction of portfolio expenses) the total
return of the Standard & Poor's 500
Composite Stock Price Index
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
26
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
PORTFOLIOS OF EQ ADVISORS TRUST (CONTINUED)
- -----------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BT International Equity Index Replicate as closely as possible (before Bankers Trust Company
deduction of portfolio expenses) the total
return of the Morgan Stanley Capital
International Europe, Australia, Far East Index
- -----------------------------------------------------------------------------------------------------------------------------
BT Small Company Index Replicate as closely as possible (before Bankers Trust Company
deduction of portfolio expenses) the total
return of the Russell 2000 Index
- -----------------------------------------------------------------------------------------------------------------------------
Capital Guardian Research Long-term growth of capital Capital Guardian Trust Company
- -----------------------------------------------------------------------------------------------------------------------------
Capital Guardian U.S. Equity Long-term growth of capital Capital Guardian Trust Company
- -----------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Long-term growth capital Evergreen Asset Management Corp.
- -----------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Foundation In order of priority, reasonable income, Evergreen Asset Management Corp.
conservation of capital, and capital appreciation
- -----------------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Long-term capital growth Massachusetts Financial Services Company
Companies
- -----------------------------------------------------------------------------------------------------------------------------
MFS Growth with Income Reasonable current income and long-term Massachusetts Financial Services Company
growth of capital and income
- -----------------------------------------------------------------------------------------------------------------------------
MFS Research Long-term growth of capital and future income Massachusetts Financial Services Company
- -----------------------------------------------------------------------------------------------------------------------------
Mercury Basic Value Equity Capital appreciation and secondarily, income Mercury Asset Management, US
- -----------------------------------------------------------------------------------------------------------------------------
Mercury World Strategy High total investment return Mercury Asset Management, US
- -----------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Long-term capital appreciation Morgan Stanley Asset Management
Markets Equity
- -----------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Balanced Balanced investment Putnam Investment Management, Inc.
- -----------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Capital growth, current income is a secondary Putnam Investment Management, Inc.
Value objective
- -----------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income Substantial dividend income and also capital T. Rowe Price Associates, Inc.
appreciation
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
27
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
PORTFOLIOS OF EQ ADVISORS TRUST (CONTINUED)
- --------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
T. Rowe Price International Long-term growth of capital Rowe Price-Fleming International, Inc.
Stock
- --------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Long-term capital appreciation Warburg Pincus Asset Management, Inc.
Value
- --------------------------------------------------------------------------------------------------------
</TABLE>
Other important information about the portfolios is included in the prospectus
for EQ Advisors Trust attached at the end of this prospectus.
<PAGE>
- ----------
28
- --------------------------------------------------------------------------------
FIXED MATURITY OPTIONS
We offer fixed maturity options with maturity dates ranging from one to ten
years. You can allocate your contributions to one or more of these fixed
maturity options. Under the Assured Payment Option and APO Plus, we offer
additional fixed maturity options with maturity dates ranging from eleven to
fifteen years. We provide distributions during the fixed period under the
Assured Payment Option and APO Plus by allocating your contributions to fixed
maturity options that mature in consecutive order. These amounts become part of
our general account assets. They will accumulate interest at the "rate to
maturity" for each fixed maturity option. The total amount you allocate to and
accumulate in each fixed maturity option is called the "fixed maturity amount."
The fixed maturity options are generally not available in contracts issued in
Maryland. In Maryland the fixed maturity options are only available under the
Assured Payment Option and APO Plus which are issued as separate contracts
rather than as a part of a Rollover IRA or Flexible Premium IRA contract. See
Appendix VI for more information on the Assured Payment Option and APO Plus
contracts available in Maryland.
- --------------------------------------------------------------------------------
Fixed maturity options range from one to ten years to maturity. Assured Payment
Option and APO Plus offer additional fixed maturity options for years eleven to
fifteen.
- --------------------------------------------------------------------------------
The rate to maturity you will receive for each fixed maturity option is the rate
to maturity in effect for new contributions allocated to that fixed maturity
option on the date we apply your contribution. If you make any withdrawals or
transfers from a fixed maturity option before the maturity date, we will make a
"market value adjustment" that may increase or decrease any fixed maturity
amount you have left in that fixed maturity option. We will discuss the market
value adjustment below and in greater detail later in this prospectus under
"More information."
On the maturity date of a fixed maturity option your fixed maturity amount,
assuming you have not made any withdrawals or transfers, will equal your
contribution to that fixed maturity option plus interest, at the rate to
maturity for that contribution, to the date of the calculation. This is the
fixed maturity option's "maturity value." Before maturity, the current value we
will report for your fixed maturity amounts will reflect a market value
adjustment. Your current value will reflect the market value adjustment that we
would make if you were to withdraw all of your fixed maturity amounts on the
date of the report. We call this your "market adjusted amount."
FIXED MATURITY OPTIONS AND MATURITY DATES. We currently offer fixed maturity
options ending on February 15th for each of the maturity years 2001 through
2010. Not all of these fixed maturity options will be available for annuitant
ages 76 and older. See "Allocating your contributions" below. As fixed maturity
options expire, we expect to add maturity years so that generally 10 fixed
maturity options are available at any time.
Under the Assured Payment Option and APO Plus, we offer additional fixed
maturity options ending on February 15th for each of the maturity years 2010
through 2014.
We will not accept allocations to a fixed maturity option if on the date the
contribution is to be applied:
o the fixed maturity option's maturity date is within the current calendar
year; or
o the rate to maturity is 3% or less.
YOUR CHOICES AT THE MATURITY DATE. We will notify you on or before December 31st
of the year before each of your fixed maturity options is scheduled to mature.
At that time, you may choose to have one of the following take place on the
maturity date, as long as none of the conditions listed above or in "Allocating
your contributions," below would apply:
(a) transfer the maturity value into another available fixed maturity option or
into any of the variable investment options; or
<PAGE>
- --------
29
- --------------------------------------------------------------------------------
(b) withdraw the maturity value (there may be a withdrawal charge).
If we do not receive your choice on or before the fixed maturity option's
maturity date, we will automatically transfer your maturity value into the fixed
maturity option that will mature next.
MARKET VALUE ADJUSTMENT. If you make any withdrawals (including transfers,
surrender of your contract, or when we make deductions for charges) from a fixed
maturity option before it matures we will make a market value adjustment, which
will increase or decrease any fixed maturity amount you have in that fixed
maturity option. The amount of the adjustment will depend on two factors:
(a) the difference between the rate to maturity that applies to the amount
being withdrawn and the rate to maturity in effect at that time for new
allocations to that same fixed maturity option, and
(b) the length of time remaining until the maturity date.
In general, if interest rates rise from the time that you originally allocate an
amount to a fixed maturity option to the time that you take a withdrawal, the
market value adjustment will be negative. Likewise, if interest rates drop at
the end of that time, the market value adjustment will be positive. Also, the
amount of the market value adjustment, either up or down, will be greater the
longer the time remaining until the fixed maturity option's maturity date.
Therefore, it is possible that the market value adjustment could greatly reduce
your value in the fixed maturity options, particularly in the fixed maturity
options with later maturity dates.
We provide an illustration of the market adjusted amount of specified maturity
values, an explanation of how we calculate the market value adjustment and
information concerning our general account and investments purchased with
amounts allocated to the fixed maturity options, in "More information" later in
this prospectus. Appendix III of this prospectus provides an example of how the
market value adjustment is calculated.
OFF MATURITY DATE PAYMENTS. Under Assured Payment Option and APO Plus, you may
choose to receive payments monthly, quarterly or annually. If you choose annual
payments, generally your payments will be made on February 15th as each fixed
maturity option matures. You may instead choose to have your annual payments
made in a month other than February. We refer to payments we make on an annual
basis in any month other than February and monthly or quarterly payments, as
payments made "off maturity dates." If you choose to have your payments made off
maturity dates, we will be required to begin making your payments before the
maturity date of a fixed maturity option. In planning for these payments we will
allocate a portion of your initial contribution or account value to the separate
account for the fixed maturity options, but not to the fixed maturity options
contained in the separate account. We will credit these amounts with interest at
rates that will not be less than 3%.
After that, as each fixed maturity option expires we will transfer your maturity
value from the expired fixed maturity option and hold the maturity value in the
separate account. We will credit interest to these amounts at the same rate as
the rate to maturity that was credited in the expired fixed maturity option.
These amounts will then be used to provide for payments off maturity dates
during the fixed period.
- --------------------------------------------------------------------------------
Whether you choose monthly, quarterly, or annual payments, your payments will be
made on the 15th day of the month.
- --------------------------------------------------------------------------------
We will not make a market value adjustment to the amounts held in the separate
account to provide for payments off maturity dates.
ACCOUNT FOR SPECIAL DOLLAR COST AVERAGING
The account for special dollar cost averaging is part of our general account. We
pay interest at guaranteed rates in this account. We will credit interest to the
amounts that you have in the account for special dollar cost averaging every
day. We set the interest rates periodically, according to procedures that we
have. We reserve the right to change these procedures.
<PAGE>
- --------
30
- --------------------------------------------------------------------------------
The account for special dollar cost averaging is available for allocation of all
or a portion of your initial contribution under the special dollar cost
averaging program. It is available only for the first year of your contract. We
will guarantee to pay our current interest rate that is in effect on the date
that your contribution is allocated to this account. Your guaranteed interest
rate will be shown in your contract. The rate will never be less than 3%. See
"Allocating your contributions," below for the rules and restrictions that apply
to the special dollar cost averaging program.
<PAGE>
- --------
31
- --------------------------------------------------------------------------------
THE CONTRACT FEATURES AND BENEFITS DESCRIBED BELOW DO NOT APPLY WHEN THE ASSURED
PAYMENT OPTION OR APO PLUS IS IN EFFECT UNDER A ROLLOVER IRA OR FLEXIBLE PREMIUM
IRA CONTRACT. FOR INFORMATION REGARDING YOUR CONTRACT BENEFITS UNDER THE ASSURED
PAYMENT OPTION OR APO PLUS, SEE "ACCESSING YOUR MONEY - ASSURED PAYMENT OPTION
AND APO PLUS."
ALLOCATING YOUR CONTRIBUTIONS
You may choose from among three ways to allocate your contributions under your
contract: self-directed, principal assurance, or dollar cost averaging.
SELF-DIRECTED ALLOCATION
You may allocate your contributions to one or more, or all, of the variable
investment options and fixed maturity options. Allocations must be in whole
percentages and you may change your allocations at any time. However, the total
of your allocations must equal 100%. If the annuitant is age 76 or older, you
may allocate contributions to fixed maturity options if their maturities are
five years or less. Also, you may not allocate amounts to fixed maturity options
with maturity dates that are later than the February 15th immediately following
the date annuity payments are to begin.
PRINCIPAL ASSURANCE ALLOCATION
Under this allocation program you select a fixed maturity option. We specify the
portion of your initial contribution to be allocated to that fixed maturity
option in an amount that will cause the maturity value to equal the amount of
your entire initial contribution on the fixed maturity option's maturity date.
The maturity date you select generally may not be later than 10 years, or
earlier than 7 years from your contract date. You allocate the rest of your
contribution to the variable investment options however you choose.
For example, if your initial contribution is $10,000, and on March 15, 2000 you
chose the fixed maturity option with a maturity date of February 15, 2010, since
the rate to maturity was 6.23% on March 15, 2000, we would have allocated
$5,488.00 to that fixed maturity option and the balance to your choice of
variable investment options. On the maturity date your value in the fixed
maturity option would be $10,000.
The principal assurance allocation is only available for annuitant ages 75 or
younger when the contract is issued. If you are purchasing a Rollover IRA,
Flexible Premium IRA, QP, or Rollover TSA contract, before you select a maturity
year that would extend beyond the year in which you will reach age 70 1/2, you
should consider whether your value in the variable investment options, or your
other traditional IRA or TSA funds are sufficient to meet your required minimum
distributions. See "Tax information."
You may not elect principal assurance if the special dollar cost averaging
program is in effect.
DOLLAR COST AVERAGING
We offer two dollar cost averaging programs. Each program allows you to
gradually allocate amounts to the variable investment options by periodically
transferring approximately the same dollar amount to the variable investment
options you select. This will cause you to purchase more units if the unit's
value is low and fewer units if the unit's value is high. Therefore, you may get
a lower average cost per unit over the long term. These plans of investing,
however, do not guarantee that you will earn a profit or be protected against
losses.
- --------------------------------------------------------------------------------
Units measure your value in each variable investment option.
- --------------------------------------------------------------------------------
SPECIAL DOLLAR COST AVERAGING PROGRAMS. Under the special dollar cost averaging
program, you may choose to allocate all or a portion of your initial
contribution to the account for special dollar cost averaging. However, you must
allocate at least $2,000 to the account for special
<PAGE>
- ----------
32
- --------------------------------------------------------------------------------
dollar cost averaging for this program. In Pennsylvania we refer to this program
as "enhanced rate special dollar cost averaging."
You may have your account value transferred to any of the variable investment
options. We will transfer amounts from the account for special dollar cost
averaging into the variable investment options over an available time period
that you select. We offer time periods of 6 or 12 months. We may also offer
other time periods. Your financial professional can provide information on the
time periods currently available in your state or you may contact our processing
office. You may only select one time period. Each time period has a different
interest rate. Once you select a time period, you may not change it. Currently,
your account value will be transferred from the account for special dollar cost
averaging into the variable investment options on a monthly basis. We may offer
this program in the future with transfers on a different basis. We will transfer
all amounts out of the account for special dollar cost averaging by the end of
the chosen time period. The transfer date will be the same day of the month as
the contract date, but not later than the 28th day of the month.
If you choose to allocate only a portion of your initial contribution to the
account for special dollar cost averaging, the remaining balance of your initial
contribution will be allocated to the variable investment options or fixed
maturity options according to your instructions. You may not allocate additional
contributions to the account for special dollar cost averaging.
- --------------------------------------------------------------------------------
The account for special dollar cost averaging provides guaranteed interest.
- --------------------------------------------------------------------------------
The only amounts that should be transferred from the account for special dollar
cost averaging are your regularly scheduled transfers to the variable investment
options. If you request to transfer or withdraw any other amounts from the
account for special dollar cost averaging, we will transfer all of the value
that you have remaining in the account for special dollar cost averaging to the
investment options according to the allocation percentages we have on file for
you. As a result, you will no longer be able to participate in the special
dollar cost averaging program. You may also ask us to cancel your participation
at any time.
In the state of Oregon where the account for special dollar cost averaging is
not available, we offer a special dollar cost averaging program in the Alliance
Money Market option for allocation of your entire initial contribution. Under
this program we will not deduct the mortality and expense risks and
administrative charges from assets in the Alliance Money Market option. You may
not allocate amounts other than your initial contribution to this program .
GENERAL DOLLAR COST AVERAGING PROGRAM. If your value in the Alliance Money
Market option is at least $5,000, you may choose, at any time, to have a
specified dollar amount or percentage of your value transferred from that option
to the other variable investment options. You can select to have transfers made
on a monthly, quarterly, or annual basis. The transfer date will be the same
calendar day of the month as the contract date, but not later than the 28th day
of the month. You can also specify the number of transfers or instruct us to
continue making the transfers until all amounts in the Alliance Money Market
option have been transferred out.
The minimum amount that we will transfer each time is $250. The maximum amount
we will transfer is equal to your value in the Alliance Money Market option at
the time the program is elected, divided by the number of transfers scheduled to
be made.
If, on any transfer date, your value in the Alliance Money Market option is
equal to or less than the amount you have elected to have transferred, the
entire amount will be transferred. The general dollar cost averaging program
will then end. You may change the transfer amount once each contract year or
cancel this program at any time.
<PAGE>
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33
- --------------------------------------------------------------------------------
----------------------------------------
You may not elect dollar cost averaging or special dollar cost averaging if you
are participating in the rebalancing program. See "Transferring your money among
investment options." You may not elect the special dollar cost averaging program
if the principal assurance program is in effect.
YOUR BENEFIT BASE
The benefit base is used to calculate the guaranteed minimum income benefit, the
5% roll up to age 80, and the 5% roll up to age 70 guaranteed minimum death
benefits. See "Our baseBUILDER option" and "Guaranteed minimum death benefit"
below. The benefit base is equal to:
o your initial contribution and any additional contributions to the contract;
plus
o daily interest; less
o a deduction that reflects any withdrawals you make (the amount of the
deduction is described under "How withdrawals affect your guaranteed
minimum income benefit and guaranteed minimum death benefit" in "Accessing
your money"); less
o a deduction for any withdrawal charge remaining when you exercise your
guaranteed minimum income benefit; and less
o a deduction for any outstanding loan plus accrued interest on the date that
you exercise your guaranteed minimum income benefit (applies to Rollover
TSA only).
The effective annual interest rate credited to the benefit base is:
o 5% for the benefit base with respect to the variable investment options
(other than the Alliance Money Market and Alliance Intermediate Government
Securities options) and the account for special dollar cost averaging; and
o 3% for the benefit base with respect to the Alliance Money Market and
Alliance Intermediate Government Securities options, the fixed maturity
options and the loan reserve account.
No interest is credited after the annuitant is age 80 (age 70 if the 5% roll up
to age 70 is elected).
- --------------------------------------------------------------------------------
Your benefit base is not an account value or a cash value.
- --------------------------------------------------------------------------------
ANNUITY PURCHASE FACTORS
Annuity purchase factors are the factors applied to determine your periodic
payments under the guaranteed minimum income benefit, annuity payout options as
well as to determine allocation of your contributions under the Assured Payment
Option and APO Plus. The guaranteed minimum income benefit is discussed under
"Our baseBUILDER option" and annuity payout options, Assured Payment Option and
APO Plus are all discussed in "Accessing your money" later in this prospectus.
The guaranteed annuity purchase factors are those factors specified in your
contract. You should note that the guaranteed annuity purchase factors we use to
determine your periodic payments are more conservative for the annuity payout
options available as options under the guaranteed minimum income benefit than
the annuity purchase factors we use for the fixed annuity payout options and the
Income Manager payout options. This means that assuming the same account value,
the same form of annuity benefit and the use of guaranteed annuity purchase
factors, each periodic payment under the guaranteed income benefit will be
smaller than each periodic payment under an annuity payout option. The current
annuity purchase factors are those factors that are in effect at any given time.
Annuity purchase factors are based on interest rates, mortality tables,
frequency of payments, the form of annuity benefit, and the annuitant's (and any
joint annuitant's) age and sex in certain instances.
OUR BASEBUILDER OPTION
The baseBUILDER option offers you a guaranteed minimum income benefit combined
with the guaranteed minimum death benefit available under the contract. For
Rollover IRA, Flexible Premium IRA, and Rollover TSA contracts where the
annuitant is between ages 20 and 60 at contract issue, and where you elect the
baseBUILDER option, we offer an additional guaranteed minimum death benefit of a
5% roll
<PAGE>
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34
- --------------------------------------------------------------------------------
up to age 70. The baseBUILDER benefit is available if the annuitant is between
the ages of 20 and 75 at the time the contract is issued. There is an additional
charge for the baseBUILDER benefit which is described under "baseBUILDER benefit
charge" in "Charges and expenses."
The guaranteed minimum income benefit component of baseBUILDER is described
below. Whether you elect baseBUILDER or not, the guaranteed minimum death
benefit is provided under the contract. The guaranteed minimum death benefit is
described under "Guaranteed minimum death benefit." baseBUILDER is currently not
available in some states. Please ask your financial professional if baseBUILDER
is available in your state.
The guaranteed minimum income benefit guarantees you a minimum amount of
lifetime income under our Income Manager (life annuity with a period certain)
payout annuity contract. The Income Manager (life annuity with a period certain)
payout annuity contract provides payments during a specified period of time
(called a period certain) that will continue for the rest of the annuitant's
life thereafter. If the annuitant dies before the period certain has ended,
payments will continue to the beneficiary for the time remaining in the period
certain.
- --------------------------------------------------------------------------------
The guaranteed minimum income benefit, which is also known as a living benefit,
should be regarded as a safety net only. It provides income protection if you
elect an income payout while the annuitant is alive.
- --------------------------------------------------------------------------------
When you exercise the guaranteed minimum income benefit, the annual lifetime
income that you will receive under the Income Manager (life with period certain)
payout annuity option will be the greater of (i) your guaranteed minimum income
benefit which is calculated by applying your benefit base at guaranteed annuity
purchase factors, or (ii) the income provided by applying your actual account
value at our then current annuity purchase factors.
ILLUSTRATIONS OF GUARANTEED MINIMUM INCOME BENEFIT. The table below illustrates
the guaranteed minimum income benefit amounts per $100,000 of initial
contribution, for a male annuitant age 60 (at issue) on the contract date
anniversaries indicated using the guaranteed annuity purchase factors as of the
date of this prospectus, assuming no additional contributions, withdrawals, or
loans under Rollover TSA contracts, and assuming there were no allocations to
the Alliance Money Market option, Alliance Intermediate Government Securities
option or the fixed maturity options.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
GUARANTEED MINIMUM
INCOME BENEFIT - ANNUAL INCOME
CONTRACT DATE PAYABLE FOR LIFE WITH
ANNIVERSARY AT EXERCISE 10 YEAR PERIOD CERTAIN
- ----------------------------------------------------------------
<S> <C>
7 $ 8,315
10 $10,341
15 $14,924
- ----------------------------------------------------------------
</TABLE>
When you elect to receive annual income, your contract will terminate and you
will receive an Income Manager (life annuity with a period certain) annuity
payout option. You will begin receiving payments one payment period after the
annuity payout option is issued. Your period certain will be based on the
annuitant's age at the time the benefit is exercised, as follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------
LEVEL PAYMENTS*
- ---------------------------------------------------
PERIOD CERTAIN YEARS
--------------------------
ANNUITANT'S
AGE AT EXERCISE IRAS NQ
- ---------------------------------------------------
<S> <C> <C>
60 to 75 10 10
76 9 10
77 8 10
78 7 10
79 7 10
80 7 10
81 7 9
82 7 8
83 7 7
- ---------------------------------------------------
</TABLE>
* Other forms and periods certain may also be available. For Rollover IRA and
Flexible Premium IRA contracts, please see "Required minimum distributions"
under "Individual retirement arrangements" in "Tax information," as to how
this option may be affected if exercised after age 70 1/2.
Before you elect baseBUILDER, you should consider the fact that the guaranteed
minimum income benefit provides a form of insurance and is based on conservative
actuarial factors. Therefore, even if your account value is less than your
benefit base, you may generate more income by
<PAGE>
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35
- --------------------------------------------------------------------------------
applying your account value to current annuity purchase factors. We will make
this comparison for you when the need arises.
You should also consider that the guaranteed annuity purchase factors we use to
determine your Income Manager benefit under baseBUILDER are more conservative
than the guaranteed annuity purchase factors we use for the Income Manager
payout annuity option. This means that, assuming the same amount is applied to
purchase the benefit and that we use guaranteed annuity purchase factors to
compute the benefit, each periodic payment under the baseBUILDER Income Manager
will be smaller than each periodic payment under the Income Manager payout
annuity option.
The Income Manager (life annuity with a period certain) payout annuity contracts
are offered through our prospectus for the Income Manager payout annuities. You
may obtain a copy of the most current version from your financial professional.
You should read it carefully before you decide to exercise your guaranteed
minimum income benefit.
SUCCESSOR ANNUITANT/CONTRACT OWNER. If the successor annuitant/contract owner
(discussed under "More information" later in this prospectus) elects to continue
the contract after your death, the guaranteed minimum income benefit will
continue to be available on the contract date anniversaries specified above
based on the contract date. However, the guaranteed minimum income benefit must
be exercised based on the age of the successor annuitant/contract owner.
EXERCISE OF GUARANTEED MINIMUM INCOME BENEFIT. On each contract date anniversary
that you are eligible to exercise the guaranteed minimum income benefit, we will
send you an eligibility notice illustrating how much income could be provided as
of the contract anniversary. You may notify us within 30 days following the
contract date anniversary if you want to exercise the guaranteed minimum income
benefit. You must return your contract to us in order to exercise this benefit.
The amount of income you actually receive will be determined when we receive
your request to exercise the benefit. You will begin receiving payments one
payment period after the annuity payout contract is issued.
You (or the successor annuitant/owner, if applicable) will be eligible to
exercise the guaranteed minimum income benefit as follows:
o If the annuitant was at least age 20 and no older than age 44 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary
beginning with the 15th contract date anniversary.
o If the annuitant was at least age 45 and no older than age 53 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary
after the annuitant is age 60.
o If the annuitant was at least age 54 and no older than age 75 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary
beginning with the 7th contract date anniversary.
Please note:
(i) the latest date you may exercise the guaranteed minimum income benefit
is the contract date anniversary following the annuitant's 83rd
birthday;
(ii) if the annuitant was older than age 63 at the time an IRA, QP or
Rollover TSA contract was issued, the baseBUILDER may not be an
appropriate feature because the minimum distributions required by tax
law must begin before the guaranteed minimum income benefit can be
exercised; and
(iii) for QP and Rollover TSA contracts, if you are eligible to exercise your
guaranteed minimum income benefit, we will first roll over amounts in
such contract to a Rollover IRA contract. You will be the owner of the
Rollover IRA contract.
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GUARANTEED MINIMUM DEATH BENEFIT
A guaranteed minimum death benefit is provided as part of the baseBUILDER
benefit. A guaranteed minimum death benefit is also provided under your contract
even if you do not elect baseBUILDER. In this case, the baseBUILDER benefit
charge does not apply.
GUARANTEED MINIMUM DEATH BENEFIT APPLICABLE FOR ANNUITANT AGES 0 THROUGH 79 AT
ISSUE OF NQ CONTRACTS; 20 THROUGH 79 AT ISSUE OF ROLLOVER IRA, ROTH CONVERSION
IRA, FLEXIBLE PREMIUM ROTH IRA, AND ROLLOVER TSA CONTRACTS; 20 THROUGH 70 AT
ISSUE OF FLEXIBLE PREMIUM IRA CONTRACTS; AND 20 THROUGH 75 AT ISSUE OF QP
CONTRACTS.
You must elect either the "5% roll up to age 80" (or, if available, the 5% roll
up to age 70 if you are electing the baseBUILDER) or the "annual ratchet to age
80" guaranteed minimum death benefit when you apply for a contract. Once you
have made your election, you may not change it.
5% ROLL UP TO AGE 80. This guaranteed minimum death benefit is equal to the
benefit base described earlier in "Your benefit base." This guaranteed minimum
death benefit is not available in New York.
Optional guaranteed minimum death benefit available for ages 20 through 60 at
issue of Rollover IRA, Flexible Premium IRA, and TSA contracts if baseBUILDER is
also elected.
5% ROLL UP TO AGE 70. This is an optional guaranteed minimum death benefit
available for ages 20 through 60 at issue of Rollover IRA, Flexible Premium IRA,
and TSA contracts if baseBUILDER is also elected. Your guaranteed minimum death
benefit will be calculated as described above under "5% roll up to age 80"
except that interest will be credited only through age 70.
ANNUAL RATCHET TO AGE 80. On the contract date, your guaranteed minimum death
benefit equals your initial contribution. Then, on each contract date
anniversary, we will determine your guaranteed minimum death benefit by
comparing your current guaranteed minimum death benefit to your account value on
that contract date anniversary. If your account value is higher than your
guaranteed minimum death benefit, we will increase your guaranteed minimum death
benefit to equal your account value. On the other hand, if your account value on
the contract date anniversary is less than your guaranteed minimum death
benefit, we will not adjust your guaranteed minimum death benefit either up or
down. If you make additional contributions, we will increase your current
guaranteed minimum death benefit by the dollar amount of the contribution on the
date the contribution is allocated to your investment options. If you take a
withdrawal from your contract, we will adjust your guaranteed minimum death
benefit on the date you take the withdrawal.
GUARANTEED MINIMUM DEATH BENEFIT
Applicable for annuitant ages 80 through 83 at issue.
On the contract date, your guaranteed minimum death benefit equals your initial
contribution. Thereafter, it will be increased by the dollar amount of any
additional contributions. We will adjust your guaranteed minimum death benefit
if you take any withdrawals.
----------------------------------------
Please see "How withdrawals affect your guaranteed minimum income benefit and
guaranteed minimum death benefit" in "Accessing your money" for information on
how withdrawals affect your guaranteed minimum death benefit. For contracts
issued in New York, the guaranteed minimum death benefit at the annuitant's
death will never be less than your value in the variable investment options,
plus the sum of the fixed maturity amounts in each fixed maturity option.
See Appendix IV for an example of how we calculate the guaranteed minimum death
benefit.
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your contract, you may return it to
us for a refund. To exercise this cancellation right you must mail the contract
directly to our Processing
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Office within 10 days after you receive it. If state law requires, this "free
look" period may be longer.
Generally, your refund will equal your account value under the contract on the
day we receive notification of your decision to cancel the contract and will
reflect (i) any investment gain or loss in the variable investment options (less
the daily charges we deduct), (ii) any positive or negative market value
adjustments in the fixed maturity options, and (iii) any guaranteed interest in
the account for special dollar cost averaging, through the date we receive your
contract. Some states require that we refund the full amount of your
contribution (not reflecting (i), (ii) or (iii) above). For any IRA contract
returned to us within seven days after you receive it, we are required to refund
the full amount of your contribution.
We may require that you wait six months before you may apply for a contract with
us again if:
o you cancel your contract during the free look period; or
o you change your mind before you receive your contract whether we have
received your contribution or not.
Please see "Tax information" for possible consequences of cancelling your
contract.
In addition to the cancellation right described above, if you fully convert an
existing traditional IRA contract to a Roth Conversion IRA or Flexible Premium
Roth IRA contract, you may cancel your Roth Conversion IRA contract and return
to a Rollover IRA or Flexible Premium IRA contract, whichever applies. Our
processing office, or your financial professional, can provide you with the
cancellation instructions.
<PAGE>
2 Determining your contract's value
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YOUR ACCOUNT VALUE AND CASH VALUE
Your "account value" is the total of the: (i) values you have in the variable
investment options; (ii) market adjusted amounts in the fixed maturity options;
(iii) value in the account for special dollar cost averaging and (iv) value you
have in the loan reserve account (applies for Rollover TSA contracts only).
These amounts are subject to certain fees and charges discussed under "Charges
and expenses."
Your contract also has a "cash value." At any time before annuity payments
begin, your contract's cash value is equal to the account value, less: (i) the
total amount or a pro rata portion of the annual administrative charge
(applicable for Flexible Premium IRA and Flexible Premium Roth IRA contracts
only); (ii) less any applicable withdrawal charges; and (iii) the amount of any
outstanding loan plus accrued interest (applicable to Rollover TSA contracts
only). Please see "Surrendering your contract to receive its cash value" in
"Accessing your money."
YOUR CONTRACT'S VALUE IN THE VARIABLE INVESTMENT OPTIONS
Each variable investment option invests in shares of a corresponding portfolio.
Your value in each variable investment option is measured by "units." The value
of your units will increase or decrease as though you had invested it in the
corresponding portfolio's shares directly. Your value, however, will be reduced
by the amount of the fees and charges that we deduct under the contract.
The unit value for each variable investment option depends on the investment
performance of that option, minus daily charges for mortality and expense risks
and administrative expenses. On any day, your value in any variable investment
option equals the number of units credited to that option, adjusted for any
units purchased for or deducted from your contract under that option, multiplied
by that day's value for one unit. The number of your contract units in any
variable investment option does not change unless they are:
(i) increased to reflect additional contributions;
(ii) decreased to reflect a withdrawal (plus applicable withdrawal charges);
(iii) increased to reflect a transfer into, or decreased to reflect a
transfer out of, a variable investment option; or
(iv) decreased to reflect a transfer of your loan amount to the loan reserve
account under a Rollover TSA contract.
In addition, when we deduct the baseBUILDER benefit charge the number of units
credited to your contract will be reduced. Your units are also reduced under
Flexible Premium IRA and Flexible Premium Roth IRA contracts when we deduct the
annual administrative charge. A description of how unit values are calculated is
found in the SAI.
YOUR CONTRACT'S VALUE IN THE FIXED MATURITY OPTIONS
Your value in each fixed maturity option at any time before the maturity date is
the market adjusted amount in each option. This is equivalent to your fixed
maturity amount increased or decreased by the market value adjustment. Your
value, therefore, may be higher or lower than your contributions (less
withdrawals) accumulated at the rate to maturity. At the maturity date, your
value in the fixed maturity option will equal its maturity value. Your value
will also include any amounts held in the separate account to provide for
payments off maturity dates under the Assured Payment Option and APO Plus.
YOUR CONTRACT'S VALUE IN THE ACCOUNT FOR SPECIAL DOLLAR COST AVERAGING
Your value in the account for special dollar cost averaging at any time will
equal your initial contribution allocated to that option, plus interest, less
the sum of all amounts that have been transferred to the variable investment
options you have selected.
<PAGE>
3 Transferring your money among investment options
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TRANSFERRING YOUR ACCOUNT VALUE
At any time before the date annuity payments are to begin, you can transfer some
or all of your account value among the investment options, subject to the
following:
o You may not transfer any amount to the account for special dollar cost
averaging.
o You may not transfer to a fixed maturity option that matures in the current
calendar year, or that has a rate to maturity of 3%.
o If the annuitant is 76 or older, you must limit your transfers to fixed
maturity options to those with maturities of five years or less. Also, the
maturity dates may be no later than the February 15th immediately following
the date annuity payments are to begin.
o If you make transfers out of a fixed maturity option other than at its
maturity date the transfer may cause a market value adjustment.
o A transfer request while the Assured Payment Option or APO Plus is in
effect will terminate the option.
You may request a transfer in writing or by telephone using TOPS. (We anticipate
that transfers will be available by using EQAccess by the end of 2000.) You must
send in all written transfer requests directly to our processing office.
Transfer requests should specify:
(1) the contract number,
(2) the dollar amounts or percentages of your current account value to be
transferred, and
(3) the investment options to and from which you are transferring.
We will confirm all transfers in writing.
MARKET TIMING
You should note that the product is not designed for professional "market
timing" organizations, or other organizations or individuals engaging in a
market timing strategy, making programmed transfers, frequent transfers or
transfers that are large in relation to the total assets of the underlying
mutual fund portfolio. Market timing strategies are disruptive to the underlying
mutual fund portfolios in which the variable investment options invest. If we
determine that your transfer patterns among the variable investment options
reflect a market timing strategy, we reserve the right to take action including,
but not limited to: restricting the availability of transfers through telephone
requests, facsimile transmissions, automated telephone services, Internet
services or any electronic transfer services. We may also refuse to act on
transfer instructions of an agent acting under a power of attorney who is acting
on behalf of more than one owner.
REBALANCING YOUR ACCOUNT VALUE
We currently offer a rebalancing program that you can use to automatically
reallocate your account value among the variable investment options. You must
tell us:
(a) the percentage you want invested in each variable investment option (whole
percentages only), and
(b) how often you want the rebalancing to occur (quarterly, semiannually, or
annually on a contract year basis. Rebalancing will occur on the same day
of the month as the contract date).
While your rebalancing program is in effect, we will transfer amounts among each
variable investment option so that the percentage of your account value that you
specify is invested in each option at the end of each rebalancing date. Your
entire account value in the variable investment options must be included in the
rebalancing program.
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Rebalancing does not assure a profit or protect against loss. You should
periodically review your allocation percentages as your needs change. You may
want to discuss the rebalancing program with your financial professional before
electing the program.
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You may elect the rebalancing program at any time. You may also change your
allocation instructions or cancel the program at any time. If you request a
transfer while the
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rebalancing program is in effect, we will process the transfer as requested; the
rebalancing program will remain in effect unless you request that it be canceled
in writing.
You may not elect the rebalancing program if you are participating in the dollar
cost averaging program, special dollar cost averaging program, or if the Assured
Payment Option or APO Plus are in effect. Rebalancing is not available for
amounts you have allocated in the fixed maturity options.
<PAGE>
4 Accessing your money
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ASSURED PAYMENT OPTION AND APO PLUS
(Rollover IRA and Flexible Premium IRA contracts only)
We offer two options, the Assured Payment Option and APO Plus, under which you
may receive distributions from your Rollover IRA or Flexible Premium IRA
contract. If you choose one of these two distribution options you will receive
guaranteed payments for a specified period of time we call the "fixed period."
When the fixed period ends you will continue to receive payments for as long as
you are living.
You can elect the Assured Payment Option or APO Plus in the application or at a
later date, provided that your account value is at least $10,000 at the time of
election.
Assured Payment Option and APO Plus benefits will differ for contracts issued in
Maryland. See Appendix VI at the end of this prospectus for more information.
ASSURED PAYMENT OPTION
HOW WE ALLOCATE YOUR CONTRIBUTIONS. In order to provide for the payments you
receive during the fixed period, we allocate a portion of your initial
contribution or account value to fixed maturity options that mature in
consecutive date order. The remaining portion is allocated to your choice of a
single life or joint and survivor life contingent annuity to provide for the
payments you will receive after the fixed period. The payments are intended to
pay out your entire account value by the end of the fixed period.
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The life contingent annuity provides for the payments after the fixed period
ends.
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We determine the allocation of your contributions based on a number of factors.
They are:
o the amount of your contribution;
o annuity purchase factors; and
o the fixed period.
We then allocate your initial contribution among:
(1) The separate account containing:
(i) the fixed maturity options; and
(ii) amounts held to provide payments to you off maturity dates; and
(2) the life contingent annuity.
We will allocate your additional contributions in the same manner. Additional
contributions will increase the level of your future payments. You may not
change this allocation.
While the Assured Payment Option is in effect, no amounts may be allocated to
the variable investment options and the account for special dollar cost
averaging.
If you are using funds from multiple sources to purchase the Rollover IRA or
Flexible Premium IRA contract with the Assured Payment Option in effect, we will
allocate your contributions to the Alliance Money Market option until we receive
all amounts under the contract. Once all amounts are received we will then apply
them under the Assured Payment Option.
PAYMENTS. The payments you receive will increase by 10% every three years during
the fixed period on each third anniversary of the payment start date. After the
end of the fixed period, your first payment under the life contingent annuity
will be 10% greater than the final payment made under the fixed period.
Whether you choose monthly, quarterly or annual payments, you will usually begin
receiving payments one payment period after the contract date anniversary on
which you elected to begin payments under your option, unless you elect
otherwise, as described under "Off maturity date payments" earlier in this
prospectus. Your payments will always be made on the 15th day of the month.
However, if you are age 53 1/2 or older, you must defer the date your payments
will start until you are age 59 1/2. If you are at least age 59 1/2 at the time
the Assured Payment Option is elected you may choose to defer the date your
payments will start. Generally, you may defer payments for a period of up to 72
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months after you make your election. This is called the deferral period.
Deferral of the payment start date permits you to lock in rates at a time when
you may consider current rates to be high, while permitting you to delay
receiving payments if you have no immediate need to receive income under your
contract.
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The deferral period together with the fixed period may be referred to as a
"liquidity period." You will be able to make withdrawals before the end of the
fixed period. You may also choose to surrender your contract for its cash value
while keeping the life contingent annuity in effect.
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Before you decide to defer payments, you should consider the fact that the
amount of income you purchase is based on the rates to maturity in effect on the
date we allocate your contribution. Therefore, if rates rise during the deferral
period, your payments may be less than they would have been if you had elected
the Assured Payment Option at a later date. Deferral of the payment start date
is not available if you are older than age 80. If your deferred payment start
date is after you reach age 70 1/2, you should consider the effect that deferral
may have on your required minimum distributions.
See Appendix V for an example of how payments are made under the Assured Payment
Option.
If you are age 70 1/2 or older, your payments during the fixed period are
designed to meet required minimum distributions under your contract. We
determine the amount of the payments based on the value in each fixed maturity
option and the assigned value of the life contingent annuity for tax purposes.
If at any time your payment under the Assured Payment Option would be less than
the minimum amount required to be distributed under minimum distribution rules,
we will notify you of the difference. You may then choose to have an additional
amount withdrawn under your contract. We will treat such withdrawal as a lump
sum withdrawal. However, no withdrawal charge will apply. We will then adjust
your future scheduled payments so that the minimum distribution rules are met.
You also have the option to take the amount from other traditional IRA funds you
may have.
FIXED PERIOD. The fixed period based on your age at the time the contract is
issued (or your age at the time the Assured Payment Option is elected) will be
as follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------
AGE* FIXED PERIOD
- ------------------------------------------------------
<S> <C>
59 1/2 through 70 15 years
71 through 75 12 years
76 through 80 9 years
81 through 83 6 years
- ------------------------------------------------------
</TABLE>
If you defer the date payments will start, your fixed period will be as
follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------
FIXED PERIOD
BASED ON DEFERRAL PERIOD
---------------------------------
1-36 37-60 61-72
AGE* MONTHS MONTHS MONTHS
- --------------------------------------------------------
<S> <C> <C> <C>
53 1/2 through 70 12 years 9 years 9 years
71 through 75 9 years 9 years N/A
76 through 80 6 years 6 years N/A
81 through 83 N/A N/A N/A
- --------------------------------------------------------
</TABLE>
* For joint and survivor payments, the fixed period is based on the age of the
younger annuitant.
PURCHASE RESTRICTIONS FOR JOINT AND SURVIVOR PAYMENTS. If you elect payments on
a joint and survivor basis:
o the joint annuitant must be your spouse; and
o neither you nor the joint annuitant can be over age 83.
PAYMENTS AFTER THE FIXED PERIOD. After the end of the fixed period, we will
continue your payments under the life contingent annuity if either you or the
joint annuitant is living. Payments continue throughout your lifetime (or the
lifetime of the joint annuitant, if joint and survivor payments are elected) on
the same payment schedule (either monthly, quarterly or annually) as the
payments you received during the fixed period.
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The portion of your contribution allocated to the life contingent annuity does
not have a cash value or an account value and, therefore, does not provide for
withdrawals.
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THERE IS NO DEATH BENEFIT PROVIDED UNDER THE LIFE CONTINGENT ANNUITY AND
PAYMENTS ARE MADE TO YOU ONLY IF YOU (OR THE JOINT ANNUITANT) ARE LIVING WHEN
THE PAYMENTS ARE SCHEDULED TO BEGIN. THESE PAYMENTS ARE ONLY MADE DURING YOUR
LIFETIME AND, IF APPLICABLE, THE LIFETIME OF THE JOINT ANNUITANT. THEREFORE, YOU
SHOULD CONSIDER THE POSSIBILITY THAT NO PAYMENTS WILL BE MADE UNDER THE LIFE
CONTINGENT ANNUITY IF YOU (OR THE JOINT ANNUITANT) DO NOT SURVIVE TO THE DATE
PAYMENTS ARE TO BEGIN.
Under the life contingent annuity you may elect single life or joint and
survivor payments. Joint and survivor payments are available on a 100%, one-half
or two-thirds to survivor basis. Your first payment under the life contingent
annuity will be 10% greater than the final payment under the fixed period. After
the fixed period we will increase your payments annually on each anniversary of
the payment start date under the life contingent annuity. We will base this
increase on the annual increase in the Consumer Price Index, but it will never
be greater than 3% per year.
ALLOCATION OF WITHDRAWALS. Only lump sum withdrawals are permitted under the
Assured Payment Option. We will subtract your withdrawal from all remaining
fixed maturity options to which your account value is allocated as well as from
amounts held in the separate account to provide for payments off maturity dates.
As a result we will reduce the amount of your payments and the length of your
fixed period. We will also begin making payments to you under the life
contingent annuity at an earlier date. In order to achieve this result we will
withdraw additional amounts over the amount of the withdrawal you requested.
These amounts will be taken from the separate account which contains the fixed
maturity options and from amounts held to provide for payments off maturity
dates. The amounts are then allocated to the life contingent annuity. The exact
additional amount we withdraw will depend on how much is necessary to assure
that the same pattern of payments will continue in reduced amounts for your life
and the life of the joint annuitant. The first increase in your payments will
take place no later than the date of the next planned increase.
Withdrawals are subject to a withdrawal charge and will have a 10% free
withdrawal amount available. No withdrawal charges will apply to the payments
made during the fixed period or a withdrawal made to meet the minimum
distribution requirement under the contract.
DEATH BENEFIT. If a death benefit becomes payable during the fixed period we
will pay the death benefit amount to the designated beneficiary. The death
benefit amount is the greater of:
(1) your account value; and
(2) the sum of the fixed maturity amounts in each fixed maturity option plus
any amounts to provide for payments off maturity dates.
We will not make any payments under the life contingent annuity after your death
unless you have elected payments on a joint and survivor basis. If you elect
joint and one-half or joint and two-thirds to survivor payments, at your death
or the joint annuitant's death, we will reduce the payments by one-half or
one-third, whichever applies.
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A death benefit is never payable under the life contingent annuity. The death
benefit applies only during the fixed period.
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TERMINATION. The Assured Payment Option will be terminated if you:
(1) cancel the option at any time by sending a written request satisfactory to
us; or
(2) submit an additional contribution and you do not want it allocated under
the Assured Payment Option; or
(3) request a transfer of your account value; or
(4) request a change in the date the payments are to start under the life
contingent annuity.
Once the Assured Payment Option has ended, the life contingent annuity will
remain in effect and payments will be made if you or the joint annuitant, are
living on the date payments are to start. No additional amounts will be
allocated under the life contingent annuity. You may elect to
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restart the Assured Payment Option by submitting a written request satisfactory
to us, but no sooner than three years after the option was terminated. If you
own an Equitable Accumulator Rollover IRA or Flexible Premium IRA contract and
you elected the Assured Payment Option at age 70 1/2 or older and subsequently
terminate this option, required minimum distributions must continue to be made
under your contract. Before terminating the Assured Payment Option, you should
consider the implications this may have under the minimum distribution
requirements. See "Tax Information."
ANNUITY PAYOUT OPTIONS AND SURRENDERING THE CONTRACT. Once your contract is
surrendered or an annuity payout option is chosen, we will return the contract
to you with a notation that the life contingent annuity is still in effect. You
may not surrender the life contingent annuity.
APO PLUS
APO Plus is a variation of the Assured Payment Option. Except as indicated
below, APO Plus operates under the same guidelines as the Assured Payment
Option. Under APO Plus you will be able to keep a portion of your value in the
Alliance Common Stock option or the Alliance Equity Index option, whichever one
you choose. Once you have selected a variable investment option it may not be
changed.
You may not elect APO Plus if the Assured Payment Option is already in effect.
APO Plus allows you to remain invested in the variable investment option for
longer than would be possible if you had applied your entire account value all
at once to the Assured Payment Option or to an annuity payout option.
HOW WE ALLOCATE YOUR CONTRIBUTIONS. We allocate a portion of your initial
contribution or account value to the Assured Payment Option. Under the Assured
Payment Option amounts are allocated in the same manner as described above. Your
remaining account value is allocated to the variable investment option you
select. Periodically during the fixed period we transfer a portion of your value
in the variable investment option to the fixed maturity options to increase your
guaranteed level payments under the Assured Payment Option.
The amount allocated under the Assured Payment Option will provide for level
payments. The amount of the level payments are equal to the amount of the
initial payment that would have been provided if you had allocated your entire
initial contribution or account value under the Assured Payment Option. The
difference between the amount required for level payments and the amount
required for increasing payments provided under the Assured Payment Option, is
allocated to the variable investment option you selected. If you have any value
in the fixed maturity options at the time this option is elected, a market value
adjustment may apply as a result of such amounts being transferred to activate
the Assured Payment Option.
FIXED PERIOD. The fixed period and deferral period schedule shown for the
Assured Payment Option will also apply under APO Plus.
On the third February 15th following the date your first payment is made during
the fixed period, a portion of your value in the variable investment option may
be transferred to the Assured Payment Option in order to increase your level
payments. If you elect a deferral period of three years or more, a portion of
your value in the variable investment option will be allocated to the Assured
Payment Option on the February 15th before the date your first payment is made.
If your payments are to be made on February 15th, the date of the first payment
will be counted as the first February 15th for the purpose of this transfer to
the Assured Payment Option.
The transfer of amounts to the Assured Payment Option is repeated each third
year during the fixed period. The first increase in payments will be reflected
in the payment made to you after three full years of payments and then every
three years after that. Immediately following your last payment during the fixed
period, your remaining value in the variable investment option is first
allocated to the life contingent annuity to change the level payments previously
purchased to increasing payments. These increasing payments will increase each
year based on the annual increase in the Consumer Price Index, but never greater
than 3%. If you have any value remaining after the increasing payments are
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purchased, this amount is allocated to the life contingent annuity to further
increase your lifetime payments. If your value in the variable investment option
is insufficient to purchase the increasing payments, then the level payments
previously purchased will be increased as much as possible.
While APO Plus provides you with a minimum amount of level guaranteed lifetime
payments under the Assured Payment Option, the total amount of income that you
will receive over time will depend on the investment performance of the variable
investment option which you selected. It will also depend on the current rates
to maturity and the cost of the life contingent annuity, which also varies. As a
result, the combined amount of guaranteed lifetime income you receive under APO
Plus may be more or less than the amount that could have been purchased if your
entire initial contribution or account value had been allocated to the Assured
Payment Option.
See Appendix V for an example of the payments purchased under APO Plus.
ALLOCATION OF ADDITIONAL CONTRIBUTIONS. Any additional contributions you make
may only be allocated to the variable investment option. We do not permit
additional contributions after the end of the fixed period.
WITHDRAWALS. If you take a lump sum withdrawal or if a lump sum withdrawal is
made to satisfy minimum distribution requirements such withdrawal will be taken
from your value in the variable investment option unless you specify otherwise.
If there is insufficient value in the variable investment option any additional
amount will be taken from the separate account containing the fixed maturity
options and from amounts held to provide for payments off maturity dates, in the
same manner as described above for the Assured Payment Option.
DEATH BENEFIT. If a death benefit becomes payable during the fixed period we
will pay the death benefit amount to the designated beneficiary. The death
benefit amount is equal to the greater of your value in the:
(1) fixed maturity options; and
(2) the separate account containing the fixed maturity amounts and any amounts
held to provide for payments off maturity dates.
When the greater of (1) and (2) above is determined, the value in the variable
investment option is added. A death benefit is never payable under the life
contingent annuity.
TERMINATION OF APO PLUS. You may terminate APO Plus at any time by submitting a
written request satisfactory to us. You may choose one of the following two
options if you terminate APO Plus:
(1) your contract will operate under the Equitable Accumulator Rollover IRA or
Flexible Premium IRA rules; or
(2) you may elect the Assured Payment Option.
If you elect the Assured Payment Option, your remaining value in the variable
investment option will be allocated to the fixed maturity options, the separate
account to provide for payments off maturity dates, and the life contingent
annuity. A market value adjustment may apply for any amounts allocated from a
fixed maturity option. At least 45 days prior to the end of each three-year
period, we will send you a quote indicating how much future income could be
provided under the Assured Payment Option. The quote would be based on your
current account value, current rates to maturity for the fixed maturity options,
and current purchase rates under the life contingent annuity as of the date of
the quote. The actual amount of future income you would receive depends on the
rates in effect on the day you switch to the Assured Payment Option.
WITHDRAWING YOUR ACCOUNT VALUE
You have several ways to withdraw your account value before annuity payments
begin. The table below shows the methods available under each type of contract.
More information follows the table. For the tax consequences of withdrawals, see
"Tax information."
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<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
METHOD OF WITHDRAWAL
- ----------------------------------------------------------------------------------------------
SUBSTANTIALLY MINIMUM
CONTRACT LUMP SUM SYSTEMATIC EQUAL DISTRIBUTION
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NQ Yes Yes No No
Rollover IRA* Yes Yes Yes Yes
- ----------------------------------------------------------------------------------------------
Flexible
Premium IRA* Yes Yes Yes Yes
- ----------------------------------------------------------------------------------------------
Roth Conversion
IRA Yes Yes Yes No
- ----------------------------------------------------------------------------------------------
Flexible Premium
Roth IRA Yes Yes Yes No
- ----------------------------------------------------------------------------------------------
QP Yes No No Yes
- ----------------------------------------------------------------------------------------------
Rollover TSA** Yes No No Yes
- ----------------------------------------------------------------------------------------------
</TABLE>
* If Assured Payment Option or APO Plus is elected, only lump sum withdrawals
are available.
** For some Rollover TSA contracts, your ability to take withdrawals, loans or
surrender your contract may be limited. You must provide withdrawal
restriction information when you apply for a contract. See "Tax information
- Tax Sheltered Annuity contracts (TSAs)."
LUMP SUM WITHDRAWALS
(All contracts)
You may take lump sum withdrawals from your account value at any time. (Rollover
TSA contracts may have restrictions.) The minimum amount you may withdraw is
$300. If you request to withdraw more than 90% of a contract's current cash
value we will treat it as a request to surrender the contract for its cash
value. See "Surrendering your contract to receive its cash value" below.
Lump sum withdrawals in excess of the 15% (10% under Assured Payment Option or
APO Plus) free withdrawal amount (see "15% free withdrawal amount" in "Charges
and expenses") may be subject to a withdrawal charge. Under Rollover TSA
contracts, if a loan is outstanding, you may only take lump sum withdrawals as
long as the cash value remaining after any withdrawal equals at least 10% of the
outstanding loan plus accrued interest.
SYSTEMATIC WITHDRAWALS
(NQ and all IRA contracts)
You may take systematic withdrawals of a particular dollar amount or a
particular percentage of your account value.
You may take systematic withdrawals on a monthly, quarterly, or annual basis as
long as the withdrawals do not exceed the following percentages of your account
value: 1.2% monthly, 3.6% quarterly, and 15.0% annually. The minimum amount you
may take in each systematic withdrawal is $250. If the amount withdrawn would be
less than $250 on the date a withdrawal is to be taken, we will not make a
payment and we will terminate your systematic withdrawal election.
We will make the withdrawals on any day of the month that you select as long as
it is not later than the 28th day of the month. If you do not select a date, we
will make the withdrawals on the same calendar day of the month as the contract
date. You must wait at least 28 days after your contract is issued before your
systematic withdrawals can begin.
You may elect to take systematic withdrawals at any time. If you own an IRA
contract, you may elect this withdrawal method only if you are between ages 59
1/2 and 70 1/2.
You may change the payment frequency, or the amount or percentage of your
systematic withdrawals, once each contract year. However, you may not change the
amount or percentage in any contract year in which you have already taken a lump
sum withdrawal. You can cancel the systematic withdrawal option at any time.
Systematic withdrawals are not subject to a withdrawal charge, except to the
extent that, when added to a lump sum withdrawal previously taken in the same
contract year, the systematic withdrawal exceeds the 15% free withdrawal amount.
SUBSTANTIALLY EQUAL WITHDRAWALS
(All IRA contracts)
The substantially equal withdrawals option allows you to receive distributions
from your account value without triggering the 10% additional federal tax
penalty, which normally applies to distributions made before age 59 1/2. See
"Tax information." Once you begin to take substantially equal withdrawals, you
should not stop them or change the pattern of your withdrawals until after the
later of age 59 1/2
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or five full years after the first withdrawal. If you stop or change the
withdrawals or take a lump sum withdrawal, you may be liable for the 10% federal
tax penalty that would have otherwise been due on prior withdrawals made under
this option and for any interest on those withdrawals.
You may elect to take substantially equal withdrawals at any time before age 59
1/2. We will make the withdrawal on any day of the month that you select as long
as it is not later than the 28th day of the month. You may not elect to receive
the first payment in the same contract year in which you took a lump sum
withdrawal. We will calculate the amount of your substantially equal
withdrawals. The payments will be made monthly, quarterly, or annually as you
select. These payments will continue until we receive written notice from you to
cancel this option or you take a lump sum withdrawal. You may elect to start
receiving substantially equal withdrawals again, but the payments may not
restart in the same contract year in which you took a lump sum withdrawal. We
will calculate the new withdrawal amount.
You may not elect substantially equal withdrawals if you have balances in the
account for special dollar cost averaging.
Substantially equal withdrawals are not subject to a withdrawal charge.
MINIMUM DISTRIBUTION WITHDRAWALS
(Rollover IRA, Flexible Premium IRA, QP, and Rollover TSA contracts only - See
"Tax information")
We offer the minimum distribution withdrawal option to help you meet lifetime
required minimum distributions under federal income tax rules. You may elect
this option in the year in which you reach age 70 1/2. The minimum amount we
will pay out is $250. You may elect the method you want us to use to calculate
your minimum distribution withdrawals from the choices we offer. Currently,
minimum distribution withdrawal payments will be made annually.
We do not impose a withdrawal charge on minimum distribution withdrawals except
if when added to a lump sum withdrawal previously taken in the same contract
year, the minimum distribution withdrawal exceeds the 15% free withdrawal
amount.
We will calculate your annual payment based on your account value at the end of
the prior calendar year based on the method you choose.
Under Rollover TSA contracts, you may not elect minimum distribution withdrawals
if a loan is outstanding.
- --------------------------------------------------------------------------------
For Rollover IRA, Flexible Premium IRA, QP, and Rollover TSA contracts, we will
send a form outlining the distribution options available in the year you reach
age 70 1/2 (if you have not begun your annuity payments before that time).
- --------------------------------------------------------------------------------
HOW WITHDRAWALS ARE TAKEN FROM YOUR ACCOUNT VALUE
Unless you specify otherwise, we will subtract your withdrawals on a pro rata
basis from your value in the variable investment options. If there is
insufficient value or no value in the variable investment options, any
additional amount of the withdrawal required or the total amount of the
withdrawal will be withdrawn from the fixed maturity options in order of the
earliest maturity date(s) first and then from the account for special dollar
cost averaging. A market value adjustment may apply to withdrawals from the
fixed maturity options.
HOW WITHDRAWALS AFFECT YOUR GUARANTEED MINIMUM INCOME BENEFIT AND GUARANTEED
MINIMUM DEATH BENEFIT
Withdrawals will reduce your guaranteed benefits on either a dollar-for-dollar
basis or on a pro rata basis as explained below:
INCOME BENEFIT AND DEATH BENEFIT
5% roll up to age 80 or age 70 - If you elect the 5% roll up to age 80 or 5%
roll up to age 70 guaranteed minimum death benefit, your benefit base will be
reduced on a dollar-for-dollar basis as long as the sum of your
<PAGE>
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48
- --------------------------------------------------------------------------------
withdrawals in a contract year is 5% or less of the guaranteed minimum death
benefit on the most recent contract date anniversary. Once you take a withdrawal
that causes the sum of your withdrawals in a contract year to exceed 5% of the
guaranteed minimum death benefit on the most recent contract date anniversary,
that withdrawal and any subsequent withdrawals in that same contract year will
reduce your benefit base on a pro rata basis.
The timing of your withdrawals and whether they exceed the 5% threshold
described above can have a significant impact on your guaranteed minimum income
benefit or guaranteed minimum death benefit.
Annual ratchet to age 80 - If you elect the annual ratchet to age 80 guaranteed
minimum death benefit, each withdrawal will always reduce your benefit base and
current guaranteed minimum death benefit on a pro rata basis.
Annuitant issue ages 80 through 83 - If your contract was issued when the
annuitant was between ages 80 and 83, each withdrawal will always reduce your
current guaranteed minimum death benefit on a pro rata basis.
----------------------------
Reduction on a dollar-for-dollar basis means that your current benefit will be
reduced by the dollar amount of the withdrawal. Reduction on a pro rata basis
means that we calculate the percentage of your current account value that is
being withdrawn and we reduce your current benefit by that same percentage. For
example, if your account value is $30,000 and you withdraw $12,000, you have
withdrawn 40% of your account value. If your guaranteed minimum death benefit
was $40,000 before the withdrawal, it would be reduced by $16,000 ($40,000 x.40)
and your new guaranteed minimum death benefit after the withdrawal would be
$24,000 ($40,000 - $16,000).
LOANS UNDER ROLLOVER TSA CONTRACTS
You may take loans from a Rollover TSA unless restricted by the employer who
provided the Rollover TSA funds. If you cannot take a loan, or cannot take a
loan without approval from the employer who provided the funds, we will have
this information in our records based on what you and the employer who provided
the funds told us when you purchased your contract. The employer must also tell
us whether special employer plan rules of the Employee Retirement Income
Security Act of 1974 ("ERISA") apply. We will not permit you to take a loan
while you are taking minimum distribution withdrawals.
You should read the terms and conditions on our loan request form carefully
before taking out a loan. Under Rollover TSA contracts subject to ERISA, you may
only take a loan with the written consent of your spouse. Your contract contains
further details of the loan provision. Also, see "Tax information" for general
rules applicable to loans.
We will permit you to have only one loan outstanding at a time. The minimum loan
amount is $1,000. The maximum amount is $50,000 or, if less, 50% of your account
value, subject to any limits under the federal income tax rules. The term of a
loan is five years. However, if you use the loan to acquire your primary
residence, the term is 10 years. The term may not extend beyond the earliest of:
(1) the date annuity payments begin,
(2) the date the contract terminates, and
(3) the date a death benefit is paid (the outstanding loan will be deducted
from the death benefit amount).
Interest will accrue daily on your outstanding loan at a rate we set. The loan
interest rate will be equal to the Moody's Corporate Bond Yield Averages for Baa
bonds for the calendar month ending two months before the first day of the
calendar quarter in which the rate is determined.
LOAN RESERVE ACCOUNT. On the date your loan is processed, we will transfer the
amount of your loan to the loan reserve account. Unless you specify otherwise,
we will subtract your loan on a pro rata basis from your value in the variable
investment options. If there is insufficient value or no value in the variable
investment options, any additional amount of the loan will be subtracted from
the fixed maturity options in order of the earliest maturity date(s) first. A
market value adjustment may apply.
<PAGE>
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49
- --------------------------------------------------------------------------------
We will credit interest to the amount in the loan reserve account at a rate of
2% lower than the loan interest rate that applies for the time your loan is
outstanding. On each contract date anniversary after the date the loan is
processed, we will transfer the amount of interest earned in the loan reserve
account to the variable investment options on a pro rata basis. When you make a
loan repayment, unless you specify otherwise, we will transfer the dollar amount
of the loan repaid from the loan reserve account to the investment options
according to the allocation percentages we have on our records.
SURRENDERING YOUR CONTRACT TO RECEIVE ITS CASH VALUE
You may surrender your contract to receive its cash value at any time while the
annuitant is living and before you begin to receive annuity payments. (Rollover
TSA contracts may have restrictions.) For a surrender to be effective, we must
receive your written request and your contract at our processing office. We will
determine your cash value on the date we receive the required information. All
benefits under the contract will terminate as of that date.
You may receive your cash value in a single sum payment or apply it to one or
more of the annuity payout options. See "Your annuity payout options" below. For
the tax consequences of surrenders, see "Tax information."
WHEN TO EXPECT PAYMENTS
Generally, we will fulfill requests for payments out of the variable investment
options within seven calendar days after the date of the transaction to which
the request relates. These transactions may include applying proceeds to a
variable annuity, payment of a death benefit, payment of any amount you withdraw
(less any withdrawal charge) and, upon surrender, payment of the cash value. We
may postpone such payments or applying proceeds for any period during which:
(1) the New York Stock Exchange is closed or restricts trading,
(2) sales of securities or determination of the fair value of a variable
investment option's assets is not reasonably practicable because of an
emergency, or
(3) the SEC, by order, permits us to defer payment to protect people remaining
in the variable investment options.
We can defer payment of any portion of your value in the fixed maturity options
and the account for special dollar cost averaging (other than for death
benefits) for up to six months while you are living. We also may defer payments
for a reasonable amount of time (not to exceed 10 days) while we are waiting for
a contribution check to clear.
All payments are made by check and are mailed to you (or the payee named in a
tax-free exchange) by U.S. mail, unless you request that we use an express
delivery service at your expense.
YOUR ANNUITY PAYOUT OPTIONS
Equitable Accumulator offers you several choices of annuity payout options. Some
enable you to receive fixed annuity payments, which can be either level or
increasing and others enable you to receive variable annuity payments.
You can choose from among the annuity payout options listed below. Restrictions
may apply, depending on the type of contract you own or the annuitant's age at
contract issue. In addition, if you are exercising your guaranteed minimum
income benefit under baseBUILDER, your choice of payout options are those that
are available under the baseBUILDER (see "Our baseBUILDER option").
<PAGE>
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50
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
<S> <C>
Fixed annuity payout options Life annuity
Life annuity with period
certain
Life annuity with refund
certain
Period certain annuity
- -----------------------------------------------------------------
Variable Immediate Annuity Life annuity (not available
payout options in New York)
Life annuity with period
certain
- -----------------------------------------------------------------
Income Manager payout Life annuity with a period
options certain
Period certain annuity
- -----------------------------------------------------------------
</TABLE>
o Life annuity: An annuity that guarantees payments for the rest of the
annuitant's life. Payments end with the last monthly payment before the
annuitant's death. Because there is no continuation of benefits following
the annuitant's death with this payout option, it provides the highest
monthly payment of any of the life annuity options, so long as the
annuitant is living.
o Life annuity with period certain: An annuity that guarantees payments for
the rest of the annuitant's life. If the annuitant dies before the end of a
selected period of time ("period certain"), payments continue to the
beneficiary for the balance of the period certain. The period certain
cannot extend beyond the annuitants life expectancy. A life annuity with a
period certain is the form of annuity under the contracts that you will
receive if you do not elect a different payout option. In this case, the
period certain will be based on the annuitants age and will not exceed 10
years.
o Life annuity with refund certain: An annuity that guarantees payments for
the rest of the annuitant's life. If the annuitant dies before the amount
applied to purchase the annuity option has been recovered, payments to the
beneficiary will continue until that amount has been recovered. This payout
option is available only as a fixed annuity.
o Period certain annuity: An annuity that guarantees payments for a specific
period of time, usually 5, 10, 15, or 20 years. This guaranteed period may
not exceed the annuitant's life expectancy. This option does not guarantee
payments for the rest of the annuitant's life. It does not permit any
repayment of the unpaid principal, so you cannot elect to receive part of
the payments as a single sum payment with the rest paid in monthly annuity
payments. This payout option is available only as a fixed annuity.
The life annuity, life annuity with period certain, and life annuity with refund
certain payout options are available on a single life or joint and survivor life
basis. The joint and survivor life annuity guarantees payments for the rest of
the annuitant's life and, after the annuitant's death, payments continue to the
survivor. We may offer other payout options not outlined here. Your financial
professional can provide details.
FIXED ANNUITY PAYOUT OPTION
With fixed annuities, we guarantee fixed annuity payments will be based either
on the tables of guaranteed annuity purchase factors in your contract or on our
then current annuity purchase factors, whichever is more favorable for you.
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTIONS
Variable Immediate Annuities are described in a separate prospectus that is
available from your financial professional. Before you select a Variable
Immediate Annuity payout option, you should read the prospectus which contains
important information that you should know.
Variable annuities may be funded through your choice of variable investment
options investing in portfolios of EQ Advisors Trust. The contract also offers a
fixed annuity option that can be elected in combination with the variable
annuity payout options. The amount of each variable annuity payment will
fluctuate, depending upon the performance of the variable investment options,
and whether the actual rate of investment return is higher or lower than an
assumed base rate.
<PAGE>
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INCOME MANAGER PAYOUT OPTIONS
The Income Manager payout annuity contracts differ from the other payout annuity
contracts. The other payout annuity contracts may provide higher or lower income
levels, but do not have all the features of the Income Manager payout annuity
contract. You may request an illustration of the Income Manager payout annuity
contract from your financial professional. Income Manager payout options are
described in a separate prospectus that is available from your financial
professional. Before you select an Income Manager payout option, you should read
the prospectus which contains important information that you should know.
Both Income Manager payout options provide guaranteed level payments (NQ and IRA
contracts). The Income Manager (life annuity with period certain) also provides
guaranteed increasing payments (NQ contracts only). You may not elect a period
certain Income Manager payout option unless withdrawal charges are no longer in
effect under your Equitable Accumulator.
For QP and Rollover TSA contracts, if you want to elect an Income Manager payout
option, we will first roll over amounts in such contract to a Rollover IRA
contract. You will be the owner of the Rollover IRA contract.
You may choose to apply only part of the account value of your Equitable
Accumulator contract to an Income Manager payout annuity. In this case, we will
consider any amounts applied as a withdrawal from your Equitable Accumulator and
we will deduct any applicable withdrawal charge. For the tax consequences of
withdrawals, see "Tax information."
Depending upon your circumstances, the purchase of an Income Manager contract
may be done on a tax-free basis. Please consult your tax adviser.
THE AMOUNT APPLIED TO PURCHASE AN ANNUITY PAYOUT OPTION
The amount applied to purchase an annuity payout option varies, depending on the
payout option that you choose, and the timing of your purchase as it relates to
any withdrawal charges or market value adjustments.
If amounts in a fixed maturity option are used to purchase any annuity payout
option, prior to the maturity date, a market value adjustment will apply.
For the fixed annuity payout options and Variable Immediate Annuity payout
options, no withdrawal charge is imposed if you select a life annuity, life
annuity with period certain or life annuity with refund certain.
For the fixed annuity payout option, the withdrawal charge applicable under your
Equitable Accumulator is imposed if you select a period certain. If the period
certain is more than 5 years, then the withdrawal charge deducted will not
exceed 5% of the account value.
For the Income Manager payout options no withdrawal charge is imposed under the
Equitable Accumulator. If the withdrawal charge that otherwise would have been
applied to your account value under your Equitable Accumulator is greater than
2% of the contributions that remain in your contract at the time you purchase
your payout option, the withdrawal charges under the Income Manager will apply.
For this purpose, the year in which your account value is applied to the payout
option will be "contract year 1."
SELECTING AN ANNUITY PAYOUT OPTION
When you select a payout option, we will issue you a separate written agreement
confirming your right to receive annuity payments. We require you to return your
contract before annuity payments begin unless you are applying only some of your
account value to an Income Manager Contract. The contract owner and annuitant
must meet the issue age and payment requirements.
You can choose the date annuity payments begin but it may not be earlier than
thirteen months from the Equitable Accumulator contract date. Except with
respect to the Income Manager annuity payout options, where payments are made on
the 15th day of each month, you can change the date your annuity payments are to
begin anytime before that date as long as you do not choose a date later than
the
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28th day of any month. Also, that date may not be later than the contract date
anniversary that follows the annuitant's 90th birthday. This may be different in
some states.
Before the last day by which your annuity payments must begin, we will notify
you by letter. Once you have selected an annuity payout option and payments have
begun, no change can be made other than: (i) transfers (if permitted in the
future) among the variable investment options if a Variable Immediate Annuity
payout option is selected; and (ii) withdrawals or contract surrender (subject
to a market value adjustment) if an Income Manager annuity payout option is
chosen.
The amount of the annuity payments will depend on the amount applied to purchase
the annuity and the applicable annuity purchase factors discussed earlier.
In no event will you ever receive payments under a fixed option or an initial
payment under a variable option of less than the minimum amounts guaranteed by
the contract.
If, at the time you elect a payout option, the amount to be applied is less than
$2,000 or the initial payment under the form elected is less than $20 monthly,
we reserve the right to pay the account value in a single sum rather than as
payments under the payout option chosen.
<PAGE>
5 Charges and expenses
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CHARGES THAT EQUITABLE LIFE DEDUCTS
We deduct the following charges each day from the net assets of each variable
investment option. These charges are reflected in the unit values of each
variable investment option:
o A mortality and expense risks charge
o An administrative charge
We deduct the following charges from your account value. When we deduct these
charges from your variable investment options, we reduce the number of units
credited to your contract:
o On each contract date anniversary - an annual administrative charge if
applicable (Flexible Premium IRA and Flexible Premium Roth IRA contracts
only).
o At the time you make certain withdrawals or surrender your contract - a
withdrawal charge.
o If you elect the optional benefit - a charge for the optional baseBUILDER
benefit.
o At the time annuity payments are to begin - charges designed to approximate
certain taxes that may be imposed on us, such as premium taxes in your
state. An annuity administrative fee may also apply.
More information about these charges appears below. We will not increase these
charges for the life of your contract, except as noted. We may reduce certain
charges under group or sponsored arrangements. See "Group or sponsored
arrangements" below.
To help with your retirement planning, we may offer other annuities with
different charges, benefits, and features. Please contact your financial
professional for more information.
MORTALITY AND EXPENSE RISKS CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for mortality and expense risks, including the guaranteed
minimum death benefit. The daily charge is equivalent to an annual rate of 1.10%
of the net assets in each variable investment option.
The mortality risk we assume is the risk that annuitants as a group will live
for a longer time than our actuarial tables predict. If that happens, we would
be paying more in annuity income than we planned. We also assume a risk that the
mortality assumptions reflected in our guaranteed annuity payment tables, shown
in each contract, will differ from actual mortality experience. Lastly, we
assume a mortality risk to the extent that at the time of death, the guaranteed
minimum death benefit exceeds the cash value of the contract. The expense risk
we assume is the risk that it will cost us more to issue and administer the
contracts than we expect.
ADMINISTRATIVE CHARGE
We deduct a daily charge from the net assets in each variable investment option.
The charge, together with the annual administrative charge described below, is
to compensate us for administrative expenses under the contracts. The daily
charge is equivalent to an annual rate of 0.25% of the net assets in each
variable investment option. We reserve the right under the contracts to increase
this charge to an annual rate of 0.35%.
ANNUAL ADMINISTRATIVE CHARGE (FLEXIBLE PREMIUM IRA AND FLEXIBLE PREMIUM ROTH IRA
CONTRACTS ONLY)
Under Flexible Premium IRA and Flexible Premium Roth IRA contracts, we deduct an
administrative charge from your account value on each contract date anniversary.
We deduct the charge if your account value on the last business day of the
contract year is less than $25,000. If your account value on such date is
$25,000 or more, we do not deduct the charge. During the first two contract
years, the charge is equal to $30 or, if less, 2% of your account value. The
charge is $30 for contract years three and later.
We will deduct this charge from your value in the variable investment options on
a pro rata basis. If there is not enough value in the variable investment
options, we will deduct all or a portion of the charge from the fixed maturity
options in order of the earliest maturity date(s) first. If you
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surrender your contract during the contract year we will deduct a pro rata
portion of the charge.
WITHDRAWAL CHARGE
A withdrawal charge applies in two circumstances:
(1) if you make one or more withdrawals during a contract year that, in total,
exceed the 15% free withdrawal amount, described below, or (2) if you surrender
your contract to receive its cash value.
The withdrawal charge equals a percentage of the contributions withdrawn. The
percentage that applies depends on how long each contribution has been invested
in the contract. We determine the withdrawal charge separately for each
contribution according to the following table:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
CONTRACT YEAR
- ---------------------------------------------------------------------------------------
1 2 3 4 5 6 7 8+
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Percentage of
contribution 7% 6% 5% 4% 3% 2% 1% 0%
- ---------------------------------------------------------------------------------------
</TABLE>
If the Assured Payment Option or APO Plus is in effect, the withdrawal charge is
equal to a percentage of the contributions withdrawn minus any amounts allocated
to the life contingent annuity.
For purposes of calculating the withdrawal charge, we treat the contract year in
which we receive a contribution as "contract year 1." Amounts withdrawn up to
the free withdrawal amount are not considered withdrawal of any contribution. We
also treat contributions that have been invested the longest as being withdrawn
first. We treat contributions as withdrawn before earnings for purposes of
calculating the withdrawal charge. However, federal income tax rules treat
earnings under your contract as withdrawn first. See "Tax information."
In order to give you the exact dollar amount of the withdrawal you request, we
deduct the amount of the withdrawal and the withdrawal charge from your account
value. Any amount deducted to pay withdrawal charges is also subject to the same
withdrawal charge percentage. We deduct the charge in proportion to the amount
of the withdrawal subtracted from each investment option. The withdrawal charge
helps cover our sales expenses.
The withdrawal charge does not apply in the circumstances described below.
15% FREE WITHDRAWAL AMOUNT. Each contract year you can withdraw up to 15% of
your account value without paying a withdrawal charge. The 15% free withdrawal
amount is determined using your account value on the most recent contract date
anniversary, minus any other withdrawals made during the contract year. The 15%
free withdrawal amount does not apply if you surrender your contract.
The free withdrawal amount is 10% of your account value under the Assured
Payment Option and APO Plus.
Note the following special rule for NQ contracts issued to a charitable
remainder trust, the free withdrawal amount will equal the greater of: (1) the
current account value, less contributions that have not been withdrawn (earnings
in the contract), and (2) the 15% free withdrawal amount defined above.
DISABILITY, TERMINAL ILLNESS OR CONFINEMENT TO NURSING HOME. The withdrawal
charge also does not apply if:
o The annuitant has qualified to receive Social Security disability benefits
as certified by the Social Security Administration; or
o We receive proof satisfactory to us (including certification by a licensed
physician) that the annuitant's life expectancy is six months or less; or
o The annuitant has been confined to a nursing home for more than 90 days (or
such other period, as required in your state) as verified by a licensed
physician. A nursing home for this purpose means one that is (a) approved
by Medicare as a provider of skilled nursing care service, or (b) licensed
as a skilled nursing home by the state or territory in which it is located
(it must be within the United States, Puerto Rico, or U.S. Virgin Islands)
and meets all of the following:
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- - its main function is to provide skilled, intermediate, or custodial nursing
care;
- - it provides continuous room and board to three or more persons;
- - it is supervised by a registered nurse or licensed practical nurse;
- - it keeps daily medical records of each patient;
- - it controls and records all medications dispensed; and
- - its primary service is other than to provide housing for residents.
We reserve the right to impose a withdrawal charge, in accordance with your
contract and applicable state law, if the disability is caused by a preexisting
condition or a condition that began within 12 months of the contract date. Some
states may not permit us to waive the withdrawal charge in the above
circumstances, or may limit the circumstances for which the withdrawal charge
may be waived. Your financial professional can provide more information or you
may contact our Processing Office.
BASEBUILDER BENEFIT CHARGE
If you elect the baseBUILDER, we deduct a charge annually from your account
value on each contract date anniversary until such time as you exercise the
guaranteed minimum income benefit, elect another annuity payout option, or the
contract date anniversary after which the annuitant reaches age 83, whichever
occurs first. The charge is equal to 0.30% (0.15% if the 5% roll up to age 70
baseBUILDER combined benefit is elected) of the benefit base in effect on the
contract date anniversary.
We will deduct this charge from your value in the variable investment options on
a pro rata basis. If there is not enough value in the variable investment
options, we will deduct all or a portion of the charge from the fixed maturity
options in order of the earliest maturity date(s) first. A market value
adjustment may apply.
CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES
We deduct a charge designed to approximate certain taxes that may be imposed on
us, such as premium taxes in your state. Generally, we deduct the charge from
the amount applied to provide an annuity payout option. The current tax charge
that might be imposed varies by state and ranges from 0% to 3.5% (1% in Puerto
Rico and 5% in the U.S. Virgin Islands).
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION ADMINISTRATIVE FEE
We deduct a fee of up to $350 from the amount to be applied to the Variable
Immediate Annuity payout option.
CHARGES THAT EQ ADVISORS TRUST DEDUCTS
EQ Advisors Trust deducts charges for the following types of fees and expenses:
o Management fees ranging from 0.25% to 1.15%.
o 12b-1 fees of 0.25%.
o Operating expenses, such as trustees' fees, independent auditors' fees,
legal counsel fees, administrative service fees, custodian fees, and
liability insurance.
o Investment-related expenses, such as brokerage commissions.
These charges are reflected in the daily share price of each portfolio. Since
shares of EQ Advisors Trust are purchased at their net asset value, these fees
and expenses are, in effect, passed on to the variable investment options and
are reflected in their unit values. For more information about these charges,
please refer to the prospectus for EQ Advisors Trust following this prospectus.
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce the withdrawal charge
or the mortality and expense risks charge, or change the minimum initial
contribution requirements. We also may change the guaranteed minimum
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income benefit and the guaranteed minimum death benefit, or offer variable
investment options that invest in shares of EQ Advisors Trust that are not
subject to the 12b-1 fee. Group arrangements include those in which a trustee or
an employer, for example, purchases contracts covering a group of individuals on
a group basis. Group arrangements are not available for IRA contracts. Sponsored
arrangements include those in which an employer allows us to sell contracts to
its employees or retirees on an individual basis.
Our costs for sales, administration, and mortality generally vary with the size
and stability of the group or sponsoring organization, among other factors. We
take all these factors into account when reducing charges. To qualify for
reduced charges, a group or sponsored arrangement must meet certain
requirements, such as requirements for size and number of years in existence.
Group or sponsored arrangements that have been set up solely to buy contracts or
that have been in existence less than six months will not qualify for reduced
charges.
We also may establish different rates to maturity for the fixed maturity options
under different classes of contracts for group or sponsored arrangements.
We will make these and any similar reductions according to our rules in effect
when we approve a contract for issue. We may change these rules from time to
time. Any variation will reflect differences in costs or services and will not
be unfairly discriminatory.
Group or sponsored arrangements may be governed by federal income tax rules,
ERISA, or both. We make no representations with regard to the impact of these
and other applicable laws on such programs. We recommend that employers,
trustees, and others purchasing or making contracts available for purchase under
such programs seek the advice of their own legal and benefits advisers.
OTHER DISTRIBUTION ARRANGEMENTS
We may reduce or eliminate charges when sales are made in a manner that result
in savings of sales and administrative expenses, such as sales through persons
who are compensated by clients for recommending investments and who receive no
commission or reduced commissions in connection with the sale of the contracts.
We will not permit a reduction or elimination of charges where it would be
unfairly discriminatory.
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6 Payment of death benefit
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YOUR BENEFICIARY AND PAYMENT OF BENEFIT
You designate your beneficiary when you apply for your contract. You may change
your beneficiary at any time. The change will be effective on the date the
written request for the change is received in our processing office. We are not
responsible for any beneficiary change request that we do not receive. We will
send you a written confirmation when we receive your request. Under jointly
owned contracts, the surviving owner is considered the beneficiary, and will
take the place of any other beneficiary. You may be limited as to the
beneficiary you can designate in a Rollover TSA contract. In a QP contract, the
beneficiary must be the trustee.
The death benefit is equal to your account value, or, if greater, the guaranteed
minimum death benefit. The guaranteed minimum death benefit is part of your
contract, whether you select the baseBUILDER benefit or not. We determine the
amount of the death benefit (other than the guaranteed minimum death benefit) as
of the date we receive satisfactory proof of the annuitant's death and any
required instructions for the method of payment. We determine the amount of the
guaranteed minimum death benefit as of the date of the annuitant's death. Under
Rollover TSA contracts we will deduct the amount of any outstanding loan plus
accrued interest from the amount of the death benefit.
The death benefit payable under the Assured Payment Option or APO Plus is
described earlier in this prospectus. See "Assured Payment Option and APO Plus."
EFFECT OF THE ANNUITANT'S DEATH
If the annuitant dies before the annuity payments begin, we will pay the death
benefit to your beneficiary.
Generally, the death of the annuitant terminates the contract. However, a
beneficiary spouse of the owner/annuitant can choose to be treated as the
successor owner/annuitant and continue the contract. Only a spouse can be a
successor owner/annuitant. A successor owner/annuitant can only be named under
NQ and IRA contracts.
For IRA contracts, a beneficiary may be able to have limited ownership as
discussed under "Beneficiary continuation option" below.
WHEN AN NQ CONTRACT OWNER DIES BEFORE THE ANNUITANT
Under certain conditions the owner changes after the original owner's death.
When you are not the annuitant under an NQ contract and you die before annuity
payments begin, the beneficiary named to receive the death benefit upon the
annuitant's death will automatically become the successor owner. If you do not
want this beneficiary to be the successor owner, you should name a specific
successor owner you may name a successor owner at any time by sending
satisfactory notice to our processing office. If the contract is jointly owned
and the first owner to die is not the annuitant, the surviving owner becomes the
sole contract owner. This person will be considered the successor owner for
purposes of the distribution rules described in this section. The surviving
owner automatically takes the place of any other beneficiary designation.
Unless the surviving spouse of the owner who has died (or in the case of a joint
ownership situation, the surviving spouse of the first owner to die) is the
successor owner for this purpose, the entire interest in the contract must be
distributed under the following rules:
o The cash value of the contract must be fully paid to the successor owner
(new owner) by December 31st of the fifth calendar year after your death
(or in a joint ownership situation, the death of the first owner to die).
o The successor owner may instead elect to receive the cash value as a life
annuity (or payments for a period certain of not longer than the new
owner's life expectancy). Payments must begin no later than December 31st
following the calendar year of the non-annuitant owner's death. Unless this
alternative is elected, we will pay any cash value on December 31st of the
fifth calendar year following the year of your death (or the death of the
first owner to die).
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o If the surviving spouse is the successor owner or joint owner, the spouse
may elect to continue the contract. No distributions are required as long
as the surviving spouse and annuitant are living.
HOW DEATH BENEFIT PAYMENT IS MADE
We will pay the death benefit to the beneficiary in the form of the annuity
payout option you have chosen. If you have not chosen an annuity payout option
as of the time of the annuitant's death, the beneficiary will receive the death
benefit in a single sum. However, subject to any exceptions in the contract, our
rules and any applicable requirements under federal income tax rules, the
beneficiary may elect to apply the death benefit to one or more annuity payout
options we offer at the time. See "Your annuity payout options" in "Accessing
your money" earlier in this prospectus. Please note that any annuity payout
option chosen may not extend beyond the life expectancy of the beneficiary.
SUCCESSOR OWNER AND ANNUITANT
If you are both the contract owner and the annuitant, and your spouse is the
sole beneficiary or the joint owner, then your spouse may elect to receive the
death benefit or continue the contract as successor owner/annuitant.
If your surviving spouse decides to continue the contract, then on the contract
date anniversary following your death, we will increase the account value to
equal your current guaranteed minimum death benefit, if it is higher than the
account value. The increase in the account value will be allocated to the
investment options according to the allocation percentages we have on file for
your contract. Thereafter, withdrawal charges will no longer apply to this
amount. Withdrawal charges will apply if you make additional contributions.
These additional contributions will be withdrawn only after all other amounts
have been withdrawn. In determining whether the guaranteed minimum death benefit
will continue to grow, we will use your surviving spouse's age (as of the
contract date anniversary).
BENEFICIARY CONTINUATION OPTION
Upon your death under an IRA contract, a beneficiary may generally elect to keep
the contract in your name and receive distributions under the contract instead
of receiving the death benefit in a single sum. In order to elect this option,
the beneficiary must be an individual. Certain trusts with only individual
beneficiaries will be treated as individuals. This election must be made within
60 days following the date we receive proof of your death. We will increase the
account value to equal the death benefit if the death benefit is greater than
the account value. Except as noted in the next sentence, the beneficiary
continuation option will be available on or after May 1, 2000, depending on when
we receive regulatory clearance in your state. For Rollover IRA and Flexible
Premium IRA contracts, a similar beneficiary continuation option will be
available until the beneficiary continuation option described in this prospectus
is available. Please contact our processing office for further information. In
addition, the beneficiary continuation option is not available if APO or APO
Plus is in effect at your death.
Under the beneficiary continuation option:
o The contract continues in your name for the benefit of your beneficiary.
o The beneficiary may make transfers among the investment options, but no
additional contributions will be permitted.
o The guaranteed minimum income benefit and the death benefit (including the
guaranteed minimum death benefit) provisions will no longer be in effect.
o The beneficiary may choose at any time to withdraw all or a portion of the
account value and no withdrawal charges will apply. Any partial withdrawal
must be at least $300.
o Upon the death of the beneficiary, any remaining death benefit will be paid
in a lump sum to the person the beneficiary chooses.
For Traditional IRA contracts only, if you die AFTER the "Required Beginning
Date" for required minimum distributions (see "Tax information"), the contract
will continue if:
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(a) You were receiving minimum distribution withdrawals from this contract; and
(b) The pattern of minimum distribution withdrawals you chose was based in part
on the life of the designated beneficiary.
The withdrawals will then continue to be paid to the beneficiary on the same
basis as you chose before your death. We will be able to tell your beneficiary
whether this option is available. You should contact our processing office for
further information.
For all of the above contracts, If you die BEFORE the Required Beginning Date
(and, for a traditional IRA, therefore you were not taking minimum distribution
withdrawals under the contract) the beneficiary may choose one of the following
two beneficiary continuation options:
1. Payments over life expectancy period. The beneficiary can receive annual
minimum distributions based on the beneficiary's life expectancy. If there
is more than one beneficiary, the shortest life expectancy is used. These
minimum distributions must begin by December 31st of the calendar year
following the year of your death. In some situations, a spouse beneficiary
who elects to continue the contract in your name under the beneficiary
continuation option instead of electing successor owner/annuitant status
may also choose to delay beginning these minimum distributions until the
December 31st of the calendar year in which you would have turned age 70
1/2.
2. Five Year Rule. The beneficiary can take withdrawals as desired. If the
beneficiary does not withdraw the entire account value by the December 31st
of the fifth calendar year following your death, we will pay any amounts
remaining under the contract to the beneficiary by that date. If you have
more than one beneficiary, and one of them elects this option, then all of
your beneficiaries will receive this option.
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7 Tax information
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OVERVIEW
In this part of the prospectus, we discuss the current federal income tax rules
that generally apply to Equitable Accumulator contracts owned by United States
taxpayers. The tax rules can differ, depending on the type of contract, whether
NQ, Rollover IRA, Flexible Premium IRA, Roth Conversion IRA, Flexible Premium
Roth IRA, QP, or Rollover TSA. Therefore, we discuss the tax aspects of each
type of contract separately.
Federal income tax rules include the United States laws in the Internal Revenue
Code, and Treasury Department Regulations and Internal Revenue Service ("IRS")
interpretations of the Internal Revenue Code. These tax rules may change. We
cannot predict whether, when, or how these rules could change. Any change could
affect contracts purchased before the change.
We cannot provide detailed information on all tax aspects of the contracts.
Moreover, the tax aspects that apply to a particular person's contract may vary
depending on the facts applicable to that person. We do not discuss state income
and other state taxes, federal income tax, and withholding rules for non-U.S.
taxpayers, or federal gift and estate taxes. Transfers of the contract, rights
under the contract, or payments under the contract may be subject to gift or
estate taxes. You should not rely only on this document, but should consult your
tax adviser before your purchase.
If you are buying a contract to fund a retirement plan that already provides tax
deferral under sections of the Internal Revenue Code (IRA, QP, and Rollover
TSA), you should do so for the contract's features and benefits other than tax
deferral. In such situations, the tax deferral of the contract does not provide
additional benefits.
TRANSFERS AMONG INVESTMENT OPTIONS
You can make transfers among investment options inside the contract without
triggering taxable income.
TAXATION OF NONQUALIFIED ANNUITIES
CONTRIBUTIONS
You may not deduct the amount of your contributions to a nonqualified annuity
contract.
CONTRACT EARNINGS
Generally, you are not taxed on contract earnings until you receive a
distribution from your contract, whether as a withdrawal or as an annuity
payment. However, earnings are taxable, even without a distribution:
o if a contract fails investment diversification requirements as specified in
federal income tax rules (these rules are based on or are similar to those
specified for mutual funds under the securities laws);
o if you transfer a contract, for example, as a gift to someone other than
your spouse (or former spouse);
o if you use a contract as security for a loan (in this case, the amount
pledged will be treated as a distribution); and
o if the owner is other than an individual (such as a corporation,
partnership, trust, or other non-natural person).
All nonqualified deferred annuity contracts that Equitable Life and its
affiliates issue to you during the same calendar year are linked together and
treated as one contract for calculating the taxable amount of any distribution
from any of those contracts.
ANNUITY PAYMENTS
Once annuity payments begin, a portion of each payment is taxable as ordinary
income. You get back the remaining portion without paying taxes on it. This is
your "investment in the contract." Generally, your investment in the contract
equals the contributions you made, less any amounts you previously withdrew that
were not taxable.
For fixed annuity payments, the tax-free portion of each payment is determined
by (1) dividing your investment in the contract by the total amount you are
expected to receive out of the contract, and (2) multiplying the result by the
amount
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of the payment. For variable annuity payments, your tax-free portion of each
payment is your investment in the contract divided by the number of expected
payments.
Once you have received the amount of your investment in the contract, all
payments after that are fully taxable. If payments under a life annuity stop
because the annuitant dies, there is an income tax deduction for any unrecovered
investment in the contract.
PAYMENTS MADE BEFORE ANNUITY PAYMENTS BEGIN
If you make withdrawals before annuity payments begin under your contract, they
are taxable to you as ordinary income if there are earnings in the contract.
Generally, earnings are your account value less your investment in the contract.
If you withdraw an amount which is more than the earnings in the contract as of
the date of the withdrawal, the balance of the distribution is treated as a
return of your investment in the contract and is not taxable.
CONTRACTS PURCHASED THROUGH EXCHANGES
You may purchase your NQ contract through an exchange of another contract.
Normally, exchanges of contracts are taxable events. The exchange will not be
taxable under Section 1035 of the Internal Revenue Code if:
o the contract that is the source of the funds you are using to purchase the
NQ contract is another nonqualified deferred annuity contract or life
insurance or endowment contract.
o the owner and the annuitant are the same under the source contract and the
Equitable Accumulator NQ contract. If you are using a life insurance or
endowment contract the owner and the insured must be the same on both sides
of the exchange transaction.
The tax basis of the source contract carries over to the Equitable Accumulator
NQ contract.
A recent case permitted an owner to direct the proceeds of a partial withdrawal
from one nonqualified deferred annuity contract to a different insurer to
purchase a new nonqualified deferred annuity contract on a tax-deferred basis.
Special forms, agreement between the carriers, and provision of cost basis
information may be required to process this type of an exchange.
SURRENDERS
If you surrender or cancel the contract, the distribution is taxable as ordinary
income (not capital gain) to the extent it exceeds your investment in the
contract.
DEATH BENEFIT PAYMENTS MADE TO A BENEFICIARY AFTER YOUR DEATH
For the rules applicable to death benefits, see "Payment of death benefit"
earlier in this prospectus. The tax treatment of a death benefit taken as a
single sum is generally the same as the tax treatment of a withdrawal from or
surrender of your contract. The tax treatment of a death benefit taken as
annuity payments is generally the same as the tax treatment of annuity payments
under your contract.
EARLY DISTRIBUTION PENALTY TAX
If you take distributions before you are age 59 1/2 a penalty tax of 10% of the
taxable portion of your distribution applies in addition to the income tax. The
extra penalty tax does not apply to pre-age 59 1/2 distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o in the form of substantially equal periodic annuity payments for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and a beneficiary.
OTHER INFORMATION
The Treasury Department has the authority to issue guidelines prescribing the
circumstances in which your ability to direct your investment to particular
portfolios within a separate account may cause you, rather than the insurance
company, to be treated as the owner of the portfolio shares attributable to your
nonqualified annuity contract. In that case, income and gains attributable to
such portfolio shares would be included in your gross income for federal income
tax purposes. Under current rules, however, we believe that
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Equitable Life, and not the owner of a nonqualified annuity contract, would be
considered the owner of the portfolio shares.
SPECIAL RULES FOR NQ CONTRACTS ISSUED IN PUERTO RICO
Under current law we treat income from NQ contracts as U.S. source. A Puerto
Rico resident is subject to U.S. taxation on such U.S. source income. Only
Puerto Rico source income of Puerto Rico residents is excludable from U.S.
taxation. Income from NQ contracts is also subject to Puerto Rico tax. The
calculation of the taxable portion of amounts distributed from a contract may
differ in the two jurisdictions. Therefore, you might have to file both U.S. and
Puerto Rico tax returns, showing different amounts of income from the contract
for each tax return. Puerto Rico generally provides a credit against Puerto Rico
tax for U.S. tax paid. Depending on your personal situation and the timing of
the different tax liabilities, you may not be able to take full advantage of
this credit.
INDIVIDUAL RETIREMENT ARRANGEMENTS (IRAS)
GENERAL
"IRA" stands for individual retirement arrangement. There are two basic types of
such arrangements, individual retirement accounts and individual retirement
annuities. In an individual retirement account, a trustee or custodian holds the
assets for the benefit of the IRA owner. The assets can include mutual funds and
certificates of deposit. In an individual retirement annuity, an insurance
company issues an annuity contract that serves as the IRA.
There are two basic types of IRAs, as follows:
o Traditional IRAs, typically funded on a pre-tax basis including SEP-IRAs
and SIMPLE-IRAs, issued and funded in connection with employer-sponsored
retirement plans; and
o Roth IRAs, first available in 1998, funded on an after-tax basis.
Regardless of the type of IRA, your ownership interest in the IRA cannot be
forfeited. You or your beneficiaries who survive you are the only ones who can
receive the IRA's benefits or payments.
You can hold your IRA assets in as many different accounts and annuities as you
would like, as long as you meet the rules for setting up and making
contributions to IRAs. However, if you own multiple IRAs, you may be required to
combine IRA values or contributions for tax purposes. For further information
about individual retirement arrangements, you can read Internal Revenue Service
Publication 590 ("Individual Retirement Arrangements (IRAs)"). This publication
is usually updated annually, and can be obtained from any IRS district office or
the IRS website (http://www.irs.gov).
Equitable Life designs its traditional IRA contracts to qualify as "individual
retirement annuities" under Section 408(b) of the Internal Revenue Code. You may
purchase the contract as a traditional IRA or Roth IRA. The traditional IRAs we
offer are the Rollover IRA and Flexible Premium IRA. The versions of the Roth
IRA available are the Roth Conversion IRA and Flexible Premium Roth IRA. This
prospectus contains the information that the IRS requires you to have before you
purchase an IRA. This section of the prospectus covers some of the special tax
rules that apply to IRAs. The next section covers Roth IRAs. Education IRAs are
not discussed in this prospectus because they are not available in individual
retirement annuity form.
The Equitable Accumulator IRA contract has been approved by the IRS as to form
for use as a traditional IRA. This IRS approval is a determination only as to
the form of the annuity. It does not represent a determination of the merits of
the annuity as an investment. The IRS approval does not address every feature
possibly available under the Equitable Accumulator IRA contract. Although we do
not have IRS approval as to form, we believe that the version of the Roth IRA
currently offered complies with the requirements of the Internal Revenue Code.
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CANCELLATION
You can cancel an Equitable Accumulator IRA contract by following the directions
under "Your right to cancel within a certain number of days" in "Contract
features and benefits" earlier in the prospectus. You can cancel an Equitable
Accumulator Roth Conversion IRA contract issued as a result of a full conversion
of an Equitable Accumulator Rollover IRA or Flexible Premium IRA contract by
following the instructions in the request for full conversion form. The form is
available from our processing office or your financial professional. If you
cancel an IRA contract, we may have to withhold tax, and we must report the
transaction to the IRS. A contract cancellation could have an unfavorable tax
impact.
TRADITIONAL INDIVIDUAL RETIREMENT ANNUITIES (TRADITIONAL IRAS)
CONTRIBUTIONS TO TRADITIONAL IRAS. Individuals may make three different types of
contributions to a traditional IRA:
o regular contributions out of earned income or compensation; or
o tax-free "rollover" contributions; or
o direct custodian-to-custodian transfers from other traditional IRAs
("direct transfers").
REGULAR CONTRIBUTIONS TO TRADITIONAL IRAS
LIMITS ON CONTRIBUTIONS. Generally, $2,000 is the maximum amount that you may
contribute to all IRAs (including Roth IRAs) in any taxable year. When your
earnings are below $2,000, your earned income or compensation for the year is
the most you can contribute. This $2,000 limit does not apply to rollover
contributions or direct custodian-to-custodian transfers into a traditional IRA.
You cannot make regular traditional IRA contributions for the tax year in which
you reach age 70 1/2 or any tax year after that.
SPECIAL RULES FOR SPOUSES. If you are married and file a joint income tax
return, you and your spouse may combine your compensation to determine the
amount of regular contributions you are permitted to make to traditional IRAs
(and Roth IRAs discussed below). Even if one spouse has no compensation or
compensation under $2,000, married individuals filing jointly can contribute up
to $4,000 for any taxable year to any combination of traditional IRAs and Roth
IRAs. (Any contributions to Roth IRAs reduce the ability to contribute to
traditional IRAs and vice versa.) The maximum amount may be less if earned
income is less and the other spouse has made IRA contributions. No more than a
combined total of $2,000 can be contributed annually to either spouse's
traditional and Roth IRAs. Each spouse owns his or her traditional IRAs and Roth
IRAs even if the other spouse funded the contributions. A working spouse age
70 1/2 or over can contribute up to the lesser of $2,000 or 100% of "earned
income" to a traditional IRA for a nonworking spouse until the year in which the
nonworking spouse reaches age 70 1/2.
DEDUCTIBILITY OF CONTRIBUTIONS. The amount of traditional IRA contributions that
you can deduct for a tax year depends on whether you are covered by an
employer-sponsored tax-favored retirement plan, as defined under special federal
income tax rules. Your Form W-2 will indicate whether or not you are covered by
such a retirement plan.
IF YOU ARE NOT COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, you can
make fully deductible contributions to your traditional IRAs for each tax year
up to $2,000 or, if less, your earned income.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
adjusted gross income (AGI) is BELOW THE LOWER DOLLAR FIGURE IN A PHASE-OUT
RANGE, you can make fully deductible contributions to your traditional IRAs. For
each tax year, your fully deductible contribution can be up to $2,000 or, if
less, your earned income.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
AGI falls within a PHASE-OUT range, you can make PARTIALLY DEDUCTIBLE
CONTRIBUTIONS to your traditional IRAs.
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IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
AGI falls ABOVE THE HIGHER FIGURE IN THE PHASE-OUT RANGE, you may not deduct any
of your regular contributions to your traditional IRAs.
If you are single and covered by a retirement plan during any part of the
taxable year, the deduction for traditional IRA contributions phases out with
AGI between $31,000 and $42,000 in 2000. This range will increase every year
until 2005 when the range is $50,000-$60,000.
If you are married and file a joint return, and you are covered by a retirement
plan during any part of the taxable year, the deduction for traditional IRA
contributions phases out with AGI between $51,000 and $61,000 in 1999. This
range will increase every year until 2007 when the range is $80,000-$100,000.
Married individuals filing separately and living apart at all times are not
considered married for purposes of this deductible contribution calculation.
Generally, the active participation in an employer-sponsored retirement plan of
an individual is determined independently for each spouse. Where spouses have
"married filing jointly" status, however, the maximum deductible traditional IRA
contribution for an individual who is not an active participant (but whose
spouse is an active participant) is phased out for taxpayers with AGI of between
$150,000 and $160,000.
To determine the deductible amount of the contribution in 2000, you determine
AGI and subtract $32,000 if you are single, or $52,000 if you are married and
file a joint return with your spouse. The resulting amount is your excess AGI.
You then determine the limit on the deduction for traditional IRA contributions
using the following formula:
<TABLE>
<S> <C> <C> <C> <C>
($10,000-excess AGI)
- ------------------------------ times $2,000 (or earned Equals the adjusted
divided by $10,000 x income, if less) = deductible
contribution
limit
</TABLE>
NONDEDUCTIBLE REGULAR CONTRIBUTIONS. If you are not eligible to deduct part or
all of the traditional IRA contribution, you may still make nondeductible
contributions on which earnings will accumulate on a tax-deferred basis. The
combined deductible and nondeductible contributions to your traditional IRA (or
the nonworking spouse's traditional IRA) may not, however, exceed the maximum
$2,000 per person limit. See "Excess contributions" below. You must keep your
own records of deductible and nondeductible contributions in order to prevent
double taxation on the distribution of previously taxed amounts. See
"Withdrawals, payments and transfers of funds out of traditional IRAs" below.
If you are making nondeductible contributions in any taxable year, or you have
made nondeductible contributions to a traditional IRA in prior years and are
receiving distributions from any traditional IRA, you must file the required
information with the IRS. Moreover, if you are making nondeductible traditional
IRA contributions, you must retain all income tax returns and records pertaining
to such contributions until interests in all traditional IRAs are fully
distributed.
WHEN YOU CAN MAKE REGULAR CONTRIBUTIONS. If you file your tax returns on a
calendar year basis like most taxpayers, you have until the April 15 return
filing deadline (without extensions) of the following calendar year to make your
regular traditional IRA contributions for a tax year.
ROLLOVERS AND TRANSFERS
Rollover contributions may be made to a traditional IRA from these sources:
o qualified plans;
o TSAs (including Internal Revenue Code Section 403(b)(7) custodial
accounts); and
o other traditional IRAs.
Any amount contributed to a traditional IRA after you reach age 70 1/2 must be
net of your required minimum distribution for the year in which the rollover or
direct transfer contribution is made.
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ROLLOVERS FROM QUALIFIED PLANS OR TSAS
There are two ways to do rollovers:
o Do it yourself
You actually receive a distribution that can be rolled over and you roll it
over to a traditional IRA within 60 days after the date you receive the
funds. The distribution from your qualified plan or TSA will be net of 20%
mandatory federal income tax withholding. If you want, you can replace the
withheld funds yourself and roll over the full amount.
o Direct rollover
You tell your qualified plan trustee or TSA issuer/custodian/fiduciary to
send the distribution directly to your traditional IRA issuer. Direct
rollovers are not subject to mandatory federal income tax withholding.
All distributions from a TSA or qualified plan are eligible rollover
distributions, unless the distribution is:
o only after-tax contributions you made to the plan; or
o "required minimum distributions" after age 70 1/2 or separation from
service; or
o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancies) of you
and your designated beneficiary; or
o a hardship withdrawal; or
o substantially equal periodic payments made for a specified period of 10
years or more; or
o corrective distributions that fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse;
or
o a qualified domestic relations order distribution to a beneficiary who is
not your current spouse or former spouse.
ROLLOVERS FROM TRADITIONAL IRAS TO TRADITIONAL IRAS
You may roll over amounts from one traditional IRA to one or more of your other
traditional IRAs if you complete the transaction within 60 days after you
receive the funds. You may make such a rollover only once in every 12-month
period for the same funds. Trustee-to-trustee or custodian-to-custodian direct
transfers are not rollover transactions. You can make these more frequently than
once in every 12-month period.
The surviving spouse beneficiary of a deceased individual can roll over or
directly transfer an inherited traditional IRA to one or more other traditional
IRAs. Also, in some cases, traditional IRAs can be transferred on a tax-free
basis between spouses or former spouses as a result of a court- ordered divorce
or separation decree.
EXCESS CONTRIBUTIONS
Excess contributions to IRAs are subject to a 6% excise tax for the year in
which made and for each year after until withdrawn. The following are excess
contributions to IRAs:
o regular contributions of more than $2,000; or
o regular contributions of more than earned income for the year, if that
amount is under $2,000; or
o regular contributions to a traditional IRA made after you reach age 70 1/2;
or
o rollover contributions of amounts which are not eligible to be rolled over.
For example, after-tax contributions to a qualified plan or minimum
distributions required to be made after age 70 1/2.
You can avoid the excise tax by withdrawing an excess contribution (rollover or
regular) before the due date (including extensions) for filing your federal
income tax return for the year. If it is an excess regular traditional IRA
contribution, you cannot take a tax deduction for the amount withdrawn. You do
not have to include the excess contribution withdrawn as part of your income. It
is also not subject to the 10% additional penalty tax on early distributions,
discussed below under "Early distribution
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penalty tax." You do have to withdraw any earnings that are attributed to the
excess contribution. The withdrawn earnings would be included in your gross
income and could be subject to the 10% penalty tax.
Even after the due date for filing your return, you may withdraw an excess
rollover contribution, without income inclusion or 10% penalty, if:
(1) the rollover was from a qualified retirement plan to a traditional IRA;
(2) the excess contribution was due to incorrect information that the plan
provided; and
(3) you took no tax deduction for the excess contribution.
RECHARACTERIZATIONS
Amounts that have been contributed as traditional IRA funds may subsequently be
treated as Roth IRA funds. Special federal income tax rules allow you to change
your mind again and have amounts that are subsequently treated as Roth IRA
funds, once again treated as traditional IRA funds. You do this by using the
forms we prescribe. This is referred to as having "recharacterized" your
contribution.
WITHDRAWALS, PAYMENTS AND TRANSFERS OF FUNDS OUT OF TRADITIONAL IRAS.
NO FEDERAL INCOME TAX LAW RESTRICTIONS ON WITHDRAWALS. You can withdraw any or
all of your funds from a traditional IRA at any time. You do not need to wait
for a special event like retirement.
TAXATION OF PAYMENTS. Earnings in traditional IRAs are not subject to federal
income tax until you or your beneficiary receive them. Taxable payments or
distributions include withdrawals from your contract, surrender of your
contract, and annuity payments from your contract. Death benefits are also
taxable. Except as discussed below, the total amount of any distribution from a
traditional IRA must be included in your gross income as ordinary income.
If you have ever made nondeductible IRA contributions to any traditional IRA (it
does not have to be to this particular traditional IRA contract), those
contributions are recovered tax free when you get distributions from any
traditional IRA. You must keep permanent tax records of all of your
nondeductible contributions to traditional IRAs. At the end of any year in which
you have received a distribution from any traditional IRA, you calculate the
ratio of your total nondeductible traditional IRA contributions (less any
amounts previously withdrawn tax free) to the total account balances of all
traditional IRAs you own at the end of the year plus all traditional IRA
distributions made during the year. Multiply this by all distributions from the
traditional IRA during the year to determine the nontaxable portion of each
distribution.
In addition, a distribution is not taxable if:
o the amount received is a withdrawal of excess contributions, as described
under "Excess contributions" above; or
o the entire amount received is rolled over to another traditional IRA (see
"Rollovers and transfers" above); or
o in certain limited circumstances, where the traditional IRA acts as a
"conduit," you roll over the entire amount into a qualified plan or TSA
that accepts rollover contributions. To get this conduit traditional IRA
treatment:
o the source of funds you used to establish the traditional IRA must have
been a rollover contribution from a qualified plan; and
o the entire amount received from the traditional IRA (including any
earnings on the rollover contribution) must be rolled over into another
qualified plan within 60 days of the date received.
Similar rules apply in the case of a TSA.
However, you may lose conduit treatment if you make an eligible rollover
distribution contribution to a traditional IRA and you commingle this
contribution with other contributions. In that case, you may not be able to roll
over these eligible rollover distribution contributions and earnings to another
qualified plan or TSA at a future date. The Rollover IRA contract can be used as
a conduit IRA if amounts are not commingled.
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Distributions from a traditional IRA are not eligible for favorable ten-year
averaging and long-term capital gain treatment available to certain
distributions from qualified plans.
REQUIRED MINIMUM DISTRIBUTIONS
LIFETIME REQUIRED MINIMUM DISTRIBUTIONS. You must start taking annual
distributions from your traditional IRAs beginning at age 70 1/2.
WHEN YOU HAVE TO TAKE THE FIRST REQUIRED MINIMUM DISTRIBUTION. The first
required minimum distribution is for the calendar year in which you turn age
70 1/2. You have the choice to take this first required minimum distribution
during the calendar year you actually reach age 70 1/2, or to delay taking it
until the first three-month period in the next calendar year (January 1 - April
1). Distributions must start no later than your Required Beginning Date, which
is April 1st of the calendar year after the calendar year in which you turn age
70 1/2. If you choose to delay taking the first annual minimum distribution,
then you will have to take two minimum distributions in that year - the delayed
one for the first year and the one actually for that year. Once minimum
distributions begin, they must be made at some time each year.
HOW YOU CAN CALCULATE REQUIRED MINIMUM DISTRIBUTIONS. There are two approaches
to taking required minimum distributions - "account-based" or "annuity-based."
Account-based method. If you choose an account-based method, you divide the
value of your traditional IRA as of December 31st of the past calendar year by a
life expectancy factor from IRS tables. This gives you the required minimum
distribution amount for that particular IRA for that year. The required minimum
distribution amount will vary each year as the account value and your life
expectancy factors change.
You have a choice of life expectancy factors, depending on whether you choose a
method based only on your life expectancy, or the joint life expectancies of you
and another individual. You can decide to "recalculate" your life expectancy
every year by using your current life expectancy factor. You can decide instead
to use the "term certain" method, where you reduce your life expectancy by one
every year after the initial year. If your spouse is your designated beneficiary
for the purpose of calculating annual account-based required minimum
distributions, you can also annually recalculate your spouse's life expectancy
if you want. If you choose someone who is not your spouse as your designated
beneficiary for the purpose of calculating annual account-based required minimum
distributions, you have to use the term certain method of calculating that
person's life expectancy. If you pick a nonspouse designated beneficiary, you
may also have to do another special calculation.
You can later apply your traditional IRA funds to a life annuity-based payout.
You can only do this if you already chose to recalculate your life expectancy
annually (and your spouse's life expectancy if you select a spousal joint
annuity). For example, if you anticipate exercising your guaranteed minimum
income benefit or selecting any other form of life annuity payout after you are
age 70 1/2, you must have elected to recalculate life expectancies.
Annuity-based method. If you choose an annuity-based method, you do not have to
do annual calculations. You apply the account value to an annuity payout for
your life or the joint lives of you and a designated beneficiary, or for a
period certain not extending beyond applicable life expectancies.
DO YOU HAVE TO PICK THE SAME METHOD TO CALCULATE YOUR REQUIRED MINIMUM
DISTRIBUTIONS FOR ALL OF YOUR TRADITIONAL IRAS AND OTHER RETIREMENT PLANS? No.
If you want, you can choose a different method and a different beneficiary for
each of your traditional IRAs and other retirement plans. For example, you can
choose an annuity payout from one IRA, a different annuity payout from a
qualified plan, and an account-based annual withdrawal from another IRA.
WILL WE PAY YOU THE ANNUAL AMOUNT EVERY YEAR FROM YOUR TRADITIONAL IRA BASED ON
THE METHOD YOU CHOOSE? No, unless you affirmatively select an annuity payout
option or an account-based withdrawal option such as our minimum distribution
withdrawal option. Because the
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options we offer do not cover every option permitted under federal income tax
rules, you may prefer to do your own required minimum distribution calculations
for one or more of your traditional IRAs.
WHAT IF YOU TAKE MORE THAN YOU NEED TO FOR ANY YEAR? The required minimum
distribution amount for your traditional IRAs is calculated on a year-by-year
basis. There are no carry-back or carry-forward provisions. Also, you cannot
apply required minimum distribution amounts you take from your qualified plans
to the amounts you have to take from your traditional IRAs and vice versa.
However, the IRS will let you calculate the required minimum distribution for
each traditional IRA that you maintain, using the method that you picked for
that particular IRA. You can add these required minimum distribution amount
calculations together. As long as the total amount you take out every year
satisfies your overall traditional IRA required minimum distribution amount, you
may choose to take your annual required minimum distribution from any one or
more traditional IRAs that you own.
WHAT IF YOU TAKE LESS THAN YOU NEED TO FOR ANY YEAR? Your IRA could be
disqualified, and you could have to pay tax on the entire value. Even if your
IRA is not disqualified, you could have to pay a 50% penalty tax on the
shortfall (required amount for traditional IRAs less amount actually taken). It
is your responsibility to meet the required minimum distribution rules. We will
remind you when our records show that your age 70 1/2 is approaching. If you do
not select a method with us, we will assume you are taking your required minimum
distribution from another traditional IRA that you own.
WHAT ARE THE REQUIRED MINIMUM DISTRIBUTION PAYMENTS AFTER YOU DIE? If you die
after either (a) the start of annuity payments, or (b) your Required Beginning
Date, your beneficiary must receive payment of the remaining values in the
contract at least as rapidly as under the distribution method before your death.
In some circumstances, your surviving spouse may elect to become the owner of
the traditional IRA and halt distributions until he or she reaches age 70 1/2.
If you die before your Required Beginning Date and before annuity payments
begin, federal income tax rules require complete distribution of your entire
value in the contract within five years after your death. Payments to a
designated beneficiary over the beneficiary's life or over a period certain that
does not extend beyond the beneficiary's life expectancy are also permitted, if
these payments start within one year of your death. A surviving spouse
beneficiary can also (a) delay starting any payments until you would have
reached age 70 1/2 or (b) roll over your traditional IRA into his or her own
traditional IRA.
SUCCESSOR ANNUITANT AND OWNER
If your spouse is the sole primary beneficiary and elects to become the
successor annuitant and owner, no death benefit is payable until your surviving
spouse's death.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
IRA death benefits are taxed the same as IRA distributions.
REQUIRED MINIMUM DISTRIBUTIONS UNDER THE ASSURED PAYMENT OPTION AND APO PLUS
Although the life contingent annuity portion of the Assured Payment Option and
APO Plus does not have a cash value, it will be assigned a value for tax
purposes. This value will generally be changed each year. When you determine the
amount of account-based required minimum distributions from your traditional IRA
this value must be included. This must be done even though the life contingent
annuity may not be providing a source of funds to satisfy the required minimum
distribution.
You will generally be required to determine your required minimum distribution
by annually recalculating your life expectancy. The Assured Payment Option and
APO Plus will not be available if you have previously made a different election.
Recalculation is no longer required once the only payments you or your spouse
receive are under the life contingent annuity.
If you surrender your contract, or withdraw any remaining account value before
your payments under the life contingent annuity begin, it may be necessary for
you to
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satisfy your required minimum distribution by moving forward the start date of
payments under your life contingent annuity. Or to the extent available, you
have to take distributions from other traditional IRA funds you may have. Or,
you may convert your traditional IRA life contingent annuity under the contract
to a nonqualified life contingent annuity. This would be viewed as a
distribution of the value of the life contingent annuity from your traditional
IRA, and therefore, would be a taxable event. However, since the life contingent
annuity would no longer be part of the traditional IRA, you would not have to
include its value when determining future required minimum distributions.
If you have elected a joint and survivor form of the life contingent annuity,
the joint annuitant must be your spouse. You must determine your required
minimum distribution by annually recalculating both your life expectancy and
your spouse's life expectancy. The Assured Payment Option and APO Plus will not
be available if you have previously made a different election. Once the only
payments you or your spouse are receiving are under the life contingent annuity
recalculation is no longer required. In the event of your death or the death of
your spouse the value of such annuity will change. For this reason, it is
important that someone tell us if you or your spouse dies before the life
contingent annuity has started payments so that a lower valuation can be made.
Otherwise, a higher tax value may result in an overstatement of the amount that
would be necessary to satisfy your required minimum distribution amount.
Allocation of funds to the life contingent annuity may prevent the contract from
later receiving conduit IRA treatment.
BORROWING AND LOANS ARE PROHIBITED TRANSACTIONS
You cannot get loans from a traditional IRA. You cannot use a traditional IRA as
collateral for a loan or other obligation. If you borrow against your IRA or use
it as collateral, its tax-favored status will be lost as of the first day of the
tax year in which this prohibited event occurs. If this happens, you must
include the value of the traditional IRA in your federal gross income. Also, the
early distribution penalty tax of 10% will apply if you have not reached age
59 1/2 before the first day of that tax year.
EARLY DISTRIBUTION PENALTY TAX
A penalty tax of 10% of the taxable portion of a distribution applies to
distributions from a traditional IRA made before you reach age 59 1/2. The extra
penalty tax does not apply to pre-age 59 1/2 distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o used to pay certain extraordinary medical expenses (special federal income
tax definition); or
o used to pay medical insurance premiums for unemployed individuals (special
federal income tax definition); or
o used to pay certain first-time home buyer expenses (special federal income
tax definition; $10,000 lifetime total limit for these distributions from
all your traditional and Roth IRAs); or
o used to pay certain higher education expenses (special federal income tax
definition); or
o in the form of substantially equal periodic payments made at least annually
over your life (or your life expectancy), or over the joint lives of you
and your beneficiary (or your joint life expectancy) using an IRS-approved
distribution method.
To meet this last exception, you could elect to apply your contract value to an
Income Manager (life annuity with a period certain) payout annuity contract
(level payments version). You could also elect the substantially equal
withdrawals option. We will calculate the substantially equal annual payments
under a method we select based on guidelines issued by the IRS (currently
contained in IRS Notice 89-25, Question and Answer 12). Although substantially
equal withdrawals and Income Manager payments are not subject to the 10% penalty
tax, they are taxable as discussed in "Withdrawals, payments and
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transfers of funds out of traditional IRAs" above. Once substantially equal
withdrawals or Income Manager annuity payments begin, the distributions should
not be stopped or changed until after the later of your reaching age 59 1/2 or
five years after the date of the first distribution, or the penalty tax,
including an interest charge for the prior penalty avoidance, may apply to all
prior distributions under either option. Also, it is possible that the IRS could
view any additional withdrawal or payment you take from your contract as
changing your pattern of substantially equal withdrawals or Income Manager
payments for purposes of determining whether the penalty applies.
ROTH INDIVIDUAL RETIREMENT ANNUITIES (ROTH IRAS)
This section of the prospectus covers some of the special tax rules that apply
to Roth IRAs. If the rules are the same as those that apply to the traditional
IRA, we will refer you to the same topic under "traditional IRAs."
The Equitable Accumulator Roth IRA contract is designed to qualify as a Roth
individual retirement annuity under Sections 408A and 408(b) of the Internal
Revenue Code.
CONTRIBUTIONS TO ROTH IRAS
Individuals may make four different types of contributions to a Roth IRA:
o regular after-tax contributions out of earnings; or
o taxable rollover contributions from traditional IRAs ("conversion"
contributions); or
o tax-free rollover contributions from other Roth IRAs; or
o tax-free direct custodian-to-custodian transfers from other Roth IRAs
("direct transfers").
Regular after-tax, direct transfer, and rollover contributions may be made to a
Flexible Premium Roth IRA contract. We only permit direct transfer and rollover
contributions under the Roth Conversion IRA contract. See "Rollovers and direct
transfers" below. If you use the forms we require, we will also accept
traditional IRA funds which are subsequently recharacterized as Roth IRA funds
following special federal income tax rules.
REGULAR CONTRIBUTIONS TO ROTH IRAS
LIMITS ON REGULAR CONTRIBUTIONS. Generally, $2,000 is the maximum amount that
you may contribute to all IRAs (including Roth IRAs) in any taxable year. This
$2,000 limit does not apply to rollover contributions or direct
custodian-to-custodian transfers into a Roth IRA. Any contributions to Roth IRAs
reduce your ability to contribute to traditional IRAs and vice versa. When your
earnings are below $2,000, your earned income or compensation for the year is
the most you can contribute. If you are married and file a joint income tax
return, you and your spouse may combine your compensation to determine the
amount of regular contributions you are permitted to make to Roth IRAs and
traditional IRAs. See the discussion above under traditional IRAs.
With a Roth IRA, you can make regular contributions when you reach 70 1/2, as
long as you have sufficient earnings. But, you cannot make contributions for any
year that:
o your federal income tax filing status is "married filing jointly" and your
adjusted gross income is over $160,000; or
o your federal income tax filing status is "single" and your adjusted gross
income is over $110,000.
However, you can make regular Roth IRA contributions in reduced amounts when:
o your federal income tax filing status is "married filing jointly" and your
adjusted gross income is between $150,000 and $160,000; or
o your federal income tax filing status is "single" and your adjusted gross
income is between $95,000 and $110,000.
If you are married and filing separately and your adjusted gross income is
between $0 and $10,000 the amount of regular contributions you are permitted to
make is phased out. If your adjusted gross income is more than $10,000 you
cannot make regular Roth IRA contributions.
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WHEN YOU CAN MAKE CONTRIBUTIONS. Same as traditional IRAs.
DEDUCTIBILITY OF CONTRIBUTIONS. Roth IRA contributions are not tax deductible.
ROLLOVERS AND DIRECT TRANSFERS
WHAT IS THE DIFFERENCE BETWEEN ROLLOVER AND DIRECT TRANSFER TRANSACTIONS? You
may make rollover contributions to a Roth IRA from only two sources:
o another Roth IRA ("tax-free rollover contribution"); or
o another traditional IRA, including a SEP-IRA or SIMPLE-IRA, in a taxable
conversion rollover ("conversion contribution").
You may not make contributions to a Roth IRA from a qualified plan under Section
401(a) of the Internal Revenue Code, or a TSA under Section 403(b) of the
Internal Revenue Code. You may make direct transfer contributions to a Roth IRA
only from another Roth IRA.
The difference between a rollover transaction and a direct transfer transaction
is the following: in a rollover transaction you actually take possession of the
funds rolled over, or are considered to have received them under tax law in the
case of a change from one type of plan to another. In a direct transfer
transaction, you never take possession of the funds, but direct the first Roth
IRA custodian, trustee, or issuer to transfer the first Roth IRA funds directly
to Equitable Life, as the Roth IRA issuer. You can make direct transfer
transactions only between identical plan types (for example, Roth IRA to Roth
IRA). You can also make rollover transactions between identical plan types.
However, you can only use rollover transactions between different plan types
(for example, traditional IRA to Roth IRA).
You may make both Roth IRA to Roth IRA rollover transactions and Roth IRA to
Roth IRA direct transfer transactions. This can be accomplished on a completely
tax-free basis. However, you may make Roth IRA to Roth IRA rollover transactions
only once in any 12-month period for the same funds. Trustee-to-trustee or
custodian-to-custodian direct transfers can be made more frequently than once a
year. Also, if you send us the rollover contribution to apply it to a Roth IRA,
you must do so within 60 days after you receive the proceeds from the original
IRA to get rollover treatment.
The surviving spouse beneficiary of a deceased individual can roll over or
directly transfer an inherited Roth IRA to one or more other Roth IRAs. In some
cases, Roth IRAs can be transferred on a tax-free basis between spouses or
former spouses as a result of a court-ordered divorce or separation decree.
CONVERSION CONTRIBUTIONS TO ROTH IRAS.
In a conversion rollover transaction, you withdraw (or are considered to have
withdrawn) all or a portion of funds from a traditional IRA you maintain and
convert it to a Roth IRA within 60 days after you receive (or are considered to
have received) the traditional IRA proceeds. Unlike a rollover from a
traditional IRA to another traditional IRA, the conversion rollover transaction
is not tax-free. Instead, the distribution from the traditional IRA is generally
fully taxable. For this reason, we are required to withhold 10% federal income
tax from the amount converted unless you elect out of such withholding. (If you
have ever made nondeductible regular contributions to any traditional IRA -
whether or not it is the traditional IRA you are converting - a pro rata portion
of the distribution is tax exempt.)
There is, however, no early distribution penalty tax on the traditional IRA
withdrawal that you are converting to a Roth IRA, even if you are under age
59 1/2.
You cannot make conversion contributions to a Roth IRA for any taxable year in
which your adjusted gross income exceeds $100,000. For this purpose, your
adjusted gross income is computed without the gross income stemming from the
traditional IRA conversion. You also cannot make conversion contributions to a
Roth IRA for any taxable year in which your federal income tax filing status is
"married filing separately."
Finally, you cannot make conversion contributions to a Roth IRA to the extent
that the funds in your traditional IRA are
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subject to the annual required minimum distribution rule applicable to
traditional IRAs beginning at age 70 1/2.
WITHDRAWALS, PAYMENTS AND TRANSFERS OF FUNDS OUT OF ROTH IRAS
NO FEDERAL INCOME TAX LAW RESTRICTIONS ON WITHDRAWALS. You can withdraw any or
all of your funds from a Roth IRA at any time; you do not need to wait for a
special event like retirement.
DISTRIBUTIONS FROM ROTH IRAS
Distributions include withdrawals from your contract, surrender of your
contract, and annuity payments from your contract. Death benefits are also
distributions.
The following distributions from Roth IRAs are free of income tax:
o Rollover from a Roth IRA to another Roth IRA;
o Direct transfers from a Roth IRA to another Roth IRA;
o Qualified distributions from a Roth IRA; and
o Return of excess contributions or amounts recharacterized to a traditional
IRA.
QUALIFIED DISTRIBUTIONS FROM ROTH IRAS. Qualified distributions from Roth IRAs
made because of one of the following four qualifying events or reasons are not
includable in income:
o you reach age 59 1/2; or
o you die; or
o you become disabled (special federal income tax definition); or
o your distribution is a "qualified first-time homebuyer distribution"
(special federal income tax definition; $10,000 lifetime total limit for
these distributions from all of your traditional and Roth IRAs).
You also have to meet a five-year aging period. A qualified distribution is any
distribution made after the five-taxable-year period beginning with the first
taxable year for which you made any contribution to any Roth IRA (whether or not
the one from which the distribution is being made). It is not possible to have a
tax-free qualified distribution before the year 2003 because of the five-year
aging requirement.
NONQUALIFIED DISTRIBUTIONS FROM ROTH IRAS.
Nonqualified distributions from Roth IRAs are distributions that do not meet the
qualifying event and five-year aging period tests described above. Such
distributions are potentially taxable as ordinary income. Nonqualified
distributions receive return-of-investment-first treatment. Only the difference
between the amount of the distribution and the amount of contributions to all of
your Roth IRAs is taxable. You have to reduce the amount of contributions to all
of your Roth IRAs to reflect any previous tax-free recoveries.
You must keep your own records of regular and conversion contributions to all
Roth IRAs to assure appropriate taxation. You may have to file information on
your contributions to and distributions from any Roth IRA on your tax return.
You may have to retain all income tax returns and records pertaining to such
contributions and distributions until your interests in all Roth IRAs are
distributed.
Like traditional IRAs, taxable distributions from a Roth IRA are not entitled to
the special favorable five-year averaging method (or, in certain cases,
favorable ten-year averaging and long-term capital gain treatment) available in
certain cases to distributions from qualified plans.
REQUIRED MINIMUM DISTRIBUTIONS AT DEATH
Same as traditional IRA under "What are the required minimum distribution
payments after you die?" Lifetime required minimum distributions do not apply.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
Distributions to a beneficiary generally receive the same tax treatment as if
the distribution had been made to you.
BORROWING AND LOANS ARE PROHIBITED TRANSACTIONS
Same as traditional IRA.
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EXCESS CONTRIBUTIONS
Generally the same as traditional IRA.
Excess rollover contributions to Roth IRAs are contributions not eligible to be
rolled over (for example, conversion contributions from a traditional IRA if
your adjusted gross income is in excess of $100,000 in the conversion year).
You can withdraw or recharacterize any contribution to a Roth IRA before the due
date (including extensions) for filing your federal income tax return for the
tax year. If you do this, you must also withdraw or recharacterize any earnings
attributable to the contribution.
EARLY DISTRIBUTION PENALTY TAX
Same as traditional IRA.
For Roth IRAs, special penalty rules may apply to amounts withdrawn attributable
to 1998 conversion rollovers.
SPECIAL RULES FOR NONQUALIFIED CONTRACTS IN QUALIFIED PLANS
Under QP contracts your plan administrator or trustee notifies you as to tax
consequences. See Appendix II.
TAX-SHELTERED ANNUITY CONTRACTS (TSAS)
GENERAL
This section of the prospectus covers some of the special tax rules that apply
to TSA contracts under Section 403(b) of the Internal Revenue Code (TSAs). If
the rules are the same as those that apply to another kind of contract, for
example, traditional IRAs, we will refer you to the same topic under
"traditional IRAs."
CONTRIBUTIONS TO TSAS
There are two ways you can make contributions to this Equitable Accumulator
Rollover TSA contract:
o a rollover from another TSA contract or arrangement that meets the
requirements of Section 403(b) of the Internal Revenue Code, or
o a full or partial direct transfer of assets ("direct transfer") from
another contract or arrangement that meets the requirements of Section
403(b) of the Internal Revenue Code by means of IRS Revenue Ruling 90-24.
With appropriate written documentation satisfactory to us, we will accept
rollover contributions from "conduit IRAs" for TSA funds.
If you make a direct transfer, you must fill out our transfer form.
EMPLOYER-REMITTED CONTRIBUTIONS. The Equitable Accumulator Rollover TSA contract
does not accept employer-remitted contributions. However, we provide the
following discussion as part of our description of restrictions on the
distribution of funds directly transferred, which include employer-remitted
contributions to other TSAs.
Employer-remitted contributions to TSAs made through the employer's payroll are
subject to annual limits. (Tax-free transfer or tax-deferred rollover
contributions from another 403(b) arrangement are not subject to these annual
contribution limits.) Commonly, some or all of the contributions made to a TSA
are made under a salary reduction agreement between the employee and the
employer. These contributions are called "salary reduction" or "elective
deferral" contributions. However, a TSA can also be wholly or partially funded
through nonelective employer contributions or after-tax employee contributions.
Amounts attributable to salary reduction contributions to TSAs are generally
subject to withdrawal restrictions. Also, all amounts attributable to
investments in a 403(b)(7) custodial account are subject to withdrawal
restrictions discussed below.
ROLLOVER OR DIRECT TRANSFER CONTRIBUTIONS. You may make rollover contributions
to your Equitable Accumulator Rollover TSA contract from TSAs under Section
403(b) of the Internal Revenue Code. Generally, you may make a rollover
contribution to a TSA when you have a distributable event from an existing TSA
as a result of your:
o termination of employment with the employer who provided the TSA funds; or
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o reaching age 59 1/2 even if you are still employed; or
o disability (special federal income tax definition).
A transfer occurs when changing the funding vehicle, even if there is no
distributable event. Under a direct transfer, you do not receive a distribution.
We accept direct transfers of TSA funds under Revenue Ruling 90-24 only if:
o you give us acceptable written documentation as to the source of the funds,
and
o the Equitable Accumulator contract receiving the funds has provisions at
least as restrictive as the source contract.
Before you transfer funds to an Equitable Accumulator Rollover TSA contract, you
may have to obtain your employer's authorization or demonstrate that you do not
need employer authorization. For example, the transferring TSA may be subject to
Title I of ERISA, if the employer makes matching contributions to salary
reduction contributions made by employees. In that case, the employer must
continue to approve distributions from the plan or contract.
Your contribution to the Equitable Accumulator Rollover TSA must be net of the
required minimum distribution for the tax year in which we issue the contract
if:
o you are or will be at least age 70 1/2 in the current calendar year, and
o you have separated from service with the employer who provided the funds to
purchase the TSA you are transferring or rolling over to the Equitable
Accumulator Rollover TSA.
This rule applies regardless of whether the source of funds is a:
o rollover by check of the proceeds from another TSA; or
o direct rollover from another TSA; or
o direct transfer under Revenue Ruling 90-24 from another TSA.
Further, you must use the same elections regarding recalculation of your life
expectancy (and if applicable, your spouse's life expectancy) if you have
already begun to receive required minimum distributions from or with respect to
the TSA from which you are making your contribution to the Equitable Accumulator
Rollover TSA. You must also elect or have elected a minimum distribution
calculation method requiring recalculation of your life expectancy (and if
applicable, your spouse's life expectancy) if you elect an annuity payout for
the funds in this contract subsequent to this year.
DISTRIBUTIONS FROM TSAS
GENERAL. Depending on the terms of the employer plan and your employment status,
you may have to get your employer's consent to take a loan or withdrawal. Your
employer will tell us this when you establish the TSA through a direct transfer.
WITHDRAWAL RESTRICTIONS. If this is a Revenue Ruling 90-24 direct transfer, we
will treat all amounts transferred to this contract and any future earnings on
the amount transferred as not eligible for withdrawal until one of the following
events happens:
o you are separated from service with the employer who provided the funds to
purchase the TSA you are transferring to the Equitable Accumulator Rollover
TSA; or
o you reach age 59 1/2; or
o you die; or
o you become disabled (special federal income tax definition); or
o you take a hardship withdrawal (special federal income tax definition).
If any portion of the funds directly transferred to your TSA contract is
attributable to amounts that you invested in a 403(b)(7) custodial account, such
amounts, including earnings, are subject to withdrawal restrictions. With
respect to the portion of the funds that were never invested in a 403(b)(7)
custodial account, these restrictions apply to the salary reduction (elective
deferral) contributions to a TSA annuity contract you made and any earnings on
them. These restrictions do not apply to the amount directly transferred to
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your TSA contract that represents your December 31, 1988 account balance
attributable to salary reduction contributions to a TSA annuity contract and
earnings. To take advantage of this grandfathering you must properly notify us
in writing at our Processing Office of your December 31, 1988 account balance if
you have qualifying amounts transferred to your TSA contract.
THIS PARAGRAPH APPLIES ONLY TO PARTICIPANTS IN A TEXAS OPTIONAL RETIREMENT
PROGRAM. Texas Law permits withdrawals only after one of the following
distributable events occur:
(1) the requirements for minimum distribution (discussed under "Required
minimum distributions" below) are met; or
(2) death; or
(3) retirement; or
(4) termination of employment in all Texas public institutions of higher
education.
For you to make a withdrawal, we must receive a properly completed written
acknowledgement from the employer. If a distributable event occurs before you
are vested, we will refund to the employer any amounts provided by an employer's
first-year matching contribution. We reserve the right to change these
provisions without your consent, but only to the extent necessary to maintain
compliance with applicable law. Loans are not permitted under Texas Optional
Retirement Programs.
TAX TREATMENT OF DISTRIBUTIONS. Amounts held under TSAs are generally not
subject to federal income tax until benefits are distributed. Distributions
include withdrawals from your TSA contract and annuity payments from your TSA
contract. Death benefits paid to a beneficiary are also taxable distributions.
Unless an exception applies, amounts distributed from TSAs are includable in
gross income as ordinary income. Distributions from TSAs may be subject to 20%
federal income tax withholding. See "Federal and state income tax withholding
and information reporting" below. In addition, TSA distributions may be subject
to additional tax penalties.
If you have made after-tax contributions, you will have a tax basis in your TSA
contract, which will be recovered tax-free. Since we do not track your
investment in the contract, if any, it is your responsibility to determine how
much of the distribution is taxable.
DISTRIBUTIONS BEFORE ANNUITY PAYMENTS BEGIN. On a total surrender, the amount
received in excess of the investment in the contract is taxable. We will report
the total amount of the distribution. The amount of any partial distribution
from a TSA prior to the annuity starting date is generally taxable, except to
the extent that the distribution is treated as a withdrawal of after-tax
contributions. Distributions are normally treated as pro rata withdrawals of
after-tax contributions and earnings on those contributions.
ANNUITY PAYMENTS. If you elect an annuity payout option, you will recover any
investment in the contract as each payment is received by dividing the
investment in the contract by an expected return determined under an IRS table
prescribed for qualified annuities. The amount of each payment not excluded from
income under this exclusion ratio is fully taxable. The full amount of the
payments received after your investment in the contract is recovered is fully
taxable. If you (and your beneficiary under a joint and survivor annuity) die
before recovering the full investment in the contract, a deduction is allowed on
your (or your beneficiary's) final tax return.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
Death benefit distributions from a TSA generally receive the same tax treatment
as distributions during your lifetime. In some instances, distributions from a
TSA made to your surviving spouse may be rolled over to a traditional IRA.
LOANS FROM TSAS
You may take loans from a TSA unless restricted by the employer (for example,
under an employer plan subject to ERISA). If you cannot take a loan, or cannot
take a loan
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without approval from the employer who provided the funds, we will have this
information in our records based on what you and the employer who provided the
TSA funds told us when you purchased your contract.
Loans are generally not treated as a taxable distribution. If the amount of the
loan exceeds permissible limits under federal income tax rules when made, the
amount of the excess is treated (solely for tax purposes) as a taxable
distribution. Additionally, if the loan is not repaid at least quarterly,
amortizing (paying down) interest and principal, the amount not repaid when due
will be treated as a taxable distribution. Under Proposed Treasury Regulations
the entire unpaid balance of the loan is includable in income in the year of the
default.
TSA loans are subject to federal income tax limits and may also be subject to
the limits of the plan from which the funds came. Federal income tax rule
requirements apply even if the plan is not subject to ERISA. For example, loans
offered by TSAs are subject to the following conditions:
o The amount of a loan to a participant, when combined with all other loans
to the participant from all qualified plans of the employer, cannot exceed
the lesser of:
(1) the greater of $10,000 or 50% of the participant's nonforfeitable
accrued benefits; and
(2) $50,000 reduced by the excess (if any) of the highest outstanding
loan balance over the previous twelve months over the outstanding
loan balance of plan loans on the date the loan was made.
o In general, the term of the loan cannot exceed five years unless the loan
is used to acquire the participant's primary residence. Equitable
Accumulator Rollover TSA contracts have a term limit of 10 years for loans
used to acquire the participant's primary residence.
o All principal and interest must be amortized in substantially level
payments over the term of the loan, with payments being made at least
quarterly.
The amount borrowed and not repaid may be treated as a distribution if:
o the loan does not qualify under the conditions above;
o the participant fails to repay the interest or principal when due; or
o in some instances, the participant separates from service with the employer
who provided the funds or the plan is terminated.
In this case, the participant may have to include the unpaid amount due as
ordinary income. In addition, the 10% early distribution penalty tax may apply.
The amount of the unpaid loan balance is reported to the IRS on Form 1099-R as a
distribution.
TAX-DEFERRED ROLLOVERS AND DIRECT TRANSFERS
You may roll over any "eligible rollover distribution" from a TSA into another
eligible retirement plan, either directly or within 60 days of your receiving
the distribution. To the extent rolled over, a distribution remains
tax-deferred.
You may roll over a distribution from a TSA to another TSA or to a traditional
IRA. A spousal beneficiary may roll over death benefits only to a traditional
IRA.
The taxable portion of most distributions will be eligible for rollover, except
as specifically excluded under federal income tax rules. Distributions that you
cannot roll over generally include periodic payments for life or for a period of
10 years or more, hardship withdrawals, and required minimum distributions under
federal income tax rules.
Direct transfers of TSA funds from one TSA to another under Revenue Ruling 90-24
are not distributions.
REQUIRED MINIMUM DISTRIBUTIONS
Generally the same as traditional IRA with these differences:
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WHEN YOU HAVE TO TAKE THE FIRST REQUIRED MINIMUM DISTRIBUTION. The minimum
distribution rules force TSA participants to start calculating and taking annual
distributions from their TSAs by a required date. Generally, you must take the
first required minimum distribution for the calendar year in which you turn age
70 1/2. You may be able to delay the start of required minimum distributions for
all or part of your account balance until after age 70 1/2, as follows:
o For TSA participants who have not retired from service with the employer
who provided the funds for the TSA by the calendar year the participant
turns age 70 1/2, the required beginning date for minimum distributions is
extended to April 1 following the calendar year of retirement.
o TSA plan participants may also delay the start of required minimum
distributions to age 75 of the portion of their account value attributable
to their December 31, 1986 TSA account balance, even if retired at age
70 1/2. We will know whether or not you qualify for this exception because
it will only apply to people who establish their Equitable Accumulator
Rollover TSA by direct Revenue Ruling 90-24 transfers. If you do not give
us the amount of your December 31, 1986 account balance that is being
transferred to the Equitable Accumulator Rollover TSA on the form used to
establish the TSA, you do not qualify.
SPOUSAL CONSENT RULES
This will only apply to you if you establish your Equitable Accumulator Rollover
TSA by direct Revenue Ruling 90-24 transfer. Your employer will tell us on the
form used to establish the TSA whether or not you need to get spousal consent
for loans, withdrawals, or other distributions. If you do, you will need such
consent if you are married when you request a withdrawal under the TSA contract.
In addition, unless you elect otherwise with the written consent of your spouse,
the retirement benefits payable under the plan must be paid in the form of a
qualified joint and survivor annuity. A qualified joint and survivor annuity is
payable for the life of the annuitant with a survivor annuity for the life of
the spouse in an amount not less than one-half of the amount payable to the
annuitant during his or her lifetime. In addition, if you are married, the
beneficiary must be your spouse, unless your spouse consents in writing to the
designation of another beneficiary.
If you are married and you die before annuity payments have begun, payments will
be made to your surviving spouse in the form of a life annuity unless at the
time of your death a contrary election was in effect. However, your surviving
spouse may elect, before payments begin, to receive payments in any form
permitted under the terms of the TSA contract and the plan of the employer who
provided the funds for the TSA.
EARLY DISTRIBUTION PENALTY TAX
A penalty tax of 10% of the taxable portion of a distribution applies to
distributions from a TSA before you reach age 59 1/2. This is in addition to any
income tax. There are exceptions to the extra penalty tax. No penalty tax
applies to pre-age 59 1/2 distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o to pay for certain extraordinary medical expenses (special federal income
tax definition); or
o if you are separated from service, any form of payout after you are age 55;
or
o only if you are separated from service, a payout in the form of
substantially equal periodic payments made at least annually over your life
(or your life expectancy), or over the joint lives of you and your
beneficiary (or your joint life expectancy) using an IRS-approved
distribution method.
FEDERAL AND STATE INCOME TAX WITHHOLDING AND INFORMATION REPORTING
We must withhold federal income tax from distributions from annuity contracts.
You may be able to elect out of this income tax withholding in some cases.
Generally, we do not have to withhold if your distributions are not taxable. The
rate of withholding will depend on the type of distribution and, in certain
cases, the amount of your distribution. Any
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income tax withheld is a credit against your income tax liability. If you do not
have sufficient income tax withheld or do not make sufficient estimated income
tax payments, you may incur penalties under the estimated income tax rules.
You must file your request not to withhold in writing before the payment or
distribution is made. Our Processing Office will provide forms for this purpose.
You cannot elect out of withholding unless you provide us with your correct
Taxpayer Identification Number and a United States residence address. You cannot
elect out of withholding if we are sending the payment out of the United States.
You should note the following special situations:
o We might have to withhold and/or report on amounts we pay under a free look
or cancellation.
o We are generally required to withhold on conversion rollovers of
traditional IRAs to Roth IRAs, as it is considered a withdrawal from the
traditional IRA and is taxable.
o We are required to withhold on the gross amount of a distribution from a
Roth IRA unless you elect out of withholding. This may result in tax being
withheld even though the Roth IRA distribution is not taxable in whole or
in part.
Special withholding rules apply to foreign recipients and United States citizens
residing outside the United States. We do not discuss these rules here. Certain
states have indicated that state income tax withholding will also apply to
payments from the contracts made to residents. In some states, you may elect out
of state withholding, even if federal withholding applies. Generally, an
election out of federal withholding will also be considered an election out of
state withholding. If you need more information concerning a particular state or
any required forms, call our Processing Office at the toll-free number.
FEDERAL INCOME TAX WITHHOLDING ON PERIODIC ANNUITY PAYMENTS
We withhold differently on "periodic" and "non-periodic" payments. For a
periodic annuity payment, for example, unless you specify a different number of
withholding exemptions, we withhold assuming that you are married and claiming
three withholding exemptions. If you do not give us your correct Taxpayer
Identification Number, we withhold as if you are single with no exemptions.
Based on the assumption that you are married and claiming three withholding
exemptions, if you receive less than $14,880 in periodic annuity payments in
2000, your payments will generally be exempt from federal income tax
withholding. You could specify a different choice of withholding exemption or
request that tax be withheld. Your withholding election remains effective unless
and until you revoke it. You may revoke or change your withholding election at
any time.
FEDERAL INCOME TAX WITHHOLDING ON NON-PERIODIC ANNUITY PAYMENTS (WITHDRAWALS)
For a non-periodic distribution (total surrender or partial withdrawal), we
generally withhold at a flat 10% rate. We apply that rate to the taxable amount
in the case of nonqualified contracts, and to the payment amount in the case of
IRAs and Roth IRAs.
You cannot elect out of withholding if the payment is an eligible rollover
distribution from a qualified plan or TSA. If a non-periodic distribution from a
qualified plan or TSA is not an eligible rollover distribution then the 10%
withholding rate applies.
MANDATORY WITHHOLDING FROM TSA AND QUALIFIED PLAN DISTRIBUTIONS
Unless you have the distribution go directly to the new plan, eligible rollover
distributions from qualified plans and TSAs are subject to mandatory 20%
withholding. An eligible rollover distribution from a TSA can be rolled over to
another TSA or a traditional IRA. An eligible rollover distribution from a
qualified plan can be rolled over to another qualified plan or traditional IRA.
All distributions from a TSA or qualified plan are eligible rollover
distributions unless they are on the following list of exceptions:
o any after-tax contributions you made to the plan; or
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o any distributions which are required minimum distributions after age 70 1/2
or separation from service; or
o hardship withdrawals; or
o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and your designated beneficiary; or
o substantially equal periodic payments made for a specified period of 10
years or more; or
o corrective distributions that fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse;
or
o a qualified domestic relations order distribution to a beneficiary who is
not your current spouse or former spouse.
A death benefit payment to your surviving spouse, or a qualified domestic
relations order distribution to your current or former spouse, may be a
distribution subject to mandatory 20% withholding.
IMPACT OF TAXES TO EQUITABLE LIFE
The contracts provide that we may charge Separate Account No. 45 for taxes. We
do not now, but may in the future set up reserves for such taxes.
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ABOUT OUR SEPARATE ACCOUNT NO. 45
Each variable investment option is a subaccount of our Separate Account No. 45.
We established Separate Account No. 45 in 1994 under special provisions of the
New York Insurance Law. These provisions prevent creditors from any other
business we conduct from reaching the assets we hold in our variable investment
options for owners of our variable annuity contracts. We are the legal owner of
all of the assets in Separate Account No. 45 and may withdraw any amounts that
exceed our reserves and other liabilities with respect to variable investment
options under our contracts. The results of Separate Account No. 45's operations
are accounted for without regard to Equitable Life's other operations.
Separate Account No. 45 is registered under the Investment Company Act of 1940
and is classified by that act as a "unit investment trust." The SEC, however,
does not manage or supervise Equitable Life or Separate Account No. 45.
Each subaccount (variable investment option) within Separate Account No. 45
invests solely in class IB shares issued by the corresponding portfolio of EQ
Advisors Trust.
We reserve the right subject to compliance with laws that apply:
(1) to add variable investment options to, or to remove variable investment
options from, Separate Account No. 45, or to add other separate accounts;
(2) to combine any two or more variable investment options;
(3) to transfer the assets we determine to be the shares of the class of
contracts to which the contracts belong from any variable investment option
to another variable investment option;
(4) to operate Separate Account No. 45 or any variable investment option as a
management investment company under the Investment Company Act of 1940 (in
which case, charges and expenses that otherwise would be assessed against
an underlying mutual fund would be assessed against Separate Account No. 45
or a variable investment option directly);
(5) to deregister Separate Account No. 45 under the Investment Company Act of
1940;
(6) to restrict or eliminate any voting rights as to Separate Account No. 45;
and
(7) to cause one or more variable investment options to invest some or all of
their assets in one or more other trusts or investment companies.
ABOUT EQ ADVISORS TRUST
EQ Advisors Trust is registered under the Investment Company Act of 1940. It is
classified as an "open-end management investment company," more commonly called
a mutual fund. EQ Advisors Trust issues different shares relating to each
portfolio.
Equitable Life serves as the investment manager of EQ Advisors Trust. As such,
Equitable Life oversees the activities of the investment advisers with respect
to EQ Advisors Trust and is responsible for retaining or discontinuing the
services of those advisers. (Prior to September 1999 EQ Financial Consultants,
Inc., the predecessor to AXA Advisors, LLC and an affiliate of Equitable Life,
served as investment manager to EQ Advisors Trust.)
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999 the Alliance portfolios (other than EQ/Alliance Premier Growth)
were part of The Hudson River Trust. On October 18, 1999, these portfolios
became corresponding portfolios of EQ Advisors Trust.
EQ Advisors Trust does not impose sales charges or "loads" for buying and
selling its shares. All dividends and other distributions on Trust shares are
reinvested in full. The Board of Trustees of EQ Advisors Trust may establish
additional portfolios or eliminate existing portfolios at any time. More
detailed information about EQ Advisors Trust, the portfolio investment
objectives, policies, restrictions, risks, expenses, their Rule 12b-1 Plan
relating to its Class IB shares, and other aspects of its operations, appears in
the prospectus for EQ Advisors Trust attached at the end of this prospectus, or
in its SAI which is available upon request.
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ABOUT OUR FIXED MATURITY OPTIONS
RATES TO MATURITY AND PRICE PER $100 OF MATURITY VALUE
We can determine the amount required to be allocated to one or more fixed
maturity options in order to produce specified maturity values. For example, we
can tell you how much you need to allocate per $100 of maturity value.
The rates to maturity for new allocations as of March 15, 2000 and the related
price per $100 of maturity value were as follows:
<TABLE>
<CAPTION>
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FIXED MATURITY
OPTIONS WITH
FEBRUARY 15TH RATE TO MATURITY PRICE
MATURITY DATE OF AS OF PER $100 OF
MATURITY YEAR MARCH 15, 2000 MATURITY VALUE
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<S> <C> <C>
2001 4.45% $ 96.06
2002 5.16% $ 90.78
2003 5.68% $ 85.09
2004 5.76% $ 80.27
2005 5.87% $ 75.50
2006 5.95% $ 71.00
2007 6.02% $ 66.71
2008 6.08% $ 62.64
2009 6.17% $ 58.59
2010 6.23% $ 54.88
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</TABLE>
Available under the Assured Payment Option and APO Plus
<TABLE>
<CAPTION>
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FIXED MATURITY
OPTIONS WITH
FEBRUARY 15TH RATE TO MATURITY PRICE
MATURITY DATE OF AS OF PER $100 OF
MATURITY YEAR MARCH 15, 2000 MATURITY VALUE
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<S> <C> <C>
2011 5.72% $ 54.45
2012 5.72% $ 51.50
2013 5.72% $ 48.71
2014 5.72% $ 46.07
2015 5.72% $ 43.58
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</TABLE>
HOW WE DETERMINE THE MARKET VALUE ADJUSTMENT
We use the following procedure to calculate the market value adjustment (up or
down) we make if you withdraw all of your value from a fixed maturity option
before its maturity date.
(1) We determine the market adjusted amount on the date of the withdrawal as
follows:
(a) We determine the fixed maturity amount that would be payable on the
maturity date, using the rate to maturity for the fixed maturity
option.
(b) We determine the period remaining in your fixed maturity option
(based on the withdrawal date) and convert it to fractional years
based on a 365-day year. For example, three years and 12 days
becomes 3.0329.
(c) We determine the current rate to maturity that applies on the
withdrawal date to new allocations to the same fixed maturity
option.
(d) We determine the present value of the fixed maturity amount payable
at the maturity date, using the period determined in (b) and the
rate determined in (c).
(2) We determine the fixed maturity amount as of the current date.
(3) We subtract (2) from the result in (1)(d). The result is the market value
adjustment applicable to such fixed maturity option, which may be positive
or negative.
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Your market adjusted amount is the present value of the maturity value
discounted at the rate to maturity in effect for new contributions to that same
fixed maturity option on the date of the calculation.
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If you withdraw only a portion of the amount in a fixed maturity option, the
market value adjustment will be a percentage of the market value adjustment that
would have applied if you had withdrawn the entire value in that fixed maturity
option. This percentage is equal to the percentage of the value in the fixed
maturity option that you are withdrawing. Any withdrawal charges that are
deducted from a fixed maturity option will result in a market value adjustment
calculated in the same way. See Appendix III for an example.
For purposes of calculating the rate to maturity for new allocations to a fixed
maturity option (see (1)(c) above), we use the rate we have in effect for new
allocations to that
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fixed maturity option. We use this rate even if new allocations to that option
would not be accepted at that time. This rate will not be less than 3%. If we do
not have a rate to maturity in effect for a fixed maturity option to which the
"current rate to maturity" in (1)(c) would apply, we will use the rate at the
next closest maturity date. If we are no longer offering new fixed maturity
options, the "current rate to maturity" will be determined in accordance with
our procedures then in effect. We reserve the right to add up to 0.25% to the
current rate in (1)(c) above for purposes of calculating the market value
adjustment only.
INVESTMENTS UNDER THE FIXED MATURITY OPTIONS
Amounts allocated to the fixed maturity options are held in a "nonunitized"
separate account we have established under the New York Insurance Law. This
separate account provides an additional measure of assurance that we will make
full payment of amounts due under the fixed maturity options. Under New York
Insurance Law, the portion of the separate account's assets equal to the
reserves and other contract liabilities relating to the contracts are not
chargeable with liabilities from any other business we may conduct. We own the
assets of the separate account, as well as any favorable investment performance
on those assets. You do not participate in the performance of the assets held in
this separate account. We may, subject to state law that applies, transfer all
assets allocated to the separate account to our general account. We guarantee
all benefits relating to your value in the fixed maturity options, regardless of
whether assets supporting fixed maturity options are held in a separate account
or our general account.
We have no specific formula for establishing the rates to maturity for the fixed
maturity options. We expect the rates to be influenced by, but not necessarily
correspond to, among other things, the yields that we can expect to realize on
the separate account's investments from time to time. Our current plans are to
invest in fixed-income obligations, including corporate bonds, mortgage-backed
and asset-backed securities, and government and agency issues having durations
in the aggregate consistent with those of the fixed maturity options.
Although the above generally describes our plans for investing the assets
supporting our obligations under the fixed maturity options under the contracts,
we are not obligated to invest those assets according to any particular plan
except as we may be required to by state insurance laws. We will not determine
the rates to maturity we establish by the performance of the nonunitized
separate account.
ABOUT THE GENERAL ACCOUNT
Our general account supports all of our policy and contract guarantees,
including those that apply to the fixed maturity options and the account for
special dollar cost averaging, as well as our general obligations. Amounts
applied to the life contingent annuity become part of our general account.
The general account is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations of
all jurisdictions where we are authorized to do business. Because of exemptions
and exclusionary provisions that apply, interests in the general account have
not been registered under the Securities Act of 1933, nor is the general account
an investment company under the Investment Company Act of 1940. However, the
market value adjustment interests under the contracts are registered under the
Securities Act of 1933.
We have been advised that the staff of the SEC has not reviewed the portions of
this prospectus that relate to the general account (other than market value
adjustment interests). The disclosure with regard to the general account,
however, may be subject to certain provisions of the federal securities laws
relating to the accuracy and completeness of statements made in prospectuses.
ABOUT OTHER METHODS OF PAYMENT
AUTOMATIC INVESTMENT PROGRAM - FOR NQ, FLEXIBLE PREMIUM IRA, AND FLEXIBLE
PREMIUM ROTH IRA CONTRACTS ONLY
You may use our automatic investment program, or "AIP," to have a specified
amount automatically deducted from a
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checking account, money market account, or credit union checking account and
contributed as an additional contribution into an NQ, Flexible Premium IRA or
Flexible Premium Roth IRA contract on a monthly or quarterly basis. AIP is not
available for Rollover IRA, Roth Conversion IRA, QP, or Rollover TSA contracts.
It is also not available under the Assured Payment Option or APO Plus.
For NQ contracts, the minimum amounts we will deduct are $100 monthly and $300
quarterly. Under Flexible Premium IRA and Flexible Premium Roth IRA contracts,
the minimum amount is $50. AIP additional contributions may be allocated to any
of the variable investment options and available fixed maturity options, but not
the account for special dollar cost averaging. You choose the day of the month
you wish to have your account debited. However, you may not choose a date later
than the 28th day of the month.
You may cancel AIP at any time by notifying our Processing Office. We are not
responsible for any debits made to your account before the time written notice
of cancellation is received at our Processing Office.
DATES AND PRICES AT WHICH CONTRACT EVENTS OCCUR
We describe below the general rules for when, and at what prices, events under
your contract will occur. Other portions of this prospectus describe
circumstances that may cause exceptions. We generally do not repeat those
exceptions below.
BUSINESS DAY
Our business day is any day the New York Stock Exchange is open for trading. Our
business day generally ends at 4:00 p.m., Eastern Time for purposes of
determining the date when contributions are applied and any other transaction
requests are processed. We may, however, close due to emergency conditions.
Contributions will be applied and any other transaction requests will be
processed when they are received along with all the required information.
o If your contribution, transfer, or any other transaction request,
containing all the required information, reaches us on a non-business day
or after 4:00 p.m. on a business day, we will use the next business day.
o A loan request under your Rollover TSA contract will be processed on the
first business day of the month following the date on which the properly
completed loan request form is received.
o If your transaction is set to occur on the same day of the month as the
contract date and that date is the 29th, 30th or 31st of the month, then
the transaction will occur on the 1st day of the next month.
o When a charge is to be deducted on a contract date anniversary that is a
non-business day, we will deduct the charge on the next business day.
CONTRIBUTIONS AND TRANSFERS
o Contributions allocated to the variable investment options are invested at
the value next determined after the close of the business day.
o Contributions allocated to a fixed maturity option will receive the rate to
maturity in effect for that fixed maturity option on that business day.
o Initial contributions allocated to the account for special dollar cost
averaging receive the interest rate in effect on that business day. At
certain times, we may offer the opportunity to lock in the interest rate
for an initial contribution to be received under Section 1035 exchanges and
trustee to trustee transfers. Your financial professional can provide
information or you can call our processing office.
o Transfers to or from variable investment options will be made at the value
next determined after the close of the business day.
o Transfers to a fixed maturity option will be based on the rate to maturity
in effect for that fixed maturity option on the business day of the
transfer.
<PAGE>
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84
- --------------------------------------------------------------------------------
ABOUT YOUR VOTING RIGHTS
As the owner of the shares of EQ Advisors Trust we have the right to vote on
certain matters involving the portfolios, such as:
o the election of trustees;
o the formal approval of independent auditors selected for EQ Advisors Trust;
or
o any other matters described in the prospectus for EQ Advisors Trust or
requiring a shareholders' vote under the Investment Company Act of 1940.
We will give contract owners the opportunity to instruct us how to vote the
number of shares attributable to their contracts if a shareholder vote is taken.
If we do not receive instructions in time from all contract owners, we will vote
the shares of a portfolio for which no instructions have been received in the
same proportion as we vote shares of that portfolio for which we have received
instructions. We will also vote any shares that we are entitled to vote directly
because of amounts we have in a portfolio in the same proportions that contract
owners vote.
VOTING RIGHTS OF OTHERS
Currently, we control EQ Advisors Trust. EQ Advisors Trust shares are sold to
our separate accounts and an affiliated qualified plan trust. In addition,
shares of EQ Advisors Trust are held by separate accounts of insurance companies
both affiliated and unaffiliated with us. Shares held by these separate accounts
will probably be voted according to the instructions of the owners of insurance
policies and contracts issued by those insurance companies. While this will
dilute the effect of the voting instructions of the contract owners, we
currently do not foresee any disadvantages because of this. The Board of
Trustees of EQ Advisors Trust intends to monitor events in order to identify any
material irreconcilable conflicts that may arise and to determine what action,
if any, should be taken in response. If we believe that a response to any of
those events insufficiently protects our contract owners, we will see to it that
appropriate action is taken.
SEPARATE ACCOUNT NO. 45 VOTING RIGHTS
If actions relating to Separate Account No. 45 require contract owner approval,
contract owners will be entitled to one vote for each unit they have in the
variable investment options. Each contract owner who has elected a variable
annuity payout option may cast the number of votes equal to the dollar amount of
reserves we are holding for that annuity in a variable investment option divided
by the annuity unit value for that option. We will cast votes attributable to
any amounts we have in the variable investment options in the same proportion as
votes cast by contract owners.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under applicable
federal securities laws. To the extent that those laws or the regulations
published under those laws eliminate the necessity to submit matters for
approval by persons having voting rights in separate accounts of insurance
companies, we reserve the right to proceed in accordance with those laws or
regulations.
ABOUT LEGAL PROCEEDINGS
Equitable Life and its affiliates are parties to various legal proceedings. In
our view, none of these proceedings is likely to have a material adverse effect
upon Separate Account No. 45, our ability to meet our obligations under the
contracts, or the distribution of the contracts.
ABOUT OUR INDEPENDENT ACCOUNTANTS
The consolidated financial statements of Equitable Life at December 31, 1999 and
1998, and for the three years ended December 31, 1999, incorporated in this
prospectus by reference to the 1999 Annual Report on Form 10-K are incorporated
in reliance on the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
<PAGE>
- --------
85
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
The financial statements of Separate Account No. 45, as well as the consolidated
financial statements of Equitable Life, are in the SAI. The SAI is available
free of charge. You may request one by writing to our processing office or
calling 1-800-789-7771.
TRANSFERS OF OWNERSHIP, COLLATERAL ASSIGNMENTS, LOANS, AND BORROWING
You can transfer ownership of an NQ contract at any time before annuity payments
begin. We will continue to treat you as the owner until we receive notification
of any change at our Processing Office. You cannot assign your NQ contract as
collateral or security for a loan. Loans are also not available under your NQ
contract. In some cases, an assignment or change of ownership may have adverse
tax consequences. See "Tax information" earlier in this prospectus.
You cannot assign or transfer ownership of an IRA, QP, or Rollover TSA contract
except by surrender to us. Loans are not available and you cannot assign IRA and
QP contracts as security for a loan or other obligation. If the employer that
provided the funds does not restrict them, loans are available under a Rollover
TSA contract.
For limited transfers of ownership after the owner's death see "Beneficiary
continuation option" in "Payment of death benefit" earlier in this prospectus.
You may direct the transfer of the values under your IRA, QP, or Rollover TSA
contract to another similar arrangement, under federal income tax rules. In the
case of such a transfer, we will impose a withdrawal charge, if one applies.
DISTRIBUTION OF THE CONTRACTS
AXA Advisors, LLC ("AXA Advisors"), the successor to EQ Financial Consultants,
Inc. and an affiliate of Equitable Life, is the distributor of the contracts and
has responsibility for sales and marketing functions for Separate Account No.
45. AXA Advisors serves as the principal underwriter of Separate Account No. 45.
AXA Advisors is registered with the SEC as a broker-dealer and is a member of
the National Association of Securities Dealers, Inc. AXA Advisors' principal
business address is 1290 Avenue of the Americas, New York, New York 10104.
Pursuant to a Distribution and Servicing Agreement between AXA Advisors,
Equitable Life, and certain of Equitable Life's separate accounts, including
Separate Account No. 45, Equitable Life paid AXA Advisors distribution fees of
$325,380 for 1999 and $325,380 for 1998, as the distributor of certain contracts
and as the principal underwriter of certain separate accounts including Separate
Account No. 45. Before May 1, 1998, Equitable Distributors, Inc. ("EDI"), an
indirect, wholly owned subsidiary of Equitable Life, served as the distributor
of the contracts and the principal underwriter of Separate Account No. 45.
Pursuant to a Distribution Agreement between Equitable Life, certain of
Equitable Life's separate accounts, including Separate Account No. 45, and EDI,
Equitable Life paid EDI distribution fees of $9,444,621 for 1997 as the
distributor of certain contracts and as the principal underwriter of certain
separate accounts including Separate Account No. 45.
The contracts will be sold by financial professionals who are financial
professionals of AXA Advisors and its affiliates, who are also our licensed
insurance agents. AXA Advisors may also receive compensation and reimbursement
for its marketing services under the terms of its distribution agreement with
Equitable Life. The offering of the contracts is intended to be continuous.
<PAGE>
9 Investment performance
- --------
86
- --------------------------------------------------------------------------------
We provide the following tables to show five different measurements of the
investment performance of the variable investment options and/or the portfolios
in which they invest. We include these tables because they may be of general
interest to you.
Table 1 shows the average annual total return of the variable investment
options. Average annual total return is the annual rate of growth that would be
necessary to achieve the ending value of a contribution invested in the variable
investment options for the periods shown.
Table 2 shows the growth of a hypothetical $1,000 investment in the variable
investment options over the periods shown. Both Tables 1 and 2 take into account
all current fees and charges under the contract, including the withdrawal
charge, the optional baseBUILDER benefits charge, the annual administrative
charge under Flexible Premium IRA and Flexible Premium Roth IRA contracts, but
do not reflect the charges designed to approximate certain taxes that may be
imposed on us, such as premium taxes in your state, or any applicable annuity
administrative fee.
Tables 3, 4, and 5 show the rates of return of the variable investment options
on an annualized, cumulative, and year-by-year basis. These tables take into
account all current fees and charges under the contract, but do not reflect the
withdrawal charge, the optional baseBUILDER benefits charge, the annual
administrative charge or the charges designed to approximate certain taxes that
may be imposed on us, such as premium taxes in your state, or any applicable
annuity administrative fee. If the charges were reflected they would effectively
reduce the rates of return shown.
In all cases the results shown are based on the actual historical investment
experience of the portfolios in which the variable investment options invest. In
some cases, the results shown relate to periods when the variable investment
options and/or the contracts were not available. In those cases, we adjusted the
results of the portfolios to reflect the charges under the contracts that would
have applied had the investment options and/or contracts been available. The
contracts were first offered on May 1, 1998.
For the "Alliance" portfolios (other than EQ/Alliance Premier Growth), we have
adjusted the results prior to October 1996, when Class IB shares for these
portfolios were not available, to reflect the 12b-1 fees currently imposed.
Finally, the results shown for the Alliance Money Market and Alliance Common
Stock options for periods before March 22, 1985 reflect the results of the
variable investment options that preceded them. The "Since portfolio inception"
figures for these options are based on the date of inception of the preceding
variable investment options. We have adjusted these results to reflect the
maximum investment advisory fee payable for the portfolios, as well as an
assumed charge of 0.06% for direct operating expenses.
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999 the Alliance portfolios (other than EQ/Alliance Premier Growth)
were part of The Hudson River Trust. On October 18, 1999, these portfolios
became corresponding portfolios of EQ Advisors Trust. In each case, the
performance shown is for the indicated EQ Advisors Trust portfolio, and any
predecessors it may have had.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends. From time to time, we may
advertise different measurements of the investment performance of the variable
investment options and/or the portfolios, including the measurements reflected
in the tables below.
THE PERFORMANCE INFORMATION SHOWN BELOW AND THE PERFORMANCE INFORMATION THAT WE
ADVERTISE REFLECT PAST PERFORMANCE AND DO NOT INDICATE HOW THE VARIABLE
INVESTMENT OPTIONS MAY PERFORM IN THE FUTURE. SUCH INFORMATION ALSO DOES NOT
REPRESENT THE RESULTS EARNED BY ANY PARTICULAR INVESTOR. YOUR RESULTS WILL
DIFFER.
BENCHMARKS
Tables 3 and 4 compare the performance of variable investment options to market
indices that serve as benchmarks. Market indices are not subject to any charges
for investment advisory fees, brokerage commission or other operating expenses
typically associated with a managed portfolio. Also, they do not reflect other
contract charges
<PAGE>
- --------
87
- --------------------------------------------------------------------------------
such as the mortality and expense risks charge, administrative charges, or any
withdrawal or optional benefit charge. Comparisons with these benchmarks,
therefore, may be of limited use. We include them because they are widely known
and may help you to understand the universe of securities from which each
portfolio is likely to select its holdings. Benchmark data reflect the
reinvestment of dividend income. The benchmarks include:
- --------------------------------------------------------------------------------
EQ/AGGRESSIVE STOCK: 50% Russell 2000 Index and 50% Standard & Poor's Mid-Cap
Total Return Index.
ALLIANCE COMMON STOCK: Standard & Poor's 500 Index.
ALLIANCE CONSERVATIVE INVESTORS: 70% Lehman Treasury Bond Composite Index and
30% Standard & Poor's 500 Index.
ALLIANCE EQUITY INDEX: Standard & Poor's 500 Index.
ALLIANCE GLOBAL: Morgan Stanley Capital International World Index.
ALLIANCE GROWTH AND INCOME: 75% Standard & Poor's 500 Index and 25% Value
Line Convertibles Index.
ALLIANCE GROWTH INVESTORS: 70% Standard & Poor's 500 Index and 30% Lehman
Government/Corporate Bond Index.
ALLIANCE HIGH YIELD: Benchmark #1 - Merrill Lynch High Yield Master Index and
Benchmark #2 - Credit Suisse First Boston Global High Yield Index.
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES: Lehman Intermediate Government
Bond Index.
ALLIANCE INTERNATIONAL: Morgan Stanley Capital International Europe, Australia,
Far East Index.
ALLIANCE MONEY MARKET: Salomon Brothers Three-Month T-Bill Index.
EQ/ALLIANCE PREMIER GROWTH: Standard & Poor's 500 Index.
EQ/ALLIANCE TECHNOLOGY: Lipper Specialty Funds Average.
ALLIANCE SMALL CAP GROWTH: Russell 2000 Growth Index.
BT EQUITY 500 INDEX: Standard & Poor's 500 Index.
BT INTERNATIONAL EQUITY INDEX: Morgan Stanley Capital International Europe,
Australia, Far East Index.
BT SMALL COMPANY INDEX: Russell 2000 Index.
CAPITAL GUARDIAN RESEARCH: Standard & Poor's 500 Index.
CAPITAL GUARDIAN U.S. EQUITY: Standard & Poor's 500 Index.
EQ/EVERGREEN: Benchmark #1 - Russell 2000 Index and Benchmark #2 - Standard
& Poor's 500 Index.
EQ/EVERGREEN FOUNDATION: 60% Standard & Poor's 500 Index/40% Lehman Brothers
Aggregate Bond Index.
MFS EMERGING GROWTH COMPANIES: Russell 2000 Index.
MFS GROWTH WITH INCOME: Standard & Poor's 500 Index.
MFS RESEARCH: Standard & Poor's 500 Index.
MERCURY BASIC VALUE EQUITY: Standard & Poor's 500 Index.
MERCURY WORLD STRATEGY: 36% Standard & Poor's 500 Index/24% Morgan Stanley
Capital International Europe, Australia, Far East Index/21% Salomon Brothers
U.S. Treasury Bond 1 Year+ 14% Salomon Brothers World Government Bond
(excluding U.S.)/and 5% Three-Month U.S. Treasury Bill.
MORGAN STANLEY EMERGING MARKETS EQUITY: Morgan Stanley Capital International
Emerging Markets Free Price Return Index.
EQ/PUTNAM BALANCED: 60% Standard & Poor's 500 Index and 40% Lehman Government/
Corporate Bond Index.
EQ/PUTNAM GROWTH & INCOME VALUE: Standard & Poor's 500 Index.
T. ROWE PRICE EQUITY INCOME: Standard & Poor's 500 Index.
T. ROWE PRICE INTERNATIONAL STOCK: Morgan Stanley Capital International Europe,
Australia, Far East Index.
WARBURG PINCUS SMALL COMPANY VALUE: Benchmark #1 - Russell 2000 Index and
Benchmark #2 - Russell 2000 Value Index.
- --------------------------------------------------------------------------------
LIPPER SURVEY. The Lipper Variable Insurance Products Performance Analysis
Survey (Lipper Survey) records the performance of a large group of variable
annuity products, including managed separate accounts of insurance companies.
According to Lipper Analytical Services, Inc. (Lipper), the data are presented
net of investment management fees, direct operating expenses and asset-based
charges applicable under annuity contracts. Lipper data provide a more accurate
picture than market benchmarks of the Equitable Accumulator performance relative
to other variable annuity products.
<PAGE>
- -------
88
- --------------------------------------------------------------------------------
TABLE 1
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
LENGTH OF INVESTMENT PERIOD
---------------------------------------------------------------------------
SINCE SINCE
1 3 5 10 OPTION PORTFOLIO
VARIABLE INVESTMENT OPTIONS YEAR YEARS YEARS YEARS INCEPTION* INCEPTION**
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EQ/Aggressive Stock 7.61% 3.89% 11.67% 13.06% 11.50% 14.50%
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Common Stock 13.74% 22.29% 23.62% 14.45% 23.64% 13.43%
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors (0.78)% 6.64% 7.69% 5.61% 7.15% 5.63%
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Equity Index 9.09% 21.29% 23.43% - 22.26% 19.33%
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Global 26.57% 17.75% 15.97% 11.61% 16.72% 10.13%
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Growth and Income 7.43% 16.36% 17.53% - 17.49% 12.60%
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Growth Investors 15.08% 15.06% 15.54% 13.20% 15.31% 13.19%
- ----------------------------------------------------------------------------------------------------------------------------
Alliance High Yield (13.79)% (3.16)% 5.21% 6.21% 4.02% 5.18%
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Intermediate Government Securities (10.43)% (0.91)% 1.38% - 0.66% 1.76%
- ----------------------------------------------------------------------------------------------------------------------------
Alliance International 25.88% 8.09% - - 8.01% 8.15%
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Money Market (5.76)% (0.66)% 0.26% 0.41% 0.10% 2.82%
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth 16.38% - - - 11.93% 11.93%
- ----------------------------------------------------------------------------------------------------------------------------
BT Equity 500 Index 9.31% - - - 15.90% 15.90%
- ----------------------------------------------------------------------------------------------------------------------------
BT International Equity Index 16.24% - - - 16.91% 16.91%
- ----------------------------------------------------------------------------------------------------------------------------
BT Small Company Index 9.72% - - - 1.91% 1.91%
- ----------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen (0.92)% - - - (0.92)% (0.92)%
- ----------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Foundation (3.21)% - - - (3.21)% (3.21)%
- ----------------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies 61.33% - - - 42.58% 42.58%
- ----------------------------------------------------------------------------------------------------------------------------
MFS Growth with Income (1.90)% - - - (1.90)% (1.90)%
- ----------------------------------------------------------------------------------------------------------------------------
MFS Research 12.02% - - - 18.26% 18.26%
- ----------------------------------------------------------------------------------------------------------------------------
Mercury Basic Value Equity 7.99% - - - 12.23% 12.23%
- ----------------------------------------------------------------------------------------------------------------------------
Mercury World Strategy 10.32% - - - 6.32% 6.32%
- ----------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity 83.10% - - - 2.86% (0.71)%
- ----------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Balanced (10.28)% - - - 3.89% 3.89%
- ----------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value (11.64)% - - - 4.31% 4.31%
- ----------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income (6.88)% - - - 7.05% 7.05%
- ----------------------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock 20.49% - - - 9.95% 9.95%
- ----------------------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Value (8.58)% - - - (2.62)% (2.62)%
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* The variable investment option inception dates are: EQ/Aggressive Stock,
Alliance Common Stock, Alliance Conservative Investors, Alliance Equity
Index, Alliance Global, Alliance Growth and Income, Alliance Growth
Investors, Alliance High Yield, Alliance Intermediate Government
Securities, Alliance International, and Alliance Money Market (May 1,
1995); Alliance Small Cap Growth, Mercury Basic Value Equity, Mercury World
Strategy, MFS Emerging Growth Companies, MFS Research, EQ/Putnam Balanced,
EQ/Putnam Growth & Income Value, T. Rowe Price Equity Income, T. Rowe Price
International Stock, and Warburg Pincus Small Company Value (May 1, 1997);
Morgan Stanley Emerging Markets Equity (September 2, 1997); BT Equity 500
Index, BT International Equity Index, and BT Small Company Index (December
31, 1997); EQ/Evergreen, EQ/Evergreen Foundation, and MFS Growth with
Income (December 31, 1998). The inception dates for the variable investment
options that became available after December 31, 1998 and are therefore not
shown in this table are: EQ/Alliance Premier Growth, Capital Guardian
Research, and Capital Guardian U.S. Equity (April 30, 1999); EQ/Alliance
Technology (May 1, 2000).
** The inception dates for the portfolios underlying the Alliance variable
investment options are for portfolios of The Hudson River Trust, the assets
of which became assets of corresponding portfolios of EQ Advisors Trust on
October 18, 1999. The portfolio inception dates are: EQ/Aggressive Stock
(January 27, 1986); Alliance Common Stock (January 13, 1976); Alliance
Conservative Investors and Alliance Growth Investors (October 2, 1989);
Alliance Equity Index (March 1, 1994); Alliance Global (August 27, 1987);
Alliance Growth & Income (October 1, 1993); Alliance High Yield (January 2,
1987); Alliance Intermediate Government Securities (April 1, 1991);
Alliance International (April 3, 1995); Alliance Money Market (July 13,
1981); Alliance Small Cap Growth, Mercury Basic Value Equity, Mercury World
Strategy, MFS Emerging Growth Companies, MFS Research,EQ/Putnam Balanced,
EQ/Putnam Growth & Income Value, T. Rowe Price Equity Income, T. Rowe Price
International Stock, and Warburg Pincus Small Company Value (May 1, 1997);
BT Equity 500 Index, BT International Equity Index, and BT Small Company
Index (January 1, 1998); and Morgan Stanley Emerging Markets Equity (August
20, 1997); EQ/Evergreen, EQ/Evergreen Foundation, and MFS Growth with
Income (December 31, 1998). The inception dates for the portfolios that
became available after December 31, 1998 and are therefore not shown in the
tables are: EQ/Alliance Premier Growth, Capital Guardian Research, and
Capital Guardian U.S. Equity (April 30, 1999) and EQ/Alliance Technology
(May 1, 2000).
<PAGE>
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89
- --------------------------------------------------------------------------------
TABLE 2
GROWTH OF $1,000 UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
LENGTH OF INVESTMENT PERIOD
--------------------------------------------------------------------------
SINCE
1 3 5 10 PORTFOLIO
VARIABLE INVESTMENT OPTIONS YEAR YEARS YEARS YEARS INCEPTION*
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
EQ/Aggressive Stock $ 1,076.11 $ 1,121.37 $ 1,736.56 $ 3,411.94 $ 6,594.56
- -------------------------------------------------------------------------------------------------------------------------
Alliance Common Stock $ 1,137.36 $ 1,828.74 $ 2,887.34 $ 3,856.97 $ 20,476.65
- -------------------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors $ 992.22 $ 1,212.63 $ 1,448.59 $ 1,725.71 $ 1,752.42
- -------------------------------------------------------------------------------------------------------------------------
Alliance Equity Index $ 1,090.91 $ 1,784.44 $ 2,864.81 - $ 2,804.42
- -------------------------------------------------------------------------------------------------------------------------
Alliance Global $ 1,265.74 $ 1,632.75 $ 2,097.92 $ 2,998.41 $ 3,290.08
- -------------------------------------------------------------------------------------------------------------------------
Alliance Growth and Income $ 1,074.35 $ 1,575.58 $ 2,242.49 - $ 2,099.40
- -------------------------------------------------------------------------------------------------------------------------
Alliance Growth Investors $ 1,150.79 $ 1,523.13 $ 2,058.76 $ 3,456.50 $ 3,557.57
- -------------------------------------------------------------------------------------------------------------------------
Alliance High Yield $ 862.08 $ 908.07 $ 1,289.25 $ 1,825.87 $ 1,928.38
- -------------------------------------------------------------------------------------------------------------------------
Alliance Intermediate Government Securities $ 895.69 $ 972.95 $ 1,071.16 - $ 1,164.91
- -------------------------------------------------------------------------------------------------------------------------
Alliance International $ 1,258.78 $ 1,262.71 - - $ 1,450.01
- -------------------------------------------------------------------------------------------------------------------------
Alliance Money Market $ 942.44 $ 980.24 $ 1,012.87 $ 1,041.89 $ 1,672.63
- -------------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth $ 1,163.82 - - - $ 1,350.99
- -------------------------------------------------------------------------------------------------------------------------
BT Equity 500 Index $ 1,093.06 - - - $ 1,343.31
- -------------------------------------------------------------------------------------------------------------------------
BT International Equity Index $ 1,162.35 - - - $ 1,366.89
- -------------------------------------------------------------------------------------------------------------------------
BT Small Company Index $ 1,097.18 - - - $ 1,038.64
- -------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen $ 990.75 - - - $ 990.75
- -------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Foundation $ 967.92 - - - $ 967.92
- -------------------------------------------------------------------------------------------------------------------------
MFS Growth with Income $ 981.05 - - - $ 981.05
- -------------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies $ 1,613.30 - - - $ 2,577.16
- -------------------------------------------------------------------------------------------------------------------------
MFS Research $ 1,120.21 - - - $ 1,564.59
- -------------------------------------------------------------------------------------------------------------------------
Mercury Basic Value Equity $ 1,079.93 - - - $ 1,360.51
- -------------------------------------------------------------------------------------------------------------------------
Mercury World Strategy $ 1,103.16 - - - $ 1,777.76
- -------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity $ 1,831.00 - - - $ 983.27
- -------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Balanced $ 897.16 - - - $ 1,107.24
- -------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value $ 883.64 - - - $ 1,119.29
- -------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income $ 931.17 - - - $ 1,199.38
- -------------------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock $ 1,204.88 - - - $ 1,287.97
- -------------------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Value $ 914.21 - - - $ 931.55
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* Portfolio inception dates are shown in Table 1.
<PAGE>
- -------
90
- --------------------------------------------------------------------------------
TABLE 3
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
EQ/AGGRESSIVE STOCK 16.95% 7.97% 14.41% 14.80% - 15.96%
- -------------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap 51.65% 24.68% 19.97% 14.78% - 15.86%
- -------------------------------------------------------------------------------------------------------------------------
Benchmark 18.09% 17.48% 19.92% 15.41% - 14.58%
- -------------------------------------------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK 23.20% 25.88% 26.02% 16.70% 16.50% 14.88%
- -------------------------------------------------------------------------------------------------------------------------
Lipper Growth 29.78% 26.87% 25.55% 16.90% 15.83% 15.16%
- -------------------------------------------------------------------------------------------------------------------------
Benchmark 21.04% 27.56% 28.56% 18.21% 17.88% 16.19%
- -------------------------------------------------------------------------------------------------------------------------
ALLIANCE CONSERVATIVE INVESTORS 8.39% 10.62% 10.67% 8.18% - 8.25%
- -------------------------------------------------------------------------------------------------------------------------
Lipper Flexible Portfolio 4.42% 11.65% 13.70% 10.10% - 10.15%
- -------------------------------------------------------------------------------------------------------------------------
Benchmark 4.19% 12.07% 13.60% 10.75% - 10.68%
- -------------------------------------------------------------------------------------------------------------------------
ALLIANCE EQUITY INDEX 18.46% 24.88% 25.79% - - 21.67%
- -------------------------------------------------------------------------------------------------------------------------
Lipper Standard & Poor's 500 Index 19.36% 25.86% 26.81% - - 23.89%
- -------------------------------------------------------------------------------------------------------------------------
Benchmark 21.04% 27.56% 28.56% - - 24.14%
- -------------------------------------------------------------------------------------------------------------------------
ALLIANCE GLOBAL 36.30% 21.49% 18.78% 13.98% - 12.63%
- -------------------------------------------------------------------------------------------------------------------------
Lipper Global 44.62% 23.92% 20.57% 11.65% - 11.06%
- -------------------------------------------------------------------------------------------------------------------------
Benchmark 24.93% 21.61% 19.76% 11.42% - 10.74%
- -------------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH AND INCOME 16.77% 20.10% 20.11% - - 15.26%
- -------------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 12.90% 17.23% 20.50% - - 16.45%
- -------------------------------------------------------------------------------------------------------------------------
Benchmark 20.71% 23.10% 25.01% - - 18.77%
- -------------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS 24.57% 18.83% 18.25% 15.20% - 15.19%
- -------------------------------------------------------------------------------------------------------------------------
Lipper Flexible Portfolio 10.45% 14.19% 15.15% 11.65% - 11.68%
- -------------------------------------------------------------------------------------------------------------------------
Benchmark 13.77% 20.90% 22.15% 15.13% - 15.15%
- -------------------------------------------------------------------------------------------------------------------------
ALLIANCE HIGH YIELD (4.89)% 1.15% 8.11% 8.47% - 7.62%
- -------------------------------------------------------------------------------------------------------------------------
Lipper High Current Yield 3.65% 4.82% 8.59% 9.61% - 7.79%
- -------------------------------------------------------------------------------------------------------------------------
Benchmark #1 1.57% 5.91% 9.61% 10.79% - 9.99%
- -------------------------------------------------------------------------------------------------------------------------
Benchmark #2 3.28% 5.37% 9.07% 11.06% - 10.04%
- -------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERMEDIATE GOVERNMENT
SECURITIES (1.46)% 3.32% 4.67% - - 4.60%
- -------------------------------------------------------------------------------------------------------------------------
Lipper U.S. General Government (2.60)% 4.04% 5.81% - - 5.89%
- -------------------------------------------------------------------------------------------------------------------------
Benchmark 0.49% 5.50% 6.93% - - 6.76%
- -------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERNATIONAL 35.59% 12.07% - - - 11.44%
- -------------------------------------------------------------------------------------------------------------------------
Lipper International 43.24% 18.74% - - - 16.13%
- -------------------------------------------------------------------------------------------------------------------------
Benchmark 26.96% 15.74% - - - 13.11%
- -------------------------------------------------------------------------------------------------------------------------
ALLIANCE MONEY MARKET 3.31% 3.57% 3.68% 3.49% - 5.26%
- -------------------------------------------------------------------------------------------------------------------------
Lipper Money Market 3.78% 4.05% 4.16% 3.96% - 5.70%
- -------------------------------------------------------------------------------------------------------------------------
Benchmark 4.74% 5.01% 5.20% 5.06% - 6.65%
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -------
91
- --------------------------------------------------------------------------------
TABLE 3 (CONTINUED)
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ALLIANCE SMALL CAP GROWTH 25.90% - - - - 16.06%
- -------------------------------------------------------------------------------------------------------------------
Lipper Small Company 34.26% - - - - 19.49%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 43.09% - - - - 25.88%
- -------------------------------------------------------------------------------------------------------------------
BT EQUITY 500 INDEX 18.68% - - - - 21.04%
- -------------------------------------------------------------------------------------------------------------------
Lipper Standard & Poor's 500 Index 19.36% - - - - 23.16%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 24.76%
- -------------------------------------------------------------------------------------------------------------------
BT INTERNATIONAL EQUITY INDEX 25.75% - - - - 22.06%
- -------------------------------------------------------------------------------------------------------------------
Lipper International 43.24% - - - - 26.76%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 26.96% - - - - 23.43%
- -------------------------------------------------------------------------------------------------------------------
BT SMALL COMPANY INDEX 19.10% - - - - 7.13%
- -------------------------------------------------------------------------------------------------------------------
Lipper Small Cap 34.26% - - - - 16.02%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 21.26% - - - - 8.70%
- -------------------------------------------------------------------------------------------------------------------
EQ/EVERGREEN 8.24% - - - - 8.24%
- -------------------------------------------------------------------------------------------------------------------
Lipper Growth 29.78% - - - - 29.78%
- -------------------------------------------------------------------------------------------------------------------
Benchmark #1 21.26% - - - - 21.26%
- -------------------------------------------------------------------------------------------------------------------
Benchmark #2 21.03% - - - - 21.03%
- -------------------------------------------------------------------------------------------------------------------
EQ/EVERGREEN FOUNDATION 5.91% - - - - 5.91%
- -------------------------------------------------------------------------------------------------------------------
Lipper Balanced 8.69% - - - - 8.69%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 11.15% - - - - 11.15%
- -------------------------------------------------------------------------------------------------------------------
MFS EMERGING GROWTH COMPANIES 71.33% - - - - 46.26%
- -------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap 51.65% - - - - 32.50%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 21.26% - - - - 16.99%
- -------------------------------------------------------------------------------------------------------------------
MFS GROWTH WITH INCOME 7.25% - - - - 7.25%
- -------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 12.90% - - - 12.90%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 21.03%
- -------------------------------------------------------------------------------------------------------------------
MFS RESEARCH 21.45% - - - - 22.27%
- -------------------------------------------------------------------------------------------------------------------
Lipper Growth 29.78% - - - - 29.33%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 27.36%
- -------------------------------------------------------------------------------------------------------------------
MERCURY BASIC VALUE EQUITY 17.34% - - - - 16.35%
- -------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 12.90% - - - - 18.00%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 27.36%
- -------------------------------------------------------------------------------------------------------------------
MERCURY WORLD STRATEGY 19.71% - - - - 10.61%
- -------------------------------------------------------------------------------------------------------------------
Lipper Global Flexible Portfolio 12.93% - - - - 11.91%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 13.07% - - - - 16.18%
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------
92
- --------------------------------------------------------------------------------
TABLE 3 (CONTINUED)
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
MORGAN STANLEY EMERGING MARKETS
EQUITY 93.10% - - - - 4.28%
- -------------------------------------------------------------------------------------------------------------------
Lipper Emerging Markets 82.53% - - - - 2.90%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 66.41% - - - - (0.88)%
- -------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM BALANCED (1.31)% - - - - 8.23%
- -------------------------------------------------------------------------------------------------------------------
Lipper Balanced 8.69% - - - - 13.91%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 11.39% - - - - 18.81%
- -------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME VALUE (2.69)% - - - - 8.63%
- -------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 12.90% - - - - 18.00%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 27.36%
- -------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE EQUITY INCOME 2.16% - - - - 11.28%
- -------------------------------------------------------------------------------------------------------------------
Lipper Equity Income 6.90% - - - - 14.28%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 27.36%
- -------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE INTERNATIONAL STOCK 30.09% - - - - 14.16%
- -------------------------------------------------------------------------------------------------------------------
Lipper International 43.24% - - - - 20.38%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 26.96% - - - - 18.32%
- -------------------------------------------------------------------------------------------------------------------
WARBURG PINCUS SMALL COMPANY VALUE 0.43% - - - - 1.93%
- -------------------------------------------------------------------------------------------------------------------
Lipper Small Cap 34.26% - - - - 24.22%
- -------------------------------------------------------------------------------------------------------------------
Benchmark #1 21.26% - - - - 16.99%
- -------------------------------------------------------------------------------------------------------------------
Benchmark #2 (1.49)% - - - - 7.06%
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* Portfolio inception dates are shown in Table 1. Lipper survey and
benchmark "since portfolio inception" information are as of the month-end
closest to the actual date of portfolio inception.
<PAGE>
- -----
93
- --------------------------------------------------------------------------------
TABLE 4
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EQ/AGGRESSIVE STOCK 16.95% 25.86% 96.03% 297.56% - 686.25%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap 51.65% 102.87% 158.98% 311.69% - 683.45%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 18.09% 62.12% 147.96% 319.19% - 595.55%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK 23.20% 99.45% 217.88% 368.55% 2,020.99% 2,677.00%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Growth 29.78% 106.30% 216.51% 386.68% 1,816.52% 2,838.39%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 21.04% 107.56% 251.12% 432.78% 2,584.39% 3,555.48%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE CONSERVATIVE INVESTORS 8.39% 35.35% 66.01% 119.44% - 125.31%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Flexible Portfolio 4.42% 39.31% 91.71% 163.35% - 169.02%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 4.19% 40.74% 89.21% 177.71% - 186.90%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE EQUITY INDEX 18.46% 94.76% 214.99% - - 214.16%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Standard & Poor's 500 Index 19.36% 99.37% 227.98% - - 242.77%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 21.04% 107.56% 251.12% - - 253.66%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE GLOBAL 36.30% 79.34% 136.44% 270.06% - 334.37%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Global 44.62% 93.38% 162.57% 205.54% - 273.03%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 24.93% 79.83% 146.35% 194.99% - 252.80%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH AND INCOME 16.77% 73.23% 149.92% - - 142.91%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 12.90% 62.52% 157.04% - - 158.01%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 20.71% 86.55% 205.26% - - 204.09%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS 24.57% 67.81% 131.22% 311.69% - 325.75%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Flexible Portfolio 10.45% 49.38% 103.90% 204.29% - 211.11%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 13.77% 76.71% 171.92% 309.28% - 352.50%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE HIGH YIELD (4.89)% 3.50% 47.67% 125.47% - 159.53%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper High Current Yield 3.65% 15.25% 51.19% 151.82% - 166.74%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark #1 1.57% 18.80% 58.22% 178.72% - 245.03%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark #2 3.28% 5.37% 9.07% 11.06% - 10.04%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERMEDIATE
GOVERNMENT SECURITIES (1.46)% 10.31% 25.61% - - 48.19%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper U.S. General Government (2.60)% 12.55% 32.56% - - 64.40%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 0.49% 17.43% 39.81% - - 77.41%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERNATIONAL 35.59% 40.74% - - - 67.23%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper International 43.24% 69.17% - - - 103.07%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 26.96% 55.06% - - - 79.52%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -------
94
- --------------------------------------------------------------------------------
TABLE 4 (CONTINUED)
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ALLIANCE MONEY MARKET 3.31% 11.10% 19.82% 40.92% - 157.86%
- ---------------------------------------------------------------------------------------------------------------------------
Lipper Money Market 3.78% 12.64% 22.65% 47.52% - 178.18%
- ---------------------------------------------------------------------------------------------------------------------------
Benchmark 4.74% 15.79% 28.88% 63.79% - 229.35%
- ---------------------------------------------------------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH 25.90% - - - - 48.80%
- ---------------------------------------------------------------------------------------------------------------------------
Lipper Small Cap 34.26% - - - - 62.98%
- ---------------------------------------------------------------------------------------------------------------------------
Benchmark 43.09% - - - - 84.91%
- ---------------------------------------------------------------------------------------------------------------------------
BT EQUITY 500 INDEX 18.68% - - - - 46.50%
- ---------------------------------------------------------------------------------------------------------------------------
Lipper Standard & Poor's 500 Index 19.36% - - - - 51.69%
- ---------------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 55.65%
- ---------------------------------------------------------------------------------------------------------------------------
BT INTERNATIONAL EQUITY INDEX 25.75% - - - - 48.98%
- ---------------------------------------------------------------------------------------------------------------------------
Lipper International 43.24% - - - - 61.58%
- ---------------------------------------------------------------------------------------------------------------------------
Benchmark 26.96% - - - - 52.35%
- ---------------------------------------------------------------------------------------------------------------------------
BT SMALL COMPANY INDEX 19.10% - - - - 14.78%
- ---------------------------------------------------------------------------------------------------------------------------
Lipper Small Cap 34.26% - - - - 37.82%
- ---------------------------------------------------------------------------------------------------------------------------
Benchmark 21.26% - - - - 18.17%
- ---------------------------------------------------------------------------------------------------------------------------
EQ/EVERGREEN 8.24% - - - - 8.24%
- ---------------------------------------------------------------------------------------------------------------------------
Lipper Growth 29.78% - - - - 29.78%
- ---------------------------------------------------------------------------------------------------------------------------
Benchmark #1 21.26% - - - - 21.26%
- ---------------------------------------------------------------------------------------------------------------------------
Benchmark #2 21.03% - - - - 21.03%
- ---------------------------------------------------------------------------------------------------------------------------
EQ/EVERGREEN FOUNDATION 5.91% - - - - 5.91%
- ---------------------------------------------------------------------------------------------------------------------------
Lipper Balanced 8.69% - - - - 8.69%
- ---------------------------------------------------------------------------------------------------------------------------
Benchmark 11.15% - - - - 11.15%
- ---------------------------------------------------------------------------------------------------------------------------
MFS EMERGING GROWTH COMPANIES 71.33% - - - - 175.82%
- ---------------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap 51.65% - - - - 120.85%
- ---------------------------------------------------------------------------------------------------------------------------
Benchmark 21.26% - - - - 52.05%
- ---------------------------------------------------------------------------------------------------------------------------
MFS GROWTH WITH INCOME 7.25% - - - - 7.25%
- ---------------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 12.90% - - - - 12.90%
- ---------------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 21.03%
- ---------------------------------------------------------------------------------------------------------------------------
MFS RESEARCH 21.45% - - - - 70.99%
- ---------------------------------------------------------------------------------------------------------------------------
Lipper Growth 29.78% - - - - 101.13%
- ---------------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 90.75%
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -------
95
- --------------------------------------------------------------------------------
TABLE 4 (CONTINUED)
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
MERCURY BASIC VALUE EQUITY 17.34% - - - - 49.78%
- ------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 12.90% - - - - 56.85%
- ------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 90.75%
- ------------------------------------------------------------------------------------------------------------------
MERCURY WORLD STRATEGY 19.71% - - - - 30.89%
- ------------------------------------------------------------------------------------------------------------------
Lipper Global Flexible Portfolio 12.93% - - - - 35.69%
- ------------------------------------------------------------------------------------------------------------------
Benchmark 13.07% - - - - 49.16%
- ------------------------------------------------------------------------------------------------------------------
MORGAN STANLEY EMERGING
MARKETS EQUITY 93.10% - - - - 10.40%
- ------------------------------------------------------------------------------------------------------------------
Lipper Emerging Markets 82.53% - - - - 7.48%
- ------------------------------------------------------------------------------------------------------------------
Benchmark 66.41% - - - - 5.32%
- ------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM BALANCED (1.31)% - - - - 23.48%
- ------------------------------------------------------------------------------------------------------------------
Lipper Balanced 8.69% - - - - 42.44%
- ------------------------------------------------------------------------------------------------------------------
Benchmark 11.39% - - - - 61.21%
- ------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME
VALUE (2.69)% - - - - 24.72%
- ------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 12.90% - - - - 56.85%
- ------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 90.75%
- ------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE EQUITY INCOME 2.16% - - - - 33.02%
- ------------------------------------------------------------------------------------------------------------------
Lipper Equity Income 6.90% - - - - 43.31%
- ------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 90.75%
- ------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE INTERNATIONAL
- ------------------------------------------------------------------------------------------------------------------
STOCK 30.09% - - - - 42.40%
- ------------------------------------------------------------------------------------------------------------------
Lipper International 43.24% - - - - 65.44%
- ------------------------------------------------------------------------------------------------------------------
Benchmark 26.96% - - - - 56.70%
- ------------------------------------------------------------------------------------------------------------------
WARBURG PINCUS SMALL COMPANY
VALUE 0.43% - - - - 5.24%
- ------------------------------------------------------------------------------------------------------------------
Lipper Small Cap 34.26% - - - - 83.94%
- ------------------------------------------------------------------------------------------------------------------
Benchmark #1 21.26% - - - - 52.05%
- ------------------------------------------------------------------------------------------------------------------
Benchmark #2 (1.49)% - - - - 19.99%
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* Portfolio inception dates are shown in Table 1. Lipper survey and
benchmark "since portfolio inception" information are as month-end closest
to the actual date of portfolio inception.
<PAGE>
- -------
96
- --------------------------------------------------------------------------------
TABLE 5
YEAR-BY-YEAR RATES OF RETURN:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
1990 1991 1992 1993 1994
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock 6.43% 83.89% (4.71)% 14.89% (5.35)%
- ----------------------------------------------------------------------------------------------------------------
Alliance Common Stock (9.59)% 35.69% 1.57% 22.83% (3.70)%
- ----------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors 4.66% 17.97% 4.03% 9.04% (5.63)%
- ----------------------------------------------------------------------------------------------------------------
Alliance Equity Index - - - - (0.26)%
- ----------------------------------------------------------------------------------------------------------------
Alliance Global (7.58)% 28.47% (2.10)% 30.01% 3.56%
- ----------------------------------------------------------------------------------------------------------------
Alliance Growth and Income - - - (0.66)%+ (2.16)%
- ----------------------------------------------------------------------------------------------------------------
Alliance Growth Investors 8.89% 46.53% 3.22% 13.43% (4.70)%
- ----------------------------------------------------------------------------------------------------------------
Alliance High Yield (2.70)% 22.48% 10.51% 21.19% (4.33)%
- ----------------------------------------------------------------------------------------------------------------
Alliance Intermediate Government Securities - 10.92%+ 3.90% 8.78% (5.90)%
- ----------------------------------------------------------------------------------------------------------------
Alliance International - - - - -
- ----------------------------------------------------------------------------------------------------------------
Alliance Money Market 6.50% 4.49% 1.91% 1.32% 2.36%
- ----------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth - - - - -
- ----------------------------------------------------------------------------------------------------------------
BT Equity 500 Index - - - - -
- ----------------------------------------------------------------------------------------------------------------
BT International Equity Index - - - - -
- ----------------------------------------------------------------------------------------------------------------
BT Small Company Index - - - - -
- ----------------------------------------------------------------------------------------------------------------
EQ/Evergreen - - - - -
- ----------------------------------------------------------------------------------------------------------------
EQ/Evergreen Foundation - - - - -
- ----------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies - - - - -
- ----------------------------------------------------------------------------------------------------------------
MFS Growth with Income - - - - -
- ----------------------------------------------------------------------------------------------------------------
MFS Research - - - - -
- ----------------------------------------------------------------------------------------------------------------
Mercury Basic Value Equity - - - - -
- ----------------------------------------------------------------------------------------------------------------
Mercury World Strategy - - - - -
- ----------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity - - - - -
- ----------------------------------------------------------------------------------------------------------------
EQ/Putnam Balanced - - - - -
- ----------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value - - - - -
- ----------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income - - - - -
- ----------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock - - - - -
- ----------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Value - - - - -
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
1995 1996 1997 1998 1999
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
EQ/Aggressive Stock 29.54% 20.24% 9.04% (1.30)% 16.95%
- ----------------------------------------------------------------------------------------------------------------
Alliance Common Stock 30.34% 22.28% 27.16% 27.32% 23.20%
- ----------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors 18.49% 3.52% 11.43% 12.07% 8.39%
- ----------------------------------------------------------------------------------------------------------------
Alliance Equity Index 34.31% 20.42% 30.45% 26.03% 18.46%
- ----------------------------------------------------------------------------------------------------------------
Alliance Global 16.92% 12.76% 9.77% 19.86% 36.30%
- ----------------------------------------------------------------------------------------------------------------
Alliance Growth and Income 22.10% 18.16% 24.73% 18.94% 16.77%
- ----------------------------------------------------------------------------------------------------------------
Alliance Growth Investors 24.36% 10.80% 14.92% 17.23% 24.57%
- ----------------------------------------------------------------------------------------------------------------
Alliance High Yield 18.01% 20.91% 16.58% (6.66)% (4.89)%
- ----------------------------------------------------------------------------------------------------------------
Alliance Intermediate Government Securities 11.52% 2.11% 5.58% 6.03% (1.46)%
- ----------------------------------------------------------------------------------------------------------------
Alliance International 9.97%+ 8.04% (4.60)% 8.81% 35.59%
- ----------------------------------------------------------------------------------------------------------------
Alliance Money Market 4.06% 3.64% 3.74% 3.66% 3.31%
- ----------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth - - 25.38%+ (5.73)% 25.90%
- ----------------------------------------------------------------------------------------------------------------
BT Equity 500 Index - - - 23.44% 18.68%
- ----------------------------------------------------------------------------------------------------------------
BT International Equity Index - - - 18.47% 25.75%
- ----------------------------------------------------------------------------------------------------------------
BT Small Company Index - - - (3.63)% 19.10%
- ----------------------------------------------------------------------------------------------------------------
EQ/Evergreen - - - - 8.24%
- ----------------------------------------------------------------------------------------------------------------
EQ/Evergreen Foundation - - - - 5.91%
- ----------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies - - 21.32%+ 32.70% 71.33%
- ----------------------------------------------------------------------------------------------------------------
MFS Growth with Income - - - - 7.25%
- ----------------------------------------------------------------------------------------------------------------
MFS Research - - 14.99%+ 22.43% 21.45%
- ----------------------------------------------------------------------------------------------------------------
Mercury Basic Value Equity - - 15.97%+ 10.08% 17.34%
- ----------------------------------------------------------------------------------------------------------------
Mercury World Strategy - - 3.76%+ 5.38% 19.71%
- ----------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity - - (20.59)%+ (28.01)% 93.10%
- ----------------------------------------------------------------------------------------------------------------
EQ/Putnam Balanced - - 13.43%+ 10.30% (1.31)%
- ----------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value - - 15.15%+ 11.30% (2.69)%
- ----------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income - - 21.01%+ 7.60% 2.16%
- ----------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock - - (2.41)%+ 12.16% 30.09%
- ----------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Value - - 18.04%+ (11.22)% 0.43%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
+ Returns for these portfolios represent less than 12 months of performance.
The returns are as of each portfolio inception date as shown in Table 1.
<PAGE>
- ----------
97
- --------------------------------------------------------------------------------
COMMUNICATING PERFORMANCE DATA
In reports or other communications to contract owners or in advertising
material, we may describe general economic and market conditions affecting our
variable investment options and the portfolios and may compare the performance
or ranking of those options and the portfolios with:
o those of other insurance company separate accounts or mutual funds included
in the rankings prepared by Lipper Analytical Services, Inc., Morningstar,
Inc., VARDS, or similar investment services that monitor the performance of
insurance company separate accounts or mutual funds;
o other appropriate indices of investment securities and averages for peer
universes of mutual funds; or
o data developed by us derived from such indices or averages.
We also may furnish to present or prospective contract owners advertisements or
other communications that include evaluations of a variable investment option or
portfolio by nationally recognized financial publications. Examples of such
publications are:
- --------------------------------------------------------------------------------
Barron's Investment Management Weekly
Morningstar's Variable Money Management Letter
Annuity Sourcebook Investment Dealers Digest
Business Week National Underwriter
Forbes Pension & Investments
Fortune USA Today
Institutional Investor Investor's Business Daily
Money The New York Times
Kiplinger's Personal Finance The Wall Street Journal
Financial Planning The Los Angeles Times
Investment Adviser The Chicago Tribune
- --------------------------------------------------------------------------------
Lipper compiles performance data for peer universes of funds with similar
investment objectives in its Lipper Survey. Morningstar, Inc. compiles similar
data in the Morningstar Variable Annuity/Life Report (Morningstar Report).
The Lipper Survey records performance data as reported to it by over 800 mutual
funds underlying variable annuity and life insurance products. It divides these
actively managed portfolios into 25 categories by portfolio objectives. The
Lipper Survey contains two different universes, which reflect different types of
fees in performance data:
o The "separate account" universe reports performance data net of investment
management fees, direct operating expenses and asset-based charges
applicable under variable life and annuity contracts; and
o The "mutual fund" universe reports performance net only of investment
management fees and direct operating expenses, and therefore reflects only
charges that relate to the underlying mutual fund.
The Morningstar Variable Annuity/Life Report consists of nearly 700 variable
life and annuity funds, all of which report their data net of investment
management fees, direct operating expenses and separate account level charges.
VARDS is a monthly reporting service that monitors approximately 2,500 variable
life and variable annuity funds on performance and account information.
YIELD INFORMATION
Current yield for the Alliance Money Market option will be based on net changes
in a hypothetical investment over a given seven-day period, exclusive of capital
changes, and then "annualized" (assuming that the same seven-day result would
occur each week for 52 weeks). Current yield for the Alliance High Yield option
and Alliance Intermediate Government Securities option will be based on net
changes in a hypothetical investment over a given 30-day period, exclusive of
capital changes, and then "annualized" (assuming that the same 30-day result
would occur each month for 12 months).
"Effective yield" is calculated in a similar manner, but when annualized, any
income earned by the investment is assumed to be reinvested. The "effective
yield" will be slightly higher than the "current yield" because any earnings are
compounded weekly for the Alliance Money Market option. The current yields and
effective yields assume the deduction of all current contract charges and
expenses other than the withdrawal charge, the optional baseBUILDER benefits
charge, the annual administrative charge, and any charge
<PAGE>
- ---------
98
- -------------------------------------------------------------------------------
designed to approximate certain taxes that may be imposed on us, such as premium
taxes in your state. The yields and effective yields for the Alliance Money
Market option, when used for the special dollar cost averaging program, assume
that no contract charges are deducted. For more information, see "Yield
Information for the Alliance Money Market Option, Alliance High Yield Option,
and Alliance Intermediate Government Securities Option" in the SAI.
<PAGE>
10 Incorporation of certain documents by reference
- -------
99
- --------------------------------------------------------------------------------
Equitable Life's Annual Report on Form 10-K for the year ended December 31,
1999, is considered to be a part of this prospectus because it is incorporated
by reference.
After the date of this prospectus and before we terminate the offering of the
securities under this prospectus, all documents or reports we file with the SEC
under the Securities Exchange Act of 1934 ("Exchange Act"), will be considered
to become part of this prospectus because they are incorporated by reference.
Any statement contained in a document that is or becomes part of this
prospectus, will be considered changed or replaced for purposes of this
prospectus if a statement contained in this prospectus changes or is replaced.
Any statement that is considered to be a part of this prospectus because of its
incorporation will be considered changed or replaced for the purpose of this
prospectus if a statement contained in any other subsequently filed document
that is considered to be part of this prospectus changes or replaces that
statement. After that, only the statement that is changed or replaced will be
considered to be part of this prospectus.
We file our Exchange Act documents and reports, including our Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q, electronically according to EDGAR
under CIK No. 0000727920. The SEC maintains a Web site that contains reports,
proxy and information statements, and other information regarding registrants
that file electronically with the SEC. The address of the site is
http://www.sec.gov.
Upon written or oral request, we will provide, free of charge, to each person to
whom this prospectus is delivered, a copy of any or all of the documents
considered to be part of this prospectus because they are incorporated herein.
This does not include exhibits not specifically incorporated by reference into
the text of such documents. Requests for documents should be directed to The
Equitable Life Assurance Society of the United States, 1290 Avenue of the
Americas, New York, New York 10104. Attention: Corporate Secretary (telephone:
(212) 554-1234).
<PAGE>
Appendix I: Condensed
financial information
- --------
A-1
- --------------------------------------------------------------------------------
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION, EXCEPT EQ/ALLIANCE TECHNOLOGY WHICH IS BEING OFFERED FOR THE
FIRST TIME ON MAY 1, 2000.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
YEARS ENDED
DEC. 31, 1998 DEC. 31, 1999
-----------------------------------------
<S> <C> <C>
EQ/ALLIANCE AGGRESSIVE STOCK
- ----------------------------------------------------------------------------------------------
Unit value $ 69.37 $ 81.12
- ----------------------------------------------------------------------------------------------
Number of units outstanding (000s) 293 553
- ----------------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK
- ----------------------------------------------------------------------------------------------
Unit value $ 237.18 $ 292.20
- ----------------------------------------------------------------------------------------------
Number of units outstanding (000s) 550 1,434
- ----------------------------------------------------------------------------------------------
ALLIANCE CONSERVATIVE INVESTORS
- ----------------------------------------------------------------------------------------------
Unit value $ 21.20 $ 22.97
- ----------------------------------------------------------------------------------------------
Number of units outstanding (000s) 659 2,343
- ----------------------------------------------------------------------------------------------
ALLIANCE EQUITY INDEX
- ----------------------------------------------------------------------------------------------
Unit value $ 26.73 $ 31.67
- ----------------------------------------------------------------------------------------------
Number of units outstanding (000s) 2 16
- ----------------------------------------------------------------------------------------------
ALLIANCE GLOBAL
- ----------------------------------------------------------------------------------------------
Unit value $ 32.58 $ 44.41
- ----------------------------------------------------------------------------------------------
Number of units outstanding (000s) 354 1,361
- ----------------------------------------------------------------------------------------------
ALLIANCE GROWTH AND INCOME
- ----------------------------------------------------------------------------------------------
Unit value $ 20.99 $ 24.51
- ----------------------------------------------------------------------------------------------
Number of units outstanding (000s) 1,853 5,956
- ----------------------------------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS
- ----------------------------------------------------------------------------------------------
Unit value $ 34.84 $ 43.40
- ----------------------------------------------------------------------------------------------
Number of units outstanding (000s) 694 2,354
- ----------------------------------------------------------------------------------------------
ALLIANCE HIGH YIELD
- ----------------------------------------------------------------------------------------------
Unit value $ 27.96 $ 26.59
- ----------------------------------------------------------------------------------------------
Number of units outstanding (000s) 801 1,539
- ----------------------------------------------------------------------------------------------
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES
- ----------------------------------------------------------------------------------------------
Unit value $ 15.25 $ 15.03
- ----------------------------------------------------------------------------------------------
Number of units outstanding (000s) 929 2,057
- ----------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------
A-2
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
YEARS ENDED
DEC. 31, 1998 DEC. 31, 1999
----------------------------------------
<S> <C> <C>
ALLIANCE INTERNATIONAL
- --------------------------------------------------------------------------------
Unit value $ 12.40 $ 16.81
- --------------------------------------------------------------------------------
Number of units outstanding (000s) 166 591
- --------------------------------------------------------------------------------
ALLIANCE MONEY MARKET
- --------------------------------------------------------------------------------
Unit value $ 25.92 $ 26.78
- --------------------------------------------------------------------------------
Number of units outstanding (000s) 1,566 2,900
- --------------------------------------------------------------------------------
EQ/ALLIANCE PREMIER GROWTH
- --------------------------------------------------------------------------------
Unit value - $ 11.79
- --------------------------------------------------------------------------------
Number of units outstanding (000s) - 6,304
- --------------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH
- --------------------------------------------------------------------------------
Unit value $ 11.82 $ 14.88
- --------------------------------------------------------------------------------
Number of units outstanding (000s) 775 1,264
- --------------------------------------------------------------------------------
BT EQUITY 500 INDEX
- --------------------------------------------------------------------------------
Unit value $ 12.34 $ 14.65
- --------------------------------------------------------------------------------
Number of units outstanding (000s) 2,426 8,708
- --------------------------------------------------------------------------------
BT INTERNATIONAL EQUITY INDEX
- --------------------------------------------------------------------------------
Unit value $ 11.85 $ 14.90
- --------------------------------------------------------------------------------
Number of units outstanding (000s) 242 804
- --------------------------------------------------------------------------------
BT SMALL COMPANY INDEX
- --------------------------------------------------------------------------------
Unit value $ 9.64 $ 11.48
- --------------------------------------------------------------------------------
Number of units outstanding (000s) 284 756
- --------------------------------------------------------------------------------
CAPITAL GUARDIAN RESEARCH
- --------------------------------------------------------------------------------
Unit value - $ 10.61
- --------------------------------------------------------------------------------
Number of units outstanding (000s) - 72
- --------------------------------------------------------------------------------
CAPITAL GUARDIAN U.S. EQUITY
- --------------------------------------------------------------------------------
Unit value - $ 10.28
- --------------------------------------------------------------------------------
Number of units outstanding (000s) - 126
- --------------------------------------------------------------------------------
EQ/EVERGREEN
- --------------------------------------------------------------------------------
Unit value - $ 10.82
- --------------------------------------------------------------------------------
Number of units outstanding (000s) - 139
- --------------------------------------------------------------------------------
EQ/EVERGREEN FOUNDATION
- --------------------------------------------------------------------------------
Unit value - $ 10.59
- --------------------------------------------------------------------------------
Number of units outstanding (000s) - 149
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
A-3
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
YEARS ENDED
DEC. 31, 1998 DEC. 31, 1999
----------------------------------------
<S> <C> <C>
MFS EMERGING GROWTH COMPANIES
- --------------------------------------------------------------------------------------
Unit value $ 16.10 $ 27.59
- --------------------------------------------------------------------------------------
Number of units outstanding (000s) 1,942 6,114
- --------------------------------------------------------------------------------------
MFS GROWTH WITH INCOME
- --------------------------------------------------------------------------------------
Unit value - $ 10.72
- --------------------------------------------------------------------------------------
Number of units outstanding (000s) - 550
- --------------------------------------------------------------------------------------
MFS RESEARCH
- --------------------------------------------------------------------------------------
Unit value $ 14.08 $ 17.10
- --------------------------------------------------------------------------------------
Number of units outstanding (000s) 1,479 3,160
- --------------------------------------------------------------------------------------
MERCURY BASIC VALUE EQUITY
- --------------------------------------------------------------------------------------
Unit value $ 12.76 $ 14.98
- --------------------------------------------------------------------------------------
Number of units outstanding (000s) 1,009 2,567
- --------------------------------------------------------------------------------------
MERCURY WORLD STRATEGY
- --------------------------------------------------------------------------------------
Unit value $ 10.94 $ 13.09
- --------------------------------------------------------------------------------------
Number of units outstanding (000s) 140 273
- --------------------------------------------------------------------------------------
MORGAN STANLEY EMERGING MARKETS EQUITY
- --------------------------------------------------------------------------------------
Unit value $ 5.72 $ 11.04
- --------------------------------------------------------------------------------------
Number of units outstanding (000s) 177 1,267
- --------------------------------------------------------------------------------------
EQ/PUTNAM BALANCED
- --------------------------------------------------------------------------------------
Unit value $ 12.51 $ 12.35
- --------------------------------------------------------------------------------------
Number of units outstanding (000s) 1,136 2,777
- --------------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME VALUE
- --------------------------------------------------------------------------------------
Unit value $ 12.82 $ 12.47
- --------------------------------------------------------------------------------------
Number of units outstanding (000s) 867 2,057
- --------------------------------------------------------------------------------------
T. ROWE PRICE EQUITY INCOME
- --------------------------------------------------------------------------------------
Unit value $ 13.02 $ 13.30
- --------------------------------------------------------------------------------------
Number of units outstanding (000s) 1,059 2,091
- --------------------------------------------------------------------------------------
T. ROWE PRICE INTERNATIONAL STOCK
- --------------------------------------------------------------------------------------
Unit value $ 10.95 $ 14.24
- --------------------------------------------------------------------------------------
Number of units outstanding (000s) 705 1,488
- --------------------------------------------------------------------------------------
WARBURG PINCUS SMALL COMPANY VALUE
- --------------------------------------------------------------------------------------
Unit value $ 10.48 $ 10.53
- --------------------------------------------------------------------------------------
Number of units outstanding (000s) 560 972
- --------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Appendix II: Purchase considerations for QP contracts
- ------
B-1
- --------------------------------------------------------------------------------
Trustees who are considering the purchase of an Equitable Accumulator QP
contract should discuss with their tax advisers whether this is an appropriate
investment vehicle for the employer's plan. Trustees should consider whether the
plan provisions permit the investment of plan assets in the QP contract, the
distribution of such an annuity, the purchase of the guaranteed minimum income
benefit, and the payment of death benefits in accordance with the requirements
of the federal income tax rules. The QP contract and this prospectus should be
reviewed in full, and the following factors, among others, should be noted.
Assuming continued plan qualification and operation, earnings on qualified plan
assets will accumulate value on a tax-deferred basis even if the plan is not
funded by the Equitable Accumulator QP contract or another annuity. Therefore,
you should purchase an Equitable Accumulator QP Contract to fund a plan for the
contract's features and benefits other than tax deferral. This QP contract
accepts transfer contributions only and not regular, ongoing payroll
contributions. For 401(k) plans under defined contribution plans, no employee
after-tax contributions are accepted.
Under defined benefit plans, we will not accept rollovers from a defined
contribution plan to a defined benefit plan. We will only accept transfers from
a defined benefit plan or a change of investment vehicles in the plan. Only one
additional contribution may be made per contract year. For defined benefit
plans, the maximum percentage of actuarial value of the plan
participant/employee's normal retirement benefit that can be funded by a QP
contract is 80%. The account value under a QP contract may at any time be more
or less than the lump sum actuarial equivalent of the accrued benefit for a
defined benefit plan participant/employee. Equitable Life does not guarantee
that the account value under a QP contract will at any time equal the actuarial
value of 80% of a participant/employee's accrued benefit. If overfunding of a
plan occurs, withdrawals from the QP contract may be required. A withdrawal
charge and/or market value adjustment may apply.
Further, Equitable Life will not perform or provide any plan recordkeeping
services with respect to the QP contracts. The plan's administrator will be
solely responsible for performing or providing for all such services. There is
no loan feature offered under the QP contracts, so if the plan provides for
loans and a participant/employee takes a loan from the plan, other plan assets
must be used as the source of the loan and any loan repayments must be credited
to other investment vehicles and/or accounts available under the plan.
Given that required minimum distributions must generally commence from the plan
for annuitants after age 70 1/2, trustees should consider whether the QP
contract is an appropriate purchase for annuitants approaching or over age
70 1/2.
o The QP contract may not be an appropriate purchase for annuitants
approaching or over age 70 1/2; and
o The guaranteed minimum income benefit under baseBuilder may not be an
appropriate feature for annuitants who are older than age 63 1/2 when the
contract is issued.
Finally, because the method of purchasing the QP contract including the large
initial contribution and the features of the QP contract may appeal more to plan
participants/employees who are older and tend to be highly paid, and because
certain features of the QP contract are available only to plan
participants/employees who meet certain minimum and/or maximum age requirements,
plan trustees should discuss with their advisers whether the purchase of the QP
contract would cause the plan to engage in prohibited discrimination in
contributions, benefits or otherwise.
<PAGE>
Appendix III: Market value adjustment example
- ------
C-1
- --------------------------------------------------------------------------------
The example below shows how the market value adjustment would be determined and
how it would be applied to a withdrawal, assuming that $100,000 was allocated on
February 15, 2001 to a fixed maturity option with a maturity date of February
15, 2010 (nine years later) at a hypothetical rate to maturity of 7.00%,
resulting in a maturity value of $183,846 on the maturity date. We further
assume that a withdrawal of $50,000 is made four years later on February 15,
2005.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
HYPOTHETICAL ASSUMED
RATE TO MATURITY ON
FEBRUARY 15, 2005
- --------------------------------------------------------------------------------------------
5.00% 9.00%
- --------------------------------------------------------------------------------------------
<S> <C> <C>
AS OF FEBRUARY 15, 2005 (BEFORE WITHDRAWAL)
- --------------------------------------------------------------------------------------------
(1) Market adjusted amount $144,048 $ 119,487
- --------------------------------------------------------------------------------------------
(2) Fixed maturity amount $131,080 $ 131,080
- --------------------------------------------------------------------------------------------
(3) Market value adjustment:
(1) - (2) $ 12,968 $ (11,593)
- --------------------------------------------------------------------------------------------
ON FEBRUARY 15, 2005 (AFTER WITHDRAWAL)
- --------------------------------------------------------------------------------------------
(4) Portion of market value adjustment associated with withdrawal:
(3) x [$50,000/(1)] $ 4,501 $ (4,851)
- --------------------------------------------------------------------------------------------
(5) Reduction in fixed maturity amount:
[$50,000 - (4)] $ 45,499 $ 54,851
- --------------------------------------------------------------------------------------------
(6) Fixed maturity amount: (2) - (5) $ 85,581 $ 76,229
- --------------------------------------------------------------------------------------------
(7) Maturity value $120,032 $ 106,915
- --------------------------------------------------------------------------------------------
(8) Market adjusted amount of (7) $ 94,048 $ 69,487
- --------------------------------------------------------------------------------------------
</TABLE>
You should note that under this example if a withdrawal is made when rates have
increased from 7.00% to 9.00% (right column), a portion of a negative market
value adjustment is realized. On the other hand, if a withdrawal is made when
rates have decreased from 7.00% to 5.00% (left column), a portion of a positive
market value adjustment is realized.
<PAGE>
Appendix IV: Guaranteed minimum death benefit example
- ------
D-1
- --------------------------------------------------------------------------------
The death benefit under the contracts is equal to the account value or, if
greater, the guaranteed minimum death benefit.
The following illustrates the guaranteed minimum death benefit calculation.
Assuming $100,000 is allocated to the variable investment options (with no
allocation to the Alliance Money Market option, Alliance Intermediate Government
Securities option or the fixed maturity options), no additional contributions,
no transfers and no withdrawals, and no loans under a Rollover TSA contract, the
guaranteed minimum death benefit for an annuitant age 45 would be calculated as
follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
END OF 5% ROLL UP TO AGE 80 ANNUAL RATCHET TO AGE 80
CONTRACT GUARANTEED MINIMUM GUARANTEED MINIMUM
YEAR ACCOUNT VALUE DEATH BENEFIT(1) DEATH BENEFIT
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 $105,000 $ 105,000(1) $ 105,000(3)
- -------------------------------------------------------------------------------------------------
2 $115,500 $ 110,250(2) $ 115,500(3)
- -------------------------------------------------------------------------------------------------
3 $129,360 $ 115,763(2) $ 129,360(3)
- -------------------------------------------------------------------------------------------------
4 $103,488 $ 121,551(1) $ 129,360(4)
- -------------------------------------------------------------------------------------------------
5 $113,837 $ 127,628(1) $ 129,360(4)
- -------------------------------------------------------------------------------------------------
6 $127,497 $ 134,010(1) $ 129,360(4)
- -------------------------------------------------------------------------------------------------
7 $127,497 $ 140,710(1) $ 129,360(4)
- -------------------------------------------------------------------------------------------------
</TABLE>
The account values for contract years 1 through 7 are based on hypothetical
rates of return of 5.00%, 10.00%, 12.00%, (20.00)%, 10.00%, 12.00% and 0.00%. We
are using these rates solely to illustrate how the benefit is determined. The
return rates bear no relationship to past or future investment results.
5% ROLL UP TO AGE 80
(1) At the end of contract year 1, and again at the end of contract years 4
through 7, the death benefit will be equal to the guaranteed minimum death
benefit.
(2) At the end of contract years 2 and 3, the death benefit will be equal to
the current account value since it is higher than the current guaranteed
minimum death benefit.
ANNUAL RATCHET TO AGE 80
(3) At the end of contract years 1 through 3, the guaranteed minimum death
benefit is equal to the current account value.
(4) At the end of contract years 4 through 7, the guaranteed minimum death
benefit is equal to the guaranteed minimum death benefit at the end of the
prior year since it is equal to or higher than the current account value.
<PAGE>
Appendix V: Example of payments under the Assured Payment Option and APO Plus
- --------
E-1
- --------------------------------------------------------------------------------
The second column in the chart below illustrates the payments for a male age 70
who purchased the Assured Payment Option on March 15, 2000 with a single
contribution of $100,000, with increasing annual payments. The payments are to
commence on March 15, 2001. It assumes that the fixed period is 15 years and
that the life contingent annuity will provide payments on a single life basis.
Based on the rates to maturity for the fixed maturity options and the current
purchase rate for the life contingent annuity, on March 15, 2000, the initial
payment would be $6,929.75 and would increase in each three-year period to a
final payment of $10,145.85. The first payment under the life contingent annuity
would be $11,160.43.
The rates to maturity as of March 15, 2000 for fixed maturity options maturing
on February 15, 2001 through 2015 are: 4.45%, 5.16%, 5.68%, 5.76%, 5.87%, 5.95%,
6.02%, 6.08%, 6.17%, 6.23%, 5.72%, 5.72%, 5.72%, 5.72% and 5.72%, respectively.
Alternatively as shown in the third and fourth columns, this individual could
purchase APO Plus with the same $100,000 contribution, with the same fixed
period and the life contingent annuity on a single life basis. Assuming election
of the Alliance Common Stock option based on the rates to maturity for the fixed
maturity options and the current purchase rate for the life contingent annuity,
on March 15, 2000, the same initial payment of $6,929.75 would be purchased
under APO Plus. However, unlike the payment under the Assured Payment Option
that will increase every three years, this initial payment under APO Plus is not
guaranteed to increase. Therefore, only $78,608.66 is needed to purchase the
initial payment stream, and the remaining $21,391.34 is invested in the variable
investment options. Any future increase in payments under APO Plus will depend
on the investment performance in the Alliance Common Stock option.
Assuming hypothetical average annual rates of return of 0% and 8% (after
deduction of charges) for the variable investment option, the value in the
variable investment option would grow to $21,391.34 and $28,931.37 respectively
as of February 15, 2004. A portion of this amount is used to purchase the
increase in the payments for the fourth year. The remainder will stay in the
variable investment option to be drawn upon for the purchase of increases in
payments at for each third year thereafter during the fixed period and at the
end of the fixed period under the life contingent annuity. Based on the rates to
maturity for the fixed maturity options and purchase rates for the life
contingent annuity as of March 15, 2000, the third and fourth columns illustrate
the increasing payments that would be purchased under APO Plus assuming 0% and
8% rates of return respectively.
Under both options, while you are living payments increase annually after the
16th year under the life contingent annuity based on the increase, if any, in
the Consumer Price Index, but in no event greater than 3% per year.
ANNUAL PAYMENTS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
GUARANTEED INCREASING ILLUSTRATIVE ILLUSTRATIVE
PAYMENTS UNDER THE PAYMENTS UNDER PAYMENTS UNDER
YEARS ASSURED PAYMENT OPTION APO PLUS AT 0% APO PLUS AT 8%
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
1-3 $ 6,830.91 $ 6,830.91 $ 6.830.91
- --------------------------------------------------------------------------------
4-6 $ 7,514.00 $ 7,136.01 $ 7,734.43
- --------------------------------------------------------------------------------
7-9 $ 8,265.40 $ 7,549.09 $ 8,662.57
- --------------------------------------------------------------------------------
10-12 $ 9,091.94 $ 7,976.62 $ 9,645.68
- --------------------------------------------------------------------------------
13-15 $ 10,001.14 $ 8,385.16 $ 10,645.18
- --------------------------------------------------------------------------------
16 $ 11,001.25 $ 8,726.89 $ 11,591.27
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
E-2
- --------------------------------------------------------------------------------
As described above, a portion of the illustrated contribution is applied to the
life contingent annuity. This amount will generally be larger under the Assured
Payment Option than under APO Plus. Also, a larger portion of the contribution
will be allocated to fixed maturity options under the former than the latter. In
this illustration, $80,415.69 is allocated under the Assured Payment Option to
the fixed maturity options and under APO Plus, $68,025.05 is allocated to the
fixed maturity options. In addition, under APO Plus $21,391.34 is allocated to
the variable investment option. The balance of the $100,000 ($19,584.31 and
$10,583.61, respectively) is applied to the life contingent annuity.
The rates of return of 0% and 8% are for illustrative purposes only and are not
intended to represent an expected or guaranteed rate of return. Your investment
results will vary. Payments will also depend on the the rates to maturity and
life contingent annuity purchase rates in effect on the day the contribution is
applied. It is assumed that no lump sum withdrawals are taken.
<PAGE>
Appendix VI: Assured Payment Option and APO Plus contracts issued in the state
of Maryland
- --------
F-1
- --------------------------------------------------------------------------------
THE FOLLOWING INFORMATION SPECIFIES THE VARIATIONS THAT RELATE TO THE ASSURED
PAYMENT OPTION AND APO PLUS CONTRACTS ISSUED IN MARYLAND.
The Assured Payment Option and APO Plus (available only as traditional IRAs) are
issued as separate contracts rather than as a distribution option under a
Rollover IRA or Flexible Premium IRA contract.
You may purchase an Assured Payment Option of APO Plus contract with a minimum
single contribution of $10,000. You may also choose to apply the account value
from a Flexible Premium IRA or Rollover IRA contract to purchase an Assured
Payment Option or APO Plus contract. Your account value will be applied as a
single contribution.
We will allocate your single contribution in the same manner as described under
"Assured Payment Option and APO Plus" earlier in this prospectus. You are not
permitted to make additional contributions under the Assured Payment Option and
APO Plus.
PAYMENTS. Your payments must begin within 13 months after the contract date.
You may not elect to defer your payments.
DEATH BENEFIT. If you die during the fixed period, we will continue payments to
your designated beneficiary. Your beneficiary may choose to discontinue the
payments and receive a lump sum amount. If the lump sum is elected within one
year of your death, the amount will be equal the death benefit payable under the
Assured Payment Option and APO Plus.
TERMINATING THE CONTRACT. You may choose to terminate the contract by
surrendering the contract as described under "Surrendering your contract to
receive its cash value." We will return the contract to you with a notation that
the life contingent annuity is still in effect. The date payments are to start
under the life contingent annuity will be moved forward.
TAX INFORMATION. The Assured Payment Option and APO Plus contracts have not been
submitted to the IRS for approval as to form for use as a traditional IRA.
However, we believe that those contracts as currently offered comply with the
requirements of the Internal Revenue Code.
<PAGE>
Statement of additional information
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Unit Values 2
Custodian and Independent Accountants 3
Yield Information for the Alliance Money Market Option, Alliance High Yield Option,
and Alliance Intermediate Government Securities Option 3
Financial Statements 12
</TABLE>
HOW TO OBTAIN AN EQUITABLE ACCUMULATOR STATEMENT OF ADDITIONAL INFORMATION FOR
SEPARATE ACCOUNT NO. 45
Send this request form to:
Equitable Accumulator
P.O. Box 1547
Secaucus, NJ 07096-1547
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Please send me an Equitable Accumulator SAI for Separate Account No. 45 dated
May 1, 2000.
- ------------------------------------------------------------------------------
Name:
- ------------------------------------------------------------------------------
Address:
- ------------------------------------------------------------------------------
City State Zip
(IM-95-02 SAI(05/00))
<PAGE>
EQUITABLE ACCUMULATOR(SM)
A combination variable and fixed deferred
annuity contract
PROSPECTUS DATED MAY 1, 2000
Please read and keep this prospectus for future reference. It contains
important information that you should know before purchasing or taking any
other action under your contract. Also, at the end of this prospectus you will
find attached the prospectus for EQ Advisors Trust, which contains important
information about its portfolios.
-------------------------------------------------------------------------------
WHAT IS THE EQUITABLE ACCUMULATOR?
Equitable Accumulator is a deferred annuity contract issued by THE EQUITABLE
LIFE ASSURANCE SOCIETY OF THE UNITED STATES. It provides for the accumulation
of retirement savings and for income. The contract offers income and death
benefit protection. It also offers a number of payout options. You invest to
accumulate value on a tax-deferred basis in one or more of our variable
investment options, fixed maturity options, or the account for special dollar
cost averaging ("investment options"). This contract may not be available in
all states.
- --------------------------------------------------------------------------------
VARIABLE INVESTMENT OPTIONS
- --------------------------------------------------------------------------------
o EQ/Aggressive Stock(1) o J.P. Morgan Core Bond(3)
o Alliance Common Stock o Lazard Large Cap Value
o Alliance High Yield o Lazard Small Cap Value
o Alliance Money Market o MFS Emerging Growth
o EQ/Alliance Premier Growth Companies
o Alliance Small Cap Growth o MFS Growth with Income
o EQ/Alliance Technology(2) o MFS Research
o BT Equity 500 Index o Mercury Basic Value Equity(4)
o BT International Equity Index o Mercury World Strategy(5)
o BT Small Company Index o Morgan Stanley Emerging
o Capital Guardian International Markets Equity
o Capital Guardian Research o EQ/Putnam Growth & Income
o Capital Guardian U.S. Equity Value
o EQ/Evergreen o EQ/Putnam International Equity
o EQ/Evergreen Foundation o EQ/Putnam Investors Growth
- --------------------------------------------------------------------------------
- ---------------------
(1) Formerly named "Alliance Aggressive Stock."
(2) May not be available in California.
(3) Formerly named "JPM Core Bond."
(4) Formerly named "Merrill Lynch Basic Value Equity."
(5) Formerly named "Merrill Lynch World Strategy."
You may allocate amounts to any of the variable investment options. Each
variable investment option is a subaccount of our Separate Account No. 49. Each
variable investment option, in turn, invests in a corresponding securities
portfolio of EQ Advisors Trust. Your investment results in a variable
investment option will depend on the investment performance of the related
portfolio.
FIXED MATURITY OPTIONS. You may allocate amounts to one or more fixed maturity
options. These amounts will receive a fixed rate of interest for a specified
period. Interest is earned at a guaranteed rate set by us. We make a market
value adjustment (up or down) if you make transfers or withdrawals from a fixed
maturity option before its maturity date.
ACCOUNT FOR SPECIAL DOLLAR COST AVERAGING. This account also pays fixed
interest at guaranteed rates.
TYPES OF CONTRACTS. We offer the contracts for use as:
o A nonqualified annuity ("NQ") for after-tax contributions only.
o An individual retirement annuity ("IRA"), either traditional IRA or Roth
IRA.
We offer two versions of the traditional IRA: "Rollover IRA" and "Flexible
Premium IRA." We also offer two versions of the Roth IRA: "Roth Conversion
IRA" and "Flexible Premium Roth IRA."
o An annuity that is an investment vehicle for a qualified defined
contribution or defined benefit plan ("QP").
o An Internal Revenue Code Section 403(b) Tax-Sheltered Annuity ("TSA") -
("Rollover TSA").
A contribution of at least $5,000 is required to purchase an NQ, Rollover IRA,
Roth Conversion IRA, QP, or Rollover TSA contract. For Flexible Premium IRA or
Flexible Premium Roth IRA contracts, we require a contribution of $2,000 to
purchase a contract.
Registration statements relating to this offering have been filed with the
Securities and Exchange Commission ("SEC"). The statement of additional
information ("SAI") dated May 1, 2000 is a part of one of the registration
statements. The SAI is available free of charge. You may request one by writing
to our processing office or calling 1-800-789-7771. The SAI has been
incorporated by reference into this prospectus. This prospectus and the SAI can
also be obtained from the SEC's Web site at http://www.sec.gov. The table of
contents for the SAI appears at the back of this prospectus.
THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. THE CONTRACTS ARE NOT INSURED BY THE FDIC OR ANY OTHER
AGENCY. THEY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE NOT
BANK GUARANTEED. THEY ARE SUBJECT TO INVESTMENT RISKS AND POSSIBLE LOSS OF
PRINCIPAL.
72085
1999 PORTFOLIO
<PAGE>
Contents of this prospectus
- ----------------
2
- --------------------------------------------------------------------------------
EQUITABLE ACCUMULATOR(SM)
- ---------------------------------------------------------------
Index of key words and phrases 4
Who is Equitable Life? 5
How to reach us 6
Equitable Accumulator at a glance - key features 8
- ---------------------------------------------------------------
FEE TABLE 11
- ---------------------------------------------------------------
Examples 14
Condensed financial information 15
- ---------------------------------------------------------------
1
- ---------------------------------------------------------------
CONTRACT FEATURES AND BENEFITS 16
- ---------------------------------------------------------------
How you can purchase and contribute to your contract 16
Owner and annuitant requirements 21
How you can make your contributions 21
What are your investment options under the contract? 21
Allocating your contributions 25
Your benefit base 26
Annuity purchase factors 27
Our baseBUILDER option 27
Guaranteed minimum death benefit 29
Your right to cancel within a certain number of days 30
2
- ---------------------------------------------------------------
DETERMINING YOUR CONTRACT'S VALUE 31
- ---------------------------------------------------------------
Your account value and cash value 31
Your contract's value in the variable
investment options 31
Your contract's value in the fixed maturity options 31
Your contract's value in the account for special dollar
cost averaging 31
- --------------------------------------------------------------------------------
"We," "our," and "us" refer to Equitable Life.
When we address the reader of this prospectus with words such as "you" and
"your," we mean the person who has the right or responsibility that the
prospectus is discussing at that point. This is usually the contract owner.
When we use the word "contract" it also includes certificates that are issued
under group contracts in some states.
<PAGE>
----------
3
- --------------------------------------------------------------------------------
3
- ------------------------------------------------------------------
TRANSFERRING YOUR MONEY AMONG
INVESTMENT OPTIONS 32
- ------------------------------------------------------------------
Transferring your account value 32
Market timing 32
Rebalancing your account value 32
4
- ------------------------------------------------------------------
ACCESSING YOUR MONEY 33
- ------------------------------------------------------------------
Withdrawing your account value 33
How withdrawals are taken from your account value 34
How withdrawals affect your guaranteed minimum
income benefit and guaranteed minimum death
benefit 34
Loans under Rollover TSA contracts 35
Surrendering your contract to receive its cash value 36
When to expect payments 36
Your annuity payout options 36
5
- ------------------------------------------------------------------
CHARGES AND EXPENSES 40
- ------------------------------------------------------------------
Charges that Equitable Life deducts 40
Charges that EQ Advisors Trust deducts 42
Group or sponsored arrangements 42
Other distribution arrangements 43
6
- ------------------------------------------------------------------
PAYMENT OF DEATH BENEFIT 44
- ------------------------------------------------------------------
Your beneficiary and payment of benefit 44
How death benefit payment is made 45
Beneficiary continuation option 45
7
- ------------------------------------------------------------------
TAX INFORMATION 47
- ------------------------------------------------------------------
Overview 47
Transfers among investment options 47
Taxation of nonqualified annuities 47
Individual retirement arrangements (IRAs) 49
Special rules for nonqualified contracts in qualified plans 59
Tax-Sheltered Annuity contracts (TSAs) 59
Federal and state income tax withholding and
information reporting 64
Impact of taxes to Equitable Life 65
8
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MORE INFORMATION 66
- ------------------------------------------------------------------
About our Separate Account No. 49 66
About EQ Advisors Trust 66
About our fixed maturity options 67
About the general account 68
About other methods of payment 68
Dates and prices at which contract events occur 69
About your voting rights 70
About legal proceedings 71
About our independent accountants 71
Financial statements 71
Transfers of ownership, collateral assignments, loans,
and borrowing 71
Distribution of the contracts 71
9
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INVESTMENT PERFORMANCE 72
- ------------------------------------------------------------------
Benchmarks 72
Communicating performance data 81
10
- ------------------------------------------------------------------
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE 83
- ------------------------------------------------------------------
- ------------------------------------------------------------------
APPENDICES
- ------------------------------------------------------------------
I -- Condensed financial information A-1
II -- Purchase considerations for QP contracts B-1
III-- Market value adjustment example C-1
IV -- Guaranteed minimum death benefit example D-1
- ------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
- -------------------------------------------------------------
<PAGE>
Index of key words and phrases
--------
4
- --------------------------------------------------------------------------------
This index should help you locate more information on the terms used in this
prospectus.
PAGE
account for special dollar cost
averaging 24
account value 31
annuitant 16
annuity payout options 36
baseBUILDER 27
beneficiary 44
benefit base 26
business day 69
cash value 31
conduit IRA 53
contract date 10
contract date anniversary 10
contract year 10
contributions to Roth IRAs 56
regular contributions 56
rollovers and direct transfers 57
conversion contributions 57
contributions to traditional IRAs 50
regular contributions 50
rollovers and transfers 51
EQAccess 6
ERISA 35
fixed maturity options 23
Flexible Premium IRA cover
Flexible Premium Roth IRA cover
guaranteed minimum death benefit 29
guaranteed minimum income benefit 27
IRA 49
IRS 47
investment options 21
loan reserve account 35
market adjusted amount 24
market value adjustment 24
maturity value 23
NQ cover
participant 21
portfolio cover
processing office 6
QP 59
rate to maturity 23
Required Beginning Date 54
Rollover IRA cover
Rollover TSA cover
Roth Conversion IRA cover
Roth IRA 56
SAI cover
SEC cover
TOPS 6
TSA 59
traditional IRA 50
unit 31
variable investment options 21
To make this prospectus easier to read, we sometimes use different words than in
the contract or supplemental materials. This is illustrated below. Although we
use different words, they have the same meaning in this prospectus as in the
contract or supplemental materials. Your registered representative can provide
further explanation about your contract.
- ----------------------------------------------------------------------
PROSPECTUS CONTRACT OR SUPPLEMENTAL MATERIALS
- ----------------------------------------------------------------------
fixed maturity options Guarantee Periods (Guaranteed Fixed
Interest Accounts in supplemental materials)
variable investment options Investment Funds
account value Annuity Account Value
rate to maturity Guaranteed Rates
unit Accumulation Unit
baseBUILDER Guaranteed Minimum Income Benefit
- ----------------------------------------------------------------------
<PAGE>
Who is Equitable Life?
---------------
5
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We are The Equitable Life Assurance Society of the United States ("Equitable
Life"), a New York stock life insurance corporation. We have been doing
business since 1859. Equitable Life is a subsidiary of AXA Financial, Inc.
(previously, The Equitable Companies Incorporated). The majority shareholder of
AXA Financial, Inc. is AXA, a French holding company for an international group
of insurance and related financial services companies. As a majority
shareholder, and under its other arrangements with Equitable Life and Equitable
Life's parent, AXA exercises significant influence over the operations and
capital structure of Equitable Life and its parent. No company other than
Equitable Life, however, has any legal responsibility to pay amounts that
Equitable Life owes under the contract.
AXA Financial, Inc. and its consolidated subsidiaries managed approximately
$462.7 billion in assets as of December 31, 1999. For over 100 years Equitable
Life has been among the largest insurance companies in the United States. We
are licensed to sell life insurance and annuities in all fifty states, the
District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our home
office is located at 1290 Avenue of the Americas, New York, N.Y. 10104.
<PAGE>
- ----------
6
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HOW TO REACH US
You may communicate with our processing office as listed below for any of the
following purposes:
- ---------------------------------------------
FOR CONTRIBUTIONS SENT BY REGULAR MAIL:
- ---------------------------------------------
Equitable Accumulator
P.O. Box 13014
Newark, NJ 07188-0014
- ---------------------------------------------
FOR CONTRIBUTIONS SENT BY EXPRESS DELIVERY:
- ---------------------------------------------
Equitable Accumulator
c/o Bank One, N.A.
300 Harmon Meadow Boulevard, 3rd Floor
Attn: Box 13014
Secaucus, NJ 07094
- ---------------------------------------------
FOR ALL OTHER COMMUNICATIONS (E.G.,
REQUESTS FOR TRANSFERS, WITHDRAWALS, OR
REQUIRED NOTICES) SENT BY REGULAR MAIL:
- ---------------------------------------------
Equitable Accumulator
P.O. Box 1547
Secaucus, NJ 07096-1547
- ---------------------------------------------
FOR ALL OTHER COMMUNICATIONS (E.G.,
REQUESTS FOR TRANSFERS, WITHDRAWALS, OR
REQUIRED NOTICES) SENT BY EXPRESS DELIVERY:
- ---------------------------------------------
Equitable Accumulator
200 Plaza Drive, 4th Floor
Secaucus, NJ 07094
- ---------------------------------------------
REPORTS WE PROVIDE:
- ---------------------------------------------
o written confirmation of financial transactions;
o statement of your contract values at the close of each calendar quarter
(four per year); and
o annual statement of your contract values as of the close of the contract
year.
- ------------------------------------
TELEPHONE OPERATED PROGRAM SUPPORT
("TOPS") AND EQACCESS SYSTEMS:
- ------------------------------------
TOPS is designed to provide you with up-to-date information via touch-tone
telephone. EQAccess is designed to provide this information through the
Internet. You can obtain information on:
o your current account value;
o your current allocation percentages (anticipated to be available through
EQAccess by the end of 2000);
o the number of units you have in the variable investment options;
o rates to maturity for the fixed maturity options;
o the daily unit values for the variable investment options; and
o performance information regarding the variable investment options (not
available through TOPS).
You can also:
o change your allocation percentages and/or transfer among the investment
options (anticipated to be available through EQAccess by the end of 2000);
o change your TOPS personal identification number (PIN) (not available
through EQAccess); and
o change your EQAccess password (not available through TOPS).
TOPS and EQAccess are normally available seven days a week, 24 hours a day. You
may use TOPS by calling toll free 1-888-909-7770. You may use EQAccess by
visiting our Web site at http://www.equitable.com and clicking EQAccess. Of
course, for reasons beyond our control, these services may sometimes be
unavailable.
We have established procedures to reasonably confirm that the instructions
communicated by telephone or Internet are
<PAGE>
----------
7
- --------------------------------------------------------------------------------
genuine. For example, we will require certain personal identification
information before we will act on telephone or Internet instructions and we
will provide written confirmation of your transfers. If we do not employ
reasonable procedures to confirm the genuineness of telephone or Internet
instructions, we may be liable for any losses arising out of any act or
omission that constitutes negligence, lack of good faith, or willful
misconduct. In light of our procedures, we will not be liable for following
telephone or Internet instructions we reasonably believe to be genuine.
We reserve the right to limit access to these services if we determine that you
are engaged in a market timing strategy (see "Market timing" in "Transferring
your money among investment options").
- ---------------------------------------------------------------
CUSTOMER SERVICE REPRESENTATIVE:
- ---------------------------------------------------------------
You may also use our toll-free number (1-800-789-7771) to speak with one of our
customer service representatives. Our customer service representatives are
available on any business day from 8:30 a.m. until 5:30 p.m., Eastern time.
WE REQUIRE THAT THE FOLLOWING TYPES OF COMMUNICATIONS BE ON SPECIFIC FORMS WE
PROVIDE FOR THAT PURPOSE:
(1) authorization for telephone transfers by your registered representative;
(2) conversion of a traditional IRA to a Roth Conversion IRA or Flexible
Premium Roth IRA contract;
(3) election of the automatic investment program;
(4) election of the rebalancing program;
(5) requests for loans under Rollover TSA contracts;
(6) spousal consent for loans under Rollover TSA contracts;
(7) tax withholding election; and
(8) election of the beneficiary continuation option.
WE ALSO HAVE SPECIFIC FORMS THAT WE RECOMMEND YOU USE FOR THE FOLLOWING TYPES
OF REQUESTS:
(1) address changes;
(2) beneficiary changes;
(3) transfers between investment options; and
(4) contract surrender and withdrawal requests.
TO CANCEL OR CHANGE ANY OF THE FOLLOWING WE REQUIRE WRITTEN NOTIFICATION
GENERALLY AT LEAST SEVEN CALENDAR DAYS BEFORE THE NEXT SCHEDULED TRANSACTION:
(1) automatic investment program;
(2) general dollar cost averaging;
(3) rebalancing;
(4) special dollar cost averaging;
(5) substantially equal withdrawals;
(6) systematic withdrawals; and
(7) the date annuity payments are to begin.
You must sign and date all these requests. Any written request that is not on
one of our forms must include your name and your contract number along with
adequate details about the notice you wish to give or the action you wish us to
take.
SIGNATURES:
The proper person to sign forms, notices and requests would normally be the
owner. If there are joint owners both must sign.
<PAGE>
EQUITABLE ACCUMULATOR AT A GLANCE - KEY FEATURES
- --------
8
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
PROFESSIONAL Equitable Accumulator's variable investment options invest in different portfolios managed
INVESTMENT by professional investment advisers.
MANAGEMENT
- ------------------------------------------------------------------------------------------------------------------------------------
FIXED MATURITY o 10 fixed maturity options with maturities ranging from approximately 1 to 10 years.
OPTIONS o Each fixed maturity option offers a guarantee of principal and interest rate if you hold
it to maturity.
-------------------------------------------------------------------------------------------------------
If you make withdrawals or transfers from a fixed maturity option before maturity, there
will be a market value adjustment due to differences in interest rates. This may increase
or decrease any value that you have left in that fixed maturity option. If you surrender
your contract, a market value adjustment may also apply.
- ------------------------------------------------------------------------------------------------------------------------------------
ACCOUNT FOR SPECIAL DOLLAR Available for dollar cost averaging all or a portion of your initial contribution.
COST AVERAGING
- ------------------------------------------------------------------------------------------------------------------------------------
TAX ADVANTAGES o On earnings inside No tax on any dividends, interest or capital gains until you
the contract make withdrawals from your contract or receive annuity
payments.
-------------------------------------------------------------------------------------------------------
o On transfers inside No tax on transfers among investment options.
the contract
-------------------------------------------------------------------------------------------------------
If you are buying a contract to fund a retirement plan that already provides tax deferral
under sections of the Internal Revenue Code, you should do so for the contract's features
and benefits other than tax deferral. In such situations, the tax deferral of the contract
does not provide necessary or additional benefits.
- ------------------------------------------------------------------------------------------------------------------------------------
BASEBUILDER(R) baseBUILDER combines a guaranteed minimum income benefit with a guaranteed minimum death
benefit provided under the contract. The guaranteed minimum income benefit provides income
protection for you while the annuitant lives. The guaranteed minimum death benefit provides
a death benefit for the beneficiary should the annuitant die.
- ------------------------------------------------------------------------------------------------------------------------------------
CONTRIBUTION AMOUNTS o NQ, Rollover IRA, Roth Conversion IRA, QP, and Rollover TSA contracts
o Initial minimum: $5,000
o Additional minimum: $1,000
$100 monthly and $300 quarterly under our automatic investment
program (NQ contracts)
-------------------------------------------------------------------------------------------------------
o Flexible Premium IRA and Flexible Premium Roth IRA contracts
o Initial minimum: $2,000
o Additional minimum: $50 ($50 under our automatic investment program)
-------------------------------------------------------------------------------------------------------
Maximum contribution limitations may apply.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
-----
9
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<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
ACCESS TO YOUR MONEY o Lump sum withdrawals
o Several withdrawal options on a periodic basis
o Loans under Rollover TSA contracts
o Contract surrender
You may incur a withdrawal charge for certain withdrawals or if
you surrender your contract. You may also incur income tax and a tax penalty.
- ------------------------------------------------------------------------------------------------------------------------------------
PAYOUT ALTERNATIVES o Fixed annuity payout options
o Variable Immediate Annuity payout options
o Income Manager(Registered Trademark) payout options
- ------------------------------------------------------------------------------------------------------------------------------------
ADDITIONAL FEATURES o Guaranteed minimum death benefit even if you do not elect baseBUILDER
o Dollar cost averaging
o Automatic investment program
o Account value rebalancing (quarterly, semiannually, and annually)
o Free transfers
o Waiver of withdrawal charge for disability, te rminal illness, or confinement to a nursing home
- ------------------------------------------------------------------------------------------------------------------------------------
FEES AND CHARGES o Daily charges on amounts invested in variable investment options for mortality and expense risks and
administrative charges at a current annual rate of 1.35% (1.45% maximum).
o Annual 0.30% benefit base charge for the optional baseBUILDER benefit until you exercise your
guaranteed minimum income benefit, elect another annuity payout or the contract date
anniversary after the annuitant reaches age 83, whichever occurs first. The benefit base is
described under "Your benefit base" in "Contract features and benefits." If you do not elect
baseBUILDER, you still receive a guaranteed minimum death benefit under your contract at no
additional charge.
o Under Flexible Premium IRA and Flexible Premium Roth IRA contracts, if your account value at
the end of the contract year is less than $25,000, we deduct an annual administrative charge
equal to $30 or during the first two contract years 2% of your account value, if less. If your
account value is $25,000 or more, we will not deduct the charge.
o No sales charge deducted at the time you make contributions.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
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10
- --------------------------------------------------------------------------------
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
FEES AND o During the first seven contract years following a contribution, a charge will be
CHARGES (CONTINUED) deducted from amounts that you withdraw that exceed 15% of your account value.
We use the account value on the most recent contract date anniversary to
calculate the 15% amount available. The charge begins at 7% in the first
contract year following a contribution. It declines by 1% each year to 1% in the
seventh contract year. There is no withdrawal charge in the eighth and later
contract years following a contribution.
- ------------------------------------------------------------------------------------------------------------------------------------
The "contract date" is the effective date of a contract. This usually is the business day we
receive the properly completed and signed application, along with any other required documents,
and your initial contribution. Your contract date will be shown in your contract. The 12-month
period beginning on your contract date and each 12-month period after that date is a "contract
year." The end of each 12-month period is your "contract date anniversary."
-------------------------------------------------------------------------------------------------------------
o We deduct a charge designed to approximate certain taxes that may be imposed on
us, such as premium taxes in your state. This charge is generally deducted from
the amount applied to an annuity payout option.
o We deduct a $350 annuity administrative fee from amounts applied to purchase
the Variable Immediate Annuity payout options.
o Annual expenses of EQ Advisors Trust portfolios are calculated as a percentage
of the average daily net assets invested in each portfolio. These expenses
include management fees ranging from 0.25% to 1.15% annually, 12b-1 fees of
0.25% annually, and other expenses.
- ------------------------------------------------------------------------------------------------------------------------------------
ANNUITANT ISSUE AGES NQ: 0-83
Rollover IRA,Roth Conversion IRA, Flexible Premium Roth IRA, and Rollover TSA: 20-83 Flexible
Premium IRA: 20-70
QP: 20-75
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ABOVE IS NOT A COMPLETE DESCRIPTION OF ALL MATERIAL PROVISIONS OF THE
CONTRACT. IN SOME CASES RESTRICTIONS OR EXCEPTIONS APPLY. ALSO, ALL FEATURES OF
THE CONTRACT ARE NOT NECESSARILY AVAILABLE IN YOUR STATE OR AT CERTAIN AGES.
For more detailed information we urge you to read the contents of this
prospectus, as well as your contract. Please feel free to speak with your
registered representative, or call us, if you have any questions.
OTHER CONTRACTS
We offer a variety of fixed and variable annuity contracts. They may offer
features, including investment options, fees and/or charges that are different
from those in the contracts offered by this prospectus. Not every contract is
offered through the same distributor. Upon request, your registered
representative can show you information regarding other Equitable Life annuity
contracts that he or she distributes. You can also contact us to find out more
about any of the Equitable Life annuity contracts.
<PAGE>
FEE TABLE
--------
11
- --------------------------------------------------------------------------------
The fee table below will help you understand the various charges and expenses
that apply to your contract. The table reflects charges you will directly incur
under the contract, as well as charges and expenses of the portfolios that you
will bear indirectly. Charges designed to approximate certain taxes that may be
imposed on us, such as premium taxes in your state, may also apply. Also, an
annuity administrative fee may apply when your annuity payments are to begin.
Each of the charges and expenses is more fully described under "Charges and
expenses" later in this prospectus.
The fixed maturity options and the account for special dollar cost averaging are
not covered by the fee table and examples. However, the annual administrative
charge and the withdrawal charge do apply to the fixed maturity options and the
account for special dollar cost averaging. A market value adjustment (up or
down) may apply as a result of a withdrawal, transfer, or surrender of amounts
from a fixed maturity option.
- -------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR VARIABLE INVESTMENT OPTIONS EXPRESSED AS AN
ANNUAL PERCENTAGE OF DAILY NET ASSETS
- -------------------------------------------------------------------------------
Mortality and expense risks (1) 1.10%
Administrative 0.25% current (0.35% maximum)
Total annual expenses 1.35% current (1.45% maximum)
- -------------------------------------------------------------------------------
FLEXIBLE PREMIUM IRA AND FLEXIBLE PREMIUM ROTH IRA CONTRACTS ONLY:
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE ON EACH CONTRACT DATE ANNIVERSARY
- -------------------------------------------------------------------------------
Maximum annual administrative charge
If your account value on a contract date anniversary
is less than $25,000(2) $30
If your account value on a contract date anniversary
is $25,000 or more $0
- -------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE AT THE TIME YOU REQUEST CERTAIN
TRANSACTIONS
- -------------------------------------------------------------------------------
WITHDRAWAL CHARGE AS A PERCENTAGE OF CONTRIBUTIONS (deducted if you surrender
your contract or make certain withdrawals. The withdrawal charge percentage we
use is determined by the contract year in which you make the withdrawal or
surrender your contract. For each contribution, we consider the contract
year in which we receive that contribution to be "contract year 1")(3)
Contract
year
1... 7.00%
2... 6.00%
3... 5.00%
4... 4.00%
5... 3.00%
6... 2.00%
7... 1.00%
8+... 0.00%
Charge if you elect a Variable Immediate Annuity payout option $350
- -------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE EACH YEAR IF YOU ELECT THE OPTIONAL
BENEFIT
- -------------------------------------------------------------------------------
baseBUILDER BENEFITS CHARGE (calculated as a percentage of the benefit base.
Deducted annually on each contract date anniversary)(4) 0.30%
- -------------------------------------------------------------------------------
<PAGE>
- -----
12
- --------------------------------------------------------------------------------
EQ ADVISORS TRUST ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOTAL
OTHER ANNUAL
EXPENSES EXPENSES
MANAGEMENT (AFTER EXPENSE (AFTER EXPENSE
FEES(5) 12b-1 FEES(6) LIMITATION)(7) LIMITATION)(8)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock 0.60% 0.25% 0.04% 0.89%
Alliance Common Stock 0.46% 0.25% 0.04% 0.75%
Alliance High Yield 0.60% 0.25% 0.05% 0.90%
Alliance Money Market 0.34% 0.25% 0.05% 0.64%
EQ/Alliance Premier Growth 0.90% 0.25% 0.00% 1.15%
Alliance Small Cap Growth 0.75% 0.25% 0.07% 1.07%
EQ/Alliance Technology 0.90% 0.25% 0.00% 1.15%
BT Equity 500 Index 0.25% 0.25% 0.10% 0.60%
BT International Equity Index 0.35% 0.25% 0.40% 1.00%
BT Small Company Index 0.25% 0.25% 0.25% 0.75%
Capital Guardian International 0.85% 0.25% 0.10% 1.20%
Capital Guardian Research 0.65% 0.25% 0.05% 0.95%
Capital Guardian U.S. Equity 0.65% 0.25% 0.05% 0.95%
EQ/Evergreen 0.65% 0.25% 0.05% 0.95%
EQ/Evergreen Foundation 0.60% 0.25% 0.10% 0.95%
J.P. Morgan Core Bond 0.45% 0.25% 0.10% 0.80%
Lazard Large Cap Value 0.65% 0.25% 0.05% 0.95%
Lazard Small Cap Value 0.75% 0.25% 0.10% 1.10%
MFS Emerging Growth Companies 0.65% 0.25% 0.10% 1.00%
MFS Growth with Income 0.60% 0.25% 0.10% 0.95%
MFS Research 0.65% 0.25% 0.05% 0.95%
Mercury Basic Value Equity 0.60% 0.25% 0.10% 0.95%
Mercury World Strategy 0.70% 0.25% 0.25% 1.20%
Morgan Stanley Emerging Markets Equity 1.15% 0.25% 0.35% 1.75%
EQ/Putnam Growth & Income Value 0.60% 0.25% 0.10% 0.95%
EQ/Putnam International Equity 0.85% 0.25% 0.15% 1.25%
EQ/Putnam Investors Growth 0.65% 0.25% 0.05% 0.95%
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
Notes:
(1) A portion of this charge is for providing the guaranteed minimum death
benefit.
(2) During the first two contract years this charge is equal to the lesser of
$30 or 2% of your account value if it applies. Thereafter, the charge is
$30 for each contract year.
(3) Deducted upon a withdrawal of amounts in excess of the 15% free withdrawal
amount and upon surrender of a contract.
(4) The benefit base is described under "Contract features and benefits - Your
guaranteed minimum income benefit under baseBUILDER."
(5) The management fees shown reflect revised management fees, effective on or
about May 1, 2000, which were approved by shareholders. The management
fees shown for EQ/Putnam Growth & Income Value and Lazard Large Cap Value
do not reflect the waiver of a portion of each of these portfolio's
investment management fees that are currently in effect. The management
fees for each portfolio cannot be increased without a vote of that
portfolio's shareholders.
<PAGE>
-----
13
- --------------------------------------------------------------------------------
(6) Portfolio shares are all subject to fees imposed under the distribution
plan (the "Rule 12b-1 Plan") adopted by EQ Advisors Trust pursuant to Rule
12b-1 under the Investment Company Act of 1940. The 12b-1 fee will not be
increased for the life of the contracts. Prior to October 18, 1999, the
total annual expenses for the Alliance Small Cap Growth portfolio were
limited to 1.20% under an expense limitation arrangement related to that
portfolio's Rule 12b-1 Plan. The arrangement is no longer in effect. The
amounts shown have been restated to reflect the expenses that would have
been incurred in 1999, absent the expense limitation agreement.
(7) The amounts shown as "Other Expenses" will fluctuate from year to year
depending on actual expenses. See footnote (8) for any expense limitation
agreements.
On October 18, 1999, the Alliance portfolios (other than EQ/Alliance Premier
Growth and EQ/Alliance Technology) became part of the portfolios of EQ
Advisors Trust. The "Other Expenses" for these portfolios have been restated
to reflect the estimated expenses that would have been incurred had these
portfolios been portfolios of EQ Advisors Trust for the entire year ended
December 31, 1999. The restated expenses reflect an increase of 0.01% for
each of these portfolios.
(8) Equitable Life, EQ Advisors Trust's manager, has entered into an expense
limitation agreement with respect to certain portfolios. Under this
agreement Equitable Life has agreed to waive or limit its fees and assume
other expenses. Under the expense limitation agreement, total annual
operating expenses of certain portfolios (other than interest, taxes,
brokerage commissions, capitalized expenditures, extraordinary expenses,
and 12b-1 fees) are limited as a percentage of the average daily net
assets of the following portfolios: 1.75% for Morgan Stanley Emerging
Markets Equity; 1.25% for EQ/Putnam International Equity; 1.20% for
Mercury World Strategy and Capital Guardian International; 1.15% for
EQ/Alliance Premier Growth and EQ/Alliance Technology; 1.10% for Lazard
Small Cap Value; 1.00% for BT International Equity Index and MFS Emerging
Growth Companies; 0.95% for Capital Guardian U.S. Equity, Capital Guardian
Research, EQ/Evergreen, EQ/Evergreen Foundation, Lazard Large Cap Value,
MFS Growth with Income, MFS Research, Mercury Basic Value Equity;
EQ/Putnam Growth & Income Value and EQ/Putnam Investors Growth; 0.80% for
J.P. Morgan Core Bond; 0.75% for BT Small Company Index; and 0.60% for BT
Equity 500 Index. The expense limitations for the EQ/Alliance Premier
Growth, BT Equity 500 Index, J.P. Morgan Core Bond, MFS Growth with
Income, MFS Research, MFS Emerging Growth Companies, Mercury Basic Value
Equity and EQ/Putnam International Equity portfolios reflect an increase
effective on May 1, 2000. The expense limitation for the EQ/Evergreen
portfolio reflects a decrease effective on May 1, 2000.
Absent the expense limitation, the "Other Expenses" for 1999 on an
annualized basis for each of the portfolios would have been as follows:
1.00% for Morgan Stanley Emerging Markets Equity; 0.10% for EQ/Alliance
Technology; 0.23% for EQ/Alliance Premier Growth; 0.32% for EQ/Putnam
International Equity; 0.46% for Mercury World Strategy; 0.66% for Capital
Guardian International; 0.26% for Lazard Small Cap Value; 0.49% for BT
International Equity Index; 0.17% for MFS Emerging Growth Companies; 0.34%
for Capital Guardian U.S. Equity; 0.47% for Capital Guardian Research; 1.87%
for EQ/Evergreen; 1.07% for EQ/Evergreen Foundation; 0.21% for Lazard Large
Cap Value; 0.37% for MFS Growth with Income; 0.17% for MFS Research; 0.17%
for Mercury Basic Value Equity; 0.16% for EQ/Putnam Growth & Income Value;
0.19% for EQ/Putnam Investors Growth; 0.20% for J.P. Morgan Core Bond; 0.71%
for BT Small Company Index; and 0.18% for BT Equity 500 Index. Initial seed
capital was invested on April 30, 1999 for the EQ/Alliance Premier Growth,
Capital Guardian U.S. Equity, Capital Guardian Research and Capital Guardian
International portfolios and will be invested on or about May 1, 2000 for
the EQ/Alliance Technology portfolio and therefore expenses have been
estimated.
Each portfolio may at a later date make a reimbursement to Equitable Life
for any of the management fees waived or limited and other expenses assumed
and paid by Equitable Life pursuant to the expense limitation agreement
provided that, among other things, such portfolio has reached sufficient
size to permit such reimbursement to be made and provided that the
portfolio's current annual operating expenses do not exceed the operating
expense limit determined for such portfolio. For more information see the
prospectus for EQ Advisors Trust.
<PAGE>
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14
- --------------------------------------------------------------------------------
EXAMPLES
The examples below show the expenses that a hypothetical contract owner (who has
purchased a Flexible Premium IRA or Flexible Premium Roth IRA contract and
elected baseBUILDER) would pay in the situations illustrated. We assume that a
$1,000 contribution is invested in one of the variable investment options listed
and a 5% annual return is earned on the assets in that option.(1) The annual
administrative charge is based on charges that apply to a mix of estimated
contract sizes, resulting in an estimated administrative charge for the purpose
of these examples of $0.14 per $1,000. Since the annual administrative charge
only applies under Flexible Premium IRA and Flexible Premium Roth IRA contracts,
the charges shown in the examples would be lower for NQ, Rollover IRA, Roth
Conversion IRA, QP, and Rollover TSA contracts. Other than as indicated above,
the charges used in the examples are the maximum charges rather than the lower
current charges.
These examples should not be considered a representation of past or future
expenses for each option. Actual expenses may be greater or less than those
shown. Similarly, the annual rate of return assumed in the examples is not an
estimate or guarantee of future investment performance.
<TABLE>
<CAPTION>
IF YOU SURRENDER YOUR CONTRACT AT THE END
OF EACH PERIOD SHOWN, THE EXPENSES
WOULD BE:
-------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock $ 94.61 $ 131.94 $ 172.20 $ 306.66
Alliance Common Stock $ 93.14 $ 127.53 $ 164.87 $ 292.16
Alliance High Yield $ 94.71 $ 132.25 $ 172.72 $ 307.69
Alliance Money Market $ 91.98 $ 124.06 $ 159.09 $ 280.62
EQ/Alliance Premier Growth $ 98.49 $ 143.51 $ 191.34 $ 343.99
Alliance Small Cap Growth $ 96.50 $ 137.58 $ 181.55 $ 325.00
EQ/Alliance Technology $ 97.44 $ 140.39 $ 186.20 $ 334.04
BT Equity 500 Index $ 91.67 $ 123.12 $ 157.50 $ 277.45
BT International Equity Index $ 95.87 $ 135.70 $ 178.44 $ 318.92
BT Small Company Index $ 93.24 $ 127.85 $ 165.40 $ 293.20
Capital Guardian International $ 97.97 $ 141.96 $ 188.77 $ 339.03
Capital Guardian Research $ 95.34 $ 134.13 $ 175.84 $ 313.83
Capital Guardian U.S. Equity $ 95.34 $ 134.13 $ 175.84 $ 313.83
EQ/Evergreen $ 95.34 $ 134.13 $ 175.84 $ 313.83
EQ/Evergreen Foundation $ 95.34 $ 134.13 $ 175.84 $ 313.83
J.P. Morgan Core Bond $ 93.77 $ 129.42 $ 168.02 $ 298.40
Lazard Large Cap Value $ 95.34 $ 134.13 $ 175.84 $ 313.83
Lazard Small Cap Value $ 96.92 $ 138.83 $ 183.62 $ 329.03
MFS Emerging Growth Companies $ 95.87 $ 135.70 $ 178.44 $ 318.92
MFS Growth with Income $ 95.34 $ 134.13 $ 175.84 $ 313.83
MFS Research $ 95.34 $ 134.13 $ 175.84 $ 313.83
Mercury Basic Value Equity $ 95.34 $ 134.13 $ 175.84 $ 313.83
Mercury World Strategy $ 97.97 $ 141.96 $ 188.77 $ 339.03
Morgan Stanley Emerging Markets Equity $ 103.74 $ 159.02 $ 216.73 $ 392.23
EQ/Putnam Growth & Income Value $ 95.34 $ 134.13 $ 175.84 $ 313.83
EQ/Putnam International Equity $ 98.49 $ 143.51 $ 191.34 $ 343.99
EQ/Putnam Investors Growth $ 96.39 $ 137.27 $ 181.03 $ 323.99
<CAPTION>
IF YOU DO NOT SURRENDER YOUR CONTRACT AT
THE END OF EACH PERIOD SHOWN, THE
EXPENSES WOULD BE:
------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock $ 24.61 $ 81.94 $ 142.20 $ 306.66
Alliance Common Stock $ 23.14 $ 77.53 $ 134.87 $ 292.16
Alliance High Yield $ 24.71 $ 82.25 $ 142.72 $ 307.69
Alliance Money Market $ 21.98 $ 74.06 $ 129.09 $ 280.62
EQ/Alliance Premier Growth $ 28.49 $ 93.51 $ 161.34 $ 343.99
Alliance Small Cap Growth $ 26.50 $ 87.58 $ 151.55 $ 325.00
EQ/Alliance Technology $ 27.44 $ 90.39 $ 156.20 $ 334.04
BT Equity 500 Index $ 21.67 $ 73.12 $ 127.50 $ 277.45
BT International Equity Index $ 25.87 $ 85.70 $ 148.44 $ 318.92
BT Small Company Index $ 23.24 $ 77.85 $ 135.40 $ 293.20
Capital Guardian International $ 27.97 $ 91.96 $ 158.77 $ 339.03
Capital Guardian Research $ 25.34 $ 84.13 $ 145.84 $ 313.83
Capital Guardian U.S. Equity $ 25.34 $ 84.13 $ 145.84 $ 313.83
EQ/Evergreen $ 25.34 $ 84.13 $ 145.84 $ 313.83
EQ/Evergreen Foundation $ 25.34 $ 84.13 $ 145.84 $ 313.83
J.P. Morgan Core Bond $ 23.77 $ 79.42 $ 138.02 $ 298.40
Lazard Large Cap Value $ 25.34 $ 84.13 $ 145.84 $ 313.83
Lazard Small Cap Value $ 26.92 $ 88.83 $ 153.62 $ 329.03
MFS Emerging Growth Companies $ 25.87 $ 85.70 $ 148.44 $ 318.92
MFS Growth with Income $ 25.34 $ 84.13 $ 145.84 $ 313.83
MFS Research $ 25.34 $ 84.13 $ 145.84 $ 313.83
Mercury Basic Value Equity $ 25.34 $ 84.13 $ 145.84 $ 313.83
Mercury World Strategy $ 27.97 $ 91.96 $ 158.77 $ 339.03
Morgan Stanley Emerging Markets Equity $ 33.74 $ 109.02 $ 186.73 $ 392.23
EQ/Putnam Growth & Income Value $ 25.34 $ 84.13 $ 145.84 $ 313.83
EQ/Putnam International Equity $ 28.49 $ 93.51 $ 161.34 $ 343.99
EQ/Putnam Investors Growth $ 26.39 $ 87.27 $ 151.03 $ 323.99
</TABLE>
<PAGE>
-----
15
- --------------------------------------------------------------------------------
- ----------
(1) The amount accumulated from the $1,000 contribution could not be paid in
the form of an annuity payout option at the end of any of the periods
shown in the examples. This is because if the amount applied to purchase
an annuity payout option is less than $2,000, or the initial payment is
less than $20, we may pay the amount to you in a single sum instead of
payments under an annuity payout option. See "Accessing your money."
IF YOU ELECT A VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION:
Assuming an annuity payout option could be issued (see note (1) above), and you
elect a Variable Immediate Annuity payout option, the expenses shown in the
example for "if you do not surrender your contract" would, in each case, be
increased by $4.34 based on the average amount applied to annuity payout options
in 1999. See "Annuity administrative fee" under "Charges and expenses."
CONDENSED FINANCIAL INFORMATION
Please see Appendix I at the end of this prospectus for the unit values and the
number of units outstanding as of the end of the periods shown for each of the
variable investment options available as of December 31, 1999.
<PAGE>
1
CONTRACT FEATURES AND BENEFITS
- --------
16
- --------------------------------------------------------------------------------
HOW YOU CAN PURCHASE AND CONTRIBUTE TO YOUR CONTRACT
You may purchase a contract by making payments to us that we call
"contributions." We require a minimum contribution amount for each type of
contract purchased. The following table summarizes our rules regarding
contributions to your contract. All ages in the table refer to the age of the
annuitant named in the contract.
- ------------------------------------------------------------------------------
The "annuitant" is the person who is the measuring life for determining contract
benefits. The annuitant is not necessarily the contract owner.
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
AVAILABLE
CONTRACT FOR ANNUITANT MINIMUM LIMITATIONS ON
TYPE ISSUE AGES CONTRIBUTIONS SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NQ 0 through 83 $5,000 (initial) o After-tax money. o No additional
$1,000 (additional) o Paid to us by check or contributions after
transfer of age 84.
contract value
in a tax-deferred
exchange under
Section 1035 of
the Internal
Revenue Code.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
-----
17
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
AVAILABLE
CONTRACT FOR ANNUITANT MINIMUM LIMITATIONS ON
TYPE ISSUE AGES CONTRIBUTIONS SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Rollover IRA 20 through 83 o $5,000 (initial) o Rollovers from a o No rollover or direct
o $1,000 (additional) qualified plan. transfer contributions
o Regular IRA o Rollovers from a TSA. after age 84.
contributions o Rollovers from another o Contributions after
traditional individual age 70 1/2 must be net
retirement of required minimum
arrangement. distributions.
o Direct o Regular IRA
custodian-to-custodian contributions limited to
transfers from another $2,000 per year.
traditional individual o Although we accept
retirement regular IRA
arrangement. contributions under the
rollover IRA contracts,
we intend that this
contract be used for
rollover and direct
transfer contributions.
Please refer to
"Withdrawals,
payments and transfers
of funds out of
traditional IRA's" in
"Tax information" for a
discussion of conduit
IRA's.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
18
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
AVAILABLE
CONTRACT FOR ANNUITANT MINIMUM LIMITATIONS ON
TYPE ISSUE AGES CONTRIBUTIONS SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Roth 20 through 83 $5,000 (initial) o Rollovers from another o No additional rollover
Conversion IRA $1,000 (additional) Roth IRA. or direct transfer
o Conversion rollovers contributions after
from a traditional IRA. o Conversion rollovers
o Direct transfers from after age 70 1/2 must be
another Roth IRA. net of required
minimum distributions
for the traditional IRA
you are rolling over.
o You cannot roll over funds
from a traditional IRA if
your adjusted gross income
is $100,000 or more.
o Regular contributions are
not permitted.
o Only rollover and direct
transfer contributions are
permitted.
- ------------------------------------------------------------------------------------------------------------------------------------
Rollover TSA 20 through 83 $5,000 (initial) o Rollovers from another o No additional rollover
TSA contract or or direct transfer
$1,000 (additional) arrangement. contributions after
o Rollovers from a age 84.
traditional IRA which o Contributions after age
was a "conduit" for 70 1/2 must be net of
TSA funds previously required minimum
rolled over. distributions.
o Direct transfers from o Employer-remitted
another contract or contributions are not
arrangement under permitted.
Section 403(b) of the
Internal Revenue Code,
complying with IRS
Revenue Ruling 90-24.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
-----
19
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
AVAILABLE
CONTRACT FOR ANNUITANT MINIMUM LIMITATIONS ON
TYPE ISSUE AGES CONTRIBUTIONS SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
QP 20 through 75 $5,000 (initial) o Only transfer o Regular ongoing
$1,000 (additional) contributions from an payroll contributions
existing qualified plan are not permitted.
trust as a change of o Only one additional
investment vehicle contribution may be
under the plan. made during a contract
o The plan must be year.
qualified under Section o No additional transfer
401(a) of the Internal contributions after
Revenue Code. age 76.
o For 401(k) plans, o For defined benefit
transferred plans, employee
contributions may only contributions are not
include employee permitted.
pre-tax contributions. o Contributions after age
70 1/2 must be net of any
required minimum
distributions.
Please refer to Appendix II for a discussion of purchase considerations of QP contracts.
- ------------------------------------------------------------------------------------------------------------------------------------
Flexible 20 through 70 o $2,000 (initial) o "Regular" traditional o No regular IRA
Premium IRA o $50 (additional after IRA contributions. contributions in the
the first contract year) o Rollovers from a calendar year you turn
the first contract year) age 70 1/2 and
o Rollovers from a TSA. thereafter.
o Rollovers from another o Total regular
traditional individual contributions may not
retirement exceed $2,000 for a
arrangement. year
o Direct custodian- o No additional rollover
to-custodian transfers or direct transfer
from another contributions after
traditional individual age 71.
retirement o Rollover and direct
arrangement. transfer contributions
after age 70 1/2 must
be net of required
minimum distributions.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
20
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
AVAILABLE
CONTRACT FOR ANNUITANT MINIMUM LIMITATIONS ON
TYPE ISSUE AGES CONTRIBUTIONS SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
<S> <C> <C> <C> <C>
o Although we accept rollover
and direct transfer
contributions under the
Flexible Premium IRA
contract, we intend that
this contract be used for
ongoing regular
contributions. Please refer
to "Withdrawals, payments
and transfers of funds out
of traditional IRAs" in "Tax
information" for a
discussion of conduit IRAs.
- ------------------------------------------------------------------------------------------------------------------------------------
Flexible 20 through 83 o $2,000 (initial) o Regular after-tax o No additional regular
Premium o $50 (additional after contributions. after-tax contributions
Roth IRA the first contract year) o Rollovers from another age 84.
Roth IRA. o No additional rollover or
o Conversion rollovers direct transfer
from a traditional IRA contributions after
o Direct transfers from age 84.
another Roth IRA. o Contributions are subject to
income limits and other tax
rules. See "Tax information-
Contributions to Roth
IRAs.".
o Although we accept rollover
and direct transfer
contributions under the
Flexible Premium Roth IRA
contract, we intend that
this contract be used for
ongoing regular
contributions.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See "Tax information" for a more detailed discussion of sources of contributions
and certain contribution limitations. We may refuse to accept any contribution
if the sum of all contributions under all Equitable Accumulator contracts with
the same annuitant would then total more than $1,500,000. We reserve the right
to limit aggregate contributions made after the first contract year to 150% of
first-year contributions. We may also refuse to accept any contribution if the
sum of all contributions under all Equitable Life annuity accumulation contracts
that you own would then total more than $2,500,000.
For information on when contributions are credited under your contract see
"Dates and prices at which contract events occur" under "More information" later
in this prospectus.
<PAGE>
----------
21
- --------------------------------------------------------------------------------
OWNER AND ANNUITANT REQUIREMENTS
Under NQ contracts, the annuitant can be different than the owner. A joint
owner may also be named. Only natural persons can be joint owners. This means
that an entity such as a corporation cannot be a joint owner.
Under all IRA and Rollover TSA contracts, the owner and annuitant must be the
same person.
Under QP contracts, the owner must be the trustee of the qualified plan and the
annuitant must be the plan participant/employee. See Appendix II for more
information on QP contracts.
-------------------------------------------------------------------------------
A participant is an individual who is currently, or was formerly, participating
in an eligible employer's QP or TSA plan.
-------------------------------------------------------------------------------
HOW YOU CAN MAKE YOUR CONTRIBUTIONS
Except as noted below, contributions must be by check drawn on a U.S. bank, in
U.S. dollars, and made payable to Equitable Life. We do not accept third-party
checks endorsed to us except for rollover contributions, tax-free exchanges or
trustee checks that involve no refund. All checks are subject to our ability to
collect the funds. We reserve the right to reject a payment if it is received
in an unacceptable form.
For your convenience, we will accept initial and additional contributions by
wire transmittal from certain broker-dealers who have agreements with us for
this purpose. Additional contributions may also be made under our automatic
investment program. These methods of payment are discussed in detail under
"More information" later in this prospectus.
Your initial contribution must generally be accompanied by an application and
any other form we need to process the payments. If any information is missing
or unclear, we will try to obtain that information. If we are unable to obtain
all of the information we require within five business days after we receive an
incomplete application or form, we will inform the registered representative
submitting the application on your behalf. We will then return the contribution
to you unless you specifically direct us to keep your contribution until we
receive the required information.
-------------------------------------------------------------------------------
Our "business day" is any day the New York Stock Exchange is open for trading
and generally ends at 4:00 p.m. Eastern Time. We may, however, close due to
emergency conditions.
-------------------------------------------------------------------------------
SECTION 1035 EXCHANGES
You may apply the value of an existing nonqualified deferred annuity contract
(or life insurance or endowment contract) to purchase an Equitable Accumulator
NQ contract in a tax-free exchange if you follow certain procedures as shown in
the form that we require you to use. Also see "Tax information" later in this
prospectus.
WHAT ARE YOUR INVESTMENT OPTIONS UNDER THE CONTRACT?
Your investment options are the variable investment options, the fixed maturity
options, and the account for special dollar cost averaging.
VARIABLE INVESTMENT OPTIONS
Your investment results in any one of the variable investment options will
depend on the investment performance of the underlying portfolios. Listed below
are the currently available portfolios, their investment objectives, and their
advisers.
-------------------------------------------------------------------------------
You can choose from among the variable investment options.
-------------------------------------------------------------------------------
<PAGE>
- -----
22
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PORTFOLIOS OF EQ ADVISORS TRUST
- -------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Alliance Capital Management L.P.,
EQ/Aggressive Stock Long-term growth of capital Massachusetts Financial Services Company
Long-term growth of capital and increasing
Alliance Common Stock income Alliance Capital Management L.P.
High return by maximizing current income and,
to the extent consistent with that objective,
Alliance High Yield capital appreciation Alliance Capital Management L.P.
High level of current income while preserving
Alliance Money Market assets and maintaining liquidity Alliance Capital Management L.P.
Alliance Small Cap Growth Long-term growth of capital Alliance Capital Management L.P.
EQ/Alliance Premier Growth Long-term growth of capital Alliance Capital Management L.P.
EQ/Alliance Technology Long-term growth of capital Alliance Capital Management, L.P.
Replicate as closely as possible (before
deduction of portfolio expenses) the total
return of the Standard & Poor's 500 Composite
Stock
BT Equity 500 Index Price Index Bankers Trust Company
Replicate as closely as possible (before
deduction of portfolio expenses) the total return
of the Morgan Stanley Capital International
BT International Equity Index Europe, Australia, Far East Index Bankers Trust Company
Replicate as closely as possible (before
deduction of portfolio expenses) the total return
BT Small Company Index of the Russell 2000 Index Bankers Trust Company
Long-term growth of capital by investing
Capital Guardian International primarily in non-United States equity securities Capital Guardian Trust Company
Capital Guardian Research Long-term growth of capital Capital Guardian Trust Company
Capital Guardian U.S. Equity Long-term growth of capital Capital Guardian Trust Company
EQ/Evergreen Long-term growth of capital Evergreen Asset Management Corp.
In order of priority, reasonable income,
EQ/Evergreen Foundation conservation of capital, and capital appreciation Evergreen Asset Management Corp.
High total return consistent with moderate risk
J.P. Morgan Core Bond of capital and maintenance of liquidity J. P. Morgan Investment Management Inc.
Lazard Large Cap Value Capital appreciation Lazard Asset Management
Lazard Small Cap Value Capital appreciation Lazard Asset Management
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- ----------
23
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PORTFOLIOS OF EQ ADVISORS TRUST (CONTINUED)
- -------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MFS Emerging Growth
Companies Long-term capital growth Massachusetts Financial Services Company
Reasonable current income and long-term
MFS Growth with Income growth of capital and income Massachusetts Financial Services Company
MFS Research Long-term growth of capital and future income Massachusetts Financial Services Company
Mercury Basic Value Equity Capital appreciation and secondarily, income Mercury Asset Management US
Mercury World Strategy High total investment return Mercury Asset Management US Morgan
Stanley Emerging
Markets Equity Long-term capital appreciation Morgan Stanley Asset Management
EQ/Putnam Growth & Income Capital growth, current income is a secondary
Value objective Putnam Investment Management, Inc.
EQ/Putnam International Equity Capital appreciation Putnam Investment Management, Inc.
Long-term growth of capital and any increased
EQ/Putnam Investors Growth income that results from this growth Putnam Investment Management, Inc.
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Other important information about the portfolios is included in the prospectus
for EQ Advisors Trust attached at the end of this prospectus.
FIXED MATURITY OPTIONS
We offer fixed maturity options with maturity dates ranging from one to ten
years. You can allocate your contributions to one or more of these fixed
maturity options. These amounts become part of our general account assets. They
will accumulate interest at the "rate to maturity" for each fixed maturity
option. The total amount you allocate to and accumulate in each fixed maturity
option is called the "fixed maturity amount." The fixed maturity options are
not available in contracts issued in Maryland.
-----------------------------------------------------------------------------
Fixed maturity options range from one to ten years to maturity.
-----------------------------------------------------------------------------
The rate to maturity you will receive for each fixed maturity option is the
rate to maturity in effect for new contributions allocated to that fixed
maturity option on the date we apply your contribution. If you make any
withdrawals or transfers from a fixed maturity option before the maturity date,
we will make a "market value adjustment" that may increase or decrease any
fixed maturity amount you have left in that fixed maturity option. We will
discuss the market value adjustment below and in greater detail later in this
prospectus under "More information."
On the maturity date of a fixed maturity option your fixed maturity amount,
assuming you have not made any withdrawals or transfers, will equal your
contribution to that fixed maturity option plus interest, at the rate to
maturity for that contribution, to the date of the calculation. This is the
fixed maturity option's "maturity value." Before maturity, the current value we
will report for your fixed maturity amounts will reflect a market value
adjustment. Your current
<PAGE>
- ----------
24
- --------------------------------------------------------------------------------
value will reflect the market value adjustment that we would make if you were
to withdraw all of your fixed maturity amounts on the date of the report. We
call this your "market adjusted amount."
FIXED MATURITY OPTIONS AND MATURITY DATES. We currently offer fixed maturity
options ending on February 15th for each of the maturity years 2001 through
2010. Not all of these fixed maturity options will be available for annuitant
ages 76 and older. See "Allocating your contributions" below. As fixed maturity
options expire, we expect to add maturity years so that generally 10 fixed
maturity options are available at any time.
We will not accept allocations to a fixed maturity option if on the date the
contribution is to be applied:
o the fixed maturity option's maturity date is within the current calendar
year; or
o the rate to maturity is 3% or less.
YOUR CHOICES AT THE MATURITY DATE. We will notify you on or before December
31st of the year before each of your fixed maturity options is scheduled to
mature. At that time, you may choose to have one of the following take place on
the maturity date, as long as none of the conditions listed above or in
"Allocating your contributions," below would apply:
(a) transfer the maturity value into another available fixed maturity
option or into any of the variable investment options; or
(b) withdraw the maturity value (there may be a withdrawal charge).
If we do not receive your choice on or before the fixed maturity option's
maturity date, we will automatically transfer your maturity value into the
fixed maturity option that will mature next.
MARKET VALUE ADJUSTMENT. If you make any withdrawals (including transfers,
surrender of your contract, or when we make deductions for charges) from a
fixed maturity option before it matures we will make a market value adjustment,
which will increase or decrease any fixed maturity amount you have in that
fixed maturity option. The amount of the adjustment will depend on two factors:
(a) the difference between the rate to maturity that applies to the
amount being withdrawn and the rate to maturity in effect at that
time for new allocations to that same fixed maturity option, and
(b) the length of time remaining until the maturity date.
In general, if interest rates rise from the time that you originally allocate
an amount to a fixed maturity option to the time that you take a withdrawal,
the market value adjustment will be negative. Likewise, if interest rates drop
at the end of that time, the market value adjustment will be positive. Also,
the amount of the market value adjustment, either up or down, will be greater
the longer the time remaining until the fixed maturity option's maturity date.
Therefore, it is possible that the market value adjustment could greatly reduce
your value in the fixed maturity options, particularly in the fixed maturity
options with later maturity dates.
We provide an illustration of the market adjusted amount of specified maturity
values, an explanation of how we calculate the market value adjustment, and
information concerning our general account and investments purchased with
amounts allocated to the fixed maturity options, in "More information" later in
this prospectus. Appendix III of this prospectus provides an example of how the
market value adjustment is calculated.
ACCOUNT FOR SPECIAL DOLLAR COST AVERAGING
The account for special dollar cost averaging is part of our general account.
We pay interest at guaranteed rates in this account. We will credit interest to
the amounts that you have in the account for special dollar cost averaging
every day. We set the interest rates periodically, according to procedures that
we have. We reserve the right to change these procedures.
The account for special dollar cost averaging is available for allocation of
all or a portion of your initial contribution under the special dollar cost
averaging program. We will guarantee
<PAGE>
----------
25
- --------------------------------------------------------------------------------
to pay our current interest rate that is in effect on the date that your
contribution is allocated to this account. Your guaranteed interest rate will
be shown in your contract. The rate will never be less than 3%. See "Allocating
your contributions," below for the rules and restrictions that apply to the
special dollar cost averaging program.
ALLOCATING YOUR CONTRIBUTIONS
You may choose from among three ways to allocate your contributions under your
contract: self-directed, principal assurance, or dollar cost averaging.
SELF-DIRECTED ALLOCATION
You may allocate your contributions to one or more, or all, of the variable
investment options and fixed maturity options. Allocations must be in whole
percentages and you may change your allocations at any time. However, the total
of your allocations must equal 100%. If the annuitant is age 76 or older, you
may allocate contributions to fixed maturity options if their maturities are
five years or less. Also, you may not allocate amounts to fixed maturity
options with maturity dates that are later than the February 15th immediately
following the date annuity payments are to begin.
PRINCIPAL ASSURANCE ALLOCATION
Under this allocation program you select a fixed maturity option. We specify
the portion of your initial contribution to be allocated to that fixed maturity
option in an amount that will cause the maturity value to equal the amount of
your entire initial contribution on the fixed maturity option's maturity date.
The maturity date you select generally may not be later than 10 years, or
earlier than 7 years from your contract date. You allocate the rest of your
contribution to the variable investment options however you choose.
For example, if your initial contribution is $10,000, and on March 15, 2000 you
chose the fixed maturity option with a maturity date of February 15, 2010,
since the rate to maturity was 6.23% on March 15, 2000, we would have allocated
$5,488.00 to that fixed maturity option and the balance to your choice of
variable investment options. On the maturity date your value in the fixed
maturity option would be $10,000.
The principal assurance allocation is only available for annuitant ages 75 or
younger when the contract is issued. If you are purchasing a Rollover IRA,
Flexible Premium IRA, QP, or Rollover TSA contract, before you select a
maturity year that would extend beyond the year in which you will reach age
70 1/2, you should consider whether your value in the variable investment
options, or your other traditional IRA or TSA funds are sufficient to meet your
required minimum distributions. See "Tax information."
You may not elect principal assurance if the special dollar cost averaging
program is in effect.
DOLLAR COST AVERAGING
We offer two dollar cost averaging programs. Each program allows you to
gradually allocate amounts to the variable investment options by periodically
transferring approximately the same dollar amount to the variable investment
options you select. This will cause you to purchase more units if the unit's
value is low and fewer units if the unit's value is high. Therefore, you may
get a lower average cost per unit over the long term. These plans of investing,
however, do not guarantee that you will earn a profit or be protected against
losses.
-----------------------------------------------------------------------------
Units measure your value in each variable investment option.
-----------------------------------------------------------------------------
SPECIAL DOLLAR COST AVERAGING PROGRAM. Under the special dollar cost averaging
program, you may choose to allocate all or a portion of your initial
contribution to the account for special dollar cost averaging. However, you
must allocate at least $2,000 to the account for special dollar cost averaging
for this program. In Pennsylvania we refer to this program as "enhanced rate
dollar cost averaging."
You may have your account value transferred to any of the variable investment
options. We will transfer amounts from the account for special dollar cost
averaging into the variable
<PAGE>
- ----------
26
- --------------------------------------------------------------------------------
investment options over an available time period that you select. We offer time
periods of 6 or 12 months. We may also offer other time periods. Your
registered representative can provide information on the time periods currently
available in your state or you may contact our processing office. You may only
select one time period. Each time period has a different interest rate. Once
you select a time period, you may not change it. Currently, your account value
will be transferred from the account for special dollar cost averaging into the
variable investment options on a monthly basis. We may offer this program in
the future with transfers on a different basis. We will transfer all amounts
out of the account for special dollar cost averaging by the end of the chosen
time period. The transfer date will be the same day of the month as the
contract date, but not later than the 28th day of the month.
If you choose to allocate only a portion of your initial contribution to the
account for special dollar cost averaging, the remaining balance of your
initial contribution will be allocated to the variable investment options or
fixed maturity options according to your instructions. You may not allocate
additional contributions to the account for special dollar cost averaging.
-----------------------------------------------------------------------------
The account for special dollar cost averaging provides guaranteed interest.
-----------------------------------------------------------------------------
The only amounts that should be transferred from the account for special dollar
cost averaging are your regularly scheduled transfers to the variable
investment options. If you request to transfer or withdraw any other amounts,
from the account for special dollar cost averaging, we will transfer all of the
value that you have remaining in the account for special dollar cost averaging
to the investment options according to the allocation percentages we have on
file for you. As a result, you will no longer be able to participate in the
special dollar cost averaging program. You may also ask us to cancel your
participation at any time.
In the state of Oregon where the account for special dollar cost averaging is
not available, we offer a special dollar cost averaging program in the Alliance
Money Market option. Under this program we will not deduct the mortality and
expense risks and administrative charges from assets in the Alliance Money
Market option. You may not allocate amounts other than your initial
contribution to this program.
GENERAL DOLLAR COST AVERAGING PROGRAM. If your value in the Alliance Money
Market option is at least $5,000, you may choose, at any time, to have a
specified dollar amount or percentage of your value transferred from that
option to the other variable investment options. You can select to have
transfers made on a monthly, quarterly, or annual basis. The transfer date will
be the same calendar day of the month as the contract date, but not later than
the 28th day of the month. You can also specify the number of transfers or
instruct us to continue making the transfers until all amounts in the Alliance
Money Market option have been transferred out.
The minimum amount that we will transfer each time is $250. The maximum amount
we will transfer is equal to your value in the Alliance Money Market option at
the time the program is elected, divided by the number of transfers scheduled
to be made.
If, on any transfer date, your value in the Alliance Money Market option is
equal to or less than the amount you have elected to have transferred, the
entire amount will be transferred. The general dollar cost averaging program
will then end. You may change the transfer amount once each contract year or
cancel this program at any time.
----------------------------------------
You may not elect dollar cost averaging or special dollar cost averaging if you
are participating in the rebalancing program. See "Transferring your money
among investment options." You may not elect the special dollar cost averaging
program if the principal assurance program is in effect.
YOUR BENEFIT BASE
The benefit base is used to calculate both the guaranteed minimum income
benefit and the 5% roll up to age 80 guaranteed minimum death benefit. See "Our
baseBUILDER option" and "Guaranteed minimum death benefit" below. The benefit
base is equal to:
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27
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o your initial contribution and any additional contributions to the contract;
plus
o daily interest; less
o a deduction that reflects any withdrawals you make (the amount of the
deduction is described under "How withdrawals affect your guaranteed minimum
income benefit and guaranteed minimum death benefit" in "Accessing your
money"); less
o a deduction for any withdrawal charge remaining when you exercise your
guaranteed minimum income benefit; and less
o a deduction for any outstanding loan plus accrued interest on the date that
you exercise your guaranteed minimum income benefit (applies to Rollover TSA
only).
The effective annual interest rate credited to the benefit base is:
o 5% for the benefit base with respect to the variable investment options
(other than the Alliance Money Market option) and the account for special
dollar cost averaging; and
o 3% for the benefit base with respect to the Alliance Money Market option,
the fixed maturity options and the loan reserve account.
No interest is credited after the annuitant is age 80.
-----------------------------------------------------------------------------
Your benefit base is not an account value or a cash value.
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ANNUITY PURCHASE FACTORS
Annuity purchase factors are the factors applied to determine your periodic
payments under the guaranteed minimum income benefit and annuity payout
options. The guaranteed minimum income benefit is discussed under "Our
baseBUILDER option" and annuity payout options are discussed under "Your
annuity payout options" in "Accessing your money" later in this prospectus. The
guaranteed annuity purchase factors are those factors specified in your
contract. The current annuity purchase factors are those factors that are in
effect at any given time. Annuity purchase factors are based on interest rates,
mortality tables, frequency of payments, the form of annuity benefit, and the
annuitant's (and any joint annuitant's) age and sex in certain instances.
OUR baseBUILDER OPTION
The baseBUILDER option offers you a guaranteed minimum income benefit combined
with the guaranteed minimum death benefit available under the contract. The
baseBUILDER benefit is available if the annuitant is between the ages of 20 and
75 at the time the contract is issued. There is an additional charge for the
baseBUILDER benefit which is described under "baseBUILDER benefit charge" in
"Charges and expenses."
The guaranteed minimum income benefit component of baseBUILDER is described
below. Whether you elect baseBUILDER or not, the guaranteed minimum death
benefit is provided under the contract. The guaranteed minimum death benefit is
described under "Guaranteed minimum death benefit." baseBUILDER is currently
not available in some states. Please ask your registered representative if
baseBUILDER is available in your state.
The guaranteed minimum income benefit guarantees you a minimum amount of
lifetime income under our Income Manager (life annuity with a period certain)
payout annuity contract. The Income Manager (life annuity with a period
certain) payout annuity contract provides payments during a specified period of
time (called a period certain) that will continue for the rest of the
annuitant's life thereafter. If the annuitant dies before the period certain
has ended, payments will continue to the beneficiary for the time remaining in
the period certain.
- --------------------------------------------------------------------------------
The guaranteed minimum income benefit, which is also known as a living benefit,
should be regarded as a safety net only. It provides income protection if you
elect an income payout while the annuitant is alive.
- --------------------------------------------------------------------------------
When you exercise the guaranteed minimum income benefit, the annual lifetime
income that you will receive under the Income Manager (life with period
certain) payout annuity option will be the greater of (i) your guaranteed
minimum income benefit which is calculated by applying your benefit
<PAGE>
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28
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base at guaranteed annuity purchase factors, or (ii) the income provided by
applying your actual account value at our then current annuity purchase
factors.
ILLUSTRATIONS OF GUARANTEED MINIMUM INCOME BENEFIT.
The table below illustrates the guaranteed minimum income benefit amounts per
$100,000 of initial contribution, for a male annuitant age 60 (at issue) on the
contract date anniversaries indicated, using the guaranteed annuity purchase
factors as of the date of this prospectus assuming no additional contributions,
withdrawals, or loans under Rollover TSA contracts, and assuming there were no
allocations to the Alliance Money Market option or the fixed maturity options.
GUARANTEED MINIMUM
INCOME BENEFIT - ANNUAL INCOME
CONTRACT DATE PAYABLE FOR LIFE WITH
ANNIVERSARY AT EXERCISE 10 YEAR PERIOD CERTAIN
----------------------- ------------------------------
7 $ 8,315
10 $10,341
15 $14,924
When you elect to receive annual income, your contract will terminate and you
will receive an Income Manager (life annuity with a period certain) annuity
payout option. You will begin receiving payments one payment period after the
annuity payout option is issued. Your period certain will be based on the
annuitant's age at the time the benefit is exercised, as follows:
LEVEL PAYMENTS*
- ----------------------------------------
PERIOD CERTAIN
YEARS
--------------------
ANNUITANT'S
AGE AT EXERCISE IRAS NQ
- ----------------- ---------- -------
60 to 75 10 10
76 9 10
77 8 10
78 7 10
79 7 10
80 7 10
81 7 9
82 7 8
83 7 7
* Other forms and periods certain may also be available. For Rollover IRA and
Flexible Premium IRA contracts, please see "Required minimum distributions"
under "Individual retirement arrangements" in "Tax information," as to how
this option may be affected if exercised after age 70 1/2.
Before you elect baseBUILDER, you should consider the fact that the guaranteed
minimum income benefit provides a form of insurance and is based on
conservative actuarial factors. Therefore, even if your account value is less
than your benefit base, you may generate more income by applying your account
value to current annuity purchase factors . We will make this comparison for
you when the need arises.
You should also consider that the guaranteed annuity purchase factors we use to
determine your Income Manager benefit under baseBUILDER are more conservative
than the guaranteed annuity purchase factors we use for the Income Manager
payout annuity option. This means that, assuming the same amount is applied to
purchase the benefit and that we use guaranteed annuity purchase factors to
compute the benefit, each periodic payment under the baseBUILDER Income Manager
will be smaller than each periodic payment under the Income Manager payout
annuity option.
The Income Manager (life annuity with a period certain) payout annuity
contracts are offered through our prospectus for the Income Manager payout
annuities. You may obtain a copy of the most current version from your
registered representative. You should read it carefully before you decide to
exercise your guaranteed minimum income benefit.
SUCCESSOR ANNUITANT/CONTRACT OWNER. If the successor annuitant/contract owner
(discussed under "More information" later in this prospectus) elects to
continue the contract after your death, the guaranteed minimum income benefit
will continue to be available on the contract date anniversaries specified
above based on the contract date. However, the guaranteed minimum income
benefit must be exercised based on the age of the successor annuitant/ contract
owner.
EXERCISE OF GUARANTEED MINIMUM INCOME BENEFIT. On each contract date
anniversary that you are eligible to
<PAGE>
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29
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exercise the guaranteed minimum income benefit, we will send you an eligibility
notice illustrating how much income could be provided as of the contract
anniversary. You may notify us within 30 days following the contract date
anniversary if you want to exercise the guaranteed minimum income benefit. You
must return your contract to us in order to exercise this benefit. The amount
of income you actually receive will be determined when we receive your request
to exercise the benefit. You will begin receiving payments one payment period
after the annuity payout contract is issued.
You (or the successor annuitant/owner, if applicable) will be eligible to
exercise the guaranteed minimum income benefit as follows:
o If the annuitant was at least age 20 and no older than age 44 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary
beginning with the 15th contract date anniversary.
o If the annuitant was at least age 45 and no older than age 53 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary after
the annuitant is age 60.
o If the annuitant was at least age 54 and no older than age 75 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary
beginning with the 7th contract date anniversary.
Please note:
(i) the latest date you may exercise the guaranteed minimum income
benefit is the contract date anniversary following the annuitant's
83rd birthday;
(ii) if the annuitant was older than age 63 at the time an IRA, QP or
Rollover TSA contract was issued, the baseBUILDER may not be an
appropriate feature because the minimum distributions required by
tax law must begin before the guaranteed minimum income benefit can
be exercised; and
(iii) for QP and Rollover TSA contracts, if you are eligible to exercise
your guaranteed minimum income benefit, we will first roll over
amounts in such contract to a Rollover IRA contract. You will be the
owner of the Rollover IRA contract.
GUARANTEED MINIMUM DEATH BENEFIT
A guaranteed minimum death benefit is provided as part of the baseBUILDER
benefit. A guaranteed minimum death benefit is also provided under your
contract even if you do not elect baseBUILDER. In this case, the baseBUILDER
benefit charge does not apply.
GUARANTEED MINIMUM DEATH BENEFIT APPLICABLE FOR ANNUITANT AGES 0 THROUGH 79 AT
ISSUE OF NQ CONTRACTS; 20 THROUGH 79 AT ISSUE OF ROLLOVER IRA, ROTH CONVERSION
IRA, FLEXIBLE PREMIUM ROTH IRA, AND ROLLOVER TSA CONTRACTS; 20 THROUGH 70 AT
ISSUE OF FLEXIBLE PREMIUM IRA CONTRACTS; AND 20 THROUGH 75 AT ISSUE OF QP
CONTRACTS.
You must elect either the "5% roll up to age 80" or the "annual ratchet to age
80" guaranteed minimum death benefit when you apply for a contract. Once you
have made your election, you may not change it.
5% ROLL UP TO AGE 80. This guaranteed minimum death benefit is equal to the
benefit base described earlier in "Your benefit base." This guaranteed minimum
death benefit is not available in New York.
ANNUAL RATCHET TO AGE 80. On the contract date, your guaranteed minimum death
benefit equals your initial contribution. Then, on each contract date
anniversary, we will determine your guaranteed minimum death benefit by
comparing your current guaranteed minimum death benefit to your account value
on that contract date anniversary. If your account value is higher than your
guaranteed minimum death benefit, we will increase your guaranteed minimum
death benefit to equal your account value. On the other hand, if your account
value on the contract date anniversary
<PAGE>
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30
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is less than your guaranteed minimum death benefit, we will not adjust your
guaranteed minimum death benefit either up or down. If you make additional
contributions, we will increase your current guaranteed minimum death benefit
by the dollar amount of the contribution on the date the contribution is
allocated to your investment options. If you take a withdrawal from your
contract, we will adjust your guaranteed minimum death benefit on the date you
take the withdrawal.
Guaranteed minimum death benefit applicable for annuitant ages 80 through 83
at issue.
On the contract date, your guaranteed minimum death benefit equals your initial
contribution. Thereafter, it will be increased by the dollar amount of any
additional contributions. We will adjust your guaranteed minimum death benefit
if you take any withdrawals.
----------------------------------------
Please see "How withdrawals affect your guaranteed minimum income benefit and
guaranteed minimum death benefit" in "Accessing your money" for information on
how withdrawals affect your guaranteed minimum death benefit. For contracts
issued in New York, the guaranteed minimum death benefit at the annuitant's
death will never be less than your value in the variable investment options,
plus the sum of the fixed maturity amounts in each fixed maturity option.
See Appendix IV for an example of how we calculate the guaranteed minimum death
benefit.
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your contract, you may return it
to us for a refund. To exercise this cancellation right you must mail the
contract directly to our processing office within 10 days after you receive it.
If state law requires, this "free look" period may be longer.
Generally, your refund will equal your account value under the contract on the
day we receive notification of your decision to cancel the contract and will
reflect (i) any investment gain or loss in the variable investment options
(less the daily charges we deduct), (ii) any positive or negative market value
adjustments in the fixed maturity options, and (iii) any guaranteed interest in
the account for special dollar cost averaging, through the date we receive your
contract. Some states require that we refund the full amount of your
contribution (not reflecting (i), (ii) or (iii) above). For any IRA contract
returned to us within seven days after you receive it, we are required to
refund the full amount of your contribution.
We may require that you wait six months before you may apply for a contract
with us again if:
o you cancel your contract during the free look period; or
o you change your mind before you receive your contract whether we have
received your contribution or not.
Please see "Tax information" for possible consequences of cancelling your
contract.
In addition to the cancellation right described above, if you fully convert an
existing traditional IRA contract to a Roth Conversion IRA or Flexible Premium
Roth IRA contract, you may cancel your Roth Conversion IRA or Flexible Premium
Roth IRA contract and return to a Rollover IRA or Flexible Premium IRA
contract, whichever applies. Our processing office, or your registered
representative, can provide you with the cancellation instructions.
<PAGE>
2
DETERMINING YOUR CONTRACT'S VALUE
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31
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YOUR ACCOUNT VALUE AND CASH VALUE
Your "account value" is the total of the: (i) values you have in the variable
investment options; (ii) market adjusted amounts in the fixed maturity options;
and (iii) value in the account for special dollar cost averaging; and (iv)
value you have in the loan reserve account (applies for Rollover TSA Contracts
only). These amounts are subject to certain fees and charges discussed under
"Charges and expenses."
Your contract also has a "cash value." At any time before annuity payments
begin, your contract's cash value is equal to the account value, less: (i) the
total amount or a pro rata portion of the annual administrative charge
(applicable for Flexible Premium IRA and Flexible Premium Roth IRA contracts
only); (ii) and less any withdrawal charges; and (iii) the amount of any
outstanding loan plus accrued interest (applicable to Rollover TSA accounts
only). Please see "Surrendering your contract to receive its cash value" in
"Accessing your money."
YOUR CONTRACT'S VALUE IN THE VARIABLE INVESTMENT OPTIONS
Each variable investment option invests in shares of a corresponding portfolio.
Your value in each variable investment option is measured by "units." The value
of your units will increase or decrease as though you had invested it in the
corresponding portfolio's shares directly. Your value, however, will be reduced
by the amount of the fees and charges that we deduct under the contract.
The unit value for each variable investment option depends on the investment
performance of that option, minus daily charges for mortality and expense risks
and administrative expenses. On any day, your value in any variable investment
option equals the number of units credited to that option, adjusted for any
units purchased for or deducted from your contract under that option,
multiplied by that day's value for one unit. The number of your contract units
in any variable investment option does not change unless they are:
(i) increased to reflect additional contributions;
(ii) decreased to reflect a withdrawal (plus applicable withdrawal
charges);
(iii) increased to reflect a transfer into, or decreased to reflect a
transfer out of, a variable investment option; or
(iv) decreased to reflect a transfer of your loan amount to the loan
reserve account under a Rollover TSA contract.
In addition, when we deduct the baseBUILDER benefit charge the number of units
credited to your contract will be reduced. Your units are also reduced under
Flexible Premium IRA and Flexible Premium Roth IRA contracts when we deduct the
annual administrative charge. A description of how unit values are calculated
is found in the SAI.
YOUR CONTRACT'S VALUE IN THE FIXED MATURITY OPTIONS
Your value in each fixed maturity option at any time before the maturity date
is the market adjusted amount in each option. This is equivalent to your fixed
maturity amount increased or decreased by the market value adjustment. Your
value, therefore, may be higher or lower than your contributions (less
withdrawals) accumulated at the rate to maturity. At the maturity date, your
value in the fixed maturity option will equal its maturity value.
YOUR CONTRACT'S VALUE IN THE ACCOUNT FOR SPECIAL DOLLAR COST AVERAGING
Your value in the account for special dollar cost averaging at any time will
equal your initial contribution allocated to that option, plus interest, less
the sum of all amounts that have been transferred to the variable investment
options you have selected.
<PAGE>
3
TRANSFERRING YOUR MONEY AMONG INVESTMENT OPTIONS
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32
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TRANSFERRING YOUR ACCOUNT VALUE
At any time before the date annuity payments are to begin, you can transfer
some or all of your account value among the investment options, subject to the
following:
o You may not transfer any amount to the account for special dollar cost
averaging.
o You may not transfer to a fixed maturity option that matures in the current
calendar year, or that has a rate to maturity of 3%.
o If the annuitant is 76 or older, you must limit your transfers to fixed
maturity options to those with maturities of five years or less. Also, the
maturity dates may be no later than the February 15th immediately following
the date annuity payments are to begin.
o If you make transfers out of a fixed maturity option other than at its
maturity date the transfer may cause a market value adjustment.
You may request a transfer in writing or by telephone using TOPS. (We
anticipate that transfers will be available by using EQAccess by the end of
2000). You must send in all written transfer requests directly to our
processing office. Transfer requests should specify:
(1) the contract number,
(2) the dollar amounts or percentages of your current account value to be
transferred, and
(3) the investment options to and from which you are transferring.
We will confirm all transfers in writing.
MARKET TIMING
You should note that the product is not designed for professional "market
timing" organizations, or other organizations or individuals engaging in a
market timing strategy, making programmed transfers, frequent transfers or
transfers that are large in relation to the total assets of the underlying
mutual fund portfolio. Market timing strategies are disruptive to the
underlying mutual fund portfolios in which the variable investment options
invest. If we determine that your transfer patterns among the variable
investment options reflect a market timing strategy, we reserve the right to
take action including, but not limited to: restricting the availability of
transfers through telephone requests, facsimile transmissions, automated
telephone services, Internet services or any electronic transfer services. We
may also refuse to act on transfer instructions of an agent acting under a
power of attorney who is acting on behalf of more than one owner.
REBALANCING YOUR ACCOUNT VALUE
We currently offer a rebalancing program that you can use to automatically
reallocate your account value among the variable investment options. You must
tell us:
(a) the percentage you want invested in each variable investment option
(whole percentages only), and
(b) how often you want the rebalancing to occur (quarterly, semiannually, or
annually on a contract year basis. Rebalancing will occur on the same day
of the month as the contract date).
While your rebalancing program is in effect, we will transfer amounts among
each variable investment option so that the percentage of your account value
that you specify is invested in each option at the end of each rebalancing
date. Your entire account value in the variable investment options must be
included in the rebalancing program.
------------------------------------------------------------------------------
Rebalancing does not assure a profit or protect against loss. You should
periodically review your allocation percentages as your needs change. You may
want to discuss the rebalancing program with your registered representative or
other financial adviser before electing the program.
-------------------------------------------------------------------------------
You may elect the rebalancing program at any time. You may also change your
allocation instructions or cancel the program at any time. If you request a
transfer while the rebalancing program is in effect, we will process the
transfer as requested; the rebalancing program will remain in effect unless you
request that it be cancelled in writing.
You may not elect the rebalancing program if you are participating in the
dollar cost averaging or special dollar cost averaging program. Rebalancing is
not available for amounts you have allocated in the fixed maturity options.
<PAGE>
4
ACCESSING YOUR MONEY
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33
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WITHDRAWING YOUR ACCOUNT VALUE
You have several ways to withdraw your account value before annuity payments
begin. The table below shows the methods available under each type of contract.
More information follows the table. For the tax consequences of withdrawals,
see "Tax information."
<TABLE>
<CAPTION>
METHOD OF WITHDRAWAL
- -----------------------------------------------------------------------------------
SUBSTANTIALLY MINIMUM
CONTRACT LUMP SUM SYSTEMATIC EQUAL DISTRIBUTION
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NQ Yes Yes No No
- -----------------------------------------------------------------------------------
Rollover IRA Yes Yes Yes Yes
- -----------------------------------------------------------------------------------
Flexible
Premium IRA Yes Yes Yes Yes
- -----------------------------------------------------------------------------------
Roth Conversion
IRA Yes Yes Yes No
- -----------------------------------------------------------------------------------
Flexible
Premium
Roth IRA Yes Yes Yes No
- -----------------------------------------------------------------------------------
QP Yes No No Yes
- -----------------------------------------------------------------------------------
Rollover TSA* Yes No No Yes
- -----------------------------------------------------------------------------------
</TABLE>
* For some Rollover TSA contracts, your ability to take withdrawals, loans or
surrender your contract may be limited. You must provide withdrawal
restriction information when you apply for a contract. See "Tax information -
Tax Sheltered Annuity contracts (TSAs)."
LUMP SUM WITHDRAWALS
(All contracts)
You may take lump sum withdrawals from your account value at any time.
(Rollover TSA contracts may have restrictions.) The minimum amount you may
withdraw is $300. If you request to withdraw more than 90% of a contract's
current cash value we will treat it as a request to surrender the contract for
its cash value. See "Surrendering your contract to receive its cash value"
below.
Lump sum withdrawals in excess of the 15% free withdrawal amount (see "15% free
withdrawal amount" in "Charges and expenses") may be subject to a withdrawal
charge. Under Rollover TSA contracts, if a loan is outstanding, you may only
take lump sum withdrawals as long as the cash value remaining after any
withdrawal equals at least 10% of the outstanding loan plus accrued interest.
SYSTEMATIC WITHDRAWALS
(NQ and all IRA contracts)
You may take systematic withdrawals of a particular dollar amount or a
particular percentage of your account value.
You may take systematic withdrawals on a monthly, quarterly, or annual basis as
long as the withdrawals do not exceed the following percentages of your account
value: 1.2% monthly, 3.6% quarterly, and 15.0% annually. The minimum amount you
may take in each systematic withdrawal is $250. If the amount withdrawn would
be less than $250 on the date a withdrawal is to be taken, we will not make a
payment and we will terminate your systematic withdrawal election.
We will make the withdrawals on any day of the month that you select as long as
it is not later than the 28th day of the month. If you do not select a date, we
will make the withdrawals on the same calendar day of the month as the contract
date. You must wait at least 28 days after your contract is issued before your
systematic withdrawals can begin.
You may elect to take systematic withdrawals at any time. If you own an IRA
contract, you may elect this withdrawal method only if you are between ages
59 1/2 and 70 1/2.
You may change the payment frequency, or the amount or percentage of your
systematic withdrawals, once each contract year. However, you may not change
the amount or percentage in any contract year in which you have already taken a
lump sum withdrawal. You can cancel the systematic withdrawal option at any
time.
Systematic withdrawals are not subject to a withdrawal charge, except to the
extent that, when added to a lump sum withdrawal previously taken in the same
contract year, the systematic withdrawal exceeds the 15% free withdrawal
amount.
SUBSTANTIALLY EQUAL WITHDRAWALS
(All IRA contracts)
The substantially equal withdrawals option allows you to receive distributions
from your account value without
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triggering the 10% additional federal tax penalty, which normally applies to
distributions made before age 59 1/2. See "Tax information." Once you begin to
take substantially equal withdrawals, you should not stop them or change the
pattern of your withdrawals until after the later of age 59 1/2 or five full
years after the first withdrawal. If you stop or change the withdrawals or take
a lump sum withdrawal, you may be liable for the 10% federal tax penalty that
would have otherwise been due on prior withdrawals made under this option and
for any interest on those withdrawals.
You may elect to take substantially equal withdrawals at any time before age
59 1/2. We will make the withdrawal on any day of the month that you select as
long as it is not later than the 28th day of the month. You may not elect to
receive the first payment in the same contract year in which you took a lump
sum withdrawal. We will calculate the amount of your substantially equal
withdrawals. The payments will be made monthly, quarterly, or annually as you
select. These payments will continue until we receive written notice from you
to cancel this option or you take a lump sum withdrawal. You may elect to start
receiving substantially equal withdrawals again, but the payments may not
restart in the same contract year in which you took a lump sum withdrawal. We
will calculate the new withdrawal amount.
You may not elect substantially equal withdrawals if you have balances in the
account for special dollar cost averaging.
Substantially equal withdrawals are not subject to a withdrawal charge.
MINIMUM DISTRIBUTION WITHDRAWALS
(Rollover IRA, Flexible Premium IRA, QP, and Rollover TSA contracts only - See
"Tax information")
We offer the minimum distribution withdrawal option to help you meet lifetime
required minimum distributions under federal income tax rules. You may elect
this option in the year in which you reach age 70 1/2. The minimum amount we
will pay out is $250. You may elect the method you want us to use to calculate
your minimum distribution withdrawals from the choices we offer. Currently,
minimum distribution withdrawal payments will be made annually.
We do not impose a withdrawal charge on minimum distribution withdrawals except
if when added to a lump sum withdrawal previously taken in the same contract
year, the minimum distribution withdrawal exceeds the 15% free withdrawal
amount.
We will calculate your annual payment based on your account value at the end of
the prior calendar year based on the method you choose.
Under Rollover TSA contracts, you may not elect minimum distribution
withdrawals if a loan is outstanding.
-----------------------------------------------------------------------------
For Rollover IRA, Flexible Premium IRA, QP, and Rollover TSA contracts, we will
send a form outlining the distribution options available in the year you reach
age 701/2 (if you have not begun your annuity payments before that time).
-----------------------------------------------------------------------------
HOW WITHDRAWALS ARE TAKEN FROM YOUR ACCOUNT VALUE
Unless you specify otherwise, we will subtract your withdrawals on a pro rata
basis from your value in the variable investment options. If there is
insufficient value or no value in the variable investment options, any
additional amount of the withdrawal required or the total amount of the
withdrawal will be withdrawn from the fixed maturity options in order of the
earliest maturity date(s) first and then from the account for special dollar
cost averaging. A market value adjustment may apply to withdrawals from the
fixed maturity options.
HOW WITHDRAWALS AFFECT YOUR GUARANTEED MINIMUM INCOME BENEFIT AND GUARANTEED
MINIMUM DEATH BENEFIT
Withdrawals will reduce your guaranteed benefits on either a dollar-for-dollar
basis or on a pro rata basis as explained below:
<PAGE>
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INCOME BENEFIT AND DEATH BENEFIT
5% roll up to age 80 - If you elect the 5% roll up to age 80 guaranteed
minimum death benefit, your benefit base will be reduced on a dollar-for-dollar
basis as long as the sum of your withdrawals in a contract year is 5% or less
of the guaranteed minimum death benefit on the most recent contract date
anniversary. Once you take a withdrawal that causes the sum of your withdrawals
in a contract year to exceed 5% of the guaranteed minimum death benefit on the
most recent contract date anniversary, that withdrawal and any subsequent
withdrawals in that same contract year will reduce your benefit base on a pro
rata basis.
The timing of your withdrawals and whether they exceed the 5% threshold
described above can have a significant impact on your guaranteed minimum income
benefit or guaranteed minimum death benefit.
Annual ratchet to age 80 - If you elect the annual ratchet to age 80 guaranteed
minimum death benefit, each withdrawal will always reduce your benefit base and
current guaranteed minimum death benefit on a pro rata basis.
Annuitant issue ages 80 through 83 - If your contract was issued when the
annuitant was between ages 80 and 83, each withdrawal will always reduce your
current guaranteed minimum death benefit on a pro rata basis.
Reduction on a dollar-for-dollar basis means that your current benefit will be
reduced by the dollar amount of the withdrawal. Reduction on a pro rata basis
means that we calculate the percentage of your current account value that is
being withdrawn and we reduce your current benefit by that same percentage. For
example, if your account value is $30,000 and you withdraw $12,000, you have
withdrawn 40% of your account value. If your guaranteed minimum death benefit
was $40,000 before the withdrawal, it would be reduced by $16,000 ($40,000
x.40) and your new guaranteed minimum death benefit after the withdrawal would
be $24,000 ($40,000 - $16,000).
LOANS UNDER ROLLOVER TSA CONTRACTS
You may take loans from a Rollover TSA unless restricted by the employer who
provided the Rollover TSA funds. If you cannot take a loan, or cannot take a
loan without approval from the employer who provided the funds, we will have
this information in our records based on what you and the employer who provided
the funds told us when you purchased your contract. The employer must also tell
us whether special employer plan rules of the Employee Retirement Income
Security Act of 1974 ("ERISA") apply. We will not permit you to take a loan
while you are taking minimum distribution withdrawals.
You should read the terms and conditions on our loan request form carefully
before taking out a loan. Under Rollover TSA contracts subject to ERISA, you
may only take a loan with the written consent of your spouse. Your contract
contains further details of the loan provision. Also, see "Tax information" for
general rules applicable to loans.
We will permit you to have only one loan outstanding at a time. The minimum
loan amount is $1,000. The maximum amount is $50,000 or, if less, 50% of your
account value, subject to any limits under the federal income tax rules. The
term of a loan is five years. However, if you use the loan to acquire your
primary residence, the term is 10 years. The term may not extend beyond the
earliest of:
(1) the date annuity payments begin,
(2) the date the contract terminates, and
(3) the date a death benefit is paid (the outstanding loan will be deducted
from the death benefit amount).
Interest will accrue daily on your outstanding loan at a rate we set. The loan
interest rate will be equal to the Moody's Corporate Bond Yield Averages for
Baa bonds for the calendar month ending two months before the first day of the
calendar quarter in which the rate is determined.
LOAN RESERVE ACCOUNT. On the date your loan is processed, we will transfer the
amount of your loan to the loan reserve account. Unless you specify otherwise,
we will subtract your loan on a pro rata basis from your value in the
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variable investment options. If there is insufficient value or no value in the
variable investment options, any additional amount of the loan will be
subtracted from the fixed maturity options in order of the earliest maturity
date(s) first. A market value adjustment may apply.
We will credit interest to the amount in the loan reserve account at a rate of
2% lower than the loan interest rate that applies for the time your loan is
outstanding. On each contract date anniversary after the date the loan is
processed, we will transfer the amount of interest earned in the loan reserve
account to the variable investment options on a pro rata basis. When you make a
loan repayment, unless you specify otherwise, we will transfer the dollar
amount of the loan repaid from the loan reserve account to the investment
options according to the allocation percentages we have on our records.
SURRENDERING YOUR CONTRACT TO RECEIVE ITS CASH VALUE
You may surrender your contract to receive its cash value at any time while the
annuitant is living and before you begin to receive annuity payments. (Rollover
TSA contracts may have restrictions.) For a surrender to be effective, we must
receive your written request and your contract at our processing office. We
will determine your cash value on the date we receive the required information.
All benefits under the contract will terminate as of that date.
You may receive your cash value in a single sum payment or apply it to one or
more of the annuity payout options. See "Your annuity payout options" below.
For the tax consequences of surrenders, see "Tax information."
WHEN TO EXPECT PAYMENTS
Generally, we will fulfill requests for payments out of the variable investment
options within seven calendar days after the date of the transaction to which
the request relates. These transactions may include applying proceeds to a
variable annuity, payment of a death benefit, payment of any amount you
withdraw (less any withdrawal charge) and, upon surrender, payment of the cash
value. We may postpone such payments or applying proceeds for any period during
which:
(1) the New York Stock Exchange is closed or restricts trading,
(2) sales of securities or determination of the fair value of a variable
investment option's assets is not reasonably practicable because of an
emergency, or
(3) the SEC, by order, permits us to defer payment to protect people
remaining in the variable investment options.
We can defer payment of any portion of your value in the fixed maturity options
and the account for special dollar cost averaging (other than for death
benefits) for up to six months while you are living. We also may defer payments
for a reasonable amount of time (not to exceed 10 days) while we are waiting
for a contribution check to clear.
All payments are made by check and are mailed to you (or the payee named in a
tax-free exchange) by U.S. mail, unless you request that we use an express
delivery service at your expense.
YOUR ANNUITY PAYOUT OPTIONS
Equitable Accumulator offers you several choices of annuity payout options.
Some enable you to receive fixed annuity payments, which can be either level or
increasing and others enable you to receive variable annuity payments.
You can choose from among the annuity payout options listed below. Restrictions
may apply, depending on the type of contract you own or the annuitant's age at
contract issue. In addition, if you are exercising your guaranteed minimum
income benefit under baseBUILDER, your choice of payout options are those that
are available under the baseBUILDER (see "Our baseBUILDER option").
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Fixed annuity payout options Life annuity
Life annuity with period
certain
Life annuity with refund
certain
Period certain annuity
Variable Immediate Annuity Life annuity (not available
payout options in New York)
Life annuity with period
certain
Income Manager payout Life annuity with period
options certain
Period certain annuity
o Life annuity: An annuity that guarantees payments for the rest of the
annuitant's life. Payments end with the last monthly payment before the
annuitant's death. Because there is no continuation of benefits following
the annuitant's death with this payout option, it provides the highest
monthly payment of any of the life annuity options, so long as the annuitant
is living.
o Life annuity with period certain: An annuity that guarantees payments for
the rest of the annuitant's life. If the annuitant dies before the end of a
selected period of time ("period certain"), payments continue to the
beneficiary for the balance of the period certain. The period certain cannot
extend beyond the annuitant's life expectancy. A life annuity with a period
certain is the form of annuity under the contracts that you will receive if
you do not elect a different payout option. In this case, the period certain
will be based on the annuitant's age and will not exceed 10 years.
o Life annuity with refund certain: An annuity that guarantees payments for
the rest of the annuitant's life. If the annuitant dies before the amount
applied to purchase the annuity option has been recovered, payments to the
beneficiary will continue until that amount has been recovered. This payout
option is available only as a fixed annuity.
o Period certain annuity: An annuity that guarantees payments for a specific
period of time, usually 5, 10, 15, or 20 years. This guaranteed period may
not exceed the annuitant's life expectancy. This option does not guarantee
payments for the rest of the annuitant's life. It does not permit any
repayment of the unpaid principal, so you cannot elect to receive part of
the payments as a single sum payment with the rest paid in monthly annuity
payments. This payout option is available only as a fixed annuity.
The life annuity, life annuity with period certain, and life annuity with
refund certain payout options are available on a single life or joint and
survivor life basis. The joint and survivor life annuity guarantees payments
for the rest of the annuitant's life and, after the annuitant's death, payments
continue to the survivor. We may offer other payout options not outlined here.
Your registered representative can provide details.
FIXED ANNUITY PAYOUT OPTION
With fixed annuities, we guarantee fixed annuity payments will be based either
on the tables of guaranteed annuity purchase factors in your contract or on our
then current annuity purchase factors, whichever is more favorable for you.
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTIONS
Variable Immediate Annuities are described in a separate prospectus that is
available from your registered representative. Before you select a Variable
Immediate Annuity payout option, you should read the prospectus which contains
important information that you should know.
Variable annuities may be funded through your choice of variable investment
options investing in portfolios of EQ Advisors Trust. The contract also offers
a fixed annuity option that can be elected in combination with the variable
annuity payout options. The amount of each variable annuity payment will
fluctuate, depending upon the performance of the variable investment options,
and whether the actual rate of investment return is higher or lower than an
assumed base rate.
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INCOME MANAGER PAYOUT OPTIONS
The Income Manager payout annuity contracts differ from the other payout
annuity contracts. The other payout annuity contracts may provide higher or
lower income levels, but do not have all the features of the Income Manager
payout annuity contract. You may request an illustration of the Income Manager
payout annuity contract from your registered representative. Income Manager
payout options are described in a separate prospectus that is available from
your registered representative. Before you select an Income Manager payout
option, you should read the prospectus which contains important information
that you should know.
Both Income Manager payout options provide guaranteed level payments (NQ and
IRA contracts). The Income Manager (life annuity with period certain) also
provides guaranteed increasing payments (NQ contracts only). You may not elect
a period certain Income Manager payout option unless withdrawal charges are no
longer in effect under your Equitable Accumulator.
For QP and Rollover TSA contracts, if you want to elect an Income Manager
payout option, we will first roll over amounts in such contract to a Rollover
IRA contract. You will be the owner of the Rollover IRA contract.
You may choose to apply only part of the account value of your Equitable
Accumulator contract to an Income Manager payout annuity. In this case, we will
consider any amounts applied as a withdrawal from your Equitable Accumulator
and we will deduct any applicable withdrawal charge. For the tax consequences
of withdrawals, see "Tax information."
Depending upon your circumstances, the purchase of an Income Manager contract
may be done on a tax-free basis. Please consult your tax adviser.
THE AMOUNT APPLIED TO PURCHASE AN ANNUITY PAYOUT OPTION
The amount applied to purchase an annuity payout option varies, depending on
the payout option that you choose, and the timing of your purchase as it
relates to any withdrawal charges or market value adjustments.
If amounts in a fixed maturity option are used to purchase any annuity payout
option, prior to the maturity date, a market value adjustment will apply.
For the fixed annuity payout options and Variable Immediate Annuity payout
options, no withdrawal charge is imposed if you select a life annuity, life
annuity with period certain or life annuity with refund certain.
For the fixed annuity payout option, the withdrawal charge applicable under
your Equitable Accumulator is imposed if you select a period certain. If the
period certain is more than 5 years, then the withdrawal charge deducted will
not exceed 5% of the account value.
For the Income Manager payout options no withdrawal charge is imposed under the
Equitable Accumulator. If the withdrawal charge that otherwise would have been
applied to your account value under your Equitable Accumulator is greater than
2% of the contributions that remain in your contract at the time you purchase
your payout option, the withdrawal charges under the Income Manager will apply.
For this purpose, the year in which your account value is applied to the payout
option will be "contract year 1."
SELECTING AN ANNUITY PAYOUT OPTION
When you select a payout option, we will issue you a separate written agreement
confirming your right to receive annuity payments. We require you to return
your contract before annuity payments begin unless you are applying only some
of your account value to an Income Manager Contract. The contract owner and
annuitant must meet the issue age and payment requirements.
You can choose the date annuity payments begin but it may not be earlier than
thirteen months from the Equitable Accumulator contract date. Except with
respect to the Income Manager annuity payout options, where payments are made
on the 15th day of each month, you can change the date your annuity payments
are to begin anytime before that date as long as you do not choose a date later
than the
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28th day of any month. Also, that date may not be later than the contract date
anniversary that follows the annuitant's 90th birthday. This may be different
in some states.
Before the last day by which your annuity payments must begin, we will notify
you by letter. Once you have selected an annuity payout option and payments
have begun, no change can be made other than (i) transfers (if permitted in the
future) among the variable investment options if a Variable Immediate Annuity
payout option is selected; and (ii) withdrawals or contract surrender (subject
to a market value adjustment) if an Income Manager annuity payout option is
chosen.
The amount of the annuity payments will depend on the amount applied to
purchase the annuity and applicable annuity purchase factors discussed earlier.
In no event will you ever receive payments under a fixed option or an initial
payment under a variable option of less than the minimum amounts guaranteed by
the contract.
If, at the time you elect a payout option, the amount to be applied is less
than $2,000 or the initial payment under the form elected is less than $20
monthly, we reserve the right to pay the account value in a single sum rather
than as payments under the payout option chosen.
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5
CHARGES AND EXPENSES
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CHARGES THAT EQUITABLE LIFE DEDUCTS
We deduct the following charges each day from the net assets of each variable
investment option. These charges are reflected in the unit values of each
variable investment option:
o A mortality and expense risks charge
o An administrative charge
We deduct the following charges from your account value. When we deduct these
charges from your variable investment options, we reduce the number of units
credited to your contract:
o On each contract date anniversary - an annual administrative charge, if
applicable (Flexible Premium IRA and Flexible Premium Roth IRA contracts
only).
o At the time you make certain withdrawals or surrender your contract - a
withdrawal charge.
o If you elect the optional benefit - a charge for the optional baseBUILDER
benefit.
o At the time annuity payments are to begin - charges designed to approximate
certain taxes that may imposed on us, such as premium taxes in your state.
An annuity administrative fee may also apply.
More information about these charges appears below. We will not increase these
charges for the life of your contract, except as noted. We may reduce certain
charges under group or sponsored arrangements. See "Group or sponsored
arrangements" below.
To help with your retirement planning, we may offer other annuities with
different charges, benefits, and features. Please contact your registered
representative for more information.
MORTALITY AND EXPENSE RISKS CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for mortality and expense risks, including the guaranteed
minimum death benefit. The daily charge is equivalent to an annual rate of
1.10% of the net assets in each variable investment option.
The mortality risk we assume is the risk that annuitants as a group will live
for a longer time than our actuarial tables predict. If that happens, we would
be paying more in annuity income than we planned. We also assume a risk that
the mortality assumptions reflected in our guaranteed annuity payment tables,
shown in each contract, will differ from actual mortality experience. Lastly,
we assume a mortality risk to the extent that at the time of death, the
guaranteed minimum death benefit exceeds the cash value of the contract. The
expense risk we assume is the risk that it will cost us more to issue and
administer the contracts than we expect.
ADMINISTRATIVE CHARGE
We deduct a daily charge from the net assets in each variable investment
option. The charge, together with the annual administrative charge described
below, is to compensate us for administrative expenses under the contracts. The
daily charge is equivalent to an annual rate of 0.25% of the net assets in each
variable investment option. We reserve the right under the contracts to
increase this charge to an annual rate of 0.35%.
ANNUAL ADMINISTRATIVE CHARGE (FLEXIBLE PREMIUM IRA AND FLEXIBLE PREMIUM ROTH
IRA CONTRACTS ONLY)
Under Flexible Premium IRA and Flexible Premium Roth IRA contracts, we deduct
an administrative charge from your account value on each contract date
anniversary. We deduct the charge if your account value on the last business
day of the contract year is less than $25,000. If your account value on such
date is $25,000 or more, we do not deduct the charge. During the first two
contract years, the charge is equal to $30 or, if less, 2% of your account
value. The charge is $30 for contract years three and later.
We will deduct this charge from your value in the variable investment options
on a pro rata basis. If there is not enough value in the variable investment
options, we will deduct all or a portion of the charge from the fixed maturity
options in order of the earliest maturity date(s) first. If you
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surrender your contract during the contract year we will deduct a pro rata
portion of the charge.
WITHDRAWAL CHARGE
A withdrawal charge applies in two circumstances:
(1) if you make one or more withdrawals during a contract year that, in total,
exceed the 15% free withdrawal amount, described below, or (2) if you surrender
your contract to receive its cash value.
The withdrawal charge equals a percentage of the contributions withdrawn. The
percentage that applies depends on how long each contribution has been invested
in the contract. We determine the withdrawal charge separately for each
contribution according to the following table:
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CONTRACT YEAR
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1 2 3 4 5 6 7 8+
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Percentage of
contribution 7% 6% 5% 4% 3% 2% 1% 0%
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For purposes of calculating the withdrawal charge, we treat the contract year
in which we receive a contribution as "contract year 1." Amounts withdrawn up
to the free withdrawal amount are not considered withdrawal of any
contribution. We also treat contributions that have been invested the longest
as being withdrawn first. We treat contributions as withdrawn before earnings
for purposes of calculating the withdrawal charge. However, federal income tax
rules treat earnings under your contract as withdrawn first. See "Tax
information."
In order to give you the exact dollar amount of the withdrawal you request, we
deduct the amount of the withdrawal and the withdrawal charge from your account
value. Any amount deducted to pay withdrawal charges is also subject to the
same withdrawal charge percentage. We deduct the charge in proportion to the
amount of the withdrawal subtracted from each investment option. The withdrawal
charge helps cover our sales expenses.
The withdrawal charge does not apply in the circumstances described below.
15% FREE WITHDRAWAL AMOUNT. Each contract year you can withdraw up to 15% of
your account value without paying a withdrawal charge. The 15% free withdrawal
amount is determined using your account value on the most recent contract date
anniversary, minus any other withdrawals made during the contract year. The 15%
free withdrawal amount does not apply if you surrender your contract.
Note the following special rule for NQ contracts issued to a charitable
remainder trust, the free withdrawal amount will equal the greater of: (1) the
current account value, less contributions that have not been withdrawn
(earnings in the contract), and (2) the 15% free withdrawal amount defined
above.
DISABILITY, TERMINAL ILLNESS OR CONFINEMENT TO NURSING HOME. The withdrawal
charge also does not apply if:
o The annuitant has qualified to receive Social Security disability benefits
as certified by the Social Security Administration; or
o We receive proof satisfactory to us (including certification by a licensed
physician) that the annuitant's life expectancy is six months or less; or
o The annuitant has been confined to a nursing home for more than 90 days (or
such other period, as required in your state) as verified by a licensed
physician. A nursing home for this purpose means one that is (a) approved by
Medicare as a provider of skilled nursing care service, or (b) licensed as a
skilled nursing home by the state or territory in which it is located (it
must be within the United States, Puerto Rico, or U.S. Virgin Islands) and
meets all of the following:
- its main function is to provide skilled, intermediate, or custodial
nursing care;
- it provides continuous room and board to three or more persons;
- it is supervised by a registered nurse or licensed practical nurse;
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- it keeps daily medical records of each patient;
- it controls and records all medications dispensed; and
- its primary service is other than to provide housing for residents.
We reserve the right to impose a withdrawal charge, in accordance with your
contract and applicable state law, if the disability is caused by a preexisting
condition or a condition that began within 12 months of the contract date. Some
states may not permit us to waive the withdrawal charge in the above
circumstances, or may limit the circumstances for which the withdrawal charge
may be waived. Your registered representative can provide more information or
you may contact our processing office.
baseBUILDER BENEFIT CHARGE
If you elect the baseBUILDER we deduct a charge annually from your account
value on each contract date anniversary until such time as you exercise the
guaranteed minimum income benefit, elect another annuity payout option, or the
contract date anniversary after which the annuitant reaches age 83, whichever
occurs first. The charge is equal to 0.30% of the benefit base in effect on the
contract date anniversary.
We will deduct this charge from your value in the variable investment options
on a pro rata basis. If there is not enough value in the variable investment
options, we will deduct all or a portion of the charge from the fixed maturity
options in order of the earliest maturity date(s) first. A market value
adjustment may apply.
CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES
We deduct a charge designed to approximate certain taxes that may be imposed on
us, such as premium taxes in your state. Generally, we deduct the charge from
the amount applied to provide an annuity payout option. The current tax charge
that might be imposed varies by state and ranges from 0% to 3.5% (1% in Puerto
Rico and 5% in the U.S. Virgin Islands).
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION ADMINISTRATIVE FEE
We deduct a fee of up to $350 from the amount to be applied to the Variable
Immediate Annuity payout option.
CHARGES THAT EQ ADVISORS TRUST DEDUCTS
EQ Advisors Trust deducts charges for the following types of fees and expenses:
o Management fees ranging from 0.25% to 1.15%.
o 12b-1 fees of 0.25%.
o Operating expenses, such as trustees' fees, independent auditors' fees,
legal counsel fees, administrative service fees, custodian fees, and
liability insurance.
o Investment-related expenses, such as brokerage commissions.
These charges are reflected in the daily share price of each portfolio. Since
shares of EQ Advisors Trust are purchased at their net asset value, these fees
and expenses are, in effect, passed on to the variable investment options and
are reflected in their unit values. For more information about these charges,
please refer to the prospectus for EQ Advisors Trust following this prospectus.
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce the withdrawal
charge or the mortality and expense risks charge, or change the minimum initial
contribution requirements. We also may change the guaranteed minimum income
benefit and the guaranteed minimum death benefit, or offer variable investment
options that invest in shares of EQ Advisors Trust that are not subject to the
12b-1 fee. Group arrangements include those in which a trustee or an employer,
for example, purchases contracts covering a group of individuals on a group
basis. Group arrangements are not available for IRA contracts. Sponsored
arrangements include those in which an employer allows us to sell contracts to
its employees or retirees on an individual basis.
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Our costs for sales, administration, and mortality generally vary with the size
and stability of the group or sponsoring organization, among other factors. We
take all these factors into account when reducing charges. To qualify for
reduced charges, a group or sponsored arrangement must meet certain
requirements, such as requirements for size and number of years in existence.
Group or sponsored arrangements that have been set up solely to buy contracts
or that have been in existence less than six months will not qualify for
reduced charges.
We also may establish different rates to maturity for the fixed maturity
options under different classes of contracts for group or sponsored
arrangements.
We will make these and any similar reductions according to our rules in effect
when we approve a contract for issue. We may change these rules from time to
time. Any variation will reflect differences in costs or services and will not
be unfairly discriminatory.
Group or sponsored arrangements may be governed by federal income tax rules,
ERISA, or both. We make no representations with regard to the impact of these
and other applicable laws on such programs. We recommend that employers,
trustees, and others purchasing or making contracts available for purchase
under such programs seek the advice of their own legal and benefits advisers.
OTHER DISTRIBUTION ARRANGEMENTS
We may reduce or eliminate charges when sales are made in a manner that result
in savings of sales and administrative expenses, such as sales through persons
who are compensated by clients for recommending investments and who receive no
commission or reduced commissions in connection with the sale of the contracts.
We will not permit a reduction or elimination of charges where it would be
unfairly discriminatory.
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6
PAYMENT OF DEATH BENEFIT
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YOUR BENEFICIARY AND PAYMENT OF BENEFIT
You designate your beneficiary when you apply for your contract. You may change
your beneficiary at any time. The change will be effective on the date the
written request for the change is received in our processing office. We are not
responsible for any beneficiary change request that we do not receive. We will
send you a written confirmation when we receive your request. Under jointly
owned contracts, the surviving owner is considered the beneficiary, and will
take the place of any other beneficiary. You may be limited as to the
beneficiary you can designate in a Rollover TSA contract. In a QP contract, the
beneficiary must be the trustee.
The death benefit is equal to your account value, or, if greater, the
guaranteed minimum death benefit. The guaranteed minimum death benefit is part
of your contract, whether you select the baseBUILDER benefit or not. We
determine the amount of the death benefit (other than the guaranteed minimum
death benefit) as of the date we receive satisfactory proof of the annuitant's
death and any required instructions for the method of payment. We determine the
amount of the guaranteed minimum death benefit as of the date of the
annuitant's death. Under Rollover TSA contracts we will deduct the amount of
any outstanding loan plus accrued interest from the amount of the death
benefit.
EFFECT OF THE ANNUITANT'S DEATH
If the annuitant dies before the annuity payments begin, we will pay the death
benefit to your beneficiary.
Generally, the death of the annuitant terminates the contract. However, a
beneficiary spouse of the owner/annuitant can choose to be treated as the
successor owner/annuitant and continue the contract. Only a spouse can be a
successor owner/annuitant. A successor owner/annuitant, can only be named under
NQ and IRA contracts.
For IRA contracts, a beneficiary may be able to have limited ownership as
discussed under "Beneficiary continuation option" below.
WHEN AN NQ CONTRACT OWNER DIES BEFORE THE ANNUITANT
Under certain conditions the owner changes after the original owner's death.
When you are not the annuitant under an NQ contract and you die before annuity
payments begin, the beneficiary named to receive the death benefit upon the
annuitant's death will automatically become the successor owner. If you do not
want this beneficiary to be the successor owner, you should name a specific
successor owner. You may name a successor at any time by sending satisfactory
notice to our processing office. If the contract is jointly owned and the first
owner to die is not the annuitant, the surviving owner becomes the sole
contract owner. This person will be considered the successor owner for purposes
of the distribution rules described in this section. The surviving owner
automatically takes the place of any other beneficiary designation.
Unless the surviving spouse of the owner who has died (or in the case of a
joint ownership situation, the surviving spouse of the first owner to die) is
the successor owner for this purpose, the entire interest in the contract must
be distributed under the following rules:
o The cash value of the contract must be fully paid to the successor owner
(new owner) by December 31st of the fifth calendar year after your death (or
in a joint ownership situation, the death of the first owner to die).
o The successor owner may instead elect to receive the cash value as a life
annuity (or payments for a period certain of not longer than the new owner's
life expectancy). Payments must begin no later than December 31st following
the calendar year of the non-annuitant owner's death. Unless this
alternative is elected, we will pay any cash value on December 31st of the
fifth calendar year following the year of your death (or the death of the
first owner to die).
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o If the surviving spouse is the successor owner or joint owner, the spouse
may elect to continue the contract. No distributions are required as long as
the surviving spouse and annuitant are living.
HOW DEATH BENEFIT PAYMENT IS MADE
We will pay the death benefit to the beneficiary in the form of the annuity
payout option you have chosen. If you have not chosen an annuity payout option
as of the time of the annuitant's death, the beneficiary will receive the death
benefit in a single sum. However, subject to any exceptions in the contract,
our rules and any applicable requirements under federal income tax rules, the
beneficiary may elect to apply the death benefit to one or more annuity payout
options we offer at the time. See "Your annuity payout options" in "Accessing
your money" earlier in this prospectus. Please note that any annuity payout
option chosen may not extend beyond the life expectancy of the beneficiary.
SUCCESSOR OWNER AND ANNUITANT
If you are both the contract owner and the annuitant, and your spouse is the
sole beneficiary or the joint owner, then your spouse may elect to receive the
death benefit or continue the contract as successor owner/annuitant.
If your surviving spouse decides to continue the contract, then on the contract
date anniversary following your death, we will increase the account value to
equal your current guaranteed minimum death benefit, if it is higher than the
account value. The increase in the account value will be allocated to the
investment options according to the allocation percentages we have on file for
your contract. Thereafter, withdrawal charges will no longer apply to this
amount. Withdrawal charges will apply if you make additional contributions.
These additional contributions will be withdrawn only after all other amounts
have been withdrawn. In determining whether the guaranteed minimum death
benefit will continue to grow, we will use your surviving spouse's age (as of
the contract date anniversary).
BENEFICIARY CONTINUATION OPTION
Upon your death under an IRA contract, a beneficiary may generally elect to
keep the contract in your name and receive distributions under the contract
instead of receiving the death benefit in a single sum. In order to elect this
option, the beneficiary must be an individual. Certain trusts with only
individual beneficiaries will be treated as individuals. This election must be
made within 60 days following the date we receive proof of your death. We will
increase the account value to equal the death benefit if the death benefit is
greater than the account value. Except as noted in the next sentence, the
beneficiary continuation option will be available on or after May 1, 2000
depending on when we receive regulatory clearance in your state. For Rollover
IRA and Flexible Premium IRA contracts, a similar beneficiary continuation
option will be available until the beneficiary continuation option described in
this prospectus is available. Please contact our processing office for further
information.
Under the beneficiary continuation option:
o The contract continues in your name for the benefit of your beneficiary.
o The beneficiary may make transfers among the investment options but no
additional contributions will be permitted.
o The guaranteed minimum income benefit and the death benefit (including the
guaranteed minimum death benefit) provisions will no longer be in effect.
o The beneficiary may choose at any time to withdraw all or a portion of the
account value and no withdrawal charges will apply. Any partial withdrawal
must be at least $300.
o Upon the death of the beneficiary, any remaining death benefit will be paid
in a lump sum to the person the beneficiary chooses.
For Traditional IRA contracts only, if you die AFTER the "Required Beginning
Date" for required minimum distributions (see "Tax information"), the contract
will continue if:
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(a) You were receiving minimum distribution withdrawals from this
contract; and
(b) The pattern of minimum distribution withdrawals you chose was based
in part on the life of the designated beneficiary.
The withdrawals will then continue to be paid to the beneficiary on the same
basis as you chose before your death. We will be able to tell your beneficiary
whether this option is available. You should contact our processing office for
further information.
For all of the above contracts, if you die BEFORE the Required Beginning Date
(and, for a traditional IRA, therefore you were not taking minimum distribution
withdrawals under the contract) the beneficiary may choose one of the following
two beneficiary continuation options:
1. Payments over life expectancy period. The beneficiary can receive annual
minimum distributions based on the beneficiary's life expectancy. If there is
more than one beneficiary, the shortest life expectancy is used. These minimum
distributions must begin by December 31st of the calendar year following the
year of your death. In some situations, a spouse beneficiary who elects to
continue the contract in your name under the beneficiary continuation option
instead of electing successor owner/annuitant status may also choose to delay
beginning the minimum distributions until the December 31st of the calendar
year in which you would have turned age 70 1/2.
2. Five Year Rule. The beneficiary can take withdrawals as desired. If the
beneficiary does not withdraw the entire account value by the December 31st of
the fifth calendar year following your death, we will pay any amounts remaining
under the contract to the beneficiary by that date. If you have more than one
beneficiary, and one of them elects this option, then all of your beneficiaries
will receive this option.
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7
TAX INFORMATION
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OVERVIEW
In this part of the prospectus, we discuss the current federal income tax rules
that generally apply to Equitable Accumulator contracts owned by United States
taxpayers. The tax rules can differ, depending on the type of contract, whether
NQ, Rollover IRA, Flexible Premium IRA, Roth Conversion IRA, Flexible Premium
Roth IRA, QP, or Rollover TSA. Therefore, we discuss the tax aspects of each
type of contract separately.
Federal income tax rules include the United States laws in the Internal Revenue
Code, and Treasury Department Regulations and Internal Revenue Service ("IRS")
interpretations of the Internal Revenue Code. These tax rules may change. We
cannot predict whether, when, or how these rules could change. Any change could
affect contracts purchased before the change.
We cannot provide detailed information on all tax aspects of the contracts.
Moreover, the tax aspects that apply to a particular person's contract may vary
depending on the facts applicable to that person. We do not discuss state
income and other state taxes, federal income tax, and withholding rules for
non-U.S. taxpayers, or federal gift and estate taxes. Transfers of the
contract, rights under the contract, or payments under the contract may be
subject to gift or estate taxes. You should not rely only on this document, but
should consult your tax adviser before your purchase.
If you are buying a contract to fund a retirement plan that already provides
tax deferral under sections of the Internal Revenue Code (IRA, QP, and Rollover
TSA), you should do so for the contract's features and benefits other than tax
deferral. In such situations, the tax deferral of the contract does not provide
additional benefits.
TRANSFERS AMONG INVESTMENT OPTIONS
You can make transfers among investment options inside the contract without
triggering taxable income.
TAXATION OF NONQUALIFIED ANNUITIES
CONTRIBUTIONS
You may not deduct the amount of your contributions to a nonqualified annuity
contract.
CONTRACT EARNINGS
Generally, you are not taxed on contract earnings until you receive a
distribution from your contract, whether as a withdrawal or as an annuity
payment. However, earnings are taxable, even without a distribution:
o if a contract fails investment diversification requirements as specified in
federal income tax rules (these rules are based on or are similar to those
specified for mutual funds under the securities laws);
o if you transfer a contract, for example, as a gift to someone other than
your spouse (or former spouse);
o if you use a contract as security for a loan (in this case, the amount
pledged will be treated as a distribution); and
o if the owner is other than an individual (such as a corporation,
partnership, trust, or other non-natural person).
All nonqualified deferred annuity contracts that Equitable Life and its
affiliates issue to you during the same calendar year are linked together and
treated as one contract for calculating the taxable amount of any distribution
from any of those contracts.
ANNUITY PAYMENTS
Once annuity payments begin, a portion of each payment is taxable as ordinary
income. You get back the remaining portion without paying taxes on it. This is
your "investment in the contract." Generally, your investment in the contract
equals the contributions you made, less any amounts you previously withdrew
that were not taxable.
For fixed annuity payments, the tax-free portion of each payment is determined
by (1) dividing your investment in the contract by the total amount you are
expected to receive out of the contract, and (2) multiplying the result by the
amount
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of the payment. For variable annuity payments, your tax-free portion of each
payment is your investment in the contract divided by the number of expected
payments.
Once you have received the amount of your investment in the contract, all
payments after that are fully taxable. If payments under a life annuity stop
because the annuitant dies, there is an income tax deduction for any
unrecovered investment in the contract.
PAYMENTS MADE BEFORE ANNUITY PAYMENTS BEGIN
If you make withdrawals before annuity payments begin under your contract, they
are taxable to you as ordinary income if there are earnings in the contract.
Generally, earnings are your account value less your investment in the
contract. If you withdraw an amount which is more than the earnings in the
contract as of the date of the withdrawal, the balance of the distribution is
treated as a return of your investment in the contract and is not taxable.
CONTRACTS PURCHASED THROUGH EXCHANGES
You may purchase your NQ contract through an exchange of another contract.
Normally, exchanges of contracts are taxable events. The exchange will not be
taxable under Section 1035 of the Internal Revenue Code if:
o the contract that is the source of the funds you are using to purchase the
NQ contract is another nonqualified deferred annuity contract or life
insurance or endowment contract.
o the owner and the annuitant are the same under the source contract and the
Equitable Accumulator NQ contract. If you are using a life insurance or
endowment contract the owner and the insured must be the same on both sides
of the exchange transaction.
The tax basis of the source contract carries over to the Equitable Accumulator
NQ contract.
A recent case permitted an owner to direct the proceeds of a partial withdrawal
from one nonqualified deferred annuity contract to a different insurer to
purchase a new nonqualified deferred annuity contract on a tax-deferred basis.
Special forms, agreement between the carriers, and provision of cost basis
information may be required to process this type of an exchange.
SURRENDERS
If you surrender or cancel the contract, the distribution is taxable as
ordinary income (not capital gain) to the extent it exceeds your investment in
the contract.
DEATH BENEFIT PAYMENTS MADE TO A BENEFICIARY AFTER YOUR DEATH
For the rules applicable to death benefits, see "Payment of death benefit"
earlier in this prospectus. The tax treatment of a death benefit taken as a
single sum is generally the same as the tax treatment of a withdrawal from or
surrender of your contract. The tax treatment of a death benefit taken as
annuity payments is generally the same as the tax treatment of annuity payments
under your contract.
EARLY DISTRIBUTION PENALTY TAX
If you take distributions before you are age 59 1/2 a penalty tax of 10% of the
taxable portion of your distribution applies in addition to the income tax. The
extra penalty tax does not apply to pre-age 59 1/2 distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o in the form of substantially equal periodic annuity payments for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and a beneficiary.
OTHER INFORMATION
The Treasury Department has the authority to issue guidelines prescribing the
circumstances in which your ability to direct your investment to particular
portfolios within a separate account may cause you, rather than the insurance
company, to be treated as the owner of the portfolio shares attributable to
your nonqualified annuity contract. In that case, income and gains attributable
to such portfolio shares would be included in your gross income for federal
income tax purposes. Under current rules, however, we believe that
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Equitable Life, and not the owner of a nonqualified annuity contract, would be
considered the owner of the portfolio shares.
SPECIAL RULES FOR NQ CONTRACTS ISSUED IN PUERTO RICO
Under current law we treat income from NQ contracts as U.S. source. A Puerto
Rico resident is subject to U.S. taxation on such U.S. source income. Only
Puerto Rico source income of Puerto Rico residents is excludable from U.S.
taxation. Income from NQ contracts is also subject to Puerto Rico tax. The
calculation of the taxable portion of amounts distributed from a contract may
differ in the two jurisdictions. Therefore, you might have to file both U.S.
and Puerto Rico tax returns, showing different amounts of income from the
contract for each tax return. Puerto Rico generally provides a credit against
Puerto Rico tax for U.S. tax paid. Depending on your personal situation and
the timing of the different tax liabilities, you may not be able to take full
advantage of this credit.
INDIVIDUAL RETIREMENT ARRANGEMENTS (IRAS)
GENERAL
"IRA" stands for individual retirement arrangement. There are two basic types
of such arrangements, individual retirement accounts and individual retirement
annuities. In an individual retirement account, a trustee or custodian holds
the assets for the benefit of the IRA owner. The assets can include mutual
funds and certificates of deposit. In an individual retirement annuity, an
insurance company issues an annuity contract that serves as the IRA.
There are two basic types of IRAs, as follows:
o Traditional IRAs, typically funded on a pre-tax basis including SEP-IRAs and
SIMPLE-IRAs, issued and funded in connection with employer-sponsored
retirement plans; and
o Roth IRAs, first available in 1998, funded on an after-tax basis.
Regardless of the type of IRA, your ownership interest in the IRA cannot be
forfeited. You or your beneficiaries who survive you are the only ones who can
receive the IRA's benefits or payments.
You can hold your IRA assets in as many different accounts and annuities as you
would like, as long as you meet the rules for setting up and making
contributions to IRAs. However, if you own multiple IRAs, you may be required
to combine IRA values or contributions for tax purposes. For further
information about individual retirement arrangements, you can read Internal
Revenue Service Publication 590 ("Individual Retirement Arrangements (IRAs)").
This publication is usually updated annually, and can be obtained from any IRS
district office or the IRS Web site (http://www.irs.gov).
Equitable Life designs its traditional IRA contracts to qualify as individual
retirement annuities under Section 408(b) of the Internal Revenue Code. You may
purchase the contract as a traditional IRA or Roth IRA. The traditional IRAs we
offer are the Rollover IRA and Flexible Premium IRA. The versions of the Roth
IRA available are the Roth Conversion IRA and Flexible Premium Roth IRA. This
prospectus contains the information that the IRS requires you to have before
you purchase an IRA. This section of the prospectus covers some of the special
tax rules that apply to IRAs. The next section covers Roth IRAs. Education IRAs
are not discussed in this prospectus because they are not available in
individual retirement annuity form.
The Equitable Accumulator IRA contract has been approved by the IRS as to form
for use as a traditional IRA. This IRS approval is a determination only as to
the form of the annuity. It does not represent a determination of the merits of
the annuity as an investment. The IRS approval does not address every feature
possibly available under the Equitable Accumulator IRA contract. Although we do
not have IRS approval as to form, we believe that the version of the Roth IRA
currently offered complies with the requirements of the Internal Revenue Code.
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CANCELLATION
You can cancel an Equitable Accumulator IRA contract by following the
directions under "Your right to cancel within a certain number of days" in
"Contract features and benefits" earlier in the prospectus. You can cancel an
Equitable Accumulator Roth Conversion IRA contract issued as a result of a full
conversion of an Equitable Accumulator Rollover IRA or Flexible Premium IRA
contract by following the instructions in the request for full conversion form.
The form is available from our processing office or your registered
representative. If you cancel an IRA contract, we may have to withhold tax, and
we must report the transaction to the IRS. A contract cancellation could have
an unfavorable tax impact.
TRADITIONAL INDIVIDUAL RETIREMENT ANNUITIES (TRADITIONAL IRAS)
CONTRIBUTIONS TO TRADITIONAL IRAS. Individuals may make three different types
of contributions to a traditional IRA:
o regular contributions out of earned income or compensation; or
o tax-free "rollover" contributions; or
o direct custodian-to-custodian transfers from other traditional IRAs ("direct
transfers").
REGULAR CONTRIBUTIONS TO TRADITIONAL IRAS
LIMITS ON CONTRIBUTIONS. Generally, $2,000 is the maximum amount that you may
contribute to all IRAs (including Roth IRAs) in any taxable year. When your
earnings are below $2,000, your earned income or compensation for the year is
the most you can contribute. This $2,000 limit does not apply to rollover
contributions or direct custodian-to-custodian transfers into a traditional
IRA. You cannot make regular traditional IRA contributions for the tax year in
which you reach age 70 1/2 or any tax year after that.
SPECIAL RULES FOR SPOUSES. If you are married and file a joint income tax
return, you and your spouse may combine your compensation to determine the
amount of regular contributions you are permitted to make to traditional IRAs
(and Roth IRAs discussed below). Even if one spouse has no compensation or
compensation under $2,000, married individuals filing jointly can contribute up
to $4,000 for any taxable year to any combination of traditional IRAs and Roth
IRAs. (Any contributions to Roth IRAs reduce the ability to contribute to
traditional IRAs and vice versa.) The maximum amount may be less if earned
income is less and the other spouse has made IRA contributions. No more than a
combined total of $2,000 can be contributed annually to either spouse's
traditional and Roth IRAs. Each spouse owns his or her traditional IRAs and
Roth IRAs even if the other spouse funded the contributions. A working spouse
age 70 1/2 or over can contribute up to the lesser of $2,000 or 100% of "earned
income" to a traditional IRA for a nonworking spouse until the year in which
the nonworking spouse reaches age 70 1/2.
DEDUCTIBILITY OF CONTRIBUTIONS. The amount of traditional IRA contributions
that you can deduct for a tax year depends on whether you are covered by an
employer-sponsored tax-favored retirement plan, as defined under special
federal income tax rules. Your Form W-2 will indicate whether or not you are
covered by such a retirement plan.
IF YOU ARE NOT COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, you
can make fully deductible contributions to your traditional IRAs for each tax
year up to $2,000 or, if less, your earned income.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
adjusted gross income (AGI) is BELOW THE LOWER DOLLAR FIGURE IN A PHASE-OUT
RANGE, you can make fully deductible contributions to your traditional IRAs.
For each tax year, your fully deductible contribution can be up to $2,000 or,
if less, your earned income.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
AGI falls within a PHASE-OUT range, you can make PARTIALLY DEDUCTIBLE
CONTRIBUTIONS to your traditional IRAs.
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IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
AGI falls ABOVE THE HIGHER FIGURE IN THE PHASE-OUT RANGE, you may not deduct
any of your regular contributions to your traditional IRAs.
If you are single and covered by a retirement plan during any part of the
taxable year, the deduction for traditional IRA contributions phases out with
AGI between $31,000 and $42,000 in 2000. This range will increase every year
until 2005 when the range is $50,000-$60,000.
If you are married and file a joint return, and you are covered by a retirement
plan during any part of the taxable year, the deduction for traditional IRA
contributions phases out with AGI between $51,000 and $61,000 in 1999. This
range will increase every year until 2007 when the range is $80,000-$100,000.
Married individuals filing separately and living apart at all times are not
considered married for purposes of this deductible contribution calculation.
Generally, the active participation in an employer-sponsored retirement plan of
an individual is determined independently for each spouse. Where spouses have
"married filing jointly" status, however, the maximum deductible traditional
IRA contribution for an individual who is not an active participant (but whose
spouse is an active participant) is phased out for taxpayers with AGI of
between $150,000 and $160,000.
To determine the deductible amount of the contribution in 2000, you determine
AGI and subtract $32,000 if you are single, or $52,000 if you are married and
file a joint return with your spouse. The resulting amount is your excess AGI.
You then determine the limit on the deduction for traditional IRA contributions
using the following formula:
($10,000-excess AGI) times $2,000 (or earned Equals the adjusted
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divided by $10,000 x income, if less) = deductible
contribution
limit
NONDEDUCTIBLE REGULAR CONTRIBUTIONS. If you are not eligible to deduct part or
all of the traditional IRA contribution, you may still make nondeductible
contributions on which earnings will accumulate on a tax-deferred basis. The
combined deductible and nondeductible contributions to your traditional IRA (or
the nonworking spouse's traditional IRA) may not, however, exceed the maximum
$2,000 per person limit. See "Excess contributions" below. You must keep your
own records of deductible and nondeductible contributions in order to prevent
double taxation on the distribution of previously taxed amounts. See
"Withdrawals, payments and transfers of funds out of traditional IRAs" below.
If you are making nondeductible contributions in any taxable year, or you have
made nondeductible contributions to a traditional IRA in prior years and are
receiving distributions from any traditional IRA, you must file the required
information with the IRS. Moreover, if you are making nondeductible traditional
IRA contributions, you must retain all income tax returns and records
pertaining to such contributions until interests in all traditional IRAs are
fully distributed.
WHEN YOU CAN MAKE REGULAR CONTRIBUTIONS. If you file your tax returns on a
calendar year basis like most taxpayers, you have until the April 15 return
filing deadline (without extensions) of the following calendar year to make
your regular traditional IRA contributions for a tax year.
ROLLOVERS AND TRANSFERS
Rollover contributions may be made to a traditional IRA from these sources:
o qualified plans;
o TSAs (including Internal Revenue Code Section 403(b)(7) custodial
accounts); and
o other traditional IRAs.
Any amount contributed to a traditional IRA after you reach age 70 1/2 must be
net of your required minimum distribution for the year in which the rollover or
direct transfer contribution is made.
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ROLLOVERS FROM QUALIFIED PLANS OR TSAS
There are two ways to do rollovers:
o Do it yourself
You actually receive a distribution that can be rolled over and you roll it
over to a traditional IRA within 60 days after the date you receive the
funds. The distribution from your qualified plan or TSA will be net of 20%
mandatory federal income tax withholding. If you want, you can replace the
withheld funds yourself and roll over the full amount.
o Direct rollover
You tell your qualified plan trustee or TSA issuer/custodian/fiduciary to
send the distribution directly to your traditional IRA issuer. Direct
rollovers are not subject to mandatory federal income tax withholding.
All distributions from a TSA or qualified plan are eligible rollover
distributions, unless the distribution is:
o only after-tax contributions you made to the plan; or
o "required minimum distributions" after age 70 1/2 or separation from
service; or
o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancies) of you
and your designated beneficiary; or
o a hardship withdrawal; or
o substantially equal periodic payments made for a specified period of 10
years or more; or
o corrective distributions that fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse;
or
o a qualified domestic relations order distribution to a beneficiary who is
not your current spouse or former spouse.
ROLLOVERS FROM TRADITIONAL IRAS TO TRADITIONAL IRAS
You may roll over amounts from one traditional IRA to one or more of your other
traditional IRAs if you complete the transaction within 60 days after you
receive the funds. You may make such a rollover only once in every 12-month
period for the same funds. Trustee-to-trustee or custodian-to-custodian direct
transfers are not rollover transactions. You can make these more frequently
than once in every 12-month period.
The surviving spouse beneficiary of a deceased individual can roll over or
directly transfer an inherited traditional IRA to one or more other traditional
IRAs. Also, in some cases, traditional IRAs can be transferred on a tax-free
basis between spouses or former spouses as a result of a court-ordered divorce
or separation decree.
EXCESS CONTRIBUTIONS
Excess contributions to IRAs are subject to a 6% excise tax for the year in
which made and for each year after until withdrawn. The following are excess
contributions to IRAs:
o regular contributions of more than $2,000; or
o regular contributions of more than earned income for the year, if that
amount is under $2,000; or
o regular contributions to a traditional IRA made after you reach age 70 1/2;
or
o rollover contributions of amounts which are not eligible to be rolled over.
For example, after-tax contributions to a qualified plan or minimum
distributions required to be made after age 70 1/2.
You can avoid the excise tax by withdrawing an excess contribution (rollover or
regular) before the due date (including extensions) for filing your federal
income tax return for the year. If it is an excess regular traditional IRA
contribution, you cannot take a tax deduction for the amount withdrawn. You do
not have to include the excess contribution withdrawn as part of your income.
It is also not subject to the 10% additional penalty tax on early
distributions, discussed below under "Early distribution
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penalty tax." You do have to withdraw any earnings that are attributed to the
excess contribution. The withdrawn earnings would be included in your gross
income and could be subject to the 10% penalty tax.
Even after the due date for filing your return, you may withdraw an excess
rollover contribution, without income inclusion or 10% penalty, if:
(1) the rollover was from a qualified retirement plan to a traditional IRA;
(2) the excess contribution was due to incorrect information that the plan
provided; and
(3) you took no tax deduction for the excess contribution.
RECHARACTERIZATIONS
Amounts that have been contributed as traditional IRA funds may subsequently be
treated as Roth IRA funds. Special federal income tax rules allow you to change
your mind again and have amounts that are subsequently treated as Roth IRA
funds, once again treated as traditional IRA funds. You do this by using the
forms we prescribe. This is referred to as having "recharacterized" your
contribution.
WITHDRAWALS, PAYMENTS AND TRANSFERS OF FUNDS OUT OF TRADITIONAL IRAS
NO FEDERAL INCOME TAX LAW RESTRICTIONS ON WITHDRAWALS. You can withdraw any or
all of your funds from a traditional IRA at any time. You do not need to wait
for a special event like retirement.
TAXATION OF PAYMENTS. Earnings in traditional IRAs are not subject to federal
income tax until you or your beneficiary receive them. Taxable payments or
distributions include withdrawals from your contract, surrender of your
contract, and annuity payments from your contract. Death benefits are also
taxable. Except as discussed below, the total amount of any distribution from a
traditional IRA must be included in your gross income as ordinary income.
If you have ever made nondeductible IRA contributions to any traditional IRA
(it does not have to be to this particular traditional IRA contract), those
contributions are recovered tax free when you get distributions from any
traditional IRA. You must keep permanent tax records of all of your
nondeductible contributions to traditional IRAs. At the end of any year in
which you have received a distribution from any traditional IRA, you calculate
the ratio of your total nondeductible traditional IRA contributions (less any
amounts previously withdrawn tax free) to the total account balances of all
traditional IRAs you own at the end of the year plus all traditional IRA
distributions made during the year. Multiply this by all distributions from the
traditional IRA during the year to determine the nontaxable portion of each
distribution.
In addition, a distribution is not taxable if:
o the amount received is a withdrawal of excess contributions, as described
under "Excess contributions" above; or
o the entire amount received is rolled over to another traditional IRA (see
"Rollovers and transfers" above); or
o in certain limited circumstances, where the traditional IRA acts as a
"conduit," you roll over the entire amount into a qualified plan or TSA that
accepts rollover contributions. To get this conduit traditional IRA
treatment:
o the source of funds you used to establish the traditional IRA must have
been a rollover contribution from a qualified plan; and
o the entire amount received from the traditional IRA (including any
earnings on the rollover contribution) must be rolled over into another
qualified plan within 60 days of the date received.
Similar rules apply in the case of a TSA.
However, you may lose conduit treatment if you make an eligible rollover
distribution contribution to a traditional IRA and you commingle this
contribution with other contributions. In that case, you may not be able to
roll over these eligible rollover distribution contributions and earnings to
another qualified plan or TSA at a future date. The Rollover IRA contract can
be used as a conduit IRA if amounts are not commingled.
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Distributions from a traditional IRA are not eligible for favorable, ten-year
averaging and long-term capital gain treatment available to certain
distributions from qualified plans.
REQUIRED MINIMUM DISTRIBUTIONS
LIFETIME REQUIRED MINIMUM DISTRIBUTIONS. You must start taking annual
distributions from your traditional IRAs beginning at age 70 1/2.
WHEN YOU HAVE TO TAKE THE FIRST REQUIRED MINIMUM DISTRIBUTION. The first
required minimum distribution is for the calendar year in which you turn age
70 1/2. You have the choice to take this first required minimum distribution
during the calendar year you actually reach age 70 1/2, or to delay taking it
until the first three-month period in the next calendar year (January 1 - April
1). Distributions must start no later than your Required Beginning Date, which
is April 1st of the calendar year after the calendar year in which you turn age
70 1/2. If you choose to delay taking the first annual minimum distribution,
then you will have to take two minimum distributions in that year - the delayed
one for the first year and the one actually for that year. Once minimum
distributions begin, they must be made at some time each year.
HOW YOU CAN CALCULATE REQUIRED MINIMUM DISTRIBUTIONS. There are two approaches
to taking required minimum distributions - "account-based" or "annuity-based."
Account-based method. If you choose an account-based method, you divide the
value of your traditional IRA as of December 31st of the past calendar year by
a life expectancy factor from IRS tables. This gives you the required minimum
distribution amount for that particular IRA for that year. The required minimum
distribution amount will vary each year as the account value and your life
expectancy factors change.
You have a choice of life expectancy factors, depending on whether you choose a
method based only on your life expectancy, or the joint life expectancies of
you and another individual. You can decide to "recalculate" your life
expectancy every year by using your current life expectancy factor. You can
decide instead to use the "term certain" method, where you reduce your life
expectancy by one every year after the initial year. If your spouse is your
designated beneficiary for the purpose of calculating annual account-based
required minimum distributions, you can also annually recalculate your spouse's
life expectancy if you want. If you choose someone who is not your spouse as
your designated beneficiary for the purpose of calculating annual account-based
required minimum distributions, you have to use the term certain method of
calculating that person's life expectancy. If you pick a nonspouse designated
beneficiary, you may also have to do another special calculation.
You can later apply your traditional IRA funds to a life annuity-based payout.
You can only do this if you already chose to recalculate your life expectancy
annually (and your spouse's life expectancy if you select a spousal joint
annuity). For example, if you anticipate exercising your guaranteed minimum
income benefit or selecting any other form of life annuity payout after you are
age 70 1/2, you must have elected to recalculate life expectancies.
Annuity-based method. If you choose an annuity-based method, you do not have to
do annual calculations. You apply the account value to an annuity payout for
your life or the joint lives of you and a designated beneficiary, or for a
period certain not extending beyond applicable life expectancies.
DO YOU HAVE TO PICK THE SAME METHOD TO CALCULATE YOUR REQUIRED MINIMUM
DISTRIBUTIONS FOR ALL OF YOUR TRADITIONAL IRAS AND OTHER RETIREMENT PLANS? No.
If you want, you can choose a different method and a different beneficiary for
each of your traditional IRAs and other retirement plans. For example, you can
choose an annuity payout from one IRA, a different annuity payout from a
qualified plan, and an account-based annual withdrawal from another IRA.
WILL WE PAY YOU THE ANNUAL AMOUNT EVERY YEAR FROM YOUR TRADITIONAL IRA BASED
ON THE METHOD YOU CHOOSE? No, unless you affirmatively select an annuity
payout option or an account-based withdrawal option such as our minimum
distribution withdrawal option. Because
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the options we offer do not cover every option permitted under federal income
tax rules, you may prefer to do your own required minimum distribution
calculations for one or more of your traditional IRAs.
WHAT IF YOU TAKE MORE THAN YOU NEED TO FOR ANY YEAR? The required minimum
distribution amount for your traditional IRAs is calculated on a year-by-year
basis. There are no carry-back or carry-forward provisions. Also, you cannot
apply required minimum distribution amounts you take from your qualified plans
to the amounts you have to take from your traditional IRAs and vice versa.
However, the IRS will let you calculate the required minimum distribution for
each traditional IRA that you maintain, using the method that you picked for
that particular IRA. You can add these required minimum distribution amount
calculations together. As long as the total amount you take out every year
satisfies your overall traditional IRA required minimum distribution amount,
you may choose to take your annual required minimum distribution from any one
or more traditional IRAs that you own.
WHAT IF YOU TAKE LESS THAN YOU NEED TO FOR ANY YEAR?
Your IRA could be disqualified, and you could have to pay tax on the entire
value. Even if your IRA is not disqualified, you could have to pay a 50%
penalty tax on the shortfall (required amount for traditional IRAs less amount
actually taken). It is your responsibility to meet the required minimum
distribution rules. We will remind you when our records show that your age
70 1/2 is approaching. If you do not select a method with us, we will assume
you are taking your required minimum distribution from another traditional IRA
that you own.
WHAT ARE THE REQUIRED MINIMUM DISTRIBUTION PAYMENTS AFTER YOU DIE? If you die
after either (a) the start of annuity payments, or (b) your Required Beginning
Date, your beneficiary must receive payment of the remaining values in the
contract at least as rapidly as under the distribution method before your
death. In some circumstances, your surviving spouse may elect to become the
owner of the traditional IRA and halt distributions until he or she reaches age
70 1/2.
If you die before your Required Beginning Date and before annuity payments
begin, federal income tax rules require complete distribution of your entire
value in the contract within five years after your death. Payments to a
designated beneficiary over the beneficiary's life or over a period certain
that does not extend beyond the beneficiary's life expectancy are also
permitted, if these payments start within one year of your death. A surviving
spouse beneficiary can also (a) delay starting any payments until you would
have reached age 70 1/2 or (b) roll over your traditional IRA into his or her
own traditional IRA.
SUCCESSOR ANNUITANT AND OWNER
If your spouse is the sole primary beneficiary and elects to become the
successor annuitant and owner, no death benefit is payable until your surviving
spouse's death.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
IRA death benefits are taxed the same as IRA distributions.
BORROWING AND LOANS ARE PROHIBITED TRANSACTIONS
You cannot get loans from a traditional IRA. You cannot use a traditional IRA
as collateral for a loan or other obligation. If you borrow against your IRA or
use it as collateral, its tax-favored status will be lost as of the first day
of the tax year in which this prohibited event occurs. If this happens, you
must include the value of the traditional IRA in your federal gross income.
Also, the early distribution penalty tax of 10% will apply if you have not
reached age 59 1/2 before the first day of that tax year.
EARLY DISTRIBUTION PENALTY TAX
A penalty tax of 10% of the taxable portion of a distribution applies to
distributions from a traditional IRA made before you reach age 59 1/2. The
extra penalty tax does not apply to pre-age 59 1/2 distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o used to pay certain extraordinary medical expenses (special federal income
tax definition); or
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o used to pay medical insurance premiums for unemployed individuals (special
federal income tax definition); or
o used to pay certain first-time home buyer expenses (special federal income
tax definition; $10,000 lifetime total limit for these distributions from
all your traditional and Roth IRAs); or
o used to pay certain higher education expenses (special federal income tax
definition); or
o in the form of substantially equal periodic payments made at least annually
over your life (or your life expectancy), or over the joint lives of you and
your beneficiary (or your joint life expectancy) using an IRS-approved
distribution method.
To meet this last exception, you could elect to apply your contract value to an
Income Manager (life annuity with a period certain) payout annuity contract
(level payments version). You could also elect the substantially equal
withdrawals option. We will calculate the substantially equal annual payments
under a method we select based on guidelines issued by the IRS (currently
contained in IRS Notice 89-25, Question and Answer 12). Although substantially
equal withdrawals and Income Manager payments are not subject to the 10%
penalty tax, they are taxable as discussed in "Withdrawals, payments and
transfers of funds out of traditional IRAs" above. Once substantially equal
withdrawals or Income Manager annuity payments begin, the distributions should
not be stopped or changed until after the later of your reaching age 59 1/2 or
five years after the date of the first distribution, or the penalty tax,
including an interest charge for the prior penalty avoidance, may apply to all
prior distributions under either option. Also, it is possible that the IRS
could view any additional withdrawal or payment you take from your contract as
changing your pattern of substantially equal withdrawals or Income Manager
payments for purposes of determining whether the penalty applies.
ROTH INDIVIDUAL RETIREMENT ANNUITIES (ROTH IRAS)
This section of the prospectus covers some of the special tax rules that apply
to Roth IRAs. If the rules are the same as those that apply to the traditional
IRA, we will refer you to the same topic under "traditional IRAs."
The Equitable Accumulator Roth IRA contract is designed to qualify as a Roth
individual retirement annuity under Sections 408A and 408(b) of the Internal
Revenue Code.
CONTRIBUTIONS TO ROTH IRAS
Individuals may make four different types of contributions to a Roth IRA:
o regular after-tax contributions out of earnings; or
o taxable rollover contributions from traditional IRAs ("conversion"
contributions); or
o tax-free rollover contributions from other Roth IRAs; or
o tax-free direct custodian-to-custodian transfers from other Roth IRAs
("direct transfers").
Regular after-tax, direct transfer, and rollover contributions may be made to a
Flexible Premium Roth IRA contract. We only permit direct transfer and rollover
contributions under the Roth Conversion IRA contract. See "Rollovers and direct
transfers" below. If you use the forms we require, we will also accept
traditional IRA funds which are subsequently recharacterized as Roth IRA funds
following special federal income tax rules.
REGULAR CONTRIBUTIONS TO ROTH IRAS
LIMITS ON REGULAR CONTRIBUTIONS. Generally, $2,000 is the maximum amount that
you may contribute to all IRAs (including Roth IRAs) in any taxable year. This
$2,000 limit does not apply to rollover contributions or direct
custodian-to-custodian transfers into a Roth IRA. Any contributions to Roth
IRAs reduce your ability to contribute to traditional IRAs and vice versa. When
your earnings are below $2,000, your earned income or compensation for the year
is the most you can contribute. If you are married and file a joint income tax
return, you and your spouse may combine your compensation to determine the
amount of regular contributions you are permitted to make to Roth IRAs and
traditional IRAs. See the discussion above under traditional IRAs.
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With a Roth IRA, you can make regular contributions when you reach 70 1/2, as
long as you have sufficient earnings. But, you cannot make contributions for
any year that:
o your federal income tax filing status is "married filing jointly" and your
adjusted gross income is over $160,000; or
o your federal income tax filing status is "single" and your adjusted gross
income is over $110,000.
However, you can make regular Roth IRA contributions in reduced amounts when:
o your federal income tax filing status is "married filing jointly" and your
adjusted gross income is between $150,000 and $160,000; or
o your federal income tax filing status is "single" and your adjusted gross
income is between $95,000 and $110,000.
If you are married and filing separately and your adjusted gross income is
between $0 and $10,000 the amount of regular contributions you are permitted to
make is phased out. If your adjusted gross income is more than $10,000 you
cannot make regular Roth IRA contributions.
WHEN YOU CAN MAKE CONTRIBUTIONS. Same as traditional IRAs.
DEDUCTIBILITY OF CONTRIBUTIONS. Roth IRA contributions are not tax deductible.
ROLLOVERS AND DIRECT TRANSFERS
WHAT IS THE DIFFERENCE BETWEEN ROLLOVER AND DIRECT TRANSFER TRANSACTIONS? You
may make rollover contributions to a Roth IRA from only two sources:
o another Roth IRA ("tax-free rollover contribution"); or
o another traditional IRA, including a SEP-IRA or SIMPLE-IRA, in a taxable
conversion rollover ("conversion contribution").
You may not make contributions to a Roth IRA from a qualified plan under
Section 401(a) of the Internal Revenue Code, or a TSA under Section 403(b) of
the Internal Revenue Code. You may make direct transfer contributions to a Roth
IRA only from another Roth IRA.
The difference between a rollover transaction and a direct transfer transaction
is the following: in a rollover transaction you actually take possession of the
funds rolled over, or are considered to have received them under tax law in the
case of a change from one type of plan to another. In a direct transfer
transaction, you never take possession of the funds, but direct the first Roth
IRA custodian, trustee, or issuer to transfer the first Roth IRA funds directly
to Equitable Life, as the Roth IRA issuer. You can make direct transfer
transactions only between identical plan types (for example, Roth IRA to Roth
IRA). You can also make rollover transactions between identical plan types.
However, you can only use rollover transactions between different plan types
(for example, traditional IRA to Roth IRA).
You may make both Roth IRA to Roth IRA rollover transactions and Roth IRA to
Roth IRA direct transfer transactions. This can be accomplished on a completely
tax-free basis. However, you may make Roth IRA to Roth IRA rollover
transactions only once in any 12-month period for the same funds.
Trustee-to-trustee or custodian-to-custodian direct transfers can be made more
frequently than once a year. Also, if you send us the rollover contribution to
apply it to a Roth IRA, you must do so within 60 days after you receive the
proceeds from the original IRA to get rollover treatment.
The surviving spouse beneficiary of a deceased individual can roll over or
directly transfer an inherited Roth IRA to one or more other Roth IRAs. In some
cases, Roth IRAs can be transferred on a tax-free basis between spouses or
former spouses as a result of a court-ordered divorce or separation decree.
CONVERSION CONTRIBUTIONS TO ROTH IRAS
In a conversion rollover transaction, you withdraw (or are considered to have
withdrawn) all or a portion of funds from a traditional IRA you maintain and
convert it to a Roth IRA within 60 days after you receive (or are considered to
have received) the traditional IRA proceeds. Unlike a
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rollover from a traditional IRA to another traditional IRA, the conversion
rollover transaction is not tax-free. Instead, the distribution from the
traditional IRA is generally fully taxable. For this reason, we are required to
withhold 10% federal income tax from the amount converted unless you elect out
of such withholding. If you have ever made nondeductible regular contributions
to any traditional IRA - whether or not it is the traditional IRA you are
converting - a pro rata portion of the distribution is tax free.
There is, however, no early distribution penalty tax on the traditional IRA
withdrawal that you are converting to a Roth IRA, even if you are under age
59 1/2.
You cannot make conversion contributions to a Roth IRA for any taxable year in
which your adjusted gross income exceeds $100,000. For this purpose, your
adjusted gross income is computed without the gross income stemming from the
traditional IRA conversion. You also cannot make conversion contributions to a
Roth IRA for any taxable year in which your federal income tax filing status is
"married filing separately."
Finally, you cannot make conversion contributions to a Roth IRA to the extent
that the funds in your traditional IRA are subject to the annual required
minimum distribution rule applicable to traditional IRAs beginning at age
70 1/2.
WITHDRAWALS, PAYMENTS AND TRANSFERS OF FUNDS OUT OF ROTH IRAS
NO FEDERAL INCOME TAX LAW RESTRICTIONS ON WITHDRAWALS. You can withdraw any or
all of your funds from a Roth IRA at any time; you do not need to wait for a
special event like retirement.
DISTRIBUTIONS FROM ROTH IRAS
Distributions include withdrawals from your contract, surrender of your
contract, and annuity payments from your contract. Death benefits are also
distributions.
The following distributions from Roth IRAs are free of income tax:
o Rollover from a Roth IRA to another Roth IRA;
o Direct transfer from a Roth IRA to another Roth IRA;
o Qualified distributions from a Roth IRA; and
o Return of excess contributions or amounts recharacterized to a traditional
IRA.
QUALIFIED DISTRIBUTIONS FROM ROTH IRAS. Qualified distributions from Roth IRAs
made because of one of the following four qualifying events or reasons are not
includable in income:
o you reach age 59 1/2; or
o you die; or
o you become disabled (special federal income tax definition); or
o your distribution is a "qualified first-time homebuyer distribution"
(special federal income tax definition; $10,000 lifetime total limit for
these distributions from all of your traditional and Roth IRAs).
You also have to meet a five-year aging period. A qualified distribution is any
distribution made after the five-taxable- year period beginning with the first
taxable year for which you made any contribution to any Roth IRA (whether or
not the one from which the distribution is being made). It is not possible to
have a tax-free qualified distribution before the year 2003 because of the
five-year aging requirement.
NONQUALIFIED DISTRIBUTIONS FROM ROTH IRAS. Nonqualified distributions from Roth
IRAs are distributions that do not meet the qualifying event and five-year
aging period tests described above. Such distributions are potentially taxable
as ordinary income. Nonqualified distributions receive
return-of-investment-first treatment. Only the difference between the amount of
the distribution and the amount of contributions to all of your Roth IRAs is
taxable. You have to reduce the amount of contributions to all of your Roth
IRAs to reflect any previous tax-free recoveries.
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You must keep your own records of regular and conversion contributions to all
Roth IRAs to assure appropriate taxation. You may have to file information on
your contributions to and distributions from any Roth IRA on your tax return.
You may have to retain all income tax returns and records pertaining to such
contributions and distributions until your interests in all Roth IRAs are
distributed.
Like traditional IRAs, taxable distributions from a Roth IRA are not entitled
to the special favorable five-year averaging method (or, in certain cases,
favorable ten-year averaging and long-term capital gain treatment) available in
certain cases to distributions from qualified plans.
REQUIRED MINIMUM DISTRIBUTIONS AT DEATH
Same as traditional IRA under "What are the required minimum distribution
payments after you die?" Lifetime required minimum distributions do not apply.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
Distributions to a beneficiary generally receive the same tax treatment as if
the distribution had been made to you.
BORROWING AND LOANS ARE PROHIBITED TRANSACTIONS
Same as traditional IRA.
EXCESS CONTRIBUTIONS
Generally the same as traditional IRA.
Excess rollover contributions to Roth IRAs are contributions not eligible to be
rolled over (for example, conversion contributions from a traditional IRA if
your adjusted gross income is in excess of $100,000 in the conversion year).
You can withdraw or recharacterize any contribution to a Roth IRA before the
due date (including extensions) for filing your federal income tax return for
the tax year. If you do this, you must also withdraw or recharacterize any
earnings attributable to the contribution.
EARLY DISTRIBUTION PENALTY TAX
Same as traditional IRA.
For Roth IRAs, special penalty rules may apply to amounts withdrawn
attributable to 1998 conversion rollovers.
SPECIAL RULES FOR NONQUALIFIED CONTRACTS IN QUALIFIED PLANS
Under QP contracts your plan administrator or trustee notifies you as to tax
consequences. See Appendix II.
TAX-SHELTERED ANNUITY CONTRACTS (TSAS)
GENERAL
This section of the prospectus covers some of the special tax rules that apply
to TSA contracts under Section 403(b) of the Internal Revenue Code (TSAs). If
the rules are the same as those that apply to another kind of contract, for
example, traditional IRAs, we will refer you to the same topic under
"traditional IRAs."
CONTRIBUTIONS TO TSAS
There are two ways you can make contributions to this Equitable Accumulator
Rollover TSA contract:
o a rollover from another TSA contract or arrangement that meets the
requirements of Section 403(b) of the Internal Revenue Code, or
o a full or partial direct transfer of assets ("direct transfer") from another
contract or arrangement that meets the requirements of Section 403(b) of the
Internal Revenue Code by means of IRS Revenue Ruling 90-24.
With appropriate written documentation satisfactory to us, we will accept
rollover contributions from "conduit IRAs" for TSA funds.
If you make a direct transfer, you must fill out our transfer form.
EMPLOYER-REMITTED CONTRIBUTIONS. The Equitable Accumulator Rollover TSA
contract does not accept employer-remitted contributions. However, we provide
the following discussion as part of our description of restrictions on the
distribution of funds directly transferred, which include employer-remitted
contributions to other TSAs.
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Employer-remitted contributions to TSAs made through the employer's payroll are
subject to annual limits. (Tax-free transfer or tax-deferred rollover
contributions from another 403(b) arrangement are not subject to these annual
contribution limits.) Commonly, some or all of the contributions made to a TSA
are made under a salary reduction agreement between the employee and the
employer. These contributions are called "salary reduction" or "elective
deferral" contributions. However, a TSA can also be wholly or partially funded
through nonelective employer contributions or after-tax employee contributions.
Amounts attributable to salary reduction contributions to TSAs are generally
subject to withdrawal restrictions. Also, all amounts attributable to
investments in a 403(b)(7) custodial account are subject to withdrawal
restrictions discussed below.
ROLLOVER OR DIRECT TRANSFER CONTRIBUTIONS. You may make rollover contributions
to your Equitable Accumulator Rollover TSA contract from TSAs under Section
403(b) of the Internal Revenue Code. Generally, you may make a rollover
contribution to a TSA when you have a distributable event from an existing TSA
as a result of your:
o termination of employment with the employer who provided the TSA funds; or
o reaching age 59 1/2 even if you are still employed; or
o disability (special federal income tax definition).
A transfer occurs when changing the funding vehicle, even if there is no
distributable event. Under a direct transfer, you do not receive a
distribution. We accept direct transfers of TSA funds under Revenue Ruling
90-24 only if:
o you give us acceptable written documentation as to the source of the funds,
and
o the Equitable Accumulator contract receiving the funds has provisions at
least as restrictive as the source contract.
Before you transfer funds to an Equitable Accumulator Rollover TSA contract,
you may have to obtain your employer's authorization or demonstrate that you do
not need employer authorization. For example, the transferring TSA may be
subject to Title I of ERISA, if the employer makes matching contributions to
salary reduction contributions made by employees. In that case, the employer
must continue to approve distributions from the plan or contract.
Your contribution to the Equitable Accumulator Rollover TSA must be net of the
required minimum distribution for the tax year in which we issue the contract
if:
o you are or will be at least age 70 1/2 in the current calendar year, and
o you have separated from service with the employer who provided the funds to
purchase the TSA you are transferring or rolling over to the Equitable
Accumulator Rollover TSA.
This rule applies regardless of whether the source of funds is a:
o rollover by check of the proceeds from another TSA; or
o direct rollover from another TSA; or
o direct transfer under Revenue Ruling 90-24 from another TSA.
Further, you must use the same elections regarding recalculation of your life
expectancy (and if applicable, your spouse's life expectancy) if you have
already begun to receive required minimum distributions from or with respect to
the TSA from which you are making your contribution to the Equitable
Accumulator Rollover TSA. You must also elect or have elected a minimum
distribution calculation method requiring recalculation of your life expectancy
(and if applicable, your spouse's life expectancy) if you elect an annuity
payout for the funds in this contract subsequent to this year.
DISTRIBUTIONS FROM TSAS
GENERAL. Depending on the terms of the employer plan and your employment
status, you may have to get your employer's consent to take a loan or
withdrawal. Your employer will tell us this when you establish the TSA through
a direct transfer.
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WITHDRAWAL RESTRICTIONS. If this is a Revenue Ruling 90-24 direct transfer, we
will treat all amounts transferred to this contract and any future earnings on
the amount transferred as not eligible for withdrawal until one of the
following events happens:
o you are separated from service with the employer who provided the funds to
purchase the TSA you are transferring to the Equitable Accumulator Rollover
TSA;
o you reach age 59 1/2; or
o you die; or
o you become disabled (special federal income tax definition); or
o you take a hardship withdrawal (special federal income tax definition).
If any portion of the funds directly transferred to your TSA contract is
attributable to amounts that you invested in a 403(b)(7) custodial account,
such amounts, including earnings, are subject to withdrawal restrictions. With
respect to the portion of the funds that were never invested in a 403(b)(7)
custodial account, these restrictions apply to the salary reduction (elective
deferral) contributions to a TSA annuity contract you made and any earnings on
them. These restrictions do not apply to the amount directly transferred to
your TSA contract that represents your December 31, 1988 account balance
attributable to salary reduction contributions to a TSA annuity contract and
earnings. To take advantage of this grandfathering you must properly notify us
in writing at our processing office of your December 31, 1988 account balance
if you have qualifying amounts transferred to your TSA contract.
THIS PARAGRAPH APPLIES ONLY TO PARTICIPANTS IN A TEXAS OPTIONAL RETIREMENT
PROGRAM. Texas Law permits withdrawals only after one of the following
distributable events occur:
(1) the requirements for minimum distribution (discussed under "Required
minimum distributions" below) are met; or
(2) death; or
(3) retirement; or
(4) termination of employment in all Texas public institutions of higher
education.
For you to make a withdrawal, we must receive a properly completed written
acknowledgement from the employer. If a distributable event occurs before you
are vested, we will refund to the employer any amounts provided by an
employer's first-year matching contribution. We reserve the right to change
these provisions without your consent, but only to the extent necessary to
maintain compliance with applicable law. Loans are not permitted under Texas
Optional Retirement Programs.
TAX TREATMENT OF DISTRIBUTIONS. Amounts held under TSAs are generally not
subject to federal income tax until benefits are distributed. Distributions
include withdrawals from your TSA contract and annuity payments from your TSA
contract. Death benefits paid to a beneficiary are also taxable distributions.
Unless an exception applies, amounts distributed from TSAs are includable in
gross income as ordinary income. Distributions from TSAs may be subject to 20%
federal income tax withholding. See "Federal and state income tax withholding
and information reporting" below. In addition, TSA distributions may be subject
to additional tax penalties.
If you have made after-tax contributions, you will have a tax basis in your TSA
contract, which will be recovered tax-free. Since we do not track your
investment in the contract, if any, it is your responsibility to determine how
much of the distribution is taxable.
DISTRIBUTIONS BEFORE ANNUITY PAYMENTS BEGIN. On a total surrender, the amount
received in excess of the investment in the contract is taxable. We will report
the total amount of the distribution. The amount of any partial distribution
from a TSA prior to the annuity starting date is generally taxable, except to
the extent that the distribution is treated as a withdrawal of after-tax
contributions. Distributions are normally treated as pro rata withdrawals of
after-tax contributions and earnings on those contributions.
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ANNUITY PAYMENTS. If you elect an annuity payout option, you will recover any
investment in the contract as each payment is received by dividing the
investment in the contract by an expected return determined under an IRS table
prescribed for qualified annuities. The amount of each payment not excluded
from income under this exclusion ratio is fully taxable. The full amount of the
payments received after your investment in the contract is recovered is fully
taxable. If you (and your beneficiary under a joint and survivor annuity) die
before recovering the full investment in the contract, a deduction is allowed
on your (or your beneficiary's) final tax return.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
Death benefit distributions from a TSA generally receive the same tax treatment
as distributions during your lifetime. In some instances, distributions from a
TSA made to your surviving spouse may be rolled over to a traditional IRA.
LOANS FROM TSAS
You may take loans from a TSA unless restricted by the employer (for example,
under an employer plan subject to ERISA). If you cannot take a loan, or cannot
take a loan without approval from the employer who provided the funds, we will
have this information in our records based on what you and the employer who
provided the TSA funds told us when you purchased your contract.
Loans are generally not treated as a taxable distribution. If the amount of the
loan exceeds permissible limits under federal income tax rules when made, the
amount of the excess is treated (solely for tax purposes) as a taxable
distribution. Additionally, if the loan is not repaid at least quarterly,
amortizing (paying down) interest and principal, the amount not repaid when due
will be treated as a taxable distribution. Under Proposed Treasury Regulations
the entire unpaid balance of the loan is includable in income in the year of
the default.
TSA loans are subject to federal income tax limits and may also be subject to
the limits of the plan from which the funds came. Federal income tax rule
requirements apply even if the plan is not subject to ERISA. For example, loans
offered by TSAs are subject to the following conditions:
o The amount of a loan to a participant, when combined with all other loans to
the participant from all qualified plans of the employer, cannot exceed the
lesser of
(1) the greater of $10,000 or 50% of the participant's nonforfeitable
accrued benefits and
(2) $50,000 reduced by the excess (if any) of the highest outstanding loan
balance over the previous twelve months over the outstanding loan
balance of plan loans on the date the loan was made.
o In general, the term of the loan cannot exceed five years unless the loan is
used to acquire the participant's primary residence. Equitable Accumulator
Rollover TSA contracts have a term limit of 10 years for loans used to
acquire the participant's primary residence.
o All principal and interest must be amortized in substantially level payments
over the term of the loan, with payments being made at least quarterly.
The amount borrowed and not repaid may be treated as a distribution if:
o the loan does not qualify under the conditions above;
o the participant fails to repay the interest or principal when due; or
o in some instances, the participant separates from service with the employer
who provided the funds or the plan is terminated.
In this case, the participant may have to include the unpaid amount due as
ordinary income. In addition, the 10% early distribution penalty tax may apply.
The amount of the unpaid loan balance is reported to the IRS on Form 1099-R as
a distribution.
TAX-DEFERRED ROLLOVERS AND DIRECT TRANSFERS
You may roll over any "eligible rollover distribution" from a TSA into another
eligible retirement plan, either directly or
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within 60 days of your receiving the distribution. To the extent rolled over,
a distribution remains tax-deferred.
You may roll over a distribution from a TSA to another TSA or to a traditional
IRA. A spousal beneficiary may roll over death benefits only to a traditional
IRA.
The taxable portion of most distributions will be eligible for rollover, except
as specifically excluded under federal income tax rules. Distributions that you
cannot roll over generally include periodic payments for life or for a period
of 10 years or more, hardship withdrawals, and required minimum distributions
under federal income tax rules.
Direct transfers of TSA funds from one TSA to another under Revenue Ruling
90-24 are not distributions.
REQUIRED MINIMUM DISTRIBUTIONS
Generally the same as traditional IRA with these differences:
WHEN YOU HAVE TO TAKE THE FIRST REQUIRED MINIMUM DISTRIBUTION. The minimum
distribution rules force TSA participants to start calculating and taking
annual distributions from their TSAs by a required date. Generally, you must
take the first required minimum distribution for the calendar year in which you
turn age 70 1/2. You may be able to delay the start of required minimum
distributions for all or part of your account balance until after age 70 1/2,
as follows:
o For TSA participants who have not retired from service with the employer who
provided the funds for the TSA by the calendar year the participant turns
age 70 1/2, the required beginning date for minimum distributions is
extended to April 1 following the calendar year of retirement.
o TSA plan participants may also delay the start of required minimum
distributions to age 75 of the portion of their account value attributable
to their December 31, 1986 TSA account balance, even if retired at age
70 1/2. We will know whether or not you qualify for this exception because
it will only apply to people who establish their Equitable Accumulator
Rollover TSA by direct Revenue Ruling 90-24 transfers. If you do not give us
the amount of your December 31, 1986 account balance that is being
transferred to the Equitable Accumulator Rollover TSA on the form used to
establish the TSA, you do not qualify.
SPOUSAL CONSENT RULES
This will only apply to you if you establish your Equitable Accumulator
Rollover TSA by direct Revenue Ruling 90-24 transfer. Your employer will tell
us on the form used to establish the TSA whether or not you need to get spousal
consent for loans, withdrawals, or other distributions. If you do, you will
need such consent if you are married when you request a withdrawal under the
TSA contract. In addition, unless you elect otherwise with the written consent
of your spouse, the retirement benefits payable under the plan must be paid in
the form of a qualified joint and survivor annuity. A qualified joint and
survivor annuity is payable for the life of the annuitant with a survivor
annuity for the life of the spouse in an amount not less than one-half of the
amount payable to the annuitant during his or her lifetime. In addition, if you
are married, the beneficiary must be your spouse, unless your spouse consents
in writing to the designation of another beneficiary.
If you are married and you die before annuity payments have begun, payments
will be made to your surviving spouse in the form of a life annuity unless at
the time of your death a contrary election was in effect. However, your
surviving spouse may elect, before payments begin, to receive payments in any
form permitted under the terms of the TSA contract and the plan of the employer
who provided the funds for the TSA.
EARLY DISTRIBUTION PENALTY TAX
A penalty tax of 10% of the taxable portion of a distribution applies to
distributions from a TSA before you reach age 59 1/2. This is in addition to
any income tax. There are exceptions to the extra penalty tax. No penalty tax
applies to pre-age 59 1/2 distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
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o to pay for certain extraordinary medical expenses (special federal income
tax definition); or
o if you are separated from service, any form of payout after you are age 55;
or
o only if you are separated from service, a payout in the form of
substantially equal periodic payments made at least annually over your life
(or your life expectancy), or over the joint lives of you and your
beneficiary (or your joint life expectancy) using an IRS-approved
distribution method.
FEDERAL AND STATE INCOME TAX WITHHOLDING AND INFORMATION REPORTING
We must withhold federal income tax from distributions from annuity contracts.
You may be able to elect out of this income tax withholding in some cases.
Generally, we do not have to withhold if your distributions are not taxable.
The rate of withholding will depend on the type of distribution and, in certain
cases, the amount of your distribution. Any income tax withheld is a credit
against your income tax liability. If you do not have sufficient income tax
withheld or do not make sufficient estimated income tax payments, you may incur
penalties under the estimated income tax rules.
You must file your request not to withhold in writing before the payment or
distribution is made. Our processing office will provide forms for this
purpose. You cannot elect out of withholding unless you provide us with your
correct Taxpayer Identification Number and a United States residence address.
You cannot elect out of withholding if we are sending the payment out of the
United States.
You should note the following special situations:
o We might have to withhold and/or report on amounts we pay under a free look
or cancellation.
o We are generally required to withhold on conversion rollovers of traditional
IRAs to Roth IRAs, as it is considered a withdrawal from the traditional IRA
and is taxable.
o We are required to withhold on the gross amount of a distribution from a
Roth IRA unless you elect out of withholding. This may result in tax being
withheld even though the Roth IRA distribution is not taxable in whole or in
part.
Special withholding rules apply to foreign recipients and United States
citizens residing outside the United States. We do not discuss these rules
here. Certain states have indicated that state income tax withholding will also
apply to payments from the contracts made to residents. In some states, you may
elect out of state withholding, even if federal withholding applies. Generally,
an election out of federal withholding will also be considered an election out
of state withholding. If you need more information concerning a particular
state or any required forms, call our processing office at the toll-free
number.
FEDERAL INCOME TAX WITHHOLDING ON PERIODIC ANNUITY PAYMENTS
We withhold differently on "periodic" and "non-periodic" payments. For a
periodic annuity payment, for example, unless you specify a different number of
withholding exemptions, we withhold assuming that you are married and claiming
three withholding exemptions. If you do not give us your correct Taxpayer
Identification Number, we withhold as if you are single with no exemptions.
Based on the assumption that you are married and claiming three withholding
exemptions, if you receive less than $14,880 in periodic annuity payments in
2000, your payments will generally be exempt from federal income tax
withholding. You could specify a different choice of withholding exemption or
request that tax be withheld. Your withholding election remains effective
unless and until you revoke it. You may revoke or change your withholding
election at any time.
FEDERAL INCOME TAX WITHHOLDING ON NON-PERIODIC ANNUITY PAYMENTS (WITHDRAWALS)
For a non-periodic distribution (total surrender or partial withdrawal), we
generally withhold at a flat 10% rate. We apply that rate to the taxable amount
in the case of nonqualified contracts, and to the payment amount in the case of
IRAs and Roth IRAs.
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You cannot elect out of withholding if the payment is an eligible rollover
distribution from a qualified plan or TSA. If a non-periodic distribution from
a qualified plan or TSA is not an eligible rollover distribution then the 10%
withholding rate applies.
MANDATORY WITHHOLDING FROM TSA AND QUALIFIED PLAN DISTRIBUTIONS
Unless you have the distribution go directly to the new plan, eligible rollover
distributions from qualified plans and TSAs are subject to mandatory 20%
withholding. An eligible rollover distribution from a TSA can be rolled over to
another TSA or a traditional IRA. An eligible rollover distribution from a
qualified plan can be rolled over to another qualified plan or traditional IRA.
All distributions from a TSA or qualified plan are eligible rollover
distributions unless they are on the following list of exceptions:
o any after-tax contributions you made to the plan; or
o any distributions which are required minimum distributions after age 70 1/2
or separation from service; or
o hardship withdrawals; or
o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and your designated beneficiary; or
o substantially equal periodic payments made for a specified period of 10
years or more; or
o corrective distributions that fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse;
or
o a qualified domestic relations order distribution to a beneficiary who is
not your current spouse or former spouse.
A death benefit payment to your surviving spouse, or a qualified domestic
relations order distribution to your current or former spouse, may be a
distribution subject to mandatory 20% withholding.
IMPACT OF TAXES TO EQUITABLE LIFE
The contracts provide that we may charge Separate Account No. 49 for taxes. We
do not now, but may in the future set up reserves for such taxes.
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MORE INFORMATION
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ABOUT OUR SEPARATE ACCOUNT NO. 49
Each variable investment option is a subaccount of our Separate Account No. 49.
We established Separate Account No. 49 in 1996 under special provisions of the
New York Insurance Law. These provisions prevent creditors from any other
business we conduct from reaching the assets we hold in our variable investment
options for owners of our variable annuity contracts. We are the legal owner of
all of the assets in Separate Account No. 49 and may withdraw any amounts that
exceed our reserves and other liabilities with respect to variable investment
options under our contracts. The results of Separate Account No. 49's
operations are accounted for without regard to Equitable Life's other
operations.
Separate Account No. 49 is registered under the Investment Company Act of 1940
and is classified by that act as a "unit investment trust." The SEC, however,
does not manage or supervise Equitable Life or Separate Account No. 49.
Each subaccount (variable investment option) within Separate Account No. 49
invests solely in class IB shares issued by the corresponding portfolio of EQ
Advisors Trust.
We reserve the right subject to compliance with laws that apply:
(1) to add variable investment options to, or to remove variable investment
options from, Separate Account No. 49, or to add other separate
accounts;
(2) to combine any two or more variable investment options;
(3) to transfer the assets we determine to be the shares of the class of
contracts to which the contracts belong from any variable investment
option to another variable investment option;
(4) to operate Separate Account No. 49 or any variable investment option as a
management investment company under the Investment Company Act of 1940
(in which case, charges and expenses that otherwise would be assessed
against an underlying mutual fund would be assessed against Separate
Account No. 49 or a variable investment option directly);
(5) to deregister Separate Account No. 49 under the Investment Company Act of
1940;
(6) to restrict or eliminate any voting rights as to Separate Account No. 49;
and
(7) to cause one or more variable investment options to invest some or all of
their assets in one or more other trusts or investment companies.
ABOUT EQ ADVISORS TRUST
EQ Advisors Trust is registered under the Investment Company Act of 1940. It is
classified as an "open-end management investment company," more commonly called
a mutual fund. EQ Advisors Trust issues different shares relating to each
portfolio.
Equitable Life serves as the investment manager of EQ Advisors Trust. As such,
Equitable Life oversees the activities of the investment advisers with respect
to EQ Advisors Trust and is responsible for retaining or discontinuing the
services of those advisers. (Prior to September 1999 EQ Financial Consultants,
Inc., the predecessor to AXA Advisors, LLC and an affiliate of Equitable Life,
served as investment manager to EQ Advisors Trust.)
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999 the Alliance portfolios (other than EQ/Alliance Premier
Growth) were part of The Hudson River Trust. On October 18, 1999, these
portfolios became corresponding portfolios of EQ Advisors Trust.
EQ Advisors Trust does not impose sales charges or "loads" for buying and
selling its shares. All dividends and other distributions on Trust shares are
reinvested in full. The Board of Trustees of EQ Advisors Trust may establish
additional portfolios or eliminate existing portfolios at any time. More
detailed information about EQ Advisors Trust, the portfolio investment
objectives, policies, restrictions, risks, expenses, the Rule 12b-1 Plan
relating to its Class IB shares, and other aspects of its operations, appears
in the prospectus for EQ Advisors Trust attached at the end of this prospectus,
or in its SAI which is available upon request.
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ABOUT OUR FIXED MATURITY OPTIONS
RATES TO MATURITY AND PRICE PER $100 OF MATURITY VALUE
We can determine the amount required to be allocated to one or more fixed
maturity options in order to produce specified maturity values. For example, we
can tell you how much you need to allocate per $100 of maturity value.
The rates to maturity for new allocations as of March 15, 2000 and the related
price per $100 of maturity value were as follows:
FIXED MATURITY
OPTIONS WITH
FEBRUARY 15TH RATE TO MATURITY PRICE
MATURITY DATE OF AS OF PER $100 OF
MATURITY YEAR MARCH 15, 2000 MATURITY VALUE
---------------- ---------------- --------------
2001 4.45% $ 96.06
2002 5.16% $ 90.78
2003 5.68% $ 85.09
2004 5.76% $ 80.27
2005 5.87% $ 75.50
2006 5.95% $ 71.00
2007 6.02% $ 66.71
2008 6.08% $ 62.64
2009 6.17% $ 58.59
2010 6.23% $ 54.88
HOW WE DETERMINE THE MARKET VALUE ADJUSTMENT
We use the following procedure to calculate the market value adjustment (up or
down) we make if you withdraw all of your value from a fixed maturity option
before its maturity date.
(1) We determine the market adjusted amount on the date of the withdrawal as
follows:
(a) We determine the fixed maturity amount that would be payable on the
maturity date, using the rate to maturity for the fixed maturity
option.
(b) We determine the period remaining in your fixed maturity option
(based on the withdrawal date) and convert it to fractional years
based on a 365-day year. For example, three years and 12 days becomes
3.0329.
(c) We determine the current rate to maturity that applies on the
withdrawal date to new allocations to the same fixed maturity option.
(d) We determine the present value of the fixed maturity amount payable
at the maturity date, using the period determined in (b) and the rate
determined in (c).
(2) We determine the fixed maturity amount as of the current date.
(3) We subtract (2) from the result in (1)(d). The result is the market value
adjustment applicable to such fixed maturity option, which may be
positive or negative.
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Your market adjusted amount is the present value of the maturity value
discounted at the rate to maturity in effect for new contributions to that same
fixed maturity option on the date of the calculation.
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If you withdraw only a portion of the amount in a fixed maturity option, the
market value adjustment will be a percentage of the market value adjustment
that would have applied if you had withdrawn the entire value in that fixed
maturity option. This percentage is equal to the percentage of the value in the
fixed maturity option that you are withdrawing. Any withdrawal charges that are
deducted from a fixed maturity option will result in a market value adjustment
calculated in the same way. See Appendix III for an example.
For purposes of calculating the rate to maturity for new allocations to a fixed
maturity option (see (1)(c) above), we use the rate we have in effect for new
allocations to that fixed maturity option. We use this rate even if new
allocations to that option would not be accepted at that time. This rate will
not be less than 3%. If we do not have a rate to maturity in effect for a fixed
maturity option to which the "current rate to maturity" in (1)(c) would apply,
we will use the rate at the next closest maturity date. If we are no
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longer offering new fixed maturity options, the "current rate to maturity" will
be determined in accordance with our procedures then in effect. We reserve the
right to add up to 0.25% to the current rate in (1)(c) above for purposes of
calculating the market value adjustment only.
INVESTMENTS UNDER THE FIXED MATURITY OPTIONS
Amounts allocated to the fixed maturity options are held in a "nonunitized"
separate account we have established under the New York Insurance Law. This
separate account provides an additional measure of assurance that we will make
full payment of amounts due under the fixed maturity options. Under New York
Insurance Law, the portion of the separate account's assets equal to the
reserves and other contract liabilities relating to the contracts are not
chargeable with liabilities from any other business we may conduct. We own the
assets of the separate account, as well as any favorable investment performance
on those assets. You do not participate in the performance of the assets held
in this separate account. We may, subject to state law that applies, transfer
all assets allocated to the separate account to our general account. We
guarantee all benefits relating to your value in the fixed maturity options,
regardless of whether assets supporting fixed maturity options are held in a
separate account or our general account.
We have no specific formula for establishing the rates to maturity for the
fixed maturity options. We expect the rates to be influenced by, but not
necessarily correspond to, among other things, the yields that we can expect to
realize on the separate account's investments from time to time. Our current
plans are to invest in fixed-income obligations, including corporate bonds,
mortgage-backed and asset-backed securities, and government and agency issues
having durations in the aggregate consistent with those of the fixed maturity
options.
Although the above generally describes our plans for investing the assets
supporting our obligations under the fixed maturity options under the
contracts, we are not obligated to invest those assets according to any
particular plan except as we may be required to by state insurance laws. We
will not determine the rates to maturity we establish by the performance of the
nonunitized separate account.
ABOUT THE GENERAL ACCOUNT
Our general account supports all of our policy and contract guarantees,
including those that apply to the fixed maturity options and the account for
special dollar cost averaging, as well as our general obligations.
The general account is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations
of all jurisdictions where we are authorized to do business. Because of
exemptions and exclusionary provisions that apply, interests in the general
account have not been registered under the Securities Act of 1933, nor is the
general account an investment company under the Investment Company Act of 1940.
However, the market value adjustment interests under the contracts are
registered under the Securities Act of 1933.
We have been advised that the staff of the SEC has not reviewed the portions of
this prospectus that relate to the general account (other than market value
adjustment interests). The disclosure with regard to the general account,
however, may be subject to certain provisions of the federal securities laws
relating to the accuracy and completeness of statements made in prospectuses.
ABOUT OTHER METHODS OF PAYMENT
WIRE TRANSMITTALS
We accept initial contributions sent by wire to our processing office by
agreement with certain broker-dealers. The transmittals must be accompanied by
information we require to allocate your contribution. Wire orders not
accompanied by complete information may be retained as described under "How you
can make your contributions" under "Contract features and benefits."
Even if we accept the wire order and essential information, a contract
generally will not be issued until we receive and accept a properly completed
application. In certain cases we
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may issue a contract based on information forwarded electronically. In these
cases, you must sign our Acknowledgement of Receipt form.
Where we require a signed application, no financial transactions will be
permitted until we receive the signed application and have issued the contract.
Where we require an Acknowledgement of Receipt form, financial transactions are
only permitted if you request them in writing, sign the request and have it
signature guaranteed, until we receive the signed Acknowledgement of Receipt
form.
After your contract has been issued, additional contributions may be
transmitted by wire.
AUTOMATIC INVESTMENT PROGRAM - FOR NQ, FLEXIBLE PREMIUM IRA, AND FLEXIBLE
PREMIUM ROTH IRA CONTRACTS ONLY
You may use our automatic investment program, or "AIP," to have a specified
amount automatically deducted from a checking account, money market account, or
credit union checking account and contributed as an additional contribution
into an NQ, Flexible Premium IRA or Flexible Premium Roth IRA contract on a
monthly or quarterly basis. AIP is not available for Rollover IRA, Roth
Conversion IRA, QP, or Rollover TSA contracts.
For NQ contracts, the minimum amounts we will deduct are $100 monthly and $300
quarterly. Under Flexible Premium IRA and Flexible Premium Roth IRA contracts,
the minimum amount is $50. AIP additional contributions may be allocated to any
of the variable investment options and available fixed maturity options, but
not the account for special dollar cost averaging. You choose the day of the
month you wish to have your account debited. However, you may not choose a date
later than the 28th day of the month.
You may cancel AIP at any time by notifying our processing office. We are not
responsible for any debits made to your account before the time written notice
of cancellation is received at our processing office.
DATES AND PRICES AT WHICH CONTRACT EVENTS OCCUR
We describe below the general rules for when, and at what prices, events under
your contract will occur. Other portions of this prospectus describe
circumstances that may cause exceptions. We generally do not repeat those
exceptions below.
BUSINESS DAY
Our business day is any day the New York Stock Exchange is open for trading.
Our business day generally ends at 4:00 p.m., Eastern Time for purposes of
determining the date when contributions are applied and any other transaction
requests are processed. We may, however, close due to emergency conditions.
Contributions will be applied and any other transaction requests will be
processed when they are received along with all the required information.
o If your contribution, transfer, or any other transaction request, containing
all the required information, reaches us on a non-business day or after 4:00
p.m. on a business day, we will use the next business day.
o A loan request under your Rollover TSA contract will be processed on the
first business day of the month following the date on which the properly
completed loan request form is received.
o If your transaction is set to occur on the same day of the month as the
contract date and that date is the 29th, 30th or 31st of the month, then the
transaction will occur on the 1st day of the next month.
o When a charge is to be deducted on a contract date anniversary that is a
non-business day, we will deduct the charge on the next business day.
CONTRIBUTIONS AND TRANSFERS
o Contributions allocated to the variable investment options are invested at
the value next determined after the close of the business day.
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o Contributions allocated to a fixed maturity option will receive the rate to
maturity in effect for that fixed maturity option on that business day.
o Initial contributions allocated to the account for special dollar cost
averaging receive the interest rate in effect on that business day. At
certain times, we may offer the opportunity to lock in the interest rate for
an initial contribution to be received under Section 1035 exchanges and
trustee to trustee transfers. Your registered representative can provide
information or you can call our processing office.
o Transfers to or from variable investment options will be made at the value
next determined after the close of the business day.
o Transfers to a fixed maturity option will be based on the rate to maturity
in effect for that fixed maturity option on the business day of the
transfer.
ABOUT YOUR VOTING RIGHTS
As the owner of the shares of EQ Advisors Trust we have the right to vote on
certain matters involving the portfolios, such as:
o the election of trustees;
o the formal approval of independent auditors selected for EQ Advisors Trust;
or
o any other matters described in the prospectus for EQ Advisors Trust or
requiring a shareholders' vote under the Investment Company Act of 1940.
We will give contract owners the opportunity to instruct us how to vote the
number of shares attributable to their contracts if a shareholder vote is
taken. If we do not receive instructions in time from all contract owners, we
will vote the shares of a portfolio for which no instructions have been
received in the same proportion as we vote shares of that portfolio for which
we have received instructions. We will also vote any shares that we are
entitled to vote directly because of amounts we have in a portfolio in the same
proportions that contract owners vote.
VOTING RIGHTS OF OTHERS
Currently, we control EQ Advisors Trust. EQ Advisors Trust shares are sold to
our separate accounts and an affiliated qualified plan trust. In addition,
shares of EQ Advisors Trust are held by separate accounts of insurance
companies both affiliated and unaffiliated with us. Shares held by these
separate accounts will probably be voted according to the instructions of the
owners of insurance policies and contracts issued by those insurance companies.
While this will dilute the effect of the voting instructions of the contract
owners, we currently do not foresee any disadvantages because of this. The
Board of Trustees of EQ Advisors Trust intends to monitor events in order to
identify any material irreconcilable conflicts that may arise and to determine
what action, if any, should be taken in response. If we believe that a response
to any of those events insufficiently protects our contract owners, we will see
to it that appropriate action is taken.
SEPARATE ACCOUNT NO. 49 VOTING RIGHTS
If actions relating to Separate Account No. 49 require contract owner approval,
contract owners will be entitled to one vote for each unit they have in the
variable investment options. Each contract owner who has elected a variable
annuity payout option may cast the number of votes equal to the dollar amount
of reserves we are holding for that annuity in a variable investment option
divided by the annuity unit value for that option. We will cast votes
attributable to any amounts we have in the variable investment options in the
same proportion as votes cast by contract owners.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under applicable
federal securities laws. To the extent that those laws or the regulations
published under those laws eliminate the necessity to submit matters for
approval by persons having voting rights in separate accounts of insurance
companies, we reserve the right to proceed in accordance with those laws or
regulations.
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ABOUT LEGAL PROCEEDINGS
Equitable Life and its affiliates are parties to various legal proceedings. In
our view, none of these proceedings is likely to have a material adverse effect
upon Separate Account No. 49, our ability to meet our obligations under the
contracts, or the distribution of the contracts.
ABOUT OUR INDEPENDENT ACCOUNTANTS
The consolidated financial statements of Equitable Life at December 31, 1999
and 1998, and for the three years ended December 31, 1999, incorporated in this
prospectus by reference to the 1999 Annual Report on Form 10-K are incorporated
in reliance on the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
FINANCIAL STATEMENTS
The financial statements of Separate Account No. 49, as well as the
consolidated financial statements of Equitable Life, are in the SAI. The SAI
is available free of charge. You may request one by writing to our processing
office or calling 1-800-789-7771.
TRANSFERS OF OWNERSHIP, COLLATERAL ASSIGNMENTS, LOANS, AND BORROWING
You can transfer ownership of an NQ contract at any time before annuity
payments begin. We will continue to treat you as the owner until we receive
notification of any change at our processing office. You cannot assign your NQ
contract as collateral or security for a loan. Loans are also not available
under your NQ contract. In some cases, an assignment or change of ownership may
have adverse tax consequences. See "Tax information" earlier in this
prospectus.
You cannot assign or transfer ownership of an IRA, QP, or Rollover TSA contract
except by surrender to us. Loans are not available and you cannot assign IRA
and QP contracts as security for a loan or other obligation. If the employer
that provided the funds does not restrict them, loans are available under a
Rollover TSA contract.
For limited transfers of ownership after the owner's death see "Beneficiary
continuation option " in "Payment of death benefit" earlier in this prospectus.
You may direct the transfer of the values under your IRA, QP, or Rollover TSA
contract to another similar arrangement under federal income tax rules. In the
case of such a transfer, we will impose a withdrawal charge, if one applies.
DISTRIBUTION OF THE CONTRACTS
Equitable Distributors, Inc. ("EDI"), an indirect, wholly owned subsidiary of
Equitable Life, is the distributor of the contracts and has responsibility for
sales and marketing functions for Separate Account No. 49. EDI serves as the
principal underwriter of Separate Account No. 49. EDI also acts as distributor
for other Equitable Life annuity products with different features, expenses,
and fees. EDI is registered with the SEC as a broker-dealer and is a member of
the National Association of Securities Dealers, Inc. EDI's principal business
address is 1290 Avenue of the Americas, New York, New York 10104. Under a
distribution agreement between EDI, Equitable Life, and certain of Equitable
Life's separate accounts, including Separate Account No. 49, Equitable Life
paid EDI distribution fees of $46,957,345 for 1999, $35,452,793 for 1998, and
$9,566,343 for 1997, as the distributor of certain contracts, including these
contracts, and as the principal underwriter of several Equitable Life separate
accounts, including Separate Account No. 49.
The contracts will be sold by registered representative of EDI, as well as by
affiliated and unaffiliated broker-dealers with which EDI has entered into
selling agreements. Broker-dealer sales compensation will generally not exceed
an amount equal to 7% of total contributions made under the contracts. EDI may
also receive compensation and reimbursement for its marketing services under
the terms of its distribution agreement with Equitable Life. Broker-dealers
receiving sales compensation will generally pay a portion of it to their
registered representative as commissions related to sales of the contracts. The
offering of the contracts is intended to be continuous.
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INVESTMENT PERFORMANCE
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We provide the following tables to show five different measurements of the
investment performance of the variable investment options and/or the portfolios
in which they invest. We include these tables because they may be of general
interest to you.
Table 1 shows the average annual total return of the variable investment
options. Average annual total return is the annual rate of growth that would be
necessary to achieve the ending value of a contribution invested in the
variable investment options for the periods shown.
Table 2 shows the growth of a hypothetical $1,000 investment in the variable
investment options over the periods shown. Both Tables 1 and 2 take into
account all current fees and charges under the contract, including the
withdrawal charge, the optional baseBUILDER benefits charge, the annual
administrative charge under Flexible Premium IRA and Flexible Premium Roth IRA
contracts, but do not reflect the charges designed to approximate certain taxes
that may be imposed on us, such as premium taxes in your state, or any
applicable annuity administrative fee.
Tables 3, 4, and 5 show the rates of return of the variable investment options
on an annualized, cumulative, and year-by-year basis. These tables take into
account all current fees and charges under the contract, but do not reflect the
withdrawal charge, the optional baseBUILDER benefits charge, the annual
administrative charge or the charges designed to approximate certain taxes that
may be imposed on us, such as premium taxes in your state, or any applicable
annuity administrative fee. If the charges were reflected they would
effectively reduce the rates of return shown.
In all cases the results shown are based on the actual historical investment
experience of the portfolios in which the variable investment options invest.
In some cases, the results shown relate to periods when the variable investment
options and/or the contracts were not available. In those cases, we adjusted
the results of the portfolios to reflect the charges under the contracts that
would have applied had the investment options and/or contracts been available.
The contracts were first offered on May 1, 1997.
For the "Alliance" portfolios (other than EQ/Alliance Premier Growth), we have
adjusted the results prior to October 1996, when Class IB shares for these
portfolios were not available, to reflect the 12b-1 fees currently imposed.
Finally, the results shown for the Alliance Money Market and Alliance Common
Stock options for periods before March 22, 1985 reflect the results of the
variable investment options that preceded them. The "Since portfolio inception"
figures for these options are based on the date of inception of the preceding
variable investment options. We have adjusted these results to reflect the
maximum investment advisory fee payable for the portfolios, as well as an
assumed charge of 0.06% for direct operating expenses.
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999 the Alliance portfolios (other than EQ/Alliance Premier
Growth) were part of The Hudson River Trust. On October 18, 1999, these
portfolios became corresponding portfolios of EQ Advisors Trust. In each case,
the performance shown is for the indicated EQ Advisors Trust portfolio and any
predecessors that it may have had.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends.
From time to time, we may advertise different measurements of the investment
performance of the variable investment options and/or the portfolios, including
the measurements reflected in the tables below.
THE PERFORMANCE INFORMATION SHOWN BELOW AND THE PERFORMANCE INFORMATION THAT WE
ADVERTISE REFLECT PAST PERFORMANCE AND DO NOT INDICATE HOW THE VARIABLE
INVESTMENT OPTIONS MAY PERFORM IN THE FUTURE. SUCH INFORMATION ALSO DOES NOT
REPRESENT THE RESULTS EARNED BY ANY PARTICULAR INVESTOR. YOUR RESULTS WILL
DIFFER.
BENCHMARKS
Tables 3 and 4 compare the performance of variable investment options to market
indices that serve as benchmarks. Market indices are not subject to any charges
for investment advisory fees, brokerage commission or other operating expenses
typically associated with a managed
<PAGE>
- ----------
73
- --------------------------------------------------------------------------------
portfolio. Also, they do not reflect other contract charges such as the
mortality and expense risks charge, administrative charges, or any withdrawal
or optional benefit charge. Comparisons with these benchmarks, therefore, may
be of limited use. We include them because they are widely known and may help
you to understand the universe of securities from which each portfolio is
likely to select its holdings. Benchmark data reflect the reinvestment of
dividend income. The benchmarks include:
- --------------------------------------------------------------------------------
EQ/AGGRESSIVE STOCK: 50% Russell 2000 Index and 50% Standard
& Poor's Mid-Cap Total Return Index.
ALLIANCE COMMON STOCK: Standard & Poor's 500 Index.
ALLIANCE HIGH YIELD: Benchmark #1 - Merrill Lynch High Yield
Master Index and Benchmark #2 - Credit Suisse First Boston
Global High Yield Index.
ALLIANCE MONEY MARKET: Salomon Brothers Three-Month T-Bill
Index.
EQ/ALLIANCE PREMIER GROWTH: Standard & Poor's 500 Index.
ALLIANCE SMALL CAP GROWTH: Russell 2000 Growth Index.
EQ/ALLIANCE TECHNOLOGY: Lipper Specialty Funds Average.
BT EQUITY 500 INDEX: Standard & Poor's 500 Index.
BT INTERNATIONAL EQUITY INDEX: Morgan Stanley Capital
International Europe, Australia, Far East Index.
BT SMALL COMPANY INDEX: Russell 2000 Index.
CAPITAL GUARDIAN INTERNATIONAL: Morgan Stanley Capital
International Europe, Australia, Far East Index.
CAPITAL GUARDIAN RESEARCH: Standard & Poor's 500 Index.
CAPITAL GUARDIAN U.S. EQUITY: Standard & Poor's 500 Index.
EQ/EVERGREEN: Benchmark #1 - Russell 2000 Index and
Benchmark #2 - Standard and Poor's 500 Index.
EQ/EVERGREEN FOUNDATION: 60% Standard & Poor's 500
Index/40% Lehman Brothers Aggregate Bond Index.
J.P. MORGAN CORE BOND: Salomon Brothers Broad Investment
Grade Bond.
LAZARD LARGE CAP VALUE: Standard & Poor's 500 Index.
LAZARD SMALL CAP VALUE: Russell 2000 Index.
MFS EMERGING GROWTH COMPANIES: Russell 2000 Index.
MFS GROWTH WITH INCOME: Standard & Poor's 500 Index.
MFS RESEARCH: Standard & Poor's 500 Index.
MERCURY BASIC VALUE EQUITY: Standard & Poor's 500 Index.
MERCURY WORLD STRATEGY: 36% Standard & Poor's 500 Index/24%
Morgan Stanley Capital International Europe, Australia, Far East
Index/21% Salomon Brothers U.S. Treasury Bond 1 Year+ 14%
Salomon Brothers World Government Bond (excluding U.S.)/ and
5% Three-Month U.S. Treasury Bill.
MORGAN STANLEY EMERGING MARKETS EQUITY: Morgan Stanley
Capital International Emerging Markets Free Price Return Index.
EQ/PUTNAM GROWTH & INCOME VALUE: Standard & Poor's 500
Index.
EQ/PUTNAM INTERNATIONAL EQUITY: Morgan Stanley Capital
International Europe, Australia, Far East Index.
EQ/PUTNAM INVESTORS GROWTH: Standard & Poor's 500 Index.
- --------------------------------------------------------------------------------
LIPPER SURVEY. The Lipper Variable Insurance Products Performance Analysis
Survey (Lipper Survey) records the performance of a large group of variable
annuity products, including managed separate accounts of insurance companies.
According to Lipper Analytical Services, Inc. (Lipper), the data are presented
net of investment management fees, direct operating expenses and asset-based
charges applicable under annuity contracts. Lipper data provide a more accurate
picture than market benchmarks of the Equitable Accumulator performance
relative to other variable annuity products.
<PAGE>
- -----
74
- --------------------------------------------------------------------------------
TABLE 1
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
LENGTH OF INVESTMENT PERIOD
SINCE SINCE
1 3 5 10 OPTION PORTFOLIO
VARIABLE INVESTMENT OPTIONS YEAR YEARS YEARS YEARS INCEPTION* INCEPTION**
--------------------------- ---- ----- ----- ----- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
EQ/Aggressive Stock 7.61% 3.89% 11.67% 13.06% 3.54% 14.50%
Alliance Common Stock 13.74% 22.29% 23.62% 14.45% 22.64% 13.43%
Alliance High Yield (13.79)% (3.16)% 5.21% 6.21% (2.35)% 5.18%
Alliance Money Market (5.76)% (0.66)% 0.26% 0.41% (0.59)% 2.82%
Alliance Small Cap Growth 16.38% - - - 11.93% 11.93%
BT Equity 500 Index 9.31% - - - 15.90% 15.90%
BT International Equity Index 16.24% - - - 16.91% 16.91%
BT Small Company Index 9.72% - - - 1.91% 1.91%
EQ/Evergreen (0.92)% - - - (0.92)% (0.92)%
EQ/Evergreen Foundation (3.21)% - - - (3.21)% (3.21)%
J.P. Morgan Core Bond (11.87)% - - - (3.06)% (3.06)%
Lazard Large Cap Value (6.90)% - - - 4.82% 4.82%
Lazard Small Cap Value (8.64)% - - - (9.41)% (9.41)%
MFS Emerging Growth Companies 61.33% - - - 42.58% 42.58%
MFS Growth with Income (1.90)% - - - (1.90)% (1.90)%
MFS Research 12.02% - - - 18.26% 18.26%
Mercury Basic Value Equity 7.99% - - - 12.23% 12.23%
Mercury World Strategy 10.32% - - - 6.32% 6.32%
Morgan Stanley Emerging Markets Equity 83.10% - - - 12.66% (0.71)%
EQ/Putnam Growth & Income Value (11.64)% - - - 4.31% 4.31%
EQ/Putnam International Equity 48.09% - - - 26.32% 26.32%
EQ/Putnam Investors Growth 18.94% - - - 29.11% 29.11%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* The variable investment option inception dates are: Alliance Money
Market, Alliance High Yield, Alliance Common Stock, and EQ/Aggressive
Stock (October 16, 1996); Alliance Small Cap Growth, MFS Research, MFS
Emerging Growth Companies, Mercury Basic Value Equity, Mercury World
Strategy, EQ/Putnam Growth & Income Value, EQ/Putnam Investors Growth,
and EQ/Putnam International Equity (May 1, 1997); BT Equity 500 Index, BT
Small Company Index, BT International Equity Index, J.P. Morgan Core
Bond, Lazard Large Cap Value, Lazard Small Cap Value, and Morgan Stanley
Emerging Markets Equity (December 31, 1997); EQ/Evergreen, EQ/Evergreen
Foundation, and MFS Growth with Income (December 31, 1998). The inception
dates for the variable investment options that became available on or
after December 31, 1998, and are therefore not shown in this table are:
EQ/Alliance Premier Growth, Capital Guardian U.S. Equity, Capital
Guardian Research, and Capital Guardian International (April 30, 1999);
EQ/Alliance Technology (May 1, 2000).
** The inception dates for the portfolios underlying the Alliance variable
investment options shown in the tables are for portfolios of The Hudson
River Trust, the assets of which became assets of corresponding
portfolios of EQ Advisors Trust on October 18, 1999. The portfolio
inception dates are: Alliance Money Market (July 13, 1981); Alliance High
Yield (January 2, 1987); Alliance Common Stock (January 13, 1976);
EQ/Aggressive Stock (January 27, 1986); Alliance Small Cap Growth, MFS
Research, MFS Emerging Growth Companies, Mercury Basic Value Equity,
Mercury World Strategy, EQ/Putnam Growth & Income Value, EQ/Putnam
Investors Growth, and EQ/Putnam International Equity (May 1, 1997); BT
Equity 500 Index, BT Small Company Index, BT International Equity Index,
J.P. Morgan Core Bond, Lazard Large Cap Value, and Lazard Small Cap Value
(January 1, 1998); Morgan Stanley Emerging Markets Equity (August 20,
1997); and EQ/Evergreen, EQ/Evergreen Foundation, and MFS Growth with
Income (December 31, 1998). The inception dates for the portfolios that
became available on or after December 31, 1998 and are therefore not
shown in the tables are: EQ/Alliance Premier Growth, Capital Guardian
U.S. Equity, Capital Guardian Research, and Capital Guardian
International (April 30, 1999); EQ/Alliance Technology (May 1, 2000).
<PAGE>
-----
75
- --------------------------------------------------------------------------------
TABLE 2
GROWTH OF $1,000 UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
LENGTH OF INVESTMENT PERIOD
SINCE
1 3 5 10 PORTFOLIO
VARIABLE INVESTMENT OPTIONS YEAR YEARS YEARS YEARS INCEPTION*
--------------------------- ---- ----- ----- ----- ----------
<S> <C> <C> <C> <C> <C>
EQ/Aggressive Stock $ 1,076.11 $ 1,121.37 $ 1,736.56 $ 3,411.94 $ 6,594.56
Alliance Common Stock $ 1,137.36 $ 1,828.74 $ 2,887.34 $ 3,856.97 $ 20,476.65
Alliance High Yield $ 862.08 $ 908.07 $ 1,289.25 $ 1,825.87 $ 1,928.38
Alliance Money Market $ 942.44 $ 980.24 $ 1,012.87 $ 1,041.89 $ 1,672.63
Alliance Small Cap Growth $ 1,163.82 - - - $ 1,350.99
BT Equity 500 Index $ 1,093.06 - - - $ 1,343.31
BT International Equity Index $ 1,162.35 - - - $ 1,366.89
BT Small Company Index $ 1,097.18 - - - $ 1,038.64
EQ/Evergreen $ 990.75 - - - $ 990.75
EQ/Evergreen Foundation $ 967.92 - - - $ 967.92
J.P. Morgan Core Bond $ 881.29 - - - $ 939.75
Lazard Large Cap Value $ 930.97 - - - $ 1,098.68
Lazard Small Cap Value $ 913.63 - - - $ 820.65
MFS Emerging Growth Companies $ 1,613.30 - - - $ 2,577.16
MFS Growth with Income $ 981.05 - - - $ 981.05
MFS Research $ 1,120.21 - - - $ 1,564.59
Mercury Basic Value Equity $ 1,079.93 - - - $ 1,360.51
Mercury World Strategy $ 1,103.16 - - - $ 1,177.76
Morgan Stanley Emerging Markets Equity $ 1,831.00 - - - $ 983.27
EQ/Putnam Growth & Income Value $ 883.64 - - - $ 1,119.29
EQ/Putnam International Equity $ 1,480.90 - - - $ 1,865.34
EQ/Putnam Investors Growth $ 1,189.40 - - - $ 1,977.57
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* Portfolio inception dates are shown in Table 1.
<PAGE>
- -----
76
- --------------------------------------------------------------------------------
TABLE 3
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
------ ------- ------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
EQ/AGGRESSIVE STOCK 16.95% 7.97% 14.41% 14.80% - 15.96%
Lipper Mid-Cap Growth 51.65% 24.68% 19.97% 14.78% - 15.86%
Benchmark 18.09% 17.48% 19.92% 15.41% - 14.58%
ALLIANCE COMMON STOCK 23.20% 25.88% 26.02% 16.70% 16.50% 14.88%
Lipper Growth 29.78% 26.87% 25.55% 16.90% 15.83% 15.16%
Benchmark 21.03% 27.56% 28.56% 18.21% 17.88% 16.19%
ALLIANCE HIGH YIELD (4.89)% 1.15% 8.11% 8.47% - 7.62%
Lipper High Current Yield 3.65% 4.82% 8.59% 9.61% - 7.79%
Benchmark #1 1.57% 5.91% 9.61% 10.79% - 9.99%
Benchmark #2 3.28% 5.37% 9.07% 11.06% - 10.04%
ALLIANCE MONEY MARKET 3.31% 3.57% 3.68% 3.49% - 5.26%
Lipper Money Market 3.78% 4.05% 4.16% 3.96% - 5.70%
Benchmark 4.74% 5.01% 5.20% 5.06% - 6.65%
ALLIANCE SMALL CAP GROWTH 25.90% - - - - 16.06%
Lipper Small Company Growth 34.26% - - - - 19.49%
Benchmark 43.09% - - - - 25.88%
BT EQUITY 500 INDEX 18.68% - - - - 21.04%
Lipper Standard and Poors 500 Index 19.36% - - - - 23.16%
Benchmark 21.03% - - - - 24.76%
BT INTERNATIONAL EQUITY INDEX 25.75% - - - - 22.06%
Lipper International 43.24% - - - - 26.76%
Benchmark 26.96% - - - - 23.43%
BT SMALL COMPANY INDEX 19.10% - - - - 7.13%
Lipper Small Cap 34.26% - - - - 16.02%
Benchmark 21.26% - - - - 8.70%
EQ/EVERGREEN 8.24% - - - - 8.24%
Lipper Growth 29.78% - - - - 29.78%
Benchmark #1 21.26% - - - - 21.26%
Benchmark #2 21.03% - - - - 21.03%
EQ/EVERGREEN FOUNDATION 5.91% - - - - 5.91%
Lipper Balanced 8.69% - - - - 8.69%
Benchmark 11.15% - - - - 11.15%
J.P. MORGAN CORE BOND (2.93)% - - - - 2.18%
Lipper Intermediate Investment Grade Debt (0.83)% - - - - 3.84%
Benchmark (1.77)% - - - - 2.64%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
-----
77
- --------------------------------------------------------------------------------
TABLE 3 (CONTINUED)
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
------ ------- ------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
LAZARD LARGE CAP VALUE 2.14% - - - - 9.99%
Lipper Capital Appreciation 43.66% - - - - 32.61%
Benchmark 21.03% - - - - 24.76%
LAZARD SMALL CAP VALUE 0.37% - - - - (4.08)%
Lipper Small Cap 34.26% - - - - 16.02%
Benchmark 21.26% - - - - 8.70%
MFS EMERGING GROWTH COMPANIES 71.33% - - - - 46.26%
Lipper Mid-Cap 51.65% - - - - 32.50%
Benchmark 21.26% - - - - 16.99%
MFS GROWTH WITH INCOME 7.25% - - - - 7.25%
Lipper Growth & Income 12.90% - - - - 12.90%
Benchmark 21.03% - - - - 21.03%
MFS RESEARCH 21.45% - - - - 22.27%
Lipper Growth 29.78% - - - - 29.33%
Benchmark 21.03% - - - - 27.36%
MERCURY BASIC VALUE EQUITY 17.34% - - - - 16.35%
Lipper Growth & Income 12.90% - - - - 18.00%
Benchmark 21.03% - - - - 27.36%
MERCURY WORLD STRATEGY 19.71% - - - - 10.61%
Lipper Global Flexible Portfolio 12.93% - - - - 11.91%
Benchmark 13.07% - - - - 16.18%
MORGAN STANLEY EMERGING MARKETS EQUITY 93.10% - - - - 4.28%
Lipper Emerging Markets 82.53% - - - - 2.90%
Benchmark 66.41% - - - - (0.88)%
EQ/PUTNAM GROWTH & INCOME VALUE (2.69)% - - - - 8.63%
Lipper Growth & Income 12.90% - - - - 18.00%
Benchmark 21.03% - - - - 27.36%
EQ/PUTNAM INTERNATIONAL EQUITY 58.09% - - - - 30.22%
Lipper International 43.24% - - - - 20.38%
Benchmark 26.96% - - - - 18.32%
EQ/PUTNAM INVESTORS GROWTH 28.51% - - - - 32.86%
Lipper Growth 29.78% - - - - 29.33%
Benchmark 21.03% - - - - 27.36%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* Portfolio inception dates are shown in Table 1. Lipper survey and
benchmark "since portfolio inception" information are as of the month-end
closest to the actual date of portfolio inception.
<PAGE>
- -----
78
- --------------------------------------------------------------------------------
TABLE 4
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
------ ------- ------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
EQ/AGGRESSIVE STOCK 16.95% 25.86% 96.03% 297.56% - 686.25%
Lipper Mid-Cap Growth 51.65% 102.87% 158.98% 311.69% - 683.45%
Benchmark 18.09% 62.12% 147.96% 319.19% - 595.55%
ALLIANCE COMMON STOCK 23.20% 99.45% 217.88% 368.55% 2,020.99% 2,677.00%
Lipper Growth 29.78% 106.30% 216.51% 386.68% 1,816.52% 2,838.39%
Benchmark 21.04% 107.56% 251.12% 432.78% 2,584.39% 3,555.46%
ALLIANCE HIGH YIELD (4.89)% 3.50% 47.67% 125.47% - 159.53%
Lipper High Current Yield 3.65% 15.25% 51.19% 151.82% - 166.74%
Benchmark #1 1.57% 18.80% 58.22% 178.72% - 245.03%
Benchmark #2 3.28% 17.00% 54.39% 185.43% - 246.92%
ALLIANCE MONEY MARKET 3.31% 11.10% 19.82% 40.92% - 157.86%
Lipper Money Market 3.78% 12.64% 22.65% 47.52% - 178.18%
Benchmark 4.74% 15.79% 28.88% 63.79% - 229.35%
ALLIANCE SMALL CAP GROWTH 25.90% - - - - 48.80%
Lipper Small Company Growth 34.26% - - - - 62.98%
Benchmark 43.09% - - - - 84.91%
BT EQUITY 500 INDEX 18.68% - - - - 46.50%
Lipper Standard and Poors 500 Index 19.36% - - - - 51.69%
Benchmark 21.03% - - - - 55.65%
BT INTERNATIONAL EQUITY INDEX 25.75% - - - - 48.98%
Lipper International 43.24% - - - - 61.58%
Benchmark 26.96% - - - - 52.35%
BT SMALL COMPANY INDEX 19.10% - - - - 14.78%
Lipper Small Cap 34.26% - - - - 37.82%
Benchmark 21.26% - - - - 18.17%
EQ/EVERGREEN 8.24% - - - - 8.24%
Lipper Growth 29.78% - - - - 29.78%
Benchmark #1 21.26% - - - - 21.26%
Benchmark #2 21.03% - - - - 21.03%
EQ/EVERGREEN FOUNDATION 5.91% - - - - 5.91%
Lipper Balanced 8.69% - - - - 8.69%
Benchmark 11.15% - - - - 11.15%
J.P. MORGAN CORE BOND (2.93)% - - - - 4.41%
Lipper Intermediate Investment
Grade Debt (0.83)% - - - - 7.83%
Benchmark (1.77)% - - - - 5.96%
LAZARD LARGE CAP VALUE 2.14% - - - - 20.98%
Lipper Capital Appreciation 43.66% - - - - 79.44%
Benchmark 21.03% - - - - 55.65%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
-----
79
- --------------------------------------------------------------------------------
TABLE 4 (CONTINUED)
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
------ ------- ------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
LAZARD SMALL CAP VALUE 0.37% - - - - (7.99)%
Lipper Small Cap 34.26% - - - - 37.82%
Benchmark 21.26% - - - - 18.17%
MFS EMERGING GROWTH COMPANIES 71.33% - - - - 175.82%
Lipper Mid-Cap 51.65% - - - - 120.85%
Benchmark 21.26% - - - - 52.05%
MFS GROWTH WITH INCOME 7.25% - - - - 7.25%
Lipper Growth & Income 12.90% - - - - 12.90%
Benchmark 21.03% - - - - 21.03%
MFS RESEARCH 21.45% - - - - 70.99%
Lipper Growth 29.78% - - - - 101.13%
Benchmark 21.03% - - - - 90.75%
MERCURY BASIC VALUE EQUITY 17.34% - - - - 49.78%
Lipper Growth & Income 12.90% - - - - 56.85%
Benchmark 21.03% - - - - 90.75%
MERCURY WORLD STRATEGY 19.71% - - - - 30.89%
Lipper Global Flexible Portfolio 12.93% - - - - 35.69%
Benchmark 13.07% - - - - 49.16%
MORGAN STANLEY EMERGING
MARKETS EQUITY 93.10% - - - - 10.40%
Lipper Emerging Markets 82.53% - - - - 7.48%
Benchmark 66.41% - - - - 5.32%
EQ/PUTNAM GROWTH & INCOME
VALUE (2.69)% - - - - 24.72%
Lipper Growth & Income 12.90% - - - - 56.85%
Benchmark 21.03% - - - - 90.75%
EQ/PUTNAM INTERNATIONAL EQUITY 58.09% - - - - 102.33%
Lipper International 43.24% - - - - 65.44%
Benchmark 26.96% - - - - 56.70%
EQ/PUTNAM INVESTORS GROWTH 28.51% - - - - 113.43%
Lipper Growth 29.78% - - - - 101.13%
Benchmark 21.03% - - - - 90.75%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* Portfolio inception dates are shown in Table 1. Lipper survey and
benchmark "since portfolio inception" information are as month-end closest
to the actual date of portfolio inception.
<PAGE>
- -----
80
- --------------------------------------------------------------------------------
TABLE 5
YEAR-BY-YEAR RATES OF RETURN:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
1990 1991 1992 1993 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
EQ/Aggressive Stock 6.43% 83.89% (4.71)% 14.89% (5.35)%
Alliance Common Stock (9.59)% 35.69% 1.57% 22.83% (3.70)%
Alliance High Yield (2.70)% 22.48% 10.51% 21.19% (4.33)%
Alliance Money Market 6.50% 4.49% 1.91% 1.32% 2.36%
Alliance Small Cap Growth - - - - -
BT Equity 500 Index - - - - -
BT International Equity Index - - - - -
BT Small Company Index - - - - -
EQ/Evergreen - - - - -
EQ/Evergreen Foundation - - - - -
J.P. Morgan Core Bond - - - - -
Lazard Large Cap Value - - - - -
Lazard Small Cap Value - - - - -
MFS Emerging Growth Companies - - - - -
MFS Growth with Income - - - - -
MFS Research - - - - -
Mercury Basic Value Equity - - - - -
Mercury World Strategy - - - - -
Morgan Stanley Emerging Markets Equity - - - - -
EQ/Putnam Growth & Income Value - - - - -
EQ/Putnam International Equity - - - - -
EQ/Putnam Investors Growth - - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
1995 1996 1997 1998 1999
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
EQ/Aggressive Stock 29.54% 20.24% 9.04% (1.30)% 16.95%
Alliance Common Stock 30.34% 22.28% 27.16% 27.32% 23.20%
Alliance High Yield 18.01% 20.91% 16.58% (6.66)% (4.89)%
Alliance Money Market 4.06% 3.64% 3.74% 3.66% 3.31%
Alliance Small Cap Growth - - 25.38% (5.73)% 25.90%
BT Equity 500 Index - - - 23.44% 18.68%
BT International Equity Index - - - 18.47% 25.75%
BT Small Company Index - - - (3.63)% 19.10%
EQ/Evergreen - - - - 8.24%
EQ/Evergreen Foundation - - - - 5.91%
J.P. Morgan Core Bond - - - 7.56% (2.93)%
Lazard Large Cap Value - - - 18.44% 2.14%
Lazard Small Cap Value - - - (8.32)% 0.37%
MFS Emerging Growth Companies - - 21.32%+ 32.70% 71.33%
MFS Growth with Income - - - - 7.25%
MFS Research - - 14.99%+ 22.43% 21.45%
Mercury Basic Value Equity - - 15.97%+ 10.08% 17.34%
Mercury World Strategy - - 3.76%+ 5.38% 19.71%
Morgan Stanley Emerging Markets Equity - - (20.59)%+ (28.01)% 93.10%
EQ/Putnam Growth & Income Value - - 15.15%+ 11.30% (2.69)%
EQ/Putnam International Equity - - 8.59%+ 17.86% 58.09%
EQ/Putnam Investors Growth - - 23.53%+ 34.45% 28.51%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
+ Returns for these portfolios represent less than 12 months of performance.
The returns are as of each portfolio inception date as shown in Table 1.
<PAGE>
----------
81
- --------------------------------------------------------------------------------
COMMUNICATING PERFORMANCE DATA
In reports or other communications to contract owners or in advertising
material, we may describe general economic and market conditions affecting our
variable investment options and the portfolios and may compare the performance
or ranking of those options and the portfolios with:
o those of other insurance company separate accounts or mutual funds included
in the rankings prepared by Lipper Analytical Services, Inc., Morningstar,
Inc., VARDS, or similar investment services that monitor the performance
of insurance company separate accounts or mutual funds;
o other appropriate indices of investment securities and averages for peer
universes of mutual funds; or
o data developed by us derived from such indices or averages.
We also may furnish to present or prospective contract owners advertisements or
other communications that include evaluations of a variable investment option
or portfolio by nationally recognized financial publications. Examples of such
publications are:
- --------------------------------------------------------------------------------
Barron's Investment Management Weekly
Morningstar's Variable Annuity Money Management Letter
Sourcebook Investment Dealers Digest
Business Week National Underwriter
Forbes Pension & Investments
Fortune USA Today
Institutional Investor Investor's Business Daily
Money The New York Times
Kiplinger's Personal Finance The Wall Street Journal
Financial Planning The Los Angeles Times
Investment Adviser The Chicago Tribune
- --------------------------------------------------------------------------------
Lipper compiles performance data for peer universes of funds with similar
investment objectives in its Lipper Survey. Morningstar, Inc. compiles similar
data in the Morningstar Variable Annuity/Life Report (Morningstar Report).
The Lipper Survey records performance data as reported to it by over 800 mutual
funds underlying variable annuity and life insurance products. It divides these
actively managed portfolios into 25 categories by portfolio objectives. The
Lipper Survey contains two different universes, which reflect different types
of fees in performance data:
o The "separate account" universe reports performance data net of investment
management fees, direct operating expenses and asset-based charges
applicable under variable life and annuity contracts, and
o The "mutual fund" universe reports performance net only of investment
management fees and direct operating expenses, and therefore reflects only
charges that relate to the underlying mutual fund.
The Morningstar Variable Annuity/Life Report consists of nearly 700 variable
life and annuity funds, all of which report their data net of investment
management fees, direct operating expenses and separate account level charges.
VARDS is a monthly reporting service that monitors approximately 2,500 variable
life and variable annuity funds on performance and account information.
YIELD INFORMATION
Current yield for the Alliance Money Market option will be based on net changes
in a hypothetical investment over a given seven-day period, exclusive of
capital changes, and then "annualized" (assuming that the same seven-day result
would occur each week for 52 weeks). Current yield for the Alliance High Yield
option will be based on net changes in a hypothetical investment over a given
30-day period, exclusive of capital changes, and then "annualized" (assuming
that the same 30-day result would occur each month for 12 months).
"Effective yield" is calculated in a similar manner, but when annualized, any
income earned by the investment is assumed to be reinvested. The "effective
yield" will be slightly higher than the "current yield" because any earnings
are compounded weekly for the Alliance Money Market option. The current yields
and effective yields assume the deduction of all contract charges and expenses
other than the withdrawal charge, the optional baseBUILDER benefits charge, the
annual administrative charge, and any charge
<PAGE>
- ----------
82
- --------------------------------------------------------------------------------
designed to approximate certain taxes that may be imposed on us in your state,
such as premium taxes. The yields and effective yields for the Alliance Money
Market option, when used for the special dollar cost averaging program, assume
that no contract charges are deducted. For more information, see "Yield
Information for the Alliance Money Market Option and Alliance High Yield
Option" in the SAI.
<PAGE>
10
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
----------------
83
- --------------------------------------------------------------------------------
Equitable Life's Annual Report on Form 10-K for the year ended December 31,
1999, is considered to be a part of this prospectus because it is incorporated
by reference.
After the date of this prospectus and before we terminate the offering of the
securities under this prospectus, all documents or reports we file with the SEC
under the Securities Exchange Act of 1934 ("Exchange Act"), will be considered
to become part of this prospectus because they are incorporated by reference.
Any statement contained in a document that is, or becomes part of this
prospectus, will be considered changed or replaced for purposes of this
prospectus if a statement contained in this prospectus changes or is replaced.
Any statement that is considered to be a part of this prospectus because of its
incorporation will be considered changed or replaced for the purpose of this
prospectus if a statement contained in any other subsequently filed document
that is considered to be part of this prospectus changes or replaces that
statement. After that, only the statement that is changed or replaced will be
considered to be part of this prospectus.
We file our Exchange Act documents and reports, including our Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q, electronically according to EDGAR
under CIK No. 0000727920. The SEC maintains a Web site that contains reports,
proxy and information statements, and other information regarding registrants
that file electronically with the SEC. The address of the site is
http://www.sec.gov.
Upon written or oral request, we will provide, free of charge, to each person
to whom this prospectus is delivered, a copy of any or all of the documents
considered to be part of this prospectus because they are incorporated herein.
This does not include exhibits not specifically incorporated by reference into
the text of such documents. Requests for documents should be directed to The
Equitable Life Assurance Society of the United States, 1290 Avenue of the
Americas, New York, New York 10104. Attention: Corporate Secretary (telephone:
(212) 554-1234).
<PAGE>
APPENDIX I: CONDENSED FINANCIAL INFORMATION
--------
A-1
- --------------------------------------------------------------------------------
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION EXCEPT FOR EQ/ALLIANCE TECHNOLOGY WHICH IS BEING OFFERED FOR
THE FIRST TIME ON MAY 1, 2000.
- --------------------------------------------------------------------------------
YEARS ENDED
DEC. 31, 1998 DEC. 31, 1999
------------- -------------
EQ/AGGRESSIVE STOCK
Unit value $ 69.37 $ 81.12
Number of units outstanding (000s) 939 1,163
ALLIANCE COMMON STOCK
Unit value $ 237.18 $ 292.20
Number of units outstanding (000s) 1,542 2,344
ALLIANCE HIGH YIELD
Unit value $ 27.96 $ 26.59
Number of units outstanding (000s) 4,521 5,048
ALLIANCE MONEY MARKET
Unit value $ 25.92 $ 26.78
Number of units outstanding (000s) 5,158 7,278
EQ/ALLIANCE PREMIER GROWTH
Unit value - $ 11.79
Number of units outstanding (000s) - 8,614
ALLIANCE SMALL CAP GROWTH
Unit value $ 11.82 $ 14.88
Number of units outstanding (000s) 6,101 6,912
BT EQUITY 500 INDEX
Unit value $ 12.34 $ 14.65
Number of units outstanding (000s) 12,279 27,541
BT INTERNATIONAL EQUITY INDEX
Unit value $ 11.85 $ 14.90
Number of units outstanding (000s) 1,827 3,219
BT SMALL COMPANY INDEX
Unit value $ 9.64 $ 11.48
Number of units outstanding (000s) 1,610 2,922
CAPITAL GUARDIAN INTERNATIONAL
Unit value - $ 13.96
Number of units outstanding (000s) - 1,477
CAPITAL GUARDIAN RESEARCH
Unit value - $ 10.61
Number of units outstanding (000s) - 982
CAPITAL GUARDIAN U.S. EQUITY
Unit value - $ 10.28
Number of units outstanding (000s) - 2,907
EQ/EVERGREEN
Unit value - $ 10.82
Number of units outstanding (000s) - 91
EQ/EVERGREEN FOUNDATION
Unit value - $ 10.59
Number of units outstanding (000s) - 510
- --------------------------------------------------------------------------------
<PAGE>
- -----
A-2
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
YEARS ENDED
DEC. 31, 1998 DEC. 31, 1999
------------- -------------
J.P. MORGAN CORE BOND
Unit value $ 10.76 $ 10.44
Number of units outstanding (000s) 8,661 12,838
LAZARD LARGE CAP VALUE
Unit value $ 11.84 $ 12.10
Number of units outstanding (000s) 5,696 9,428
LAZARD SMALL CAP VALUE
Unit value $ 9.17 $ 9.20
Number of units outstanding (000s) 4,733 6,774
MFS EMERGING GROWTH COMPANIES
Unit value $ 16.10 $ 27.59
Number of units outstanding (000s) 9,117 13,671
MFS GROWTH WITH INCOME
Unit value - $ 10.72
Number of units outstanding (000s) - 6,033
MFS RESEARCH
Unit value $ 14.08 $ 17.10
Number of units outstanding (000s) 14,913 19,251
MERCURY BASIC VALUE EQUITY
Unit value $ 12.76 $ 14.98
Number of units outstanding (000s) 4,389 5,766
MERCURY WORLD STRATEGY
Unit value $ 10.94 $ 13.09
Number of units outstanding (000s) 717 615
MORGAN STANLEY EMERGING MARKETS EQUITY
Unit value $ 5.72 $ 11.04
Number of units outstanding (000s) 1,805 3,859
EQ/PUTNAM GROWTH & INCOME VALUE
Unit value $ 12.82 $ 12.47
Number of units outstanding (000s) 24,343 29,522
EQ/PUTNAM INTERNATIONAL EQUITY
Unit value $ 12.80 $ 20.23
Number of units outstanding (000s) 10,607 13,783
EQ/PUTNAM INVESTORS GROWTH
Unit value $ 16.61 $ 21.35
Number of units outstanding (000s) 10,072 17,154
- --------------------------------------------------------------------------------
<PAGE>
APPENDIX II: PURCHASE CONSIDERATIONS FOR QP CONTRACTS
--------
B-1
- --------------------------------------------------------------------------------
Trustees who are considering the purchase of an Equitable Accumulator QP
contract should discuss with their tax advisers whether this is an appropriate
investment vehicle for the employer's plan. Trustees should consider whether the
plan provisions permit the investment of plan assets in the QP contract, the
distribution of such an annuity, the purchase of the guaranteed minimum income
benefit, and the payment of death benefits in accordance with the requirements
of the federal income tax rules. The QP contract and this prospectus should be
reviewed in full, and the following factors, among others, should be noted.
Assuming continued plan qualification and operation, earnings on qualified plan
assets will accumulate value on a tax-deferred basis even if the plan is not
funded by the Equitable Accumulator QP contract or another annuity. Therefore,
you should purchase an Equitable Accumulator QP contract to fund a plan for the
contract's features and benefits other than tax deferral. This QP contract
accepts transfer contributions only and not regular, ongoing payroll
contributions. For 401(k) plans under defined contribution plans, no employee
after-tax contributions are accepted.
Under defined benefit plans, we will not accept rollovers from a defined
contribution plan to a defined benefit plan. We will only accept transfers from
a defined benefit plan or a change of investment vehicles in the plan. Only one
additional contribution may be made per contract year. For defined benefit
plans, the maximum percentage of actuarial value of the plan
participant/employee's normal retirement benefit that can be funded by a QP
contract is 80%. The account value under a QP contract may at any time be more
or less than the lump sum actuarial equivalent of the accrued benefit for a
defined benefit plan participant/employee. Equitable Life does not guarantee
that the account value under a QP contract will at any time equal the actuarial
value of 80% of a participant/employee's accrued benefit. If overfunding of a
plan occurs, withdrawals from the QP contract may be required. A withdrawal
charge and/or market value adjustment may apply.
Further, Equitable Life will not perform or provide any plan recordkeeping
services with respect to the QP contracts. The plan's administrator will be
solely responsible for performing or providing for all such services. There is
no loan feature offered under the QP contracts, so if the plan provides for
loans and a participant/employee takes a loan from the plan, other plan assets
must be used as the source of the loan and any loan repayments must be credited
to other investment vehicles and/or accounts available under the plan.
Given that required minimum distributions must generally commence from the plan
for annuitants after age 70 1/2, trustees should consider whether the QP
contract is an appropriate purchase for annuitants approaching or over age
70 1/2.
o The QP contract may not be an appropriate purchase for annuitants
approaching or over age 70 1/2; and
o The guaranteed minimum income benefit under baseBUILDER may not be an
appropriate feature for annuitants who are older than age 63 1/2 when the
contract is issued.
Finally, because the method of purchasing the QP contract including the large
initial contribution and the features of the QP contract may appeal more to plan
participants/employees who are older and tend to be highly paid, and because
certain features of the QP contract are available only to plan
participants/employees who meet certain minimum and/or maximum age requirements,
plan trustees should discuss with their advisers whether the purchase of the QP
contract would cause the plan to engage in prohibited discrimination in
contributions, benefits or otherwise.
<PAGE>
APPENDIX III: MARKET VALUE ADJUSTMENT EXAMPLE
- --------
C-1
- --------------------------------------------------------------------------------
The example below shows how the market value adjustment would be determined and
how it would be applied to a withdrawal, assuming that $100,000 was allocated on
February 15, 2001 to a fixed maturity option with a maturity date of February
15, 2010 (nine years later) at a hypothetical rate to maturity of 7.00%,
resulting in a maturity value of $183,846 on the maturity date. We further
assume that a withdrawal of $50,000 is made four years later on February 15,
2005.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
HYPOTHETICAL ASSUMED
RATE TO MATURITY ON
FEBRUARY 15, 2005
5.00% 9.00%
------- -------
<S> <C> <C>
AS OF FEBRUARY 15, 2005 (BEFORE WITHDRAWAL)
(1) Market adjusted amount $144,048 $ 119,487
(2) Fixed maturity amount $131,080 $ 131,080
(3) Market value adjustment:
(1) - (2) $ 12,968 $ (11,593)
ON FEBRUARY 15, 2005 (AFTER WITHDRAWAL)
(4) Portion of market value adjustment associated with withdrawal:
(3) x [$50,000/(1)] $ 4,501 $ (4,851)
(5) Reduction in fixed maturity amount:
[$50,000 - (4)] $ 45,499 $ 54,851
(6) Fixed maturity amount: (2) - (5) $ 85,581 $ 76,229
(7) Maturity value $120,032 $ 106,915
(8) Market adjusted amount of (7) $ 94,048 $ 69,487
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
You should note that under this example if a withdrawal is made when rates have
increased from 7.00% to 9.00% (right column), a portion of a negative market
value adjustment is realized. On the other hand, if a withdrawal is made when
rates have decreased from 7.00% to 5.00% (left column), a portion of a positive
market value adjustment is realized.
<PAGE>
APPENDIX IV: GUARANTEED MINIMUM DEATH BENEFIT EXAMPLE
--------
D-1
- --------------------------------------------------------------------------------
The death benefit under the contracts is equal to the account value or, if
greater, the guaranteed minimum death benefit.
The following illustrates the guaranteed minimum death benefit calculation.
Assuming $100,000 is allocated to the variable investment options (with no
allocation to the Alliance Money Market option or the fixed maturity options),
no additional contributions, no transfers and no withdrawals, and no loans under
a Rollover TSA contract, the guaranteed minimum death benefit for an annuitant
age 45 would be calculated as follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
END OF 5% ROLL UP TO AGE 80 ANNUAL RATCHET TO AGE 80
CONTRACT GUARANTEED MINIMUM GUARANTEED MINIMUM
YEAR ACCOUNT VALUE DEATH BENEFIT(1) DEATH BENEFIT
-------- ------------- -------------------- ------------------------
<S> <C> <C> <C>
1 $105,000 $ 105,000(1) $ 105,000(3)
2 $115,500 $ 110,250(2) $ 115,500(3)
3 $129,360 $ 115,763(2) $ 129,360(3)
4 $103,488 $ 121,551(1) $ 129,360(4)
5 $113,837 $ 127,628(1) $ 129,360(4)
6 $127,497 $ 134,010(1) $ 129,360(4)
7 $127,497 $ 140,710(1) $ 129,360(4)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The account values for contract years 1 through 7 are based on hypothetical
rates of return of 5.00%, 10.00%, 12.00%, (20.00)%, 10.00%, 12.00% and 0.00%. We
are using these rates solely to illustrate how the benefit is determined. The
return rates bear no relationship to past or future investment results.
5% ROLL UP TO AGE 80
(1) At the end of contract year 1, and again at the end of contract years 4
through 7, the death benefit will be equal to the guaranteed minimum death
benefit.
(2) At the end of contract years 2 and 3, the death benefit will be equal to
the current account value since it is higher than the current guaranteed
minimum death benefit.
ANNUAL RATCHET TO AGE 80
(3) At the end of contract years 1 through 3, the guaranteed minimum death
benefit is equal to the current account value.
(4) At the end of contract years 4 through 7, the guaranteed minimum death
benefit is equal to the guaranteed minimum death benefit at the end of the
prior year since it is equal to or higher than the current account value.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Unit Values 2
Custodian and Independent Accountants 3
Yield Information for the Alliance Money Market Option and Alliance High Yield Option 3
Financial Statements 5
</TABLE>
HOW TO OBTAIN AN EQUITABLE ACCUMULATOR STATEMENT OF ADDITIONAL INFORMATION FOR
SEPARATE ACCOUNT NO. 49
Send this request form to:
Equitable Accumulator
P.O. Box 1547
Secaucus, NJ 07096-1547
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Please send me an Equitable Accumulator SAI for Separate Account No. 49 dated
May 1, 2000.
- ------------------------------------------------------------------------------
Name:
- ------------------------------------------------------------------------------
Address:
- ------------------------------------------------------------------------------
City State Zip
(SAI 1AMLF(05/00))
<PAGE>
EQUITABLE ACCUMULATOR(SM)
A combination variable and fixed deferred
annuity contract
Please read and keep this prospectus for future reference. It contains
important information that you should know before purchasing or taking any
other action under your contract. Also, at the end of this prospectus you will
find attached the prospectus for EQ Advisors Trust, which contains important
information about its portfolios.
PROSPECTUS DATED MAY 1, 2000
- --------------------------------------------------------------------------------
WHAT IS THE EQUITABLE ACCUMULATOR?
Equitable Accumulator is a deferred annuity contract issued by THE EQUITABLE
LIFE ASSURANCE SOCIETY OF THE UNITED STATES. It provides for the accumulation
of retirement savings and for income. The contract offers income and death
benefit protection. It also offers a number of payout and distribution options.
The distribution options available under the contract are the Assured Payment
Option and APO Plus. You invest to accumulate value on a tax-deferred basis in
one or more of our variable investment options, fixed maturity options, or the
account for special dollar cost averaging ("investment options"). This contract
may not currently be available in all states.
<TABLE>
<S> <C>
VARIABLE INVESTMENT OPTIONS
- ----------------------------------------------------------------------------------------------
FIXED INCOME
- ----------------------------------------------------------------------------------------------
o Alliance High Yield o Alliance Money Market
o Alliance Intermediate
Government Securities
- ----------------------------------------------------------------------------------------------
DOMESTIC STOCKS
- ----------------------------------------------------------------------------------------------
o EQ/Aggressive Stock(1) o EQ/Evergreen
o Alliance Common Stock o MFS Emerging Growth
Companies
o Alliance Growth and Income
o MFS Growth with Income
o EQ/Alliance Premier Growth
o MFS Research
o Alliance Small Cap Growth
o Mercury Basic Value Equity(3)
o EQ/Alliance Technology(2)
o EQ/Putnam Growth & Income
o BT Equity 500 Index Value
o T. Rowe Price Equity Income
o Capital Guardian Research
o Warburg Pincus Small Company
o Capital Guardian U.S. Equity Value
- ----------------------------------------------------------------------------------------------
INTERNATIONAL STOCKS
- ----------------------------------------------------------------------------------------------
o Alliance Global o Morgan Stanley Emerging
Markets Equity
o Alliance International
o T. Rowe Price International
o BT International Equity Index Stock
- ----------------------------------------------------------------------------------------------
BALANCED/HYBRID
- ----------------------------------------------------------------------------------------------
o Alliance Conservative Investors o Mercury World Strategy(4)
o Alliance Growth Investors o EQ/Putnam Balanced
o EQ/Evergreen Foundation
- ----------------------------------------------------------------------------------------------
o Alliance Equity Index (Available only under APO Plus)
- ----------------------------------------------------------------------------------------------
(1) Formerly named "Alliance Aggressive Stock."
(2) May not be available in California.
(3) Formerly named "Merrill Lynch Basic Value Equity."
(4) Formerly named "Merrill Lynch World Strategy."
</TABLE>
You may allocate amounts to any of the variable investment options. Each
variable investment option is a subaccount of our Separate Account No. 45. Each
variable investment option, in turn, invests in a corresponding securities
portfolio of EQ Advisors Trust. Your investment results in a variable
investment option will depend on the investment performance of the related
portfolio.
FIXED MATURITY OPTIONS. You may allocate amounts to one or more fixed maturity
options. These amounts will receive a fixed rate of interest for a specified
period. Interest is earned at a guaranteed rate set by us. We make a market
value adjustment (up or down) if you make transfers or withdrawals from a fixed
maturity option before its maturity date.
ACCOUNT FOR SPECIAL DOLLAR COST AVERAGING. This account also pays fixed interest
at guaranteed rates.
TYPES OF CONTRACTS. We offer the contracts for use as:
o A nonqualified annuity ("NQ") for after-tax contributions only.
o An individual retirement annuity ("IRA"), either traditional IRA or Roth
IRA.
We offer two versions of the traditional IRA: "Rollover IRA" and "Flexible
Premium IRA." The Assured Payment Option and APO Plus are available under
Rollover IRA and Flexible Premium IRA contracts.
We also offer two versions of the Roth IRA: "Roth Conversion IRA" and
"Flexible Premium Roth IRA."
o An annuity that is an investment vehicle for a qualified defined
contribution or defined benefit plan ("QP").
o An Internal Revenue Code Section 403(b) Tax-Sheltered Annuity ("TSA") -
("Rollover TSA").
A contribution of at least $5,000 is required to purchase an NQ, Rollover IRA,
Roth Conversion IRA, QP or Rollover TSA contract. For Flexible Premium IRA or
Flexible Premium Roth IRA contracts, we require a contribution of $2,000 to
purchase a contract. Under Rollover IRA or Flexible Premium IRA contracts you
may elect the Assured Payment Option or APO Plus with a minimum initial
contribution of $10,000.
Registration statements relating to this offering have been filed with the
Securities and Exchange Commission ("SEC"). The statement of additional
information ("SAI") dated May 1, 2000 is a part of one of the registration
statements. The SAI is available free of charge. You may request one by writing
to our processing office or calling 1-800-789-7771. The SAI has been
incorporated by reference into this prospectus. This prospectus and the SAI can
also be obtained from the SEC's Web site at http://www.sec.gov. The table of
contents for the SAI appears at the back of this prospectus.
THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. THE CONTRACTS ARE NOT INSURED BY THE FDIC OR ANY OTHER
AGENCY. THEY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE NOT
BANK GUARANTEED. THEY ARE SUBJECT TO INVESTMENT RISKS AND POSSIBLE LOSS OF
PRINCIPAL.
72074
2000 Portfolio
<PAGE>
CONTENTS OF THIS PROSPECTUS
- ----------------
2
- --------------------------------------------------------------------------------
CONTENTS OF THIS PROSPECTUS
- --------------------------------------------------------------------------------
EQUITABLE ACCUMULATOR(SM)
- ------------------------------------------------------------------
Index of key words and phrases 4
Who is Equitable Life? 5
How to reach us 6
Equitable Accumulator at a glance - key features 8
- ------------------------------------------------------------------
FEE TABLE 11
- ------------------------------------------------------------------
Examples 14
- ------------------------------------------------------------------
1
- ----
CONTRACT FEATURES AND BENEFITS 16
- ------------------------------------------------------------------
How you can purchase and contribute to your contract 16
Owner and annuitant requirements 23
How you can make your contributions 23
What are your investment options under the contract? 23
Allocating your contributions 29
Your benefit base 31
Annuity purchase factors 31
Our baseBUILDER option 31
Guaranteed minimum death benefit 33
Your right to cancel within a certain number of days 34
- ------------------------------------------------------------------
2
- ----
DETERMINING YOUR CONTRACT'S VALUE 35
- ------------------------------------------------------------------
Your account value and cash value 35
Your contract's value in the variable investment options 35
Your contract's value in the fixed maturity options 35
Your contract's value in the account for special dollar cost
averaging 35
- ------------------------------------------------------------------
"We," "our," and "us" refer to Equitable Life. When we use the word "contract"
When we address the reader of this prospectus it also includes certificates
with words such as "you" and "your," we mean that are issued under group
the person who has the right or contracts in some states.
responsibility that the prospectus is
discussing at that point. This is usually
the contract owner.
<PAGE>
- ----------
3
- --------------------------------------------------------------------------------
CONTENTS OF THIS PROSPECTUS
- --------------------------------------------------------------------------------
3
- -----
TRANSFERRING YOUR MONEY AMONG
INVESTMENT OPTIONS 36
- --------------------------------------------------------------------------------
Transferring your account value 36
Market timing 36
Rebalancing your account value 36
4
- -----
ACCESSING YOUR MONEY 38
- --------------------------------------------------------------------------------
Assured Payment Option and APO Plus 38
Withdrawing your account value 42
How withdrawals are taken from your account value 44
How withdrawals affect your guaranteed minimum
income benefit and guaranteed minimum death
benefit 44
Loans under Rollover TSA contracts 45
Surrendering your contract to receive its cash value 46
When to expect payments 46
Your annuity payout options 46
5
- -----
CHARGES AND EXPENSES 50
- --------------------------------------------------------------------------------
Charges that Equitable Life deducts 50
Charges that EQ Advisors Trust deducts 52
Group or sponsored arrangements 53
Other distribution arrangements 53
6
- -----
PAYMENT OF DEATH BENEFIT 54
- --------------------------------------------------------------------------------
Your beneficiary and payment of benefit 54
How death benefit payment is made 55
Beneficiary continuation option 55
7
- -----
TAX INFORMATION 57
- --------------------------------------------------------------------------------
Overview 57
Transfers among investment options 57
Taxation of nonqualified annuities 57
Individual retirement arrangements (IRAs) 59
Special rules for nonqualified contracts in qualified plans 70
Tax-Sheltered Annuity contracts (TSAs) 70
Federal and state income tax withholding and
information reporting 74
Impact of taxes to Equitable Life 76
8
- -----
MORE INFORMATION 77
- --------------------------------------------------------------------------------
About our Separate Account No. 45 77
About EQ Advisors Trust 77
About our fixed maturity options 78
About the general account 79
About other methods of payment 79
Dates and prices at which contract events occur 80
About your voting rights 81
About legal proceedings 81
About our independent accountants 81
Financial statements 82
Transfers of ownership, collateral assignments, loans,
and borrowing 82
Distribution of the contracts 82
9
- -----
INVESTMENT PERFORMANCE 83
- --------------------------------------------------------------------------------
Benchmarks 83
Communicating performance data 94
10
- -----
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE 96
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
APPENDICES
- --------------------------------------------------------------------------------
I - Purchase considerations for QP contracts A-1
II - Market value adjustment example B-1
III - Guaranteed minimum death benefit example C-1
IV - Example of payments under the Assured Payment
Option and APO Plus D-1
V - Assured Payment Option and APO Plus contracts
issued in the state of Maryland E-1
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<PAGE>
INDEX OF KEY WORDS AND PHRASES
- --------
4
- --------------------------------------------------------------------------------
INDEX OF KEY WORDS AND PHRASES
- --------------------------------------------------------------------------------
This index should help you locate more information on the terms used in this
prospectus.
<TABLE>
<CAPTION>
PAGE
<S> <C>
account for special dollar cost
averaging 27
account value 35
annuitant 16
annuity payout options 46
APO Plus 41
Assured Payment Option 38
baseBUILDER 31
beneficiary 54
benefit base 31
business day 80
cash value 35
conduit IRA 63
contract date 10
contract date anniversary 10
contract year 10
contributions to Roth IRAs 67
regular contributions 67
rollovers and direct transfers 68
conversion contributions 68
direct custodian-to-custodian
transfers 67
contributions to traditional IRAs 60
regular contributions 60
rollovers and transfers 61
EQAccess 6
ERISA 45
fixed maturity options 26
Flexible Premium IRA cover
</TABLE>
<TABLE>
<CAPTION>
PAGE
<S> <C>
Flexible Premium Roth IRA cover
guaranteed minimum death benefit 33
guaranteed minimum income benefit 31
IRA 59
IRS 57
investment options 23
loan reserve account 45
market adjusted amount 26
market value adjustment 27
maturity value 26
NQ cover
participant 23
portfolio cover
processing office 6
QP 70
rate to maturity 26
Required Beginning Date 64
Rollover IRA cover
Rollover TSA cover
Roth Conversion IRA cover
Roth IRA 67
SAI cover
SEC cover
TOPS 6
TSA 70
traditional IRA 60
unit 35
variable investment options 23
</TABLE>
To make this prospectus easier to read, we sometimes use different words than in
the contract or supplemental materials. This is illustrated below. Although we
use different words, they have the same meaning in this prospectus as in the
contract or supplemental materials. Your financial professional can provide
further explanation about your contract.
<TABLE>
<CAPTION>
PROSPECTUS CONTRACT OR SUPPLEMENTAL MATERIALS
<S> <C>
fixed maturity options Guarantee Periods (GIROs in Supplemental Materials)
variable investment options Investment Funds
account value Annuity Account Value
rate to maturity Guaranteed Rates
unit Accumulation Unit
baseBUILDER Guaranteed Minimum Income Benefit
</TABLE>
<PAGE>
WHO IS EQUITABLE LIFE?
- ----------------
5
- --------------------------------------------------------------------------------
WHO IS EQUITABLE LIFE?
- --------------------------------------------------------------------------------
We are The Equitable Life Assurance Society of the United States ("Equitable
Life"), a New York stock life insurance corporation. We have been doing
business since 1859. Equitable Life is a wholly owned subsidiary of AXA
Financial, Inc. (previously, The Equitable Companies Incorporated). The
majority shareholder of AXA Financial, Inc. is AXA, a French holding company
for an international group of insurance and related financial services
companies. As a majority shareholder, and under its other arrangements with
Equitable Life and Equitable Life's parent, AXA exercises significant influence
over the operations and capital structure of Equitable Life and its parent. No
company other than Equitable Life, however, has any legal responsibility to pay
amounts that Equitable Life owes under the contract.
AXA Financial, Inc. and its consolidated subsidiaries managed approximately
$462.7 billion in assets as of December 31, 1999. For over 100 years Equitable
Life has been among the largest insurance companies in the United States. We
are licensed to sell life insurance and annuities in all fifty states, the
District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our home
office is located at 1290 Avenue of the Americas, New York, N.Y. 10104.
<PAGE>
- ----------
6
- --------------------------------------------------------------------------------
WHO IS EQUITABLE LIFE?
- --------------------------------------------------------------------------------
HOW TO REACH US
You may communicate with our processing office as listed below for any of the
following purposes:
- --------------------------------------------------------------------------------
FOR CONTRIBUTIONS SENT BY REGULAR MAIL:
- --------------------------------------------------------------------------------
Equitable Accumulator
P.O. Box 13014
Newark, NJ 07188-0014
- --------------------------------------------------------------------------------
FOR CONTRIBUTIONS SENT BY EXPRESS DELIVERY:
- --------------------------------------------------------------------------------
Equitable Accumulator
c/o Bank One, N.A.
300 Harmon Meadow Boulevard, 3rd Floor
Attn: Box 13014
Secaucus, NJ 07094
- --------------------------------------------------------------------------------
FOR ALL OTHER COMMUNICATIONS (E.G.,
REQUESTS FOR TRANSFERS, WITHDRAWALS, OR
REQUIRED NOTICES) SENT BY REGULAR MAIL:
- --------------------------------------------------------------------------------
Equitable Accumulator
P.O. Box 1547
Secaucus, NJ 07096-1547
- --------------------------------------------------------------------------------
FOR ALL OTHER COMMUNICATIONS (E.G.,
REQUESTS FOR TRANSFERS, WITHDRAWALS, OR
REQUIRED NOTICES) SENT BY EXPRESS DELIVERY:
- --------------------------------------------------------------------------------
Equitable Accumulator
200 Plaza Drive, 4th Floor
Secaucus, NJ 07094
- --------------------------------------------------------------------------------
REPORTS WE PROVIDE:
- --------------------------------------------------------------------------------
o written confirmation of financial transactions;
o statement of your contract values at the close of each calendar quarter
(four per year); and
o annual statement of your contract values as of the close of the contract
year.
- --------------------------------------------------------------------------------
TELEPHONE OPERATED PROGRAM SUPPORT
("TOPS") AND EQACCESS SYSTEMS:
- --------------------------------------------------------------------------------
TOPS is designed to provide you with up-to-date information via touch-tone
telephone. EQAccess is designed to provide this information through the
Internet. You can obtain information on:
o your current account value;
o your current allocation percentages (anticipated to be available through
EQAccess by the end of 2000);
o the number of units you have in the variable investment options;
o rates to maturity for the fixed maturity options;
o the daily unit values for the variable investment options; and
o performance information regarding the variable investment options (not
available through TOPS).
You can also:
o change your allocation percentages and/or transfer among the investment
options; (anticipated to be available through EQAccess by the end of 2000);
o change your TOPS personal identification number (PIN); (not available
through EQAccess); and
o change your EQAccess password (not available through TOPS).
TOPS and EQAccess are normally available seven days a week, 24 hours a day. You
may use TOPS by calling toll free 1-888-909-7770. You may use EQAccess by
visiting our Web site at http://www.equitable.com and clicking on EQAccess. Of
course, for reasons beyond our control, these services may sometimes be
unavailable.
We have established procedures to reasonably confirm that the instructions
communicated by telephone or Internet are genuine. For example, we will require
certain personal
<PAGE>
- ----------
7
- --------------------------------------------------------------------------------
WHO IS EQUITABLE LIFE ?
- --------------------------------------------------------------------------------
identification information before we will act on telephone or Internet
instructions and we will provide written confirmation of your transfers. If we
do not employ reasonable procedures to confirm the genuineness of telephone or
Internet instructions, we may be liable for any losses arising out of any act or
omission that constitutes negligence, lack of good faith, or willful misconduct.
In light of our procedures, we will not be liable for following telephone or
Internet instructions we reasonably believe to be genuine.
We reserve the right to limit access to these services if we determine that you
are engaged in a market timing strategy (see "Market timing" in "Transferring
your money among investment options").
- --------------------------------------------------------------------------------
CUSTOMER SERVICE REPRESENTATIVE:
- --------------------------------------------------------------------------------
You may also use our toll-free number (1-800-789-7771) to speak with one of our
customer service representatives. Our customer service representatives are
available on any business day from 8:30 a.m. until 5:30 p.m., Eastern Time.
WE REQUIRE THAT THE FOLLOWING TYPES OF COMMUNICATIONS BE ON SPECIFIC FORMS WE
PROVIDE FOR THAT PURPOSE:
(1) conversion of a traditional IRA to a Roth Conversion IRA or Flexible
Premium Roth IRA contract;
(2) election of the Assured Payment Option or APO Plus;
(3) election of the automatic investment program;
(4) election of the rebalancing program;
(5) requests for loans under Rollover TSA contracts;
(6) spousal consent for loans under Rollover TSA contracts;
(7) tax withholding election; and
(8) election of the beneficiary continuation option.
WE ALSO HAVE SPECIFIC FORMS THAT WE RECOMMEND YOU USE FOR THE FOLLOWING TYPES OF
REQUESTS:
(1) address changes;
(2) beneficiary changes;
(3) transfers between investment options; and
(4) contract surrender and withdrawal requests.
TO CANCEL OR CHANGE ANY OF THE FOLLOWING WE REQUIRE WRITTEN NOTIFICATION
GENERALLY AT LEAST SEVEN CALENDAR DAYS BEFORE THE NEXT SCHEDULED TRANSACTION:
(1) automatic investment program;
(2) general dollar cost averaging;
(3) rebalancing;
(4) special dollar cost averaging;
(5) Assured Payment Option or APO Plus;
(6) substantially equal withdrawals;
(7) systematic withdrawals; and
(8) the date annuity payments are to begin.
You must sign and date all these requests. Any written request that is not on
one of our forms must include your name and your contract number along with
adequate details about the notice you wish to give or the action you wish us to
take.
SIGNATURES:
The proper person to sign forms, notices and requests would normally be the
owner. If there are joint owners both must sign.
<PAGE>
EQUITABLE ACCUMULATOR AT A GLANCE - KEY FEATURES
- --------
8
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EQUITABLE ACCUMULATOR AT A GLANCE - KEY FEATURES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
PROFESSIONAL Equitable Accumulator's variable investment options invest in different portfolios managed
INVESTMENT by professional investment advisers.
MANAGEMENT
- ---------------------------------------------------------------------------------------------------------------------------------
FIXED MATURITY o 10 fixed maturity options with maturities ranging from approximately 1 to 10 years.
OPTIONS Under the Assured Payment Option and APO Plus, 5 additional fixed maturity options with maturities
ranging from 11 to 15 years.
o Each fixed maturity option offers a guarantee of principal and interest rate if you hold it to
maturity.
----------------------------------------------------------------------------------------------------
If you make withdrawals or transfers from a fixed maturity option before maturity, there will be a
market value adjustment due to differences in interest rates. This may increase or decrease any
value that you have left in that fixed maturity option. If you surrender your contract, a market
value adjustment may also apply.
- ---------------------------------------------------------------------------------------------------------------------------------
ACCOUNT FOR SPECIAL DOLLAR Available for dollar cost averaging all or a portion of any eligible contribution to your contract.
COST AVERAGING
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
TAX ADVANTAGES o On earnings inside the No tax on any dividends, interest or capital gains until you
contract make withdrawals from your contract or receive annuity payments.
----------------------------------------------------------------------------------------------------
o On transfers inside the No tax on transfers among investment options.
contract
----------------------------------------------------------------------------------------------------
If you are buying a contract to fund a retirement plan that already provides tax deferral under
sections of the Internal Revenue Code, you should do so for the contract's features and benefits other
than tax deferral. In such situations, the tax deferral of the contract does not provide necessary or
additional benefits.
- ---------------------------------------------------------------------------------------------------------------------------------
BASEBUILDER(R) PROTECTION baseBUILDER combines a guaranteed minimum income benefit with the guaranteed minimum death
benefit provided under the contract. The guaranteed minimum income benefit provides income protection
for you while the annuitant lives. The guaranteed minimum death benefit provides a death benefit for
the beneficiary should the annuitant die. For Rollover IRA, Flexible Premium IRA and Rollover TSA
Contracts, an additional guaranteed minimum death benefit is available under baseBUILDER where the
annuitant is between ages 20 and 60 at contract issue.
- ---------------------------------------------------------------------------------------------------------------------------------
CONTRIBUTION AMOUNTS o NQ, Rollover IRA, Roth Conversion IRA, QP, and Rollover TSA c
<S> <C> <C>
o Initial minimum: $5,000
o Additional minimum: $1,000
$100 monthly and $300 quarterly under our automatic
investment program (NQ contracts)
---------------------------------------------------------------------------------------------------
o Flexible Premium IRA and Flexible Premium Roth IRA contracts
o Initial minimum: $2,000
o Additional minimum: $50 ($50 under our automatic investment program)
---------------------------------------------------------------------------------------------------
o Assured Payment Option and APO Plus under Rollover IRA and Flexible Premium
IRA contracts
o Initial minimum: $10,000
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
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9
- --------------------------------------------------------------------------------
EQUITABLE ACCUMULATOR AT A GLANCE - KEY FEATURES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
o Additional minimum: $1,000 (applicable to APO Plus only)
--------------------------------------------------------------------------------------------------------
Maximum contribution limitations may apply.
- -------------------------------------------------------------------------------------------------------------------------------
ACCESS TO YOUR MONEY o Assured Payment Option
o APO Plus
o Lump sum withdrawals
o Several withdrawal options on a periodic basis
o Loans under Rollover TSA contracts
o Contract surrender
You may incur a withdrawal charge for certain withdrawals or if you surrender your contract.
You may also incur income tax and a tax penalty.
- -------------------------------------------------------------------------------------------------------------------------------
PAYOUT OPTIONS o Fixed annuity payout options
o Variable Immediate Annuity payout options
o Income Manager(R) payout options
- -------------------------------------------------------------------------------------------------------------------------------
ADDITIONAL FEATURES o Guaranteed minimum death benefit even if you do not elect baseBUILDER
o Dollar cost averaging
o Automatic investment program
o Account value rebalancing (quarterly, semiannually, and annually)
o Free transfers
o Waiver of withdrawal charge for disability, terminal illness, or confinement to a nursing
home
- -------------------------------------------------------------------------------------------------------------------------------
FEES AND CHARGES o Daily charges on amounts invested in the variable investment options for mortality and expense
risks, administrative charges and distribution charges at a current annual rate of 1.55% (1.65% maximum).
o Annual 0.30% benefit base charge for the optional baseBUILDER benefit until you exercise your guaranteed
minimum income benefit, elect another annuity payout option or the contract date anniversary after the
annuitant reaches age 85, whichever occurs first. The benefit base is described under "Your benefit base"
in "Contract features and benefits." If you do not elect baseBUILDER, you still receive a guaranteed
minimum death benefit under your contract at no additional charge.
o Under Flexible Premium IRA and Flexible Premium Roth IRA contracts, if your account value at the end of the
contract year is less than $25,000, we deduct an annual administrative charge equal to $30 or during the
first two contract years 2% of your account value, if less. If your account value is $25,000 or more,
we will not deduct the charge.
o No sales charge deducted at the time you make contributions.
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
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10
- --------------------------------------------------------------------------------
EQUITABLE ACCUMULATOR AT A GLANCE -- KEY FEATURES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------------------------------------------------------
FEES AND o During the first seven contract years following a contribution, a charge will be deducted from amounts
CHARGES (CONTINUED) that you withdraw that exceed 15% of your account value. We use the account value on the most recent
contract date anniversary to calculate this 15% amount available. The charge begins at 7% in the
first contract year following a contribution. It declines by 1% each year to 1% in the seventh
contract year. There is no withdrawal charge in the eighth and later contract years following a
contribution. In addition, there is no withdrawal charge if the annuitant is age 86 or older when the
contract is issued. Certain other exemptions apply.
--------------------------------------------------------------------------------------------------------
The "contract date" is the effective date of a contract. This usually is the business day we receive the
properly completed and signed application, along with any other required documents, and your initial
contribution. Your contract date will be shown in your contract. The 12-month period beginning on your
contract date and each 12-month period after that date is a "contract year." The end of each 12-month
period is your "contract date anniversary."
--------------------------------------------------------------------------------------------------------
o We deduct a charge designed to approximate certain taxes that may be imposed on us, such as premium taxes
in your state. This charge is generally deducted from the amount applied to an annuity payout option.
o We deduct a $350 annuity administrative fee from amounts applied to the Variable Immediate Annuity
payout options.
o Annual expenses of EQ Advisors Trust portfolios are calculated as a percentage of the average daily net
assets invested in each portfolio. These expenses include management fees ranging from 0.25% to 1.15%
annually, 12b-1 fees of 0.25% annually, and other expenses.
- ---------------------------------------------------------------------------------------------------------------------------------
ANNUITANT ISSUE AGES NQ: 0-90
Rollover IRA, Roth Conversion IRA, Flexible Premium Roth IRA, and Rollover TSA: 20-90
Flexible Premium IRA: 20-70
Assured Payment Option and APO Plus: 53 1/2-83
QP: 20-75
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ABOVE IS NOT A COMPLETE DESCRIPTION OF ALL MATERIAL PROVISIONS OF THE
CONTRACT. IN SOME CASES RESTRICTIONS OR EXCEPTIONS APPLY. ALSO, ALL FEATURES OF
THE CONTRACT ARE NOT NECESSARILY AVAILABLE IN YOUR STATE OR AT CERTAIN AGES.
For more detailed information we urge you to read the contents of this
prospectus, as well as your contract. Please feel free to speak with your
financial professional, or call us, if you have any questions.
OTHER CONTRACTS
We offer a variety of fixed and variable annuity contracts. They may offer
features, including investment options, fees and/or charges that are different
from those in the contracts offered by this prospectus. Not every contract is
offered through the same distributor. Upon request, your financial professional
can show you information regarding other Equitable Life annuity contracts that
he or she distributes. You can also contact us to find out more about any of the
Equitable Life annuity contracts.
<PAGE>
FEE TABLE
- --------
11
- --------------------------------------------------------------------------------
FEE TABLE
- --------------------------------------------------------------------------------
The fee table below will help you understand the various charges and expenses
that apply to your contract. The table reflects charges you will directly incur
under the contract, as well as charges and expenses of the Portfolios that you
will bear indirectly. Charges designed to approximate certain taxes that may be
imposed on us, such as premium taxes in your state, may also apply. Also, an
annuity administrative fee may apply when your annuity payments are to begin.
Each of the charges and expenses is more fully described in "Charges and
expenses" later in this prospectus.
The fixed maturity options and the account for special dollar cost averaging are
not covered by the fee table and examples. However, the annual administrative
charge and the withdrawal charge do apply to the fixed maturity options and the
account for special dollar cost averaging. A market value adjustment (up or
down) may apply as a result of a withdrawal, transfer, or surrender of amounts
from a fixed maturity option.
<TABLE>
<S> <C>
- -----------------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR VARIABLE INVESTMENT OPTIONS EXPRESSED AS AN
ANNUAL PERCENTAGE OF DAILY NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------------
Mortality and expense risks (1) 1.10%
Administrative 0.25% current (0.35% maximum)
Distribution 0.20%
----
Total annual expenses 1.55% current (1.65% maximum)
- -----------------------------------------------------------------------------------------------------------------------------
FLEXIBLE PREMIUM IRA AND FLEXIBLE PREMIUM ROTH IRA CONTRACTS ONLY:
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE ON EACH CONTRACT DATE ANNIVERSARY
- -----------------------------------------------------------------------------------------------------------------------------
Maximum annual administrative charge
If your account value on a contract date anniversary is less than $25,000(2) $ 30
If your account value on a contract date anniversary is $25,000 or more $ 0
- -----------------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE AT THE TIME YOU REQUEST CERTAIN TRANSACTIONS
- -----------------------------------------------------------------------------------------------------------------------------
Withdrawal charge as a percentage of contributions (deducted if you surrender your Contract
contract or make certain withdrawals. The withdrawal charge percentage we use is year
determined by the contract year in which you make the withdrawal or surrender your 1 .....7.00%
contract. For each contribution, we consider the contract year in which we receive 2 .....6.00%
that contribution to be "contract year 1")(3) 3 .....5.00%
4 .....4.00%
5 .....3.00%
6 .....2.00%
7 .....1.00%
8+.....0.00%
Charge if you elect a Variable Immediate Annuity payout option $350
- -----------------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE EACH YEAR IF YOU ELECT THE OPTIONAL BENEFIT
- -----------------------------------------------------------------------------------------------------------------------------
BASEBUILDER BENEFITS CHARGE (calculated as a percentage of the benefit base.
Deducted annually on each contract date anniversary)(4) 0.30%
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
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12
- --------------------------------------------------------------------------------
FEE TABLE
- --------------------------------------------------------------------------------
EQ ADVISORS TRUST ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
TOTAL
OTHER ANNUAL
EXPENSES EXPENSES
MANAGEMENT (AFTER EXPENSE (AFTER EXPENSE
FEES(5) 12B-1 FEE(6) LIMITATION)(7) LIMITATION)(8)
-------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock 0.60% 0.25% 0.04% 0.89%
Alliance Common Stock 0.46% 0.25% 0.04% 0.75%
Alliance Conservative Investors 0.60% 0.25% 0.07% 0.92%
Alliance Equity Index 0.25% 0.25% 0.05% 0.55%
Alliance Global 0.73% 0.25% 0.09% 1.07%
Alliance Growth and Income 0.59% 0.25% 0.05% 0.89%
Alliance Growth Investors 0.57% 0.25% 0.05% 0.87%
Alliance High Yield 0.60% 0.25% 0.05% 0.90%
Alliance Intermediate Government Securities 0.50% 0.25% 0.07% 0.82%
Alliance International 0.85% 0.25% 0.20% 1.30%
Alliance Money Market 0.34% 0.25% 0.05% 0.64%
EQ/Alliance Premier Growth 0.90% 0.25% 0.00% 1.15%
Alliance Small Cap Growth 0.75% 0.25% 0.07% 1.07%
EQ/Alliance Technology 0.90% 0.25% 0.00% 1.15%
BT Equity 500 Index 0.25% 0.25% 0.10% 0.60%
BT International Equity Index 0.35% 0.25% 0.40% 1.00%
BT Small Company Index 0.25% 0.25% 0.25% 0.75%
Capital Guardian Research 0.65% 0.25% 0.05% 0.95%
Capital Guardian U.S. Equity 0.65% 0.25% 0.05% 0.95%
EQ/Evergreen 0.65% 0.25% 0.05% 0.95%
EQ/Evergreen Foundation 0.60% 0.25% 0.10% 0.95%
MFS Emerging Growth Companies 0.65% 0.25% 0.10% 1.00%
MFS Growth with Income 0.60% 0.25% 0.10% 0.95%
MFS Research 0.65% 0.25% 0.05% 0.95%
Mercury Basic Value Equity 0.60% 0.25% 0.10% 0.95%
Mercury World Strategy 0.70% 0.25% 0.25% 1.20%
Morgan Stanley Emerging Markets Equity 1.15% 0.25% 0.35% 1.75%
EQ/Putnam Balanced 0.60% 0.25% 0.05% 0.90%
EQ/Putnam Growth & Income Value 0.60% 0.25% 0.10% 0.95%
T. Rowe Price Equity Income 0.60% 0.25% 0.10% 0.95%
T. Rowe Price International Stock 0.85% 0.25% 0.15% 1.25%
Warburg Pincus Small Company Value 0.75% 0.25% 0.10% 1.10%
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
Notes:
(1) A portion of this charge is for providing the guaranteed minimum death
benefit.
(2) During the first two contract years this charge is equal to the lesser of
$30 or 2% of your account value if it applies. Thereafter, the charge is
$30 for each contract year.
(3) Deducted upon a withdrawal of amounts in excess of the 15% free withdrawal
amount and upon surrender of a contract.
(4) This charge is for providing a guaranteed minimum income benefit in
combination with the guaranteed minimum death benefit available under the
contract. The charge for the 5% roll up to age 70 baseBUILDER benefit is
0.15%. The benefit base is described under "Your benefit base" in
"Contract features and benefits."
(5) The management fees shown reflect revised management fees, effective on or
about May 1, 2000, which were approved by shareholders. The management
fees shown for EQ/Putnam Balanced, EQ/Putnam Growth & Income Value,
Warburg
<PAGE>
- -----
13
- --------------------------------------------------------------------------------
FEE TABLE
- --------------------------------------------------------------------------------
Pincus Small Company Value and T. Rowe Price International Stock do not
reflect the waiver of a portion of each of these portfolio's investment
management fees that are currently in effect. The management fees for each
portfolio cannot be increased without a vote of that portfolio's
shareholders.
(6) Portfolio shares are all subject to fees imposed under the distribution
plan (the "Rule 12b-1 Plan") adopted by EQ Advisors Trust pursuant to Rule
12b-1 under the Investment Company Act of 1940. The 12b-1 fee will not be
increased for the life of the contracts. Prior to October 18, 1999, the
total annual expenses for the Alliance Small Cap Growth portfolio were
limited to 1.20% under an expense limitation arrangement related to that
portfolio's Rule 12b-1 Plan. The arrangement is no longer in effect. The
amounts shown have been restated to reflect the expenses that would have
been incurred in 1999, absent the expense limitation arrangement.
(7) The amounts shown as "Other Expenses" will fluctuate from year to year
depending on actual expenses. See footnote (8) for any expense limitation
agreements.
On October 18, 1999 the Alliance portfolios (other than EQ/Alliance
Premier Growth and EQ/Alliance Technology) became part of the portfolios
of EQ Advisors Trust. The "Other Expenses" for these portfolios have been
restated to reflect the estimated expenses that would have been incurred
had these portfolios been portfolios of EQ Advisors Trust for the entire
year ended December 31, 1999. The restated expenses reflect an increase of
0.01% for each of these portfolios.
(8) Equitable Life, EQ Advisors Trust's manager, has entered into an expense
limitation agreement with respect to certain portfolios. Under this
agreement Equitable Life has agreed to waive or limit its fees and assume
other expenses. Under the expense limitation agreement, total annual
operating expenses of certain portfolios (other than interest, taxes,
brokerage commissions, capitalized expenditures, extraordinary expenses,
and 12b-1 fees) are limited as a percentage of the average daily net
assets of each of the following portfolios: 1.75% for Morgan Stanley
Emerging Markets Equity; 1.25% for T. Rowe Price International Stock;
1.20% for Mercury World Strategy; 1.15% for EQ/Alliance Premier Growth and
EQ/Alliance Technology; 1.10% for Warburg Pincus Small Company Value;
1.00% for BT International Equity Index; 1.00% for MFS Emerging Growth
Companies; 0.95% for Capital Guardian U.S. Equity, Capital Guardian
Research, EQ/Evergreen, EQ/Evergreen Foundation, MFS Growth with Income,
MFS Research, Mercury Basic Value Equity and EQ/Putnam Growth & Income
Value; 0.90% for EQ/Putnam Balanced and T. Rowe Price Equity Income; 0.75%
for BT Small Company Index; and 0.60% for BT Equity 500 Index. The expense
limitations for the EQ/Alliance Premier Growth, BT Equity 500 Index, MFS
Growth with Income, MFS Research, MFS Emerging Growth Companies and
Mercury Basic Value Equity portfolios reflect an increase effective on May
1, 2000. The expense limitation for the EQ/Evergreen portfolio reflects a
decrease effective on May 1, 2000.
Absent the expense limitation, the "Other Expenses" for 1999 on an
annualized basis for each of the portfolios would have been as follows:
1.00% for Morgan Stanley Emerging Markets Equity; 0.10% for EQ/Alliance
Technology; 0.23% for EQ/Alliance Premier Growth; 0.30% for T. Rowe Price
International Stock; 0.46% for Mercury World Strategy; 0.24% for Warburg
Pincus Small Company Value; 0.49% for BT International Equity Index; 0.17%
for MFS Emerging Growth Companies; 0.34% for Capital Guardian U.S. Equity;
0.47% for Capital Guardian Research; 1.87% for EQ/Evergreen; 1.07% for
EQ/Evergreen Foundation; 0.37% for MFS Growth with Income: 0.17% for MFS
Research and Mercury Basic Value Equity; 0.16% for EQ/Putnam Growth &
Income Value; 0.28% for EQ/Putnam Balanced; 0.21% for T. Rowe Price Equity
Income; 0.71% for BT Small Company Index; and 0.18% for BT Equity 500
Index. Initial seed capital was invested on April 30, 1999 for the
EQ/Alliance Premier Growth, Capital Guardian U.S. Equity, and Capital
Guardian Research portfolios and will be invested on or about May 1, 2000
for the EQ/Alliance Technology portfolio and therefore expenses have been
estimated.
Each portfolio may at a later date make a reimbursement to Equitable Life
for any of the management fees waived or limited and other expenses
assumed and paid by Equitable Life pursuant to the expense limitation
agreement provided that, among other things, such portfolio has reached
sufficient size to permit such reimbursement to be made and provided that
the portfolio's current annual operating expenses do not exceed the
operating expense limit determined for such portfolio. For more
information see the prospectus for EQ Advisors Trust.
<PAGE>
- -----
14
- --------------------------------------------------------------------------------
FEE TABLE
- --------------------------------------------------------------------------------
EXAMPLES
The examples below show the expenses that a hypothetical contract owner who has
purchased a Flexible Premium IRA or Flexible Premium Roth IRA contract would pay
in the situations illustrated. The examples show the expenses if (1) baseBUILDER
is elected with a 5% roll up to age 80 or annual ratchet to age 80 guaranteed
minimum death benefit and (2) APO Plus is elected. We assume that a $1,000
contribution is invested in one of the variable investment options listed and a
5% annual return is earned on the assets in that option.(1) The annual
administrative charge is based on charges that apply to a mix of estimated
contract sizes, resulting in an estimated administrative charge for the purpose
of these examples of $0.14 per $1,000. Since the annual administrative charge
only applies under Flexible Premium IRA and Flexible Premium Roth IRA contracts,
the charges shown in the examples would be lower for NQ, Rollover IRA, Roth
Conversion IRA, QP, and Rollover TSA contracts. Other than as indicated above,
the charges used in the examples are the maximum charges rather than the lower
current charges.
These examples should not be considered a representation of past or future
expenses for each option. Actual expenses may be greater or less than those
shown. Similarly, the annual rate of return assumed in the examples is not an
estimate or guarantee of future investment performance.
<TABLE>
<CAPTION>
(1) EXPENSES REFLECTING BASEBUILDER ELECTION
-------------------------------------------------
IF YOU SURRENDER YOUR CONTRACT AT THE END
OF EACH PERIOD SHOWN, THE EXPENSES
WOULD BE:
-------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ------------ ------------ -----------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock $ 96.71 $ 138.21 $ 182.58 $ 327.01
Alliance Common Stock $ 95.24 $ 133.82 $ 175.32 $ 312.81
Alliance Conservative Investors $ 97.13 $ 139.46 $ 184.65 $ 331.03
Alliance Global $ 98.70 $ 144.14 $ 192.37 $ 345.97
Alliance Growth and Income $ 96.81 $ 138.52 $ 183.10 $ 328.02
Alliance Growth Investors $ 96.60 $ 137.89 $ 182.07 $ 326.00
Alliance High Yield $ 96.81 $ 138.52 $ 183.10 $ 328.02
Alliance Intermediate Government Securities $ 96.08 $ 136.33 $ 179.48 $ 320.95
Alliance International $ 101.12 $ 151.29 $ 204.11 $ 368.42
Alliance Money Market $ 94.08 $ 130.37 $ 169.59 $ 301.50
EQ/Alliance Premier Growth $ 100.59 $ 149.74 $ 201.56 $ 363.58
Alliance Small Cap Growth $ 98.60 $ 143.83 $ 191.86 $ 344.98
EQ/Alliance Technology $ 99.54 $ 146.63 $ 196.46 $ 353.84
BT Equity 500 Index $ 93.77 $ 129.42 $ 168.02 $ 298.40
BT International Equity Index $ 97.97 $ 141.96 $ 188.77 $ 339.03
BT Small Company Index $ 95.34 $ 134.13 $ 175.84 $ 313.83
Capital Guardian Research $ 97.44 $ 140.39 $ 186.20 $ 334.04
Capital Guardian U.S. Equity $ 97.44 $ 140.39 $ 186.20 $ 334.04
EQ/Evergreen $ 97.44 $ 140.39 $ 186.20 $ 334.04
<CAPTION>
IF YOU DO NOT SURRENDER YOUR CONTRACT AT
THE END OF EACH PERIOD SHOWN, THE
EXPENSES WOULD BE:
------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock $ 26.71 $ 88.21 $ 152.58 $ 327.01
Alliance Common Stock $ 25.24 $ 83.82 $ 145.32 $ 312.81
Alliance Conservative Investors $ 27.13 $ 89.46 $ 154.65 $ 331.03
Alliance Global $ 28.70 $ 94.14 $ 162.37 $ 345.97
Alliance Growth and Income $ 26.81 $ 88.52 $ 153.10 $ 328.02
Alliance Growth Investors $ 26.60 $ 87.89 $ 152.07 $ 326.00
Alliance High Yield $ 26.81 $ 88.52 $ 153.10 $ 328.02
Alliance Intermediate Government Securities $ 26.08 $ 86.33 $ 149.48 $ 320.95
Alliance International $ 31.12 $ 101.29 $ 174.11 $ 368.42
Alliance Money Market $ 24.08 $ 80.37 $ 139.59 $ 301.50
EQ/Alliance Premier Growth $ 30.59 $ 99.74 $ 171.56 $ 363.58
Alliance Small Cap Growth $ 28.60 $ 93.83 $ 161.86 $ 344.98
EQ/Alliance Technology $ 29.54 $ 96.63 $ 166.46 $ 353.84
BT Equity 500 Index $ 23.77 $ 79.42 $ 138.02 $ 298.40
BT International Equity Index $ 27.97 $ 91.96 $ 158.77 $ 339.03
BT Small Company Index $ 25.34 $ 84.13 $ 145.84 $ 313.83
Capital Guardian Research $ 27.44 $ 90.39 $ 156.20 $ 334.04
Capital Guardian U.S. Equity $ 27.44 $ 90.39 $ 156.20 $ 334.04
EQ/Evergreen $ 27.44 $ 90.39 $ 156.20 $ 334.04
</TABLE>
<PAGE>
- -----
15
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
IF YOU SURRENDER YOUR CONTRACT AT THE END
OF EACH PERIOD SHOWN, THE EXPENSES
WOULD BE:
-------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ------------ ------------ -----------
<S> <C> <C> <C> <C>
EQ/Evergreen Foundation $ 97.44 $ 140.39 $ 186.20 $ 334.04
MFS Emerging Growth Companies $ 97.97 $ 141.96 $ 188.77 $ 339.03
MFS Growth with Income $ 97.44 $ 140.39 $ 186.20 $ 334.04
MFS Research $ 97.44 $ 140.39 $ 186.20 $ 334.04
Mercury Basic Value Equity $ 97.44 $ 140.39 $ 186.20 $ 334.04
Mercury World Strategy $ 100.07 $ 148.18 $ 199.02 $ 358.72
Morgan Stanley Emerging Markets Equity $ 105.84 $ 165.17 $ 226.73 $ 410.83
EQ/Putnam Balanced $ 96.92 $ 138.83 $ 183.62 $ 329.03
EQ/Putnam Growth & Income Value $ 97.44 $ 140.39 $ 186.20 $ 334.04
T. Rowe Price Equity Income $ 97.44 $ 140.39 $ 186.20 $ 334.04
T. Rowe Price International Stock $ 100.59 $ 149.74 $ 201.56 $ 363.58
Warburg Pincus Small Company Value $ 99.02 $ 145.07 $ 193.91 $ 348.92
<CAPTION>
IF YOU DO NOT SURRENDER YOUR CONTRACT AT
THE END OF EACH PERIOD SHOWN, THE
EXPENSES WOULD BE:
------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
EQ/Evergreen Foundation $ 27.44 $ 90.39 $ 156.20 $ 334.04
MFS Emerging Growth Companies $ 27.97 $ 91.96 $ 158.77 $ 339.03
MFS Growth with Income $ 27.44 $ 90.39 $ 156.20 $ 334.04
MFS Research $ 27.44 $ 90.39 $ 156.20 $ 334.04
Mercury Basic Value Equity $ 27.44 $ 90.39 $ 156.20 $ 334.04
Mercury World Strategy $ 30.07 $ 98.18 $ 169.02 $ 358.72
Morgan Stanley Emerging Markets Equity $ 35.84 $ 115.17 $ 196.73 $ 410.83
EQ/Putnam Balanced $ 26.92 $ 88.83 $ 153.62 $ 329.03
EQ/Putnam Growth & Income Value $ 27.44 $ 90.39 $ 156.20 $ 334.04
T. Rowe Price Equity Income $ 27.44 $ 90.39 $ 156.20 $ 334.04
T. Rowe Price International Stock $ 30.59 $ 99.74 $ 171.56 $ 363.58
Warburg Pincus Small Company Value $ 29.02 $ 95.07 $ 163.91 $ 348.92
</TABLE>
<TABLE>
<CAPTION>
(2) EXPENSES REFLECTING APO PLUS ELECTION
- --------------------------------------------------------------------------------------------------------------------------
IF YOU SURRENDER YOUR CONTRACT AT THE END IF YOU DO NOT SURRENDER YOUR CONTRACT AT
OF EACH PERIOD SHOWN, THE EXPENSES THE END OF EACH PERIOD SHOWN, THE
WOULD BE: EXPENSES WOULD BE:
------------------------------------------------- ------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ------------ ------------ ----------- ----------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Alliance Common Stock $ 95.10 $ 127.18 $ 161.88 $ 281.03 $ 25.10 $ 77.18 $ 131.88 $ 281.03
Alliance Equity Index $ 93.10 $ 121.18 $ 151.88 $ 261.07 $ 23.10 $ 71.18 $ 121.88 $ 261.07
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) The amount accumulated from the $1,000 contribution could not be paid in
the form of an annuity payout option at the end of any of the periods
shown in the examples. This is because if the amount applied to purchase
an annuity payout option is less than $2,000, or the initial payment is
less than $20, we may pay the amount to you in a single sum instead of
payments under an annuity payout option. See "Accessing your money."
IF YOU ELECT A VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION:
Assuming an annuity payout option could be issued (see note (1) above), and you
elect a Variable Immediate Annuity payout option, the expenses shown in the
example for "if you do not surrender your contract" would, in each case, be
increased by $4.34 based on the average amount applied to annuity payout options
in 1999. See "Annuity administrative fee" in "Charges and expenses."
<PAGE>
1
- ---
CONTRACT FEATURES AND BENEFITS
- --------
16
- --------------------------------------------------------------------------------
CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
HOW YOU CAN PURCHASE AND CONTRIBUTE TO YOUR CONTRACT
You may purchase a contract by making payments to us that we call
"contributions." We require a minimum contribution amount for each type of
contract purchased. The following table summarizes our rules regarding
contributions to your contract. All ages in the table refer to the age of the
annuitant named in the contract.
- --------------------------------------------------------------------------------
The "annuitant" is the person who is the measuring life for determining contract
benefits. The annuitant is not necessarily the contract owner.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
AVAILABLE
CONTRACT FOR ANNUITANT MINIMUM LIMITATIONS ON
TYPE ISSUE AGES CONTRIBUTIONS SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NQ
o 0 through 90 $5,000 (initial) o After-tax money. o For annuitants up to
age 83 at contract
o 0 through 85 in $1,000 (additional) o Paid to us by check or issue, additional
New York and transfer of contract contributions may be
Pennsylvania value in a tax-deferred made up to age 84.
exchange under
Section 1035 of the o For annuitants age 84
Internal Revenue Code. and older at contract
issue, additional
contributions may be
made up to one year
beyond the annuitant's
issue age.
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
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17
- --------------------------------------------------------------------------------
CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
AVAILABLE
CONTRACT FOR ANNUITANT MINIMUM LIMITATIONS ON
TYPE ISSUE AGES CONTRIBUTIONS SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Rollover IRA
o 20 through 90 o $5,000 (initial) o Rollovers from a o For annuitants up to
qualified plan. age 83 at contract
o 20 through 85 in o $1,000 (additional) issue, additional
New York and o Rollovers from a TSA. contributions may be
Pennsylvania made up to age 84.
o Rollovers from another
traditional individual o For annuitants age 84
retirement and older at contract
arrangement. issue, additional
o Direct contributions may be
custodian-to-custodian made up to one year
transfers from another beyond your issue age.
traditional individual o Contributions after
retirement age 70 1/2 must be net
arrangement. of required minimum
distributions.
o Regular IRA o Regular IRA
contributions. contributions limited to
$2,000 per year.
o Although we accept
reqular IRA
contributions under the
Rollover IRA contracts,
we intend that this
contract be used for
rollover and direct
transfer contributions.
Please refer to
"Withdrawals,
payments and transfers
of funds out of
traditional IRAs" in
"Tax information" for a
discussion of conduit
IRAs.
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
18
- --------------------------------------------------------------------------------
CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
AVAILABLE
CONTRACT FOR ANNUITANT MINIMUM LIMITATIONS ON
TYPE ISSUE AGES CONTRIBUTIONS SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Roth
Conversion IRA o 20 through 90 o $5,000 (initial) o Rollovers from another o For annuitants up to
Roth IRA. age 83 at contract
o 20 through 85 in o $1,000 (additional) o Conversion rollovers issue, additional
New York and from a traditional IRA. contributions may be
Pennsylvania made up to age 84.
o Direct transfers from
another Roth IRA. o For annuitants age 84
and older at contract issue,
additional contributions
may be made up to one year
beyond your issue age.
o Conversion rollovers after
age 70 1/2 must be net of
required minimum distributions
for the traditional IRA
you are rolling over.
o You cannot roll over funds
from a traditional IRA if
your adjusted gross income
is $100,000 or more.
o Regular contributions are
not permitted.
o Only rollover and direct
transfer contributions
are permitted.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
19
- --------------------------------------------------------------------------------
CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
AVAILABLE
CONTRACT FOR ANNUITANT MINIMUM LIMITATIONS ON
TYPE ISSUE AGES CONTRIBUTIONS SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Rollover TSA o 20 through 90 o $5,000 (initial) o Rollovers from another o For annuitants up to age
TSA contract or 83 at contract
o 20 through 85 in o $1,000 (additional) arrangement. issue, additional
New York and contributions may be
Pennsylvania o Rollovers from a made up to age 84.
traditional IRA which
was a "conduit" for o For annuitants age 84
TSA funds previously and older at contract
rolled over. issue, additional
contributions may be
o Direct transfers from made up to one year
another contract or beyond your issue age.
arrangement under
Section 403(b) of the o Contributions after age
Internal Revenue Code, 70 1/2 must be net of
complying with IRS required minimum
Revenue Ruling 90-24. distributions.
o Employer-remitted
contributions are not
permitted.
This contract may not be available in your state.
- ------------------------------------------------------------------------------------------------------------------------------
QP 20 through 75 o $5,000 (initial) o Only transfer o Regular ongoing
contributions from an payroll contributions
o $1,000 (additional) existing qualified plan are not permitted.
trust as a change of
investment vehicle o Only one additional
under the plan. contribution may be
made during a contract
o The plan must be year.
qualified under Section
401(a) of the Internal o No additional transfer
Revenue Code. contributions after
age 76.
o For 401(k) plans,
transferred o For defined benefit
contributions may only plans, employee
include employee contributions are not
pre-tax contributions. permitted.
o Contributons after
age 70 1/2 must be net
of any required
minimum distributions.
Please refer to Appendix I for a discussion of purchase considerations of QP
Contracts.
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
20
- --------------------------------------------------------------------------------
CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
AVAILABLE
CONTRACT FOR ANNUITANT MINIMUM LIMITATIONS ON
TYPE ISSUE AGES CONTRIBUTIONS SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Flexible 20 through 70 o $2,000 (initial) o "Regular" traditional o No regular IRA
Premium IRA IRA contributions. contributions in the
o $50 (additional after calendar year you turn
the first contract year) o Rollovers from a age 70 1/2 and
qualified plan. thereafter.
o Rollovers from a TSA. o Total regular
contributions may
o Rollovers from another not exceed $2,000 for
traditional individual a year.
retirement
arrangement. o No additional rollover
or direct transfer
o Direct custodian- contributions after
to-custodian transfers age 71.
from another
traditional individual o Rollover and direct
retirement transfer contributions
arrangement. after age 70 1/2 must be net
of required minimum
distributions.
o Although we accept rollover
and direct transfer
contributions under the
Flexible Premium IRA contract,
we intend that this contract
be used for ongoing regular
contributions. Please refer to
"Withdrawals, payments and
transfers of funds out of
traditional IRAs" in "Tax
information" for a discussion
of conduit IRAs.
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
21
- --------------------------------------------------------------------------------
CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
AVAILABLE
CONTRACT FOR ANNUITANT MINIMUM LIMITATIONS ON
TYPE ISSUE AGES CONTRIBUTIONS SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Flexible o 20 through 90 o $2,000 (initial) o Regular after-tax o For annuitants up to
Premium contributions. age 83 at contract
Roth IRA o 20 through 85 in o $50 (additional after issue, additional
New York and the first contract year) o Rollovers from another contributions may be
Pennsylvania Roth IRA. made up to age 84.
o Conversion rollovers o For annuitants age 84
from a traditional IRA. and older at contract
issue, additional
o Direct transfers from contributions may be
another Roth IRA. made up to one year beyond
your issue age.
o Contributions are subject to
income limits and other tax
rules. See "Contributions to
Roth IRAs" in "Tax
information."
o Although we accept rollover
and direct transfer
contributions under the
Flexible Premium Roth IRA
contract, we intend that this
contract be used for ongoing
regular contributions.
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
22
- --------------------------------------------------------------------------------
CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
AVAILABLE
CONTRACT FOR ANNUITANT MINIMUM LIMITATIONS ON
TYPE ISSUE AGES CONTRIBUTIONS SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Rollover 53 1/2 through 83 o $10,000 (initial) o Rollovers from a o Additional rollover or
IRA or Flexible qualified plan. direct transfer
Premium o $1,000 (additional) contributions may be
IRA with o Rollovers from a TSA. made until the earlier
Assured of age 84 or within
Payment o Rollovers from another seven years from the
Option or traditional individual end of the fixed period.
APO Plus retirement arrangement
o Contributions after age
70 1/2 must be net of
o Direct required minimum
custodian-to-custodian distributions.
transfers from another
traditional individual
retirement arrangement.
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See "Tax information" for a more detailed discussion of sources of contributions
and certain contribution limitations. We may refuse to accept any contribution
if the sum of all contributions under all Equitable Accumulator contracts with
the same annuitant would then total more than $1,500,000. We reserve the right
to limit aggregate contributions made after the first contract year to 150% of
first-year contributions. We may also refuse to accept any contribution if the
sum of all contributions under all Equitable Life annuity accumulation contracts
that you own would then total more than $2,500,000.
For information on when contributions are credited under your contract see
"Dates and prices at which contract events occur" in "More information" later in
this prospectus.
<PAGE>
- ----------
23
- --------------------------------------------------------------------------------
CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
OWNER AND ANNUITANT REQUIREMENTS
Under NQ contracts, the annuitant can be different than the owner. A joint owner
may also be named. Only natural persons can be joint owners. This means that an
entity such as a corporation cannot be a joint owner.
Under all IRA and Rollover TSA contracts, the owner and annuitant must be the
same person.
Under QP contracts, the owner must be the trustee of the qualified plan and the
annuitant must be the plan participant/employee. See Appendix I for more
information on QP contracts.
- --------------------------------------------------------------------------------
A "participant" is an individual who is currently, or was formerly,
participating in an eligible employer's QP or TSA plan.
- --------------------------------------------------------------------------------
HOW YOU CAN MAKE YOUR CONTRIBUTIONS
Except as noted below, contributions must be by check drawn on a U.S. bank, in
U.S. dollars, and made payable to Equitable Life. We do not accept third-party
checks endorsed to us except for rollover contributions, tax-free exchanges or
trustee checks that involve no refund. All checks are subject to our ability to
collect the funds. We reserve the right to reject a payment if it is received in
an unacceptable form.
Additional contributions may also be made under our automatic investment
program. This method of payment is discussed in detail in "More information"
later in this prospectus.
Your initial contribution must generally be accompanied by an application and
any other form we need to process the payments. If any information is missing or
unclear, we will try to obtain that information. If we are unable to obtain all
of the information we require within five business days after we receive an
incomplete application or form, we will inform the financial professional
submitting the application on your behalf. We will then return the contribution
to you unless you specifically direct us to keep your contribution until we
receive the required information.
- --------------------------------------------------------------------------------
Our "business day" is any day the New York Stock Exchange is open for trading
and generally ends at 4:00 p.m. Eastern Time. We may, however, close due to
emergency conditions.
- --------------------------------------------------------------------------------
SECTION 1035 EXCHANGES
You may apply the value of an existing nonqualified deferred annuity contract
(or life insurance or endowment contract) to purchase an Equitable Accumulator
NQ contract in a tax-free exchange if you follow certain procedures as shown in
the form that we require you to use. Also see "Tax information" later in this
prospectus.
WHAT ARE YOUR INVESTMENT OPTIONS UNDER THE CONTRACT?
Your investment options are the variable investment options, the fixed maturity
options, and the account for special dollar cost averaging.
VARIABLE INVESTMENT OPTIONS
Your investment results in any one of the variable investment options will
depend on the investment performance of the underlying portfolios. Listed below
are the currently available portfolios, their investment objectives, and their
advisers.
- --------------------------------------------------------------------------------
You can choose from among the variable investment options.
- --------------------------------------------------------------------------------
<PAGE>
- -----
24
- --------------------------------------------------------------------------------
CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION
- ------------------------------------------------------------------------------------------------------------------------------
PORTFOLIOS OF EQ ADVISORS TRUST
- ------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
EQ/Aggressive Stock Long-term growth of capital Alliance Capital Management L.P.,
Massachusetts Financial Services Company
Alliance Common Stock Long-term growth of capital and increasing Alliance Capital Management L.P.
income
Alliance Conservative Investors High total return without, in the adviser's Alliance Capital Management L.P.
opinion, undue risk to principal
Alliance Equity Index Total return (before deduction of portfolio Alliance Capital Management L.P.
(available only under APO Plus) expenses) that approximates the total return
performance of the Standard & Poor's 500
Composite Index
Alliance Global Long-term growth of capital Alliance Capital Management L.P.
Alliance Growth and Income High total return through a combination of Alliance Capital Management L.P.
current income and capital appreciation
Alliance Growth Investors High total return consistent with the adviser's Alliance Capital Management L.P.
determination of reasonable risk
Alliance High Yield High return by maximizing current income and, Alliance Capital Management L.P.
to the extent consistent with that objective,
capital appreciation
Alliance Intermediate High current income consistent with relative Alliance Capital Management L.P.
Government Securities stability of principal
Alliance International Long-term growth of capital Alliance Capital Management L.P.
Alliance Money Market High level of current income while preserving Alliance Capital Management L.P.
assets and maintaining liquidity
EQ/Alliance Premier Growth Long-term growth of capital Alliance Capital Management L.P.
Alliance Small Cap Growth Long-term growth of capital Alliance Capital Management L.P.
EQ/Alliance Technology Long-term growth of capital Alliance Capital Management L.P.
BT Equity 500 Index Replicate as closely as possible (before Bankers Trust Company
deduction of portfolio expenses) the total
return of the Standard & Poor's 500
Composite Stock Price Index
</TABLE>
<PAGE>
- -----
25
- --------------------------------------------------------------------------------
CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
<TABLE>
- ----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
PORTFOLIOS OF EQ ADVISORS TRUST (CONTINUED)
- -----------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- -------------------------------- -------------------------------------------------- -----------------------------------------
<S> <C> <C>
BT International Equity Index Replicate as closely as possible (before Bankers Trust Company
deduction of portfolio expenses) the total
return of the Morgan Stanley Capital
International Europe, Australia, Far East Index
BT Small Company Index Replicate as closely as possible (before Bankers Trust Company
deduction of portfolio expenses) the total
return of the Russell 2000 Index
Capital Guardian Research Long-term growth of capital Capital Guardian Trust Company
Capital Guardian U.S. Equity Long-term growth of capital Capital Guardian Trust Company
EQ/Evergreen Long-term growth of capital Evergreen Asset Management Corp.
EQ/Evergreen Foundation In order of priority, reasonable income, Evergreen Asset Management Corp.
conservation of capital, and capital appreciation
MFS Emerging Growth Long-term capital growth Massachusetts Financial Services Company
Companies
MFS Growth with Income Reasonable current income and long-term Massachusetts Financial Services Company
growth of capital and income
MFS Research Long-term growth of capital and future income Massachusetts Financial Services Company
Mercury Basic Value Equity Capital appreciation and secondarily, income Mercury Asset Management US
Mercury World Strategy High total investment return Mercury Asset Management US
Morgan Stanley Emerging Long-term capital appreciation Morgan Stanley Asset Management
Markets Equity
EQ/Putnam Balanced Balanced investment Putnam Investment Management, Inc.
EQ/Putnam Growth & Income Capital growth, current income is a secondary Putnam Investment Management, Inc.
Value objective
T. Rowe Price Equity Income Substantial dividend income and also capital T. Rowe Price Associates, Inc.
appreciation
T. Rowe Price International Long-term growth of capital Rowe Price-Fleming International, Inc.
Stock
Warburg Pincus Small Company Long-term capital appreciation Warburg Pincus Asset Management, Inc.
Value
</TABLE>
Other important information about the portfolios is included in the prospectus
for EQ Advisors Trust attached at the end of this prospectus.
<PAGE>
- ----------
26
- --------------------------------------------------------------------------------
CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
FIXED MATURITY OPTIONS
We offer fixed maturity options with maturity dates ranging from one to ten
years. You can allocate your contributions to one or more of these fixed
maturity options. Under the Assured Payment Option and APO Plus, we offer
additional fixed maturity options with maturity dates ranging from eleven to
fifteen years. We provide distributions during the fixed period under the
Assured Payment Option and APO Plus by allocating your contributions to fixed
maturity options that mature in consecutive order. These amounts become part of
our general account assets. They will accumulate interest at the "rate to
maturity" for each fixed maturity option. The total amount you allocate to and
accumulate in each fixed maturity option is called the "fixed maturity amount."
The fixed maturity options are generally not available in contracts issued in
Maryland. In Maryland the fixed maturity options are only available under the
Assured Payment Option and APO Plus which are issued as separate contracts
rather than as a part of a Rollover IRA or Flexible Premium IRA contract. See
Appendix V for more information on the Assured Payment Option and APO Plus
contracts available in Maryland.
-------------------------------------------------------------------------------
Fixed maturity options range from one to ten years to maturity. Assured Payment
Option and APO Plus offer additional fixed maturity options for years eleven to
fifteen.
- --------------------------------------------------------------------------------
The rate to maturity you will receive for each fixed maturity option is the
rate to maturity in effect for new contributions allocated to that fixed
maturity option on the date we apply your contribution. If you make any
withdrawals or transfers from a fixed maturity option before the maturity date,
we will make a "market value adjustment" that may increase or decrease any
fixed maturity amount you have left in that fixed maturity option. We discuss
the market value adjustment below and in greater detail later in this
prospectus in "More information."
On the maturity date of a fixed maturity option your fixed maturity amount,
assuming you have not made any withdrawals or transfers, will equal your
contribution to that fixed maturity option plus interest, at the rate to
maturity for that contribution, to the date of the calculation. This is the
fixed maturity option's "maturity value." Before maturity, the current value we
will report for your fixed maturity amounts will reflect a market value
adjustment. Your current value will reflect the market value adjustment that we
would make if you were to withdraw all of your fixed maturity amounts on the
date of the report. We call this your "market adjusted amount."
FIXED MATURITY OPTIONS AND MATURITY DATES. We currently offer fixed maturity
options ending on February 15th for each of the maturity years 2001 through
2010. Not all of these fixed maturity options will be available for annuitant
ages 76 and older. See "Allocating your contributions" below. As fixed maturity
options expire, we expect to add maturity years so that generally 10 fixed
maturity options are available at any time.
Under the Assured Payment Option and APO Plus, we offer additional fixed
maturity options ending on February 15th for each of the maturity years 2011
through 2015.
We will not accept allocations to a fixed maturity option if on the date the
contribution is to be applied:
o the fixed maturity option's maturity date is within the current calendar
year; or
o the rate to maturity is 3% or less.
YOUR CHOICES AT THE MATURITY DATE. We will notify you on or before December
31st of the year before each of your fixed maturity options is scheduled to
mature. At that time, you may choose to have one of the following take place on
the maturity date, as long as none of the conditions listed above or in
"Allocating your contributions," below would apply:
(a) transfer the maturity value into another available fixed maturity option or
into any of the variable investment options; or
<PAGE>
- ----------
27
- --------------------------------------------------------------------------------
CONTRACT FEATURES AND BENEFITS
- --------------------------------------------------------------------------------
(b) withdraw the maturity value (there may be a withdrawal charge).
If we do not receive your choice on or before the fixed maturity option's
maturity date, we will automatically transfer your maturity value into the
fixed maturity option that will mature next.
MARKET VALUE ADJUSTMENT. If you make any withdrawals (including transfers,
surrender of your contract, or when we make deductions for charges) from a
fixed maturity option before it matures we will make a market value adjustment,
which will increase or decrease any fixed maturity amount you have in that
fixed maturity option. The amount of the adjustment will depend on two factors:
(a) the difference between the rate to maturity that applies to the amount being
withdrawn and the rate to maturity in effect at that time for new
allocations to that same fixed maturity option, and
(b) the length of time remaining until the maturity date.
In general, if interest rates rise from the time that you originally allocate
an amount to a fixed maturity option to the time that you take a withdrawal,
the market value adjustment will be negative. Likewise, if interest rates drop
at the end of that time, the market value adjustment will be positive. Also,
the amount of the market value adjustment, either up or down, will be greater
the longer the time remaining until the fixed maturity option's maturity date.
Therefore, it is possible that the market value adjustment could greatly reduce
your value in the fixed maturity options, particularly in the fixed maturity
options with later maturity dates.
We provide an illustration of the market adjusted amount of specified maturity
values, an explanation of how we calculate the market value adjustment, and
information concerning our general account and investments purchased with
amounts allocated to the fixed maturity options, in "More information" later in
this prospectus. Appendix II of this prospectus provides an example of how the
market value adjustment is calculated.
OFF MATURITY DATE PAYMENTS. Under Assured Payment Option and APO Plus, you may
choose to receive payments monthly, quarterly or annually. If you choose annual
payments, generally your payments will be made on February 15th as each fixed
maturity option matures. You may instead choose to have your annual payments
made in a month other than February. We refer to payments we make on an annual
basis in any month other than February and monthly or quarterly payments, as
payments made "off maturity dates." If you choose to have your payments made
off maturity dates, we will be required to begin making your payments before
the maturity date of a fixed maturity option. In planning for these payments we
will allocate a portion of your initial contribution or account value to the
separate account for the fixed maturity options, but not to the fixed maturity
options contained in the separate account. We will credit these amounts with
interest at rates that will not be less than 3%.
After that, as each fixed maturity option expires we will transfer your
maturity value from the expired fixed maturity option and hold the maturity
value in the separate account. We will credit interest to these amounts at the
same rate as the rate to maturity that was credited in the expired fixed
maturity option. These amounts will then be used to provide for payments off
maturity dates during the fixed period.
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Whether you choose monthly, quarterly, or annual payments, your payments will
be made on the 15th day of the month.
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We will not make a market value adjustment to the amounts held in the separate
account to provide for payments off maturity dates.
ACCOUNT FOR SPECIAL DOLLAR COST AVERAGING
The account for special dollar cost averaging is part of our general account.
We pay interest at guaranteed rates in this account. We will credit interest to
the amounts that you have in the account for special dollar cost averaging
every day. We set the interest rates periodically, according to procedures that
we have. We reserve the right to change these procedures.
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CONTRACT FEATURES AND BENEFITS
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We guarantee to pay our current interest rate that is in effect on the date
that your contribution is allocated to this account. Your guaranteed interest
rate for the time period you select will be shown in your contract. The rate
will never be less than 3%.
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CONTRACT FEATURES AND BENEFITS
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THE CONTRACT FEATURES AND BENEFITS DESCRIBED BELOW DO NOT APPLY WHEN THE ASSURED
PAYMENT OPTION OR APO PLUS IS IN EFFECT UNDER A ROLLOVER IRA OR FLEXIBLE PREMIUM
IRA CONTRACT. FOR INFORMATION REGARDING YOUR CONTRACT BENEFITS UNDER THE ASSURED
PAYMENT OPTION OR APO PLUS, SEE "ACCESSING YOUR MONEY - ASSURED PAYMENT OPTION
AND APO PLUS."
ALLOCATING YOUR CONTRIBUTIONS
You may choose from among three ways to allocate your contributions under your
contract: self-directed, principal assurance, or dollar cost averaging.
SELF-DIRECTED ALLOCATION
You may allocate your contributions to one or more, or all, of the variable
investment options and fixed maturity options. Allocations must be in whole
percentages and you may change your allocations at any time. However, the total
of your allocations must equal 100%. If the annuitant is age 76 or older, you
may allocate contributions to fixed maturity options if their maturities are
five years or less. Also, you may not allocate amounts to fixed maturity options
with maturity dates that are later than the February 15th immediately following
the date annuity payments are to begin.
PRINCIPAL ASSURANCE ALLOCATION
Under this allocation program you select a fixed maturity option. We specify the
portion of your initial contribution to be allocated to that fixed maturity
option in an amount that will cause the maturity value to equal the amount of
your entire initial contribution on the fixed maturity option's maturity date.
The maturity date you select generally may not be later than 10 years, or
earlier than 7 years from your contract date. You allocate the rest of your
contribution to the variable investment options however you choose.
For example, if your initial contribution is $10,000, and on March 15, 2000 you
chose the fixed maturity option with a maturity date of February 15, 2010, since
the rate to maturity was 5.98% on March 15, 2000, we would have allocated
$5,618.00 to that fixed maturity option and the balance to your choice of
variable investment options. On the maturity date your value in the fixed
maturity option would be $10,000.
The principal assurance allocation is only available for annuitant ages 75 or
younger when the contract is issued. If you are purchasing a Rollover IRA,
Flexible Premium IRA, QP, or Rollover TSA contract, before you select a maturity
year that would extend beyond the year in which you will reach age 70 1/2, you
should consider whether your value in the variable investment options, or your
other traditional IRA or TSA funds are sufficient to meet your required minimum
distributions. See "Tax information."
You may not elect principal assurance if the special dollar cost averaging
program is in effect.
DOLLAR COST AVERAGING
We offer two dollar cost averaging programs. Each program allows you to
gradually allocate amounts to the variable investment options by periodically
transferring approximately the same dollar amount to the variable investment
options you select. This will cause you to purchase more units if the unit's
value is low and fewer units if the unit's value is high. Therefore, you may get
a lower average cost per unit over the long term. These plans of investing,
however, do not guarantee that you will earn a profit or be protected against
losses.
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Units measure your value in each variable investment option.
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SPECIAL DOLLAR COST AVERAGING PROGRAM. Under the special dollar cost averaging
program, you may choose to allocate all or a portion of any eligible
contribution to the account for special dollar cost averaging. Currently the
only eligible contribution is your initial contribution; however, we may permit
other contributions to contracts sold in the
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30
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CONTRACT FEATURES AND BENEFITS
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future to be eligible for the special dollar cost averaging program. You must
allocate at least $2,000 to the account for special dollar cost averaging for
this program. In Pennsylvania we refer to this program as "enhanced rate
special dollar cost averaging."
You may have your account value transferred to any of the variable investment
options. We will transfer amounts from the account for special dollar cost
averaging into the variable investment options over an available time period
that you select. We offer time periods of 6, 12, or 18 months. We may also
offer other time periods. Your financial professional can provide information
on the time periods currently available in your state, or you may contact our
processing office. You may only select one time period for each eligible
contribution. Each time period has a different interest rate. Once you select a
time period, you may not change it. Currently, your account value will be
transferred from the account for special dollar cost averaging into the
variable investment options on a monthly basis. We may offer this program in
the future with transfers on a different basis. We will transfer all amounts
out of the account for special dollar cost averaging by the end of the chosen
time period. The transfer date will be the same day of the month as the
contract date, but not later than the 28th day of the month.
If you choose to allocate only a portion of an eligible contribution to the
account for special dollar cost averaging, the remaining balance of that
contribution will be allocated to the variable investment options or fixed
maturity options according to your instructions.
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The account for special dollar cost averaging provides guaranteed interest.
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The only amounts that should be transferred from the account for special dollar
cost averaging are your regularly scheduled transfers to the variable
investment options. If you request to transfer or withdraw any other amounts
from the account for special dollar cost averaging, we will transfer all of the
value that you have remaining in the account for special dollar cost averaging
attributable to the affected contribution to the investment options according
to the allocation percentages we have on file for you. You may ask us to cancel
your participation at any time.
In the state of Oregon where the account for special dollar cost averaging is
not available, we offer a special dollar cost averaging program in the Alliance
Money Market option for allocation of your entire initial contribution. Under
this program we will not deduct the mortality and expense risks, administrative
charges and distribution charges from assets in the Alliance Money Market
option. You may not allocate amounts other than your initial contribution to
this program.
GENERAL DOLLAR COST AVERAGING PROGRAM. If your value in the Alliance Money
Market option is at least $5,000, you may choose, at any time, to have a
specified dollar amount or percentage of your value transferred from that
option to the other variable investment options. You can select to have
transfers made on a monthly, quarterly, or annual basis. The transfer date will
be the same calendar day of the month as the contract date, but not later than
the 28th day of the month. You can also specify the number of transfers or
instruct us to continue making the transfers until all amounts in the Alliance
Money Market option have been transferred out.
The minimum amount that we will transfer each time is $250. The maximum amount
we will transfer is equal to your value in the Alliance Money Market option at
the time the program is elected, divided by the number of transfers scheduled
to be made.
If, on any transfer date, your value in the Alliance Money Market option is
equal to or less than the amount you have elected to have transferred, the
entire amount will be transferred. The general dollar cost averaging program
will then end. You may change the transfer amount once each contract year or
cancel this program at any time.
----------------------------------------
You may not elect dollar cost averaging or special dollar cost averaging if you
are participating in the rebalancing program. See "Transferring your money
among investment options." You may not elect the special dollar cost averaging
program if the principal assurance program is in effect.
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YOUR BENEFIT BASE
The benefit base is used to calculate the guaranteed minimum income benefit,
and both the 5% roll up to age 80, and the 5% roll up to age 70 guaranteed
minimum death benefits. See "Our baseBUILDER option" and "Guaranteed minimum
death benefit" below. The benefit base is equal to:
o your initial contribution and any additional contributions to the contract;
plus
o daily interest; less
o a deduction that reflects any withdrawals you make (the amount of the
deduction is described under "How withdrawals affect your guaranteed minimum
income benefit and guaranteed minimum death benefit" in "Accessing your
money"); less
o a deduction for any withdrawal charge remaining when you exercise your
guaranteed minimum income benefit; and less
o a deduction for any outstanding loan plus accrued interest on the date that
you exercise your guaranteed minimum income benefit (applies to Rollover TSA
only).
The effective annual interest rate credited to the benefit base is:
o 5% for the benefit base with respect to the variable investment options
(other than the Alliance Money Market and Alliance Intermediate Government
Securities options) and the account for special dollar cost averaging; and
o 3% for the benefit base with respect to the Alliance Money Market and
Alliance Intermediate Government Securities options, the fixed maturity
options and the loan reserve account.
No interest is credited after the annuitant is age 80 (age 70 if the 5% roll
up to age 70 is elected).
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Your benefit base is not an account value or a cash value.
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ANNUITY PURCHASE FACTORS
Annuity purchase factors are the factors applied to determine your periodic
payments under the guaranteed minimum income benefit, annuity payout options as
well as to determine allocation of your contributions under the Assured Payment
Option and APO Plus. The guaranteed minimum income benefit is discussed under
"Our baseBUILDER option" and annuity payout options, Assured Payment Option and
APO Plus are all discussed in "Accessing your money" later in this prospectus.
The guaranteed annuity purchase factors are those factors specified in your
contract. The current annuity purchase factors are those factors that are in
effect at any given time. Annuity purchase factors are based on interest rates,
mortality tables, frequency of payments, the form of annuity benefit, and the
annuitant's (and any joint annuitant's) age and sex in certain instances.
OUR BASEBUILDER OPTION
The baseBUILDER option offers you a guaranteed minimum income benefit combined
with the guaranteed minimum death benefit available under the contract. For
Rollover IRA, Flexible Premium IRA, and Rollover TSA contracts where the
annuitant is between ages 20 and 60 at contract issue, and where you elect the
baseBUILDER option, we offer an additional guaranteed minimum death benefit of
a 5% rollup to age 70. The baseBUILDER benefit is available if the annuitant is
between the ages of 20 and 75 at the time the contract is issued. There is an
additional charge for the baseBUILDER benefit which is described under
"baseBUILDER benefit charge" in "Charges and expenses."
The guaranteed minimum income benefit component of baseBUILDER is described
below. Whether you elect baseBUILDER or not, the guaranteed minimum death
benefit is provided under the contract. The guaranteed minimum death benefit is
described under "Guaranteed minimum death benefit." baseBUILDER is currently
not available in some states. Please ask your financial professional if
baseBUILDER is available in your state.
The guaranteed minimum income benefit guarantees you a minimum amount of fixed
income under your choice of a life annuity fixed payout option or an Income
Manager level
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CONTRACT FEATURES AND BENEFITS
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payment life with a period certain payout option (subject to state
availability). You choose which of these payout options you want and whether
you want the option to be paid on a single or joint life basis at the time you
exercise your guaranteed minimum income benefit. The maximum period certain
available under the Income Manager payout option is 10 years. This period may
be shorter, depending on the annuitant's age when you exercise your guaranteed
minimum income benefit and the type of contract you own. We may also make other
forms of payout options available. For a description of payout options, see
"Your annuity payout options" in "Accessing your money" later in this
prospectus.
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The guaranteed minimum income benefit, which is also known as a living benefit,
should be regarded as a safety net only. It provides income protection if you
elect an income payout while the annuitant is alive.
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When you exercise the guaranteed minimum income benefit, the annual lifetime
income that you will receive under the life annuity payout option will be the
greater of (i) your guaranteed minimum income benefit which is calculated by
applying your benefit base at guaranteed annuity purchase factors, or (ii) the
income provided by applying your actual account value at our then current
annuity purchase factors.
When you elect to receive annual lifetime income, your contract will terminate
and you will receive an annuity payout option. You will begin receiving
payments one payment period after the annuity payout option is issued. Payments
end with the last payment before the annuitant's (or joint annuitant's, if
applicable) death. There is no continuation of benefits following the
annuitant's (or joint annuitant's, if applicable) death.
Before you elect baseBUILDER, you should consider the fact that the guaranteed
minimum income benefit provides a form of insurance and is based on
conservative actuarial factors. Therefore, even if your account value is less
than your benefit base, you may generate more income by applying your account
value to current annuity purchase factors. We will make this comparison for you
when the need arises.
You should also consider that the guaranteed annuity purchase factors we use to
determine your Income Manager benefit under baseBUILDER are more conservative
than the guaranteed annuity purchase factors we use for the Income Manager
payout annuity option. This means that, assuming the same amount is applied to
purchase the benefit and that we use guaranteed annuity purchase factors to
compute the benefit, each periodic payment under the baseBUILDER Income Manager
will be smaller than each periodic payment under the Income Manager payout
annuity option.
ILLUSTRATIONS OF GUARANTEED MINIMUM INCOME BENEFIT.
The table below illustrates the guaranteed minimum income benefit amounts per
$100,000 of initial contribution, for a male annuitant age 60 (at issue) on the
contract date anniversaries indicated, who has elected the life annuity fixed
payout option, using the guaranteed annuity purchase factors as of the date of
this prospectus, assuming no additional contributions, withdrawals, or loans
under Rollover TSA contracts, and assuming there were no allocations to the
Alliance Money Market, Alliance Intermediate Government Securities options, or
the fixed maturity options.
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GUARANTEED MINIMUM INCOME
CONTRACT DATE BENEFIT - ANNUAL INCOME PAYABLE
ANNIVERSARY AT EXERCISE FOR LIFE
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10 $10,816
15 $16,132
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EXERCISE OF GUARANTEED MINIMUM INCOME BENEFIT.
On each contract date anniversary that you are eligible to exercise the
guaranteed minimum income benefit, we will send you an eligibility notice
illustrating how much income could be provided as of the contract anniversary.
You may notify us within 30 days following the contract date anniversary if you
want to exercise the guaranteed minimum income benefit. You must return your
contract to
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CONTRACT FEATURES AND BENEFITS
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us in order to exercise this benefit. The amount of income you actually receive
will be determined when we receive your request to exercise the benefit. You
will begin receiving payments one payment period after the annuity payout
contract is issued.
You (or the successor annuitant/owner, if applicable) will be eligible to
exercise the guaranteed minimum income benefit as follows:
o If the annuitant was at least age 20 and no older than age 44 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary
beginning with the 15th contract date anniversary.
o If the annuitant was at least age 45 and no older than age 49 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary after
the annuitant is age 60.
o If the annuitant was at least age 50 and no older than age 75 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary
beginning with the 10th contract date anniversary.
Please note:
(i) the latest date you may exercise the guaranteed minimum income benefit is
the contract date anniversary following the annuitant's 85th birthday;
(ii) if the annuitant was age 75 when the contract was issued, the only time
you may exercise the guaranteed minimum income benefit is within 30 days
following the first contract date anniversary that it becomes available;
(iii) if the annuitant was older than age 60 at the time an IRA, QP or Rollover
TSA contract was issued, the baseBUILDER may not be an appropriate feature
because the minimum distributions required by tax law must begin before
the guaranteed minimum income benefit can be exercised; and
(iv) For QP and Rollover TSA contracts, if you are eligible to exercise your
guaranteed minimum income benefit, we will first roll over amounts in such
contract to a Rollover IRA contract. You will be the owner of the Rollover
IRA contract.
GUARANTEED MINIMUM DEATH BENEFIT
A guaranteed minimum death benefit is provided as part of the baseBUILDER
benefit. A guaranteed minimum death benefit is also provided under your
contract even if you do not elect baseBUILDER. In this case, the baseBUILDER
benefit charge does not apply.
GUARANTEED MINIMUM DEATH BENEFIT APPLICABLE FOR ANNUITANT AGES 0 THROUGH 79 AT
ISSUE OF NQ CONTRACTS; 20 THROUGH 79 AT ISSUE OF ROLLOVER IRA, ROTH CONVERSION
IRA, FLEXIBLE PREMIUM ROTH IRA, AND ROLLOVER TSA CONTRACTS; 20 THROUGH 70 AT
ISSUE OF FLEXIBLE PREMIUM IRA CONTRACTS; AND 20 THROUGH 75 AT ISSUE OF QP
CONTRACTS.
You must elect either the "5% roll up to age 80" (or, if available, the 5% roll
up to age 70 if you are electing the baseBUILDER) or the "annual ratchet to age
80" guaranteed minimum death benefit when you apply for a contract. Once you
have made your election, you may not change it.
5% ROLL UP TO AGE 80. This guaranteed minimum death benefit is equal to the
benefit base described earlier in "Your benefit base." This guaranteed minimum
death benefit is not available in New York.
Optional guaranteed minimum death benefit available for ages 20 through 60 at
issue of Rollover IRA, Flexible Premium IRA, and TSA contracts if baseBUILDER
is also elected.
5% ROLL UP TO AGE 70. This is an optional guaranteed minimum death benefit
available for ages 20 through 60 at issue of Rollover IRA, Flexible Premium
IRA, and TSA contracts if baseBUILDER is also elected. Your guaranteed minimum
death benefit will be calculated as described above under "5% roll up to age
80" except that interest will be credited only through age 70.
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CONTRACT FEATURES AND BENEFITS
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ANNUAL RATCHET TO AGE 80. On the contract date, your guaranteed minimum death
benefit equals your initial contribution. Then, on each contract date
anniversary, we will determine your guaranteed minimum death benefit by
comparing your current guaranteed minimum death benefit to your account value
on that contract date anniversary. If your account value is higher than your
guaranteed minimum death benefit, we will increase your guaranteed minimum
death benefit to equal your account value. On the other hand, if your account
value on the contract date anniversary is less than your guaranteed minimum
death benefit, we will not adjust your guaranteed minimum death benefit either
up or down. If you make additional contributions, we will increase your current
guaranteed minimum death benefit by the dollar amount of the contribution on
the date the contribution is allocated to your investment options. If you take
a withdrawal from your contract, we will reduce your guaranteed minimum death
benefit on the date you take the withdrawal.
GUARANTEED MINIMUM DEATH BENEFIT APPLICABLE FOR ANNUITANT AGES 80 THROUGH 90 AT
ISSUE OF NQ, ROLLOVER IRA, ROTH CONVERSION IRA, FLEXIBLE PREMIUM ROTH IRA, AND
ROLLOVER TSA CONTRACTS.
On the contract date, your guaranteed minimum death benefit equals your initial
contribution. Thereafter, it will be increased by the dollar amount of any
additional contributions. We will reduce your guaranteed minimum death benefit
if you take any withdrawals.
----------------------------------------
Please see "How withdrawals affect your guaranteed minimum income benefit and
guaranteed minimum death benefit" in "Accessing your money" for information on
how withdrawals affect your guaranteed minimum death benefit. For contracts
issued in New York, the guaranteed minimum death benefit at the annuitant's
death will never be less than your value in the variable investment options,
plus the sum of the fixed maturity amounts in each fixed maturity option.
See Appendix III for an example of how we calculate the guaranteed minimum
death benefit.
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your contract, you may return it
to us for a refund. To exercise this cancellation right you must mail the
contract directly to our Processing Office within 10 days after you receive it.
If state law requires, this "free look" period may be longer.
Generally, your refund will equal your account value under the contract on the
day we receive notification of your decision to cancel the contract and will
reflect (i) any investment gain or loss in the variable investment options
(less the daily charges we deduct), (ii) any positive or negative market value
adjustments in the fixed maturity options, and (iii) any guaranteed interest in
the account for special dollar cost averaging, through the date we receive your
contract. Some states require that we refund the full amount of your
contribution (not reflecting (i), (ii) or (iii) above). For any IRA contract
returned to us within seven days after you receive it, we are required to
refund the full amount of your contribution.
We may require that you wait six months before you may apply for a contract
with us again if:
o you cancel your contract during the free look period; or
o you change your mind before you receive your contract whether we have
received your contribution or not.
Please see "Tax information" for possible consequences of cancelling your
contract.
In addition to the cancellation right described above, if you fully convert an
existing traditional IRA contract to a Roth Conversion IRA or Flexible Premium
Roth IRA contract, you may cancel your Roth Conversion IRA contract and return
to a Rollover IRA or Flexible Premium IRA contract, whichever applies. Our
processing office, or your financial professional, can provide you with the
cancellation instructions.
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2
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DETERMINING YOUR CONTRACT'S VALUE
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35
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DETERMINING YOUR CONTRACT'S VALUE
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YOUR ACCOUNT VALUE AND CASH VALUE
Your "account value" is the total of the: (i) values you have in the variable
investment options; (ii) market adjusted amounts in the fixed maturity options;
(iii) value in the account for special dollar cost averaging; and (iv) value
you have in the loan reserve account (applies for Rollover TSA contracts only).
These amounts are subject to certain fees and charges discussed under "Charges
and expenses."
Your contract also has a "cash value." At any time before annuity payments
begin, your contract's cash value is equal to the account value, less: (i) the
total amount or a pro rata portion of the annual administrative charge
(applicable for Flexible Premium IRA and Flexible Premium Roth IRA contracts
only); (ii) any applicable withdrawal charges; and (iii) the amount of any
outstanding loan plus accrued interest (applicable to Rollover TSA contracts
only). Please see "Surrendering your contract to receive its cash value" in
"Accessing your money."
YOUR CONTRACT'S VALUE IN THE VARIABLE INVESTMENT OPTIONS
Each variable investment option invests in shares of a corresponding portfolio.
Your value in each variable investment option is measured by "units." The value
of your units will increase or decrease as though you had invested it in the
corresponding portfolio's shares directly. Your value, however, will be reduced
by the amount of the fees and charges that we deduct under the contract.
The unit value for each variable investment option depends on the investment
performance of that option, less daily charges for:
(i) mortality and expense risks;
(ii) administrative expenses; and
(iii) distribution charges.
On any day, your value in any variable investment option equals the number of
units credited to that option, adjusted for any units purchased for or deducted
from your contract under that option, multiplied by that day's value for one
unit. The number of your contract units in any variable investment option does
not change unless they are:
(i) increased to reflect additional contributions;
(ii) decreased to reflect a withdrawal (plus applicable withdrawal charges);
(iii) increased to reflect a transfer into, or decreased to reflect a transfer
out of, a variable investment option; or
(iv) decreased to reflect a transfer of your loan amount to the loan reserve
account under a Rollover TSA contract.
In addition, when we deduct the baseBUILDER benefit charge the number of units
credited to your contract will be reduced. Your units are also reduced under
Flexible Premium IRA and Flexible Premium Roth IRA contracts when we deduct the
annual administrative charge. A description of how unit values are calculated
is found in the SAI.
YOUR CONTRACT'S VALUE IN THE FIXED MATURITY OPTIONS
Your value in each fixed maturity option at any time before the maturity date
is the market adjusted amount in each option. This is equivalent to your fixed
maturity amount increased or decreased by the market value adjustment. Your
value, therefore, may be higher or lower than your contributions (less
withdrawals) accumulated at the rate to maturity. At the maturity date, your
value in the fixed maturity option will equal its maturity value. Your value
will also include any amounts held in the separate account to provide for
payments off maturity dates under the Assured Payment Option and APO Plus.
YOUR CONTRACT'S VALUE IN THE ACCOUNT FOR SPECIAL DOLLAR COST AVERAGING
Your value in the account for special dollar cost averaging at any time will
equal your contribution allocated to that option, plus interest, less the sum
of all amounts that have been transferred to the variable investment options
you have selected.
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3
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TRANSFERRING YOUR MONEY AMONG INVESTMENT OPTIONS
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36
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TRANSFERRING YOUR MONEY AMONG INVESTMENT OPTIONS
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TRANSFERRING YOUR ACCOUNT VALUE
At any time before the date annuity payments are to begin, you can transfer
some or all of your account value among the investment options, subject to the
following:
o You may not transfer any amount to the account for special dollar cost
averaging.
o You may not transfer to a fixed maturity option that matures in the current
calendar year, or that has a rate to maturity of 3% or less.
o If the annuitant is 76 or older, you must limit your transfers to fixed
maturity options to those with maturities of five years or less. Also, the
maturity dates may be no later than the February 15th immediately following
the date annuity payments are to begin.
o If you make transfers out of a fixed maturity option other than at its
maturity date the transfer may cause a market value adjustment.
o A transfer request while the Assured Payment Option or APO Plus is in effect
will terminate the option.
You may request a transfer in writing, or by telephone using TOPS. (We
anticipate that transfers will be available online by using EQAccess by the end
of 2000.) You must send in all written transfer requests directly to our
processing office. Transfer requests should specify:
(1) the contract number,
(2) the dollar amounts or percentages of your current account value to be
transferred, and
(3) the investment options to and from which you are transferring.
We will confirm all transfers in writing.
MARKET TIMING
Your should note that the product is not designed for professional "market
timing" organizations, or other organizations or individuals engaging in a
market timing strategy, making programmed transfers, frequent transfers or
transfers that are large in relation to the total assets of the underlying
mutual fund portfolio. Market timing strategies are disruptive to the
underlying mutual fund portfolios in which the variable investment options
invest. If we determine that your transfer patterns among the variable
investment options reflect a market timing strategy, we reserve the right to
take action including, but not limited to: restricting the availability of
transfers through telephone requests, facsimile transmissions, automated
telephone services, Internet services or any electronic transfer services. We
may also refuse to act on transfer instructions of an agent acting under a
power of attorney who is acting on behalf of more than one owner.
REBALANCING YOUR ACCOUNT VALUE
We currently offer a rebalancing program that you can use to automatically
reallocate your account value among the variable investment options. You must
tell us:
(a) the percentage you want invested in each variable investment option
(whole percentages only), and
(b) how often you want the rebalancing to occur (quarterly, semiannually, or
annually on a contract year basis. Rebalancing will occur on the same day
of the month as the contract date).
While your rebalancing program is in effect, we will transfer amounts among
each variable investment option so that the percentage of your account value
that you specify is invested in each option at the end of each rebalancing
date. Your entire account value in the variable investment options must be
included in the rebalancing program.
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Rebalancing does not assure a profit or protect against loss. You should
periodically review your allocation percentages as your needs change. You may
want to discuss the rebalancing program with your financial professional or
other financial adviser before electing the program.
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You may elect the rebalancing program at any time. You may also change your
allocation instructions or cancel the program at any time. If you request a
transfer while the
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rebalancing program is in effect, we will process the transfer as requested;
the rebalancing program will remain in effect unless you request that it be
canceled in writing.
You may not elect the rebalancing program if you are participating in the
dollar cost averaging program or special dollar cost averaging program or if
the Assured Payment Option or APO Plus are in effect. Rebalancing is not
available for amounts you have allocated in the fixed maturity options.
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ACCESSING YOUR MONEY
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38
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ASSURED PAYMENT OPTION AND APO PLUS
(Rollover IRA and Flexible Premium IRA contracts only)
We offer two options, the Assured Payment Option and APO Plus, under which you
may receive distributions from your Rollover IRA or Flexible Premium IRA
contract. If you choose one of these two distribution options you will receive
guaranteed payments for a specified period of time we call the "fixed period."
When the fixed period ends you will continue to receive payments for as long as
you are living.
You can elect the Assured Payment Option or APO Plus in the application or at a
later date, provided that your account value is at least $10,000 at the time of
election.
Assured Payment Option and APO Plus benefits will differ for contracts issued
in Maryland. See Appendix V at the end of this prospectus for more information.
ASSURED PAYMENT OPTION
HOW WE ALLOCATE YOUR CONTRIBUTIONS. In order to provide for the payments you
receive during the fixed period, we allocate a portion of your initial
contribution or account value to fixed maturity options that mature in
consecutive date order. The remaining portion is allocated to your choice of a
single life or joint and survivor life contingent annuity to provide for the
payments you will receive after the fixed period. The payments are intended to
pay out your entire account value by the end of the fixed period.
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The life contingent annuity provides for the payments after the fixed period
ends.
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We determine the allocation of your contributions based on a number of factors.
They are:
o the amount of your contribution;
o annuity purchase factors; and
o the fixed period.
We then allocate your initial contribution among:
(1) The separate account containing:
(i) the fixed maturity options; and
(ii) amounts held to provide payments to you off maturity dates; and
(2) the life contingent annuity.
We will allocate your additional contributions in the same manner. Additional
contributions will increase the level of your future payments. You may not
change this allocation.
While the Assured Payment Option is in effect, no amounts may be allocated to
the variable investment options and the account for special dollar cost
averaging.
If you are using funds from multiple sources to purchase the Rollover IRA or
Flexible Premium IRA contract with the Assured Payment Option in effect, we
will allocate your contributions to the Alliance Money Market option until we
receive all amounts under the contract. Once all amounts are received we will
then apply them under the Assured Payment Option.
PAYMENTS. The payments you receive will increase by 10% every three years
during the fixed period on each third anniversary of the payment start date.
After the end of the fixed period, your first payment under the life contingent
annuity will be 10% greater than the final payment made under the fixed period.
Whether you choose monthly, quarterly or annual payments, you will usually
begin receiving payments one payment period after the contract date anniversary
on which you elected to begin payments under your option, unless you elect
otherwise, as described under "Off maturity date payments" earlier in this
prospectus. Your payments will always be made on the 15th day of the month.
However, if you are age 53 1/2 or older, you must defer the date your payments
will start until you are age 59 1/2. If you are at least age 59 1/2 at the time
the Assured Payment Option is elected you may choose to defer the date your
payments will start. Generally, you may defer payments for a period of up to 72
months after you make your election. This is called the deferral period.
Deferral of the payment start date permits you to lock in rates at a time when
you may consider current
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rates to be high, while permitting you to delay receiving payments if you have
no immediate need to receive income under your contract.
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The deferral period together with the fixed period may be referred to as a
"liquidity period." You will be able to make withdrawals before the end of the
fixed period. You may also choose to surrender your contract for its cash value
while keeping the life contingent annuity in effect.
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Before you decide to defer payments, you should consider the fact that the
amount of income you purchase is based on the rates to maturity in effect on
the date we allocate your contribution. Therefore, if rates rise during the
deferral period, your payments may be less than they would have been if you had
elected the Assured Payment Option at a later date. Deferral of the payment
start date is not available if you are older than age 80. If your deferred
payment start date is after you reach age 70 1/2, you should consider the
effect that deferral may have on your required minimum distributions.
See Appendix IV for an example of how payments are made under the Assured
Payment Option.
If you are age 70 1/2 or older, your payments during the fixed period are
designed to meet required minimum distributions under your contract. We
determine the amount of the payments based on the value in each fixed maturity
option and the assigned value of the life contingent annuity for tax purposes.
If at any time your payment under the Assured Payment Option would be less than
the minimum amount required to be distributed under minimum distribution rules,
we will notify you of the difference. You may then choose to have an additional
amount withdrawn under your contract. We will treat such withdrawal as a lump
sum withdrawal. However, no withdrawal charge will apply. We will then adjust
your future scheduled payments so that the minimum distribution rules are met.
You also have the option to take the amount from other traditional IRA funds
you may have.
FIXED PERIOD. The fixed period based on your age at the time the contract is
issued (or your age at the time the Assured Payment Option is elected) will be
as follows:
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AGE* FIXED PERIOD
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59 1/2 through 70 15 years
71 through 75 12 years
76 through 80 9 years
81 through 83 6 years
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If you defer the date payments will start, your fixed period
will be as follows:
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FIXED PERIOD
BASED ON DEFERRAL PERIOD
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1-36 37-60 61-72
AGE* MONTHS MONTHS MONTHS
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53 1/2 through 70 12 years 9 years 9 years
71 through 75 9 years 9 years N/A
76 through 80 6 years 6 years N/A
81 through 83 N/A N/A N/A
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* For joint and survivor payments, the fixed period is based on the
age of the younger annuitant.
PURCHASE RESTRICTIONS FOR JOINT AND SURVIVOR PAYMENTS. If you elect payments on
a joint and survivor basis:
o the joint annuitant must be your spouse; and
o neither you nor the joint annuitant can be over age 83.
PAYMENTS AFTER THE FIXED PERIOD. After the end of the fixed period, we will
continue your payments under the life contingent annuity if either you or the
joint annuitant is living. Payments continue throughout your lifetime (or the
lifetime of the joint annuitant, if joint and survivor payments are elected) on
the same payment schedule (either monthly, quarterly or annually) as the
payments you received during the fixed period.
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The portion of your contribution allocated to the life contingent annuity does
not have a cash value or an account value and, therefore, does not provide for
withdrawals.
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THERE IS NO DEATH BENEFIT PROVIDED UNDER THE LIFE CONTINGENT ANNUITY AND
PAYMENTS ARE MADE TO YOU ONLY IF YOU (OR THE JOINT ANNUITANT) ARE LIVING WHEN
THE PAYMENTS ARE SCHEDULED TO BEGIN. THESE
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PAYMENTS ARE ONLY MADE DURING YOUR LIFETIME AND, IF APPLICABLE, THE LIFETIME OF
THE JOINT ANNUITANT. THEREFORE, YOU SHOULD CONSIDER THE POSSIBILITY THAT NO
PAYMENTS WILL BE MADE UNDER THE LIFE CONTINGENT ANNUITY IF YOU (OR THE JOINT
ANNUITANT) DO NOT SURVIVE TO THE DATE PAYMENTS ARE TO BEGIN.
Under the life contingent annuity you may elect single life or joint and
survivor payments. Joint and survivor payments are available on a 100%,
one-half or two-thirds to survivor basis. Your first payment under the life
contingent annuity will be 10% greater than the final payment under the fixed
period. After the fixed period we will increase your payments annually on each
anniversary of the payment start date under the life contingent annuity. We
will base this increase on the annual increase in the Consumer Price Index, but
it will never be greater than 3% per year.
ALLOCATION OF WITHDRAWALS. Only lump sum withdrawals are permitted under the
Assured Payment Option. We will subtract your withdrawal from all remaining
fixed maturity options to which your account value is allocated as well as from
amounts held in the separate account to provide for payments off maturity
dates. As a result we will reduce the amount of your payments and the length of
your fixed period. We will also begin making payments to you under the life
contingent annuity at an earlier date. In order to achieve this result we will
withdraw additional amounts over the amount of the withdrawal you requested.
These amounts will be taken from the separate account which contains the fixed
maturity options and from amounts held to provide for payments off maturity
dates. The amounts are then allocated to the life contingent annuity. The exact
additional amount we withdraw will depend on how much is necessary to assure
that the same pattern of payments will continue in reduced amounts for your
life and the life of the joint annuitant. The first increase in your payments
will take place no later than the date of the next planned increase.
Withdrawals are subject to a withdrawal charge and will have a 10% free
withdrawal amount available. No withdrawal charges will apply to the payments
made during the fixed period or a withdrawal made to meet the minimum
distribution requirement under the contract.
DEATH BENEFIT. If a death benefit becomes payable during the fixed period we
will pay the death benefit amount to the designated beneficiary. The death
benefit amount is the greater of:
(1) your account value; and
(2) the sum of the fixed maturity amounts in each fixed maturity option plus
any amounts to provide for payments off maturity dates.
We will not make any payments under the life contingent annuity after your
death unless you have elected payments on a joint and survivor basis. If you
elect joint and one-half or joint and two-thirds to survivor payments, at your
death or the joint annuitant's death, we will reduce the payments by one-half
or one-third, whichever applies.
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A death benefit is never payable under the life contingent annuity. The death
benefit applies only during the fixed period.
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TERMINATION. The Assured Payment Option will be terminated if you:
(1) cancel the option at any time by sending a written request satisfactory to
us; or
(2) submit an additional contribution and you do not want it allocated under
the Assured Payment Option; or
(3) request a transfer of your account value; or
(4) request a change in the date the payments are to start under the life
contingent annuity.
Once the Assured Payment Option has ended, the life contingent annuity will
remain in effect and payments will be made if you or the joint annuitant, are
living on the date payments are to start. No additional amounts will be
allocated under the life contingent annuity. You may elect to restart the
Assured Payment Option by submitting a written request satisfactory to us, but
no sooner than three years after the option was terminated. If you own an
Equitable
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Accumulator Rollover IRA or Flexible Premium IRA contract and you elected the
Assured Payment Option at age 70 1/2 or older and subsequently terminate this
option, required minimum distributions must continue to be made under your
contract. Before terminating the Assured Payment Option, you should consider
the implications this may have under the minimum distribution requirements.
See "Tax Information."
ANNUITY PAYOUT OPTIONS AND SURRENDERING THE CONTRACT. Once your contract is
surrendered or an annuity payout option is chosen, we will return the contract
to you with a notation that the life contingent annuity is still in effect. You
may not surrender the life contingent annuity.
APO PLUS
APO Plus is a variation of the Assured Payment Option. Except as indicated
below, APO Plus operates under the same guidelines as the Assured Payment
Option. Under APO Plus you will be able to keep a portion of your value in the
Alliance Common Stock option or the Alliance Equity Index option, whichever one
you choose. Once you have selected a variable investment option it may not be
changed.
You may not elect APO Plus if the Assured Payment Option is already in effect.
APO Plus allows you to remain invested in the variable investment option for
longer than would be possible if you had applied your entire account value all
at once to the Assured Payment Option or to an annuity payout option.
HOW WE ALLOCATE YOUR CONTRIBUTIONS. We allocate a portion of your initial
contribution or account value to the Assured Payment Option. Under the Assured
Payment Option amounts are allocated in the same manner as described above.
Your remaining account value is allocated to the variable investment option you
select. Periodically during the fixed period we transfer a portion of your
value in the variable investment option to the fixed maturity options to
increase your guaranteed level payments under the Assured Payment Option.
The amount allocated under the Assured Payment Option will provide for level
payments. The amount of the level payments are equal to the amount of the
initial payment that would have been provided if you had allocated your entire
initial contribution or account value under the Assured Payment Option. The
difference between the amount required for level payments and the amount
required for increasing payments provided under the Assured Payment Option, is
allocated to the variable investment option you selected. If you have any value
in the fixed maturity options at the time this option is elected, a market
value adjustment may apply as a result of such amounts being transferred to
activate the Assured Payment Option.
FIXED PERIOD. The fixed period and deferral period schedule shown for the
Assured Payment Option will also apply under APO Plus.
On the third February 15th following the date your first payment is made during
the fixed period, a portion of your value in the variable investment option may
be transferred to the Assured Payment Option in order to increase your level
payments. If you elect a deferral period of three years or more, a portion of
your value in the variable investment option will be allocated to the Assured
Payment Option on the February 15th before the date your first payment is made.
If your payments are to be made on February 15th, the date of the first payment
will be counted as the first February 15th for the purpose of this transfer to
the Assured Payment Option.
The transfer of amounts to the Assured Payment Option is repeated each third
year during the fixed period. The first increase in payments will be reflected
in the payment made to you after three full years of payments and then every
three years after that. Immediately following your last payment during the
fixed period, your remaining value in the variable investment option is first
allocated to the life contingent annuity to change the level payments
previously purchased to increasing payments. These increasing payments will
increase each year based on the annual increase in the Consumers Price Index,
but never greater than 3%. If you have any value remaining after the increasing
payments are purchased, this amount is allocated to the life contingent annuity
to further increase your lifetime payments. If your
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value in the variable investment option is insufficient to purchase the
increasing payments, then the level payments previously purchased will be
raised as much as possible.
While APO Plus provides you with a minimum amount of level guaranteed lifetime
payments under the Assured Payment Option, the total amount of income that you
will receive over time will depend on the investment performance of the
variable investment option which you selected. It will also depend on the
current rates to maturity and the cost of the life contingent annuity, which
also varies. As a result, the combined amount of guaranteed lifetime income you
receive under APO Plus may be more or less than the amount that could have been
purchased if your entire initial contribution or account value had been
allocated to the Assured Payment Option.
See Appendix IV for an example of the payments purchased under APO Plus.
ALLOCATION OF ADDITIONAL CONTRIBUTIONS. Any additional contributions you make
may only be allocated to the variable investment option. We do not permit
additional contributions after the end of the fixed period.
WITHDRAWALS. If you take a lump sum withdrawal or if a lump sum withdrawal is
made to satisfy minimum distribution requirements such withdrawal will be taken
from your value in the variable investment option unless you specify otherwise.
If there is insufficient value in the variable investment option any additional
amount will be taken from the separate account containing the fixed maturity
options and from amounts held to provide for payments off maturity dates, in
the same manner as described above for the Assured Payment Option.
DEATH BENEFIT. If a death benefit becomes payable during the fixed period we
will pay the death benefit amount to the designated beneficiary. The death
benefit amount is equal to the greater of your value in the:
(1) fixed maturity options; and
(2) the separate account containing the fixed maturity amounts and any
amounts held to provide for payments off maturity dates.
When the greater of (1) and (2) above is determined, the value in the variable
investment option is added. A death benefit is never payable under the life
contingent annuity.
TERMINATION OF APO PLUS. You may terminate APO Plus at any time by submitting
a written request satisfactory to us. You may choose one of the following two
options if you terminate APO Plus:
(1) your contract will operate under the Equitable Accumulator Rollover IRA
or Flexible Premium IRA rules; or
(2) you may elect the Assured Payment Option.
If you elect the Assured Payment Option, your remaining value in the variable
investment option will be allocated to the fixed maturity options, the separate
account to provide for payments off maturity dates, and the life contingent
annuity. A market value adjustment may apply for any amounts allocated from a
fixed maturity option. At least 45 days prior to the end of each three-year
period, we will send you a quote indicating how much future income could be
provided under the Assured Payment Option. The quote would be based on your
current account value, current rates to maturity for the fixed maturity
options, and current purchase rates under the life contingent annuity as of the
date of the quote. The actual amount of future income you would receive depends
on the rates in effect on the day you switch to the Assured Payment Option.
WITHDRAWING YOUR ACCOUNT VALUE
You have several ways to withdraw your account value before annuity payments
begin. The table below shows the methods available under each type of contract.
More information follows the table. For the tax consequences of withdrawals,
see "Tax information."
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METHOD OF WITHDRAWAL
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SUBSTANTIALLY MINIMUM
CONTRACT LUMP SUM SYSTEMATIC EQUAL DISTRIBUTION
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NQ Yes Yes No No
Rollover IRA* Yes Yes Yes Yes
Flexible
Premium IRA* Yes Yes Yes Yes
Roth Conversion
IRA Yes Yes Yes No
Flexible Premium
Roth IRA Yes Yes Yes No
QP Yes No No Yes
Rollover TSA** Yes No No Yes
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* If Assured Payment Option or APO Plus is elected, only lump sum withdrawals
are available.
** For some Rollover TSA contracts, your ability to take withdrawals, loans or
surrender your contract may be limited. You must provide withdrawal
restriction information when you apply for a contract. See "Tax Sheltered
Annuity contracts (TSAs)" in "Tax information."
LUMP SUM WITHDRAWALS
(All contracts)
You may take lump sum withdrawals from your account value at any time.
(Rollover TSA contracts may have restrictions.) The minimum amount you may
withdraw is $300. If you request to withdraw more than 90% of a contract's
current cash value we will treat it as a request to surrender the contract for
its cash value. See "Surrendering your contract to receive its cash value"
below.
Lump sum withdrawals in excess of the 15% (10% under Assured Payment Option or
APO Plus) free withdrawal amount (see "15% free withdrawal amount" in "Charges
and expenses") may be subject to a withdrawal charge. Under Rollover TSA
contracts, if a loan is outstanding, you may only take lump sum withdrawals as
long as the cash value remaining after any withdrawal equals at least 10% of
the outstanding loan plus accrued interest.
SYSTEMATIC WITHDRAWALS
(NQ and all IRA contracts)
You may take systematic withdrawals of a particular dollar amount or a
particular percentage of your account value.
You may take systematic withdrawals on a monthly, quarterly, or annual basis as
long as the withdrawals do not exceed the following percentages of your account
value: 1.2% monthly, 3.6% quarterly, and 15.0% annually. The minimum amount you
may take in each systematic withdrawal is $250. If the amount withdrawn would
be less than $250 on the date a withdrawal is to be taken, we will not make a
payment and we will terminate your systematic withdrawal election.
We will make the withdrawals on any day of the month that you select as long as
it is not later than the 28th day of the month. If you do not select a date, we
will make the withdrawals on the same calendar day of the month as the contract
date. You must wait at least 28 days after your contract is issued before your
systematic withdrawals can begin.
You may elect to take systematic withdrawals at any time. If you own an IRA
contract, you may elect this withdrawal method only if you are between ages 59
1/2 and 70 1/2.
You may change the payment frequency, or the amount or percentage of your
systematic withdrawals, once each contract year. However, you may not change
the amount or percentage in any contract year in which you have already taken a
lump sum withdrawal. You can cancel the systematic withdrawal option at any
time.
Systematic withdrawals are not subject to a withdrawal charge, except to the
extent that, when added to a lump sum withdrawal previously taken in the same
contract year, the systematic withdrawal exceeds the 15% free withdrawal
amount.
SUBSTANTIALLY EQUAL WITHDRAWALS
(All IRA contracts)
The substantially equal withdrawals option allows you to receive distributions
from your account value without triggering the 10% additional federal tax
penalty, which normally applies to distributions made before age 59 1/2. See
"Tax information." Once you begin to take substantially equal withdrawals, you
should not stop them or change the pattern of your withdrawals until after the
later of age 59 1/2
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or five full years after the first withdrawal. If you stop or change the
withdrawals or take a lump sum withdrawal, you may be liable for the 10%
federal tax penalty that would have otherwise been due on prior withdrawals
made under this option and for any interest on those withdrawals.
You may elect to take substantially equal withdrawals at any time before age
59 1/2. We will make the withdrawal on any day of the month that you select as
long as it is not later than the 28th day of the month. You may not elect to
receive the first payment in the same contract year in which you took a lump
sum withdrawal. We will calculate the amount of your substantially equal
withdrawals. The payments will be made monthly, quarterly, or annually as you
select. These payments will continue until we receive written notice from you
to cancel this option or you take a lump sum withdrawal. You may elect to start
receiving substantially equal withdrawals again, but the payments may not
restart in the same contract year in which you took a lump sum withdrawal. We
will calculate the new withdrawal amount.
You may not elect substantially equal withdrawals if you have balances in the
account for special dollar cost averaging.
Substantially equal withdrawals are not subject to a withdrawal charge.
MINIMUM DISTRIBUTION WITHDRAWALS
(Rollover IRA, Flexible Premium IRA, QP, and Rollover TSA contracts only - See
"Tax information")
We offer the minimum distribution withdrawal option to help you meet lifetime
required minimum distributions under federal income tax rules. You may elect
this option in the year in which you reach age 70 1/2. The minimum amount we
will pay out is $250. You may elect the method you want us to use to calculate
your minimum distribution withdrawals from the choices we offer. Currently,
minimum distribution withdrawal payments will be made annually.
We do not impose a withdrawal charge on minimum distribution withdrawals except
if when added to a lump sum withdrawal previously taken in the same contract
year, the minimum distribution withdrawal exceeds the 15% free withdrawal
amount.
We will calculate your annual payment based on your account value at the end of
the prior calendar year based on the method you choose.
Under Rollover TSA contracts, you may not elect minimum distribution
withdrawals if a loan is outstanding.
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For Rollover IRA, Flexible Premium IRA, QP, and Rollover TSA contracts, we will
send a form outlining the distribution options available in the year you reach
age 70 1/2 (if you have not begun your annuity payments before that time).
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HOW WITHDRAWALS ARE TAKEN FROM YOUR ACCOUNT VALUE
Unless you specify otherwise, we will subtract your withdrawals on a pro rata
basis from your value in the variable investment options. If there is
insufficient value or no value in the variable investment options, any
additional amount of the withdrawal required or the total amount of the
withdrawal will be withdrawn from the fixed maturity options in order of the
earliest maturity date(s) first and then from the account for special dollar
cost averaging. A market value adjustment may apply to withdrawals from the
fixed maturity options.
HOW WITHDRAWALS AFFECT YOUR GUARANTEED MINIMUM INCOME BENEFIT AND GUARANTEED
MINIMUM DEATH BENEFIT
Withdrawals will reduce your guaranteed benefits on either a dollar-for-dollar
basis or on a pro rata basis as explained below:
INCOME BENEFIT AND DEATH BENEFIT
5% roll up to age 80 or age 70 - If you elect the 5% roll up to age 80 or 5%
roll up to age 70 guaranteed minimum death benefit, your benefit base will be
reduced on a dollar-for-dollar basis as long as the sum of your
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withdrawals in a contract year is 5% or less of the guaranteed minimum death
benefit on the most recent contract date anniversary. Once you take a
withdrawal that causes the sum of your withdrawals in a contract year to exceed
5% of the guaranteed minimum death benefit on the most recent contract date
anniversary, that withdrawal and any subsequent withdrawals in that same
contract year will reduce your benefit base on a pro rata basis.
The timing of your withdrawals and whether they exceed the 5% threshold
described above can have a significant impact on your guaranteed minimum income
benefit or guaranteed minimum death benefit.
Annual ratchet to age 80 - If you elect the annual ratchet to age 80 guaranteed
minimum death benefit, each withdrawal will always reduce your benefit base and
current guaranteed minimum death benefit on a pro rata basis.
Annuitant issue ages 80 through 90 - If your contract was issued when the
annuitant was between ages 80 and 90, each withdrawal will always reduce your
current guaranteed minimum death benefit on a pro rata basis.
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Reduction on a dollar-for-dollar basis means that your current benefit will be
reduced by the dollar amount of the withdrawal. Reduction on a pro rata basis
means that we calculate the percentage of your current account value that is
being withdrawn and we reduce your current benefit by that same percentage. For
example, if your account value is $30,000 and you withdraw $12,000, you have
withdrawn 40% of your account value. If your guaranteed minimum death benefit
was $40,000 before the withdrawal, it would be reduced by $16,000 ($40,000
x.40) and your new guaranteed minimum death benefit after the withdrawal would
be $24,000 ($40,000 - $16,000).
LOANS UNDER ROLLOVER TSA CONTRACTS
You may take loans from a Rollover TSA unless restricted by the employer who
provided the Rollover TSA funds. If you cannot take a loan, or cannot take a
loan without approval from the employer who provided the funds, we will have
this information in our records based on what you and the employer who provided
the funds told us when you purchased your contract. The employer must also tell
us whether special employer plan rules of the Employee Retirement Income
Security Act of 1974 ("ERISA") apply. We will not permit you to take a loan
while you are taking minimum distribution withdrawals.
You should read the terms and conditions on our loan request form carefully
before taking out a loan. Under Rollover TSA contracts subject to ERISA, you
may only take a loan with the written consent of your spouse. Your contract
contains further details of the loan provision. Also, see "Tax information" for
general rules applicable to loans.
We will permit you to have only one loan outstanding at a time. The minimum
loan amount is $1,000. The maximum amount is $50,000 or, if less, 50% of your
account value, subject to any limits under the federal income tax rules. The
term of a loan is five years. However, if you use the loan to acquire your
primary residence, the term is 10 years. The term may not extend beyond the
earliest of:
(1) the date annuity payments begin,
(2) the date the contract terminates, and
(3) the date a death benefit is paid (the outstanding loan will be deducted
from the death benefit amount).
Interest will accrue daily on your outstanding loan at a rate we set. The loan
interest rate will be equal to the Moody's Corporate Bond Yield Averages for
Baa bonds for the calendar month ending two months before the first day of the
calendar quarter in which the rate is determined.
LOAN RESERVE ACCOUNT. On the date your loan is processed, we will transfer the
amount of your loan to the loan reserve account. Unless you specify otherwise,
we will subtract your loan on a pro rata basis from your value in the variable
investment options. If there is insufficient value or no value in the variable
investment options, any additional amount of the loan will be subtracted from
the fixed maturity options in order of the earliest maturity date(s) first. A
market value adjustment may apply.
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We will credit interest to the amount in the loan reserve account at a rate of
2% lower than the loan interest rate that applies for the time your loan is
outstanding. On each contract date anniversary after the date the loan is
processed, we will transfer the amount of interest earned in the loan reserve
account to the variable investment options on a pro rata basis. When you make a
loan repayment, unless you specify otherwise, we will transfer the dollar
amount of the loan repaid from the loan reserve account to the investment
options according to the allocation percentages we have on our records.
SURRENDERING YOUR CONTRACT TO RECEIVE ITS CASH VALUE
You may surrender your contract to receive its cash value at any time while the
annuitant is living and before you begin to receive annuity payments. (Rollover
TSA contracts may have restrictions.) For a surrender to be effective, we must
receive your written request and your contract at our processing office. We
will determine your cash value on the date we receive the required information.
All benefits under the contract will terminate as of that date.
You may receive your cash value in a single sum payment or apply it to one or
more of the annuity payout options. See "Your annuity payout options" below.
For the tax consequences of surrenders, see "Tax information."
WHEN TO EXPECT PAYMENTS
Generally, we will fulfill requests for payments out of the variable investment
options within seven calendar days after the date of the transaction to which
the request relates. These transactions may include applying proceeds to a
variable annuity, payment of a death benefit, payment of any amount you
withdraw (less any withdrawal charge) and, upon surrender, payment of the cash
value. We may postpone such payments or applying proceeds for any period during
which:
(1) the New York Stock Exchange is closed or restricts trading,
(2) sales of securities or determination of the fair value of a variable
investment option's assets is not reasonably practicable because of an
emergency, or
(3) the SEC, by order, permits us to defer payment to protect people
remaining in the variable investment options.
We can defer payment of any portion of your value in the fixed maturity options
and the account for special dollar cost averaging (other than for death
benefits) for up to six months while you are living. We also may defer payments
for a reasonable amount of time (not to exceed 10 days) while we are waiting
for a contribution check to clear.
All payments are made by check and are mailed to you (or the payee named in a
tax-free exchange) by U.S. mail, unless you request that we use an express
delivery service at your expense.
YOUR ANNUITY PAYOUT OPTIONS
Equitable Accumulator offers you several choices of annuity payout options.
Some enable you to receive fixed annuity payments, which can be either level or
increasing, and others enable you to receive variable annuity payments.
You can choose from among the annuity payout options listed below. Restrictions
may apply, depending on the type of contract you own or the annuitant's age at
contract issue. In addition, if you are exercising your guaranteed minimum
income benefit under baseBUILDER, your choice of payout options are those that
are available under the baseBUILDER (see "Our baseBUILDER option").
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ACCESSING YOUR MONEY
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Fixed annuity payout options Life annuity
Life annuity with period
certain
Life annuity with refund
certain
Period certain annuity
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Variable Immediate Annuity Life annuity (not available
payout options in New York)
Life annuity with period
certain
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Income Manager payout Life annuity with period
options (available for certain
annuitants age 83 or less Period certain annuity
at contract issue)
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o Life annuity: An annuity that guarantees payments for the rest of the
annuitant's life. Payments end with the last monthly payment before the
annuitant's death. Because there is no continuation of benefits following
the annuitant's death with this payout option, it provides the highest
monthly payment of any of the life annuity options, so long as the annuitant
is living.
o Life annuity with period certain: An annuity that guarantees payments for
the rest of the annuitant's life. If the annuitant dies before the end of a
selected period of time ("period certain"), payments continue to the
beneficiary for the balance of the period certain. The period certain cannot
extend beyond the annuitant's life expectancy. A life annuity with a period
certain is the form of annuity under the contracts that you will receive if
you do not elect a different payout option. In this case, the period certain
will be based on the annuitant's age and will not exceed 10 years.
o Life annuity with refund certain: An annuity that guarantees payments for
the rest of the annuitant's life. If the annuitant dies before the amount
applied to purchase the annuity option has been recovered, payments to the
beneficiary will continue until that amount has been recovered. This payout
option is available only as a fixed annuity.
o Period certain annuity: An annuity that guarantees payments for a specific
period of time, usually 5, 10, 15, or 20 years. This guaranteed period may
not exceed the annuitant's life expectancy. This option does not guarantee
payments for the rest of the annuitant's life. It does not permit any
repayment of the unpaid principal, so you cannot elect to receive part of
the payments as a single sum payment with the rest paid in monthly annuity
payments. This payout option is available only as a fixed annuity.
The life annuity, life annuity with period certain, and life annuity with
refund certain payout options are available on a single life or joint and
survivor life basis. The joint and survivor life annuity guarantees payments
for the rest of the annuitant's life and, after the annuitant's death, payments
continue to the survivor. We may offer other payout options not outlined here.
Your financial professional can provide details.
FIXED ANNUITY PAYOUT OPTION
With fixed annuities, we guarantee fixed annuity payments will be based either
on the tables of guaranteed annuity purchase factors in your contract or on our
then current annuity purchase factors, whichever is more favorable for you.
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTIONS
Variable Immediate Annuities are described in a separate prospectus that is
available from your financial professional. Before you select a Variable
Immediate Annuity payout option, you should read the prospectus which contains
important information that you should know.
Variable annuities may be funded through your choice of variable investment
options investing in portfolios of EQ Advisors Trust. The contract also offers
a fixed annuity option that can be elected in combination with the variable
annuity payout options. The amount of each variable annuity payment will
fluctuate, depending upon the performance of the variable investment options,
and whether the actual rate of investment return is higher or lower than an
assumed base rate.
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INCOME MANAGER PAYOUT OPTIONS
The Income Manager payout annuity contracts differ from the other payout
annuity contracts. The other payout annuity contracts may provide higher or
lower income levels, but do not have all the features of the Income Manager
payout annuity contract. You may request an illustration of the Income Manager
payout annuity contract from your financial professional. Income Manager payout
options are described in a separate prospectus that is available from your
financial professional. Before you select an Income Manager payout option, you
should read the prospectus which contains important information that you should
know.
Both Income Manager payout options provide guaranteed level payments (NQ and
IRA contracts). The Income Manager (life annuity with period certain) also
provides guaranteed increasing payments (NQ contracts only). You may not elect
a period certain Income Manager payout option unless withdrawal charges are no
longer in effect under your Equitable Accumulator.
For QP and Rollover TSA contracts, if you want to elect an Income Manager
payout option, we will first roll over amounts in such contract to a Rollover
IRA contract. You will be the owner of the Rollover IRA contract.
You may choose to apply only part of the account value of your Equitable
Accumulator contract to an Income Manager payout annuity. In this case, we will
consider any amounts applied as a withdrawal from your Equitable Accumulator
and we will deduct any applicable withdrawal charge. For the tax consequences
of withdrawals, see "Tax information."
Depending upon your circumstances, the purchase of an Income Manager contract
may be done on a tax-free basis. Please consult your tax adviser.
THE AMOUNT APPLIED TO PURCHASE AN ANNUITY PAYOUT OPTION
The amount applied to purchase an annuity payout option varies, depending on
the payout option that you choose, and the timing of your purchase as it
relates to any withdrawal charges or market value adjustments.
If amounts in a fixed maturity option are used to purchase any annuity payout
option, prior to the maturity date, a market value adjustment will apply.
For the fixed annuity payout options and Variable Immediate Annuity payout
options, no withdrawal charge is imposed if you select a life annuity, life
annuity with period certain or life annuity with refund certain.
For the fixed annuity payout option, the withdrawal charge applicable under
your Equitable Accumulator is imposed if you select a period certain. If the
period certain is more than 5 years, then the withdrawal charge deducted will
not exceed 5% of the account value.
For the Income Manager payout options no withdrawal charge is imposed under the
Equitable Accumulator. If the withdrawal charge that otherwise would have been
applied to your account value under your Equitable Accumulator is greater than
2% of the contributions that remain in your contract at the time you purchase
your payout option, the withdrawal charges under the Income Manager will apply.
For this purpose, the year in which your account value is applied to the payout
option will be "contract year 1."
For contracts issued in New York where the annuitant was age 84 or 85 at
contract issue, any applicable withdrawal charge will be imposed on payments if
you select a period certain annuity.
SELECTING AN ANNUITY PAYOUT OPTION
When you select a payout option, we will issue you a separate written agreement
confirming your right to receive annuity payments. We require you to return
your contract before annuity payments begin unless you are applying only some
of your account value to an Income Manager contract. The contract owner and
annuitant must meet the issue age and payment requirements.
You can choose the date annuity payments begin but it may not be earlier than
thirteen months from the Equitable Accumulator contract date. Except with
respect to the
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ACCESSING YOUR MONEY
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Income Manager annuity payout options, where payments are made on the 15th day
of each month, you can change the date your annuity payments are to begin
anytime before that date as long as you do not choose a date later than the
28th day of any month. Also, that date may not be later than:
(i) if the annuitant was not older than age 83 when the contract was issued,
the contract date anniversary that follows the annuitant's 90th birthday;
(ii) if the annuitant was age 84 but not older than age 88 when the contract
was issued the annuitant's age at issue plus seven years;
(iii) if the annuitant was age 89 or 90 when the contract was issued, age 95;
and
(iv) for contracts issued in New York, by the annuitant's 90th birthday.
The above may be different in some states.
Before the last date by which your annuity payments must begin, we will notify
you by letter. Once you have selected an annuity payout option and payments
have begun, no change can be made other than: (i) transfers (if permitted in
the future) among the variable investment options if a Variable Immediate
Annuity payout option is selected; and (ii) withdrawals or contract surrender
(subject to a market value adjustment) if an Income Manager annuity payout
option is chosen.
The amount of the annuity payments will depend on the amount applied to
purchase the annuity and the applicable annuity purchase factors, discussed
earlier.
In no event will you ever receive payments under a fixed option or an initial
payment under a variable option of less than the minimum amounts guaranteed by
the contract.
If, at the time you elect a payout option, the amount to be applied is less
than $2,000 or the initial payment under the form elected is less than $20
monthly, we reserve the right to pay the account value in a single sum rather
than as payments under the payout option chosen.
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CHARGES AND EXPENSES
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50
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CHARGES AND EXPENSES
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CHARGES THAT EQUITABLE LIFE DEDUCTS
We deduct the following charges each day from the net assets of each variable
investment option. These charges are reflected in the unit values of each
variable investment option:
o A mortality and expense risks charge
o An administrative charge
o A distribution charge
We deduct the following charges from your account value. When we deduct these
charges from your variable investment options, we reduce the number of units
credited to your contract:
o On each contract date anniversary - an annual administrative charge if
applicable (Flexible Premium IRA and Flexible Premium Roth IRA contracts
only).
o At the time you make certain withdrawals or surrender your contract - a
withdrawal charge.
o If you elect the optional benefit - a charge for the optional baseBUILDER
benefit.
o At the time annuity payments are to begin - charges designed to approximate
certain taxes that may be imposed on us, such as premium taxes in your
state. An annuity administrative fee may also apply.
More information about these charges appears below. We will not increase these
charges for the life of your contract, except as noted. We may reduce certain
charges under group or sponsored arrangements. See "Group or sponsored
arrangements" below.
To help with your retirement planning, we may offer other annuities with
different charges, benefits, and features. Please contact your financial
professional for more information.
MORTALITY AND EXPENSE RISKS CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for mortality and expense risks, including the guaranteed
minimum death benefit. The daily charge is equivalent to an annual rate of
1.10% of the net assets in each variable investment option.
The mortality risk we assume is the risk that annuitants as a group will live
for a longer time than our actuarial tables predict. If that happens, we would
be paying more in annuity income than we planned. We also assume a risk that
the mortality assumptions reflected in our guaranteed annuity payment tables,
shown in each contract, will differ from actual mortality experience. Lastly,
we assume a mortality risk to the extent that at the time of death, the
guaranteed minimum death benefit exceeds the cash value of the contract. The
expense risk we assume is the risk that it will cost us more to issue and
administer the contracts than we expect.
ADMINISTRATIVE CHARGE
We deduct a daily charge from the net assets in each variable investment
option. The charge, together with the annual administrative charge described
below, is to compensate us for administrative expenses under the contracts. The
daily charge is equivalent to an annual rate of 0.25% of the net assets in each
variable investment option. We reserve the right under the contracts to
increase this charge to an annual rate of 0.35%.
DISTRIBUTION CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for a portion of our sales expenses under the contracts. The
daily charge is equivalent to an annual rate of 0.20% of the net assets in each
variable investment option.
ANNUAL ADMINISTRATIVE CHARGE (FLEXIBLE PREMIUM IRA AND FLEXIBLE PREMIUM ROTH
IRA CONTRACTS ONLY)
Under Flexible Premium IRA and Flexible Premium Roth IRA contracts, we deduct
an administrative charge from your account value on each contract date
anniversary. We deduct the charge if your account value on the last business
day of the contract year is less than $25,000. If your account value on such
date is $25,000 or more, we do not deduct the
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CHARGES AND EXPENSES
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charge. During the first two contract years, the charge is equal to $30 or, if
less, 2% of your account value. The charge is $30 for contract years three and
later.
We will deduct this charge from your value in the variable investment options
on a pro rata basis. If there is not enough value in the variable investment
options, we will deduct all or a portion of the charge from the fixed maturity
options in order of the earliest maturity date(s) first. If you surrender your
contract during the contract year we will deduct a pro rata portion of the
charge.
WITHDRAWAL CHARGE
A withdrawal charge applies in two circumstances: (1) if you make one or more
withdrawals during a contract year that, in total, exceed the 15% free
withdrawal amount, described below, or (2) if you surrender your contract to
receive its cash value.
The withdrawal charge equals a percentage of the contributions withdrawn. The
percentage that applies depends on how long each contribution has been invested
in the contract. We determine the withdrawal charge separately for each
contribution according to the following table:
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CONTRACT YEAR
- --------------------------------------------------------------------------------
1 2 3 4 5 6 7 8+
- --------------------------------------------------------------------------------
Percentage of
contribution 7% 6% 5% 4% 3% 2% 1% 0%
- --------------------------------------------------------------------------------
If the Assured Payment Option or APO Plus is in effect, the withdrawal charge
is equal to a percentage of the contributions withdrawn minus any amounts
allocated to the life contingent annuity.
For purposes of calculating the withdrawal charge, we treat the contract year
in which we receive a contribution as "contract year 1." Amounts withdrawn up
to the free withdrawal amount are not considered withdrawal of any
contribution. We also treat contributions that have been invested the longest
as being withdrawn first. We treat contributions as withdrawn before earnings
for purposes of calculating the withdrawal charge. However, federal income tax
rules treat earnings under your contract as withdrawn first. See "Tax
information." Please note that you may incur a withdrawal charge if your
contract was issued in New York and your annuitant was age 84 or 85 at issue
because you must accept distribution of your cash value beginning with the
contract anniversary following the annuitant's 90th birthday.
In order to give you the exact dollar amount of the withdrawal you request, we
deduct the amount of the withdrawal and the withdrawal charge from your account
value. Any amount deducted to pay withdrawal charges is also subject to that
same withdrawal charge percentage. We deduct the charge in proportion to the
amount of the withdrawal subtracted from each investment option. The withdrawal
charge helps cover our sales expenses.
For annuitants that are ages 84 and 85 when the contract is issued in
Pennsylvania, the withdrawal charge will be computed in the same manner as for
other contracts, except that the withdrawal charge schedule will be different.
For these contracts, the withdrawal charge schedule will be 5% of each
contribution made in the first contract year, decreasing by 1% each subsequent
contract year to 0% in the sixth and later contract years.
The withdrawal charge does not apply in the circumstances described below.
ANNUITANT AGES 86 THROUGH 90 WHEN THE CONTRACT IS ISSUED. The withdrawal charge
does not apply under the contract if the annuitant is age 86 or older when the
contract is issued.
15% FREE WITHDRAWAL AMOUNT. Each contract year you can withdraw up to 15% of
your account value without paying a withdrawal charge. The 15% free withdrawal
amount is determined using your account value on the most recent contract date
anniversary, minus any other withdrawals made during the contract year. The 15%
free withdrawal amount does not apply if you surrender your contract.
The free withdrawal amount is 10% of your account value under the Assured
Payment Option and APO Plus.
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CHARGES AND EXPENSES
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Note the following special rule for NQ contracts issued to a charitable
remainder trust, the free withdrawal amount will equal the greater of: (1) the
current account value, less contributions that have not been withdrawn
(earnings in the contract), and (2) the 15% free withdrawal amount defined
above.
DISABILITY, TERMINAL ILLNESS OR CONFINEMENT TO NURSING HOME. The withdrawal
charge does not apply if:
o The annuitant has qualified to receive Social Security disability benefits
as certified by the Social Security Administration; or
o We receive proof satisfactory to us (including certification by a licensed
physician) that the annuitant's life expectancy is six months or less; or
o The annuitant has been confined to a nursing home for more than 90 days (or
such other period, as required in your state) as verified by a licensed
physician. A nursing home for this purpose means one that is (a) approved by
Medicare as a provider of skilled nursing care service, or (b) licensed as a
skilled nursing home by the state or territory in which it is located (it
must be within the United States, Puerto Rico, or U.S. Virgin Islands) and
meets all of the following:
- its main function is to provide skilled, intermediate, or custodial
nursing care;
- it provides continuous room and board to three or more persons;
- it is supervised by a registered nurse or licensed practical nurse;
- it keeps daily medical records of each patient;
- it controls and records all medications dispensed; and
- its primary service is other than to provide housing for residents.
We reserve the right to impose a withdrawal charge, in accordance with your
contract and applicable state law, if the disability is caused by a preexisting
condition or a condition that began within 12 months of the contract date. Some
states may not permit us to waive the withdrawal charge in the above
circumstances, or may limit the circumstances for which the withdrawal charge
may be waived. Your financial professional can provide more information or you
may contact our Processing Office.
BASEBUILDER BENEFIT CHARGE
If you elect the baseBUILDER, we deduct a charge annually from your account
value on each contract date anniversary until such time as you exercise the
guaranteed minimum income benefit, elect another annuity payout option, or the
contract date anniversary after the annuitant reaches age 85, whichever occurs
first. The charge is equal to 0.30% (0.15% if the 5% roll up to age 70
baseBUILDER benefit is elected) of the benefit base in effect on the contract
date anniversary.
We will deduct this charge from your value in the variable investment options
on a pro rata basis. If there is not enough value in the variable investment
options, we will deduct all or a portion of the charge from the fixed maturity
options in order of the earliest maturity date(s) first. A market value
adjustment may apply.
CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES
We deduct a charge designed to approximate certain taxes that may be imposed on
us, such as premium taxes in your state. Generally, we deduct the charge from
the amount applied to provide an annuity payout option. The current tax charge
that might be imposed by us varies by state and ranges from 0% to 3.5% (1% in
Puerto Rico and 5% in the U.S. Virgin Islands).
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION ADMINISTRATIVE FEE
We deduct a fee of $350 from the amount to be applied to the Variable Immediate
Annuity payout option.
CHARGES THAT EQ ADVISORS TRUST DEDUCTS
EQ Advisors Trust deducts charges for the following types of fees and expenses:
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CHARGES AND EXPENSES
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o Management fees ranging from 0.25% to 1.15%.
o 12b-1 fees of 0.25%.
o Operating expenses, such as trustees' fees, independent auditors' fees,
legal counsel fees, administrative service fees, custodian fees, and
liability insurance.
o Investment-related expenses, such as brokerage commissions.
These charges are reflected in the daily share price of each portfolio. Since
shares of EQ Advisors Trust are purchased at their net asset value, these fees
and expenses are, in effect, passed on to the variable investment options and
are reflected in their unit values. For more information about these charges,
please refer to the prospectus for EQ Advisors Trust following this prospectus.
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce the withdrawal
charge or the mortality and expense risks charge, or change the minimum initial
contribution requirements. We also may change the guaranteed minimum income
benefit and the guaranteed minimum death benefit, or offer variable investment
options that invest in shares of EQ Advisors Trust that are not subject to the
12b-1 fee. Group arrangements include those in which a trustee or an employer,
for example, purchases contracts covering a group of individuals on a group
basis. Group arrangements are not available for IRA contracts. Sponsored
arrangements include those in which an employer allows us to sell contracts to
its employees or retirees on an individual basis.
Our costs for sales, administration, and mortality generally vary with the size
and stability of the group or sponsoring organization, among other factors. We
take all these factors into account when reducing charges. To qualify for
reduced charges, a group or sponsored arrangement must meet certain
requirements, such as requirements for size and number of years in existence.
Group or sponsored arrangements that have been set up solely to buy contracts
or that have been in existence less than six months will not qualify for
reduced charges.
We also may establish different rates to maturity for the fixed maturity
options under different classes of contracts for group or sponsored
arrangements.
We will make these and any similar reductions according to our rules in effect
when we approve a contract for issue. We may change these rules from time to
time. Any variation will reflect differences in costs or services and will not
be unfairly discriminatory.
Group or sponsored arrangements may be governed by federal income tax rules,
ERISA, or both. We make no representations with regard to the impact of these
and other applicable laws on such programs. We recommend that employers,
trustees, and others purchasing or making contracts available for purchase
under such programs seek the advice of their own legal and benefits advisers.
OTHER DISTRIBUTION ARRANGEMENTS
We may reduce or eliminate charges when sales are made in a manner that result
in savings of sales and administrative expenses, such as sales through persons
who are compensated by clients for recommending investments and who receive no
commission or reduced commissions in connection with the sale of the contracts.
We will not permit a reduction or elimination of charges where it would be
unfairly discriminatory.
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PAYMENT OF DEATH BENEFIT
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PAYMENT OF DEATH BENEFIT
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YOUR BENEFICIARY AND PAYMENT OF BENEFIT
You designate your beneficiary when you apply for your contract. You may change
your beneficiary at any time. The change will be effective on the date the
written request for the change is received in our processing office. We are not
responsible for any beneficiary change request that we do not receive. We will
send you a written confirmation when we receive your request. Under jointly
owned contracts, the surviving owner is considered the beneficiary, and will
take the place of any other beneficiary. You may be limited as to the
beneficiary you can designate in a Rollover TSA contract. In a QP contract, the
beneficiary must be the trustee.
The death benefit is equal to your account value, or, if greater, the
guaranteed minimum death benefit. The guaranteed minimum death benefit is part
of your contract, whether you select the baseBUILDER benefit or not. We
determine the amount of the death benefit (other than the guaranteed minimum
death benefit) as of the date we receive satisfactory proof of the annuitant's
death and any required instructions for the method of payment. We determine the
amount of the guaranteed minimum death benefit as of the date of the
annuitant's death. Under Rollover TSA contracts we will deduct the amount of
any outstanding loan plus accrued interest from the amount of the death
benefit.
The death benefit payable under the Assured Payment Option or APO Plus is
described earlier in this prospectus. See "Assured Payment Option and APO
Plus."
EFFECT OF THE ANNUITANT'S DEATH
If the annuitant dies before the annuity payments begin, we will pay the death
benefit to your beneficiary.
Generally, the death of the annuitant terminates the contract. However, a
beneficiary spouse of the owner/annuitant can choose to be treated as the
successor owner/annuitant and continue the contract. Only a spouse can be a
successor owner/annuitant. A successor owner/annuitant can only be named under
NQ and IRA contracts.
For IRA contracts, a beneficiary may be able to have limited ownership as
discussed under "Beneficiary continuation option" below.
WHEN AN NQ CONTRACT OWNER DIES BEFORE THE ANNUITANT
Under certain conditions the owner changes after the original owner's death.
When you are not the annuitant under an NQ contract and you die before annuity
payments begin, the beneficiary named to receive the death benefit upon the
annuitant's death will automatically become the successor owner. If you do not
want this beneficiary to be the successor owner, you should name a specific
successor owner. You may name a successor owner at any time by sending
satisfactory notice to our processing office. If the contract is jointly owned
and the first owner to die is not the annuitant, the surviving owner becomes
the sole contract owner. This person will be considered the successor owner for
purposes of the distribution rules described in this section. The surviving
owner automatically takes the place of any other beneficiary designation.
Unless the surviving spouse of the owner who has died (or in the case of a
joint ownership situation, the surviving spouse of the first owner to die) is
the successor owner for this purpose, the entire interest in the contract must
be distributed under the following rules:
o The cash value of the contract must be fully paid to the successor owner
(new owner) by December 31st of the fifth calendar year after your death (or
in a joint ownership situation, the death of the first owner to die).
o The successor owner may instead elect to receive the cash value as a life
annuity (or payments for a period certain of not longer than the new owner's
life expectancy). Payments must begin no later than December 31st following
the calendar year of the non-annuitant owner's death. Unless this
alternative is elected, we will pay any cash value on December 31st of the
fifth calendar year following the year of your death (or the death of the
first owner to die).
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PAYMENT OF DEATH BENEFIT
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o If the surviving spouse is the successor owner or joint owner, the spouse
may elect to continue the contract. No distributions are required as long as
the surviving spouse and annuitant are living.
HOW DEATH BENEFIT PAYMENT IS MADE
We will pay the death benefit to the beneficiary in the form of the annuity
payout option you have chosen. If you have not chosen an annuity payout option
as of the time of the annuitant's death, the beneficiary will receive the death
benefit in a single sum. However, subject to any exceptions in the contract,
our rules and any applicable requirements under federal income tax rules, the
beneficiary may elect to apply the death benefit to one or more annuity payout
options we offer at the time. See "Your annuity payout options" in "Accessing
your money" earlier in this prospectus. Please note that any annuity payout
option chosen may not extend beyond the life expectancy of the beneficiary.
SUCCESSOR OWNER AND ANNUITANT
If you are both the contract owner and the annuitant, and your spouse is the
sole beneficiary or the joint owner, then your spouse may elect to receive the
death benefit or continue the contract as successor owner/annuitant.
If your surviving spouse decides to continue the contract, then on the contract
date anniversary following your death, we will increase the account value to
equal your current guaranteed minimum death benefit, if it is higher than the
account value. The increase in the account value will be allocated to the
investment options according to the allocation percentages we have on file for
your contract. Thereafter, withdrawal charges will no longer apply to this
amount. Withdrawal charges will apply if you make additional contributions.
These additional contributions will be withdrawn only after all other amounts
have been withdrawn. In determining whether the guaranteed minimum death
benefit will continue to grow, we will use your surviving spouse's age (as of
the contract date anniversary).
BENEFICIARY CONTINUATION OPTION
Upon your death under an IRA contract, a beneficiary may generally elect to
keep the contract in your name and receive distributions under the contract
instead of receiving the death benefit in a single sum. In order to elect this
option, the beneficiary must be an individual. Certain trusts with only
individual beneficiaries will be treated as individuals. This election must be
made within 60 days following the date we receive proof of your death. We will
increase the account value to equal the death benefit if the death benefit is
greater than the account value. Except as noted in the next sentence, the
beneficiary continuation option will be available on or after May 1, 2000,
depending on when we receive regulatory clearance in your state. For Rollover
IRA and Flexible Premium IRA contracts, a similar beneficiary continuation
option will be available until the beneficiary continuation option described in
this prospectus is available. Please contact our processing office for further
information. In addition, the beneficiary continuation option is not available
if APO or APO Plus is in effect at your death.
Under the beneficiary continuation option:
o The contract continues in your name for the benefit of your beneficiary.
o The beneficiary may make transfers among the investment options but no
additional contributions will be permitted.
o The guaranteed minimum income benefit and the death benefit (including the
guaranteed minimum death benefit) provisions will no longer be in effect.
o The beneficiary may choose at any time to withdraw all or a portion of the
account value and no withdrawal charges will apply. Any partial withdrawal
must be at least $300.
o Upon the death of the beneficiary, any remaining death benefit will be paid
in a lump sum to the person the beneficiary chooses.
For Traditional IRA contracts only, if you die AFTER the "Required Beginning
Date" for required minimum distributions (see "Tax information"), the contract
will continue if:
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(a) You were receiving minimum distribution withdrawals from this contract;
and
(b) The pattern of minimum distribution withdrawals you chose was based in
part on the life of the designated beneficiary.
The withdrawals will then continue to be paid to the beneficiary on the same
basis as you chose before your death. We will be able to tell your beneficiary
whether this option is available. You should contact our processing office for
further information.
For all of the above contracts, If you die BEFORE the Required Beginning Date
(and, for a traditional IRA, therefore you were not taking minimum distribution
withdrawals under the contract) the beneficiary may choose one of the following
two beneficiary continuation options:
1. Payments over life expectancy period. The beneficiary can receive annual
minimum distributions based on the beneficiary's life expectancy. If there
is more than one beneficiary, the shortest life expectancy is used. These
minimum distributions must begin by December 31st of the calendar year
following the year of your death. In some situations, a spouse beneficiary
who elects to continue the contract in your name under the beneficiary
continuation option instead of electing successor owner/ annuitant status
may also choose to delay beginning these minimum distributions until the
December 31st of the calendar year in which you would have turned age
70 1/2.
2. Five Year Rule. The beneficiary can take withdrawals as desired. If the
beneficiary does not withdraw the entire account value by the December 31st
of the fifth calendar year following your death, we will pay any amounts
remaining under the contract to the beneficiary by that date. If you have
more than one beneficiary, and one of them elects this option, then all of
your beneficiaries will receive this option.
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OVERVIEW
In this part of the prospectus, we discuss the current federal income tax rules
that generally apply to Equitable Accumulator contracts owned by United States
taxpayers. The tax rules can differ, depending on the type of contract, whether
NQ, Rollover IRA, Flexible Premium IRA, Roth Conversion IRA, Flexible Premium
Roth IRA, QP, or Rollover TSA. Therefore, we discuss the tax aspects of each
type of contract separately.
Federal income tax rules include the United States laws in the Internal Revenue
Code, and Treasury Department Regulations and Internal Revenue Service ("IRS")
interpretations of the Internal Revenue Code. These tax rules may change. We
cannot predict whether, when, or how these rules could change. Any change could
affect contracts purchased before the change.
We cannot provide detailed information on all tax aspects of the contracts.
Moreover, the tax aspects that apply to a particular person's contract may vary
depending on the facts applicable to that person. We do not discuss state
income and other state taxes, federal income tax, and withholding rules for
non-U.S. taxpayers, or federal gift and estate taxes. Transfers of the
contract, rights under the contract, or payments under the contract may be
subject to gift or estate taxes. You should not rely only on this document, but
should consult your tax adviser before your purchase.
If you are buying a contract to fund a retirement plan that already provides
tax deferral under sections of the Internal Revenue Code (IRA, QP, and Rollover
TSA), you should do so for the contract's features and benefits other than tax
deferral. In such situations, the tax deferral of the contract does not provide
additional benefits.
TRANSFERS AMONG INVESTMENT OPTIONS
You can make transfers among investment options inside the contract without
triggering taxable income.
TAXATION OF NONQUALIFIED ANNUITIES
CONTRIBUTIONS
You may not deduct the amount of your contributions to a nonqualified annuity
contract.
CONTRACT EARNINGS
Generally, you are not taxed on contract earnings until you receive a
distribution from your contract, whether as a withdrawal or as an annuity
payment. However, earnings are taxable, even without a distribution:
o if a contract fails investment diversification requirements as specified in
federal income tax rules (these rules are based on or are similar to those
specified for mutual funds under the securities laws);
o if you transfer a contract, for example, as a gift to someone other than
your spouse (or former spouse);
o if you use a contract as security for a loan (in this case, the amount
pledged will be treated as a distribution); and
o if the owner is other than an individual (such as a corporation,
partnership, trust, or other non-natural person).
All nonqualified deferred annuity contracts that Equitable Life and its
affiliates issue to you during the same calendar year are linked together and
treated as one contract for calculating the taxable amount of any distribution
from any of those contracts.
ANNUITY PAYMENTS
Once annuity payments begin, a portion of each payment is taxable as ordinary
income. You get back the remaining portion without paying taxes on it. This is
your "investment in the contract." Generally, your investment in the contract
equals the contributions you made, less any amounts you previously withdrew
that were not taxable.
For fixed annuity payments, the tax-free portion of each payment is determined
by (1) dividing your investment in the contract by the total amount you are
expected to receive out of the contract, and (2) multiplying the result by the
amount
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of the payment. For variable annuity payments, your tax-free portion of each
payment is your investment in the contract divided by the number of expected
payments.
Once you have received the amount of your investment in the contract, all
payments after that are fully taxable. If payments under a life annuity stop
because the annuitant dies, there is an income tax deduction for any
unrecovered investment in the contract.
PAYMENTS MADE BEFORE ANNUITY PAYMENTS BEGIN
If you make withdrawals before annuity payments begin under your contract, they
are taxable to you as ordinary income if there are earnings in the contract.
Generally, earnings are your account value less your investment in the
contract. If you withdraw an amount which is more than the earnings in the
contract as of the date of the withdrawal, the balance of the distribution is
treated as a return of your investment in the contract and is not taxable.
CONTRACTS PURCHASED THROUGH EXCHANGES
You may purchase your NQ contract through an exchange of another contract.
Normally, exchanges of contracts are taxable events. The exchange will not be
taxable under Section 1035 of the Internal Revenue Code if:
o the contract that is the source of the funds you are using to purchase the
NQ contract is another nonqualified deferred annuity contract or life
insurance or endowment contract.
o the owner and the annuitant are the same under the source contract and the
Equitable Accumulator NQ contract. If you are using a life insurance or
endowment contract the owner and the insured must be the same on both sides
of the exchange transaction.
The tax basis of the source contract carries over to the Equitable Accumulator
NQ contract.
A recent case permitted an owner to direct the proceeds of a partial withdrawal
from one nonqualified deferred annuity contract to a different insurer to
purchase a new nonqualified deferred annuity contract on a tax-deferred basis.
Special forms, agreement between the carriers, and provision of cost basis
information may be required to process this type of an exchange.
SURRENDERS
If you surrender or cancel the contract, the distribution is taxable as
ordinary income (not capital gain) to the extent it exceeds your investment in
the contract.
DEATH BENEFIT PAYMENTS MADE TO A BENEFICIARY AFTER YOUR DEATH
For the rules applicable to death benefits, see "Payment of death benefit"
earlier in this prospectus. The tax treatment of a death benefit taken as a
single sum is generally the same as the tax treatment of a withdrawal from or
surrender of your contract. The tax treatment of a death benefit taken as
annuity payments is generally the same as the tax treatment of annuity payments
under your contract.
EARLY DISTRIBUTION PENALTY TAX
If you take distributions before you are age 59 1/2 a penalty tax of 10% of the
taxable portion of your distribution applies in addition to the income tax. The
extra penalty tax does not apply to pre-age 59 1/2 distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o in the form of substantially equal periodic annuity payments for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and a beneficiary.
OTHER INFORMATION
The Treasury Department has the authority to issue guidelines prescribing the
circumstances in which your ability to direct your investment to particular
portfolios within a separate account may cause you, rather than the insurance
company, to be treated as the owner of the portfolio shares attributable to
your nonqualified annuity contract. In that case, income and gains attributable
to such portfolio shares would be included in your gross income for federal
income tax purposes. Under current rules, however, we believe that
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Equitable Life, and not the owner of a nonqualified annuity contract, would be
considered the owner of the portfolio shares.
SPECIAL RULES FOR NQ CONTRACTS ISSUED IN PUERTO RICO
Under current law we treat income from NQ contracts as U.S. source. A Puerto
Rico resident is subject to U.S. taxation on such U.S. source income. Only
Puerto Rico source income of Puerto Rico residents is excludable from U.S.
taxation. Income from NQ contracts is also subject to Puerto Rico tax. The
calculation of the taxable portion of amounts distributed from a contract may
differ in the two jurisdictions. Therefore, you might have to file both U.S.
and Puerto Rico tax returns, showing different amounts of income from the
contract for each tax return. Puerto Rico generally provides a credit against
Puerto Rico tax for U.S. tax paid. Depending on your personal situation and
the timing of the different tax liabilities, you may not be able to take full
advantage of this credit.
INDIVIDUAL RETIREMENT ARRANGEMENTS (IRAS)
GENERAL
"IRA" stands for individual retirement arrangement. There are two basic types
of such arrangements, individual retirement accounts and individual retirement
annuities. In an individual retirement account, a trustee or custodian holds
the assets for the benefit of the IRA owner. The assets can include mutual
funds and certificates of deposit. In an individual retirement annuity, an
insurance company issues an annuity contract that serves as the IRA.
There are two basic types of IRAs, as follows:
o Traditional IRAs, typically funded on a pre-tax basis including SEP-IRAs and
SIMPLE-IRAs, issued and funded in connection with employer-sponsored
retirement plans; and
o Roth IRAs, first available in 1998, funded on an after-tax basis.
Regardless of the type of IRA, your ownership interest in the IRA cannot be
forfeited. You or your beneficiaries who survive you are the only ones who can
receive the IRA's benefits or payments.
You can hold your IRA assets in as many different accounts and annuities as you
would like, as long as you meet the rules for setting up and making
contributions to IRAs. However, if you own multiple IRAs, you may be required
to combine IRA values or contributions for tax purposes. For further
information about individual retirement arrangements, you can read Internal
Revenue Service Publication 590 ("Individual Retirement Arrangements (IRAs)").
This publication is usually updated annually, and can be obtained from any IRS
district office or the IRS website (http://www.irs.gov).
Equitable Life designs its traditional IRA contracts to qualify as "individual
retirement annuities" under Section 408(b) of the Internal Revenue Code. You
may purchase the contract as a traditional IRA or Roth IRA. The traditional
IRAs we offer are the Rollover IRA and Flexible Premium IRA. The versions of
the Roth IRA available are the Roth Conversion IRA and Flexible Premium Roth
IRA. This prospectus contains the information that the IRS requires you to have
before you purchase an IRA. This section of the prospectus covers some of the
special tax rules that apply to IRAs. The next section covers Roth IRAs.
Education IRAs are not discussed in this prospectus because they are not
available in individual retirement annuity form.
The Equitable Accumulator IRA contract has been approved by the IRS as to form
for use as a traditional IRA. This IRS approval is a determination only as to
the form of the annuity. It does not represent a determination of the merits of
the annuity as an investment. The IRS approval does not address every feature
possibly available under the Equitable Accumulator IRA contract. Although we do
not have IRS approval as to form, we believe that the version of the Roth IRA
currently offered complies with the requirements of the Internal Revenue Code.
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CANCELLATION
You can cancel an Equitable Accumulator IRA contract by following the
directions under "Your right to cancel within a certain number of days" in
"Contract features and benefits" earlier in the prospectus. You can cancel an
Equitable Accumulator Roth Conversion IRA contract issued as a result of a full
conversion of an Equitable Accumulator Rollover IRA or Flexible Premium IRA
contract by following the instructions in the request for full conversion form.
The form is available from our processing office or your financial
professional. If you cancel an IRA contract, we may have to withhold tax, and
we must report the transaction to the IRS. A contract cancellation could have
an unfavorable tax impact.
TRADITIONAL INDIVIDUAL RETIREMENT ANNUITIES (TRADITIONAL IRAS)
CONTRIBUTIONS TO TRADITIONAL IRAS. Individuals may make three different types
of contributions to a traditional IRA:
o regular contributions out of earned income or compensation; or
o tax-free "rollover" contributions; or
o direct custodian-to-custodian transfers from other traditional IRAs ("direct
transfers").
REGULAR CONTRIBUTIONS TO TRADITIONAL IRAS
LIMITS ON CONTRIBUTIONS. Generally, $2,000 is the maximum amount that you may
contribute to all IRAs (including Roth IRAs) in any taxable year. When your
earnings are below $2,000, your earned income or compensation for the year is
the most you can contribute. This $2,000 limit does not apply to rollover
contributions or direct custodian-to-custodian transfers into a traditional
IRA. You cannot make regular traditional IRA contributions for the tax year in
which you reach age 70 1/2 or any tax year after that.
SPECIAL RULES FOR SPOUSES. If you are married and file a joint income tax
return, you and your spouse may combine your compensation to determine the
amount of regular contributions you are permitted to make to traditional IRAs
(and Roth IRAs discussed below). Even if one spouse has no compensation or
compensation under $2,000, married individuals filing jointly can contribute up
to $4,000 for any taxable year to any combination of traditional IRAs and Roth
IRAs. (Any contributions to Roth IRAs reduce the ability to contribute to
traditional IRAs and vice versa.) The maximum amount may be less if earned
income is less and the other spouse has made IRA contributions. No more than a
combined total of $2,000 can be contributed annually to either spouse's
traditional and Roth IRAs. Each spouse owns his or her traditional IRAs and
Roth IRAs even if the other spouse funded the contributions. A working spouse
age 70 1/2 or over can contribute up to the lesser of $2,000 or 100% of "earned
income" to a traditional IRA for a nonworking spouse until the year in which
the nonworking spouse reaches age 70 1/2.
DEDUCTIBILITY OF CONTRIBUTIONS. The amount of traditional IRA contributions
that you can deduct for a tax year depends on whether you are covered by an
employer-sponsored tax-favored retirement plan, as defined under special
federal income tax rules. Your Form W-2 will indicate whether or not you are
covered by such a retirement plan.
IF YOU ARE NOT COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, you
can make fully deductible contributions to your traditional IRAs for each tax
year up to $2,000 or, if less, your earned income.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
adjusted gross income (AGI) is BELOW THE LOWER DOLLAR FIGURE IN A PHASE-OUT
RANGE, you can make fully deductible contributions to your traditional IRAs.
For each tax year, your fully deductible contribution can be up to $2,000 or,
if less, your earned income.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
AGI falls within a PHASE-OUT range, you can make PARTIALLY DEDUCTIBLE
CONTRIBUTIONS to your traditional IRAs.
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IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
AGI falls ABOVE THE HIGHER FIGURE IN THE PHASE-OUT RANGE, you may not deduct
any of your regular contributions to your traditional IRAs.
If you are single and covered by a retirement plan during any part of the
taxable year, the deduction for traditional IRA contributions phases out with
AGI between $32,000 and $42,000 in 2000. This range will increase every year
until 2005 when the range is $50,000-$60,000.
If you are married and file a joint return, and you are covered by a retirement
plan during any part of the taxable year, the deduction for traditional IRA
contributions phases out with AGI between $52,000 and $62,000 in 2000. This
range will increase every year until 2007 when the range is $80,000-$100,000.
Married individuals filing separately and living apart at all times are not
considered married for purposes of this deductible contribution calculation.
Generally, the active participation in an employer-sponsored retirement plan of
an individual is determined independently for each spouse. Where spouses have
"married filing jointly" status, however, the maximum deductible traditional
IRA contribution for an individual who is not an active participant (but whose
spouse is an active participant) is phased out for taxpayers with AGI of
between $150,000 and $160,000.
To determine the deductible amount of the contribution in 2000, you determine
AGI and subtract $32,000 if you are single, or $52,000 if you are married and
file a joint return with your spouse. The resulting amount is your excess AGI.
You then determine the limit on the deduction for traditional IRA contributions
using the following formula:
($10,000-excess AGI) times $2,000 (or earned Equals the adjusted
---------------------- x income, if less) = deductible
divided by $10,000 contribution
limit
NONDEDUCTIBLE REGULAR CONTRIBUTIONS. If you are not eligible to deduct part or
all of the traditional IRA contribution, you may still make nondeductible
contributions on which earnings will accumulate on a tax-deferred basis. The
combined deductible and nondeductible contributions to your traditional IRA (or
the nonworking spouse's traditional IRA) may not, however, exceed the maximum
$2,000 per person limit. See "Excess contributions" below. You must keep your
own records of deductible and nondeductible contributions in order to prevent
double taxation on the distribution of previously taxed amounts. See
"Withdrawals, payments and transfers of funds out of traditional IRAs" below.
If you are making nondeductible contributions in any taxable year, or you have
made nondeductible contributions to a traditional IRA in prior years and are
receiving distributions from any traditional IRA, you must file the required
information with the IRS. Moreover, if you are making nondeductible traditional
IRA contributions, you must retain all income tax returns and records
pertaining to such contributions until interests in all traditional IRAs are
fully distributed.
WHEN YOU CAN MAKE REGULAR CONTRIBUTIONS. If you file your tax returns on a
calendar year basis like most taxpayers, you have until the April 15 return
filing deadline (without extensions) of the following calendar year to make
your regular traditional IRA contributions for a tax year.
ROLLOVERS AND TRANSFERS
Rollover contributions may be made to a traditional IRA from these sources:
o qualified plans;
o TSAs (including Internal Revenue Code Section 403(b)(7) custodial
accounts); and
o other traditional IRAs.
Any amount contributed to a traditional IRA after you reach age 70 1/2 must be
net of your required minimum distribution for the year in which the rollover or
direct transfer contribution is made.
ROLLOVERS FROM QUALIFIED PLANS OR TSAS
There are two ways to do rollovers:
o Do it yourself
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You actually receive a distribution that can be rolled over and you roll it
over to a traditional IRA within 60 days after the date you receive the
funds. The distribution from your qualified plan or TSA will be net of 20%
mandatory federal income tax withholding. If you want, you can replace the
withheld funds yourself and roll over the full amount.
o Direct rollover
You tell your qualified plan trustee or TSA issuer/custodian/fiduciary to
send the distribution directly to your traditional IRA issuer. Direct
rollovers are not subject to mandatory federal income tax withholding.
All distributions from a TSA or qualified plan are eligible rollover
distributions, unless the distribution is:
o only after-tax contributions you made to the plan; or
o "required minimum distributions" after age 70 1/2 or separation from
service; or
o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancies) of you
and your designated beneficiary; or
o a hardship withdrawal; or
o substantially equal periodic payments made for a specified period of 10
years or more; or
o corrective distributions that fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse;
or
o a qualified domestic relations order distribution to a beneficiary who is
not your current spouse or former spouse.
ROLLOVERS FROM TRADITIONAL IRAS TO TRADITIONAL IRAS
You may roll over amounts from one traditional IRA to one or more of your other
traditional IRAs if you complete the transaction within 60 days after you
receive the funds. You may make such a rollover only once in every 12-month
period for the same funds. Trustee-to-trustee or custodian-to-custodian direct
transfers are not rollover transactions. You can make these more frequently
than once in every 12-month period.
The surviving spouse beneficiary of a deceased individual can roll over or
directly transfer an inherited traditional IRA to one or more other traditional
IRAs. Also, in some cases, traditional IRAs can be transferred on a tax-free
basis between spouses or former spouses as a result of a court- ordered divorce
or separation decree.
EXCESS CONTRIBUTIONS
Excess contributions to IRAs are subject to a 6% excise tax for the year in
which made and for each year after until withdrawn. The following are excess
contributions to IRAs:
o regular contributions of more than $2,000; or
o regular contributions of more than earned income for the year, if that
amount is under $2,000; or
o regular contributions to a traditional IRA made after you reach age 70 1/2;
or
o rollover contributions of amounts which are not eligible to be rolled over.
For example, after-tax contributions to a qualified plan or minimum
distributions required to be made after age 70 1/2.
You can avoid the excise tax by withdrawing an excess contribution (rollover or
regular) before the due date (including extensions) for filing your federal
income tax return for the year. If it is an excess regular traditional IRA
contribution, you cannot take a tax deduction for the amount withdrawn. You do
not have to include the excess contribution withdrawn as part of your income.
It is also not subject to the 10% additional penalty tax on early
distributions, discussed below under "Early distribution penalty tax." You do
have to withdraw any earnings that are attributed to the excess contribution.
The withdrawn earnings would be included in your gross income and could be
subject to the 10% penalty tax.
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Even after the due date for filing your return, you may withdraw an excess
rollover contribution, without income inclusion or 10% penalty, if:
(1) the rollover was from a qualified retirement plan to a traditional IRA;
(2) the excess contribution was due to incorrect information that the plan
provided; and
(3) you took no tax deduction for the excess contribution.
RECHARACTERIZATIONS
Amounts that have been contributed as traditional IRA funds may subsequently be
treated as Roth IRA funds. Special federal income tax rules allow you to change
your mind again and have amounts that are subsequently treated as Roth IRA
funds, once again treated as traditional IRA funds. You do this by using the
forms we prescribe. This is referred to as having "recharacterized" your
contribution.
WITHDRAWALS, PAYMENTS AND TRANSFERS OF FUNDS OUT OF TRADITIONAL IRAS.
NO FEDERAL INCOME TAX LAW RESTRICTIONS ON WITHDRAWALS. You can withdraw any or
all of your funds from a traditional IRA at any time. You do not need to wait
for a special event like retirement.
TAXATION OF PAYMENTS. Earnings in traditional IRAs are not subject to federal
income tax until you or your beneficiary receive them. Taxable payments or
distributions include withdrawals from your contract, surrender of your
contract, and annuity payments from your contract. Death benefits are also
taxable. Except as discussed below, the total amount of any distribution from a
traditional IRA must be included in your gross income as ordinary income.
If you have ever made nondeductible IRA contributions to any traditional IRA
(it does not have to be to this particular traditional IRA contract), those
contributions are recovered tax free when you get distributions from any
traditional IRA. You must keep permanent tax records of all of your
nondeductible contributions to traditional IRAs. At the end of any year in
which you have received a distribution from any traditional IRA, you calculate
the ratio of your total nondeductible traditional IRA contributions (less any
amounts previously withdrawn tax free) to the total account balances of all
traditional IRAs you own at the end of the year plus all traditional IRA
distributions made during the year. Multiply this by all distributions from the
traditional IRA during the year to determine the nontaxable portion of each
distribution.
In addition, a distribution is not taxable if:
o the amount received is a withdrawal of excess contributions, as described
under "Excess contributions" above; or
o the entire amount received is rolled over to another traditional IRA (see
"Rollovers and transfers" above); or
o in certain limited circumstances, where the traditional IRA acts as a
"conduit," you roll over the entire amount into a qualified plan or TSA that
accepts rollover contributions. To get this conduit traditional IRA
treatment:
o the source of funds you used to establish the traditional IRA must have
been a rollover contribution from a qualified plan; and
o the entire amount received from the traditional IRA (including any
earnings on the rollover contribution) must be rolled over into another
qualified plan within 60 days of the date received.
Similar rules apply in the case of a TSA.
However, you may lose conduit treatment if you make an eligible rollover
distribution contribution to a traditional IRA and you commingle this
contribution with other contributions. In that case, you may not be able to
roll over these eligible rollover distribution contributions and earnings to
another qualified plan or TSA at a future date. The Rollover IRA contract can
be used as a conduit IRA if amounts are not commingled.
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Distributions from a traditional IRA are not eligible for favorable ten-year
averaging and long-term capital gain treatment available to certain
distributions from qualified plans.
REQUIRED MINIMUM DISTRIBUTIONS
LIFETIME REQUIRED MINIMUM DISTRIBUTIONS. You must start taking annual
distributions from your traditional IRAs beginning at age 70 1/2.
WHEN YOU HAVE TO TAKE THE FIRST REQUIRED MINIMUM DISTRIBUTION. The first
required minimum distribution is for the calendar year in which you turn age 70
1/2. You have the choice to take this first required minimum distribution
during the calendar year you actually reach age 70 1/2, or to delay taking it
until the first three-month period in the next calendar year (January 1 - April
1). Distributions must start no later than your Required Beginning Date, which
is April 1st of the calendar year after the calendar year in which you turn age
70 1/2. If you choose to delay taking the first annual minimum distribution,
then you will have to take two minimum distributions in that year - the delayed
one for the first year and the one actually for that year. Once minimum
distributions begin, they must be made at some time each year.
HOW YOU CAN CALCULATE REQUIRED MINIMUM DISTRIBUTIONS. There are two approaches
to taking required minimum distributions - "account-based" or "annuity-based."
Account-based method. If you choose an account-based method, you divide the
value of your traditional IRA as of December 31st of the past calendar year by
a life expectancy factor from IRS tables. This gives you the required minimum
distribution amount for that particular IRA for that year. The required minimum
distribution amount will vary each year as the account value and your life
expectancy factors change.
You have a choice of life expectancy factors, depending on whether you choose a
method based only on your life expectancy, or the joint life expectancies of
you and another individual. You can decide to "recalculate" your life
expectancy every year by using your current life expectancy factor. You can
decide instead to use the "term certain" method, where you reduce your life
expectancy by one every year after the initial year. If your spouse is your
designated beneficiary for the purpose of calculating annual account-based
required minimum distributions, you can also annually recalculate your spouse's
life expectancy if you want. If you choose someone who is not your spouse as
your designated beneficiary for the purpose of calculating annual account-based
required minimum distributions, you have to use the term certain method of
calculating that person's life expectancy. If you pick a nonspouse designated
beneficiary, you may also have to do another special calculation.
You can later apply your traditional IRA funds to a life annuity-based payout.
You can only do this if you already chose to recalculate your life expectancy
annually (and your spouse's life expectancy if you select a spousal joint
annuity). For example, if you anticipate exercising your guaranteed minimum
income benefit or selecting any other form of life annuity payout after you are
age 70 1/2, you must have elected to recalculate life expectancies.
Annuity-based method. If you choose an annuity-based method, you do not have to
do annual calculations. You apply the account value to an annuity payout for
your life or the joint lives of you and a designated beneficiary, or for a
period certain not extending beyond applicable life expectancies.
DO YOU HAVE TO PICK THE SAME METHOD TO CALCULATE YOUR REQUIRED MINIMUM
DISTRIBUTIONS FOR ALL OF YOUR TRADITIONAL IRAS AND OTHER RETIREMENT PLANS? No.
If you want, you can choose a different method and a different beneficiary for
each of your traditional IRAs and other retirement plans. For example, you can
choose an annuity payout from one IRA, a different annuity payout from a
qualified plan, and an account-based annual withdrawal from another IRA.
WILL WE PAY YOU THE ANNUAL AMOUNT EVERY YEAR FROM YOUR TRADITIONAL IRA BASED ON
THE METHOD YOU CHOOSE? No, unless you affirmatively select an annuity payout
option or an account-based withdrawal option such as our minimum distribution
withdrawal option. Because the
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options we offer do not cover every option permitted under federal income tax
rules, you may prefer to do your own required minimum distribution calculations
for one or more of your traditional IRAs.
WHAT IF YOU TAKE MORE THAN YOU NEED TO FOR ANY YEAR? The required minimum
distribution amount for your traditional IRAs is calculated on a year-by-year
basis. There are no carry-back or carry-forward provisions. Also, you cannot
apply required minimum distribution amounts you take from your qualified plans
to the amounts you have to take from your traditional IRAs and vice versa.
However, the IRS will let you calculate the required minimum distribution for
each traditional IRA that you maintain, using the method that you picked for
that particular IRA. You can add these required minimum distribution amount
calculations together. As long as the total amount you take out every year
satisfies your overall traditional IRA required minimum distribution amount,
you may choose to take your annual required minimum distribution from any one
or more traditional IRAs that you own.
WHAT IF YOU TAKE LESS THAN YOU NEED TO FOR ANY YEAR? Your IRA could be
disqualified, and you could have to pay tax on the entire value. Even if your
IRA is not disqualified, you could have to pay a 50% penalty tax on the
shortfall (required amount for traditional IRAs less amount actually taken). It
is your responsibility to meet the required minimum distribution rules. We will
remind you when our records show that your age 70 1/2 is approaching. If you do
not select a method with us, we will assume you are taking your required
minimum distribution from another traditional IRA that you own.
WHAT ARE THE REQUIRED MINIMUM DISTRIBUTION PAYMENTS AFTER YOU DIE? If you die
after either (a) the start of annuity payments, or (b) your Required Beginning
Date, your beneficiary must receive payment of the remaining values in the
contract at least as rapidly as under the distribution method before your
death. In some circumstances, your surviving spouse may elect to become the
owner of the traditional IRA and halt distributions until he or she reaches age
70 1/2.
If you die before your Required Beginning Date and before annuity payments
begin, federal income tax rules require complete distribution of your entire
value in the contract within five years after your death. Payments to a
designated beneficiary over the beneficiary's life or over a period certain
that does not extend beyond the beneficiary's life expectancy are also
permitted, if these payments start within one year of your death. A surviving
spouse beneficiary can also (a) delay starting any payments until you would
have reached age 70 1/2 or (b) roll over your traditional IRA into his or her
own traditional IRA.
SUCCESSOR ANNUITANT AND OWNER
If your spouse is the sole primary beneficiary and elects to become the
successor annuitant and owner, no death benefit is payable until your surviving
spouse's death.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
IRA death benefits are taxed the same as IRA distributions.
REQUIRED MINIMUM DISTRIBUTIONS UNDER THE ASSURED PAYMENT OPTION AND APO PLUS
Although the life contingent annuity portion of the Assured Payment Option and
APO Plus does not have a cash value, it will be assigned a value for tax
purposes. This value will generally be changed each year. When you determine
the amount of account-based required minimum distributions from your
traditional IRA this value must be included. This must be done even though the
life contingent annuity may not be providing a source of funds to satisfy the
required minimum distribution.
You will generally be required to determine your required minimum distribution
by annually recalculating your life expectancy. The Assured Payment Option and
APO Plus will not be available if you have previously made a different
election. Recalculation is no longer required once the only payments you or
your spouse receive are under the life contingent annuity.
If you surrender your contract, or withdraw any remaining account value before
your payments under the life contingent annuity begin, it may be necessary for
you to
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satisfy your required minimum distribution by moving forward the start date of
payments under your life contingent annuity. Or to the extent available, you
have to take distributions from other traditional IRA funds you may have. Or,
you may convert your traditional IRA life contingent annuity under the contract
to a nonqualified life contingent annuity. This would be viewed as a
distribution of the value of the life contingent annuity from your traditional
IRA, and therefore, would be a taxable event. However, since the life
contingent annuity would no longer be part of the traditional IRA, you would
not have to include its value when determining future required minimum
distributions.
If you have elected a joint and survivor form of the life contingent annuity,
the joint annuitant must be your spouse. You must determine your required
minimum distribution by annually recalculating both your life expectancy and
your spouse's life expectancy. The Assured Payment Option and APO Plus will not
be available if you have previously made a different election. Once the only
payments you or your spouse are receiving are under the life contingent annuity
recalculation is no longer required. In the event of your death or the death of
your spouse the value of such annuity will change. For this reason, it is
important that someone tell us if you or your spouse dies before the life
contingent annuity has started payments so that a lower valuation can be made.
Otherwise, a higher tax value may result in an overstatement of the amount that
would be necessary to satisfy your required minimum distribution amount.
Allocation of funds to the life contingent annuity may prevent the contract
from later receiving conduit IRA treatment.
BORROWING AND LOANS ARE PROHIBITED TRANSACTIONS
You cannot get loans from a traditional IRA. You cannot use a traditional IRA
as collateral for a loan or other obligation. If you borrow against your IRA or
use it as collateral, its tax-favored status will be lost as of the first day
of the tax year in which this prohibited event occurs. If this happens, you
must include the value of the traditional IRA in your federal gross income.
Also, the early distribution penalty tax of 10% will apply if you have not
reached age 59 1/2 before the first day of that tax year.
EARLY DISTRIBUTION PENALTY TAX
A penalty tax of 10% of the taxable portion of a distribution applies to
distributions from a traditional IRA made before you reach age 59 1/2. The
extra penalty tax does not apply to pre-age 59 1/2 distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o used to pay certain extraordinary medical expenses (special federal income
tax definition); or
o used to pay medical insurance premiums for unemployed individuals (special
federal income tax definition); or
o used to pay certain first-time home buyer expenses (special federal income
tax definition; $10,000 lifetime total limit for these distributions from
all your traditional and Roth IRAs); or
o used to pay certain higher education expenses (special federal income tax
definition); or
o in the form of substantially equal periodic payments made at least annually
over your life (or your life expectancy), or over the joint lives of you and
your beneficiary (or your joint life expectancy) using an IRS-approved
distribution method.
To meet this last exception, you could elect to apply your contract value to an
Income Manager (life annuity with a period certain) payout annuity contract
(level payments version). You could also elect the substantially equal
withdrawals option. We will calculate the substantially equal annual payments
under a method we select based on guidelines issued by the IRS (currently
contained in IRS Notice 89-25, Question and Answer 12). Although substantially
equal withdrawals and Income Manager payments are not subject to the 10%
penalty tax, they are taxable as discussed in "Withdrawals, payments and
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transfers of funds out of traditional IRAs" above. Once substantially equal
withdrawals or Income Manager annuity payments begin, the distributions should
not be stopped or changed until after the later of your reaching age 59 1/2 or
five years after the date of the first distribution, or the penalty tax,
including an interest charge for the prior penalty avoidance, may apply to all
prior distributions under either option. Also, it is possible that the IRS
could view any additional withdrawal or payment you take from your contract as
changing your pattern of substantially equal withdrawals or Income Manager
payments for purposes of determining whether the penalty applies.
ROTH INDIVIDUAL RETIREMENT ANNUITIES (ROTH IRAS)
This section of the prospectus covers some of the special tax rules that apply
to Roth IRAs. If the rules are the same as those that apply to the traditional
IRA, we will refer you to the same topic under "traditional IRAs."
The Equitable Accumulator Roth IRA contract is designed to qualify as a Roth
individual retirement annuity under Sections 408A and 408(b) of the Internal
Revenue Code.
CONTRIBUTIONS TO ROTH IRAS
Individuals may make four different types of contributions to a Roth IRA:
o regular after-tax contributions out of earnings; or
o taxable rollover contributions from traditional IRAs ("conversion"
contributions); or
o tax-free rollover contributions from other Roth IRAs; or
o tax-free direct custodian-to-custodian transfers from other Roth IRAs
("direct transfers").
Regular after-tax, direct transfer, and rollover contributions may be made to a
Flexible Premium Roth IRA contract. We only permit direct transfer and rollover
contributions under the Roth Conversion IRA contract. See "Rollovers and direct
transfers" below. If you use the forms we require, we will also accept
traditional IRA funds which are subsequently recharacterized as Roth IRA funds
following special federal income tax rules.
REGULAR CONTRIBUTIONS TO ROTH IRAS
LIMITS ON REGULAR CONTRIBUTIONS. Generally, $2,000 is the maximum amount that
you may contribute to all IRAs (including Roth IRAs) in any taxable year. This
$2,000 limit does not apply to rollover contributions or direct
custodian-to-custodian transfers into a Roth IRA. Any contributions to Roth
IRAs reduce your ability to contribute to traditional IRAs and vice versa. When
your earnings are below $2,000, your earned income or compensation for the year
is the most you can contribute. If you are married and file a joint income tax
return, you and your spouse may combine your compensation to determine the
amount of regular contributions you are permitted to make to Roth IRAs and
traditional IRAs. See the discussion above under traditional IRAs.
With a Roth IRA, you can make regular contributions when you reach 70 1/2, as
long as you have sufficient earnings. But, you cannot make contributions for
any year that:
o your federal income tax filing status is "married filing jointly" and your
adjusted gross income is over $160,000; or
o your federal income tax filing status is "single" and your adjusted gross
income is over $110,000.
However, you can make regular Roth IRA contributions in reduced amounts when:
o your federal income tax filing status is "married filing jointly" and your
adjusted gross income is between $150,000 and $160,000; or
o your federal income tax filing status is "single" and your adjusted gross
income is between $95,000 and $110,000.
If you are married and filing separately and your adjusted gross income is
between $0 and $10,000 the amount of regular contributions you are permitted to
make is phased out. If your adjusted gross income is more than $10,000 you
cannot make regular Roth IRA contributions.
WHEN YOU CAN MAKE CONTRIBUTIONS. Same as traditional IRAs.
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DEDUCTIBILITY OF CONTRIBUTIONS. Roth IRA contributions are not tax deductible.
ROLLOVERS AND DIRECT TRANSFERS
WHAT IS THE DIFFERENCE BETWEEN ROLLOVER AND DIRECT TRANSFER TRANSACTIONS? You
may make rollover contributions to a Roth IRA from only two sources:
o another Roth IRA ("tax-free rollover contribution"); or
o another traditional IRA, including a SEP-IRA or SIMPLE-IRA, in a taxable
conversion rollover ("conversion contribution").
You may not make contributions to a Roth IRA from a qualified plan under
Section 401(a) of the Internal Revenue Code, or a TSA under Section 403(b) of
the Internal Revenue Code. You may make direct transfer contributions to a Roth
IRA only from another Roth IRA.
The difference between a rollover transaction and a direct transfer transaction
is the following: in a rollover transaction you actually take possession of the
funds rolled over, or are considered to have received them under tax law in the
case of a change from one type of plan to another. In a direct transfer
transaction, you never take possession of the funds, but direct the first Roth
IRA custodian, trustee, or issuer to transfer the first Roth IRA funds directly
to Equitable Life, as the Roth IRA issuer. You can make direct transfer
transactions only between identical plan types (for example, Roth IRA to Roth
IRA). You can also make rollover transactions between identical plan types.
However, you can only use rollover transactions between different plan types
(for example, traditional IRA to Roth IRA).
You may make both Roth IRA to Roth IRA rollover transactions and Roth IRA to
Roth IRA direct transfer transactions. This can be accomplished on a completely
tax-free basis. However, you may make Roth IRA to Roth IRA rollover
transactions only once in any 12-month period for the same funds.
Trustee-to-trustee or custodian-to-custodian direct transfers can be made more
frequently than once a year. Also, if you send us the rollover contribution to
apply it to a Roth IRA, you must do so within 60 days after you receive the
proceeds from the original IRA to get rollover treatment.
The surviving spouse beneficiary of a deceased individual can roll over or
directly transfer an inherited Roth IRA to one or more other Roth IRAs. In some
cases, Roth IRAs can be transferred on a tax-free basis between spouses or
former spouses as a result of a court-ordered divorce or separation decree.
CONVERSION CONTRIBUTIONS TO ROTH IRAS.
In a conversion rollover transaction, you withdraw (or are considered to have
withdrawn) all or a portion of funds from a traditional IRA you maintain and
convert it to a Roth IRA within 60 days after you receive (or are considered to
have received) the traditional IRA proceeds. Unlike a rollover from a
traditional IRA to another traditional IRA, the conversion rollover transaction
is not tax-free. Instead, the distribution from the traditional IRA is
generally fully taxable. For this reason, we are required to withhold 10%
federal income tax from the amount converted unless you elect out of such
withholding. If you have ever made nondeductible regular contributions to any
traditional IRA - whether or not it is the traditional IRA you are converting -
a pro rata portion of the distribution is tax free.
There is, however, no early distribution penalty tax on the traditional IRA
withdrawal that you are converting to a Roth IRA, even if you are under age
59 1/2.
You cannot make conversion contributions to a Roth IRA for any taxable year in
which your adjusted gross income exceeds $100,000. For this purpose, your
adjusted gross income is computed without the gross income stemming from the
traditional IRA conversion. You also cannot make conversion contributions to a
Roth IRA for any taxable year in which your federal income tax filing status is
"married filing separately."
Finally, you cannot make conversion contributions to a Roth IRA to the extent
that the funds in your traditional IRA are subject to the annual required
minimum distribution rule applicable to traditional IRAs beginning at age
70 1/2.
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WITHDRAWALS, PAYMENTS AND TRANSFERS OF FUNDS OUT OF ROTH IRAS
NO FEDERAL INCOME TAX LAW RESTRICTIONS ON WITHDRAWALS. You can withdraw any or
all of your funds from a Roth IRA at any time; you do not need to wait for a
special event like retirement.
DISTRIBUTIONS FROM ROTH IRAS
Distributions include withdrawals from your contract, surrender of your
contract, and annuity payments from your contract. Death benefits are also
distributions.
The following distributions from Roth IRAs are free of income tax:
o Rollover from a Roth IRA to another Roth IRA;
o Direct transfers from a Roth IRA to another Roth IRA;
o Qualified distributions from a Roth IRA; and
o Return of excess contributions or amounts recharacterized to a traditional
IRA.
QUALIFIED DISTRIBUTIONS FROM ROTH IRAS. Qualified distributions from Roth IRAs
made because of one of the following four qualifying events or reasons are not
includable in income:
o you reach age 59 1/2; or
o you die; or
o you become disabled (special federal income tax definition); or
o your distribution is a "qualified first-time homebuyer distribution"
(special federal income tax definition; $10,000 lifetime total limit for
these distributions from all of your traditional and Roth IRAs).
You also have to meet a five-year aging period. A qualified distribution is any
distribution made after the five-taxable-year period beginning with the first
taxable year for which you made any contribution to any Roth IRA (whether or
not the one from which the distribution is being made). It is not possible to
have a tax-free qualified distribution before the year 2003 because of the
five-year aging requirement.
NONQUALIFIED DISTRIBUTIONS FROM ROTH IRAS.
Nonqualified distributions from Roth IRAs are distributions that do not meet
the qualifying event and five-year aging period tests described above. Such
distributions are potentially taxable as ordinary income. Nonqualified
distributions receive return-of-investment-first treatment. Only the difference
between the amount of the distribution and the amount of contributions to all
of your Roth IRAs is taxable. You have to reduce the amount of contributions to
all of your Roth IRAs to reflect any previous tax-free recoveries.
You must keep your own records of regular and conversion contributions to all
Roth IRAs to assure appropriate taxation. You may have to file information on
your contributions to and distributions from any Roth IRA on your tax return.
You may have to retain all income tax returns and records pertaining to such
contributions and distributions until your interests in all Roth IRAs are
distributed.
Like traditional IRAs, taxable distributions from a Roth IRA are not entitled
to the special favorable five-year averaging method (or, in certain cases,
favorable ten-year averaging and long-term capital gain treatment) available in
certain cases to distributions from qualified plans.
REQUIRED MINIMUM DISTRIBUTIONS AT DEATH
Same as traditional IRA under "What are the required minimum distribution
payments after you die?" Lifetime required minimum distributions do not apply.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
Distributions to a beneficiary generally receive the same tax treatment as if
the distribution had been made to you.
BORROWING AND LOANS ARE PROHIBITED TRANSACTIONS
Same as traditional IRA.
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EXCESS CONTRIBUTIONS
Generally the same as traditional IRA.
Excess rollover contributions to Roth IRAs are contributions not eligible to be
rolled over (for example, conversion contributions from a traditional IRA if
your adjusted gross income is in excess of $100,000 in the conversion year).
You can withdraw or recharacterize any contribution to a Roth IRA before the
due date (including extensions) for filing your federal income tax return for
the tax year. If you do this, you must also withdraw or recharacterize any
earnings attributable to the contribution.
EARLY DISTRIBUTION PENALTY TAX
Same as traditional IRA.
For Roth IRAs, special penalty rules may apply to amounts withdrawn
attributable to 1998 conversion rollovers.
SPECIAL RULES FOR NONQUALIFIED CONTRACTS IN QUALIFIED PLANS
Under QP contracts your plan administrator or trustee notifies you as to tax
consequences. See Appendix I.
TAX-SHELTERED ANNUITY CONTRACTS (TSAS)
GENERAL
This section of the prospectus covers some of the special tax rules that apply
to TSA contracts under Section 403(b) of the Internal Revenue Code (TSAs). If
the rules are the same as those that apply to another kind of contract, for
example, traditional IRAs, we will refer you to the same topic under
"traditional IRAs."
CONTRIBUTIONS TO TSAS
There are two ways you can make contributions to this Equitable Accumulator
Rollover TSA contract:
o a rollover from another TSA contract or arrangement that meets the
requirements of Section 403(b) of the Internal Revenue Code, or
o a full or partial direct transfer of assets ("direct transfer") from another
contract or arrangement that meets the requirements of Section 403(b) of the
Internal Revenue Code by means of IRS Revenue Ruling 90-24.
With appropriate written documentation satisfactory to us, we will accept
rollover contributions from "conduit IRAs" for TSA funds.
If you make a direct transfer, you must fill out our transfer form.
EMPLOYER-REMITTED CONTRIBUTIONS. The Equitable Accumulator Rollover TSA
contract does not accept employer-remitted contributions. However, we provide
the following discussion as part of our description of restrictions on the
distribution of funds directly transferred, which include employer-remitted
contributions to other TSAs.
Employer-remitted contributions to TSAs made through the employer's payroll are
subject to annual limits. (Tax-free transfer or tax-deferred rollover
contributions from another 403(b) arrangement are not subject to these annual
contribution limits.) Commonly, some or all of the contributions made to a TSA
are made under a salary reduction agreement between the employee and the
employer. These contributions are called "salary reduction" or "elective
deferral" contributions. However, a TSA can also be wholly or partially funded
through nonelective employer contributions or after-tax employee contributions.
Amounts attributable to salary reduction contributions to TSAs are generally
subject to withdrawal restrictions. Also, all amounts attributable to
investments in a 403(b)(7) custodial account are subject to withdrawal
restrictions discussed below.
ROLLOVER OR DIRECT TRANSFER CONTRIBUTIONS. You may make rollover contributions
to your Equitable Accumulator Rollover TSA contract from TSAs under Section
403(b) of the Internal Revenue Code. Generally, you may make a rollover
contribution to a TSA when you have a distributable event from an existing TSA
as a result of your:
o termination of employment with the employer who provided the TSA funds; or
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o reaching age 59 1/2 even if you are still employed; or
o disability (special federal income tax definition).
A transfer occurs when changing the funding vehicle, even if there is no
distributable event. Under a direct transfer, you do not receive a
distribution. We accept direct transfers of TSA funds under Revenue Ruling
90-24 only if:
o you give us acceptable written documentation as to the source of the funds,
and
o the Equitable Accumulator contract receiving the funds has provisions at
least as restrictive as the source contract.
Before you transfer funds to an Equitable Accumulator Rollover TSA contract,
you may have to obtain your employer's authorization or demonstrate that you do
not need employer authorization. For example, the transferring TSA may be
subject to Title I of ERISA, if the employer makes matching contributions to
salary reduction contributions made by employees. In that case, the employer
must continue to approve distributions from the plan or contract.
Your contribution to the Equitable Accumulator Rollover TSA must be net of the
required minimum distribution for the tax year in which we issue the contract
if:
o you are or will be at least age 70 1/2 in the current calendar year, and
o you have separated from service with the employer who provided the funds to
purchase the TSA you are transferring or rolling over to the Equitable
Accumulator Rollover TSA.
This rule applies regardless of whether the source of funds is a:
o rollover by check of the proceeds from another TSA; or
o direct rollover from another TSA; or
o direct transfer under Revenue Ruling 90-24 from another TSA.
Further, you must use the same elections regarding recalculation of your life
expectancy (and if applicable, your spouse's life expectancy) if you have
already begun to receive required minimum distributions from or with respect to
the TSA from which you are making your contribution to the Equitable
Accumulator Rollover TSA. You must also elect or have elected a minimum
distribution calculation method requiring recalculation of your life expectancy
(and if applicable, your spouse's life expectancy) if you elect an annuity
payout for the funds in this contract subsequent to this year.
DISTRIBUTIONS FROM TSAS
GENERAL. Depending on the terms of the employer plan and your employment
status, you may have to get your employer's consent to take a loan or
withdrawal. Your employer will tell us this when you establish the TSA through
a direct transfer.
WITHDRAWAL RESTRICTIONS. If this is a Revenue Ruling 90-24 direct transfer, we
will treat all amounts transferred to this contract and any future earnings on
the amount transferred as not eligible for withdrawal until one of the
following events happens:
o you are separated from service with the employer who provided the funds to
purchase the TSA you are transferring to the Equitable Accumulator Rollover
TSA; or
o you reach age 59 1/2; or
o you die; or
o you become disabled (special federal income tax definition); or
o you take a hardship withdrawal (special federal income tax definition).
If any portion of the funds directly transferred to your TSA contract is
attributable to amounts that you invested in a 403(b)(7) custodial account,
such amounts, including earnings, are subject to withdrawal restrictions. With
respect to the portion of the funds that were never invested in a 403(b)(7)
custodial account, these restrictions apply to the salary reduction (elective
deferral) contributions to a TSA annuity contract you made and any earnings on
them. These restrictions do not apply to the amount directly transferred to
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your TSA contract that represents your December 31, 1988 account balance
attributable to salary reduction contributions to a TSA annuity contract and
earnings. To take advantage of this grandfathering you must properly notify us
in writing at our Processing Office of your December 31, 1988 account balance
if you have qualifying amounts transferred to your TSA contract.
THIS PARAGRAPH APPLIES ONLY TO PARTICIPANTS IN A TEXAS OPTIONAL RETIREMENT
PROGRAM. Texas Law permits withdrawals only after one of the following
distributable events occur:
(1) the requirements for minimum distribution (discussed under "Required
minimum distributions" below) are met; or
(2) death; or
(3) retirement; or
(4) termination of employment in all Texas public institutions of higher
education.
For you to make a withdrawal, we must receive a properly completed written
acknowledgement from the employer. If a distributable event occurs before you
are vested, we will refund to the employer any amounts provided by an
employer's first-year matching contribution. We reserve the right to change
these provisions without your consent, but only to the extent necessary to
maintain compliance with applicable law. Loans are not permitted under Texas
Optional Retirement Programs.
TAX TREATMENT OF DISTRIBUTIONS. Amounts held under TSAs are generally not
subject to federal income tax until benefits are distributed. Distributions
include withdrawals from your TSA contract and annuity payments from your TSA
contract. Death benefits paid to a beneficiary are also taxable distributions.
Unless an exception applies, amounts distributed from TSAs are includable in
gross income as ordinary income. Distributions from TSAs may be subject to 20%
federal income tax withholding. See "Federal and state income tax withholding
and information reporting" below. In addition, TSA distributions may be subject
to additional tax penalties.
If you have made after-tax contributions, you will have a tax basis in your TSA
contract, which will be recovered tax-free. Since we do not track your
investment in the contract, if any, it is your responsibility to determine how
much of the distribution is taxable.
DISTRIBUTIONS BEFORE ANNUITY PAYMENTS BEGIN. On a total surrender, the amount
received in excess of the investment in the contract is taxable. We will report
the total amount of the distribution. The amount of any partial distribution
from a TSA prior to the annuity starting date is generally taxable, except to
the extent that the distribution is treated as a withdrawal of after-tax
contributions. Distributions are normally treated as pro rata withdrawals of
after-tax contributions and earnings on those contributions.
ANNUITY PAYMENTS. If you elect an annuity payout option, you will recover any
investment in the contract as each payment is received by dividing the
investment in the contract by an expected return determined under an IRS table
prescribed for qualified annuities. The amount of each payment not excluded
from income under this exclusion ratio is fully taxable. The full amount of the
payments received after your investment in the contract is recovered is fully
taxable. If you (and your beneficiary under a joint and survivor annuity) die
before recovering the full investment in the contract, a deduction is allowed
on your (or your beneficiary's) final tax return.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
Death benefit distributions from a TSA generally receive the same tax treatment
as distributions during your lifetime. In some instances, distributions from a
TSA made to your surviving spouse may be rolled over to a traditional IRA.
LOANS FROM TSAS
You may take loans from a TSA unless restricted by the employer (for example,
under an employer plan subject to ERISA). If you cannot take a loan, or cannot
take a loan
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without approval from the employer who provided the funds, we will have this
information in our records based on what you and the employer who provided the
TSA funds told us when you purchased your contract.
Loans are generally not treated as a taxable distribution. If the amount of the
loan exceeds permissible limits under federal income tax rules when made, the
amount of the excess is treated (solely for tax purposes) as a taxable
distribution. Additionally, if the loan is not repaid at least quarterly,
amortizing (paying down) interest and principal, the amount not repaid when due
will be treated as a taxable distribution. Under Proposed Treasury Regulations
the entire unpaid balance of the loan is includable in income in the year of
the default.
TSA loans are subject to federal income tax limits and may also be subject to
the limits of the plan from which the funds came. Federal income tax rule
requirements apply even if the plan is not subject to ERISA. For example, loans
offered by TSAs are subject to the following conditions:
o The amount of a loan to a participant, when combined with all other loans to
the participant from all qualified plans of the employer, cannot exceed the
lesser of:
(1) the greater of $10,000 or 50% of the participant's nonforfeitable
accrued benefits; and
(2) $50,000 reduced by the excess (if any) of the highest outstanding loan
balance over the previous twelve months over the outstanding loan
balance of plan loans on the date the loan was made.
o In general, the term of the loan cannot exceed five years unless the loan is
used to acquire the participant's primary residence. Equitable Accumulator
Rollover TSA contracts have a term limit of 10 years for loans used to
acquire the participant's primary residence.
o All principal and interest must be amortized in substantially level payments
over the term of the loan, with payments being made at least quarterly.
The amount borrowed and not repaid may be treated as a distribution if:
o the loan does not qualify under the conditions above;
o the participant fails to repay the interest or principal when due; or
o in some instances, the participant separates from service with the employer
who provided the funds or the plan is terminated.
In this case, the participant may have to include the unpaid amount due as
ordinary income. In addition, the 10% early distribution penalty tax may apply.
The amount of the unpaid loan balance is reported to the IRS on Form 1099-R as
a distribution.
TAX-DEFERRED ROLLOVERS AND DIRECT TRANSFERS
You may roll over any "eligible rollover distribution" from a TSA into another
eligible retirement plan, either directly or within 60 days of your receiving
the distribution. To the extent rolled over, a distribution remains
tax-deferred.
You may roll over a distribution from a TSA to another TSA or to a traditional
IRA. A spousal beneficiary may roll over death benefits only to a traditional
IRA.
The taxable portion of most distributions will be eligible for rollover, except
as specifically excluded under federal income tax rules. Distributions that you
cannot roll over generally include periodic payments for life or for a period
of 10 years or more, hardship withdrawals, and required minimum distributions
under federal income tax rules.
Direct transfers of TSA funds from one TSA to another under Revenue Ruling
90-24 are not distributions.
REQUIRED MINIMUM DISTRIBUTIONS
Generally the same as traditional IRA with these differences:
WHEN YOU HAVE TO TAKE THE FIRST REQUIRED MINIMUM DISTRIBUTION. The minimum
distribution rules force TSA participants to start calculating and taking
annual distributions from their TSAs by a required date. Generally, you must
take the first required minimum distribution for the calendar year in which you
turn age 70 1/2. You may be
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able to delay the start of required minimum distributions for all or part of
your account balance until after age 70 1/2, as follows:
o For TSA participants who have not retired from service with the employer who
provided the funds for the TSA by the calendar year the participant turns
age 70 1/2, the required beginning date for minimum distributions is
extended to April 1 following the calendar year of retirement.
o TSA plan participants may also delay the start of required minimum
distributions to age 75 of the portion of their account value attributable
to their December 31, 1986 TSA account balance, even if retired at age 70
1/2. We will know whether or not you qualify for this exception because it
will only apply to people who establish their Equitable Accumulator Rollover
TSA by direct Revenue Ruling 90-24 transfers. If you do not give us the
amount of your December 31, 1986 account balance that is being transferred
to the Equitable Accumulator Rollover TSA on the form used to establish the
TSA, you do not qualify.
SPOUSAL CONSENT RULES
This will only apply to you if you establish your Equitable Accumulator
Rollover TSA by direct Revenue Ruling 90-24 transfer. Your employer will tell
us on the form used to establish the TSA whether or not you need to get spousal
consent for loans, withdrawals, or other distributions. If you do, you will
need such consent if you are married when you request a withdrawal under the
TSA contract. In addition, unless you elect otherwise with the written consent
of your spouse, the retirement benefits payable under the plan must be paid in
the form of a qualified joint and survivor annuity. A qualified joint and
survivor annuity is payable for the life of the annuitant with a survivor
annuity for the life of the spouse in an amount not less than one-half of the
amount payable to the annuitant during his or her lifetime. In addition, if you
are married, the beneficiary must be your spouse, unless your spouse consents
in writing to the designation of another beneficiary.
If you are married and you die before annuity payments have begun, payments
will be made to your surviving spouse in the form of a life annuity unless at
the time of your death a contrary election was in effect. However, your
surviving spouse may elect, before payments begin, to receive payments in any
form permitted under the terms of the TSA contract and the plan of the employer
who provided the funds for the TSA.
EARLY DISTRIBUTION PENALTY TAX
A penalty tax of 10% of the taxable portion of a distribution applies to
distributions from a TSA before you reach age 59 1/2. This is in addition to
any income tax. There are exceptions to the extra penalty tax. No penalty tax
applies to pre-age 59 1/2 distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o to pay for certain extraordinary medical expenses (special federal income
tax definition); or
o if you are separated from service, any form of payout after you are age 55;
or
o only if you are separated from service, a payout in the form of
substantially equal periodic payments made at least annually over your life
(or your life expectancy), or over the joint lives of you and your
beneficiary (or your joint life expectancy) using an IRS-approved
distribution method.
FEDERAL AND STATE INCOME TAX WITHHOLDING
AND INFORMATION REPORTING
We must withhold federal income tax from distributions from annuity contracts.
You may be able to elect out of this income tax withholding in some cases.
Generally, we do not have to withhold if your distributions are not taxable.
The rate of withholding will depend on the type of distribution and, in certain
cases, the amount of your distribution. Any income tax withheld is a credit
against your income tax liability. If you do not have sufficient income tax
withheld or do not make sufficient estimated income tax payments, you may incur
penalties under the estimated income tax rules.
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You must file your request not to withhold in writing before the payment or
distribution is made. Our Processing Office will provide forms for this
purpose. You cannot elect out of withholding unless you provide us with your
correct Taxpayer Identification Number and a United States residence address.
You cannot elect out of withholding if we are sending the payment out of the
United States.
You should note the following special situations:
o We might have to withhold and/or report on amounts we pay under a free look
or cancellation.
o We are generally required to withhold on conversion rollovers of traditional
IRAs to Roth IRAs, as it is considered a withdrawal from the traditional IRA
and is taxable.
o We are required to withhold on the gross amount of a distribution from a
Roth IRA unless you elect out of withholding. This may result in tax being
withheld even though the Roth IRA distribution is not taxable in whole or in
part.
Special withholding rules apply to foreign recipients and United States
citizens residing outside the United States. We do not discuss these rules
here. Certain states have indicated that state income tax withholding will also
apply to payments from the contracts made to residents. In some states, you may
elect out of state withholding, even if federal withholding applies. Generally,
an election out of federal withholding will also be considered an election out
of state withholding. If you need more information concerning a particular
state or any required forms, call our Processing Office at the toll-free
number.
FEDERAL INCOME TAX WITHHOLDING ON PERIODIC ANNUITY PAYMENTS
We withhold differently on "periodic" and "non-periodic" payments. For a
periodic annuity payment, for example, unless you specify a different number of
withholding exemptions, we withhold assuming that you are married and claiming
three withholding exemptions. If you do not give us your correct Taxpayer
Identification Number, we withhold as if you are single with no exemptions.
Based on the assumption that you are married and claiming three withholding
exemptions, if you receive less than $14,880 in periodic annuity payments in
2000, your payments will generally be exempt from federal income tax
withholding. You could specify a different choice of withholding exemption or
request that tax be withheld. Your withholding election remains effective
unless and until you revoke it. You may revoke or change your withholding
election at any time.
FEDERAL INCOME TAX WITHHOLDING ON NON-PERIODIC ANNUITY PAYMENTS (WITHDRAWALS)
For a non-periodic distribution (total surrender or partial withdrawal), we
generally withhold at a flat 10% rate. We apply that rate to the taxable amount
in the case of nonqualified contracts, and to the payment amount in the case of
IRAs and Roth IRAs.
You cannot elect out of withholding if the payment is an eligible rollover
distribution from a qualified plan or TSA. If a non-periodic distribution from
a qualified plan or TSA is not an eligible rollover distribution then the 10%
withholding rate applies.
MANDATORY WITHHOLDING FROM TSA AND QUALIFIED PLAN DISTRIBUTIONS
Unless you have the distribution go directly to the new plan, eligible rollover
distributions from qualified plans and TSAs are subject to mandatory 20%
withholding. An eligible rollover distribution from a TSA can be rolled over to
another TSA or a traditional IRA. An eligible rollover distribution from a
qualified plan can be rolled over to another qualified plan or traditional IRA.
All distributions from a TSA or qualified plan are eligible rollover
distributions unless they are on the following list of exceptions:
o any after-tax contributions you made to the plan; or
o any distributions which are required minimum distributions after age 70 1/2
or separation from service; or
o hardship withdrawals; or
o substantially equal periodic payments made at least
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annually for your life (or life expectancy) or the joint lives (or joint
life expectancy) of you and your designated beneficiary; or
o substantially equal periodic payments made for a specified period of 10
years or more; or
o corrective distributions that fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse;
or
o a qualified domestic relations order distribution to a beneficiary who is
not your current spouse or former spouse.
A death benefit payment to your surviving spouse, or a qualified domestic
relations order distribution to your current or former spouse, may be a
distribution subject to mandatory 20% withholding.
IMPACT OF TAXES TO EQUITABLE LIFE
The contracts provide that we may charge Separate Account No. 45 for taxes. We
do not now, but may in the future set up reserves for such taxes.
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ABOUT OUR SEPARATE ACCOUNT NO. 45
Each variable investment option is a subaccount of our Separate Account No. 45.
We established Separate Account No. 45 in 1994 under special provisions of the
New York Insurance Law. These provisions prevent creditors from any other
business we conduct from reaching the assets we hold in our variable investment
options for owners of our variable annuity contracts. We are the legal owner of
all of the assets in Separate Account No. 45 and may withdraw any amounts that
exceed our reserves and other liabilities with respect to variable investment
options under our contracts. The results of Separate Account No. 45's
operations are accounted for without regard to Equitable Life's other
operations.
Separate Account No. 45 is registered under the Investment Company Act of 1940
and is classified by that act as a "unit investment trust." The SEC, however,
does not manage or supervise Equitable Life or Separate Account No. 45.
Each subaccount (variable investment option) within Separate Account No. 45
invests solely in class IB shares issued by the corresponding portfolio of EQ
Advisors Trust.
We reserve the right subject to compliance with laws that apply:
(1) to add variable investment options to, or to remove variable investment
options from, Separate Account No. 45, or to add other separate
accounts;
(2) to combine any two or more variable investment options;
(3) to transfer the assets we determine to be the shares of the class of
contracts to which the contracts belong from any variable investment
option to another variable investment option;
(4) to operate Separate Account No. 45 or any variable investment option as a
management investment company under the Investment Company Act of 1940
(in which case, charges and expenses that otherwise would be assessed
against an underlying mutual fund would be assessed against Separate
Account No. 45 or a variable investment option directly);
(5) to deregister Separate Account No. 45 under the Investment Company Act of
1940;
(6) to restrict or eliminate any voting rights as to Separate Account No. 45;
and
(7) to cause one or more variable investment options to invest some or all of
their assets in one or more other trusts or investment companies.
ABOUT EQ ADVISORS TRUST
EQ Advisors Trust is registered under the Investment Company Act of 1940. It is
classified as an "open-end management investment company," more commonly called
a mutual fund. EQ Advisors Trust issues different shares relating to each
portfolio.
Equitable Life serves as the investment manager of EQ Advisors Trust. As such,
Equitable Life oversees the activities of the investment advisers with respect
to EQ Advisors Trust and is responsible for retaining or discontinuing the
services of those advisers. (Prior to September 1999 EQ Financial Consultants,
Inc., the predecessor to AXA Advisors, LLC and an affiliate of Equitable Life,
served as investment manager to EQ Advisors Trust.)
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999 the Alliance portfolios (other than EQ/Alliance Premier
Growth) were part of The Hudson River Trust. On October 18, 1999, these
portfolios became corresponding portfolios of EQ Advisors Trust.
EQ Advisors Trust does not impose sales charges or "loads" for buying and
selling its shares. All dividends and other distributions on Trust shares are
reinvested in full. The Board of Trustees of EQ Advisors Trust may establish
additional portfolios or eliminate existing portfolios at any time. More
detailed information about EQ Advisors Trust, the portfolio investment
objectives, policies, restrictions, risks, expenses, their Rule 12b-1 Plan
relating to its Class IB shares, and other aspects of its operations, appears
in the prospectus for EQ Advisors Trust attached at the end of this prospectus,
or in its SAI which is available upon request.
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ABOUT OUR FIXED MATURITY OPTIONS
RATES TO MATURITY AND PRICE PER $100 OF MATURITY VALUE
We can determine the amount required to be allocated to one or more fixed
maturity options in order to produce specified maturity values. For example, we
can tell you how much you need to allocate per $100 of maturity value.
The rates to maturity for new allocations as of March 15, 2000 and the related
price per $100 of maturity value were as follows:
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FIXED MATURITY
OPTIONS WITH
FEBRUARY 15TH RATE TO MATURITY PRICE
MATURITY DATE OF AS OF PER $100 OF
MATURITY YEAR MARCH 15, 2000 MATURITY VALUE
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2001 4.20% $ 96.27
2002 4.91% $ 91.19
2003 5.43% $ 85.68
2004 5.51% $ 81.02
2005 5.62% $ 76.39
2006 5.70% $ 72.00
2007 5.77% $ 67.81
2008 5.83% $ 63.82
2009 5.92% $ 59.84
2010 5.98% $ 56.18
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Available under the Assured Payment Option and APO Plus
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FIXED MATURITY
OPTIONS WITH
FEBRUARY 15TH RATE TO MATURITY PRICE
MATURITY DATE OF AS OF PER $100 OF
MATURITY YEAR MARCH 15, 2000 MATURITY VALUE
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2011 5.47% $ 55.88
2012 5.47% $ 52.98
2013 5.47% $ 50.22
2014 5.47% $ 47.62
2015 5.47% $ 45.15
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HOW WE DETERMINE THE MARKET VALUE ADJUSTMENT
We use the following procedure to calculate the market value adjustment (up or
down) we make if you withdraw all of your value from a fixed maturity option
before its maturity date.
(1) We determine the market adjusted amount on the date of the withdrawal as
follows:
(a) We determine the fixed maturity amount that would be payable on the
maturity date, using the rate to maturity for the fixed maturity option.
(b) We determine the period remaining in your fixed maturity option (based on
the withdrawal date) and convert it to fractional years based on a
365-day year. For example, three years and 12 days becomes 3.0329.
(c) We determine the current rate to maturity that applies on the withdrawal
date to new allocations to the same fixed maturity option.
(d) We determine the present value of the fixed maturity amount payable at
the maturity date, using the period determined in (b) and the rate
determined in (c).
(2) We determine the fixed maturity amount as of the current date.
(3) We subtract (2) from the result in (1)(d). The result is the market value
adjustment applicable to such fixed maturity option, which may be
positive or negative.
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Your market adjusted amount is the present value of the maturity value
discounted at the rate to maturity in effect for new contributions to that same
fixed maturity option on the date of the calculation.
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If you withdraw only a portion of the amount in a fixed maturity option, the
market value adjustment will be a percentage of the market value adjustment
that would have applied if you had withdrawn the entire value in that fixed
maturity option. This percentage is equal to the percentage of the value in the
fixed maturity option that you are withdrawing. Any withdrawal charges that are
deducted from a fixed maturity option will result in a market value adjustment
calculated in the same way. See Appendix II for an example.
For purposes of calculating the rate to maturity for new allocations to a fixed
maturity option (see (1)(c) above), we use the rate we have in effect for new
allocations to that
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fixed maturity option. We use this rate even if new allocations to that option
would not be accepted at that time. This rate will not be less than 3%. If we
do not have a rate to maturity in effect for a fixed maturity option to which
the "current rate to maturity" in (1)(c) would apply, we will use the rate at
the next closest maturity date. If we are no longer offering new fixed maturity
options, the "current rate to maturity" will be determined in accordance with
our procedures then in effect. We reserve the right to add up to 0.25% to the
current rate in (1)(c) above for purposes of calculating the market value
adjustment only.
INVESTMENTS UNDER THE FIXED MATURITY OPTIONS
Amounts allocated to the fixed maturity options are held in a "nonunitized"
separate account we have established under the New York Insurance Law. This
separate account provides an additional measure of assurance that we will make
full payment of amounts due under the fixed maturity options. Under New York
Insurance Law, the portion of the separate account's assets equal to the
reserves and other contract liabilities relating to the contracts are not
chargeable with liabilities from any other business we may conduct. We own the
assets of the separate account, as well as any favorable investment performance
on those assets. You do not participate in the performance of the assets held
in this separate account. We may, subject to state law that applies, transfer
all assets allocated to the separate account to our general account. We
guarantee all benefits relating to your value in the fixed maturity options,
regardless of whether assets supporting fixed maturity options are held in a
separate account or our general account.
We have no specific formula for establishing the rates to maturity for the
fixed maturity options. We expect the rates to be influenced by, but not
necessarily correspond to, among other things, the yields that we can expect to
realize on the separate account's investments from time to time. Our current
plans are to invest in fixed-income obligations, including corporate bonds,
mortgage-backed and asset-backed securities, and government and agency issues
having durations in the aggregate consistent with those of the fixed maturity
options.
Although the above generally describes our plans for investing the assets
supporting our obligations under the fixed maturity options under the
contracts, we are not obligated to invest those assets according to any
particular plan except as we may be required to by state insurance laws. We
will not determine the rates to maturity we establish by the performance of the
nonunitized separate account.
ABOUT THE GENERAL ACCOUNT
Our general account supports all of our policy and contract guarantees,
including those that apply to the fixed maturity options and the account for
special dollar cost averaging, as well as our general obligations.
The general account is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations
of all jurisdictions where we are authorized to do business. Because of
exemptions and exclusionary provisions that apply, interests in the general
account have not been registered under the Securities Act of 1933, nor is the
general account an investment company under the Investment Company Act of 1940.
However, the market value adjustment interests under the contracts are
registered under the Securities Act of 1933.
We have been advised that the staff of the SEC has not reviewed the portions of
this prospectus that relate to the general account (other than market value
adjustment interests). The disclosure with regard to the general account,
however, may be subject to certain provisions of the federal securities laws
relating to the accuracy and completeness of statements made in prospectuses.
ABOUT OTHER METHODS OF PAYMENT
AUTOMATIC INVESTMENT PROGRAM - FOR NQ, FLEXIBLE PREMIUM IRA, AND FLEXIBLE
PREMIUM ROTH IRA CONTRACTS ONLY
You may use our automatic investment program, or "AIP," to have a specified
amount automatically deducted from a checking account, money market account, or
credit union
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checking account and contributed as an additional contribution into an NQ,
Flexible Premium IRA or Flexible Premium Roth IRA contract on a monthly or
quarterly basis. AIP is not available for Rollover IRA, Roth Conversion IRA,
QP, or Rollover TSA contracts. It is also not available under the Assured
Payment Option or APO Plus.
For NQ contracts, the minimum amounts we will deduct are $100 monthly and $300
quarterly. Under Flexible Premium IRA and Flexible Premium Roth IRA contracts,
the minimum amount is $50. AIP additional contributions may be allocated to any
of the variable investment options and available fixed maturity options, but
not the account for special dollar cost averaging. You choose the day of the
month you wish to have your account debited. However, you may not choose a date
later than the 28th day of the month.
You may cancel AIP at any time by notifying our Processing Office. We are not
responsible for any debits made to your account before the time written notice
of cancellation is received at our processing office.
DATES AND PRICES AT WHICH CONTRACT EVENTS OCCUR
We describe below the general rules for when, and at what prices, events under
your contract will occur. Other portions of this prospectus describe
circumstances that may cause exceptions. We generally do not repeat those
exceptions below.
BUSINESS DAY
Our business day is any day the New York Stock Exchange is open for trading.
Our business day generally ends at 4:00 p.m., Eastern Time for purposes of
determining the date when contributions are applied and any other transaction
requests are processed. We may, however, close due to emergency conditions.
Contributions will be applied and any other transaction requests will be
processed when they are received along with all the required information.
o If your contribution, transfer, or any other transaction request, containing
all the required information, reaches us on a non-business day or after 4:00
p.m. on a business day, we will use the next business day.
o A loan request under your Rollover TSA contract will be processed on the
first business day of the month following the date on which the properly
completed loan request form is received.
o If your transaction is set to occur on the same day of the month as the
contract date and that date is the 29th, 30th or 31st of the month, then the
transaction will occur on the 1st day of the next month.
o When a charge is to be deducted on a contract date anniversary that is a
non-business day, we will deduct the charge on the next business day.
CONTRIBUTIONS AND TRANSFERS
o Contributions allocated to the variable investment options are invested at
the value next determined after the close of the business day.
o Contributions allocated to a fixed maturity option will receive the rate to
maturity in effect for that fixed maturity option on that business day.
o Initial contributions allocated to the account for special dollar cost
averaging receive the interest rate in effect on that business day. At
certain times, we may offer the opportunity to lock in the interest rate for
an initial contribution to be received under Section 1035 exchanges and
trustee to trustee transfers. Your registered representative can provide
information or you can call our processing office.
o Transfers to or from variable investment options will be made at the value
next determined after the close of the business day.
o Transfers to a fixed maturity option will be based on the rate to maturity
in effect for that fixed maturity option on the business day of the
transfer.
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ABOUT YOUR VOTING RIGHTS
As the owner of the shares of EQ Advisors Trust we have the right to vote on
certain matters involving the portfolios, such as:
o the election of trustees;
o the formal approval of independent auditors selected for EQ Advisors Trust;
or
o any other matters described in the prospectus for EQ Advisors Trust or
requiring a shareholders' vote under the Investment Company Act of 1940.
We will give contract owners the opportunity to instruct us how to vote the
number of shares attributable to their contracts if a shareholder vote is
taken. If we do not receive instructions in time from all contract owners, we
will vote the shares of a portfolio for which no instructions have been
received in the same proportion as we vote shares of that portfolio for which
we have received instructions. We will also vote any shares that we are
entitled to vote directly because of amounts we have in a portfolio in the same
proportions that contract owners vote.
VOTING RIGHTS OF OTHERS
Currently, we control EQ Advisors Trust. Its shares are sold to our separate
accounts and an affiliated qualified plan trust. In addition, shares of EQ
Advisors Trust are held by separate accounts of insurance companies both
affiliated and unaffiliated with us. Shares held by these separate accounts
will probably be voted according to the instructions of the owners of insurance
policies and contracts issued by those insurance companies. While this will
dilute the effect of the voting instructions of the contract owners, we
currently do not foresee any disadvantages because of this. The Board of
Trustees of EQ Advisors Trust intends to monitor events in order to identify
any material irreconcilable conflicts that may arise and to determine what
action, if any, should be taken in response. If we believe that a response to
any of those events insufficiently protects our contract owners, we will see to
it that appropriate action is taken.
SEPARATE ACCOUNT NO. 45 VOTING RIGHTS
If actions relating to Separate Account No. 45 require contract owner approval,
contract owners will be entitled to one vote for each unit they have in the
variable investment options. Each contract owner who has elected a variable
annuity payout option may cast the number of votes equal to the dollar amount
of reserves we are holding for that annuity in a variable investment option
divided by the annuity unit value for that option. We will cast votes
attributable to any amounts we have in the variable investment options in the
same proportion as votes cast by contract owners.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under applicable
federal securities laws. To the extent that those laws or the regulations
published under those laws eliminate the necessity to submit matters for
approval by persons having voting rights in separate accounts of insurance
companies, we reserve the right to proceed in accordance with those laws or
regulations.
ABOUT LEGAL PROCEEDINGS
Equitable Life and its affiliates are parties to various legal proceedings. In
our view, none of these proceedings is likely to have a material adverse effect
upon Separate Account No. 45, our ability to meet our obligations under the
contracts, or the distribution of the contracts.
ABOUT OUR INDEPENDENT ACCOUNTANTS
The consolidated financial statements of Equitable Life at December 31, 1999
and 1998, and for the three years ended December 31, 1999 incorporated in this
prospectus by reference to the 1999 Annual Report on Form 10-K are incorporated
in reliance on the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
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FINANCIAL STATEMENTS
The financial statements of Separate Account No. 45, as well as the
consolidated financial statements of Equitable Life, are in the SAI. The SAI
is available free of charge. You may request one by writing to our processing
office or calling 1-800-789-7771.
TRANSFERS OF OWNERSHIP, COLLATERAL ASSIGNMENTS, LOANS, AND BORROWING
You can transfer ownership of an NQ contract at any time before annuity
payments begin. We will continue to treat you as the owner until we receive
notification of any change at our Processing Office. You cannot assign your NQ
contract as collateral or security for a loan. Loans are also not available
under your NQ contract. In some cases, an assignment or change of ownership may
have adverse tax consequences. See "Tax information" earlier in this
prospectus.
You cannot assign or transfer ownership of an IRA, QP, or Rollover TSA contract
except by surrender to us. Loans are not available and you cannot assign IRA
and QP contracts as security for a loan or other obligation. If the employer
that provided the funds does not restrict them, loans are available under a
Rollover TSA contract.
For limited transfers of ownership after the owner's death see "Beneficiary
continuation option" in "Payment of death benefit" earlier in this prospectus.
You may direct the transfer of the values under your IRA, QP, or Rollover TSA
contract to another similar arrangement under federal income tax rules. In the
case of such a transfer, we will impose a withdrawal charge, if one applies.
DISTRIBUTION OF THE CONTRACTS
AXA Advisors, LLC ("AXA Advisors"), the successor to EQ Financial Consultants,
Inc. and an affiliate of Equitable Life, is the distributor of the contracts
and has responsibility for sales and marketing functions for Separate Account
No. 45. AXA Advisors serves as the principal underwriter of Separate Account
No. 45. AXA Advisors is registered with the SEC as a broker-dealer and is a
member of the National Association of Securities Dealers, Inc. AXA Advisors'
principal business address is 1290 Avenue of the Americas, New York, New York
10104. Pursuant to a Distribution and Servicing Agreement between AXA Advisors,
Equitable Life, and certain of Equitable Life's separate accounts, including
Separate Account No. 45, Equitable Life paid AXA Advisors distribution fees of
$325,380 for 1999, and $325,380 for 1998, as the distributor of certain
contracts other than the contracts described in this Prospectus which had not
been offered before 2000, and as the principal underwriter of certain separate
accounts including Separate Account No. 45. Before May 1, 1998, Equitable
Distributors, Inc. ("EDI"), also an indirect, wholly owned subsidiary of
Equitable Life, served as the distributor of the contracts and the principal
underwriter of Separate Account No. 45. Pursuant to a Distribution Agreement
between Equitable Life, certain of Equitable Life's separate accounts,
including Separate Account No. 45, and EDI, Equitable Life paid EDI
distribution fees of $9,444,621 for 1997 as the distributor of certain
contracts and as the principal underwriter of certain separate accounts
including Separate Account No. 45.
The contracts will be sold by financial professionals who are registered
representatives of AXA Advisors and its affiliates, who are also our licensed
insurance agents. AXA Advisors may also receive compensation and reimbursement
for its marketing services under the terms of its distribution agreement with
Equitable Life. The offering of the contracts is intended to be continuous.
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We provide the following tables to show five different measurements of the
investment performance of the variable investment options and/or the portfolios
in which they invest. We include these tables because they may be of general
interest to you.
Table 1 shows the average annual total return of the variable investment
options. Average annual total return is the annual rate of growth that would be
necessary to achieve the ending value of a contribution invested in the
variable investment options for the periods shown.
Table 2 shows the growth of a hypothetical $1,000 investment in the variable
investment options over the periods shown. Both Tables 1 and 2 take into
account all current fees and charges under the contract, including the
withdrawal charge, the optional baseBUILDER benefit charge, the annual
administrative charge under Flexible Premium IRA and Flexible Premium Roth IRA
contracts, but do not reflect the charges designed to approximate certain taxes
that may be imposed on us, such as premium taxes in your state or any
applicable annuity administrative fee.
Tables 3, 4, and 5 show the rates of return of the variable investment options
on an annualized, cumulative, and year-by-year basis. These tables take into
account all current fees and charges under the contract, but do not reflect the
withdrawal charge, the optional baseBUILDER benefits charge, the annual
administrative charge or charges designed to approximate certain taxes that may
be imposed on us, such as premium taxes in your state or any applicable annuity
administrative fee. If the charges were reflected they would effectively reduce
the rates of return shown.
In all cases the results shown are based on the actual historical investment
experience of the portfolios in which the variable investment options invest.
In some cases, the results shown relate to periods when the variable investment
options and/or the contracts were not available. In those cases, we adjusted
the results of the portfolios to reflect the charges under the contracts that
would have applied had the investment options and/or contracts been available.
The contracts are being offered for the first time in 2000.
For the "Alliance" portfolios (other than EQ/Alliance Premier Growth), we have
adjusted the results prior to October 1996, when Class IB shares for these
portfolios were not available, to reflect the 12b-1 fees currently imposed.
Finally, the results shown for the Alliance Money Market and Alliance Common
Stock options for periods before March 22, 1985 reflect the results of the
variable investment options that preceded them. The "Since portfolio inception"
figures for these options are based on the date of inception of the preceding
variable investment options. We have adjusted these results to reflect the
maximum investment advisory fee payable for the portfolios, as well as an
assumed charge of 0.06% for direct operating expenses.
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999 the Alliance portfolios (other than EQ/Alliance Premier
Growth) were part of The Hudson River Trust. On October 18, 1999, these
portfolios became corresponding portfolios of EQ Advisors Trust. In each case,
the performance shown is for the indicated EQ Advisors Trust portfolio, and any
predecessors it may have had.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends.
From time to time, we may advertise different measurements of the investment
performance of the variable investment options and/or the portfolios, including
the measurements reflected in the tables below.
THE PERFORMANCE INFORMATION SHOWN BELOW AND THE PERFORMANCE INFORMATION THAT WE
ADVERTISE REFLECT PAST PERFORMANCE AND DO NOT INDICATE HOW THE VARIABLE
INVESTMENT OPTIONS MAY PERFORM IN THE FUTURE. SUCH INFORMATION ALSO DOES NOT
REPRESENT THE RESULTS EARNED BY ANY PARTICULAR INVESTOR. YOUR RESULTS WILL
DIFFER.
BENCHMARKS
Tables 3 and 4 compare the performance of variable investment options to market
indices that serve as benchmarks. Market indices are not subject to any charges
for investment advisory fees, brokerage commission or other operating expenses
typically associated with a managed portfolio. Also, they do not reflect other
contract charges
<PAGE>
- ----------
84
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
such as the mortality and expense risks charge, administrative charge and
distribution charge or any withdrawal or optional benefit charge. Comparisons
with these benchmarks, therefore, may be of limited use. We include them
because they are widely known and may help you to understand the universe of
securities from which each portfolio is likely to select its holdings.
Benchmark data reflect the reinvestment of dividend income. The benchmarks
include:
- --------------------------------------------------------------------------------
EQ/AGGRESSIVE STOCK: 50% Russell 2000 Index and 50% Standard & Poor's Mid-Cap
Total Return Index.
ALLIANCE COMMON STOCK: Standard & Poor's 500 Index.
ALLIANCE CONSERVATIVE INVESTORS: 70% Lehman Treasury Bond Composite Index and
30% Standard & Poor's 500 Index.
ALLIANCE EQUITY INDEX: Standard & Poor's 500 Index.
ALLIANCE GLOBAL: Morgan Stanley Capital International World Index.
ALLIANCE GROWTH AND INCOME: 75% Standard & Poor's 500 Index and 25% Value Line
Convertibles Index.
ALLIANCE GROWTH INVESTORS: 70% Standard & Poor's 500 Index and 30% Lehman
Government/Corporate Bond Index.
ALLIANCE HIGH YIELD: Benchmark #1 - Merrill Lynch High Yield Master Index and
Benchmark #2 - Credit Suisse First Boston Global High Yield Index.
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES: Lehman Intermediate Government
Bond Index.
ALLIANCE INTERNATIONAL: Morgan Stanley Capital International Europe, Australia,
Far East Index.
ALLIANCE MONEY MARKET: Salomon Brothers Three-Month T-Bill Index.
EQ/ALLIANCE PREMIER GROWTH: Standard & Poor's 500 Index.
EQ/ALLIANCE TECHNOLOGY: Lipper Specialty Funds Average.
ALLIANCE SMALL CAP GROWTH: Russell 2000 Growth Index.
BT EQUITY 500 INDEX: Standard & Poor's 500 Index.
BT INTERNATIONAL EQUITY INDEX: Morgan Stanley Capital International Europe,
Australia, Far East Index.
BT SMALL COMPANY INDEX: Russell 2000 Index.
CAPITAL GUARDIAN RESEARCH: Standard & Poor's 500
- --------------------------------------------------------------------------------
CAPITAL GUARDIAN U.S. EQUITY: Standard & Poor's 500 Index.
EQ/EVERGREEN: Benchmark #1 - Russell 2000 Index and Benchmark #2 - Standard &
Poor's 500 Index.
EQ/EVERGREEN FOUNDATION: 60% Standard & Poor's 500 Index/40% Lehman Brothers
Aggregate Bond Index.
MFS EMERGING GROWTH COMPANIES: Russell 2000 Index.
MFS GROWTH WITH INCOME: Standard & Poor's 500 Index.
MFS RESEARCH: Standard & Poor's 500 Index.
MERCURY BASIC VALUE EQUITY: Standard & Poor's 500 Index.
MERCURY WORLD STRATEGY: 36% Standard & Poor's 500 Index/24% Morgan Stanley
Capital International Europe, Australia, Far East Index/21% Salomon Brothers
U.S. Treasury Bond 1 Year+ 14% Salomon Brothers World Government Bond
(excluding U.S.)/and 5% Three-Month U.S. Treasury Bill.
MORGAN STANLEY EMERGING MARKETS EQUITY: Morgan Stanley Capital International
Emerging Markets Free Price Return Index.
EQ/PUTNAM BALANCED: 60% Standard & Poor's 500 Index and 40% Lehman Government/
Corporate Bond Index.
EQ/PUTNAM GROWTH & INCOME VALUE: Standard & Poor's 500 Index.
T. ROWE PRICE EQUITY INCOME: Standard & Poor's 500 Index.
T. ROWE PRICE INTERNATIONAL STOCK: Morgan Stanley Capital International Europe,
Australia, Far East Index.
WARBURG PINCUS SMALL COMPANY VALUE: Benchmark #1 - Russell 2000 Index and
Benchmark #2 - Russell 2000 Value Index.
- --------------------------------------------------------------------------------
LIPPER SURVEY. The Lipper Variable Insurance Products Performance Analysis
Survey (Lipper Survey) records the performance of a large group of variable
annuity products, including managed separate accounts of insurance companies.
According to Lipper Analytical Services, Inc. (Lipper), the data are presented
net of investment management fees, direct operating expenses and asset-based
charges applicable under annuity contracts. Lipper data provide a more accurate
picture than market benchmarks of the Equitable Accumulator performance
relative to other variable annuity products.
<PAGE>
- -----
85
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
TABLE 1
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
LENGTH OF INVESTMENT PERIOD
----------------------------------------------------------------------------
SINCE SINCE
1 3 5 10 OPTION PORTFOLIO
VARIABLE INVESTMENT OPTIONS YEAR YEARS YEARS YEARS INCEPTION* INCEPTION**
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EQ/Aggressive Stock 7.38% 3.67% 11.43% 12.81% 11.26% 14.26%
Alliance Common Stock 13.49% 22.02% 23.36% 14.20% 23.37% 13.17%
Alliance Conservative Investors (0.99)% 6.40% 7.45% 5.36% 6.91% 5.38%
Alliance Equity Index 11.22% 23.55% 25.30% - 24.25% 21.29%
Alliance Global 26.31% 17.51% 15.73% 11.36% 16.47% 9.88%
Alliance Growth and Income 7.20% 16.11% 17.28% - 17.24% 12.35%
Alliance Growth Investors 14.83% 14.81% 15.29% 12.95% 15.06% 12.93%
Alliance High Yield (13.98)% (3.38)% 4.98% 5.96% 3.79% 4.94%
Alliance Intermediate Government Securities (10.63)% (1.13)% 1.16 - 0.43% 1.52%
Alliance International 25.60% 7.85% - - 7.77% 7.91%
Alliance Money Market (5.97)% (0.89)% 0.03% 0.17% (0.13)% 2.56%
Alliance Small Cap Growth 16.14% - - - 11.69% 11.69%
BT Equity 500 Index 9.07% - - - 15.66% 15.66%
BT International Equity Index 15.98% - - - 16.66% 16.66%
BT Small Company Index 9.48% - - - 1.70% 1.70%
EQ/Evergreen (1.14)% - - - (1.14)% (1.14)%
EQ/Evergreen Foundation (3.41)% - - - (3.41)% (3.41)%
MFS Emerging Growth Companies 60.98% - - - 42.28% 42.28%
MFS Growth with Income (2.11)% - - - (2.11)% (2.11)%
MFS Research 11.79% - - - 18.01% 18.01%
Mercury Basic Value Equity 7.76% - - - 11.98% 11.98%
Mercury World Strategy 10.08% - - - 6.09% 6.09%
Morgan Stanley Emerging Markets Equity 82.71% - - - 2.64% (0.92)%
EQ/Putnam Balanced (10.48)% - - - 3.67% 3.67%
EQ/Putnam Growth & Income Value (11.83)% - - - 4.09% 4.09%
T. Rowe Price Equity Income (7.09)% - - - 6.82% 6.82%
T. Rowe Price International Stock 20.23% - - - 9.72% 9.72%
Warburg Pincus Small Company Value (8.78)% - - - (2.84)% (2.84)%
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* The variable investment option inception dates are: EQ/Aggressive Stock,
Alliance Common Stock, Alliance Conservative Investors, Alliance Equity
Index, Alliance Global, Alliance Growth and Income, Alliance Growth
Investors, Alliance High Yield, Alliance Intermediate Government Securities,
Alliance International, and Alliance Money Market (May 1, 1995); Alliance
Small Cap Growth, Mercury Basic Value Equity, Mercury World Strategy, MFS
Emerging Growth Companies, MFS Research, EQ/Putnam Balanced, EQ/Putnam Growth
& Income Value, T. Rowe Price Equity Income, T. Rowe Price International
Stock, and Warburg Pincus Small Company Value (May 1, 1997); Morgan Stanley
Emerging Markets Equity (September 2, 1997); BT Equity 500 Index, BT
International Equity Index, and BT Small Company Index (December 31, 1997);
EQ/Evergreen, EQ/Evergreen Foundation, and MFS Growth with Income (December
31, 1998). The inception dates for the variable investment options that
became available after December 31, 1998 and are therefore not shown in this
table are: EQ/Alliance Premier Growth, Capital Guardian Research, and Capital
Guardian U.S. Equity (April 30, 1999) and EQ/Alliance Technology (May 1,
2000).
** The inception dates for the portfolios underlying the Alliance variable
investment options are for portfolios of The Hudson River Trust, the assets
of which became assets of corresponding portfolios of EQ Advisors Trust on
October 18, 1999. The portfolio inception dates are: EQ/Aggressive Stock
(January 27, 1986); Alliance Common Stock (January 13, 1976); Alliance
Conservative Investors and Alliance Growth Investors (October 2, 1989);
Alliance Equity Index (March 1, 1994); Alliance Global (August 27, 1987);
Alliance Growth & Income (October 1, 1993); Alliance High Yield (January 2,
1987); Alliance Intermediate Government Securities (April 1, 1991); Alliance
International (April 3, 1995); Alliance Money Market (July 13, 1981);
Alliance Small Cap Growth, Mercury Basic Value Equity, Mercury World
Strategy, MFS Emerging Growth Companies, MFS Research, EQ/Putnam Balanced,
EQ/Putnam Growth & Income Value, T. Rowe Price Equity Income, T. Rowe Price
International Stock, and Warburg Pincus Small Company Value (May 1, 1997); BT
Equity 500 Index, BT International Equity Index, and BT Small Company Index
(January 1, 1998); and Morgan Stanley Emerging Markets Equity (August 20,
1997); EQ/Evergreen, EQ/Evergreen Foundation and MFS Growth with Income
(12/31/98). The inception dates for the portfolios that became available
after December 31, 1998 and are therefore not shown in the tables are:
EQ/Alliance Premier Growth, Capital Guardian Research, and Capital Guardian
U.S. Equity (April 30, 1999) and EQ/Alliance Technology (May 1, 2000).
<PAGE>
- -----
86
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
TABLE 2
GROWTH OF $1,000 UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
LENGTH OF INVESTMENT PERIOD
-------------------------------------------------------------------------
SINCE
1 3 5 10 PORTFOLIO
VARIABLE INVESTMENT OPTIONS YEAR YEARS YEARS YEARS INCEPTION*
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
EQ/Aggressive Stock $ 1,073.76 $ 1,114.04 $ 1,717.60 $ 3,337.67 $ 6,396.96
Alliance Common Stock $ 1,134.91 $ 1,816.91 $ 2,856.60 $ 3,772.84 $ 19,404.57
Alliance Conservative Investors $ 990.07 $ 1,204.67 $ 1,432.56 $ 1,686.30 $ 1,711.16
Alliance Equity Index $ 1,112.20 $ 1,885.73 $ 3,088.01 - $ 3,084.61
Alliance Global $ 1,263.09 $ 1,622.47 $ 2,075.70 $ 2,932.69 $ 3,198.48
Alliance Growth and Income $ 1,071.99 $ 1,565.37 $ 2,218.36 - $ 2,070.63
Alliance Growth Investors $ 1,148.34 $ 1,513.27 $ 2,036.51 $ 3,380.79 $ 3,477.39
Alliance High Yield $ 860.22 $ 902.05 $ 1,275.08 $ 1,784.88 $ 1,870.11
Alliance Intermediate Government Securities $ 893.73 $ 966.52 $ 1,059.24 - $ 1,141.52
Alliance International $ 1,256.04 $ 1,254.54 - - $ 1,435.01
Alliance Money Market $ 940.28 $ 973.67 $ 1,001.42 $ 1,016.99 $ 1,595.55
Alliance Small Cap Growth $ 1,161.37 - - - $ 1,343.31
BT Equity 500 Index $ 1,090.71 - - - $ 1,337.63
BT International Equity Index $ 1,159.80 - - - $ 1,361.04
BT Small Company Index $ 1,094.83 - - - $ 1,034.25
EQ/Evergreen $ 988.60 - - - $ 988.60
EQ/Evergreen Foundation $ 965.86 - - - $ 965.86
MFS Emerging Growth Companies $ 1,609.80 - - - $ 2,562.41
MFS Growth with Income $ 978.89 - - - $ 978.89
MFS Research $ 1,117.86 - - - $ 1,555.83
Mercury Basic Value Equity $ 1,077.58 - - - $ 1,352.57
Mercury World Strategy $ 1,100.81 - - - $ 1,171.02
Morgan Stanley Emerging Markets Equity $ 1,827.10 - - - $ 978.36
EQ/Putnam Balanced $ 895.20 - - - $ 1,100.89
EQ/Putnam Growth & Income Value $ 881.68 - - - $ 1,112.78
T. Rowe Price Equity Income $ 929.11 - - - $ 1,192.44
T. Rowe Price International Stock $ 1,202.33 - - - $ 1,280.74
Warburg Pincus Small Company Value $ 912.16 - - - $ 926.01
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* Portfolio inception dates are shown in Table 1.
<PAGE>
- -----
87
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
TABLE 3
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
SINCE
ORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EQ/AGGRESSIVE STOCK 16.71% 7.75% 14.18% 14.57% - 15.72%
Lipper Mid Cap 51.65% 24.68% 19.97% 14.78% - 15.86%
Benchmark 18.09% 17.48% 19.92% 15.41% - 14.58%
ALLIANCE COMMON STOCK 22.95% 25.62% 25.77% 16.46% 16.26% 14.65%
Lipper Growth 29.78% 26.87% 25.55% 16.90% 15.83% 15.16%
Benchmark 21.04% 27.56% 28.56% 18.21% 17.88% 16.19%
ALLIANCE CONSERVATIVE INVESTORS 8.17% 10.39% 10.45% 7.96% - 8.03%
Lipper Flexible Portfolio 4.42% 11.65% 13.70% 10.10% - 10.15%
Benchmark 4.19% 12.07% 13.60% 10.75% - 10.68%
ALLIANCE EQUITY INDEX 18.22% 24.63% 25.54% - - 21.43%
Lipper S&P 500 Index 19.36% 25.86% 26.81% - - 23.89%
Benchmark 21.04% 27.56% 28.56% - - 24.14%
ALLIANCE GLOBAL 36.03% 21.25% 18.54% 13.75% - 12.41%
Lipper Global 44.62% 23.92% 20.57% 11.65% - 11.06%
Benchmark 24.93% 21.61% 19.76% 11.42% - 10.74%
ALLIANCE GROWTH AND INCOME 16.53% 19.86% 19.86% - - 15.03%
Lipper Growth & Income 12.90% 17.23% 20.50% - - 16.45%
Benchmark 20.71% 23.10% 25.01% - - 18.77%
ALLIANCE GROWTH INVESTORS 24.32% 18.59% 18.01% 14.97% - 14.95%
Lipper Flexible Portfolio 10.45% 14.19% 15.15% 11.65% - 11.68%
Benchmark 13.77% 20.90% 22.15% 15.13% - 15.15%
ALLIANCE HIGH YIELD (5.08)% 0.95% 7.89% 8.25% - 7.40%
Lipper High Current Yield 3.65% 4.82% 8.59% 9.61% - 7.79%
Benchmark #1 1.57% 5.91% 9.61% 10.79% - 9.99%
Benchmark #2 3.28% 5.37% 9.07% 11.06% - 10.04%
ALLIANCE INTERMEDIATE GOVERNMENT
SECURITIES (1.66)% 3.11% 4.45% - - 4.39%
Lipper U.S. General Government (2.60)% 4.04% 5.81% - - 5.89%
Benchmark 0.49% 5.50% 6.93% - - 6.76%
ALLIANCE INTERNATIONAL 35.31% 11.84% - - - 11.22%
Lipper International 43.24% 18.74% - - - 16.13%
Benchmark 26.96% 15.74% - - - 13.11%
ALLIANCE MONEY MARKET 3.09% 3.36% 3.47% 3.28% - 5.05%
Lipper Money Market 3.78% 4.05% 4.16% 3.96% - 5.70%
Benchmark 4.74% 5.01% 5.20% 5.06% - 6.65%
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
88
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
TABLE 3 (CONTINUED)
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ALLIANCE SMALL CAP GROWTH 25.65% - - - - 15.82%
Lipper Small Cap 34.26% - - - - 19.49%
Benchmark 43.09% - - - - 25.88%
BT EQUITY 500 INDEX 18.44% - - - - 20.79%
Lipper S&P 500 Index 19.36% - - - - 23.16%
Benchmark 21.03% - - - - 24.76%
BT INTERNATIONAL EQUITY INDEX 25.49% - - - - 21.81%
Lipper International 43.24% - - - - 26.76%
Benchmark 26.96% - - - - 23.43%
BT SMALL COMPANY INDEX 18.86% - - - - 6.92%
Lipper Small Cap 34.26% - - - - 16.02%
Benchmark 21.26% - - - - 8.70%
EQ/EVERGREEN 8.02% - - - - 8.02%
Lipper Growth 29.78% - - - - 29.78%
Benchmark #1 21.26% - - - - 21.26%
Benchmark #2 21.03% - - - - 21.03%
EQ/EVERGREEN FOUNDATION 5.70% - - - - 5.70%
Lipper Balanced 8.69% - - - - 8.69%
Benchmark 11.15% - - - - 11.15%
MFS EMERGING GROWTH COMPANIES 70.98% - - - - 45.96%
Lipper Mid-Cap 51.65% - - - - 32.50%
Benchmark 21.26% - - - - 16.99%
MFS GROWTH WITH INCOME 7.03% - - - - 7.03%
Lipper Growth and Income 12.90% - - - - 12.90%
Benchmark 21.03% - - - - 21.03%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
89
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
TABLE 3 (CONTINUED)
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
MFS RESEARCH 21.21% - - - - 22.02%
Lipper Growth 29.78% - - - - 29.33%
Benchmark 21.03% - - - - 27.36%
MERCURY BASIC VALUE EQUITY 17.10% - - - - 16.11%
Lipper Growth & Income 12.90% - - - - 18.00%
Benchmark 21.03% - - - - 27.36%
MERCURY WORLD STRATEGY 19.47% - - - - 10.39%
Lipper Global Flexible Portfolio 12.93% - - - - 11.91%
Benchmark 13.07% - - - - 16.18%
MORGAN STANLEY EMERGING MARKETS
EQUITY 92.71% - - - - 4.06%
Lipper Emerging Markets 82.53% - - - - 2.90%
Benchmark 66.41% - - - - (0.88)%
EQ/PUTNAM BALANCED (1.51)% - - - - 8.01%
Lipper Balanced 8.69% - - - - 13.91%
Benchmark 11.39% - - - - 18.81%
EQ/PUTNAM GROWTH & INCOME VALUE (2.89)% - - - - 8.41%
Lipper Growth & Income 12.90% - - - - 18.00%
Benchmark 21.03% - - - - 27.36%
T. ROWE PRICE EQUITY INCOME 1.95% - - - - 11.06%
Lipper Equity Income 6.90% - - - - 14.28%
Benchmark 21.03% - - - - 27.36%
T. ROWE PRICE INTERNATIONAL STOCK 29.83% - - - - 13.93%
Lipper International 43.24% - - - - 20.38%
Benchmark 26.96% - - - - 18.32%
WARBURG PINCUS SMALL COMPANY VALUE 0.22% - - - - 1.73%
Lipper Small Cap 34.26% - - - - 24.22%
Benchmark #1 21.26% - - - - 16.99%
Benchmark #2 (1.49)% - - - - 7.06%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* Portfolio inception dates are shown on Table 1. Lipper survey and
benchmark "since portfolio inception" information are as of the month-end
closest to the actual date of portfolio inception.
<PAGE>
- -----
90
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
TABLE 4
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EQ/AGGRESSIVE STOCK 16.71% 25.10% 94.05% 289.57% - 664.33%
Lipper Mid-Cap* 51.65% 102.87% 158.98% 311.69% - 683.45%
Benchmark 18.09% 62.12% 147.96% 319.19% - 595.55%
ALLIANCE COMMON STOCK 22.95% 98.24% 214.67% 359.13% 1,936.81% 2,545.48%
Lipper Growth* 29.78% 106.30% 216.51% 386.68% 1,816.52% 2,838.39%
Benchmark 21.04% 107.56% 251.12% 432.78% 2,584.39% 3,555.48%
ALLIANCE CONSERVATIVE INVESTORS 8.17% 34.53% 64.34% 115.03% - 120.67%
Lipper Flexible Portfolio* 4.42% 39.31% 91.71% 163.35% - 169.02%
Benchmark 4.19% 40.74% 89.21% 177.71% - 186.90%
ALLIANCE EQUITY INDEX 18.22% 93.58% 211.81% - - 210.47%
Lipper S&P 500 Index* 19.36% 99.37% 227.98% - - 242.77%
Benchmark 21.04% 107.56% 251.12% - - 253.66%
ALLIANCE GLOBAL 36.03% 78.25% 134.05% 262.62% - 323.61%
Lipper Global* 44.62% 93.38% 162.57% 205.54% - 273.03%
Benchmark 24.93% 79.83% 146.35% 194.99% - 252.80%
ALLIANCE GROWTH AND INCOME 16.53% 72.18% 147.40% - - 139.85%
Lipper Growth & Income* 12.90% 62.52% 157.04% - - 158.01%
Benchmark 20.71% 86.55% 205.26% - - 204.09%
ALLIANCE GROWTH INVESTORS 24.32% 66.79% 128.89% 303.41% - 316.99%
Lipper Flexible Portfolio* 10.45% 49.38% 103.90% 204.29% - 211.11%
Benchmark 13.77% 76.71% 171.92% 309.28% - 352.50%
ALLIANCE HIGH YIELD (5.08)% 2.87% 46.18% 120.94% - 152.78%
Lipper High Current Yield* 3.65% 15.25% 51.19% 151.82% - 166.74%
Benchmark #1 1.57% 18.80% 58.22% 178.72% - 245.03%
Benchmark #2 3.28% 17.00% 54.39% 185.43% - 246.92%
ALLIANCE INTERMEDIATE
GOVERNMENT SECURITIES (1.66)% 9.64% 24.34% - - 45.58%
Lipper U.S. General Government* (2.60)% 12.55% 32.56% - - 64.40%
Benchmark 0.49% 17.43% 39.81% - - 77.41%
ALLIANCE INTERNATIONAL 35.31% 39.89% - - - 65.62%
Lipper International* 43.24% 69.17% - - - 103.07%
Benchmark 26.96% 55.06% - - - 79.52%
ALLIANCE MONEY MARKET 3.09% 10.41% 18.59% 38.07% - 148.35%
Lipper Money Market* 3.78% 12.64% 22.65% 47.52% - 178.18%
Benchmark 4.74% 15.79% 28.88% 63.79% - 229.35%
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
91
- --------------------------------------------------------------------------------
Investment performance
- --------------------------------------------------------------------------------
TABLE 4 (CONTINUED)
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ALLIANCE SMALL CAP GROWTH 25.65% - - - - 48.00%
Lipper Small Cap* 34.26% - - - - 62.98%
Benchmark 43.09% - - - - 84.91%
BT EQUITY 500 INDEX 18.44% - - - - 45.90%
Lipper S&P 500 Index 19.36% - - - - 51.69%
Benchmark 21.03% - - - - 55.65%
BT INTERNATIONAL EQUITY INDEX 25.49% - - - - 48.37%
Lipper International 43.24% - - - - 61.58%
Benchmark 26.96% - - - - 52.35%
BT SMALL COMPANY INDEX 18.86% - - - - 14.31%
Lipper Small Cap 34.26% - - - - 37.82%
Benchmark 21.26% - - - - 18.17%
EQ/EVERGREEN 8.02% 8.02%
Lipper Growth 29.78% - - - - 29.78%
Benchmark #1 21.26% - - - - 21.26%
Benchmark #2 21.03% - - - - 21.03%
EQ/EVERGREEN FOUNDATION 5.70% 5.70%
Lipper Balanced 8.69% - - - - 8.69%
Benchmark 11.15% - - - - 11.15%
MFS EMERGING GROWTH COMPANIES 70.98% - - - - 174.33%
Lipper Mid-Cap 51.65% - - - - 120.85%
Benchmark 21.26% - - - - 52.05%
MFS GROWTH WITH INCOME 7.03% - - - - 7.03%
Lipper Growth and Income 12.90% - - - - 12.90%
Benchmark 21.03% - - - - 21.03%
MFS RESEARCH 21.21% - - - - 70.07%
Lipper Growth 29.78% - - - - 101.13%
Benchmark 21.03% - - - - 90.75%
MERCURY BASIC VALUE EQUITY 17.10% - - - - 48.97%
Lipper Growth & Income 12.90% - - - - 56.85%
Benchmark 21.03% - - - - 90.75%
MERCURY WORLD STRATEGY 19.47% - - - - 30.18%
Lipper Global Flexible Portfolio 12.93% - - - - 35.69%
Benchmark 13.07% - - - - 49.16%
MORGAN STANLEY EMERGING
MARKETS EQUITY 92.71% - - - - 9.88%
Lipper Emerging Markets 82.53% - - - - 7.48%
Benchmark 66.41% - - - - 5.32%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
92
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
TABLE 4 (CONTINUED)
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EQ/PUTNAM BALANCED (1.51)% - - - - 22.82%
Lipper Balanced 8.69% - - - - 42.44%
Benchmark 11.39% - - - - 61.21%
EQ/PUTNAM GROWTH & INCOME
VALUE (2.89)% - - - - 24.04%
Lipper Growth & Income 12.90% - - - - 56.85%
Benchmark 21.03% - - - - 90.75%
T. ROWE PRICE EQUITY INCOME 1.95% - - - - 32.30%
Lipper Equity Income 6.90% - - - - 43.31%
Benchmark 21.03% - - - - 90.75%
T. ROWE PRICE INTERNATIONAL
STOCK 29.83% - - - - 41.63%
Lipper International 43.24% - - - - 65.44%
Benchmark 26.96% - - - - 56.70%
WARBURG PINCUS SMALL COMPANY
VALUE 0.22% - - - - 4.67%
Lipper Small Cap 34.26% - - - - 83.94%
Benchmark #1 21.26% - - - - 52.05%
Benchmark #2 (1.49)% - - - - 19.99%
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* Portfolio inception dates are shown in Table 1. Lipper survey and
benchmark "since portfolio inception" information are as month-end closest
to the actual date of portfolio inception.
<PAGE>
- -----
93
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
TABLE 5
YEAR-BY-YEAR RATES OF RETURN:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
1990 1991 1992 1993
- --------------------------------------------------------------------------------------------------------
<S> <C> C> <C> <C>
EQ/Aggressive Stock 6.21% 83.52% (4.91)% 14.65%
Alliance Common Stock (9.77)% 35.41% 1.36% 22.59%
Alliance Conservative Investors 4.45% 17.73% 3.82% 8.82%
Alliance Equity Index - - - -
Alliance Global (7.76)% 28.21% (2.30)% 29.75%
Alliance Growth and Income - - - (0.71)%+
Alliance Growth Investors 8.67% 46.23% 3.01% 13.20%
Alliance High Yield (2.90)% 22.23% 10.29% 20.94%
Alliance Intermediate Government Securities - 10.75%+ 3.69% 8.56%
Alliance International - - - -
Alliance Money Market 6.29% 4.28% 1.70% 1.11%
Alliance Small Cap Growth - - - -
BT Equity 500 Index - - - -
BT International Equity Index - - - -
BT Small Company Index - - - -
EQ/Evergreen - - - -
EQ/Evergreen Foundation - - - -
MFS Emerging Growth Companies - - - -
MFS Growth with Income - - - -
MFS Research - - - -
Mercury Basic Value Equity - - - -
Mercury World Strategy - - - -
Morgan Stanley Emerging Markets Equity - - - -
EQ/Putnam Balanced - - - -
EQ/Putnam Growth & Income Value - - - -
T. Rowe Price Equity Income - - - -
T. Rowe Price International Stock - - - -
Warburg Pincus Small Company Value - - - -
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
1994 1995 1996 1997 1998 1999
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EQ/Aggressive Stock (5.54)% 29.28% 19.99% 8.82% (1.50)% 16.71%
Alliance Common Stock (3.89)% 30.08% 22.03% 26.90% 27.06% 22.95%
Alliance Conservative Investors (5.82)% 18.25% 3.30% 11.20% 11.84% 8.17%
Alliance Equity Index (0.43)%+ 34.04% 20.17% 30.19% 25.77% 18.22%
Alliance Global 3.35% 16.69% 12.53% 9.55% 19.62% 36.03%
Alliance Growth and Income (2.36)% 21.85% 17.92% 24.48% 18.69% 16.53%
Alliance Growth Investors (4.89)% 24.11% 10.57% 14.68% 16.99% 24.32%
Alliance High Yield (4.53)% 17.77% 20.66% 16.34% (6.85)% (5.08)%
Alliance Intermediate Government Securities (6.09)% 11.30% 1.90% 5.37% 5.81% (1.66)%
Alliance International - 9.81%+ 7.82% (4.79)% 8.59% 35.31%
Alliance Money Market 2.15% 3.85% 3.43% 3.53% 3.45% 3.09%
Alliance Small Cap Growth - - - 25.21%+ (5.92)% 25.65%
BT Equity 500 Index - - - - 23.19% 18.44%
BT International Equity Index - - - - 18.23% 25.49%
BT Small Company Index - - - - (3.82)% 18.86%
EQ/Evergreen - - - - - 8.02%
EQ/Evergreen Foundation - - - - - 5.70%
MFS Emerging Growth Companies - - - 21.15%+ 32.43% 70.98%
MFS Growth with Income - - - - - 7.03%
MFS Research - - - 14.84%+ 22.18% 21.21%
Mercury Basic Value Equity - - - 15.81%+ 9.85% 17.10%
Mercury World Strategy - - - 3.62%+ 5.17% 19.47%
Morgan Stanley Emerging Markets Equity - - - (20.64)%+ (28.15)% 92.71%
EQ/Putnam Balanced - - - 13.28%+ 10.08% (1.51)%
EQ/Putnam Growth & Income Value - - - 15.00%+ 11.07% (2.89)%
T. Rowe Price Equity Income - - - 20.85%+ 7.38% 1.95%
T. Rowe Price International Stock - - - (2.54)%+ 11.94% 29.83%
Warburg Pincus Small Company Value - - - 17.88%+ (11.40)% 0.22%
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
+ Returns for these portfolios represent less than 12 months of performance.
The returns are as of each portfolio inception date as shown in Table 1.
<PAGE>
- ----------
94
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
COMMUNICATING PERFORMANCE DATA
In reports or other communications to contract owners or in advertising
material, we may describe general economic and market conditions affecting our
variable investment options and the portfolios and may compare the performance
or ranking of those options and the portfolios with:
o those of other insurance company separate accounts or mutual funds included
in the rankings prepared by Lipper Analytical Services, Inc., Morningstar,
Inc., VARDS, or similar investment services that monitor the performance
of insurance company separate accounts or mutual funds;
o other appropriate indices of investment securities and averages for peer
universes of mutual funds; or
o data developed by us derived from such indices or averages.
We also may furnish to present or prospective contract owners advertisements or
other communications that include evaluations of a variable investment option
or portfolio by nationally recognized financial publications. Examples of such
publications are:
- ----------------------------------------------------------------
Barron's Investment Management Weekly
Morningstar's Variable Money Management Letter
Annuity Sourcebook Investment Dealers Digest
Business Week National Underwriter
Forbes Pension & Investments
Fortune USA Today
Institutional Investor Investor's Business Daily
Money The New York Times
Kiplinger's Personal Finance The Wall Street Journal
Financial Planning The Los Angeles Times
Investment Adviser The Chicago Tribune
- ----------------------------------------------------------------
Lipper compiles performance data for peer universes of funds with similar
investment objectives in its Lipper Survey. Morningstar, Inc. compiles similar
data in the Morningstar Variable Annuity/Life Report (Morningstar Report).
The Lipper Survey records performance data as reported to it by over 800 mutual
funds underlying variable annuity and life insurance products. It divides these
actively managed portfolios into 25 categories by portfolio objectives. The
Lipper Survey contains two different universes, which reflect different types
of fees in performance data:
o The "separate account" universe reports performance data net of investment
management fees, direct operating expenses and asset-based charges
applicable under variable life and annuity contracts; and
o The "mutual fund" universe reports performance net only of investment
management fees and direct operating expenses, and therefore reflects only
charges that relate to the underlying mutual fund.
The Morningstar Variable Annuity/Life Report consists of nearly 700 variable
life and annuity funds, all of which report their data net of investment
management fees, direct operating expenses and separate account level charges.
VARDS is a monthly reporting service that monitors approximately 2,500 variable
life and variable annuity funds on performance and account information.
YIELD INFORMATION
Current yield for the Alliance Money Market option will be based on net changes
in a hypothetical investment over a given seven-day period, exclusive of
capital changes, and then "annualized" (assuming that the same seven-day result
would occur each week for 52 weeks). Current yield for the Alliance High Yield
option and Alliance Intermediate Government Securities option will be based on
net changes in a hypothetical investment over a given 30-day period, exclusive
of capital changes, and then "annualized" (assuming that the same 30-day result
would occur each month for 12 months).
"Effective yield" is calculated in a similar manner, but when annualized, any
income earned by the investment is assumed to be reinvested. The "effective
yield" will be slightly higher than the "current yield" because any earnings
are compounded weekly for the Alliance Money Market option. The current yields
and effective yields assume the deduction of all current contract charges and
expenses other than the withdrawal charge, the optional baseBUILDER benefits
charge, the annual administrative charge, and any charge
<PAGE>
- ----------
95
- --------------------------------------------------------------------------------
INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
designed to approximate certain taxes that may be imposed on us, such as
premium taxes in your state. The yields and effective yields for the Alliance
Money Market option, when used for the special dollar cost averaging program,
assume that no contract charges are deducted. For more information, see "Yield
Information for the Alliance Money Market Option, Alliance High Yield Option,
and Alliance Intermediate Government Securities Option" in the SAI.
<PAGE>
10
- ----
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
- ----------------
96
- --------------------------------------------------------------------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
- --------------------------------------------------------------------------------
Equitable Life's Annual Report on Form 10-K for the year ended December 31,
1999, is considered to be a part of this prospectus because it is incorporated
by reference.
After the date of this prospectus and before we terminate the offering of the
securities under this prospectus, all documents or reports we file with the SEC
under the Securities Exchange Act of 1934 ("Exchange Act"), will be considered
to become part of this prospectus because they are incorporated by reference.
Any statement contained in a document that is or becomes part of this
prospectus, will be considered changed or replaced for purposes of this
prospectus if a statement contained in this prospectus changes or is replaced.
Any statement that is considered to be a part of this prospectus because of its
incorporation will be considered changed or replaced for the purpose of this
prospectus if a statement contained in any other subsequently filed document
that is considered to be part of this prospectus changes or replaces that
statement. After that, only the statement that is changed or replaced will be
considered to be part of this prospectus.
We file our Exchange Act documents and reports, including our Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q, electronically according to EDGAR
under CIK No. 0000727920. The SEC maintains a Web site that contains reports,
proxy and information statements, and other information regarding registrants
that file electronically with the SEC. The address of the site is
http://www.sec.gov.
Upon written or oral request, we will provide, free of charge, to each person
to whom this prospectus is delivered, a copy of any or all of the documents
considered to be part of this prospectus because they are incorporated herein.
This does not include exhibits not specifically incorporated by reference into
the text of such documents. Requests for documents should be directed to The
Equitable Life Assurance Society of the United States, 1290 Avenue of the
Americas, New York, New York 10104. Attention: Corporate Secretary (telephone:
(212) 554-1234).
<PAGE>
APPENDIX I: PURCHASE CONSIDERATIONS FOR QP CONTRACTS
- --------
A-1
- --------------------------------------------------------------------------------
APPENDIX I: PURCHASE CONSIDERATIONS FOR QP CONTRACTS
- --------------------------------------------------------------------------------
Trustees who are considering the purchase of an Equitable Accumulator QP
contract should discuss with their tax advisers whether this is an appropriate
investment vehicle for the employer's plan. Trustees should consider whether the
plan provisions permit the investment of plan assets in the QP contract, the
distribution of such an annuity, the purchase of the guaranteed minimum income
benefit, and the payment of death benefits in accordance with the requirements
of the federal income tax rules. The QP contract and this prospectus should be
reviewed in full, and the following factors, among others, should be noted.
Assuming continued plan qualification and operation, earnings on qualified plan
assets will accumulate value on a tax-deferred basis even if the plan is not
funded by the Equitable Accumulator QP contract or another annuity. Therefore,
you should purchase an Equitable Accumulator QP Contract to fund a plan for the
contract's features and benefits other than tax deferral. This QP contract
accepts transfer contributions only and not regular, ongoing payroll
contributions. For 401(k) plans under defined contribution plans, no employee
after-tax contributions are accepted.
Under defined benefit plans, we will not accept rollovers from a defined
contribution plan to a defined benefit plan. We will only accept transfers from
a defined benefit plan or a change of investment vehicles in the plan. Only one
additional contribution may be made per contract year. For defined benefit
plans, the maximum percentage of actuarial value of the plan
participant/employee's normal retirement benefit that can be funded by a QP
contract is 80%. The account value under a QP contract may at any time be more
or less than the lump sum actuarial equivalent of the accrued benefit for a
defined benefit plan participant/employee. Equitable Life does not guarantee
that the account value under a QP contract will at any time equal the actuarial
value of 80% of a participant/employee's accrued benefit. If overfunding of a
plan occurs, withdrawals from the QP contract may be required. A withdrawal
charge and/or market value adjustment may apply.
Further, Equitable Life will not perform or provide any plan recordkeeping
services with respect to the QP contracts. The plan's administrator will be
solely responsible for performing or providing for all such services. There is
no loan feature offered under the QP contracts, so if the plan provides for
loans and a participant/employee takes a loan from the plan, other plan assets
must be used as the source of the loan and any loan repayments must be credited
to other investment vehicles and/or accounts available under the plan.
Given that required minimum distributions must generally commence from the plan
for annuitants after age 70 1/2, trustees should consider that:
o The QP contract may not be an appropriate purchase for annuitants approaching
or over age 70 1/2; and
o The guaranteed minimum income benefit under baseBUILDER may not be an
appropriate feature for annuitants who are older than age 60 1/2 when the
contract is issued.
Finally, because the method of purchasing the QP contract, including the large
initial contribution, and the features of the QP contract may appeal more to
plan participants/employees who are older and tend to be highly paid, and
because certain features of the QP contract are available only to plan
participants/employees who meet certain minimum and/or maximum age requirements,
plan trustees should discuss with their advisers whether the purchase of the QP
contract would cause the plan to engage in prohibited discrimination in
contributions, benefits or otherwise.
<PAGE>
APPENDIX II: MARKET VALUE ADJUSTMENT EXAMPLE
- --------
B-1
- --------------------------------------------------------------------------------
APPENDIX II: MARKET VALUE ADJUSTMENT EXAMPLE
- --------------------------------------------------------------------------------
The example below shows how the market value adjustment would be determined and
how it would be applied to a withdrawal, assuming that $100,000 was allocated on
February 15, 2001 to a fixed maturity option with a maturity date of February
15, 2010 (nine years later) at a hypothetical rate to maturity of 7.00%,
resulting in a maturity value of $183,846 on the maturity date. We further
assume that a withdrawal of $50,000 is made four years later on February 15,
2005.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
HYPOTHETICAL ASSUMED
RATE TO MATURITY ON
FEBRUARY 15, 2005
-----------------------------
5.00% 9.00%
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
AS OF FEBRUARY 15, 2005 (BEFORE WITHDRAWAL)
- ------------------------------------------------------------------------------------------------
(1) Market adjusted amount $144,048 $ 119,487
(2) Fixed maturity amount $131,080 $ 131,080
(3) Market value adjustment:
(1) - (2) $ 12,968 $ (11,593)
- ------------------------------------------------------------------------------------------------
ON FEBRUARY 15, 2005 (AFTER WITHDRAWAL)
- ------------------------------------------------------------------------------------------------
(4) Portion of market value adjustment associated with withdrawal:
(3) x [$50,000/(1)] $ 4,501 $ (4,851)
(5) Reduction in fixed maturity amount:
[$50,000 - (4)] $ 45,499 $ 54,851
(6) Fixed maturity amount: (2) - (5) $ 85,581 $ 76,229
(7) Maturity value $120,032 $ 106,915
(8) Market adjusted amount of (7) $ 94,048 $ 69,487
- ------------------------------------------------------------------------------------------------
</TABLE>
You should note that under this example if a withdrawal is made when rates have
increased from 7.00% to 9.00% (right column), a portion of a negative market
value adjustment is realized. On the other hand, if a withdrawal is made when
rates have decreased from 7.00% to 5.00% (left column), a portion of a positive
market value adjustment is realized.
<PAGE>
APPENDIX III: GUARANTEED MINIMUM DEATH BENEFIT EXAMPLE
- --------
C-1
- --------------------------------------------------------------------------------
APPENDIX III: GUARANTEED MINIMUM DEATH BENEFIT EXAMPLE
- --------------------------------------------------------------------------------
The death benefit under the contracts is equal to the account value or, if
greater, the guaranteed minimum death benefit.
The following illustrates the guaranteed minimum death benefit calculation.
Assuming $100,000 is allocated to the variable investment options (with no
allocation to the Alliance Money Market option, Alliance Intermediate Government
Securities option or the fixed maturity options), no additional contributions,
no transfers and no withdrawals, and no loans under a Rollover TSA contract, the
guaranteed minimum death benefit for an annuitant age 45 would be calculated as
follows:
- --------------------------------------------------------------------------------
END OF % ROLL UP TO AGE 80 ANNUAL RATCHET TO AGE 80
CONTRACT GUARANTEED MINIMUM GUARANTEED MINIMUM
YEAR ACCOUNT VALUE DEATH BENEFIT(1) DEATH BENEFIT
- --------------------------------------------------------------------------------
1 $105,000 $105,000(1) $105,000(3)
2 $115,500 $110,250(2) $115,500(3)
3 $129,360 $115,763(2) $129,360(3)
4 $103,488 $121,551(1) $129,360(4)
5 $113,837 $127,628(1) $129,360(4)
6 $127,497 $134,010(1) $129,360(4)
7 $127,497 $140,710(1) $129,360(4)
- --------------------------------------------------------------------------------
The account values for contract years 1 through 7 are based on hypothetical
rates of return of 5.00%, 10.00%, 12.00%, (20.00)%, 10.00%, 12.00% and 0.00%. We
are using these rates solely to illustrate how the benefit is determined. The
return rates bear no relationship to past or future investment results.
5% ROLL UP TO AGE 80
(1) At the end of contract year 1, and again at the end of contract years 4
through 7, the death benefit will be equal to the guaranteed minimum death
benefit.
(2) At the end of contract years 2 and 3, the death benefit will be equal to
the current account value since it is higher than the current guaranteed
minimum death benefit.
ANNUAL RATCHET TO AGE 80
(3) At the end of contract years 1 through 3, the guaranteed minimum death
benefit is equal to the current account value.
(4) At the end of contract years 4 through 7, the guaranteed minimum death
benefit is equal to the guaranteed minimum death benefit at the end of the
prior year since it is equal to or higher than the current account value.
<PAGE>
APPENDIX IV: EXAMPLE OF PAYMENTS UNDER THE ASSURED PAYMENT OPTION AND APO PLUS
- --------
D-1
- --------------------------------------------------------------------------------
APPENDIX IV: EXAMPLE OF PAYMENTS UNDER THE ASSURED PAYMENT OPTION AND APO PLUS
- --------------------------------------------------------------------------------
The second column in the chart below illustrates the payments for a male age 70
who purchased the Assured Payment Option on March 15, 2000 with a single
contribution of $100,000, with increasing annual payments. The payments are to
commence on March 15, 2000. It assumes that the fixed period is 15 years and
that the life contingent annuity will provide payments on a single life basis.
Based on the rates to maturity for the fixed maturity options and the current
purchase rate for the life contingent annuity, on March 15, 2000, the initial
payment would be $6,830.91 and would increase in each three-year period to a
final payment of $10,001.14. The first payment under the life contingent annuity
would be $11,001.25.
The rates to maturity as of March 15, 2000 for fixed maturity options maturing
on February 15, 2001 through 2015 are: 4.20%, 4.91%, 5.43%, 5.51%, 5.62%, 5.70%,
5.77%, 5.83%, 5.92%, 5.98%, 5.47% 5.47%, 5.47%, 5.47%, and 5.47% respectively.
Alternatively as shown in the third and fourth columns, this individual could
purchase APO Plus with the same $100,000 contribution, with the same fixed
period and the life contingent annuity on a single life basis. Assuming election
of the Alliance Common Stock option based on the rates to maturity for the fixed
maturity options and the current purchase rate for the life contingent annuity,
on March 15, 2000, the same initial payment of $6,830.91 would be purchased
under APO Plus. However, unlike the payment under the Assured Payment Option
that will increase every three years, this initial payment under APO Plus is not
guaranteed to increase. Therefore, only $78,602.53 is needed to purchase the
initial payment stream, and the remaining $21,397.47 is invested in the variable
investment options. Any future increase in payments under APO Plus will depend
on the investment performance in the Alliance Common Stock option.
Assuming hypothetical average annual rates of return of 0% and 8% (after
deduction of charges) for the variable investment option, the value in the
variable investment option would grow to $21,397.47 and $28,939.67, respectively
as of February 15, 2004. A portion of this amount is used to purchase the
increase in the payments for the fourth year. The remainder will stay in the
variable investment option to be drawn upon for the purchase of increases in
payments for each third year thereafter during the fixed period and at the end
of the fixed period under the life contingent annuity. Based on the rates to
maturity for the fixed maturity options and purchase rates for the life
contingent annuity as of March 15, 2000, the third and fourth columns illustrate
the increasing payments that would be purchased under APO Plus assuming 0% and
8% rates of return respectively.
Under both options, while you are living payments increase annually after the
16th year under the life contingent annuity based on the increase, if any, in
the Consumer Price Index, but in no event greater than 3% per year.
ANNUAL PAYMENTS
<-----------------------------------------------------------------------------
GUARANTEED INCREASING ILLUSTRATIVE ILLUSTRATIVE
PAYMENTS UNDER THE PAYMENTS UNDER PAYMENTS UNDER
YEARS ASSURED PAYMENT OPTION APO PLUS AT 0% APO PLUS AT 8%
- ------------------------------------------------------------------------------
1-3 $ 6,830.91 $ 6,830.91 $ 6,830.91
4-6 $ 7,514.00 $ 7,136.01 $ 7,734.43
7-9 $ 8,265.40 $ 7,549.09 $ 8,662.57
10-12 $ 9,091.94 $ 7,976.62 $ 9,645.68
13-15 $ 10,001.14 $ 8,385.16 $ 10,645.18
16 $ 11,001.25 $ 8,726.89 $ 11,591.21
- ------------------------------------------------------------------------------
<PAGE>
- -----
D-2
- --------------------------------------------------------------------------------
APPENDIX IV: EXAMPLE OF PAYMENTS UNDER THE ASSURED PAYMENT OPTION AND APO
PLUS
- --------------------------------------------------------------------------------
As described above, a portion of the illustrated contribution is applied to the
life contingent annuity. This amount will generally be larger under the Assured
Payment Option than under APO Plus. Also, a larger portion of the contribution
will be allocated to fixed maturity options under the former than the latter. In
this illustration, $80,695.03 is allocated under the Assured Payment Option to
the fixed maturity options and under APO Plus, $68,169.87 is allocated to the
fixed maturity options. In addition, under APO Plus $21,397.47 is allocated to
the variable investment option. The balance of the $100,000 ($19,304.97 and
$10,432.66, respectively) is applied to the life contingent annuity.
The rates of return of 0% and 8% are for illustrative purposes only and are not
intended to represent an expected or guaranteed rate of return. Your investment
results will vary. Payments will also depend on the the rates to maturity and
life contingent annuity purchase rates in effect on the day the contribution is
applied. It is assumed that no lump sum withdrawals are taken.
<PAGE>
APPENDIX V: ASSURED PAYMENT OPTION AND APO PLUS CONTRACTS ISSUED IN THE STATE
OF MARYLAND
- --------
E-1
- --------------------------------------------------------------------------------
APPENDIX V: ASSURED PAYMENT OPTION AND APO PLUS CONTRACTS ISSUED IN THE STATE
OF MARYLAND
- --------------------------------------------------------------------------------
THE FOLLOWING INFORMATION SPECIFIES THE VARIATIONS THAT RELATE TO THE ASSURED
PAYMENT OPTION AND APO PLUS CONTRACTS ISSUED IN MARYLAND.
The Assured Payment Option and APO Plus (available only as traditional IRAs) are
issued as separate contracts rather than as a distribution option under a
Rollover IRA or Flexible Premium IRA contract.
You may purchase an Assured Payment Option or APO Plus contract with a minimum
single contribution of $10,000. You may also choose to apply the account value
from a Flexible Premium IRA or Rollover IRA contract to purchase an Assured
Payment Option or APO Plus contract. Your account value will be applied as a
single contribution.
We will allocate your single contribution in the same manner as described under
"Assured Payment Option and APO Plus" earlier in this prospectus. You are not
permitted to make additional contributions under the Assured Payment Option and
APO Plus.
PAYMENTS. Your payments must begin within 13 months after the contract date.
You may not elect to defer your payments.
DEATH BENEFIT. If you die during the fixed period, we will continue payments to
your designated beneficiary. Your beneficiary may choose to discontinue the
payments and receive a lump sum amount. If the lump sum is elected within one
year of your death, the amount will be equal the death benefit payable under the
Assured Payment Option and APO Plus.
TERMINATING THE CONTRACT. You may choose to terminate the contract by
surrendering the contract as described under "Surrendering your contract to
receive its cash value." We will return the contract to you with a notation that
the life contingent annuity is still in effect. The date payments are to start
under the life contingent annuity will be moved forward.
TAX INFORMATION. The Assured Payment Option and APO Plus contracts have not been
submitted to the IRS for approval as to form for use as a traditional IRA.
However, we believe that those contracts as currently offered comply with the
requirements of the Internal Revenue Code.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Unit Values 2
Custodian and Independent Accountants 3
Yield Information for the Alliance Money Market Option, Alliance High Yield Option,
and Alliance Intermediate Government Securities Option 3
Financial Statements 4
</TABLE>
HOW TO OBTAIN AN EQUITABLE ACCUMULATOR STATEMENT OF ADDITIONAL INFORMATION FOR
SEPARATE ACCOUNT NO. 45
Send this request form to:
Equitable Accumulator
P.O. Box 1547
Secaucus, NJ 07096-1547
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Please send me an Equitable Accumulator SAI for Separate Account No. 45 dated
May 1, 2000.
- ------------------------------------------------------------------------------
Name:
- ------------------------------------------------------------------------------
Address:
- ------------------------------------------------------------------------------
City State Zip
(IM-95-02 SAI(2000))
<PAGE>
Equitable Accumulator(SM)
A combination variable and fixed deferred
annuity contract
PROSPECTUS DATED MAY 1, 2000
Please read and keep this prospectus for future reference. It contains important
information that you should know before purchasing or taking any other action
under your contract. Also, at the end of this prospectus you will find attached
the prospectus for EQ Advisors Trust, which contains important information about
its portfolios.
- --------------------------------------------------------------------------------
WHAT IS THE EQUITABLE ACCUMULATOR?
Equitable Accumulator is a deferred annuity contract issued by THE EQUITABLE
LIFE ASSURANCE SOCIETY OF THE UNITED STATES. It provides for the accumulation of
retirement savings and for income. The contract offers income and death benefit
protection. It also offers a number of payout options. You invest to accumulate
value on a tax-deferred basis in one or more of our variable investment options,
fixed maturity options, or the account for special dollar cost averaging
("investment options"). This contract may not currently be available in all
states.
- ---------------------------------------------------------------------------
VARIABLE INVESTMENT OPTIONS
- ---------------------------------------------------------------------------
o EQ/Aggressive Stock(1) o J.P. Morgan Core Bond(3)
o Alliance Common Stock o Lazard Large Cap Value
o Alliance High Yield o Lazard Small Cap Value
o Alliance Money Market o Mercury Basic Value Equity(4)
o EQ/Alliance Premier Growth o Mercury World Strategy(5)
o Alliance Small Cap Growth o MFS Emerging Growth Companies
o EQ/Alliance Technology(2) o MFS Growth with Income
o BT Equity 500 Index o MFS Research
o BT International Equity Index o Morgan Stanley Emerging
o BT Small Company Index Markets Equity
o Capital Guardian International o EQ/Putnam Growth & Income
o Capital Guardian Research Value
o Capital Guardian U.S. Equity o EQ/Putnam International Equity
o EQ/Evergreen o EQ/Putnam Investors Growth
o EQ/Evergreen Foundation
- ---------------------------------------------------------------------------
(1) Formerly named "Alliance Aggressive Stock."
(2) May not be available in California.
(3) Formerly named "JPM Core Bond."
(4) Formerly named "Merrill Lynch Basic Value Equity."
(5) Formerly named "Merrill Lynch World Strategy."
You may allocate amounts to any of the variable investment options. Each
variable investment option is a subaccount of our Separate Account No. 49. Each
variable investment option, in turn, invests in a corresponding securities
portfolio of EQ Advisors Trust. Your investment results in a variable investment
option will depend on the investment performance of the related portfolio.
FIXED MATURITY OPTIONS. You may allocate amounts to one or more fixed maturity
options. These amounts will receive a fixed rate of interest for a specified
period. Interest is earned at a guaranteed rate set by us. We make a market
value adjustment (up or down) if you make transfers or withdrawals from a fixed
maturity option before its maturity date.
ACCOUNT FOR SPECIAL DOLLAR COST AVERAGING. This account also pays fixed interest
at guaranteed rates.
TYPES OF CONTRACTS. We offer the contracts for use as:
o A nonqualified annuity ("NQ") for after-tax contributions only.
o An individual retirement annuity ("IRA"), either traditional IRA or Roth
IRA.
We offer two versions of the traditional IRA: "Rollover IRA" and "Flexible
Premium IRA." We also offer two versions of the Roth IRA: "Roth Conversion
IRA" and "Flexible Premium Roth IRA."
o An annuity that is an investment vehicle for a qualified defined
contribution or defined benefit plan ("QP").
o An Internal Revenue Code Section 403(b) Tax-Sheltered Annuity ("TSA") -
("Rollover TSA").
A contribution of at least $5,000 is required to purchase an NQ, Rollover IRA,
Roth Conversion IRA, QP, or Rollover TSA contract. For Flexible Premium IRA or
Flexible Premium Roth IRA contracts, we require a contribution of $2,000 to
purchase a contract.
Registration statements relating to this offering have been filed with the
Securities and Exchange Commission ("SEC"). The statement of additional
information ("SAI") dated May 1, 2000 is a part of one of the registration
statements. The SAI is available free of charge. You may request one by writing
to our processing office or calling 1-800-789-7771. The SAI has been
incorporated by reference into this prospectus. This prospectus and the SAI can
also be obtained from the SEC's Web site at http://www.sec.gov. The table of
contents for the SAI appears at the back of this prospectus.
THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. THE CONTRACTS ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY.
THEY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE NOT BANK
GUARANTEED. THEY ARE SUBJECT TO INVESTMENT RISKS AND POSSIBLE LOSS OF PRINCIPAL.
72076
2000 PORTFOLIO
<PAGE>
2
Contents of this prospectus
- --------------------------------------------------------------------------------
EQUITABLE ACCUMULATOR(SM)
- ---------------------------------------------------------------
Index of key words and phrases 4
Who is Equitable Life? 5
How to reach us 6
Equitable Accumulator at a glance - key features 8
- ---------------------------------------------------------------
FEE TABLE 11
- ---------------------------------------------------------------
Examples 14
- ---------------------------------------------------------------
1 CONTRACT FEATURES AND BENEFITS 16
- ---------------------------------------------------------------
How you can purchase and contribute to your contract 16
Owner and annuitant requirements 22
How you can make your contributions 22
What are your investment options under the contract? 22
Allocating your contributions 26
Your benefit base 28
Annuity purchase factors 28
Our baseBUILDER option 28
Guaranteed minimum death benefit 30
Your right to cancel within a certain number of days 31
- ---------------------------------------------------------------
2 DETERMINING YOUR CONTRACT'S VALUE 32
- ---------------------------------------------------------------
Your account value and cash value 32
Your contract's value in the variable investment options 32
Your contract's value in the fixed maturity options 32
Your contract's value in the account for special dollar
cost averaging 32
- --------------------------------------------------------------------------------
"We," "our," and "us" refer to Equitable Life.
When we address the reader of this prospectus with words such as "you" and
"your," we mean the person who has the right or responsibility that the
prospectus is discussing at that point. This is usually the contract owner.
When we use the word "contract" it also includes certificates that are issued
under group contracts in some states.
<PAGE>
3
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------
3 TRANSFERRING YOUR MONEY AMONG
INVESTMENT OPTIONS 33
- ------------------------------------------------------------------
Transferring your account value 33
Market Timing 33
Rebalancing your account value 33
- ------------------------------------------------------------------
4 ACCESSING YOUR MONEY 35
- ------------------------------------------------------------------
Withdrawing your account value 35
How withdrawals are taken from your account value 36
How withdrawals affect your guaranteed minimum
income benefit and guaranteed minimum death
benefit 36
Loans under Rollover TSA contracts 37
Surrendering your contract to receive its cash value 38
When to expect payments 38
Your annuity payout options 38
- ------------------------------------------------------------------
5 CHARGES AND EXPENSES 42
- ------------------------------------------------------------------
Charges that Equitable Life deducts 42
Charges that EQ Advisors Trust deducts 44
Group or sponsored arrangements 45
Other distribution arrangements 45
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6 PAYMENT OF DEATH BENEFIT 46
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Your beneficiary and payment of benefit 46
How death benefit payment is made 47
Beneficiary continuation option 47
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7 TAX INFORMATION 49
- ------------------------------------------------------------------
Overview 49
Transfers among investment options 49
Taxation of nonqualified annuities 49
Individual retirement arrangements (IRAs) 51
Special rules for nonqualified contracts in qualified plans 61
Tax-Sheltered Annuity contracts (TSAs) 61
Federal and state income tax withholding and
information reporting 66
Impact of taxes to Equitable Life 67
- ------------------------------------------------------------------
8 MORE INFORMATION 68
- ------------------------------------------------------------------
About our Separate Account No. 49 68
About EQ Advisors Trust 68
About our fixed maturity options 69
About the general account 70
About other methods of payment 70
Dates and prices at which contract events occur 71
About your voting rights 72
About legal proceedings 73
About our independent accountants 73
Financial statements 73
Transfers of ownership, collateral assignments, loans,
and borrowing 73
Distribution of the contracts 73
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9 INVESTMENT PERFORMANCE 75
- ------------------------------------------------------------------
Benchmarks 75
Communicating performance data 84
- ------------------------------------------------------------------
10 INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE 86
- ------------------------------------------------------------------
- ------------------------------------------------------------------
APPENDICES
- ------------------------------------------------------------------
I - Purchase considerations for QP contracts A-1
II - Market value adjustment example B-1
III - Guaranteed minimum death benefit example C-1
- ------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
- ------------------------------------------------------------------
<PAGE>
4
Index of key words and phrases
- --------------------------------------------------------------------------------
This index should help you locate more information on the terms used in this
prospectus.
PAGE
account for special dollar cost
averaging 26
account value 32
annuitant 16
annuity payout options 37
baseBUILDER 28
beneficiary 46
benefit base 28
business day 71
cash value 32
conduit IRA 55
contract date 10
contract date anniversary 10
contract year 10
contributions to Roth IRAs 58
regular contributions 58
rollover and direct transfers 59
conversion contributions 60
contributions to traditional IRAs 52
regular contributions 52
rollover (rollover)s and transfers 53
EQAccess 6
ERISA 37
fixed maturity options 24
Flexible Premium IRA cover
Flexible Premium Roth IRA cover
guaranteed minimum death benefit 30
guaranteed minimum income benefit 29
IRA 49
IRS 49
investment options 22
loan reserve account 37
market adjusted amount 24
market value adjustment 25
maturity value 25
NQ cover
participant 22
portfolio cover
processing office 6
QP 60
rate to maturity 24
Required Beginning Date 56
Rollover IRA cover
Rollover TSA cover
Roth Conversion IRA cover
Roth IRA 58
SAI cover
SEC cover
TOPS 6
TSA 61
traditional IRA 51
unit 32
variable investment options 22
To make this prospectus easier to read, we sometimes use different words than in
the contract or supplemental materials. This is illustrated below. Although we
use different words, they have the same meaning in this prospectus as in the
contract or supplemental materials. Your registered representative can provide
further explanation about your contract.
- -------------------------------------------------------------------------------
PROSPECTUS CONTRACT OR SUPPLEMENTAL MATERIALS
- -------------------------------------------------------------------------------
fixed maturity options Guarantee Periods (Guaranteed Fixed
Interest Accounts in supplemental materials)
variable investment options Investment Funds
account value Annuity Account Value
rate to maturity Guaranteed Rates
unit Accumulation Unit
baseBuilder Guaranteed Minimum Income Benefit
- -------------------------------------------------------------------------------
<PAGE>
5
Who is Equitable Life?
- --------------------------------------------------------------------------------
We are The Equitable Life Assurance Society of the United States ("Equitable
Life"), a New York stock life insurance corporation. We have been doing business
since 1859. Equitable Life is a subsidiary of AXA Financial, Inc. (previously,
The Equitable Companies Incorporated). The majority shareholder of AXA
Financial, Inc. is AXA, a French holding company for an international group of
insurance and related financial services companies. As a majority shareholder,
and under its other arrangements with Equitable Life and Equitable Life's
parent, AXA exercises significant influence over the operations and capital
structure of Equitable Life and its parent. No company other than Equitable
Life, however, has any legal responsibility to pay amounts that Equitable Life
owes under the contract.
AXA Financial, Inc. and its consolidated subsidiaries managed approximately
$462.7 billion in assets as of December 31, 1999. For over 100 years Equitable
Life has been among the largest insurance companies in the United States. We are
licensed to sell life insurance and annuities in all fifty states, the District
of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our home office is
located at 1290 Avenue of the Americas, New York, N.Y. 10104.
<PAGE>
6
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HOW TO REACH US
You may communicate with our processing office as listed below for any of the
following purposes:
- --------------------------------------------------------------------------------
FOR CONTRIBUTIONS SENT BY REGULAR MAIL:
- --------------------------------------------------------------------------------
Equitable Accumulator
P.O. Box 13014
Newark, NJ 07188-0014
- --------------------------------------------------------------------------------
FOR CONTRIBUTIONS SENT BY EXPRESS DELIVERY:
- --------------------------------------------------------------------------------
Equitable Accumulator
c/o Bank One, N.A.
300 Harmon Meadow Boulevard, 3rd Floor
Attn: Box 13014
Secaucus, NJ 07094
- --------------------------------------------------------------------------------
FOR ALL OTHER COMMUNICATIONS (E.G.,
REQUESTS FOR TRANSFERS, WITHDRAWALS, OR
REQUIRED NOTICES) SENT BY REGULAR MAIL:
- --------------------------------------------------------------------------------
Equitable Accumulator
P.O. Box 1547
Secaucus, NJ 07096-1547
- --------------------------------------------------------------------------------
FOR ALL OTHER COMMUNICATIONS (E.G.,
REQUESTS FOR TRANSFERS, WITHDRAWALS, OR
REQUIRED NOTICES) SENT BY EXPRESS DELIVERY:
- --------------------------------------------------------------------------------
Equitable Accumulator
200 Plaza Drive, 4th Floor
Secaucus, NJ 07094
- --------------------------------------------------------------------------------
REPORTS WE PROVIDE:
- --------------------------------------------------------------------------------
o written confirmation of financial transactions;
o statement of your contract values at the close of each calendar quarter
(four per year); and
o annual statement of your contract values as of the close of the contract
year.
- --------------------------------------------------------------------------------
TELEPHONE OPERATED PROGRAM SUPPORT
("TOPS") AND EQACCESS SYSTEMS:
- --------------------------------------------------------------------------------
TOPS is designed to provide you with up-to-date information via touch-tone
telephone. EQAccess is designed to provide this information through the
Internet. You can obtain information on:
o your current account value;
o your current allocation percentages (anticipated to be available through
EQAccess by the end of 2000);
o the number of units you have in the variable investment options;
o rates to maturity for the fixed maturity options;
o the daily unit values for the variable investment options; and
o performance information regarding the variable investment options (not
available through TOPS).
You can also:
o change your allocation percentages and/or transfer among the investment
options (anticipated to be available through EQAccess by the end of 2000);
o change your TOPS personal identification number (PIN) (not available
through EQAccess); and
o change your EQAccess password (not available through TOPS).
TOPS and EQAccess are normally available seven days a week, 24 hours a day. You
may use TOPS by calling toll free 1-888-909-7770. You may use EQAccess by
visiting our Web site at http://www.equitable.com and clicking on EQAccess. Of
course, for reasons beyond our control, these services may sometimes be
unavailable.
We have established procedures to reasonably confirm that the instructions
communicated by telephone or Internet are genuine. For example, we will require
certain personal
<PAGE>
7
- --------------------------------------------------------------------------------
identification information before we will act on telephone or Internet
instructions and we will provide written confirmation of your transfers. If we
do not employ reasonable procedures to confirm the genuineness of telephone or
Internet instructions, we may be liable for any losses arising out of any act or
omission that constitutes negligence, lack of good faith, or willful misconduct.
In light of our procedures, we will not be liable for following telephone or
Internet instructions we reasonably believe to be genuine.
We reserve the right to limit access to these services if we determine that you
are engaged in a market timing strategy (see "Market Timing" in "Transferring
your money among investment options").
- --------------------------------------------------------------------------------
CUSTOMER SERVICE REPRESENTATIVE:
- --------------------------------------------------------------------------------
You may also use our toll-free number (1-800-789-7771) to speak with one of our
customer service representatives. Our customer service representatives are
available on any business day from 8:30 a.m. until 5:30 p.m., Eastern Time.
WE REQUIRE THAT THE FOLLOWING TYPES OF COMMUNICATIONS BE ON SPECIFIC FORMS WE
PROVIDE FOR THAT PURPOSE:
(1) authorization for telephone transfers by your registered representative;
(2) conversion of a traditional IRA to a Roth Conversion IRA or Flexible Premium
Roth IRA contract;
(3) election of the automatic investment program;
(4) election of the rebalancing program;
(5) requests for loans under Rollover TSA contracts;
(6) spousal consent for loans under Rollover TSA contracts;
(7) tax withholding election; and
(8) election of the beneficiary continuation option.
WE ALSO HAVE SPECIFIC FORMS THAT WE RECOMMEND YOU USE FOR THE FOLLOWING TYPES OF
REQUESTS:
(1) address changes;
(2) beneficiary changes;
(3) transfers between investment options; and
(4) contract surrender and withdrawal requests.
TO CANCEL OR CHANGE ANY OF THE FOLLOWING WE REQUIRE WRITTEN NOTIFICATION
GENERALLY AT LEAST SEVEN CALENDAR DAYS BEFORE THE NEXT SCHEDULED TRANSACTION:
(1) automatic investment program;
(2) general dollar cost averaging;
(3) rebalancing;
(4) special dollar cost averaging;
(5) substantially equal withdrawals;
(6) systematic withdrawals; and
(7) the date annuity payments are to begin.
You must sign and date all these requests. Any written request that is not on
one of our forms must include your name and your contract number along with
adequate details about the notice you wish to give or the action you wish us to
take.
SIGNATURES:
The proper person to sign forms, notices and requests would normally be the
owner. If there are joint owners both must sign.
<PAGE>
8
Equitable Accumulator at a glance - key features
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
PROFESSIONAL Equitable Accumulator's variable investment options invest in different portfolios managed by
INVESTMENT professional investment advisers.
MANAGEMENT
- ------------------------------------------------------------------------------------------------------------------------------------
FIXED MATURITY o 10 fixed maturity options with maturities ranging from approximately 1 to 10 years.
OPTIONS o Each fixed maturity option offers a guarantee of principal and interest rate if you hold it to
maturity.
----------------------------------------------------------------------------------------------------
If you make withdrawals or transfers from a fixed maturity option before maturity, there will be
a market value adjustment due to differences in interest rates. This may increase or decrease
any value that you have left in that fixed maturity option. If you surrender your contract, a
market value adjustment may also apply.
- ------------------------------------------------------------------------------------------------------------------------------------
ACCOUNT FOR SPECIAL DOLLAR Available for dollar cost averaging all or a portion of any eligible contribution to your contract.
COST AVERAGING
- ------------------------------------------------------------------------------------------------------------------------------------
TAX ADVANTAGES o On earnings inside the No tax on any dividends, interest or capital gains until you
contract make withdrawals from your contract or receive annuity
payments.
----------------------------------------------------------------------------------------------------
o On transfers inside the No tax on transfers among investment options.
contract
----------------------------------------------------------------------------------------------------
If you are buying a contract to fund a retirement plan that already provides tax deferral under
sections of the Internal Revenue Code, you should do so for the contract's features and benefits
other than tax deferral. In such situations, the tax deferral of the contract does not provide
necessary or additional benefits.
- ------------------------------------------------------------------------------------------------------------------------------------
BASEBUILDER(R) baseBUILDER combines a guaranteed minimum income benefit with the guaranteed minimum
PROTECTION death benefit provided under the contract. The guaranteed minimum income benefit provides
income protection for you while the annuitant lives. The guaranteed minimum death benefit
provides a death benefit for the beneficiary should the annuitant die.
- ------------------------------------------------------------------------------------------------------------------------------------
CONTRIBUTION AMOUNTS o NQ, Rollover IRA, Roth Conversion IRA, QP, and Rollover TSA contracts
o Initial minimum: $5,000
o Additional minimum: $1,000
$100 monthly and $300 quarterly under our automatic
investment program (NQ contracts)
-----------------------------------------------------------------------------------------------------
o Flexible Premium IRA and Flexible Premium Roth IRA contracts
o Initial minimum: $2,000
o Additional minimum: $50 ($50 under our automatic investment program)
-----------------------------------------------------------------------------------------------------
Maximum contribution limitations may apply.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
9
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<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
ACCESS TO YOUR MONEY o Lump sum withdrawals
o Several withdrawal options on a periodic basis
o Loans under Rollover TSA contracts
o Contract surrender
You may incur a withdrawal charge for certain withdrawals
or if you surrender your contract. You may also incur
income tax and a tax penalty.
- --------------------------------------------------------------------------------
PAYOUT OPTIONS o Fixed annuity payout options
o Variable Immediate Annuity payout options
o Income Manager(R) payout options
- --------------------------------------------------------------------------------
ADDITIONAL FEATURES o Guaranteed minimum death benefit even if you do not
elect baseBUILDER
o Dollar cost averaging
o Automatic investment program
o Account value rebalancing (quarterly, semiannually, and
annually)
o Free transfers
o Waiver of withdrawal charge for disability, terminal
illness, or confinement to a nursing home
- --------------------------------------------------------------------------------
FEES AND CHARGES o Daily charges on amounts invested in the variable
investment options for mortality and expense risks,
administrative charges and distribution charges
at a current annual rate of 1.55% (1.65% maximum).
o Annual 0.30% benefit base charge for the optional
baseBUILDER benefit until you exercise your guaranteed
minimum income benefit, elect another annuity payout
option or the contract date anniversary after the
annuitant reaches age 85, whichever occurs first. The
benefit base is described under "Your benefit base" in
"Contract features and benefits." If you do not elect
baseBUILDER you still receive a guaranteed minimum death
benefit under your contract at no additional charge.
o Under Flexible Premium IRA and Flexible Premium Roth
IRA contracts, if your account value at the end of the
contract year is less than $25,000, we deduct an annual
administrative charge equal to $30 or during the first
two contract years 2% of your account value, if less. If
your account value is $25,000 or more, we will not
deduct the charge.
o No sales charge deducted at the time you make
contributions.
o During the first seven contract years following a
contribution, a charge will be deducted from amounts
that you withdraw that exceed 15% of your account value.
We use the account value on the most recent contract
date anniversary to calculate this 15% amount available.
The charge begins at 7% in the first contract year
following a contribution. It declines by 1% each year to
1% in the seventh contract year. There is no withdrawal
charge in the eighth and later contract years following
a contribution. In addition there is no withdrawal
charge if the annuitant is age 86 or older when the
contract is issued. Certain other exemptions apply.
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
10
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<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
---------------------------------------------------------
FEES AND The "contract date" is the effective date of a contract.
CHARGES (CONTINUED) This usually is the business day we receive the property
completed and signed application, along with any other
required documents and your initial contribution. Your
contract date will be shown in your contract. The
12-month period beginning on your contract date and each
12-month period after that date is a "contract year."
The end of each 12-month period is your "contract date
anniversary."
---------------------------------------------------------
o We deduct a charge designed to approximate certain
taxes that may be imposed on us such as premium taxes in
your state. This charge is generally deducted from the
amount applied to an annuity payout option.
o We deduct a $350 annuity administrative fee from
amounts applied to the Variable Immediate Annuity payout
options.
o Annual expenses of EQ Advisors Trust portfolios are
calculated as a percentage of the average daily net
assets invested in each portfolio. These expenses
include management fees ranging from 0.25% to 1.15%
annually, 12b-1 fees of 0.25% annually, and other
expenses.
- --------------------------------------------------------------------------------
ANNUITANT ISSUE AGES NQ: 0-90
Rollover IRA, Roth Conversion IRA, Flexible Premium Roth
IRA, and Rollover TSA: 20-90
Flexible Premium IRA: 20-70
QP: 20-75
- --------------------------------------------------------------------------------
</TABLE>
THE ABOVE IS NOT A COMPLETE DESCRIPTION OF ALL MATERIAL PROVISIONS OF THE
CONTRACT. IN SOME CASES RESTRICTIONS OR EXCEPTIONS APPLY. ALSO, ALL FEATURES OF
THE CONTRACT ARE NOT NECESSARILY AVAILABLE IN YOUR STATE OR AT CERTAIN AGES.
For more detailed information we urge you to read the contents of this
prospectus, as well as your contract. Please feel free to speak with your
registered representative, or call us, if you have any questions.
OTHER CONTRACTS
We offer a variety of fixed and variable annuity contracts. They may offer
features, including investment options, fees and/or charges that are different
from those in the contracts offered by this prospectus. Not every contract is
offered through the same distributor. Upon request, your registered
representative can show you information regarding other Equitable Life annuity
contracts that he or she distributes. You can also contact us to find out more
about any of the Equitable Life annuity contracts.
<PAGE>
11
Fee table
- --------------------------------------------------------------------------------
The fee table below will help you understand the various charges and expenses
that apply to your contract. The table reflects charges you will directly incur
under the contract, as well as charges and expenses of the portfolios that you
will bear indirectly. Charges designed to approximate certain taxes that may be
imposed on us, such as premium taxes in your state, may also apply. Also, an
annuity administrative fee may apply when your annuity payments are to begin.
Each of the charges and expenses is more fully described in "Charges and
expenses" later in this prospectus.
The fixed maturity options and the account for special dollar cost averaging
are not covered by the fee table and examples. However, the annual
administrative charge and the withdrawal charge do apply to the fixed maturity
options and the account for special dollar cost averaging. A market value
adjustment (up or down) may apply as a result of a withdrawal, transfer, or
surrender of amounts from a fixed maturity option.
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR VARIABLE INVESTMENT OPTIONS EXPRESSED AS AN
ANNUAL PERCENTAGE OF DAILY NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------
Mortality and expense risks (1) 1.10%
Administrative 0.25% current (0.35% maximum)
Distribution 0.20%
-----
Total annual expenses 1.55% current (1.65% maximum)
- ------------------------------------------------------------------------------------------------------------------------
FLEXIBLE PREMIUM IRA AND FLEXIBLE PREMIUM ROTH IRA CONTRACTS ONLY:
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE ON EACH CONTRACT DATE ANNIVERSARY
- ------------------------------------------------------------------------------------------------------------------------
Maximum annual administrative charge
If your account value on a contract date anniversary is less than $25,000(2) $30
If your account value on a contract date anniversary is $25,000 or more $0
- ------------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE AT THE TIME YOU REQUEST CERTAIN TRANSACTIONS
- ------------------------------------------------------------------------------------------------------------------------
Withdrawal charge as a percentage of contributions (deducted if you surrender your Contract
contract or make certain withdrawals. The withdrawal charge percentage we use is year
determined by the contract year in which you make the withdrawal or surrender your 1 .................... 7.00%
contract. For each contribution, we consider the contract year in which we receive 2 .................... 6.00%
that contribution to be "contract year 1")(3) 3 .................... 5.00%
4 .................... 4.00%
5 .................... 3.00%
6 .................... 2.00%
7 .................... 1.00%
8+ ................... 0.00%
Charge if you elect a Variable Immediate Annuity payout option $350
- ------------------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE EACH YEAR IF YOU ELECT THE OPTIONAL BENEFIT
- ------------------------------------------------------------------------------------------------------------------------
baseBUILDER benefit charge (calculated as a percentage of the benefit base.
Deducted annually on each contract date anniversary)(4) 0.30%
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
12
- --------------------------------------------------------------------------------
EQ ADVISORS TRUST ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
TOTAL
OTHER ANNUAL
EXPENSES EXPENSES
MANAGEMENT (AFTER EXPENSE (AFTER EXPENSE
FEES(5) 12B-1 FEES(6) LIMITATION)(7) LIMITATION)(8)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock 0.60% 0.25% 0.04% 0.89%
Alliance Common Stock 0.46% 0.25% 0.04% 0.75%
Alliance High Yield 0.60% 0.25% 0.05% 0.90%
Alliance Money Market 0.34% 0.25% 0.05% 0.64%
EQ/Alliance Premier Growth 0.90% 0.25% 0.00% 1.15%
Alliance Small Cap Growth 0.75% 0.25% 0.07% 1.07%
EQ/Alliance Technology 0.90% 0.25% 0.00% 1.15%
BT Equity 500 Index 0.25% 0.25% 0.10% 0.60%
BT International Equity Index 0.35% 0.25% 0.40% 1.00%
BT Small Company Index 0.25% 0.25% 0.25% 0.75%
Capital Guardian International 0.85% 0.25% 0.10% 1.20%
Capital Guardian Research 0.65% 0.25% 0.05% 0.95%
Capital Guardian U.S. Equity 0.65% 0.25% 0.05% 0.95%
EQ/Evergreen 0.65% 0.25% 0.05% 0.95%
EQ/Evergreen Foundation 0.60% 0.25% 0.10% 0.95%
J.P. Morgan Core Bond 0.45% 0.25% 0.10% 0.80%
Lazard Large Cap Value 0.65% 0.25% 0.05% 0.95%
Lazard Small Cap Value 0.75% 0.25% 0.10% 1.10%
MFS Emerging Growth Companies 0.65% 0.25% 0.10% 1.00%
MFS Growth with Income 0.60% 0.25% 0.10% 0.95%
MFS Research 0.65% 0.25% 0.05% 0.95%
Mercury Basic Value Equity 0.60% 0.25% 0.10% 0.95%
Mercury World Strategy 0.70% 0.25% 0.25% 1.20%
Morgan Stanley Emerging Markets Equity 1.15% 0.25% 0.35% 1.75%
EQ/Putnam Growth & Income Value 0.60% 0.25% 0.10% 0.95%
EQ/Putnam International Equity 0.85% 0.25% 0.15% 1.25%
EQ/Putnam Investors Growth 0.65% 0.25% 0.05% 0.95%
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
Notes:
(1) A portion of this charge is for providing the guaranteed minimum death
benefit.
(2) During the first two contract years this charge is equal to the lesser of
$30 or 2% of your account value if it applies. Thereafter, the charge is
$30 for each contract year.
(3) Deducted upon a withdrawal of amounts in excess of the 15% free
withdrawal amount and upon surrender of a contract.
(4) This charge is for providing a guaranteed minimum income benefit in
combination with the guaranteed minimum death benefit available under the
contract. The benefit base is described under "Your benefit base" in
"Contract features and benefits."
(5) The management fees shown reflect revised management fees, effective on
or about May 1, 2000, which were approved by shareholders. The management
fees shown for EQ/Putnam Growth and Income and Lazard Large Cap Value do
not reflect the waiver of a portion of each of these portfolio's
investment management fees that are currently in effect. The management
fees for each portfolio cannot be increased without a vote of that
portfolio's shareholders.
<PAGE>
13
- --------------------------------------------------------------------------------
(6) Portfolio shares are all subject to fees imposed under the distribution
plan (the "Rule 12b-1 Plan") adopted by EQ Advisors Trust pursuant to
Rule 12b-1 under the Investment Company Act of 1940. The 12b-1 fee will
not be increased for the life of the contracts. Prior to October 18,
1999, the total annual expenses for the Alliance Small Cap Growth
portfolio were limited to 1.20% under an expense limitation arrangement
related to that portfolio's Rule 12b-1 Plan. The arrangement is no longer
in effect. The amounts shown have been restated to reflect the expenses
that would have been incurred in 1999, absent the expense limitation
agreement.
(7) The amounts shown as "Other Expenses" will fluctuate from year to year
depending on actual expenses. See footnote (8) for any expense limitation
agreements.
On October 18, 1999, the Alliance portfolios (other than EQ/Alliance
Premier Growth and EQ/Alliance Technology) became part of the portfolios
of EQ Advisors Trust. The "Other Expenses" for these portfolios have been
restated to reflect the estimated expenses that would have been incurred
had these portfolios been portfolios of EQ Advisors Trust for the entire
year ended December 31, 1999. The restated expenses reflect an increase of
0.01% for each of these portfolios.
(8) Equitable Life, EQ Advisors Trust's manager, has entered into an expense
limitation agreement with respect to certain portfolios. Under this
agreement Equitable Life has agreed to waive or limit its fees and assume
other expenses. Under the expense limitation agreement, total annual
operating expenses of certain portfolios (other than interest, taxes,
brokerage commissions, capitalized expenditures, extraordinary expenses,
and 12b-1 fees) are limited as a percentage of the average daily net
assets of the following portfolios: 1.75% for Morgan Stanley Emerging
Markets Equity; 1.25% for EQ/Putnam International Equity; 1.20% for
Mercury World Strategy and Capital Guardian International; 1.15% for
EQ/Alliance Premier Growth and EQ/Alliance Technology; 1.10% for Lazard
Small Cap Value; 1.00% for BT International Equity Index and MFS Emerging
Growth Companies; 0.95% for Capital Guardian U.S. Equity, Capital
Guardian Research, EQ/Evergreen, EQ/Evergreen Foundation, Lazard Large
Cap Value, MFS Growth with Income, MFS Research, Mercury Basic Value
Equity, EQ/Putnam Growth & Income Value and EQ/Putnam Investors Growth;
0.80% for J.P. Morgan Core Bond; 0.75% for BT Small Company Index; and
0.60% for BT Equity 500 Index. The expense limitations for the
EQ/Alliance Premier Growth, BT Equity 500 Index, J.P. Morgan Core Bond,
MFS Growth with Income, MFS Research, MFS Emerging Growth Companies,
Mercury Basic Value Equity and EQ/Putnam International Equity portfolios
reflect an increase effective on May 1, 2000. The expense limitation for
the EQ/Evergreen portfolio reflects a decrease effective on May 1, 2000.
Absent the expense limitation, the "Other Expenses" for 1999 on an
annualized basis for each of the portfolios would have been as follows:
1.00% for Morgan Stanley Emerging Markets Equity; 0.10% for EQ/Alliance
Technology; 0.23% for EQ/Alliance Premier Growth; 0.32% for EQ/Putnam
International Equity; 0.46% for Mercury World Strategy; 0.66% for Capital
Guardian International; 0.26% for Lazard Small Cap Value; 0.49% for BT
International Equity Index; 0.17% for MFS Emerging Growth Companies; 0.34%
for Capital Guardian U.S. Equity; 0.47% for Capital Guardian Research;
1.87% for EQ/Evergreen; 1.07% for EQ/Evergreen Foundation; 0.21% for
Lazard Large Cap Value; 0.37% for MFS Growth with Income; 0.17% for MFS
Research; 0.17% for Mercury Basic Value Equity; 0.16% for EQ/Putnam Growth
& Income Value; 0.19% for EQ/Putnam Investors Growth; 0.20% for J.P.
Morgan Core Bond; 0.71% for BT Small Company Index; and 0.18% for BT
Equity 500 Index. Initial seed capital was invested on April 30, 1999 for
the EQ/Alliance Premier Growth, Capital Guardian U.S. Equity, Capital
Guardian Research, and Capital Guardian International portfolios and will
be invested on or about May 1, 2000 for the EQ/Alliance Technology
portfolio and therefore expenses have been estimated.
Each portfolio may at a later date make a reimbursement to Equitable Life
for any of the management fees waived or limited and other expenses
assumed and paid by Equitable Life pursuant to the expense limitation
agreement provided that, among other things, such portfolio has reached
sufficient size to permit such reimbursement to be made and provided that
the portfolio's current annual operating expenses do not exceed the
operating expense limit determined for such portfolio. For more
information see the prospectus for EQ Advisors Trust.
<PAGE>
14
- --------------------------------------------------------------------------------
EXAMPLES
The examples below show the expenses that a hypothetical contract owner (who
has purchased a Flexible Premium IRA or Flexible Premium Roth IRA contract and
elected baseBUILDER) would pay in the situations illustrated. We assume that a
$1,000 contribution is invested in one of the variable investment options
listed and a 5% annual return is earned on the assets in that option.(1) The
annual administrative charge is based on the charges that apply to a mix of
estimated contract sizes, resulting in an estimated administrative charge for
the purpose of these examples of $0.14 per $1,000. Since the annual
administrative charge only applies under Flexible Premium IRA and Flexible
Premium Roth IRA contracts, the charges shown in the examples would be lower
for NQ, Rollover IRA, Roth Conversion IRA, QP, and Rollover TSA contracts.
Other than as indicated above, the charges used in the examples are the maximum
charges rather than the lower current charges.
These examples should not be considered a representation of past or future
expenses for each option. Actual expenses may be greater or less than those
shown. Similarly, the annual rate of return assumed in the examples is not an
estimate or guarantee of future investment performance.
<TABLE>
<CAPTION>
IF YOU SURRENDER YOUR CONTRACT AT THE END IF YOU DO NOT SURRENDER YOUR CONTRACT AT
OF EACH PERIOD SHOWN, THE EXPENSES THE END OF EACH PERIOD SHOWN, THE
WOULD BE: EXPENSES WOULD BE:
--------------------------------------------- ---------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------- ----------- ----------- ---------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Alliance Money Market $ 94.08 $ 130.37 $ 169.59 $ 301.50 $ 24.08 $ 80.37 $ 139.59 $ 301.50
Alliance High Yield $ 96.81 $ 138.52 $ 183.10 $ 328.02 $ 26.81 $ 88.52 $ 153.10 $ 328.02
Alliance Common Stock $ 95.24 $ 133.82 $ 175.32 $ 312.81 $ 25.24 $ 83.82 $ 145.32 $ 312.81
EQ/Aggressive Stock $ 96.71 $ 138.21 $ 182.58 $ 327.01 $ 26.71 $ 88.21 $ 152.58 $ 327.01
Alliance Small Cap Growth $ 98.60 $ 143.83 $ 191.86 $ 344.98 $ 28.60 $ 93.83 $ 161.86 $ 344.98
EQ/Alliance Technology $ 99.54 $ 146.63 $ 196.46 $ 353.84 $ 29.54 $ 96.63 $ 166.46 $ 353.84
EQ/Alliance Premier Growth $ 100.59 $ 149.74 $ 201.56 $ 363.58 $ 30.59 $ 99.74 $ 171.56 $ 363.58
BT Equity 500 Index $ 93.77 $ 129.42 $ 168.02 $ 298.40 $ 23.77 $ 79.42 $ 138.02 $ 298.40
BT Small Company Index $ 95.34 $ 134.13 $ 175.84 $ 313.83 $ 25.34 $ 84.13 $ 145.84 $ 313.83
BT International Equity Index $ 97.97 $ 141.96 $ 188.77 $ 339.03 $ 27.97 $ 91.96 $ 158.77 $ 339.03
Capital Guardian U.S. Equity $ 97.44 $ 140.39 $ 186.20 $ 334.04 $ 27.44 $ 90.39 $ 156.20 $ 334.04
Capital Guardian Research $ 97.44 $ 140.39 $ 186.20 $ 334.04 $ 27.44 $ 90.39 $ 156.20 $ 334.04
Capital Guardian International $ 100.07 $ 148.18 $ 199.02 $ 358.72 $ 30.07 $ 98.18 $ 169.02 $ 358.72
EQ/Evergreen $ 97.44 $ 140.39 $ 186.20 $ 334.04 $ 27.44 $ 90.39 $ 156.20 $ 334.04
EQ/Evergreen Foundation $ 97.44 $ 140.39 $ 186.20 $ 334.04 $ 27.44 $ 90.39 $ 156.20 $ 334.04
J.P. Morgan Core Bond $ 95.87 $ 135.70 $ 178.44 $ 318.92 $ 25.87 $ 85.70 $ 148.44 $ 318.92
Lazard Large Cap Value $ 97.44 $ 140.39 $ 186.20 $ 334.04 $ 27.44 $ 90.39 $ 156.20 $ 334.04
Lazard Small Cap Value $ 99.02 $ 145.07 $ 193.91 $ 348.92 $ 29.02 $ 95.07 $ 163.91 $ 348.92
MFS Growth with Income $ 97.44 $ 140.39 $ 186.20 $ 334.04 $ 27.44 $ 90.39 $ 156.20 $ 334.04
MFS Research $ 97.44 $ 140.39 $ 186.20 $ 334.04 $ 27.44 $ 90.39 $ 156.20 $ 334.04
MFS Emerging Growth Companies $ 97.97 $ 141.96 $ 188.77 $ 339.03 $ 27.97 $ 91.96 $ 158.77 $ 339.03
Mercury Basic Value Equity $ 97.44 $ 140.39 $ 186.20 $ 334.04 $ 27.44 $ 90.39 $ 156.20 $ 334.04
Mercury World Strategy $ 100.07 $ 148.18 $ 199.02 $ 358.72 $ 30.07 $ 98.18 $ 169.02 $ 358.72
Morgan Stanley Emerging Markets Equity $ 105.84 $ 165.17 $ 226.73 $ 410.83 $ 35.84 $ 115.17 $ 196.73 $ 410.83
EQ/Putnam Growth & Income Value $ 97.44 $ 140.39 $ 186.20 $ 334.04 $ 27.44 $ 90.39 $ 156.20 $ 334.04
EQ/Putnam Investors Growth $ 98.49 $ 143.51 $ 191.34 $ 343.99 $ 28.49 $ 93.51 $ 161.34 $ 343.99
EQ/Putnam International Equity $ 100.59 $ 149.74 $ 201.56 $ 363.58 $ 30.59 $ 99.74 $ 171.56 $ 363.58
</TABLE>
- ----------
(1) The amount accumulated from the $1,000 contribution could not be paid in
the form of an annuity payout option at the end of any of the periods
shown in the examples. This is because if the amount applied to purchase
an annuity payout option is less than $2,000, or the initial payment is
less than $20, we may pay the amount to you in a single sum instead of
payments under an annuity payout option. See "Accessing your money."
<PAGE>
15
- --------------------------------------------------------------------------------
IF YOU ELECT A VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION:
Assuming an annuity payout option could be issued (see note (1) above), and you
elect a Variable Immediate Annuity payout option, the expenses shown in the
example for "if you do not surrender your contract" would, in each case, be
increased by $4.34 based on the average amount applied to annuity payout
options in 1999. See "Annuity administrative fee" in "Charges and expenses."
<PAGE>
16
1 Contract features and benefits
- --------------------------------------------------------------------------------
HOW YOU CAN PURCHASE AND CONTRIBUTE TO YOUR CONTRACT
You may purchase a contract by making payments to us that we call
"contributions." We require a minimum contribution amount for each type of
contract purchased. The following table summarizes our rules regarding
contributions to your contract. All ages in the table refer to the age of the
annuitant named in the contract.
- ------------------------------------------------------------------------------
The "annuitant" is the person who is the measuring life for determining
contract benefits. The annuitant is not necessarily the contract owner.
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
AVAILABLE
CONTRACT FOR ANNUITANT MINIMUM LIMITATIONS ON
TYPE ISSUE AGES CONTRIBUTIONS SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NQ o 0 through 90 o $5,000 (initial) o After-tax money. o For annuitants up to
age 83 at contract
o 0 through 85 in o $1,000 (additional) o Paid to us by check or issue, additional
New York and transfer of contract contributions may be
Pennsylvania value in a tax-deferred made up to age 84.
exchange under
Section 1035 of the o For annuitants age 84
Internal Revenue Code. and older at contract
issue additional
contributions may be
made up to one year
beyond the annuitant's
issue age.
- -----------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
17
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
AVAILABLE
CONTRACT FOR ANNUITANT MINIMUM LIMITATIONS ON
TYPE ISSUE AGES CONTRIBUTIONS SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Rollover IRA o 20 through 90 o $5,000 (initial) o Rollovers from a o For annuitants up to
qualified plan. age 83 at contract
o 20 through 85 in o $1,000 (additional) issue, additional
New York and o Rollovers from a TSA. contributions may be
Pennsylvania made up to age 84.
o Rollovers from another
traditional individual o For annuitants age 84
retirement and older at contract
arrangement. issue additional
contributions may be
o Direct made up to one year
custodian-to-custodian beyond your issue age.
transfers from another
traditional individual o Contributions after
retirement age 70 1/2 must be net
arrangement. of required minimum
distributions.
o Regular IRA
contributions o Regular IRA
contributions limited to
$2,000 per year.
o Although we accept
regular IRA
contributions under
rollover IRA contracts,
we intend that this
contract be used for
rollover and direct
transfer contributions.
Please refer to
"Withdrawals,
payments and transfer
of funds out of
traditional IRAs" in
"Tax information" for a
discussion of conduit
IRAs.
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
18
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
AVAILABLE
CONTRACT FOR ANNUITANT MINIMUM LIMITATIONS ON
TYPE ISSUE AGES CONTRIBUTIONS SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Roth o 20 through 90 o $5,000 (initial) o Rollovers from another o For annuitants up to
Conversion IRA Roth IRA. age 83 at contract
o 20 through 85 in o $1,000 (additional) issue, additional
New York and o Conversion rollovers contributions may be
Pennsylvania from a traditional IRA. made up to age 84.
o Direct transfers from o For annuitants age 84
another Roth IRA. and older at contract
issue additional
contributions may be
made up to one year
beyond your issue age.
o Conversion rollovers
after age 70 1/2 must be
net of required
minimum distributions
for the traditional IRA
you are rolling over.
o You cannot roll over
funds from a traditional
IRA if your adjusted
gross income is
$100,000 or more.
o Regular contributions
are not permitted.
o Only rollover and direct
transfer contributions
are permitted.
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
19
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
AVAILABLE
CONTRACT FOR ANNUITANT MINIMUM LIMITATIONS ON
TYPE ISSUE AGES CONTRIBUTIONS SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Rollover TSA o 20 through 90 o $5,000 (initial) o Rollovers from another o For annuitants up to
TSA contract or age 83 at contract
o 20 through 85 in o $1,000 (additional) arrangement. issue, additional
New York and contributions may be
Pennsylvania o Rollovers from a made up to age 84.
traditional IRA which
was a "conduit" for o For annuitants age 84
TSA funds previously and older at contract
rolled over. issue additional
contributions may be
o Direct transfers from made up to one year
another contract or beyond your issue age.
arrangement under
Section 403(b) of the o Contributions after
Internal Revenue Code, age 70 1/2 must be net
complying with IRS of required minimum
Revenue Ruling 90-24. distributions.
o Employer-remitted
contributions are not
permitted.
This contract may not be available in your state.
- --------------------------------------------------------------------------------------------------------------------------
QP 20 through 75 o $5,000 (initial) o Only transfer o Regular ongoing
contributions from an payroll contributions
o $1,000 (additional) existing qualified plan are not permitted.
trust as a change of
investment vehicle o Only one additional
under the plan. contribution may be
made during a contract
o The plan must be year.
qualified under Section
401(a) of the Internal o No additional transfer
Revenue Code. contributions after
age 76.
o For 401(k) plans,
transferred o For defined benefit
contributions may only plans, employee
include employee contributions are not
pre-tax contributions. permitted.
o Contributions after age
70 1/2 must be net of
any required minimum
distributions.
Please refer to Appendix I for a discussion of purchase considerations of QP contracts.
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
20
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
AVAILABLE
CONTRACT FOR ANNUITANT MINIMUM LIMITATIONS ON
TYPE ISSUE AGES CONTRIBUTIONS SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Flexible 20 through 70 o $2,000 (initial) o "Regular" traditional o No regular IRA
Premium IRA IRA contributions. contributions in the
o $50 (additional after calendar year you turn
the first contract year) o Rollovers from a age 70 1/2 and
qualified plan. thereafter.
o Rollovers from a TSA. o Total regular
contributions may not
o Rollovers from another exceed $2,000 for a
traditional individual year.
retirement
arrangement. o No additional rollover
or direct transfer
o Direct custodian- contributions after
to-custodian transfers age 71.
from another
traditional individual o Rollover and direct
retirement transfer contributions
arrangement. after age 70 1/2 must
be net of required
minimum distributions.
o Although we accept
rollover and direct
transfer contributions
under the Flexible
Premium IRA contract,
we intend that this
contract be used for
ongoing regular
contributions. Please
refer to "Withdrawals,
payments and transfers
of funds out of
traditional IRAs" in
"Tax information" for a
discussion of conduit
IRAs.
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
21
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
AVAILABLE
CONTRACT FOR ANNUITANT MINIMUM LIMITATIONS ON
TYPE ISSUE AGES CONTRIBUTIONS SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Flexible o 20 through 90 o $2,000 (initial) o Regular after-tax o For annuitants up to
Premium Roth contributions. age 83 at contract
IRA o 20 through 85 in o $50 (additional after issue, additional
New York and the first contract year) o Rollovers from another contributions may be
Pennsylvania Roth IRA. made up to age 84.
o Conversion rollovers o For annuitants age 84
from a traditional IRA. and older at contract
issue additional
o Direct transfers from contributions may be
another Roth IRA. made up to one year
beyond your issue age.
o Contributions are
subject to income limits
and other tax rules. See
"Contributions to Roth
IRAs" in "Tax
information."
o Although we accept
rollover and direct
transfer contributions
under the Flexible
Premium Roth IRA
contract, we intend
that this contract be
used for ongoing
regular contributions.
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See "Tax information" for a more detailed discussion of sources of
contributions and certain contribution limitations. We may refuse to accept any
contribution if the sum of all contributions under all Equitable Accumulator
contracts with the same annuitant would then total more than $1,500,000. We
reserve the right to limit aggregate contributions made after the first
contract year to 150% of first-year contributions. We may also refuse to accept
any contribution if the sum of all contributions under all Equitable Life
annuity accumulation contracts that you own would then total more than
$2,500,000.
For information on when contributions are credited under your contract see
"Dates and prices at which contract events occur" in "More information" later
in this prospectus.
<PAGE>
22
- --------------------------------------------------------------------------------
OWNER AND ANNUITANT REQUIREMENTS
Under NQ contracts, the annuitant can be different than the owner. A joint owner
may also be named. Only natural persons can be joint owners. This means that an
entity such as a corporation cannot be a joint owner.
Under all IRA and Rollover TSA contracts, the owner and annuitant must be the
same person.
Under QP contracts, the owner must be the trustee of the qualified plan and the
annuitant must be the plan participant/employee. See Appendix I for more
information on QP contracts.
- -----------------------------------------------------------------------------
A "participant" is an individual who is currently, or was formerly,
participating in an eligible employer's QP or TSA plan.
- -----------------------------------------------------------------------------
HOW YOU CAN MAKE YOUR CONTRIBUTIONS
Except as noted below, contributions must be by check drawn on a U.S. bank, in
U.S. dollars, and made payable to Equitable Life. We do not accept third-party
checks endorsed to us except for rollover contributions, tax-free exchanges or
trustee checks that involve no refund. All checks are subject to our ability to
collect the funds. We reserve the right to reject a payment if it is received in
an unacceptable form.
For your convenience, we will accept initial and additional contributions by
wire transmittal from certain broker-dealers who have agreements with us for
this purpose. Additional contributions may also be made under our automatic
investment program. These methods of payment are discussed in detail in "More
information" later in this prospectus.
Your initial contribution must generally be accompanied by an application and
any other form we need to process the payments. If any information is missing or
unclear, we will try to obtain that information. If we are unable to obtain all
of the information we require within five business days after we receive an
incomplete application or form, we will inform the registered representative
submitting the application on your behalf. We will then return the contribution
to you unless you specifically direct us to keep your contribution until we
receive the required information.
- -----------------------------------------------------------------------------
Our "business day" is any day the New York Stock Exchange is open for trading
and generally ends at 4:00 p.m. Eastern Time. We may, however, close due to
emergency conditions.
- -----------------------------------------------------------------------------
SECTION 1035 EXCHANGES
You may apply the value of an existing nonqualified deferred annuity contract
(or life insurance or endowment contract) to purchase an Equitable Accumulator
NQ contract in a tax-free exchange if you follow certain procedures as shown in
the form that we require you to use. Also see "Tax information" later in this
prospectus.
WHAT ARE YOUR INVESTMENT OPTIONS UNDER THE CONTRACT?
Your investment options are the variable investment options, the fixed maturity
options, and the account for special dollar cost averaging.
VARIABLE INVESTMENT OPTIONS
Your investment results in any one of the variable investment options will
depend on the investment performance of the underlying portfolios. Listed below
are the currently available portfolios, their investment objectives, and their
advisers.
- -----------------------------------------------------------------------------
You can choose from among the variable investment options.
- -----------------------------------------------------------------------------
<PAGE>
23
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PORTFOLIOS OF EQ ADVISORS TRUST
- -------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
High level of current income while preserving
Alliance Money Market assets and maintaining liquidity Alliance Capital Management L.P.
- -------------------------------------------------------------------------------------------------------------------------------
High return by maximizing current income and,
to the extent consistent with that objective,
Alliance High Yield capital appreciation Alliance Capital Management L.P.
- -------------------------------------------------------------------------------------------------------------------------------
Long-term growth of capital and increasing
Alliance Common Stock income Alliance Capital Management L.P.
- -------------------------------------------------------------------------------------------------------------------------------
Alliance Capital Management L.P.,
EQ/Aggressive Stock Long-term growth of capital Massachusetts Financial Services Company
- -------------------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth Long-term growth of capital Alliance Capital Management L.P.
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Technology Long-term growth of capital Alliance Capital Management L.P.
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth Long-term growth of capital Alliance Capital Management L.P.
- -------------------------------------------------------------------------------------------------------------------------------
Replicate as closely as possible (before
deduction of portfolio expenses) the total return
of the Standard & Poor's 500 Composite Stock
BT Equity 500 Index Price Index Bankers Trust Company
- -------------------------------------------------------------------------------------------------------------------------------
Replicate as closely as possible (before
deduction of portfolio expenses) the total return
BT Small Company Index of the Russell 2000 Index Bankers Trust Company
- -------------------------------------------------------------------------------------------------------------------------------
Replicate as closely as possible (before
deduction of portfolio expenses) the total return
of the Morgan Stanley Capital International
BT International Equity Index Europe, Australia, Far East Index Bankers Trust Company
- -------------------------------------------------------------------------------------------------------------------------------
Capital Guardian U.S. Equity Long-term growth of capital Capital Guardian Trust Company
- -------------------------------------------------------------------------------------------------------------------------------
Capital Guardian Research Long-term growth of capital Capital Guardian Trust Company
- -------------------------------------------------------------------------------------------------------------------------------
Long-term growth of capital by investing
Capital Guardian International primarily in non-United States equity securities Capital Guardian Trust Company
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Long-term growth of capital Evergreen Asset Management Corp.
- -------------------------------------------------------------------------------------------------------------------------------
In order of priority, reasonable income,
EQ/Evergreen Foundation conservation of capital, and capital appreciation Evergreen Asset Management Corp.
- -------------------------------------------------------------------------------------------------------------------------------
High total return consistent with moderate risk
J.P. Morgan Core Bond of capital and maintenance of liquidity J. P. Morgan Investment Management Inc.
- -------------------------------------------------------------------------------------------------------------------------------
Lazard Large Cap Value Capital appreciation Lazard Asset Management
- -------------------------------------------------------------------------------------------------------------------------------
Lazard Small Cap Value Capital appreciation Lazard Asset Management
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
24
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PORTFOLIOS OF EQ ADVISORS TRUST (CONTINUED)
- -------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MFS Growth with Income Reasonable current income and long-term Massachusetts Financial Services Company
growth of capital and income
- -------------------------------------------------------------------------------------------------------------------------------
MFS Research Long-term growth of capital and future income Massachusetts Financial Services Company
- -------------------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Long-term capital growth Massachusetts Financial Services Company
Companies
- -------------------------------------------------------------------------------------------------------------------------------
Mercury Basic Value Equity Capital appreciation and secondarily, income Mercury Asset Management US
- -------------------------------------------------------------------------------------------------------------------------------
Mercury World Strategy High total investment return Mercury Asset Management US
- -------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Long-term capital appreciation Morgan Stanley Asset Management
Markets Equity
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Capital growth, current income is a secondary Putnam Investment Management, Inc.
Value objective
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Investors Growth Long-term growth of capital and any increased Putnam Investment Management, Inc.
income that results from this growth
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity Capital appreciation Putnam Investment Management, Inc.
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Other important information about the portfolios is included in the prospectus
for EQ Advisors Trust attached at the end of this prospectus.
FIXED MATURITY OPTIONS
We offer fixed maturity options with maturity dates ranging from one to ten
years. You can allocate your contributions to one or more of these fixed
maturity options. These amounts become part of our general account assets. They
will accumulate interest at the "rate to maturity" for each fixed maturity
option. The total amount you allocate to and accumulate in each fixed maturity
option is called the "fixed maturity amount." The fixed maturity options are not
available in contracts issued in Maryland.
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Fixed maturity options range from one to ten years to maturity.
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The rate to maturity you will receive for each fixed maturity option is the rate
to maturity in effect for new contributions allocated to that fixed maturity
option on the date we apply your contribution. If you make any withdrawals or
transfers from a fixed maturity option before the maturity date, we will make a
"market value adjustment" that may increase or decrease any fixed maturity
amount you have left in that fixed maturity option. We discuss the market value
adjustment below and in greater detail later in this prospectus in "More
information."
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25
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On the maturity date of a fixed maturity option your fixed maturity amount,
assuming you have not made any withdrawals or transfers, will equal your
contribution to that fixed maturity option plus interest, at the rate to
maturity for that contribution, to the date of the calculation. This is the
fixed maturity option's "maturity value." Before maturity, the current value we
will report for your fixed maturity amounts will reflect a market value
adjustment. Your current value will reflect the market value adjustment that we
would make if you were to withdraw all of your fixed maturity amounts on the
date of the report. We call this your "market adjusted amount."
FIXED MATURITY OPTIONS AND MATURITY DATES. We currently offer fixed maturity
options ending on February 15th for each of the maturity years 2001 through
2010. Not all of these fixed maturity options will be available for annuitant
ages 76 and older. See "Allocating your contributions" below. As fixed maturity
options expire, we expect to add maturity years so that generally 10 fixed
maturity options are available at any time.
We will not accept allocations to a fixed maturity option if on the date the
contribution is to be applied:
o the fixed maturity option's maturity date is within the current calendar
year; or
o the rate to maturity is 3% or less.
YOUR CHOICES AT THE MATURITY DATE. We will notify you on or before December 31st
of the year before each of your fixed maturity options is scheduled to mature.
At that time, you may choose to have one of the following take place on the
maturity date, as long as none of the conditions listed above or in "Allocating
your contributions," below would apply:
(a) transfer the maturity value into another available fixed maturity option or
into any of the variable investment options; or
(b) withdraw the maturity value (there may be a withdrawal charge).
If we do not receive your choice on or before the fixed maturity option's
maturity date, we will automatically transfer your maturity value into the fixed
maturity option that will mature next.
MARKET VALUE ADJUSTMENT. If you make any withdrawals (including transfers,
surrender of your contract, or when we make deductions for charges) from a fixed
maturity option before it matures we will make a market value adjustment, which
will increase or decrease any fixed maturity amount you have in that fixed
maturity option. The amount of the adjustment will depend on two factors:
(a) the difference between the rate to maturity that applies to the amount being
withdrawn and the rate to maturity in effect at that time for new
allocations to that same fixed maturity option, and
(b) the length of time remaining until the maturity date.
In general, if interest rates rise from the time that you originally allocate an
amount to a fixed maturity option to the time that you take a withdrawal, the
market value adjustment will be negative. Likewise, if interest rates drop at
the end of that time, the market value adjustment will be positive. Also, the
amount of the market value adjustment, either up or down, will be greater the
longer the time remaining until the fixed maturity option's maturity date.
Therefore, it is possible that the market value adjustment could greatly reduce
your value in the fixed maturity options, particularly in the fixed maturity
options with later maturity dates.
We provide an illustration of the market adjusted amount of specified maturity
values, an explanation of how we calculate the market value adjustment, and
information concerning our general account and investments purchased with
amounts allocated to the fixed maturity options, in "More information" later in
this prospectus. Appendix II of this prospectus provides an example of how the
market value adjustment is calculated.
<PAGE>
26
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ACCOUNT FOR SPECIAL DOLLAR COST AVERAGING
The account for special dollar cost averaging is part of our general account. We
pay interest at guaranteed rates in this account. We will credit interest to the
amounts that you have in the account for special dollar cost averaging every
day. We set the interest rates periodically, according to procedures that we
have. We reserve the right to change these procedures.
We guarantee to pay our current interest rate that is in effect on the date that
your contribution is allocated to this account. Your guaranteed interest rate
for the time period you select will be shown in your contract. The rate will
never be less than 3%.
ALLOCATING YOUR CONTRIBUTIONS
You may choose from among three ways to allocate your contributions under your
contract: self-directed, principal assurance, or dollar cost averaging.
SELF-DIRECTED ALLOCATION
You may allocate your contributions to one or more, or all, of the variable
investment options and fixed maturity options. Allocations must be in whole
percentages and you may change your allocations at any time. However, the total
of your allocations must equal 100%. If the annuitant is age 76 or older, you
may allocate contributions to fixed maturity options if their maturities are
five years or less. Also, you may not allocate amounts to fixed maturity options
with maturity dates that are later than the February 15th immediately following
the date annuity payments are to begin.
PRINCIPAL ASSURANCE ALLOCATION
Under this allocation program you select a fixed maturity option. We specify the
portion of your initial contribution to be allocated to that fixed maturity
option in an amount that will cause the maturity value to equal the amount of
your entire initial contribution on the fixed maturity option's maturity date.
The maturity date you select generally may not be later than 10 years, or
earlier than 7 years from your contract date. You allocate the rest of your
contribution to the variable investment options however you choose.
For example, if your initial contribution is $10,000, and on March 15, 2000 you
chose the fixed maturity option with a maturity date of February 15, 2010, since
the rate to maturity was 5.98% on March 15, 2000, we would have allocated
$5,618.00 to that fixed maturity option and the balance to your choice of
variable investment options. On the maturity date your value in the fixed
maturity option would be $10,000.
The principal assurance allocation is only available for annuitant ages 75 or
younger when the contract is issued. If you are purchasing a Rollover IRA,
Flexible Premium IRA, QP, or Rollover TSA contract, before you select a maturity
year that would extend beyond the year in which you will reach age 70 1/2, you
should consider whether your value in the variable investment options, or your
other traditional IRA or TSA funds are sufficient to meet your required minimum
distributions. See "Tax information."
You may not elect principal assurance if the special dollar cost averaging
program is in effect.
DOLLAR COST AVERAGING
We offer two dollar cost averaging programs. Each program allows you to
gradually allocate amounts to the variable investment options by periodically
transferring approximately the same dollar amount to the variable investment
options you select. This will cause you to purchase more units if the unit's
value is low and fewer units if the unit's value is high. Therefore, you may get
a lower average cost per unit over the long term. These plans of investing,
however, do not guarantee that you will earn a profit or be protected against
losses.
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Units measure your value in each variable investment option.
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SPECIAL DOLLAR COST AVERAGING PROGRAM. Under the special dollar cost averaging
program, you may choose to allocate all or a portion of any eligible
contribution to the account for special dollar cost averaging. Currently the
only
<PAGE>
27
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eligible contribution is your initial contribution; however, we may permit other
contributions to contracts sold in the future to be eligible for the special
dollar cost averaging program. You must allocate at least $2,000 to the account
for special dollar cost averaging for this program. In Pennsylvania we refer to
this program as "enhanced rate dollar cost averaging."
You may have your account value transferred to any of the variable investment
options. We will transfer amounts from the account for special dollar cost
averaging into the variable investment options over an available time period
that you select. We offer time periods of 6, 12, or 18 months. We may also offer
other time periods. Your registered representative can provide information on
the time periods currently available in your state or you may contact our
processing office. You may only select one time period for each eligible
contribution. Each time period has a different interest rate. Once you select a
time period, you may not change it. Currently, your account value will be
transferred from the account for special dollar cost averaging into the variable
investment options on a monthly basis. We may offer this program in the future
with transfers on a different basis. We will transfer all amounts out of the
account for special dollar cost averaging by the end of the chosen time period.
The transfer date will be the same day of the month as the contract date, but
not later than the 28th day of the month.
If you choose to allocate only a portion of an eligible contribution to the
account for special dollar cost averaging, the remaining balance of that
contribution will be allocated to the variable investment options or fixed
maturity options according to your instructions.
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The account for special dollar cost averaging provides guaranteed interest.
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The only amounts that should be transferred from the account for special dollar
cost averaging are your regularly scheduled transfers to the variable investment
options. If you request to transfer or withdraw any other amounts from the
account for special dollar averaging, we will transfer all of the value that you
have remaining in the account for special dollar cost averaging attributable to
the affected contribution to the investment options according to the allocation
percentages we have on file for you. You may ask us to cancel your participation
at any time.
In the state of Oregon where the account for special dollar cost averaging is
not available, we offer a special dollar cost averaging program in the Alliance
Money Market option for allocation of your entire initial contribution. Under
this program we will not deduct the mortality and expense risks, administrative
and distribution charges from assets in the Alliance Money Market option. You
may not allocate amounts other than your initial contribution to this program.
GENERAL DOLLAR COST AVERAGING PROGRAM. If your value in the Alliance Money
Market option is at least $5,000, you may choose, at any time, to have a
specified dollar amount or percentage of your value transferred from that option
to the other variable investment options. You can select to have transfers made
on a monthly, quarterly, or annual basis. The transfer date will be the same
calendar day of the month as the contract date, but not later than the 28th day
of the month. You can also specify the number of transfers or instruct us to
continue making the transfers until all amounts in the Alliance Money Market
option have been transferred out.
The minimum amount that we will transfer each time is $250. The maximum amount
we will transfer is equal to your value in the Alliance Money Market option at
the time the program is elected, divided by the number of transfers scheduled to
be made.
If, on any transfer date, your value in the Alliance Money Market option is
equal to or less than the amount you have elected to have transferred, the
entire amount will be transferred. The general dollar cost averaging program
will then end. You may change the transfer amount once each contract year or
cancel this program at any time.
----------------------------------------
You may not elect dollar cost averaging or special dollar cost averaging if you
are participating in the rebalancing
<PAGE>
28
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program. See "Transferring your money among investment options." You may not
elect the special dollar cost averaging program if the principal assurance
program is in effect.
YOUR BENEFIT BASE
The benefit base is used to calculate both the guaranteed minimum income benefit
and the 5% roll up to age 80 guaranteed minimum death benefit. See "Our
baseBUILDER option" and "Guaranteed minimum death benefit" below. The benefit
base is equal to:
o your initial contribution and any additional contributions to the contract;
plus
o daily interest; less
o a deduction that reflects any withdrawals you make (the amount of the
deduction is described under "How withdrawals affect your guaranteed minimum
income benefit and guaranteed minimum death benefit" in "Accessing your
money"); less
o a deduction for any withdrawal charge remaining when you exercise your
guaranteed minimum income benefit; and less
o a deduction for any outstanding loan plus accrued interest on the date that
you exercise your guaranteed minimum income benefit (applies to Rollover TSA
only).
The effective annual interest rate credited to the benefit base is:
o 5% for the benefit base with respect to the variable investment options
(other than the Alliance Money Market option) and the account for special
dollar cost averaging; and
o 3% for the benefit base with respect to the Alliance Money Market option,
the fixed maturity options and the loan reserve account.
No interest is credited after the annuitant is age 80.
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Your benefit base is not an account value or a cash value.
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ANNUITY PURCHASE FACTORS
Annuity purchase factors are the factors applied to determine your periodic
payments under the guaranteed minimum income benefit and annuity payout options.
The guaranteed minimum income benefit is discussed under "Our baseBUILDER
option" and annuity payout options are discussed under "Your annuity payout
options" in "Accessing your money" later in this prospectus. The guaranteed
annuity purchase factors are those factors specified in your contract. The
current annuity purchase factors are those factors that are in effect at any
given time. Annuity purchase factors are based on interest rates, mortality
tables, frequency of payments, the form of annuity benefit, and the annuitant's
(and any joint annuitant's) age and sex in certain instances.
OUR BASEBUILDER OPTION
The baseBUILDER option offers you a guaranteed minimum income benefit combined
with the guaranteed minimum death benefit available under the contract. The
baseBUILDER benefit is available if the annuitant is between the ages of 20 and
75 at the time the contract is issued. There is an additional charge for the
baseBUILDER benefit which is described under "baseBUILDER benefit charge" in
"Charges and expenses."
The guaranteed minimum income benefit component of baseBUILDER is described
below. Whether you elect baseBUILDER or not, the guaranteed minimum death
benefit is provided under the contract. The guaranteed minimum death benefit is
described under "Guaranteed minimum death benefit." baseBUILDER is currently not
available in some states. Please ask your registered representative if
baseBUILDER is available in your state.
The guaranteed minimum income benefit guarantees you a minimum amount of fixed
income under your choice of a life annuity fixed payout option or an Income
Manager level payment life with a period certain payout option (subject to state
availability). You choose which of these payout options you want and whether you
want the option to be paid on a single or joint life basis at the time you
exercise your guaranteed minimum income benefit. The maximum period
<PAGE>
29
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certain available under the Income Manager payout option is 10 years. This
period may be shorter, depending on the annuitant's age when you exercise your
guaranteed minimum income benefit and the type of contract you own. We may also
make other forms of payout options available. For a description of payout
options, see "Your annuity payout options" in "Accessing your money" later in
this prospectus.
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The guaranteed minimum income benefit, which is also known as a living benefit,
should be regarded as a safety net only. It provides income protection if you
elect an income payout while the annuitant is alive.
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When you exercise the guaranteed minimum income benefit, the annual lifetime
income that you will receive under the life annuity payout option will be the
greater of (i) your guaranteed minimum income benefit which is calculated by
applying your benefit base at guaranteed annuity purchase factors, or (ii) the
income provided by applying your actual account value at our then current
annuity purchase factors.
When you elect to receive annual lifetime income, your contract will terminate
and you will receive an annuity payout option. You will begin receiving payments
one payment period after the annuity payout option is issued. Payments end with
the last payment before the annuitant's (or joint annuitant's, if applicable)
death. There is no continuation of benefits following the annuitant's (or joint
annuitant's, if applicable) death.
Before you elect baseBUILDER, you should consider the fact that the guaranteed
minimum income benefit provides a form of insurance and is based on conservative
actuarial factors. Therefore, even if your account value is less than your
benefit base, you may generate more income by applying your account value to
current annuity purchase factors. We will make this comparison for you when the
need arises.
You should also consider that the guaranteed annuity purchase factors we use to
determine your Income Manager benefit under baseBUILDER are more conservative
than the guaranteed annuity purchase factors we use for the Income Manager
payout annuity option. This means that, assuming the same amount is applied to
purchase the benefit and that we use guaranteed annuity purchase factors to
compute the benefit, each periodic payment under the baseBUILDER Income Manager
will be smaller than each periodic payment under the Income Manager payout
annuity option.
ILLUSTRATIONS OF GUARANTEED MINIMUM INCOME BENEFIT.
The table below illustrates the guaranteed minimum income benefit amounts per
$100,000 of initial contribution, for a male annuitant age 60 (at issue) on the
contract date anniversaries indicated, who has elected the life annuity fixed
payout option, using the guaranteed annuity purchase factors as of the date of
this prospectus, assuming no additional contributions, withdrawals, or loans
under Rollover TSA contracts, and assuming there were no allocations to the
Alliance Money Market option or the fixed maturity options.
<TABLE>
<CAPTION>
- ------------------------------------------------------------
GUARANTEED MINIMUM
CONTRACT DATE INCOME BENEFIT - ANNUAL INCOME
ANNIVERSARY AT EXERCISE PAYABLE FOR LIFE
- ------------------------------------------------------------
<S> <C>
10 $10,816
15 $16,132
- ------------------------------------------------------------
</TABLE>
EXERCISE OF GUARANTEED MINIMUM INCOME BENEFIT.
On each contract date anniversary that you are eligible to exercise the
guaranteed minimum income benefit, we will send you an eligibility notice
illustrating how much income could be provided as of the contract anniversary.
You may notify us within 30 days following the contract date anniversary if you
want to exercise the guaranteed minimum income benefit. You must return your
contract to us in order to exercise this benefit. The amount of income you
actually receive will be determined when we receive your request to exercise the
benefit. You will begin receiving payments one payment period after the annuity
payout contract is issued.
You (or the successor annuitant/owner, if applicable) will be eligible to
exercise the guaranteed minimum income benefit as follows:
<PAGE>
30
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o If the annuitant was at least age 20 and no older than age 44 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary
beginning with the 15th contract date anniversary.
o If the annuitant was at least age 45 and no older than age 49 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary after
the annuitant is age 60.
o If the annuitant was at least age 50 and no older than age 75 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary
beginning with the 10th contract date anniversary.
Please note:
(i) the latest date you may exercise the guaranteed minimum income benefit is
the contract date anniversary following the annuitant's 85th birthday;
(ii) if the annuitant was age 75 when the contract was issued, the only time
you may exercise the guaranteed minimum income benefit is within 30 days
following the first contract date anniversary that it becomes available;
(iii) if the annuitant was older than age 60 at the time an IRA, QP or Rollover
TSA contract was issued, the baseBUILDER may not be an appropriate feature
because the minimum distributions required by tax law must begin before
the guaranteed minimum income benefit can be exercised; and
(iv) For QP and Rollover TSA contracts, if you are eligible to exercise your
guaranteed minimum income benefit, we will first roll over amounts in such
contract to a Rollover IRA contract. You will be the owner of the Rollover
IRA contract.
GUARANTEED MINIMUM DEATH BENEFIT
A guaranteed minimum death benefit is provided as part of the baseBUILDER
benefit. A guaranteed minimum death benefit is also provided under your contract
even if you do not elect baseBUILDER. In this case, the baseBUILDER benefit
charge does not apply.
GUARANTEED MINIMUM DEATH BENEFIT APPLICABLE FOR ANNUITANT AGES 0 THROUGH 79 AT
ISSUE OF NQ CONTRACTS; 20 THROUGH 79 AT ISSUE OF ROLLOVER IRA, ROTH CONVERSION
IRA, FLEXIBLE PREMIUM ROTH IRA, AND ROLLOVER TSA CONTRACTS; 20 THROUGH 70 AT
ISSUE OF FLEXIBLE PREMIUM IRA CONTRACTS; AND 20 THROUGH 75 AT ISSUE OF QP
CONTRACTS.
You must elect either the "5% roll up to age 80" or the "annual ratchet to age
80" guaranteed minimum death benefit when you apply for a contract. Once you
have made your election, you may not change it.
5% ROLL UP TO AGE 80. This guaranteed minimum death benefit is equal to the
benefit base described earlier in "Your benefit base." This guaranteed minimum
death benefit is not available in New York.
ANNUAL RATCHET TO AGE 80. On the contract date, your guaranteed minimum death
benefit equals your initial contribution. Then, on each contract date
anniversary, we will determine your guaranteed minimum death benefit by
comparing your current guaranteed minimum death benefit to your account value on
that contract date anniversary. If your account value is higher than your
guaranteed minimum death benefit, we will increase your guaranteed minimum death
benefit to equal your account value. On the other hand, if your account value on
the contract date anniversary is less than your guaranteed minimum death
benefit, we will not adjust your guaranteed minimum death benefit either up or
down. If you make additional contributions, we will increase your current
guaranteed minimum death benefit by the dollar amount of the contribution on the
date the contribution is allocated to your investment options. If you take a
withdrawal from your contract, we will reduce your guaranteed minimum death
benefit on the date you take the withdrawal.
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31
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GUARANTEED MINIMUM DEATH BENEFIT APPLICABLE FOR ANNUITANT AGES 80 THROUGH 90 AT
ISSUE OF NQ, ROLLOVER IRA, ROTH CONVERSION IRA, FLEXIBLE PREMIUM ROTH IRA, AND
ROLLOVER TSA CONTRACTS.
On the contract date, your guaranteed minimum death benefit equals your initial
contribution. Thereafter, it will be increased by the dollar amount of any
additional contributions. We will reduce your guaranteed minimum death benefit
if you take any withdrawals.
----------------------------------------
Please see "How withdrawals affect your guaranteed minimum income benefit and
guaranteed minimum death benefit" in "Accessing your money" for information on
how withdrawals affect your guaranteed minimum death benefit. For contracts
issued in New York, the guaranteed minimum death benefit at the annuitant's
death will never be less than your value in the variable investment options,
plus the sum of the fixed maturity amounts in each fixed maturity option.
See Appendix III for an example of how we calculate the guaranteed minimum death
benefit.
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your contract, you may return it to
us for a refund. To exercise this cancellation right you must mail the contract
directly to our processing office within 10 days after you receive it. If state
law requires, this "free look" period may be longer.
Generally, your refund will equal your account value under the contract on the
day we receive notification of your decision to cancel the contract and will
reflect (i) any investment gain or loss in the variable investment options (less
the daily charges we deduct), (ii) any positive or negative market value
adjustments in the fixed maturity options, and (iii) any guaranteed interest in
the account for special dollar cost averaging, through the date we receive your
contract. Some states require that we refund the full amount of your
contribution (not reflecting (i), (ii) or (iii) above). For any IRA contract
returned to us within seven days after you receive it, we are required to refund
the full amount of your contribution.
We may require that you wait six months before you may apply for a contract with
us again if:
o you cancel your contract during the free look period; or
o you change your mind before you receive your contract whether we have
received your contribution or not.
Please see "Tax information" for possible consequences of cancelling your
contract.
In addition to the cancellation right described above, if you fully convert an
existing traditional IRA contract to a Roth Conversion IRA or Flexible Premium
Roth IRA contract, you may cancel your Roth Conversion IRA or Flexible Premium
Roth IRA contract and return to a Rollover IRA or Flexible Premium IRA contract,
whichever applies. Our processing office, or your registered representative, can
provide you with the cancellation instructions.
<PAGE>
32
2 Determining your contract's value
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YOUR ACCOUNT VALUE AND CASH VALUE
Your "account value" is the total of the: (i) values you have in the variable
investment options; (ii) market adjusted amounts in the fixed maturity options;
(iii) value in the account for special dollar cost averaging; and (iv) value you
have in the loan reserve account (applies for Rollover TSA contracts only).
These amounts are subject to certain fees and charges discussed under "Charges
and expenses."
Your contract also has a "cash value." At any time before annuity payments
begin, your contract's cash value is equal to the account value, less: (i) the
total amount or a pro rata portion of the annual administrative charge
(applicable for Flexible Premium IRA and Flexible Premium Roth IRA contracts
only); (ii) any applicable withdrawal charges; and (iii) the amount of any
outstanding loan plus accrued interest (applicable to Rollover TSA contracts
only). Please see "Surrendering your contract to receive its cash value" in
"Accessing your money."
YOUR CONTRACT'S VALUE IN THE VARIABLE INVESTMENT OPTIONS
Each variable investment option invests in shares of a corresponding portfolio.
Your value in each variable investment option is measured by "units." The value
of your units will increase or decrease as though you had invested it in the
corresponding portfolio's shares directly. Your value, however, will be reduced
by the amount of the fees and charges that we deduct under the contract.
The unit value for each variable investment option depends on the investment
performance of that option less daily charges for:
(i) mortality and expense risks;
(ii) administrative expenses; and
(iii) distribution charges.
On any day, your value in any variable investment option equals the number of
units credited to that option, adjusted for any units purchased for or deducted
from your contract under that option, multiplied by that day's value for one
unit. The number of your contract units in any variable investment option does
not change unless they are:
(i) increased to reflect additional contributions;
(ii) decreased to reflect a withdrawal (plus applicable withdrawal charges);
(iii) increased to reflect a transfer into, or decreased to reflect a transfer
out of, a variable investment option; or
(iv) decreased to reflect a transfer of your loan amount to the loan reserve
account under a Rollover TSA contract.
In addition, when we deduct the baseBUILDER benefit charge, the number of units
credited to your contract will be reduced. Your units are also reduced under
Flexible Premium IRA and Flexible Premium Roth IRA contracts when we deduct the
annual administrative charge. A description of how unit values are calculated is
found in the SAI.
YOUR CONTRACT'S VALUE IN THE FIXED MATURITY OPTIONS
Your value in each fixed maturity option at any time before the maturity date is
the market adjusted amount in each option. This is equivalent to your fixed
maturity amount increased or decreased by the market value adjustment. Your
value, therefore, may be higher or lower than your contributions (less
withdrawals) accumulated at the rate to maturity. At the maturity date, your
value in the fixed maturity option will equal its maturity value.
YOUR CONTRACT'S VALUE IN THE ACCOUNT FOR SPECIAL DOLLAR COST AVERAGING
Your value in the account for special dollar cost averaging at any time will
equal your contribution allocated to that option, plus interest, less the sum of
all amounts that have been transferred to the variable investment options you
have selected.
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33
3 Transferring your money among investment options
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TRANSFERRING YOUR ACCOUNT VALUE
At any time before the date annuity payments are to begin, you can transfer some
or all of your account value among the investment options, subject to the
following:
o You may not transfer any amount to the account for special dollar cost
averaging.
o You may not transfer to a fixed maturity option that matures in the current
calendar year, or that has a rate to maturity of 3% or less.
o If the annuitant is 76 or older, you must limit your transfers to fixed
maturity options to those with maturities of five years or less. Also, the
maturity dates may be no later than the February 15th immediately following
the date annuity payments are to begin.
o If you make transfers out of a fixed maturity option other than at its
maturity date the transfer may cause a market value adjustment.
You may request a transfer in writing, or by telephone using TOPS. (We
anticipate that transfers will be available online by using EQAccess by the end
of 2000.) You must send in all written transfer requests directly to our
processing office. Transfer requests should specify:
(1) the contract number,
(2) the dollar amounts or percentages of your current account value to be
transferred, and
(3) the investment options to and from which you are transferring.
We will confirm all transfers in writing.
MARKET TIMING
You should note that the product is not designed for professional "market
timing" organizations, or other organizations or individuals engaging in a
market timing strategy, making programmed transfers, frequent transfers or
transfers that are large in relation to the total assets of the underlying
mutual fund portfolio. Market timing strategies are disruptive to the underlying
mutual fund portfolios in which the variable investment options invest. If we
determine that your transfer patterns among the variable investment options
reflect a market timing strategy, we reserve the right to take action including,
but not limited to: restricting the availability of transfers through telephone
requests, facsimile transmissions, automated telephone services, Internet
services or any electronic transfer services. We may also refuse to act on
transfer instructions of an agent acting under a power of attorney who is acting
on behalf of more than one owner.
REBALANCING YOUR ACCOUNT VALUE
We currently offer a rebalancing program that you can use to automatically
reallocate your account value among the variable investment options. You must
tell us:
(a) the percentage you want invested in each variable investment option (whole
percentages only), and
(b) how often you want the rebalancing to occur (quarterly, semiannually, or
annually on a contract year basis. Rebalancing will occur on the same day of
the month as the contract date).
While your rebalancing program is in effect, we will transfer amounts among each
variable investment option so that the percentage of your account value that you
specify is invested in each option at the end of each rebalancing date. Your
entire account value in the variable investment options must be included in the
rebalancing program.
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Rebalancing does not assure a profit or protect against loss. You should
periodically review your allocation percentages as your needs change. You may
want to discuss the rebalancing program with your registered representative or
other financial adviser before electing the program.
- -----------------------------------------------------------------------------
You may elect the rebalancing program at any time. You may also change your
allocation instructions or cancel the program at any time. If you request a
transfer while the rebalancing program is in effect we will process the transfer
as requested; the rebalancing program will remain in effect unless you request
that it be canceled in writing.
<PAGE>
34
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You may not elect the rebalancing program if you are participating in the dollar
cost averaging or special dollar cost averaging program. Rebalancing is not
available for amounts you have allocated in the fixed maturity options.
<PAGE>
35
4 Accessing your money
- --------------------------------------------------------------------------------
WITHDRAWING YOUR ACCOUNT VALUE
You have several ways to withdraw your account value before annuity payments
begin. The table below shows the methods available under each type of contract.
More information follows the table. For the tax consequences of withdrawals, see
"Tax information."
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
METHOD OF WITHDRAWAL
- --------------------------------------------------------------------------
SUBSTANTIALLY MINIMUM
CONTRACT LUMP SUM SYSTEMATIC EQUAL DISTRIBUTION
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NQ Yes Yes No No
- --------------------------------------------------------------------------
Rollover IRA Yes Yes Yes Yes
- --------------------------------------------------------------------------
Flexible
Premium IRA Yes Yes Yes Yes
- --------------------------------------------------------------------------
Roth Conversion
IRA Yes Yes Yes No
- --------------------------------------------------------------------------
Flexible
Premium
Roth IRA Yes Yes Yes No
- --------------------------------------------------------------------------
QP Yes No No Yes
- --------------------------------------------------------------------------
Rollover TSA* Yes No No Yes
- --------------------------------------------------------------------------
</TABLE>
* For some Rollover TSA contracts, your ability to take withdrawals, loans or
surrender your contract may be limited. You must provide withdrawal
restriction information when you apply for a contract. See "Tax Sheltered
Annuity contracts (TSAs)" in "Tax information."
LUMP SUM WITHDRAWALS
(All contracts)
You may take lump sum withdrawals from your account value at any time. (Rollover
TSA contracts may have restrictions.) The minimum amount you may withdraw is
$300. If you request to withdraw more than 90% of a contract's current cash
value we will treat it as a request to surrender the contract for its cash
value. See "Surrendering your contract to receive its cash value" below.
Lump sum withdrawals in excess of the 15% free withdrawal amount (see "15% free
withdrawal amount" in "Charges and expenses") may be subject to a withdrawal
charge. Under Rollover TSA contracts, if a loan is outstanding, you may only
take lump sum withdrawals as long as the cash value remaining after any
withdrawal equals at least 10% of the outstanding loan plus accrued interest.
SYSTEMATIC WITHDRAWALS
(NQ and all IRA contracts)
You may take systematic withdrawals of a particular dollar amount or a
particular percentage of your account value.
You may take systematic withdrawals on a monthly, quarterly, or annual basis as
long as the withdrawals do not exceed the following percentages of your account
value: 1.2% monthly, 3.6% quarterly, and 15.0% annually. The minimum amount you
may take in each systematic withdrawal is $250. If the amount withdrawn would be
less than $250 on the date a withdrawal is to be taken, we will not make a
payment and we will terminate your systematic withdrawal election.
We will make the withdrawals on any day of the month that you select as long as
it is not later than the 28th day of the month. If you do not select a date, we
will make the withdrawals on the same calendar day of the month as the contract
date. You must wait at least 28 days after your contract is issued before your
systematic withdrawals can begin.
You may elect to take systematic withdrawals at any time. If you own an IRA
contract, you may elect this withdrawal method only if you are between ages
59 1/2 and 70 1/2.
You may change the payment frequency, or the amount or percentage of your
systematic withdrawals, once each contract year. However, you may not change the
amount or percentage in any contract year in which you have already taken a lump
sum withdrawal. You can cancel the systematic withdrawal option at any time.
Systematic withdrawals are not subject to a withdrawal charge, except to the
extent that, when added to a lump sum withdrawal previously taken in the same
contract year, the systematic withdrawal exceeds the 15% free withdrawal amount.
SUBSTANTIALLY EQUAL WITHDRAWALS
(All IRA contracts)
The substantially equal withdrawals option allows you to receive distributions
from your account value without
<PAGE>
36
- --------------------------------------------------------------------------------
triggering the 10% additional federal tax penalty, which normally applies to
distributions made before age 59 1/2. See "Tax information." Once you begin to
take substantially equal withdrawals, you should not stop them or change the
pattern of your withdrawals until after the later of age 59 1/2 or five full
years after the first withdrawal. If you stop or change the withdrawals or take
a lump sum withdrawal, you may be liable for the 10% federal tax penalty that
would have otherwise been due on prior withdrawals made under this option and
for any interest on those withdrawals.
You may elect to take substantially equal withdrawals at any time before age
59 1/2. We will make the withdrawal on any day of the month that you select as
long as it is not later than the 28th day of the month. You may not elect to
receive the first payment in the same contract year in which you took a lump sum
withdrawal. We will calculate the amount of your substantially equal
withdrawals. The payments will be made monthly, quarterly, or annually as you
select. These payments will continue until we receive written notice from you to
cancel this option or you take a lump sum withdrawal. You may elect to start
receiving substantially equal withdrawals again, but the payments may not
restart in the same contract year in which you took a lump sum withdrawal. We
will calculate the new withdrawal amount.
You may not elect substantially equal withdrawals if you have balances in the
account for special dollar cost averaging.
Substantially equal withdrawals are not subject to a withdrawal charge.
MINIMUM DISTRIBUTION WITHDRAWALS
(Rollover IRA, Flexible Premium IRA, QP, and Rollover TSA contracts only - See
"Tax information")
We offer the minimum distribution withdrawal option to help you meet lifetime
required minimum distributions under federal income tax rules. You may elect
this option in the year in which you reach age 70 1/2. The minimum amount we
will pay out is $250. You may elect the method you want us to use to calculate
your minimum distribution withdrawals from the choices we offer. Currently,
minimum distribution withdrawal payments will be made annually.
We do not impose a withdrawal charge on minimum distribution withdrawals except
if when added to a lump sum withdrawal previously taken in the same contract
year, the minimum distribution withdrawal exceeds the 15% free withdrawal
amount.
We will calculate your annual payment based on your account value at the end of
the prior calendar year based on the method you choose.
Under Rollover TSA contracts, you may not elect minimum distribution withdrawals
if a loan is outstanding.
- -----------------------------------------------------------------------------
For Rollover IRA, Flexible Premium IRA, QP, and Rollover TSA contracts, we will
send a form outlining the distribution options available in the year you reach
age 70 1/2 (if you have not begun your annuity payments before that time).
- -----------------------------------------------------------------------------
HOW WITHDRAWALS ARE TAKEN FROM YOUR ACCOUNT VALUE
Unless you specify otherwise, we will subtract your withdrawals on a pro rata
basis from your value in the variable investment options. If there is
insufficient value or no value in the variable investment options, any
additional amount of the withdrawal required or the total amount of the
withdrawal will be withdrawn from the fixed maturity options in order of the
earliest maturity date(s) first and then from the account for special dollar
cost averaging. A market value adjustment may apply to withdrawals from the
fixed maturity options.
HOW WITHDRAWALS AFFECT YOUR GUARANTEED MINIMUM INCOME BENEFIT AND GUARANTEED
MINIMUM DEATH BENEFIT
Withdrawals will reduce your guaranteed benefits on either a dollar-for-dollar
basis or on a pro rata basis as explained below:
<PAGE>
37
- --------------------------------------------------------------------------------
INCOME BENEFIT AND DEATH BENEFIT
5% roll up to age 80 - If you elect the 5% roll up to age 80 guaranteed minimum
death benefit, your benefit base will be reduced on a dollar-for-dollar basis as
long as the sum of your withdrawals in a contract year is 5% or less of the
guaranteed minimum death benefit on the most recent contract date anniversary.
Once you take a withdrawal that causes the sum of your withdrawals in a contract
year to exceed 5% of the guaranteed minimum death benefit on the most recent
contract date anniversary, that withdrawal and any subsequent withdrawals in
that same contract year will reduce your benefit base on a pro rata basis.
The timing of your withdrawals and whether they exceed the 5% threshold,
described above can have a significant impact on your guaranteed minimum income
benefit or guaranteed minimum death benefit.
Annual ratchet to age 80 - If you elect the annual ratchet to age 80 guaranteed
minimum death benefit, each withdrawal will always reduce your benefit base and
current guaranteed minimum death benefit on a pro rata basis.
Annuitant issue ages 80 through 90 - If your contract was issued when the
annuitant was between ages 80 and 90, each withdrawal will always reduce your
current guaranteed minimum death benefit on a pro rata basis.
----------------------------------------
Reduction on a dollar-for-dollar basis means that your current benefit will be
reduced by the dollar amount of the withdrawal. Reduction on a pro rata basis
means that we calculate the percentage of your current account value that is
being withdrawn and we reduce your current benefit by that same percentage. For
example, if your account value is $30,000 and you withdraw $12,000, you have
withdrawn 40% of your account value. If your guaranteed minimum death benefit
was $40,000 before the withdrawal, it would be reduced by $16,000 ($40,000 x.40)
and your new guaranteed minimum death benefit after the withdrawal would be
$24,000 ($40,000 - $16,000).
LOANS UNDER ROLLOVER TSA CONTRACTS
You may take loans from a Rollover TSA unless restricted by the employer who
provided the Rollover TSA funds. If you cannot take a loan, or cannot take a
loan without approval from the employer who provided the funds, we will have
this information in our records based on what you and the employer who provided
the funds told us when you purchased your contract. The employer must also tell
us whether special employer plan rules of the Employee Retirement Income
Security Act of 1974 ("ERISA") apply. We will not permit you to take a loan
while you are taking minimum distribution withdrawals.
You should read the terms and conditions on our loan request form carefully
before taking out a loan. Under Rollover TSA contracts subject to ERISA, you may
only take a loan with the written consent of your spouse. Your contract contains
further details of the loan provision. Also, see "Tax information" for general
rules applicable to loans.
We will permit you to have only one loan outstanding at a time. The minimum loan
amount is $1,000. The maximum amount is $50,000 or, if less, 50% of your account
value, subject to any limits under the federal income tax rules. The term of a
loan is five years. However, if you use the loan to acquire your primary
residence, the term is 10 years. The term may not extend beyond the earliest of:
(1) the date annuity payments begin,
(2) the date the contract terminates, and
(3) the date a death benefit is paid (the outstanding loan will be deducted from
the death benefit amount).
Interest will accrue daily on your outstanding loan at a rate we set. The loan
interest rate will be equal to the Moody's Corporate Bond Yield Averages for Baa
bonds for the calendar month ending two months before the first day of the
calendar quarter in which the rate is determined.
LOAN RESERVE ACCOUNT. On the date your loan is processed, we will transfer the
amount of your loan to the loan reserve account. Unless you specify otherwise,
we will subtract your loan on a pro rata basis from your value in the
<PAGE>
38
- --------------------------------------------------------------------------------
variable investment options. If there is insufficient value or no value in the
variable investment options, any additional amount of the loan will be
subtracted from the fixed maturity options in order of the earliest maturity
date(s) first. A market value adjustment may apply.
We will credit interest to the amount in the loan reserve account at a rate of
2% lower than the loan interest rate that applies for the time your loan is
outstanding. On each contract date anniversary after the date the loan is
processed, we will transfer the amount of interest earned in the loan reserve
account to the variable investment options on a pro rata basis. When you make a
loan repayment, unless you specify otherwise, we will transfer the dollar amount
of the loan repaid from the loan reserve account to the investment options
according to the allocation percentages we have on our records.
SURRENDERING YOUR CONTRACT TO RECEIVE ITS CASH VALUE
You may surrender your contract to receive its cash value at any time while the
annuitant is living and before you begin to receive annuity payments. (Rollover
TSA contracts may have restrictions.) For a surrender to be effective, we must
receive your written request and your contract at our processing office. We will
determine your cash value on the date we receive the required information. All
benefits under the contract will terminate as of that date.
You may receive your cash value in a single sum payment or apply it to one or
more of the annuity payout options. See "Your annuity payout options" below. For
the tax consequences of surrenders, see "Tax information."
WHEN TO EXPECT PAYMENTS
Generally, we will fulfill requests for payments out of the variable investment
options within seven calendar days after the date of the transaction to which
the request relates. These transactions may include applying proceeds to a
variable annuity, payment of a death benefit, payment of any amount you withdraw
(less any withdrawal charge) and, upon surrender, payment of the cash value. We
may postpone such payments or applying proceeds for any period during which:
(1) the New York Stock Exchange is closed or restricts trading,
(2) sales of securities or determination of the fair value of a variable
investment option's assets is not reasonably practicable because of an
emergency, or
(3) the SEC, by order, permits us to defer payment to protect people remaining
in the variable investment options.
We can defer payment of any portion of your value in the fixed maturity options
and the account for special dollar cost averaging (other than for death
benefits) for up to six months while you are living. We also may defer payments
for a reasonable amount of time (not to exceed 10 days) while we are waiting for
a contribution check to clear.
All payments are made by check and are mailed to you (or the payee named in a
tax-free exchange) by U.S. mail, unless you request that we use an express
delivery service at your expense.
YOUR ANNUITY PAYOUT OPTIONS
Equitable Accumulator offers you several choices of annuity payout options. Some
enable you to receive fixed annuity payments, which can be either level or
increasing, and others enable you to receive variable annuity payments.
You can choose from among the annuity payout options listed below. Restrictions
may apply, depending on the type of contract you own or the annuitant's age at
contract issue. In addition, if your are exercising your guaranteed minimum
income benefit under baseBUILDER, your choice of payout options are those that
are available under the baseBUILDER (see "Our baseBUILDER option").
<PAGE>
39
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
- ---------------------------------------------------------------
Fixed annuity payout options Life annuity
Life annuity with period
certain
Life annuity with refund
certain
Period certain annuity
- ---------------------------------------------------------------
Variable Immediate Annuity Life annuity (not available
payout options in New York)
Life annuity with period
certain
- ---------------------------------------------------------------
Income Manager payout Life annuity with period
options (available for certain
annuitants age 83 or less Period certain annuity
at contract issue)
- ---------------------------------------------------------------
</TABLE>
o Life annuity: An annuity that guarantees payments for the rest of the
annuitant's life. Payments end with the last monthly payment before the
annuitant's death. Because there is no continuation of benefits following
the annuitant's death with this payout option, it provides the highest
monthly payment of any of the life annuity options, so long as the annuitant
is living.
o Life annuity with period certain: An annuity that guarantees payments for
the rest of the annuitant's life. If the annuitant dies before the end of a
selected period of time ("period certain"), payments continue to the
beneficiary for the balance of the period certain. The period certain cannot
extend beyond the annuitant's life expectancy. A life annuity with a period
certain is the form of annuity under the contract that you will receive if
you do not elect a different payout option. In this case, the period certain
will be based on the annuitant's age and will not exceed 10 years.
o Life annuity with refund certain: An annuity that guarantees payments for
the rest of the annuitant's life. If the annuitant dies before the amount
applied to purchase the annuity option has been recovered, payments to the
beneficiary will continue until that amount has been recovered. This payout
option is available only as a fixed annuity.
o Period certain annuity: An annuity that guarantees payments for a specific
period of time, usually 5, 10, 15, or 20 years. This guaranteed period may
not exceed the annuitant's life expectancy. This option does not guarantee
payments for the rest of the annuitant's life. It does not permit any
repayment of the unpaid principal, so you cannot elect to receive part of
the payments as a single sum payment with the rest paid in monthly annuity
payments. This payout option is available only as a fixed annuity.
The life annuity, life annuity with period certain, and life annuity with refund
certain payout options are available on a single life or joint and survivor life
basis. The joint and survivor life annuity guarantees payments for the rest of
the annuitant's life, and after the annuitant's death, payments continue to the
survivor. We may offer other payout options not outlined here. Your registered
representative can provide details.
FIXED ANNUITY PAYOUT OPTIONS
With fixed annuities, we guarantee fixed annuity payments will be based either
on the tables of guaranteed annuity purchase factors in your contract or on our
then current annuity purchase factors, whichever is more favorable for you.
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTIONS
Variable Immediate Annuities are described in a separate prospectus that is
available from your registered representative. Before you select a Variable
Immediate Annuity payout option, you should read the prospectus which contains
important information that you should know.
Variable annuities may be funded through your choice of variable investment
options investing in portfolios of EQ Advisors Trust. The contract also offers a
fixed annuity option that can be elected in combination with the variable
annuity payout options. The amount of each variable annuity payment will
fluctuate, depending upon the performance of the variable investment options,
and whether the actual rate of investment return is higher or lower than an
assumed base rate.
<PAGE>
40
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INCOME MANAGER PAYOUT OPTIONS
The Income Manager payout annuity contracts differ from the other payout annuity
contracts. The other payout annuity contracts may provide higher or lower income
levels, but do not have all the features of the Income Manager payout annuity
contract. You may request an illustration of the Income Manager payout annuity
contract from your registered representative. Income Manager payout options are
described in a separate prospectus that is available from your registered
representative. Before you select an Income Manager payout option, you should
read the prospectus which contains important information that you should know.
Both Income Manager payout options provide guaranteed level payments (NQ and IRA
contracts). The Income Manager (life annuity with period certain) also provides
guaranteed increasing payments (NQ contracts only). You may not elect a period
certain Income Manager payout option unless withdrawal charges are no longer in
effect under your Equitable Accumulator.
For QP and Rollover TSA contracts, if you want to elect an Income Manager payout
option, we will first roll over amounts in such contract to a Rollover IRA
contract. You will be the owner of the Rollover IRA contract.
You may choose to apply only part of the account value of your Equitable
Accumulator contract to an Income Manager payout annuity. In this case, we will
consider any amounts applied as a withdrawal from your Equitable Accumulator and
we will deduct any applicable withdrawal charge. For the tax consequences of
withdrawals, see "Tax information."
Depending upon your circumstances, the purchase of an Income Manager contract
may be done on a tax-free basis. Please consult your tax adviser.
THE AMOUNT APPLIED TO PURCHASE AN ANNUITY PAYOUT OPTION
The amount applied to purchase an annuity payout option varies, depending on the
payout option that you choose, and the timing of your purchase as it relates to
any withdrawal charges or market value adjustments.
If amounts in a fixed maturity option are used to purchase any annuity payout
option, prior to the maturity date, a market value adjustment will apply.
For the fixed annuity payout options and Variable Immediate Annuity payout
options, no withdrawal charge is imposed if you select a life annuity, life
annuity with period certain or life annuity with refund certain.
For the fixed annuity payout option, the withdrawal charge applicable under your
Equitable Accumulator is imposed if you select a period certain. If the period
certain is more than 5 years, then the withdrawal charge deducted will not
exceed 5% of the account value.
For the Income Manager payout options, no withdrawal charge is imposed under the
Equitable Accumulator. If the withdrawal charge that otherwise would have been
applied to your account value under your Equitable Accumulator is greater than
2% of the contributions that remain in your contract at the time you purchase
your payout option, the withdrawal charges under the Income Manager will apply.
For this purpose, the year in which your account value is applied to the payout
option will be "contract year 1."
For contracts issued in New York where the annuitant was age 84 or 85 at
contract issue, any applicable withdrawal charge will be imposed if you select a
period certain annuity.
SELECTING AN ANNUITY PAYOUT OPTION
When you select a payout option, we will issue you a separate written agreement
confirming your right to receive annuity payments. We require you to return your
contract before annuity payments begin unless you are applying only some of your
account value to an Income Manager contract. The contract owner and annuitant
must meet the issue age and payment requirements.
You can choose the date annuity payments begin but it may not be earlier than
thirteen months from the Equitable Accumulator contract date. Except with
respect to the Income Manager annuity payout options, where payments
<PAGE>
41
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are made on the 15th day of each month, you can change the date your annuity
payments are to begin anytime before that date as long as you do not choose a
date later than the 28th day of any month. Also, that date may not be later
than:
(i) if the annuitant was not older than age 83 when the contract was issued,
the contract date anniversary that follows the annuitant's 90th birthday;
(ii) if the annuitant was age 84 but not older than age 88 when the contract
was issued the annuitant's age at issue plus seven years;
(iii) if the annuitant was age 89 or 90 when the contract was issued, age 95;
and
(iv) for contracts issued in New York, by the annuitant's 90th birthday.
The above may be different in some states.
Before the last date by which annuity payments must begin, we will notify you by
letter. Once you have selected an annuity payout option and payments have begun,
no change can be made other than: (i) transfers (if permitted in the future)
among the variable investment options if a Variable Immediate Annuity payout
option is selected; and (ii) withdrawals or contract surrender (subject to a
market value adjustment) if an Income Manager annuity payout option is chosen.
The amount of the annuity payments will depend on the amount applied to purchase
the annuity and the applicable annuity purchase factors, discussed earlier.
In no event will you ever receive payments under a fixed option or an initial
payment under a variable option of less than the minimum amounts guaranteed by
the contract.
If, at the time you elect a payout option, the amount to be applied is less than
$2,000 or the initial payment under the form elected is less than $20 monthly,
we reserve the right to pay the account value in a single sum rather than as
payments under the payout option chosen.
<PAGE>
42
5 Charges and expenses
- --------------------------------------------------------------------------------
CHARGES THAT EQUITABLE LIFE DEDUCTS
We deduct the following charges each day from the net assets of each variable
investment option. These charges are reflected in the unit values of each
variable investment option:
o A mortality and expense risks charge
o An administrative charge
o A distribution charge
We deduct the following charges from your account value. When we deduct these
charges from your variable investment options, we reduce the number of units
credited to your contract:
o On each contract date anniversary - an annual administrative charge, if
applicable (Flexible Premium IRA and Flexible Premium Roth IRA contracts
only).
o At the time you make certain withdrawals or surrender your contract - a
withdrawal charge.
o If you elect the optional benefit - a charge for the optional baseBUILDER
benefit.
o At the time annuity payments are to begin - charges designed to approximate
certain taxes that may be imposed on us, such as premium taxes in your
state. An annuity administrative fee may also apply.
More information about these charges appears below. We will not increase these
charges for the life of your contract, except as noted. We may reduce certain
charges under group or sponsored arrangements. See "Group or sponsored
arrangements" below.
To help with your retirement planning, we may offer other annuities with
different charges, benefits, and features. Please contact your registered
representative for more information.
MORTALITY AND EXPENSE RISKS CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for mortality and expense risks, including the guaranteed
minimum death benefit. The daily charge is equivalent to an annual rate of 1.10%
of the net assets in each variable investment option.
The mortality risk we assume is the risk that annuitants as a group will live
for a longer time than our actuarial tables predict. If that happens, we would
be paying more in annuity income than we planned. We also assume a risk that the
mortality assumptions reflected in our guaranteed annuity payment tables, shown
in each contract, will differ from actual mortality experience. Lastly, we
assume a mortality risk to the extent that at the time of death, the guaranteed
minimum death benefit exceeds the cash value of the contract. The expense risk
we assume is the risk that it will cost us more to issue and administer the
contracts than we expect.
ADMINISTRATIVE CHARGE
We deduct a daily charge from the net assets in each variable investment option.
The charge, together with the annual administrative charge described below, is
to compensate us for administrative expenses under the contracts. The daily
charge is equivalent to an annual rate of 0.25% of the net assets in each
variable investment option. We reserve the right under the contracts to increase
this charge to an annual rate of 0.35%.
DISTRIBUTION CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for a portion of our sales expenses under the contracts. The
daily charge is equivalent to an annual rate of 0.20% of the net assets in each
variable investment option.
ANNUAL ADMINISTRATIVE CHARGE (FLEXIBLE PREMIUM IRA AND FLEXIBLE PREMIUM ROTH IRA
CONTRACTS ONLY)
Under Flexible Premium IRA and Flexible Premium Roth IRA contracts, we deduct an
administrative charge from your account value on each contract date anniversary.
We deduct the charge if your account value on the last business day of the
contract year is less than $25,000. If your account value on such date is
$25,000 or more, we do not deduct the
<PAGE>
43
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charge. During the first two contract years, the charge is equal to $30 or, if
less, 2% of your account value. The charge is $30 for contract years three and
later.
We will deduct this charge from your value in the variable investment options on
a pro rata basis. If there is not enough value in the variable investment
options, we will deduct all or a portion of the charge from the fixed maturity
options in order of the earliest maturity date(s) first. If you surrender your
contract during the contract year we will deduct a pro rata portion of the
charge.
WITHDRAWAL CHARGE
A withdrawal charge applies in two circumstances: (1) if you make one or more
withdrawals during a contract year that, in total, exceed the 15% free
withdrawal amount, described below, or (2) if you surrender your contract to
receive its cash value.
The withdrawal charge equals a percentage of the contributions withdrawn. The
percentage that applies depends on how long each contribution has been invested
in the contract. We determine the withdrawal charge separately for each
contribution according to the following table:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
CONTRACT YEAR
- ------------------------------------------------------------------------------------
1 2 3 4 5 6 7 8+
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Percentage of
contribution 7% 6% 5% 4% 3% 2% 1% 0%
- ------------------------------------------------------------------------------------
</TABLE>
For purposes of calculating the withdrawal charge, we treat the contract year in
which we receive a contribution as "contract year 1." Amounts withdrawn up to
the free withdrawal amount are not considered withdrawal of any contribution. We
also treat contributions that have been invested the longest as being withdrawn
first. We treat contributions as withdrawn before earnings for purposes of
calculating the withdrawal charge. However, federal income tax rules treat
earnings under your contract as withdrawn first. See "Tax information."
Please note that you may incur a withdrawal charge if your contract was issued
in New York and your annuitant was age 84 or 85 at issue because you must accept
distribution of your cash value beginning with the contract anniversary
following the annuitant's 90th birthday.
In order to give you the exact dollar amount of the withdrawal you request, we
deduct the amount of the withdrawal and the withdrawal charge from your account
value. Any amount deducted to pay withdrawal charges is also subject to that
same withdrawal charge percentage. We deduct the charge in proportion to the
amount of the withdrawal subtracted from each investment option. The withdrawal
charge helps cover our sales expenses.
For annuitants that are ages 84 and 85 when the contract is issued in
Pennsylvania, the withdrawal charge will be computed in the same manner as for
other contracts, except that the withdrawal charge schedule will be different.
For these contracts, the withdrawal charge schedule will be 5% of each
contribution made in the first contract year, decreasing by 1% each subsequent
contract year to 0% in the sixth and later contract years.
The withdrawal charge does not apply in the circumstances described below.
ANNUITANT AGES 86 THROUGH 90 WHEN THE CONTRACT IS ISSUED. The withdrawal charge
does not apply under the contract if the annuitant is age 86 or older when the
contract is issued.
15% FREE WITHDRAWAL AMOUNT. Each contract year you can withdraw up to 15% of
your account value without paying a withdrawal charge. The 15% free withdrawal
amount is determined using your account value on the most recent contract date
anniversary, minus any other withdrawals made during the contract year. The 15%
free withdrawal amount does not apply if you surrender your contract.
Note the following special rule for NQ contracts issued to a charitable
remainder trust, the free withdrawal amount will equal the greater of: (1) the
current account value, less contributions that have not been withdrawn (earnings
in the contract), and (2) the 15% free withdrawal amount defined above.
<PAGE>
44
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DISABILITY, TERMINAL ILLNESS OR CONFINEMENT TO NURSING HOME. The withdrawal
charge does not apply if:
o The annuitant has qualified to receive Social Security disability benefits
as certified by the Social Security Administration; or
o We receive proof satisfactory to us (including certification by a licensed
physician) that the annuitant's life expectancy is six months or less; or
o The annuitant has been confined to a nursing home for more than 90 days (or
such other period, as required in your state) as verified by a licensed
physician. A nursing home for this purpose means one that is (a) approved by
Medicare as a provider of skilled nursing care service, or (b) licensed as a
skilled nursing home by the state or territory in which it is located (it
must be within the United States, Puerto Rico, or U.S. Virgin Islands) and
meets all of the following:
- its main function is to provide skilled, intermediate, or custodial
nursing care;
- it provides continuous room and board to three or more persons;
- it is supervised by a registered nurse or licensed practical nurse;
- it keeps daily medical records of each patient;
- it controls and records all medications dispensed; and
- its primary service is other than to provide housing for residents.
We reserve the right to impose a withdrawal charge, in accordance with your
contract and applicable state law, if the disability is caused by a preexisting
condition or a condition that began within 12 months of the contract date. Some
states may not permit us to waive the withdrawal charge in the above
circumstances, or may limit the circumstances for which the withdrawal charge
may be waived. Your registered representative can provide more information or
you may contact our processing office.
BASEBUILDER BENEFIT CHARGE
If you elect the baseBUILDER, we deduct a charge annually from your account
value on each contract date anniversary until such time as you exercise the
guaranteed minimum income benefit, elect another annuity payout option, or the
contract date anniversary after the annuitant reaches age 85, whichever occurs
first. The charge is equal to 0.30% of the benefit base in effect on the
contract date anniversary.
We will deduct this charge from your value in the variable investment options on
a pro rata basis. If there is not enough value in the variable investment
options, we will deduct all or a portion of the charge from the fixed maturity
options in order of the earliest maturity date(s) first. A market value
adjustment may apply.
CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES
We deduct a charge designed to approximate certain applicable taxes that may be
imposed on us, such as premium taxes in your state. Generally, we deduct the
charge from the amount applied to provide an annuity payout option. The current
tax charge that might be imposed by us varies by state and ranges from 0% to
3.5% (1% in Puerto Rico and 5% in the U.S. Virgin Islands).
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION ADMINISTRATIVE FEE
We deduct a fee of $350 from the amount to be applied to the Variable Immediate
Annuity payout option.
CHARGES THAT EQ ADVISORS TRUST DEDUCTS
EQ Advisors Trust deducts charges for the following types of fees and expenses:
o Management fees ranging from 0.25% to 1.15%.
o 12b-1 fees of 0.25%.
o Operating expenses, such as trustees' fees, independent auditors' fees,
legal counsel fees, administrative service fees, custodian fees, and
liability insurance.
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o Investment-related expenses, such as brokerage commissions.
These charges are reflected in the daily share price of each portfolio. Since
shares of EQ Advisors Trust are purchased at their net asset value, these fees
and expenses are, in effect, passed on to the variable investment options and
are reflected in their unit values. For more information about these charges,
please refer to the prospectus for EQ Advisors Trust following this prospectus.
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce the withdrawal charge
or the mortality and expense risks charge, or change the minimum initial
contribution requirements. We also may change the guaranteed minimum income
benefit and the guaranteed minimum death benefit, or offer variable investment
options that invest in shares of EQ Advisors Trust that are not subject to the
12b-1 fee. Group arrangements include those in which a trustee or an employer,
for example, purchases contracts covering a group of individuals on a group
basis. Group arrangements are not available for IRA contracts. Sponsored
arrangements include those in which an employer allows us to sell contracts to
its employees or retirees on an individual basis.
Our costs for sales, administration, and mortality generally vary with the size
and stability of the group or sponsoring organization, among other factors. We
take all these factors into account when reducing charges. To qualify for
reduced charges, a group or sponsored arrangement must meet certain
requirements, such as requirements for size and number of years in existence.
Group or sponsored arrangements that have been set up solely to buy contracts or
that have been in existence less than six months will not qualify for reduced
charges.
We also may establish different rates to maturity for the fixed maturity options
under different classes of contracts for group or sponsored arrangements.
We will make these and any similar reductions according to our rules in effect
when we approve a contract for issue. We may change these rules from time to
time. Any variation will reflect differences in costs or services and will not
be unfairly discriminatory.
Group or sponsored arrangements may be governed by federal income tax rules,
ERISA, or both. We make no representations with regard to the impact of these
and other applicable laws on such programs. We recommend that employers,
trustees, and others purchasing or making contracts available for purchase under
such programs seek the advice of their own legal and benefits advisers.
OTHER DISTRIBUTION ARRANGEMENTS
We may reduce or eliminate charges when sales are made in a manner that result
in savings of sales and administrative expenses, such as sales through persons
who are compensated by clients for recommending investments and who receive no
commission or reduced commissions in connection with the sale of the contracts.
We will not permit a reduction or elimination of charges where it would be
unfairly discriminatory.
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6 Payment of death benefit
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YOUR BENEFICIARY AND PAYMENT OF BENEFIT
You designate your beneficiary when you apply for your contract. You may change
your beneficiary at any time. The change will be effective on the date the
written request for the change is received in our processing office. We are not
responsible for any beneficiary change request that we do not receive. We will
send you a written confirmation when we receive your request. Under jointly
owned contracts, the surviving owner is considered the beneficiary, and will
take the place of any other beneficiary. You may be limited as to the
beneficiary you can designate in a Rollover TSA contract. In a QP contract, the
beneficiary must be the trustee.
The death benefit is equal to your account value, or, if greater, the guaranteed
minimum death benefit. The guaranteed minimum death benefit is part of your
contract, whether you select the baseBUILDER benefit or not. We determine the
amount of the death benefit (other than the guaranteed minimum death benefit) as
of the date we receive satisfactory proof of the annuitant's death and any
required instructions for the method of payment. We determine the amount of the
guaranteed minimum death benefit as of the date of the annuitant's death. Under
Rollover TSA contracts we will deduct the amount of any outstanding loan plus
accrued interest from the amount of the death benefit.
EFFECT OF THE ANNUITANT'S DEATH
If the annuitant dies before the annuity payments begin, we will pay the death
benefit to your beneficiary.
Generally, the death of the annuitant terminates the contract. However, a
beneficiary spouse of the owner/annuitant can choose to be treated as the
successor owner/annuitant and continue the contract. Only a spouse can be a
successor owner/annuitant. A successor owner/annuitant, can only be named under
NQ and IRA contracts.
For IRA contracts, a beneficiary may be able to have limited ownership as
discussed under "Beneficiary continuation option" below.
WHEN AN NQ CONTRACT OWNER DIES BEFORE THE ANNUITANT
Under certain conditions the owner changes after the original owner's death.
When you are not the annuitant under an NQ contract and you die before annuity
payments begin, the beneficiary named to receive the death benefit upon the
annuitant's death will automatically become the successor owner. If you do not
want this beneficiary to be the successor owner, you should name a specific
successor owner. You may name a successor owner at any time by sending
satisfactory notice to our processing office. If the contract is jointly owned
and the first owner to die is not the annuitant, the surviving owner becomes the
sole contract owner. This person will be considered the successor owner for
purposes of the distribution rules described in this section. The surviving
owner automatically takes the place of any other beneficiary designation.
Unless the surviving spouse of the owner who has died (or in the case of a joint
ownership situation, the surviving spouse of the first owner to die) is the
successor owner for this purpose, the entire interest in the contract must be
distributed under the following rules:
o The cash value of the contract must be fully paid to the successor owner
(new owner) by December 31st of the fifth calendar year after your death (or
in a joint ownership situation, the death of the first owner to die).
o The successor owner may instead elect to receive the cash value as a life
annuity (or payments for a period certain of not longer than the new owner's
life expectancy). Payments must begin no later than December 31st following
the calendar year of the non-annuitant owner's death. Unless this
alternative is elected, we will pay any cash value on December 31st of the
fifth calendar year following the year of your death (or the death of the
first owner to die).
o If the surviving spouse is the successor owner or joint owner, the spouse
may elect to continue the contract. No distributions are required as long as
the surviving spouse and annuitant are living.
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HOW DEATH BENEFIT PAYMENT IS MADE
We will pay the death benefit to the beneficiary in the form of the annuity
payout option you have chosen. If you have not chosen an annuity payout option
as of the time of the annuitant's death, the beneficiary will receive the death
benefit in a single sum. However, subject to any exceptions in the contract, our
rules and any applicable requirements under federal income tax rules, the
beneficiary may elect to apply the death benefit to one or more annuity payout
options we offer at the time. See "Your annuity payout options" in "Accessing
your money" earlier in this prospectus. Please note that any annuity payout
option chosen may not extend beyond the life expectancy of the beneficiary.
SUCCESSOR OWNER AND ANNUITANT
If you are both the contract owner and the annuitant, and your spouse is the
sole beneficiary or the joint owner, then your spouse may elect to receive the
death benefit or continue the contract as successor owner/annuitant.
If your surviving spouse decides to continue the contract, then on the contract
date anniversary following your death, we will increase the account value to
equal your current guaranteed minimum death benefit, if it is higher than the
account value. The increase in the account value will be allocated to the
investment options according to the allocation percentages we have on file for
your contract. Thereafter, withdrawal charges will no longer apply to this
amount. Withdrawal charges will apply if you make additional contributions.
These additional contributions will be withdrawn only after all other amounts
have been withdrawn. In determining whether the guaranteed minimum death benefit
will continue to grow, we will use your surviving spouse's age (as of the
contract date anniversary).
BENEFICIARY CONTINUATION OPTION
Upon your death under an IRA contract, a beneficiary may generally elect to keep
the contract in your name and receive distributions under the contract instead
of receiving the death benefit in a single sum. In order to elect this option,
the beneficiary must be an individual. Certain trusts with only individual
beneficiaries will be treated as individuals. This election must be made within
60 days following the date we receive proof of your death. We will increase the
account value to equal the death benefit if the death benefit is greater than
the account value. Except as noted in the next sentence, the beneficiary
continuation option will be available on or after May 1, 2000 depending on when
we receive regulatory clearance in your state. For Rollover IRA and Flexible
Premium IRA contracts, a similar beneficiary continuation option will be
available until the beneficiary continuation option described in this prospectus
is available. Please contact our processing office for further information.
Under the beneficiary continuation option:
o The contract continues in your name for the benefit of your beneficiary.
o The beneficiary may make transfers among the investment options but no
additional contributions will be permitted.
o The guaranteed minimum income benefit and the death benefit (including the
guaranteed minimum death benefit) provisions will no longer be in effect.
o The beneficiary may choose at any time to withdraw all or a portion of the
account value and no withdrawal charges will apply. Any partial withdrawal
must be at least $300.
o Upon the death of the beneficiary, any remaining death benefit will be paid
in a lump sum to the person the beneficiary chooses.
For Traditional IRA contracts only, if you die AFTER the "Required Beginning
Date" for required minimum distributions (see "Tax information"), the contract
will continue if:
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(a) You were receiving minimum distribution withdrawals from this contract; and
(b) The pattern of minimum distribution withdrawals you chose was based in part
on the life of the designated beneficiary.
The withdrawals will then continue to be paid to the beneficiary on the same
basis as you chose before your death. We will be able to tell your beneficiary
whether this option is available. You should contact our processing office for
further information.
For all of the above contracts, if you die BEFORE the Required Beginning Date
(and, for a traditional IRA, therefore you were not taking minimum distribution
withdrawals under the contract) the beneficiary may choose one of the following
two beneficiary continuation options:
1. Payments over life expectancy period. The beneficiary can receive annual
minimum distributions based on the beneficiary's life expectancy. If there is
more than one beneficiary, the shortest life expectancy is used. These minimum
distributions must begin by December 31st of the calendar year following the
year of your death. In some situations, a spouse beneficiary who elects to
continue the contract in your name under the beneficiary continuation option
instead of electing successor owner/annuitant status may also choose to delay
beginning the minimum distributions until the December 31st of the calendar year
in which you would have turned age 70 1/2.
2. Five Year Rule. The beneficiary can take withdrawals as desired. If the
beneficiary does not withdraw the entire account value by the December 31st of
the fifth calendar year following your death, we will pay any amounts remaining
under the contract to the beneficiary by that date. If you have more than one
beneficiary, and one of them elects this option, then all of your beneficiaries
will receive this option.
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7 Tax information
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OVERVIEW
In this part of the prospectus, we discuss the current federal income tax rules
that generally apply to Equitable Accumulator contracts owned by United States
taxpayers. The tax rules can differ, depending on the type of contract, whether
NQ, Rollover IRA, Flexible Premium IRA, Roth Conversion IRA, Flexible Premium
Roth IRA, QP, or Rollover TSA. Therefore, we discuss the tax aspects of each
type of contract separately.
Federal income tax rules include the United States laws in the Internal Revenue
Code, and Treasury Department Regulations and Internal Revenue Service ("IRS")
interpretations of the Internal Revenue Code. These tax rules may change. We
cannot predict whether, when, or how these rules could change. Any change could
affect contracts purchased before the change.
We cannot provide detailed information on all tax aspects of the contracts.
Moreover, the tax aspects that apply to a particular person's contract may vary
depending on the facts applicable to that person. We do not discuss state income
and other state taxes, federal income tax, and withholding rules for non-U.S.
taxpayers, or federal gift and estate taxes. Transfers of the contract, rights
under the contract, or payments under the contract may be subject to gift or
estate taxes. You should not rely only on this document, but should consult your
tax adviser before your purchase.
If you are buying a contract to fund a retirement plan that already provides tax
deferral under sections of the Internal Revenue Code (IRA, QP, and Rollover
TSA), you should do so for the contract's features and benefits other than tax
deferral. In such situations, the tax deferral of the contract does not provide
additional benefits.
TRANSFERS AMONG INVESTMENT OPTIONS
You can make transfers among investment options inside the contract without
triggering taxable income.
TAXATION OF NONQUALIFIED ANNUITIES
CONTRIBUTIONS
You may not deduct the amount of your contributions to a nonqualified annuity
contract.
CONTRACT EARNINGS
Generally, you are not taxed on contract earnings until you receive a
distribution from your contract, whether as a withdrawal or as an annuity
payment. However, earnings are taxable, even without a distribution:
o if a contract fails investment diversification requirements as specified in
federal income tax rules (these rules are based on or are similar to those
specified for mutual funds under the securities laws);
o if you transfer a contract, for example, as a gift to someone other than
your spouse (or former spouse);
o if you use a contract as security for a loan (in this case, the amount
pledged will be treated as a distribution); and
o if the owner is other than an individual (such as a corporation,
partnership, trust, or other non-natural person).
All nonqualified deferred annuity contracts that Equitable Life and its
affiliates issue to you during the same calendar year are linked together and
treated as one contract for calculating the taxable amount of any distribution
from any of those contracts.
ANNUITY PAYMENTS
Once annuity payments begin, a portion of each payment is taxable as ordinary
income. You get back the remaining portion without paying taxes on it. This is
your "investment in the contract." Generally, your investment in the contract
equals the contributions you made, less any amounts you previously withdrew that
were not taxable.
For fixed annuity payments, the tax-free portion of each payment is determined
by (1) dividing your investment in the contract by the total amount you are
expected to receive out of the contract, and (2) multiplying the result by the
amount
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of the payment. For variable annuity payments, your tax-free portion of each
payment is your investment in the contract divided by the number of expected
payments.
Once you have received the amount of your investment in the contract, all
payments after that are fully taxable. If payments under a life annuity stop
because the annuitant dies, there is an income tax deduction for any unrecovered
investment in the contract.
PAYMENTS MADE BEFORE ANNUITY PAYMENTS BEGIN
If you make withdrawals before annuity payments begin under your contract, they
are taxable to you as ordinary income if there are earnings in the contract.
Generally, earnings are your account value less your investment in the contract.
If you withdraw an amount which is more than the earnings in the contract as of
the date of the withdrawal, the balance of the distribution is treated as a
return of your investment in the contract and is not taxable.
CONTRACTS PURCHASED THROUGH EXCHANGES
You may purchase your NQ contract through an exchange of another contract.
Normally, exchanges of contracts are taxable events. The exchange will not be
taxable under Section 1035 of the Internal Revenue Code if:
o the contract that is the source of the funds you are using to purchase the
NQ contract is another nonqualified deferred annuity contract or life
insurance or endowment contract.
o the owner and the annuitant are the same under the source contract and the
Equitable Accumulator NQ contract. If you are using a life insurance or
endowment contract the owner and the insured must be the same on both sides
of the exchange transaction.
The tax basis of the source contract carries over to the Equitable Accumulator
NQ contract.
A recent case permitted an owner to direct the proceeds of a partial withdrawal
from one nonqualified deferred annuity contract to a different insurer to
purchase a new nonqualified deferred annuity contract on a tax-deferred basis.
Special forms, agreement between the carriers, and provision of cost basis
information may be required to process this type of an exchange.
SURRENDERS
If you surrender or cancel the contract, the distribution is taxable as ordinary
income (not capital gain) to the extent it exceeds your investment in the
contract.
DEATH BENEFIT PAYMENTS MADE TO A BENEFICIARY AFTER YOUR DEATH
For the rules applicable to death benefits, see "Payment of death benefit"
earlier in this prospectus. The tax treatment of a death benefit taken as a
single sum is generally the same as the tax treatment of a withdrawal from or
surrender of your contract. The tax treatment of a death benefit taken as
annuity payments is generally the same as the tax treatment of annuity payments
under your contract.
EARLY DISTRIBUTION PENALTY TAX
If you take distributions before you are age 59 1/2 a penalty tax of 10% of the
taxable portion of your distribution applies in addition to the income tax. The
extra penalty tax does not apply to pre-age 59 1/2 distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o in the form of substantially equal periodic annuity payments for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and a beneficiary.
OTHER INFORMATION
The Treasury Department has the authority to issue guidelines prescribing the
circumstances in which your ability to direct your investment to particular
portfolios within a separate account may cause you, rather than the insurance
company, to be treated as the owner of the portfolio shares attributable to your
nonqualified annuity contract. In that case, income and gains attributable to
such portfolio shares would be included in your gross income for federal income
tax purposes. Under current rules, however, we believe that
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Equitable Life, and not the owner of a nonqualified annuity contract, would be
considered the owner of the portfolio shares.
SPECIAL RULES FOR NQ CONTRACTS ISSUED IN PUERTO RICO
Under current law we treat income from NQ contracts as U.S. source. A Puerto
Rico resident is subject to U.S. taxation on such U.S. source income. Only
Puerto Rico source income of Puerto Rico residents is excludable from U.S.
taxation. Income from NQ contracts is also subject to Puerto Rico tax. The
calculation of the taxable portion of amounts distributed from a contract may
differ in the two jurisdictions. Therefore, you might have to file both U.S. and
Puerto Rico tax returns, showing different amounts of income from the contract
for each tax return. Puerto Rico generally provides a credit against Puerto Rico
tax for U.S. tax paid. Depending on your personal situation and the timing of
the different tax liabilities, you may not be able to take full advantage of
this credit.
INDIVIDUAL RETIREMENT ARRANGEMENTS (IRAS)
GENERAL
"IRA" stands for individual retirement arrangement. There are two basic types of
such arrangements, individual retirement accounts and individual retirement
annuities. In an individual retirement account, a trustee or custodian holds the
assets for the benefit of the IRA owner. The assets can include mutual funds and
certificates of deposit. In an individual retirement annuity, an insurance
company issues an annuity contract that serves as the IRA.
There are two basic types of IRAs, as follows:
o Traditional IRAs, typically funded on a pre-tax basis including SEP-IRAs and
SIMPLE-IRAs, issued and funded in connection with employer-sponsored
retirement plans; and
o Roth IRAs, first available in 1998, funded on an after-tax basis.
Regardless of the type of IRA, your ownership interest in the IRA cannot be
forfeited. You or your beneficiaries who survive you are the only ones who can
receive the IRA's benefits or payments.
You can hold your IRA assets in as many different accounts and annuities as you
would like, as long as you meet the rules for setting up and making
contributions to IRAs. However, if you own multiple IRAs, you may be required to
combine IRA values or contributions for tax purposes. For further information
about individual retirement arrangements, you can read Internal Revenue Service
Publication 590 ("Individual Retirement Arrangements (IRAs)"). This publication
is usually updated annually, and can be obtained from any IRS district office or
the IRS Web site (http://www.irs.gov).
Equitable Life designs its traditional IRA contracts to qualify as individual
retirement annuities under Section 408(b) of the Internal Revenue Code. You may
purchase the contract as a traditional IRA or Roth IRA. The traditional IRAs we
offer are the Rollover IRA and Flexible Premium IRA. The versions of the Roth
IRA available are the Roth Conversion IRA and Flexible Premium Roth IRA. This
prospectus contains the information that the IRS requires you to have before you
purchase an IRA. This section of the prospectus covers some of the special tax
rules that apply to IRAs. The next section covers Roth IRAs. Education IRAs are
not discussed in this prospectus because they are not available in individual
retirement annuity form.
The Equitable Accumulator IRA contract has been approved by the IRS as to form
for use as a traditional IRA. This IRS approval is a determination only as to
the form of the annuity. It does not represent a determination of the merits of
the annuity as an investment. The IRS approval does not address every feature
possibly available under the Equitable Accumulator IRA contract. Although we do
not have IRS approval as to form, we believe that the version of the Roth IRA
currently offered complies with the requirements of the Internal Revenue Code.
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CANCELLATION
You can cancel an Equitable Accumulator IRA contract by following the directions
under "Your right to cancel within a certain number of days" in "Contract
features and benefits" earlier in the prospectus. You can cancel an Equitable
Accumulator Roth Conversion IRA contract issued as a result of a full conversion
of an Equitable Accumulator Rollover IRA or Flexible Premium IRA contract by
following the instructions in the request for full conversion form. The form is
available from our processing office or your registered representative. If you
cancel an IRA contract, we may have to withhold tax, and we must report the
transaction to the IRS. A contract cancellation could have an unfavorable tax
impact.
TRADITIONAL INDIVIDUAL RETIREMENT ANNUITIES (TRADITIONAL IRAS)
CONTRIBUTIONS TO TRADITIONAL IRAS. Individuals may make three different types of
contributions to a traditional IRA:
o regular contributions out of earned income or compensation; or
o tax-free "rollover" contributions; or
o direct custodian-to-custodian transfers from other traditional IRAs ("direct
transfers").
REGULAR CONTRIBUTIONS TO TRADITIONAL IRAS
LIMITS ON CONTRIBUTIONS. Generally, $2,000 is the maximum amount that you may
contribute to all IRAs (including Roth IRAs) in any taxable year. When your
earnings are below $2,000, your earned income or compensation for the year is
the most you can contribute. This $2,000 limit does not apply to rollover
contributions or direct custodian-to-custodian transfers into a traditional IRA.
You cannot make regular traditional IRA contributions for the tax year in which
you reach age 70 1/2 or any tax year after that.
SPECIAL RULES FOR SPOUSES. If you are married and file a joint income tax
return, you and your spouse may combine your compensation to determine the
amount of regular contributions you are permitted to make to traditional IRAs
(and Roth IRAs discussed below). Even if one spouse has no compensation or
compensation under $2,000, married individuals filing jointly can contribute up
to $4,000 for any taxable year to any combination of traditional IRAs and Roth
IRAs. (Any contributions to Roth IRAs reduce the ability to contribute to
traditional IRAs and vice versa.) The maximum amount may be less if earned
income is less and the other spouse has made IRA contributions. No more than a
combined total of $2,000 can be contributed annually to either spouse's
traditional and Roth IRAs. Each spouse owns his or her traditional IRAs and Roth
IRAs even if the other spouse funded the contributions. A working spouse age
70 1/2 or over can contribute up to the lesser of $2,000 or 100% of "earned
income" to a traditional IRA for a nonworking spouse until the year in which the
nonworking spouse reaches age 70 1/2.
DEDUCTIBILITY OF CONTRIBUTIONS. The amount of traditional IRA contributions that
you can deduct for a tax year depends on whether you are covered by an
employer-sponsored tax-favored retirement plan, as defined under special federal
income tax rules. Your Form W-2 will indicate whether or not you are covered by
such a retirement plan.
IF YOU ARE NOT COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, you can
make fully deductible contributions to your traditional IRAs for each tax year
up to $2,000 or, if less, your earned income.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
adjusted gross income (AGI) is BELOW THE LOWER DOLLAR FIGURE IN A PHASE-OUT
RANGE, you can make fully deductible contributions to your traditional IRAs. For
each tax year, your fully deductible contribution can be up to $2,000 or, if
less, your earned income.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
AGI falls within a PHASE-OUT range, you can make PARTIALLY DEDUCTIBLE
CONTRIBUTIONS to your traditional IRAs.
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IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
AGI falls ABOVE THE HIGHER FIGURE IN THE PHASE-OUT RANGE, you may not deduct any
of your regular contributions to your traditional IRAs.
If you are single and covered by a retirement plan during any part of the
taxable year, the deduction for traditional IRA contributions phases out with
AGI between $32,000 and $42,000 in 2000. This range will increase every year
until 2005 when the range is $50,000-$60,000.
If you are married and file a joint return, and you are covered by a retirement
plan during any part of the taxable year, the deduction for traditional IRA
contributions phases out with AGI between $52,000 and $62,000 in 2000. This
range will increase every year until 2007 when the range is $80,000-$100,000.
Married individuals filing separately and living apart at all times are not
considered married for purposes of this deductible contribution calculation.
Generally, the active participation in an employer-sponsored retirement plan of
an individual is determined independently for each spouse. Where spouses have
"married filing jointly" status, however, the maximum deductible traditional IRA
contribution for an individual who is not an active participant (but whose
spouse is an active participant) is phased out for taxpayers with AGI of between
$150,000 and $160,000.
To determine the deductible amount of the contribution in 2000, you determine
AGI and subtract $32,000 if you are single, or $52,000 if you are married and
file a joint return with your spouse. The resulting amount is your excess AGI.
You then determine the limit on the deduction for traditional IRA contributions
using the following formula:
($10,000-excess AGI) times $2,000 (or earned Equals the adjusted
- ---------------------- x income, if less) = deductible
divided by $10,000 contribution
limit
NONDEDUCTIBLE REGULAR CONTRIBUTIONS. If you are not eligible to deduct part or
all of the traditional IRA contribution, you may still make nondeductible
contributions on which earnings will accumulate on a tax-deferred basis. The
combined deductible and nondeductible contributions to your traditional IRA (or
the nonworking spouse's traditional IRA) may not, however, exceed the maximum
$2,000 per person limit. See "Excess contributions" below. You must keep your
own records of deductible and nondeductible contributions in order to prevent
double taxation on the distribution of previously taxed amounts. See
"Withdrawals, payments and transfers of funds out of traditional IRAs" below.
If you are making nondeductible contributions in any taxable year, or you have
made nondeductible contributions to a traditional IRA in prior years and are
receiving distributions from any traditional IRA, you must file the required
information with the IRS. Moreover, if you are making nondeductible traditional
IRA contributions, you must retain all income tax returns and records pertaining
to such contributions until interests in all traditional IRAs are fully
distributed.
WHEN YOU CAN MAKE REGULAR CONTRIBUTIONS. If you file your tax returns on a
calendar year basis like most taxpayers, you have until the April 15 return
filing deadline (without extensions) of the following calendar year to make your
regular traditional IRA contributions for a tax year.
ROLLOVERS AND TRANSFERS
Rollover contributions may be made to a traditional IRA from these sources:
o qualified plans;
o TSAs (including Internal Revenue Code Section 403(b)(7) custodial accounts);
and
o other traditional IRAs.
Any amount contributed to a traditional IRA after you reach age 70 1/2 must be
net of your required minimum distribution for the year in which the rollover or
direct transfer contribution is made.
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ROLLOVERS FROM QUALIFIED PLANS OR TSAS
There are two ways to do rollovers:
o Do it yourself
You actually receive a distribution that can be rolled over and you roll
it over to a traditional IRA within 60 days after the date you receive the
funds. The distribution from your qualified plan or TSA will be net of 20%
mandatory federal income tax withholding. If you want, you can replace the
withheld funds yourself and roll over the full amount.
o Direct rollover
You tell your qualified plan trustee or TSA issuer/custodian/fiduciary to
send the distribution directly to your traditional IRA issuer. Direct
rollovers are not subject to mandatory federal income tax withholding.
All distributions from a TSA or qualified plan are eligible rollover
distributions, unless the distribution is:
o only after-tax contributions you made to the plan; or
o "required minimum distributions" after age 70 1/2 or separation from
service; or
o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancies) of you
and your designated beneficiary; or
o a hardship withdrawal; or
o substantially equal periodic payments made for a specified period of 10
years or more; or
o corrective distributions that fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse;
or
o a qualified domestic relations order distribution to a beneficiary who is
not your current spouse or former spouse.
ROLLOVERS FROM TRADITIONAL IRAS TO TRADITIONAL IRAS
You may roll over amounts from one traditional IRA to one or more of your other
traditional IRAs if you complete the transaction within 60 days after you
receive the funds. You may make such a rollover only once in every 12-month
period for the same funds. Trustee-to-trustee or custodian-to-custodian direct
transfers are not rollover transactions. You can make these more frequently than
once in every 12-month period.
The surviving spouse beneficiary of a deceased individual can roll over or
directly transfer an inherited traditional IRA to one or more other traditional
IRAs. Also, in some cases, traditional IRAs can be transferred on a tax-free
basis between spouses or former spouses as a result of a court-ordered divorce
or separation decree.
EXCESS CONTRIBUTIONS
Excess contributions to IRAs are subject to a 6% excise tax for the year in
which made and for each year after until withdrawn. The following are excess
contributions to IRAs:
o regular contributions of more than $2,000; or
o regular contributions of more than earned income for the year, if that
amount is under $2,000; or
o regular contributions to a traditional IRA made after you reach age 70 1/2;
or
o rollover contributions of amounts which are not eligible to be rolled over.
For example, after-tax contributions to a qualified plan or minimum
distributions required to be made after age 70 1/2.
You can avoid the excise tax by withdrawing an excess contribution (rollover or
regular) before the due date (including extensions) for filing your federal
income tax return for the year. If it is an excess regular traditional IRA
contribution, you cannot take a tax deduction for the amount withdrawn. You do
not have to include the excess contribution withdrawn as part of your income. It
is also not subject to the 10% additional penalty tax on early distributions,
discussed below under "Early distribution
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penalty tax." You do have to withdraw any earnings that are attributed to the
excess contribution. The withdrawn earnings would be included in your gross
income and could be subject to the 10% penalty tax.
Even after the due date for filing your return, you may withdraw an excess
rollover contribution, without income inclusion or 10% penalty, if:
(1) the rollover was from a qualified retirement plan to a traditional IRA;
(2) the excess contribution was due to incorrect information that the plan
provided; and
(3) you took no tax deduction for the excess contribution.
RECHARACTERIZATIONS
Amounts that have been contributed as traditional IRA funds may subsequently be
treated as Roth IRA funds. Special federal income tax rules allow you to change
your mind again and have amounts that are subsequently treated as Roth IRA
funds, once again treated as traditional IRA funds. You do this by using the
forms we prescribe. This is referred to as having "recharacterized" your
contribution.
WITHDRAWALS, PAYMENTS AND TRANSFERS OF FUNDS OUT OF TRADITIONAL IRAS
NO FEDERAL INCOME TAX LAW RESTRICTIONS ON WITHDRAWALS. You can withdraw any or
all of your funds from a traditional IRA at any time. You do not need to wait
for a special event like retirement.
TAXATION OF PAYMENTS. Earnings in traditional IRAs are not subject to federal
income tax until you or your beneficiary receive them. Taxable payments or
distributions include withdrawals from your contract, surrender of your
contract, and annuity payments from your contract. Death benefits are also
taxable. Except as discussed below, the total amount of any distribution from a
traditional IRA must be included in your gross income as ordinary income.
If you have ever made nondeductible IRA contributions to any traditional IRA (it
does not have to be to this particular traditional IRA contract), those
contributions are recovered tax free when you get distributions from any
traditional IRA. You must keep permanent tax records of all of your
nondeductible contributions to traditional IRAs. At the end of any year in which
you have received a distribution from any traditional IRA, you calculate the
ratio of your total nondeductible traditional IRA contributions (less any
amounts previously withdrawn tax free) to the total account balances of all
traditional IRAs you own at the end of the year plus all traditional IRA
distributions made during the year. Multiply this by all distributions from the
traditional IRA during the year to determine the nontaxable portion of each
distribution.
In addition, a distribution is not taxable if:
o the amount received is a withdrawal of excess contributions, as described
under "Excess contributions" above; or
o the entire amount received is rolled over to another traditional IRA (see
"Rollovers and transfers" above); or
o in certain limited circumstances, where the traditional IRA acts as a
"conduit," you roll over the entire amount into a qualified plan or TSA that
accepts rollover contributions. To get this conduit traditional IRA
treatment:
o the source of funds you used to establish the traditional IRA must
have been a rollover contribution from a qualified plan; and
o the entire amount received from the traditional IRA (including any
earnings on the rollover contribution) must be rolled over into
another qualified plan within 60 days of the date received.
Similar rules apply in the case of a TSA.
However, you may lose conduit treatment if you make an eligible rollover
distribution contribution to a traditional IRA and you commingle this
contribution with other contributions. In that case, you may not be able to roll
over these eligible rollover distribution contributions and earnings to another
qualified plan or TSA at a future date. The Rollover IRA contract can be used as
a conduit IRA if amounts are not commingled.
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Distributions from a traditional IRA are not eligible for favorable ten-year
averaging and long-term capital gain treatment available to certain
distributions from qualified plans.
REQUIRED MINIMUM DISTRIBUTIONS
LIFETIME REQUIRED MINIMUM DISTRIBUTIONS. You must start taking annual
distributions from your traditional IRAs beginning at age 70 1/2.
WHEN YOU HAVE TO TAKE THE FIRST REQUIRED MINIMUM DISTRIBUTION. The first
required minimum distribution is for the calendar year in which you turn age
70 1/2. You have the choice to take this first required minimum distribution
during the calendar year you actually reach age 70 1/2, or to delay taking it
until the first three-month period in the next calendar year (January 1 - April
1). Distributions must start no later than your Required Beginning Date, which
is April 1st of the calendar year after the calendar year in which you turn age
70 1/2. If you choose to delay taking the first annual minimum distribution,
then you will have to take two minimum distributions in that year - the delayed
one for the first year and the one actually for that year. Once minimum
distributions begin, they must be made at some time each year.
HOW YOU CAN CALCULATE REQUIRED MINIMUM DISTRIBUTIONS. There are two approaches
to taking required minimum distributions - "account-based" or "annuity-based."
Account-based method. If you choose an account-based method, you divide the
value of your traditional IRA as of December 31st of the past calendar year by a
life expectancy factor from IRS tables. This gives you the required minimum
distribution amount for that particular IRA for that year. The required minimum
distribution amount will vary each year as the account value and your life
expectancy factors change.
You have a choice of life expectancy factors, depending on whether you choose a
method based only on your life expectancy, or the joint life expectancies of you
and another individual. You can decide to "recalculate" your life expectancy
every year by using your current life expectancy factor. You can decide instead
to use the "term certain" method, where you reduce your life expectancy by one
every year after the initial year. If your spouse is your designated beneficiary
for the purpose of calculating annual account-based required minimum
distributions, you can also annually recalculate your spouse's life expectancy
if you want. If you choose someone who is not your spouse as your designated
beneficiary for the purpose of calculating annual account-based required minimum
distributions, you have to use the term certain method of calculating that
person's life expectancy. If you pick a nonspouse designated beneficiary, you
may also have to do another special calculation.
You can later apply your traditional IRA funds to a life annuity-based payout.
You can only do this if you already chose to recalculate your life expectancy
annually (and your spouse's life expectancy if you select a spousal joint
annuity). For example, if you anticipate exercising your guaranteed minimum
income benefit or selecting any other form of life annuity payout after you are
age 70 1/2, you must have elected to recalculate life expectancies.
Annuity-based method. If you choose an annuity-based method, you do not have to
do annual calculations. You apply the account value to an annuity payout for
your life or the joint lives of you and a designated beneficiary, or for a
period certain not extending beyond applicable life expectancies.
DO YOU HAVE TO PICK THE SAME METHOD TO CALCULATE YOUR REQUIRED MINIMUM
DISTRIBUTIONS FOR ALL OF YOUR TRADITIONAL IRAS AND OTHER RETIREMENT PLANS? No.
If you want, you can choose a different method and a different beneficiary for
each of your traditional IRAs and other retirement plans. For example, you can
choose an annuity payout from one IRA, a different annuity payout from a
qualified plan, and an account-based annual withdrawal from another IRA.
WILL WE PAY YOU THE ANNUAL AMOUNT EVERY YEAR FROM YOUR TRADITIONAL IRA BASED ON
THE METHOD YOU CHOOSE? No, unless you affirmatively select an annuity payout
option or an account-based withdrawal option such as our minimum distribution
withdrawal option. Because
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the options we offer do not cover every option permitted under federal income
tax rules, you may prefer to do your own required minimum distribution
calculations for one or more of your traditional IRAs.
WHAT IF YOU TAKE MORE THAN YOU NEED TO FOR ANY YEAR? The required minimum
distribution amount for your traditional IRAs is calculated on a year-by-year
basis. There are no carry-back or carry-forward provisions. Also, you cannot
apply required minimum distribution amounts you take from your qualified plans
to the amounts you have to take from your traditional IRAs and vice versa.
However, the IRS will let you calculate the required minimum distribution for
each traditional IRA that you maintain, using the method that you picked for
that particular IRA. You can add these required minimum distribution amount
calculations together. As long as the total amount you take out every year
satisfies your overall traditional IRA required minimum distribution amount, you
may choose to take your annual required minimum distribution from any one or
more traditional IRAs that you own.
WHAT IF YOU TAKE LESS THAN YOU NEED TO FOR ANY YEAR?
Your IRA could be disqualified, and you could have to pay tax on the entire
value. Even if your IRA is not disqualified, you could have to pay a 50% penalty
tax on the shortfall (required amount for traditional IRAs less amount actually
taken). It is your responsibility to meet the required minimum distribution
rules. We will remind you when our records show that your age 70 1/2 is
approaching. If you do not select a method with us, we will assume you are
taking your required minimum distribution from another traditional IRA that you
own.
WHAT ARE THE REQUIRED MINIMUM DISTRIBUTION PAYMENTS AFTER YOU DIE? If you die
after either (a) the start of annuity payments, or (b) your Required Beginning
Date, your beneficiary must receive payment of the remaining values in the
contract at least as rapidly as under the distribution method before your death.
In some circumstances, your surviving spouse may elect to become the owner of
the traditional IRA and halt distributions until he or she reaches age 70 1/2.
If you die before your Required Beginning Date and before annuity payments
begin, federal income tax rules require complete distribution of your entire
value in the contract within five years after your death. Payments to a
designated beneficiary over the beneficiary's life or over a period certain that
does not extend beyond the beneficiary's life expectancy are also permitted, if
these payments start within one year of your death. A surviving spouse
beneficiary can also (a) delay starting any payments until you would have
reached age 70 1/2 or (b) roll over your traditional IRA into his or her own
traditional IRA.
SUCCESSOR ANNUITANT AND OWNER
If your spouse is the sole primary beneficiary and elects to become the
successor annuitant and owner, no death benefit is payable until your surviving
spouse's death.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
IRA death benefits are taxed the same as IRA distributions.
BORROWING AND LOANS ARE PROHIBITED TRANSACTIONS
You cannot get loans from a traditional IRA. You cannot use a traditional IRA as
collateral for a loan or other obligation. If you borrow against your IRA or use
it as collateral, its tax-favored status will be lost as of the first day of the
tax year in which this prohibited event occurs. If this happens, you must
include the value of the traditional IRA in your federal gross income. Also, the
early distribution penalty tax of 10% will apply if you have not reached age 59
1/2 before the first day of that tax year.
EARLY DISTRIBUTION PENALTY TAX
A penalty tax of 10% of the taxable portion of a distribution applies to
distributions from a traditional IRA made before you reach age 59 1/2. The extra
penalty tax does not apply to pre-age 59 1/2 distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o used to pay certain extraordinary medical expenses (special federal income
tax definition); or
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o used to pay medical insurance premiums for unemployed individuals (special
federal income tax definition); or
o used to pay certain first-time home buyer expenses (special federal income
tax definition; $10,000 lifetime total limit for these distributions from
all your traditional and Roth IRAs); or
o used to pay certain higher education expenses (special federal income tax
definition); or
o in the form of substantially equal periodic payments made at least annually
over your life (or your life expectancy), or over the joint lives of you and
your beneficiary (or your joint life expectancy) using an IRS-approved
distribution method.
To meet this last exception, you could elect to apply your contract value to an
Income Manager (life annuity with a period certain) payout annuity contract
(level payments version). You could also elect the substantially equal
withdrawals option. We will calculate the substantially equal annual payments
under a method we select based on guidelines issued by the IRS (currently
contained in IRS Notice 89-25, Question and Answer 12). Although substantially
equal withdrawals and Income Manager payments are not subject to the 10% penalty
tax, they are taxable as discussed in "Withdrawals, payments and transfers of
funds out of traditional IRAs" above. Once substantially equal withdrawals or
Income Manager annuity payments begin, the distributions should not be stopped
or changed until after the later of your reaching age 59 1/2 or five years after
the date of the first distribution, or the penalty tax, including an interest
charge for the prior penalty avoidance, may apply to all prior distributions
under either option. Also, it is possible that the IRS could view any additional
withdrawal or payment you take from your contract as changing your pattern of
substantially equal withdrawals or Income Manager payments for purposes of
determining whether the penalty applies.
ROTH INDIVIDUAL RETIREMENT ANNUITIES (ROTH IRAS)
This section of the prospectus covers some of the special tax rules that apply
to Roth IRAs. If the rules are the same as those that apply to the traditional
IRA, we will refer you to the same topic under "traditional IRAs."
The Equitable Accumulator Roth IRA contract is designed to qualify as a Roth
individual retirement annuity under Sections 408A and 408(b) of the Internal
Revenue Code.
CONTRIBUTIONS TO ROTH IRAS
Individuals may make four different types of contributions to a Roth IRA:
o regular after-tax contributions out of earnings; or
o taxable rollover contributions from traditional IRAs ("conversion"
contributions); or
o tax-free rollover contributions from other Roth IRAs; or
o tax-free direct custodian-to-custodian transfers from other Roth IRAs
("direct transfers").
Regular after-tax, direct transfer, and rollover contributions may be made to a
Flexible Premium Roth IRA contract. We only permit direct transfer and rollover
contributions under the Roth Conversion IRA contract. See "Rollovers and direct
transfers" below. If you use the forms we require, we will also accept
traditional IRA funds which are subsequently recharacterized as Roth IRA funds
following special federal income tax rules.
REGULAR CONTRIBUTIONS TO ROTH IRAS
LIMITS ON REGULAR CONTRIBUTIONS. Generally, $2,000 is the maximum amount that
you may contribute to all IRAs (including Roth IRAs) in any taxable year. This
$2,000 limit does not apply to rollover contributions or direct
custodian-to-custodian transfers into a Roth IRA. Any contributions to Roth IRAs
reduce your ability to contribute to traditional IRAs and vice versa. When your
earnings are below $2,000, your earned income or compensation for the year is
the most you can contribute. If you are married and file a joint income tax
return, you and your spouse may combine your compensation to determine the
amount of regular contributions you are permitted to make to Roth IRAs and
traditional IRAs. See the discussion above under traditional IRAs.
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With a Roth IRA, you can make regular contributions when you reach 70 1/2, as
long as you have sufficient earnings. But, you cannot make contributions for any
year that:
o your federal income tax filing status is "married filing jointly" and your
adjusted gross income is over $160,000; or
o your federal income tax filing status is "single" and your adjusted gross
income is over $110,000.
However, you can make regular Roth IRA contributions in reduced amounts when:
o your federal income tax filing status is "married filing jointly" and your
adjusted gross income is between $150,000 and $160,000; or
o your federal income tax filing status is "single" and your adjusted gross
income is between $95,000 and $110,000.
If you are married and filing separately and your adjusted gross income is
between $0 and $10,000 the amount of regular contributions you are permitted to
make is phased out. If your adjusted gross income is more than $10,000 you
cannot make regular Roth IRA contributions.
WHEN YOU CAN MAKE CONTRIBUTIONS. Same as traditional IRAs.
DEDUCTIBILITY OF CONTRIBUTIONS. Roth IRA contributions are not tax deductible.
ROLLOVERS AND DIRECT TRANSFERS
WHAT IS THE DIFFERENCE BETWEEN ROLLOVER AND DIRECT TRANSFER TRANSACTIONS? You
may make rollover contributions to a Roth IRA from only two sources:
o another Roth IRA ("tax-free rollover contribution"); or
o another traditional IRA, including a SEP-IRA or SIMPLE-IRA, in a taxable
conversion rollover ("conversion contribution").
You may not make contributions to a Roth IRA from a qualified plan under Section
401(a) of the Internal Revenue Code, or a TSA under Section 403(b) of the
Internal Revenue Code. You may make direct transfer contributions to a Roth IRA
only from another Roth IRA.
The difference between a rollover transaction and a direct transfer transaction
is the following: in a rollover transaction you actually take possession of the
funds rolled over, or are considered to have received them under tax law in the
case of a change from one type of plan to another. In a direct transfer
transaction, you never take possession of the funds, but direct the first Roth
IRA custodian, trustee, or issuer to transfer the first Roth IRA funds directly
to Equitable Life, as the Roth IRA issuer. You can make direct transfer
transactions only between identical plan types (for example, Roth IRA to Roth
IRA). You can also make rollover transactions between identical plan types.
However, you can only use rollover transactions between different plan types
(for example, traditional IRA to Roth IRA).
You may make both Roth IRA to Roth IRA rollover transactions and Roth IRA to
Roth IRA direct transfer transactions. This can be accomplished on a completely
tax-free basis. However, you may make Roth IRA to Roth IRA rollover transactions
only once in any 12-month period for the same funds. Trustee-to-trustee or
custodian-to-custodian direct transfers can be made more frequently than once a
year. Also, if you send us the rollover contribution to apply it to a Roth IRA,
you must do so within 60 days after you receive the proceeds from the original
IRA to get rollover treatment.
The surviving spouse beneficiary of a deceased individual can roll over or
directly transfer an inherited Roth IRA to one or more other Roth IRAs. In some
cases, Roth IRAs can be transferred on a tax-free basis between spouses or
former spouses as a result of a court-ordered divorce or separation decree.
CONVERSION CONTRIBUTIONS TO ROTH IRAS
In a conversion rollover transaction, you withdraw (or are considered to have
withdrawn) all or a portion of funds from a traditional IRA you maintain and
convert it to a Roth IRA within 60 days after you receive (or are considered to
have received) the traditional IRA proceeds. Unlike a
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rollover from a traditional IRA to another traditional IRA, the conversion
rollover transaction is not tax-free. Instead, the distribution from the
traditional IRA is generally fully taxable. For this reason, we are required to
withhold 10% federal income tax from the amount converted unless you elect out
of such withholding. If you have ever made nondeductible regular contributions
to any traditional IRA - whether or not it is the traditional IRA you are
converting - a pro rata portion of the distribution is tax free.
There is, however, no early distribution penalty tax on the traditional IRA
withdrawal that you are converting to a Roth IRA, even if you are under age 59
1/2.
You cannot make conversion contributions to a Roth IRA for any taxable year in
which your adjusted gross income exceeds $100,000. For this purpose, your
adjusted gross income is computed without the gross income stemming from the
traditional IRA conversion. You also cannot make conversion contributions to a
Roth IRA for any taxable year in which your federal income tax filing status is
"married filing separately."
Finally, you cannot make conversion contributions to a Roth IRA to the extent
that the funds in your traditional IRA are subject to the annual required
minimum distribution rule applicable to traditional IRAs beginning at age 70
1/2.
WITHDRAWALS, PAYMENTS AND TRANSFERS OF FUNDS OUT OF ROTH IRAS
NO FEDERAL INCOME TAX LAW RESTRICTIONS ON WITHDRAWALS. You can withdraw any or
all of your funds from a Roth IRA at any time; you do not need to wait for a
special event like retirement.
DISTRIBUTIONS FROM ROTH IRAS
Distributions include withdrawals from your contract, surrender of your
contract, and annuity payments from your contract. Death benefits are also
distributions.
The following distributions from Roth IRAs are free of income tax:
o Rollover from a Roth IRA to another Roth IRA;
o Direct transfer from a Roth IRA to another Roth IRA;
o Qualified distributions from a Roth IRA; and
o Return of excess contributions or amounts recharacterized to a traditional
IRA.
QUALIFIED DISTRIBUTIONS FROM ROTH IRAS. Qualified distributions from Roth IRAs
made because of one of the following four qualifying events or reasons are not
includable in income:
o you reach age 59 1/2; or
o you die; or
o you become disabled (special federal income tax definition); or
o your distribution is a "qualified first-time homebuyer distribution"
(special federal income tax definition; $10,000 lifetime total limit for
these distributions from all of your traditional and Roth IRAs).
You also have to meet a five-year aging period. A qualified distribution is any
distribution made after the five-taxable- year period beginning with the first
taxable year for which you made any contribution to any Roth IRA (whether or not
the one from which the distribution is being made). It is not possible to have a
tax-free qualified distribution before the year 2003 because of the five-year
aging requirement.
NONQUALIFIED DISTRIBUTIONS FROM ROTH IRAS. Nonqualified distributions from Roth
IRAs are distributions that do not meet the qualifying event and five-year aging
period tests described above. Such distributions are potentially taxable as
ordinary income. Nonqualified distributions receive return-of-investment-first
treatment. Only the difference between the amount of the distribution and the
amount of contributions to all of your Roth IRAs is taxable. You have to reduce
the amount of contributions to all of your Roth IRAs to reflect any previous
tax-free recoveries.
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You must keep your own records of regular and conversion contributions to all
Roth IRAs to assure appropriate taxation. You may have to file information on
your contributions to and distributions from any Roth IRA on your tax return.
You may have to retain all income tax returns and records pertaining to such
contributions and distributions until your interests in all Roth IRAs are
distributed.
Like traditional IRAs, taxable distributions from a Roth IRA are not entitled to
the special favorable five-year averaging method (or, in certain cases,
favorable ten-year averaging and long-term capital gain treatment) available in
certain cases to distributions from qualified plans.
REQUIRED MINIMUM DISTRIBUTIONS AT DEATH
Same as traditional IRA under "What are the required minimum distribution
payments after you die?" Lifetime required minimum distributions do not apply.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
Distributions to a beneficiary generally receive the same tax treatment as if
the distribution had been made to you.
BORROWING AND LOANS ARE PROHIBITED TRANSACTIONS
Same as traditional IRA.
EXCESS CONTRIBUTIONS
Generally the same as traditional IRA.
Excess rollover contributions to Roth IRAs are contributions not eligible to be
rolled over (for example, conversion contributions from a traditional IRA if
your adjusted gross income is in excess of $100,000 in the conversion year).
You can withdraw or recharacterize any contribution to a Roth IRA before the due
date (including extensions) for filing your federal income tax return for the
tax year. If you do this, you must also withdraw or recharacterize any earnings
attributable to the contribution.
EARLY DISTRIBUTION PENALTY TAX
Same as traditional IRA.
For Roth IRAs, special penalty rules may apply to amounts withdrawn attributable
to 1998 conversion rollovers.
SPECIAL RULES FOR NONQUALIFIED CONTRACTS IN QUALIFIED PLANS
Under QP contracts your plan administrator or trustee notifies you as to tax
consequences. See Appendix I.
TAX-SHELTERED ANNUITY CONTRACTS (TSAS)
GENERAL
This section of the prospectus covers some of the special tax rules that apply
to TSA contracts under Section 403(b) of the Internal Revenue Code (TSAs). If
the rules are the same as those that apply to another kind of contract, for
example, traditional IRAs, we will refer you to the same topic under
"traditional IRAs."
CONTRIBUTIONS TO TSAS
There are two ways you can make contributions to this Equitable Accumulator
Rollover TSA contract:
o a rollover from another TSA contract or arrangement that meets the
requirements of Section 403(b) of the Internal Revenue Code, or
o a full or partial direct transfer of assets ("direct transfer") from another
contract or arrangement that meets the requirements of Section 403(b) of the
Internal Revenue Code by means of IRS Revenue Ruling 90-24.
With appropriate written documentation satisfactory to us, we will accept
rollover contributions from "conduit IRAs" for TSA funds.
If you make a direct transfer, you must fill out our transfer form.
EMPLOYER-REMITTED CONTRIBUTIONS. The Equitable Accumulator Rollover TSA contract
does not accept employer-remitted contributions. However, we provide the
following discussion as part of our description of restrictions on the
distribution of funds directly transferred, which include employer-remitted
contributions to other TSAs.
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Employer-remitted contributions to TSAs made through the employer's payroll are
subject to annual limits. (Tax-free transfer or tax-deferred rollover
contributions from another 403(b) arrangement are not subject to these annual
contribution limits.) Commonly, some or all of the contributions made to a TSA
are made under a salary reduction agreement between the employee and the
employer. These contributions are called "salary reduction" or "elective
deferral" contributions. However, a TSA can also be wholly or partially funded
through nonelective employer contributions or after-tax employee contributions.
Amounts attributable to salary reduction contributions to TSAs are generally
subject to withdrawal restrictions. Also, all amounts attributable to
investments in a 403(b)(7) custodial account are subject to withdrawal
restrictions discussed below.
ROLLOVER OR DIRECT TRANSFER CONTRIBUTIONS. You may make rollover contributions
to your Equitable Accumulator Rollover TSA contract from TSAs under Section
403(b) of the Internal Revenue Code. Generally, you may make a rollover
contribution to a TSA when you have a distributable event from an existing TSA
as a result of your:
o termination of employment with the employer who provided the TSA funds; or
o reaching age 59 1/2 even if you are still employed; or
o disability (special federal income tax definition).
A transfer occurs when changing the funding vehicle, even if there is no
distributable event. Under a direct transfer, you do not receive a distribution.
We accept direct transfers of TSA funds under Revenue Ruling 90-24 only if:
o you give us acceptable written documentation as to the source of the funds,
and
o the Equitable Accumulator contract receiving the funds has provisions at
least as restrictive as the source contract.
Before you transfer funds to an Equitable Accumulator Rollover TSA contract, you
may have to obtain your employer's authorization or demonstrate that you do not
need employer authorization. For example, the transferring TSA may be subject to
Title I of ERISA, if the employer makes matching contributions to salary
reduction contributions made by employees. In that case, the employer must
continue to approve distributions from the plan or contract.
Your contribution to the Equitable Accumulator Rollover TSA must be net of the
required minimum distribution for the tax year in which we issue the contract
if:
o you are or will be at least age 70 1/2 in the current calendar year, and
o you have separated from service with the employer who provided the funds to
purchase the TSA you are transferring or rolling over to the Equitable
Accumulator Rollover TSA.
This rule applies regardless of whether the source of funds is a:
o rollover by check of the proceeds from another TSA; or
o direct rollover from another TSA; or
o direct transfer under Revenue Ruling 90-24 from another TSA.
Further, you must use the same elections regarding recalculation of your life
expectancy (and if applicable, your spouse's life expectancy) if you have
already begun to receive required minimum distributions from or with respect to
the TSA from which you are making your contribution to the Equitable Accumulator
Rollover TSA. You must also elect or have elected a minimum distribution
calculation method requiring recalculation of your life expectancy (and if
applicable, your spouse's life expectancy) if you elect an annuity payout for
the funds in this contract subsequent to this year.
DISTRIBUTIONS FROM TSAS
GENERAL. Depending on the terms of the employer plan and your employment status,
you may have to get your employer's consent to take a loan or withdrawal. Your
employer will tell us this when you establish the TSA through a direct transfer.
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WITHDRAWAL RESTRICTIONS. If this is a Revenue Ruling 90-24 direct transfer, we
will treat all amounts transferred to this contract and any future earnings on
the amount transferred as not eligible for withdrawal until one of the following
events happens:
o you are separated from service with the employer who provided the funds to
purchase the TSA you are transferring to the Equitable Accumulator Rollover
TSA; or
o you reach age 59 1/2; or
o you die; or
o you become disabled (special federal income tax definition); or
o you take a hardship withdrawal (special federal income tax definition).
If any portion of the funds directly transferred to your TSA contract is
attributable to amounts that you invested in a 403(b)(7) custodial account, such
amounts, including earnings, are subject to withdrawal restrictions. With
respect to the portion of the funds that were never invested in a 403(b)(7)
custodial account, these restrictions apply to the salary reduction (elective
deferral) contributions to a TSA annuity contract you made and any earnings on
them. These restrictions do not apply to the amount directly transferred to your
TSA contract that represents your December 31, 1988 account balance attributable
to salary reduction contributions to a TSA annuity contract and earnings. To
take advantage of this grandfathering you must properly notify us in writing at
our processing office of your December 31, 1988 account balance if you have
qualifying amounts transferred to your TSA contract.
THIS PARAGRAPH APPLIES ONLY TO PARTICIPANTS IN A TEXAS OPTIONAL RETIREMENT
PROGRAM. Texas Law permits withdrawals only after one of the following
distributable events occur:
(1) the requirements for minimum distribution (discussed under "Required minimum
distributions" below) are met; or
(2) death; or
(3) retirement; or
(4) termination of employment in all Texas public institutions of higher
education.
For you to make a withdrawal, we must receive a properly completed written
acknowledgement from the employer. If a distributable event occurs before you
are vested, we will refund to the employer any amounts provided by an employer's
first-year matching contribution. We reserve the right to change these
provisions without your consent, but only to the extent necessary to maintain
compliance with applicable law. Loans are not permitted under Texas Optional
Retirement Programs.
TAX TREATMENT OF DISTRIBUTIONS. Amounts held under TSAs are generally not
subject to federal income tax until benefits are distributed. Distributions
include withdrawals from your TSA contract and annuity payments from your TSA
contract. Death benefits paid to a beneficiary are also taxable distributions.
Unless an exception applies, amounts distributed from TSAs are includable in
gross income as ordinary income. Distributions from TSAs may be subject to 20%
federal income tax withholding. See "Federal and state income tax withholding
and information reporting" below. In addition, TSA distributions may be subject
to additional tax penalties.
If you have made after-tax contributions, you will have a tax basis in your TSA
contract, which will be recovered tax-free. Since we do not track your
investment in the contract, if any, it is your responsibility to determine how
much of the distribution is taxable.
DISTRIBUTIONS BEFORE ANNUITY PAYMENTS BEGIN. On a total surrender, the amount
received in excess of the investment in the contract is taxable. We will report
the total amount of the distribution. The amount of any partial distribution
from a TSA prior to the annuity starting date is generally taxable, except to
the extent that the distribution is treated as a withdrawal of after-tax
contributions. Distributions are normally treated as pro rata withdrawals of
after-tax contributions and earnings on those contributions.
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ANNUITY PAYMENTS. If you elect an annuity payout option, you will recover any
investment in the contract as each payment is received by dividing the
investment in the contract by an expected return determined under an IRS table
prescribed for qualified annuities. The amount of each payment not excluded from
income under this exclusion ratio is fully taxable. The full amount of the
payments received after your investment in the contract is recovered is fully
taxable. If you (and your beneficiary under a joint and survivor annuity) die
before recovering the full investment in the contract, a deduction is allowed on
your (or your beneficiary's) final tax return.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
Death benefit distributions from a TSA generally receive the same tax treatment
as distributions during your lifetime. In some instances, distributions from a
TSA made to your surviving spouse may be rolled over to a traditional IRA.
LOANS FROM TSAS
You may take loans from a TSA unless restricted by the employer (for example,
under an employer plan subject to ERISA). If you cannot take a loan, or cannot
take a loan without approval from the employer who provided the funds, we will
have this information in our records based on what you and the employer who
provided the TSA funds told us when you purchased your contract.
Loans are generally not treated as a taxable distribution. If the amount of the
loan exceeds permissible limits under federal income tax rules when made, the
amount of the excess is treated (solely for tax purposes) as a taxable
distribution. Additionally, if the loan is not repaid at least quarterly,
amortizing (paying down) interest and principal, the amount not repaid when due
will be treated as a taxable distribution. Under Proposed Treasury Regulations
the entire unpaid balance of the loan is includable in income in the year of the
default.
TSA loans are subject to federal income tax limits and may also be subject to
the limits of the plan from which the funds came. Federal income tax rule
requirements apply even if the plan is not subject to ERISA. For example, loans
offered by TSAs are subject to the following conditions:
o The amount of a loan to a participant, when combined with all other loans to
the participant from all qualified plans of the employer, cannot exceed the
lesser of:
(1) the greater of $10,000 or 50% of the participant's nonforfeitable
accrued benefits; and
(2) $50,000 reduced by the excess (if any) of the highest outstanding loan
balance over the previous twelve months over the outstanding loan
balance of plan loans on the date the loan was made.
o In general, the term of the loan cannot exceed five years unless the loan is
used to acquire the participant's primary residence. Equitable Accumulator
Rollover TSA contracts have a term limit of 10 years for loans used to
acquire the participant's primary residence.
o All principal and interest must be amortized in substantially level payments
over the term of the loan, with payments being made at least quarterly.
The amount borrowed and not repaid may be treated as a distribution if:
o the loan does not qualify under the conditions above;
o the participant fails to repay the interest or principal when due; or
o in some instances, the participant separates from service with the employer
who provided the funds or the plan is terminated.
In this case, the participant may have to include the unpaid amount due as
ordinary income. In addition, the 10% early distribution penalty tax may apply.
The amount of the unpaid loan balance is reported to the IRS on Form 1099-R as a
distribution.
TAX-DEFERRED ROLLOVERS AND DIRECT TRANSFERS
You may roll over any "eligible rollover distribution" from a TSA into another
eligible retirement plan, either directly or
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within 60 days of your receiving the distribution. To the extent rolled over, a
distribution remains tax-deferred.
You may roll over a distribution from a TSA to another TSA or to a traditional
IRA. A spousal beneficiary may roll over death benefits only to a traditional
IRA.
The taxable portion of most distributions will be eligible for rollover, except
as specifically excluded under federal income tax rules. Distributions that you
cannot roll over generally include periodic payments for life or for a period of
10 years or more, hardship withdrawals, and required minimum distributions under
federal income tax rules.
Direct transfers of TSA funds from one TSA to another under Revenue Ruling 90-24
are not distributions.
REQUIRED MINIMUM DISTRIBUTIONS
Generally the same as traditional IRA with these differences:
WHEN YOU HAVE TO TAKE THE FIRST REQUIRED MINIMUM DISTRIBUTION. The minimum
distribution rules force TSA participants to start calculating and taking annual
distributions from their TSAs by a required date. Generally, you must take the
first required minimum distribution for the calendar year in which you turn age
70 1/2. You may be able to delay the start of required minimum distributions for
all or part of your account balance until after age 70 1/2, as follows:
o For TSA participants who have not retired from service with the employer who
provided the funds for the TSA by the calendar year the participant turns
age 70 1/2, the required beginning date for minimum distributions is
extended to April 1 following the calendar year of retirement.
o TSA plan participants may also delay the start of required minimum
distributions to age 75 of the portion of their account value attributable
to their December 31, 1986 TSA account balance, even if retired at age 70
1/2. We will know whether or not you qualify for this exception because it
will only apply to people who establish their Equitable Accumulator Rollover
TSA by direct Revenue Ruling 90-24 transfers. If you do not give us the
amount of your December 31, 1986 account balance that is being transferred
to the Equitable Accumulator Rollover TSA on the form used to establish the
TSA, you do not qualify.
SPOUSAL CONSENT RULES
This will only apply to you if you establish your Equitable Accumulator Rollover
TSA by direct Revenue Ruling 90-24 transfer. Your employer will tell us on the
form used to establish the TSA whether or not you need to get spousal consent
for loans, withdrawals, or other distributions. If you do, you will need such
consent if you are married when you request a withdrawal under the TSA contract.
In addition, unless you elect otherwise with the written consent of your spouse,
the retirement benefits payable under the plan must be paid in the form of a
qualified joint and survivor annuity. A qualified joint and survivor annuity is
payable for the life of the annuitant with a survivor annuity for the life of
the spouse in an amount not less than one-half of the amount payable to the
annuitant during his or her lifetime. In addition, if you are married, the
beneficiary must be your spouse, unless your spouse consents in writing to the
designation of another beneficiary.
If you are married and you die before annuity payments have begun, payments will
be made to your surviving spouse in the form of a life annuity unless at the
time of your death a contrary election was in effect. However, your surviving
spouse may elect, before payments begin, to receive payments in any form
permitted under the terms of the TSA contract and the plan of the employer who
provided the funds for the TSA.
EARLY DISTRIBUTION PENALTY TAX
A penalty tax of 10% of the taxable portion of a distribution applies to
distributions from a TSA before you reach age 59 1/2. This is in addition to any
income tax. There are exceptions to the extra penalty tax. No penalty tax
applies to pre-age 59 1/2 distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
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o to pay for certain extraordinary medical expenses (special federal income
tax definition); or
o if you are separated from service, any form of payout after you are age 55;
or
o only if you are separated from service, a payout in the form of
substantially equal periodic payments made at least annually over your life
(or your life expectancy), or over the joint lives of you and your
beneficiary (or your joint life expectancy) using an IRS-approved
distribution method.
FEDERAL AND STATE INCOME TAX WITHHOLDING AND INFORMATION REPORTING
We must withhold federal income tax from distributions from annuity contracts.
You may be able to elect out of this income tax withholding in some cases.
Generally, we do not have to withhold if your distributions are not taxable. The
rate of withholding will depend on the type of distribution and, in certain
cases, the amount of your distribution. Any income tax withheld is a credit
against your income tax liability. If you do not have sufficient income tax
withheld or do not make sufficient estimated income tax payments, you may incur
penalties under the estimated income tax rules.
You must file your request not to withhold in writing before the payment or
distribution is made. Our processing office will provide forms for this purpose.
You cannot elect out of withholding unless you provide us with your correct
Taxpayer Identification Number and a United States residence address. You cannot
elect out of withholding if we are sending the payment out of the United States.
You should note the following special situations:
o We might have to withhold and/or report on amounts we pay under a free look
or cancellation.
o We are generally required to withhold on conversion rollovers of traditional
IRAs to Roth IRAs, as it is considered a withdrawal from the traditional IRA
and is taxable.
o We are required to withhold on the gross amount of a distribution from a
Roth IRA unless you elect out of withholding. This may result in tax being
withheld even though the Roth IRA distribution is not taxable in whole or in
part.
Special withholding rules apply to foreign recipients and United States citizens
residing outside the United States. We do not discuss these rules here. Certain
states have indicated that state income tax withholding will also apply to
payments from the contracts made to residents. In some states, you may elect out
of state withholding, even if federal withholding applies. Generally, an
election out of federal withholding will also be considered an election out of
state withholding. If you need more information concerning a particular state or
any required forms, call our processing office at the toll-free number.
FEDERAL INCOME TAX WITHHOLDING ON PERIODIC ANNUITY PAYMENTS
We withhold differently on "periodic" and "non-periodic" payments. For a
periodic annuity payment, for example, unless you specify a different number of
withholding exemptions, we withhold assuming that you are married and claiming
three withholding exemptions. If you do not give us your correct Taxpayer
Identification Number, we withhold as if you are single with no exemptions.
Based on the assumption that you are married and claiming three withholding
exemptions, if you receive less than $14,880 in periodic annuity payments in
2000, your payments will generally be exempt from federal income tax
withholding. You could specify a different choice of withholding exemption or
request that tax be withheld. Your withholding election remains effective unless
and until you revoke it. You may revoke or change your withholding election at
any time.
FEDERAL INCOME TAX WITHHOLDING ON NON-PERIODIC ANNUITY PAYMENTS (WITHDRAWALS)
For a non-periodic distribution (total surrender or partial withdrawal), we
generally withhold at a flat 10% rate. We apply that rate to the taxable amount
in the case of nonqualified contracts, and to the payment amount in the case of
IRAs and Roth IRAs.
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You cannot elect out of withholding if the payment is an eligible rollover
distribution from a qualified plan or TSA. If a non-periodic distribution from a
qualified plan or TSA is not an eligible rollover distribution then the 10%
withholding rate applies.
MANDATORY WITHHOLDING FROM TSA AND QUALIFIED PLAN DISTRIBUTIONS
Unless you have the distribution go directly to the new plan, eligible rollover
distributions from qualified plans and TSAs are subject to mandatory 20%
withholding. An eligible rollover distribution from a TSA can be rolled over to
another TSA or a traditional IRA. An eligible rollover distribution from a
qualified plan can be rolled over to another qualified plan or traditional IRA.
All distributions from a TSA or qualified plan are eligible rollover
distributions unless they are on the following list of exceptions:
o any after-tax contributions you made to the plan; or
o any distributions which are required minimum distributions after age 70 1/2
or separation from service; or
o hardship withdrawals; or
o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and your designated beneficiary; or
o substantially equal periodic payments made for a specified period of 10
years or more; or
o corrective distributions that fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse;
or
o a qualified domestic relations order distribution to a beneficiary who is
not your current spouse or former spouse.
A death benefit payment to your surviving spouse, or a qualified domestic
relations order distribution to your current or former spouse, may be a
distribution subject to mandatory 20% withholding.
IMPACT OF TAXES TO EQUITABLE LIFE
The contracts provide that we may charge Separate Account No. 49 for taxes. We
do not now, but may in the future set up reserves for such taxes.
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8 More information
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ABOUT OUR SEPARATE ACCOUNT NO. 49
Each variable investment option is a subaccount of our Separate Account No. 49.
We established Separate Account No. 49 in 1996 under special provisions of the
New York Insurance Law. These provisions prevent creditors from any other
business we conduct from reaching the assets we hold in our variable investment
options for owners of our variable annuity contracts. We are the legal owner of
all of the assets in Separate Account No. 49 and may withdraw any amounts that
exceed our reserves and other liabilities with respect to variable investment
options under our contracts. The results of Separate Account No. 49's operations
are accounted for without regard to Equitable Life's other operations.
Separate Account No. 49 is registered under the Investment Company Act of 1940
and is classified by that act as a "unit investment trust." The SEC, however,
does not manage or supervise Equitable Life or Separate Account No. 49.
Each subaccount (variable investment option) within Separate Account No. 49
invests solely in class IB shares issued by the corresponding portfolio of EQ
Advisors Trust.
We reserve the right subject to compliance with laws that apply:
(1) to add variable investment options to, or to remove variable investment
options from, Separate Account No. 49, or to add other separate accounts;
(2) to combine any two or more variable investment options;
(3) to transfer the assets we determine to be the shares of the class of
contracts to which the contracts belong from any variable investment option
to another variable investment option;
(4) to operate Separate Account No. 49 or any variable investment option as a
management investment company under the Investment Company Act of 1940 (in
which case, charges and expenses that otherwise would be assessed against an
underlying mutual fund would be assessed against Separate Account No. 49 or
a variable investment option directly);
(5) to deregister Separate Account No. 49 under the Investment Company Act of
1940;
(6) to restrict or eliminate any voting rights as to Separate Account No. 49;
and
(7) to cause one or more variable investment options to invest some or all of
their assets in one or more other trusts or investment companies.
ABOUT EQ ADVISORS TRUST
EQ Advisors Trust is registered under the Investment Company Act of 1940. It is
classified as an "open-end management investment company," more commonly called
a mutual fund. EQ Advisors Trust issues different shares relating to each
portfolio.
Equitable Life serves as the investment manager of EQ Advisors Trust. As such,
Equitable Life oversees the activities of the investment advisers with respect
to EQ Advisors Trust and is responsible for retaining or discontinuing the
services of those advisers. (Prior to September 1999, EQ Financial Consultants,
Inc., the predecessor to AXA Advisors, LLC and an affiliate of Equitable Life,
served as investment manager to EQ Advisors Trust.)
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999 the Alliance portfolios (other than EQ/Alliance Premier Growth)
were part of The Hudson River Trust. On October 18, 1999, these portfolios
became corresponding portfolios of EQ Advisors Trust.
EQ Advisors Trust does not impose sales charges or "loads" for buying and
selling its shares. All dividends and other distributions on Trust shares are
reinvested in full. The Board of Trustees of EQ Advisors Trust may establish
additional portfolios or eliminate existing portfolios at any time. More
detailed information about EQ Advisors Trust, the portfolio investment
objectives, policies, restrictions, risks, expenses, the Rule 12b-1 Plan
relating to its Class IB shares, and other aspects of its operations, appears in
the prospectus for EQ Advisors Trust attached at the end of this prospectus, or
in its SAI which is available upon request.
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ABOUT OUR FIXED MATURITY OPTIONS
RATES TO MATURITY AND PRICE PER $100 OF MATURITY VALUE
We can determine the amount required to be allocated to one or more fixed
maturity options in order to produce specified maturity values. For example, we
can tell you how much you need to allocate per $100 of maturity value.
The rates to maturity for new allocations as of March 15, 2000 and the related
price per $100 of maturity value were as follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------
FIXED MATURITY
OPTIONS WITH
FEBRUARY 15TH RATE TO MATURITY PRICE
MATURITY DATE OF AS OF PER $100 OF
MATURITY YEAR MARCH 15, 2000 MATURITY VALUE
- ---------------------------------------------------------
<S> <C> <C>
2001 4.20% $ 96.27
2002 4.91% $ 91.19
2003 5.43% $ 85.68
2004 5.51% $ 81.02
2005 5.62% $ 76.39
2006 5.70% $ 72.00
2007 5.77% $ 67.81
2008 5.83% $ 63.82
2009 5.92% $ 59.84
2010 5.98% $ 56.18
- ---------------------------------------------------------
</TABLE>
HOW WE DETERMINE THE MARKET VALUE ADJUSTMENT
We use the following procedure to calculate the market value adjustment (up or
down) we make if you withdraw all of your value from a fixed maturity option
before its maturity date.
(1) We determine the market adjusted amount on the date of the withdrawal as
follows:
(a) We determine the fixed maturity amount that would be payable on the
maturity date, using the rate to maturity for the fixed maturity option.
(b) We determine the period remaining in your fixed maturity option (based
on the withdrawal date) and convert it to fractional years based on a
365-day year. For example, three years and 12 days becomes 3.0329.
(c) We determine the current rate to maturity that applies on the withdrawal
date to new allocations to the same fixed maturity option.
(d) We determine the present value of the fixed maturity amount payable at
the maturity date, using the period determined in (b) and the rate
determined in (c).
(2) We determine the fixed maturity amount as of the current date.
(3) We subtract (2) from the result in (1)(d). The result is the market value
adjustment applicable to such fixed maturity option, which may be positive
or negative.
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Your market adjusted amount is the present value of the maturity value
discounted at the rate to maturity in effect for new contributions to that same
fixed maturity option on the date of the calculation.
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If you withdraw only a portion of the amount in a fixed maturity option, the
market value adjustment will be a percentage of the market value adjustment that
would have applied if you had withdrawn the entire value in that fixed maturity
option. This percentage is equal to the percentage of the value in the fixed
maturity option that you are withdrawing. Any withdrawal charges that are
deducted from a fixed maturity option will result in a market value adjustment
calculated in the same way. See Appendix II for an example.
For purposes of calculating the rate to maturity for new allocations to a fixed
maturity option (see (1)(c) above), we use the rate we have in effect for new
allocations to that fixed maturity option. We use this rate even if new
allocations to that option would not be accepted at that time. This rate will
not be less than 3%. If we do not have a rate to maturity in effect for a fixed
maturity option to which the "current rate to maturity" in (1)(c) would apply,
we will use the rate at the next closest maturity date. If we are no
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longer offering new fixed maturity options, the "current rate to maturity" will
be determined in accordance with our procedures then in effect. We reserve the
right to add up to 0.25% to the current rate in (1)(c) above for purposes of
calculating the market value adjustment only.
INVESTMENTS UNDER THE FIXED MATURITY OPTIONS
Amounts allocated to the fixed maturity options are held in a "nonunitized"
separate account we have established under the New York Insurance Law. This
separate account provides an additional measure of assurance that we will make
full payment of amounts due under the fixed maturity options. Under New York
Insurance Law, the portion of the separate account's assets equal to the
reserves and other contract liabilities relating to the contracts are not
chargeable with liabilities from any other business we may conduct. We own the
assets of the separate account, as well as any favorable investment performance
on those assets. You do not participate in the performance of the assets held in
this separate account. We may, subject to state law that applies, transfer all
assets allocated to the separate account to our general account. We guarantee
all benefits relating to your value in the fixed maturity options, regardless of
whether assets supporting fixed maturity options are held in a separate account
or our general account.
We have no specific formula for establishing the rates to maturity for the fixed
maturity options. We expect the rates to be influenced by, but not necessarily
correspond to, among other things, the yields that we can expect to realize on
the separate account's investments from time to time. Our current plans are to
invest in fixed-income obligations, including corporate bonds, mortgage-backed
and asset-backed securities, and government and agency issues having durations
in the aggregate consistent with those of the fixed maturity options.
Although the above generally describes our plans for investing the assets
supporting our obligations under the fixed maturity options under the contracts,
we are not obligated to invest those assets according to any particular plan
except as we may be required to by state insurance laws. We will not determine
the rates to maturity we establish by the performance of the nonunitized
separate account.
ABOUT THE GENERAL ACCOUNT
Our general account supports all of our policy and contract guarantees,
including those that apply to the fixed maturity options and the account for
special dollar cost averaging, as well as our general obligations.
The general account is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations of
all jurisdictions where we are authorized to do business. Because of exemptions
and exclusionary provisions that apply, interests in the general account have
not been registered under the Securities Act of 1933, nor is the general account
an investment company under the Investment Company Act of 1940. However, the
market value adjustment interests under the contracts are registered under the
Securities Act of 1933.
We have been advised that the staff of the SEC has not reviewed the portions of
this prospectus that relate to the general account (other than market value
adjustment interests). The disclosure with regard to the general account,
however, may be subject to certain provisions of the federal securities laws
relating to the accuracy and completeness of statements made in prospectuses.
ABOUT OTHER METHODS OF PAYMENT
WIRE TRANSMITTALS
We accept initial contributions sent by wire to our processing office by
agreement with certain broker-dealers. The transmittals must be accompanied by
information we require to allocate your contribution. Wire orders not
accompanied by complete information may be retained as described under "How you
can make your contributions" in "Contract features and benefits."
Even if we accept the wire order and essential information, a contract generally
will not be issued until we receive and accept a properly completed application.
In certain cases we
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may issue a contract based on information forwarded electronically. In these
cases, you must sign our Acknowledgement of Receipt form.
Where we require a signed application, no financial transactions will be
permitted until we receive the signed application and have issued the contract.
Where we require an Acknowledgement of Receipt form, financial transactions are
only permitted if you request them in writing, sign the request and have it
signature guaranteed, until we receive the signed Acknowledgement of Receipt
form.
After your contract has been issued, additional contributions may be transmitted
by wire.
AUTOMATIC INVESTMENT PROGRAM - FOR NQ, FLEXIBLE PREMIUM IRA, AND FLEXIBLE
PREMIUM ROTH IRA CONTRACTS ONLY
You may use our automatic investment program, or "AIP," to have a specified
amount automatically deducted from a checking account, money market account, or
credit union checking account and contributed as an additional contribution into
an NQ, Flexible Premium IRA or Flexible Premium Roth IRA contract on a monthly
or quarterly basis. AIP is not available for Rollover IRA, Roth Conversion IRA,
QP, or Rollover TSA contracts.
For NQ contracts, the minimum amounts we will deduct are $100 monthly and $300
quarterly. Under Flexible Premium IRA and Flexible Premium Roth IRA contracts,
the minimum amount is $50. AIP additional contributions may be allocated to any
of the variable investment options and available fixed maturity options, but not
the account for special dollar cost averaging. You choose the day of the month
you wish to have your account debited. However, you may not choose a date later
than the 28th day of the month.
You may cancel AIP at any time by notifying our processing office. We are not
responsible for any debits made to your account before the time written notice
of cancellation is received at our processing office.
DATES AND PRICES AT WHICH CONTRACT EVENTS OCCUR
We describe below the general rules for when, and at what prices, events under
your contract will occur. Other portions of this prospectus describe
circumstances that may cause exceptions. We generally do not repeat those
exceptions below.
BUSINESS DAY
Our business day is any day the New York Stock Exchange is open for trading. Our
business day generally ends at 4:00 p.m., Eastern Time for purposes of
determining the date when contributions are applied and any other transaction
requests are processed. We may, however, close due to emergency conditions.
Contributions will be applied and any other transaction requests will be
processed when they are received along with all the required information.
o If your contribution, transfer, or any other transaction request, containing
all the required information, reaches us on a non-business day or after 4:00
p.m. on a business day, we will use the next business day.
o A loan request under your Rollover TSA contract will be processed on the
first business day of the month following the date on which the properly
completed loan request form is received.
o If your transaction is set to occur on the same day of the month as the
contract date and that date is the 29th, 30th or 31st of the month, then the
transaction will occur on the 1st day of the next month.
o When a charge is to be deducted on a contract date anniversary that is a
non-business day, we will deduct the charge on the next business day.
CONTRIBUTIONS AND TRANSFERS
o Contributions allocated to the variable investment options are invested at
the value next determined after the close of the business day.
<PAGE>
72
- --------------------------------------------------------------------------------
o Contributions allocated to a fixed maturity option will receive the rate to
maturity in effect for that fixed maturity option on that business day.
o Initial contributions allocated to the account for special dollar cost
averaging receive the interest rate in effect on that business day. At
certain times, we may offer the opportunity to lock in the interest rate for
an initial contribution to be received under Section 1035 exchanges and
trustee to trustee transfers. Your registered representative can provide
information or you can call our processing office.
o Transfers to or from variable investment options will be made at the value
next determined after the close of the business day.
o Transfers to a fixed maturity option will be based on the rate to maturity
in effect for that fixed maturity option on the business day of the
transfer.
ABOUT YOUR VOTING RIGHTS
As the owner of the shares of EQ Advisors Trust we have the right to vote on
certain matters involving the portfolios, such as:
o the election of trustees;
o the formal approval of independent auditors selected for EQ Advisors Trust;
or
o any other matters described in the prospectus for EQ Advisors Trust or
requiring a shareholders' vote under the Investment Company Act of 1940.
We will give contract owners the opportunity to instruct us how to vote the
number of shares attributable to their contracts if a shareholder vote is taken.
If we do not receive instructions in time from all contract owners, we will vote
the shares of a portfolio for which no instructions have been received in the
same proportion as we vote shares of that portfolio for which we have received
instructions. We will also vote any shares that we are entitled to vote directly
because of amounts we have in a portfolio in the same proportions that contract
owners vote.
VOTING RIGHTS OF OTHERS
Currently, we control EQ Advisors Trust. Its shares are sold to our separate
accounts and an affiliated qualified plan trust. In addition, shares of EQ
Advisors Trust are held by separate accounts of insurance companies both
affiliated and unaffiliated with us. Shares held by these separate accounts will
probably be voted according to the instructions of the owners of insurance
policies and contracts issued by those insurance companies. While this will
dilute the effect of the voting instructions of the contract owners, we
currently do not foresee any disadvantages because of this. The Board of
Trustees of EQ Advisors Trust intends to monitor events in order to identify any
material irreconcilable conflicts that may arise and to determine what action,
if any, should be taken in response. If we believe that a response to any of
those events insufficiently protects our contract owners, we will see to it that
appropriate action is taken.
SEPARATE ACCOUNT NO. 49 VOTING RIGHTS
If actions relating to Separate Account No. 49 require contract owner approval,
contract owners will be entitled to one vote for each unit they have in the
variable investment options. Each contract owner who has elected a variable
annuity payout option may cast the number of votes equal to the dollar amount of
reserves we are holding for that annuity in a variable investment option divided
by the annuity unit value for that option. We will cast votes attributable to
any amounts we have in the variable investment options in the same proportion as
votes cast by contract owners.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under applicable
federal securities laws. To the extent that those laws or the regulations
published under those laws eliminate the necessity to submit matters for
approval by persons having voting rights in separate accounts of insurance
companies, we reserve the right to proceed in accordance with those laws or
regulations.
<PAGE>
73
- --------------------------------------------------------------------------------
ABOUT LEGAL PROCEEDINGS
Equitable Life and its affiliates are parties to various legal proceedings. In
our view, none of these proceedings is likely to have a material adverse effect
upon Separate Account No. 49, our ability to meet our obligations under the
contracts, or the distribution of the contracts.
ABOUT OUR INDEPENDENT ACCOUNTANTS
The consolidated financial statements of Equitable Life at December 31, 1999 and
1998, and for the three years ended December 31, 1999 incorporated in this
prospectus by reference to the 1999 Annual Report on Form 10-K are incorporated
in reliance on the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
FINANCIAL STATEMENTS
The financial statements of Separate Account No. 49, as well as the consolidated
financial statements of Equitable Life, are in the SAI. The SAI is available
free of charge. You may request one by writing to our processing office or
calling 1-800-789-7771.
TRANSFERS OF OWNERSHIP, COLLATERAL ASSIGNMENTS, LOANS, AND BORROWING
You can transfer ownership of an NQ contract at any time before annuity payments
begin. We will continue to treat you as the owner until we receive notification
of any change at our processing office. You cannot assign your NQ contract as
collateral or security for a loan. Loans are also not available under your NQ
contract. In some cases, an assignment or change of ownership may have adverse
tax consequences. See "Tax information" earlier in this prospectus.
You cannot assign or transfer ownership of an IRA, QP, or Rollover TSA contract
except by surrender to us. Loans are not available and you cannot assign IRA and
QP contracts as security for a loan or other obligation. If the employer that
provided the funds does not restrict them, loans are available under a Rollover
TSA contract.
For limited transfers of ownership after the owner's death see "Beneficiary
continuation option" in "Payment of death benefit" earlier in this prospectus.
You may direct the transfer of the values under your IRA, QP, or Rollover TSA
contract to another similar arrangement under federal income tax rules. In the
case of such a transfer, we will impose a withdrawal charge, if one applies.
DISTRIBUTION OF THE CONTRACTS
Equitable Distributors, Inc. ("EDI"), an indirect, wholly owned subsidiary of
Equitable Life, is the distributor of the contracts and has responsibility for
sales and marketing functions for Separate Account No. 49. EDI serves as the
principal underwriter of Separate Account No. 49. EDI also acts as distributor
for other Equitable Life annuity products with different features, expenses, and
fees. EDI is registered with the SEC as a broker-dealer and is a member of the
National Association of Securities Dealers, Inc. EDI's principal business
address is 1290 Avenue of the Americas, New York, New York 10104. Under a
distribution agreement between EDI, Equitable Life, and certain of Equitable
Life's separate accounts, including Separate Account No. 49, Equitable Life paid
EDI distribution fees of $46,957,345 for 1999, $35,452,793 for 1998, and
$9,566,343 for 1997, as the distributor of certain contracts other than the
contracts described in this prospectus, which had not been offered before 2000,
and as the principal underwriter of several Equitable Life separate accounts,
including Separate Account No. 49.
The contracts will be sold by registered representatives of EDI, as well as by
affiliated and unaffiliated broker-dealers with which EDI has entered into
selling agreements. We pay broker-dealer sales compensation that will generally
not exceed an amount equal to 7% of total contributions made under the
contracts. EDI may also receive compensation and reimbursement for its marketing
services under the terms of its distribution agreement with Equitable Life.
Broker-dealers receiving sales compensation will generally pay a portion of
<PAGE>
74
- --------------------------------------------------------------------------------
it to their registered representatives as commissions related to sales of the
contracts. The offering of the contracts is intended to be continuous.
<PAGE>
75
9 Investment performance
- --------------------------------------------------------------------------------
We provide the following tables to show five different measurements of the
investment performance of the variable investment options and/or the portfolios
in which they invest. We include these tables because they may be of general
interest to you.
Table 1 shows the average annual total return of the variable investment
options. Average annual total return is the annual rate of growth that would be
necessary to achieve the ending value of a contribution invested in the variable
investment options for the periods shown.
Table 2 shows the growth of a hypothetical $1,000 investment in the variable
investment options over the periods shown. Both Tables 1 and 2 take into account
all current fees and charges under the contract, including the withdrawal
charge, the optional baseBUILDER benefit charge, the annual administrative
charge under Flexible Premium IRA and Flexible Premium Roth IRA contracts, but
do not reflect the charges designed to approximate certain taxes that may be
imposed on us, such as premium taxes in your state or any applicable annuity
administrative fee.
Tables 3, 4, and 5 show the rates of return of the variable investment options
on an annualized, cumulative, and year-by-year basis. These tables take into
account all current fees and charges under the contract, but do not reflect the
withdrawal charge, the optional baseBUILDER benefits charge, the annual
administrative charge or the charges designed to approximate certain taxes that
may be imposed on us, suich as premium taxes in your state or any applicable
annuity administrative fee. If the charges were reflected they would effectively
reduce the rates of return shown.
In all cases the results shown are based on the actual historical investment
experience of the portfolios in which the variable investment options invest. In
some cases, the results shown relate to periods when the variable investment
options and/or the contracts were not available. In those cases, we adjusted the
results of the portfolios to reflect the charges under the contracts that would
have applied had the investment options and/or contracts been available. The
contracts are being offered for the first time in 2000.
For the "Alliance" portfolios (other than EQ/Alliance Premier Growth), we have
adjusted the results prior to October 1996, when Class IB shares for these
portfolios were not available, to reflect the 12b-1 fees currently imposed.
Finally, the results shown for the Alliance Money Market and Alliance Common
Stock options for periods before March 22, 1985 reflect the results of the
variable investment options that preceded them. The "Since portfolio inception"
figures for these options are based on the date of inception of the preceding
variable investment options. We have adjusted these results to reflect the
maximum investment advisory fee payable for the portfolios, as well as an
assumed charge of 0.06% for direct operating expenses.
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999 the Alliance portfolios (other than EQ/Alliance Premier Growth)
were part of The Hudson River Trust. On October 18, 1999, these portfolios
became corresponding portfolios of EQ Advisors Trust. In each case, the
performance shown is for the indicated EQ Advisors Trust portfolio and any
predecessors that it may have had.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends.
From time to time, we may advertise different measurements of the investment
performance of the variable investment options and/or the portfolios, including
the measurements reflected in the tables below.
THE PERFORMANCE INFORMATION SHOWN BELOW AND THE PERFORMANCE INFORMATION THAT WE
ADVERTISE REFLECT PAST PERFORMANCE AND DO NOT INDICATE HOW THE VARIABLE
INVESTMENT OPTIONS MAY PERFORM IN THE FUTURE. SUCH INFORMATION ALSO DOES NOT
REPRESENT THE RESULTS EARNED BY ANY PARTICULAR INVESTOR. YOUR RESULTS WILL
DIFFER.
BENCHMARKS
Tables 3 and 4 compare the performance of variable investment options to market
indices that serve as benchmarks. Market indices are not subject to any charges
for investment advisory fees, brokerage commission or other operating expenses
typically associated with a managed portfolio. Also, they do not reflect other
contract charges such as the mortality and expense risks charge,
<PAGE>
76
- --------------------------------------------------------------------------------
administrative charge and distribution charge, or any withdrawal or optional
benefit charge. Comparisons with these benchmarks, therefore, may be of limited
use. We include them because they are widely known and may help you to
understand the universe of securities from which each portfolio is likely to
select its holdings. Benchmark data reflect the reinvestment of dividend income.
The benchmarks include:
- --------------------------------------------------------------------------------
EQ/AGGRESSIVE STOCK: 50% Russell 2000 Index and 50% Standard
& Poor's Mid-Cap Total Return Index.
ALLIANCE COMMON STOCK: Standard & Poor's 500 Index.
ALLIANCE HIGH YIELD: Benchmark #1 - Merrill Lynch High Yield
Master Index and Benchmark #2 - Credit Suisse First Boston
Global High Yield Index.
ALLIANCE MONEY MARKET: Salomon Brothers Three-Month T-Bill
Index.
EQ/ALLIANCE PREMIER GROWTH: Standard & Poor's 500 Index.
ALLIANCE SMALL CAP GROWTH: Russell 2000 Growth Index.
EQ/ALLIANCE TECHNOLOGY: Lipper Specialty Fund Average.
BT EQUITY 500 INDEX: Standard & Poor's 500 Index.
BT INTERNATIONAL EQUITY INDEX: Morgan Stanley Capital
International Europe, Australia, Far East Index.
BT SMALL COMPANY INDEX: Russell 2000 Index.
CAPITAL GUARDIAN INTERNATIONAL: Morgan Stanley Capital
International Europe, Australia, Far East Index.
CAPITAL GUARDIAN RESEARCH: Standard & Poor's 500 Index.
CAPITAL GUARDIAN U.S. EQUITY: Standard & Poor's 500 Index.
EQ/EVERGREEN: Benchmark #1 - Russell 2000 Index and
Benchmark #2 - Standard & Poors 500 Index.
EQ/EVERGREEN FOUNDATION: 60% Standard & Poor's 500
Index/40% Lehman Brothers Aggregate Bond Index.
J.P. MORGAN CORE BOND: Salomon Brothers Broad Investment
Grade Bond.
LAZARD LARGE CAP VALUE: Standard & Poor's 500 Index.
LAZARD SMALL CAP VALUE: Russell 2000 Index.
MFS EMERGING GROWTH COMPANIES: Russell 2000 Index.
MFS GROWTH WITH INCOME: Standard & Poor's 500 Index.
MFS RESEARCH: Standard & Poor's 500 Index.
MERCURY BASIC VALUE EQUITY: Standard & Poor's 500 Index.
MERCURY WORLD STRATEGY: 36% Standard & Poor's 500 Index/24%
Morgan Stanley Capital International Europe, Australia, Far East
Index/21% Salomon Brothers U.S. Treasury Bond 1 Year+ 14%
Salomon Brothers World Government Bond (excluding U.S.)/ and
5% Three-Month U.S. Treasury Bill.
MORGAN STANLEY EMERGING MARKETS EQUITY: Morgan Stanley
Capital International Emerging Markets Free Price Return Index.
EQ/PUTNAM GROWTH & INCOME VALUE: Standard & Poor's 500
Index.
EQ/PUTNAM INTERNATIONAL EQUITY: Morgan Stanley Capital
International Europe, Australia, Far East Index.
EQ/PUTNAM INVESTORS GROWTH: Standard & Poor's 500 Index.
- --------------------------------------------------------------------------------
LIPPER SURVEY. The Lipper Variable Insurance Products Performance Analysis
Survey (Lipper Survey) records the performance of a large group of variable
annuity products, including managed separate accounts of insurance companies.
According to Lipper Analytical Services, Inc. (Lipper), the data are presented
net of investment management fees, direct operating expenses and asset-based
charges applicable under annuity contracts. Lipper data provide a more accurate
picture than market benchmarks of the Equitable Accumulator performance relative
to other variable annuity products.
<PAGE>
77
- --------------------------------------------------------------------------------
TABLE 1
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
SINCE SINCE
ONE THREE FIVE TEN OPTION PORTFOLIO
INVESTMENT FUND YEAR YEARS YEARS YEARS INCEPTION* INCEPTION**
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EQ/Aggressive Stock 7.38% 3.67% 11.43% 12.81% 3.31% 14.26%
- ----------------------------------------------------------------------------------------------------------------------
Alliance Common Stock 13.49% 22.02% 23.36% 14.20% 22.38% 13.17%
- ----------------------------------------------------------------------------------------------------------------------
Alliance High Yield (13.98)% (3.38)% 4.98% 5.96% (2.57)% 4.94%
- ----------------------------------------------------------------------------------------------------------------------
Alliance Money Market (5.97)% (0.89)% 0.03% 0.17% (0.81)% 2.56%
- ----------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth 16.14% - - - 11.69% 11.69%
- ----------------------------------------------------------------------------------------------------------------------
BT Equity 500 Index 9.07% - - - 15.66% 15.66%
- ----------------------------------------------------------------------------------------------------------------------
BT International Equity Index 15.98% - - - 16.66% 16.66%
- ----------------------------------------------------------------------------------------------------------------------
BT Small Company Index 9.48% - - - 1.70% 1.70%
- ----------------------------------------------------------------------------------------------------------------------
EQ/Evergreen (1.14)% - - - (1.14)% (1.14)%
- ----------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Foundation (3.41)% - - - (3.41)% (3.41)%
- ----------------------------------------------------------------------------------------------------------------------
J.P. Morgan Core Bond (12.06)% - - - (3.27)% (3.27)%
- ----------------------------------------------------------------------------------------------------------------------
Lazard Large Cap Value (7.11)% - - - 4.59% 4.59%
- ----------------------------------------------------------------------------------------------------------------------
Lazard Small Cap Value (8.84)% - - - (9.61)% (9.61)%
- ----------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies 60.98% - - - 42.28% 42.28%
- ----------------------------------------------------------------------------------------------------------------------
MFS Growth with Income (2.11)% - - - (2.11)% (2.11)%
- ----------------------------------------------------------------------------------------------------------------------
MFS Research 11.79% - - - 18.01% 18.01%
- ----------------------------------------------------------------------------------------------------------------------
Mercury Basic Value Equity 7.76% - - - 11.98% 11.98%
- ----------------------------------------------------------------------------------------------------------------------
Mercury World Strategy 10.08% - - - 6.09% 6.09%
- ----------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity 82.71% - - - 12.42% (0.92)%
- ----------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value (11.83)% - - - 4.09% 4.09%
- ----------------------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity 47.77% - - - 26.05% 26.05%
- ----------------------------------------------------------------------------------------------------------------------
EQ/Putnam Investors Growth 18.68% - - - 28.84% 28.84%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
* The variable investment option inception dates are: Alliance Money
Market, Alliance High Yield, Alliance Common Stock, and EQ/Aggressive
Stock (October 16, 1996); Alliance Small Cap Growth, MFS Research, MFS
Emerging Growth Companies, Mercury Basic Value Equity, Mercury World
Strategy, EQ/Putnam Growth & Income Value, EQ/Putnam Investors Growth,
and EQ/Putnam International Equity (May 1, 1997); BT Equity 500 Index, BT
Small Company Index, BT International Equity Index, J.P. Morgan Core
Bond, Lazard Large Cap Value, Lazard Small Cap Value, and Morgan Stanley
Emerging Markets Equity (December 31, 1997); EQ/Evergreen, EQ/Evergreen
Foundation, and MFS Growth with Income (December 31, 1998). The inception
dates for the variable investment options that became available after
December 31, 1998, and are therefore not shown in this table are:
EQ/Alliance Premier Growth, Capital Guardian U.S. Equity, Capital
Guardian Research, and Capital Guardian International (April 30, 1999)
and EQ/Alliance Technology (May 1, 2000).
** The inception dates for the portfolios underlying the Alliance variable
investment options shown in the tables are for portfolios of The Hudson
River Trust, the assets of which became assets of corresponding
portfolios of EQ Advisors Trust on October 18, 1999. The portfolio
inception dates are: Alliance Money Market (July 13, 1981); Alliance High
Yield (January 2, 1987); Alliance Common Stock (January 13, 1976);
EQ/Aggressive Stock (January 27, 1986); Alliance Small Cap Growth, MFS
Research, MFS Emerging Growth Companies, Mercury Basic Value Equity,
Mercury World Strategy, EQ/Putnam Growth & Income Value, EQ/Putnam
Investors Growth, and EQ/Putnam International Equity (May 1, 1997); BT
Equity 500 Index, BT Small Company Index, BT International Equity Index,
J.P. Morgan Core Bond, Lazard Large Cap Value, and Lazard Small Cap Value
January 1, 1998; Morgan Stanley Emerging Markets Equity (August 20, 1997)
EQ Evergreen, EQ/Evergreen Foundation and MFS Growth with Income
(December 31, 1998). The inception dates for the portfolios that became
available after December 31, 1998, and are therefore not shown in this
table are: EQ/Alliance Premier Growth, Capital Guardian U.S. Equity,
Capital Guardian Research, Capital Guardian International (April 30,
1999); and EQ/Alliance Technology (May 1, 2000).
<PAGE>
78
- --------------------------------------------------------------------------------
TABLE 2
GROWTH OF $1,000 UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
LENGTH OF INVESTMENT PERIOD
-------------------------------------------------------------------------
SINCE
ONE THREE FIVE TEN PORTFOLIO
VARIABLE INVESTMENT OPTIONS YEAR YEARS YEARS YEARS INCEPTION*
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
EQ/Aggressive Stock 1,073.76 1,114.04 1,717.60 3,337.67 6,396.96
- ----------------------------------------------------------------------------------------------------------------------
Alliance Common Stock 1,134.91 1,816.91 2,856.60 3,772.84 19,404.57
- ----------------------------------------------------------------------------------------------------------------------
Alliance High Yield 860.22 902.50 1,275.08 1,784.88 1,870.11
- ----------------------------------------------------------------------------------------------------------------------
Alliance Money Market 940.28 973.67 1,001.42 1,016.99 1,595.55
- ----------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth 1,161.37 - - - 1,343.31
- ----------------------------------------------------------------------------------------------------------------------
BT Equity 500 Index 1,090.71 - - - 1,337.63
- ----------------------------------------------------------------------------------------------------------------------
BT International Equity Index 1,159.80 - - - 1,361.04
- ----------------------------------------------------------------------------------------------------------------------
BT Small Company Index 1,094.83 - - - 1,034.25
- ----------------------------------------------------------------------------------------------------------------------
EQ/Evergreen 988.60 - - - 988.60
- ----------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Foundation 965.86 - - - 965.86
- ----------------------------------------------------------------------------------------------------------------------
J.P. Morgan Core Bond 879.42 - - - 935.74
- ----------------------------------------------------------------------------------------------------------------------
Lazard Large Cap Value 928.91 - - - 1,093.96
- ----------------------------------------------------------------------------------------------------------------------
Lazard Small Cap Value 911.57 - - - 816.98
- ----------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies 1,609.80 - - - 2,562.41
- ----------------------------------------------------------------------------------------------------------------------
MFS Growth with Income 987,89 - - - 978.89
- ----------------------------------------------------------------------------------------------------------------------
MFS Research 1,117.86 - - - 1,555.83
- ----------------------------------------------------------------------------------------------------------------------
Mercury Basic Value Equity 1,077.58 - - - 1,352.57
- ----------------------------------------------------------------------------------------------------------------------
Mercury World Strategy 1,100.81 - - - 1,171.02
- ----------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity 1,827.10 - - - 978.36
- ----------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value 881.68 - - - 1,112.78
- ----------------------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity 1,477.70 - - - 1,854.75
- ----------------------------------------------------------------------------------------------------------------------
EQ/Putnam Investors Growth 1,186.85 - - - 1,966.33
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* Portfolio inception dates are shown in Table 1.
<PAGE>
79
- --------------------------------------------------------------------------------
TABLE 3
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
EQ/AGGRESSIVE STOCK 16.71% 7.75% 14.18% 14.57% - 15.72%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap Growth 51.65% 24.68% 19.97% 14.78% - 15.86%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 18.09% 17.48% 19.92% 15.41% - 14.58%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK 22.95% 25.62% 25.77% 16.46% 16.26% 14.65%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Growth 29.78% 26.87% 25.55% 16.90% 15.83% 15.16%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 21.04% 27.56% 28.56% 18.21% 17.88% 16.19%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE HIGH YIELD (5.08)% 0.95% 7.89% 8.25% - 7.40%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper High Current Yield 3.65% 4.82% 8.59% 9.61% - 7.79%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark #1 1.57% 5.91% 9.61% 10.79% - 9.99%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark #2 3.28% 5.37% 9.07% 11.06% - 10.04%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE MONEY MARKET 3.09% 3.36% 3.47% 3.28% - 5.05%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Money Market 3.78% 4.05% 4.16% 3.96% - 5.70%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 4.74% 5.01% 5.20% 5.06% - 6.65%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH 25.65% - - - - 15.82%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Small Cap 34.26% - - - - 19.49%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 43.09% - - - - 25.88%
- ------------------------------------------------------------------------------------------------------------------------------
BT EQUITY 500 INDEX 18.44% - - - - 20.79%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper S&P 500 Index 19.36% - - - - 23.16%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 24.76%
- ------------------------------------------------------------------------------------------------------------------------------
BT INTERNATIONAL EQUITY INDEX 25.49% - - - - 21.81%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper International 43.24% - - - - 26.76%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 26.96% - - - - 23.43%
- ------------------------------------------------------------------------------------------------------------------------------
BT SMALL COMPANY INDEX 18.86% - - - - 6.92%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Small Cap 34.26% - - - - 16.02%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 21.26% - - - - 8.70%
- ------------------------------------------------------------------------------------------------------------------------------
EQ/EVERGREEN 8.02% - - - - 8.02%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Growth 29.78% - - - - 29.78%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark #1 21.26% - - - - 21.26%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark #2 21.03% - - - - 21.03%
- ------------------------------------------------------------------------------------------------------------------------------
EQ/EVERGREEN FOUNDATION 5.70% - - - - 5.70%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Balanced 8.69% - - - - 8.69%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 11.15% - - - - 11.15%
- ------------------------------------------------------------------------------------------------------------------------------
J.P. MORGAN CORE BOND (3.12)% - - - - 1.97%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Intermediate Investment Grade Debt (0.83)% - - - - 3.84%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark (1.77)% - - - - 2.64%
- ------------------------------------------------------------------------------------------------------------------------------
LAZARD LARGE CAP VALUE 1.93% - - - - 9.77%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Capital Appreciation 43.66% - - - - 32.61%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 24.76%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
80
- --------------------------------------------------------------------------------
TABLE 3 (CONTINUED)
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
LAZARD SMALL CAP VALUE 0.16% - - - - (4.27)%
- -------------------------------------------------------------------------------------------------------------------
Lipper Small Cap 34.26% - - - - 16.02%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 21.26% - - - - 8.70%
- -------------------------------------------------------------------------------------------------------------------
MFS EMERGING GROWTH COMPANIES 70.98% - - - - 45.96%
- -------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap 51.65% - - - - 32.50%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 21.26% - - - - 16.99%
- -------------------------------------------------------------------------------------------------------------------
MFS GROWTH WITH INCOME 7.03% - - - - 7.03%
- -------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 12.90% - - - - 12.90%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 21.03%
- -------------------------------------------------------------------------------------------------------------------
MFS RESEARCH 21.21% - - - - 22.02%
- -------------------------------------------------------------------------------------------------------------------
Lipper Growth 29.78% - - - - 29.33%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 27.36%
- -------------------------------------------------------------------------------------------------------------------
MERCURY BASIC VALUE EQUITY 17.10% - - - - 16.11%
- -------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 12.90% - - - - 18.00%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 27.36%
- -------------------------------------------------------------------------------------------------------------------
MERCURY WORLD STRATEGY 19.47% - - - - 10.39%
- -------------------------------------------------------------------------------------------------------------------
Lipper Global Flexible Portfolio 12.93% - - - - 11.91%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 13.07% - - - - 16.18%
- -------------------------------------------------------------------------------------------------------------------
MORGAN STANLEY EMERGING MARKETS
EQUITY 92.71% - - - - 4.06%
- -------------------------------------------------------------------------------------------------------------------
Lipper Emerging Markets 82.53% - - - - 2.90%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 66.41% - - - - (0.88)%
- -------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME VALUE (2.89)% - - - - 8.41%
- -------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 12.90% - - - - 18.00%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 27.36%
- -------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM INTERNATIONAL EQUITY 57.77% - - - - 29.96%
- -------------------------------------------------------------------------------------------------------------------
Lipper International 43.24% - - - - 20.38%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 26.96% - - - - 18.32%
- -------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM INVESTORS GROWTH 28.25% - - - - 32.59%
- -------------------------------------------------------------------------------------------------------------------
Lipper Growth 29.78% - - - - 29.33%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 27.36%
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* Portfolio inception dates are shown in Table 1. Lipper survey and
benchmark "since portfolio inception" information are as of the month-end
closest to the actual date of portfolio inception.
<PAGE>
81
- --------------------------------------------------------------------------------
TABLE 4
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EQ/AGGRESSIVE STOCK 16.71% 25.10% 94.05% 289.57% - 664.33%
- ----------------------------------------------------------------------------------------------------------------------------------
Lipper 51.65% 102.87% 158.98% 311.69% - 683.45%
- ----------------------------------------------------------------------------------------------------------------------------------
Benchmark 18.09% 62.12% 147.96% 319.19% - 595.55%
- ----------------------------------------------------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK 22.95% 98.24% 214.67% 359.13% 1,936.81% 2,545.48%
- ----------------------------------------------------------------------------------------------------------------------------------
Lipper Growth 29.78% 106.30% 216.51% 386.68% 1,816.52% 2,838.39%
- ----------------------------------------------------------------------------------------------------------------------------------
Benchmark 21.04% 107.56% 251.12% 432.78% 2,584.39% 3,555.46%
- ----------------------------------------------------------------------------------------------------------------------------------
ALLIANCE HIGH YIELD (5.08)% 2.87% 46.18% 120.94% - 152.78%
- ----------------------------------------------------------------------------------------------------------------------------------
Lipper High Current Yield 3.65% 15.25% 51.19% 151.82% - 166.74%
- ----------------------------------------------------------------------------------------------------------------------------------
Benchmark #1 1.57% 18.80% 58.22% 178.72% - 245.03%
- ----------------------------------------------------------------------------------------------------------------------------------
Benchmark #2 3.28% 17.00% 54.39% 185.43% - 246.92%
- ----------------------------------------------------------------------------------------------------------------------------------
ALLIANCE MONEY MARKET 3.09% 10.41% 18.59% 38.07% - 148.35%
- ----------------------------------------------------------------------------------------------------------------------------------
Lipper Money Market 3.78% 12.64% 22.65% 47.52% - 178.18%
- ----------------------------------------------------------------------------------------------------------------------------------
Benchmark 4.74% 15.79% 28.88% 63.79% - 229.35%
- ----------------------------------------------------------------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH 25.65% - - - - 48.00%
- ----------------------------------------------------------------------------------------------------------------------------------
Lipper Small Cap 34.26% - - - - 62.98%
- ----------------------------------------------------------------------------------------------------------------------------------
Benchmark 43.09% - - - - 84.91%
- ----------------------------------------------------------------------------------------------------------------------------------
BT EQUITY 500 INDEX 18.44% - - - - 45.90%
- ----------------------------------------------------------------------------------------------------------------------------------
Lipper S&P 500 Index 19.36% - - - - 51.69%
- ----------------------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 55.65%
- ----------------------------------------------------------------------------------------------------------------------------------
BT INTERNATIONAL EQUITY INDEX 25.49% - - - - 48.37%
- ----------------------------------------------------------------------------------------------------------------------------------
Lipper International 43.24% - - - - 61.58%
- ----------------------------------------------------------------------------------------------------------------------------------
Benchmark 26.96% - - - - 52.35%
- ----------------------------------------------------------------------------------------------------------------------------------
BT SMALL COMPANY INDEX 18.86% - - - - 14.31%
- ----------------------------------------------------------------------------------------------------------------------------------
Lipper Small Cap 34.26% - - - - 37.82%
- ----------------------------------------------------------------------------------------------------------------------------------
Benchmark 21.26% - - - - 18.17%
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/EVERGREEN 8.02% - - - - 8.02%
- ----------------------------------------------------------------------------------------------------------------------------------
Lipper Growth 29.78% - - - - 29.78%
- ----------------------------------------------------------------------------------------------------------------------------------
Benchmark #1 21.26% - - - - 21.26%
- ----------------------------------------------------------------------------------------------------------------------------------
Benchmark #2 21.03% - - - - 21.03%
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/EVERGREEN FOUNDATION 5.70% - - - - 5.70%
- ----------------------------------------------------------------------------------------------------------------------------------
Lipper Balanced 8.69% - - - - 8.69%
- ----------------------------------------------------------------------------------------------------------------------------------
Benchmark 11.15% - - - - 11.15%
- ----------------------------------------------------------------------------------------------------------------------------------
J.P. MORGAN CORE BOND (3.12)% - - - - 3.99%
- ----------------------------------------------------------------------------------------------------------------------------------
Lipper Intermediate Investment Grade Debt ( 0.83)% - - - - 7.83%
- ----------------------------------------------------------------------------------------------------------------------------------
Benchmark ( 1.77)% - - - - 5.96%
- ----------------------------------------------------------------------------------------------------------------------------------
LAZARD LARGE CAP VALUE 1.93% - - - - 20.49%
- ----------------------------------------------------------------------------------------------------------------------------------
Lipper Capital Appreciation 43.66% - - - - 79.44%
- ----------------------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 55.65%
- ----------------------------------------------------------------------------------------------------------------------------------
LAZARD SMALL CAP VALUE 0.16% - - - - (8.36)%
- ----------------------------------------------------------------------------------------------------------------------------------
Lipper Small Cap 34.26% - - - - 37.82%
- ----------------------------------------------------------------------------------------------------------------------------------
Benchmark 21.26% - - - - 18.17%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
82
- --------------------------------------------------------------------------------
TABLE 4 (CONTINUED)
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
MFS EMERGING GROWTH COMPANIES 70.98% - - - - 174.33%
- --------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap 51.65% - - - - 120.85%
- --------------------------------------------------------------------------------------------------------------------
Benchmark 21.26% - - - - 52.05%
- --------------------------------------------------------------------------------------------------------------------
MFS GROWTH WITH INCOME 7.03% - - - - 7.03%
- --------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 12.90% - - - - 12.90%
- --------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 21.03%
- --------------------------------------------------------------------------------------------------------------------
MFS RESEARCH 21.21% - - - - 70.07%
- --------------------------------------------------------------------------------------------------------------------
Lipper Growth 29.78% - - - - 101.13%
- --------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 90.75%
- --------------------------------------------------------------------------------------------------------------------
MERCURY BASIC VALUE EQUITY 17.10% - - - - 48.97%
- --------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 12.90% - - - - 56.85%
- --------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 90.75%
- --------------------------------------------------------------------------------------------------------------------
MERCURY WORLD STRATEGY 19.47% - - - - 30.18%
- --------------------------------------------------------------------------------------------------------------------
Lipper Global Flexible Portfolio 12.93% - - - - 35.69%
- --------------------------------------------------------------------------------------------------------------------
Benchmark 13.07% - - - - 49.16%
- --------------------------------------------------------------------------------------------------------------------
MORGAN STANLEY EMERGING MARKETS EQUITY 92.71% - - - - 9.88%
- --------------------------------------------------------------------------------------------------------------------
Lipper Emerging Markets 82.53% - - - - 7.48%
- --------------------------------------------------------------------------------------------------------------------
Benchmark 66.41% - - - - 5.32%
- --------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME VALUE (2.89)% - - - - 24.04%
- --------------------------------------------------------------------------------------------------------------------
Lipper 12.90% - - - - 56.85%
- --------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 90.75%
- --------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM INTERNATIONAL EQUITY 57.77% - - - - 101.24%
- --------------------------------------------------------------------------------------------------------------------
Lipper 43.24% - - - - 65.44%
- --------------------------------------------------------------------------------------------------------------------
Benchmark 26.96% - - - - 56.70%
- --------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM INVESTORS GROWTH 28.25% - - - - 112.28%
- --------------------------------------------------------------------------------------------------------------------
Lipper 29.78% - - - - 101.13%
- --------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 90.75%
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* Portfolio inception dates are shown in Table 1. Lipper survey and benchmark
"since portfolio inception" information are as month-end closest to the
actual date of portfolio inception.
<PAGE>
83
- --------------------------------------------------------------------------------
TABLE 5
YEAR-BY-YEAR RATES OF RETURN:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
1990 1991 1992 1993 1994
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
EQ/Aggressive Stock 6.21% 83.52% (4.91)% 14.65% (5.54)%
- -----------------------------------------------------------------------------------------------------------
Alliance Common Stock (9.77)% 35.41% 1.36% 22.59% (3.89)%
- -----------------------------------------------------------------------------------------------------------
Alliance High Yield (2.90)% 22.23% 10.29% 20.94% (4.53)%
- -----------------------------------------------------------------------------------------------------------
Alliance Money Market 6.29% 4.28% 1.70% 1.11% 2.15%
- -----------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth - - - - -
- -----------------------------------------------------------------------------------------------------------
BT Equity 500 Index - - - - -
- -----------------------------------------------------------------------------------------------------------
BT International Equity Index - - - - -
- -----------------------------------------------------------------------------------------------------------
BT Small Company Index - - - - -
- -----------------------------------------------------------------------------------------------------------
EQ/Evergreen - - - - -
- -----------------------------------------------------------------------------------------------------------
EQ/Evergreen Foundation - - - - -
- -----------------------------------------------------------------------------------------------------------
J.P. Morgan Core Bond - - - - -
- -----------------------------------------------------------------------------------------------------------
Lazard Large Cap Value - - - - -
- -----------------------------------------------------------------------------------------------------------
Lazard Small Cap Value - - - - -
- -----------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies - - - - -
- -----------------------------------------------------------------------------------------------------------
MFS Growth with Income - - - - -
- -----------------------------------------------------------------------------------------------------------
MFS Research - - - - -
- -----------------------------------------------------------------------------------------------------------
Mercury Basic Value Equity - - - - -
- -----------------------------------------------------------------------------------------------------------
Mercury World Strategy - - - - -
- -----------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity - - - - -
- -----------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value - - - - -
- -----------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity - - - - -
- -----------------------------------------------------------------------------------------------------------
EQ/Putnam Investors Growth - - - - -
- -----------------------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
1995 1996 1997 1998 1999
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
EQ/Aggressive Stock 29.28% 19.99% 8.82% (1.50)% 16.71%
- -----------------------------------------------------------------------------------------------------------
Alliance Common Stock 30.08% 22.03% 26.90% 27.06% 22.95%
- -----------------------------------------------------------------------------------------------------------
Alliance High Yield 17.77% 20.66% 16.34% (6.85)% (5.08)%
- -----------------------------------------------------------------------------------------------------------
Alliance Money Market 3.85% 3.43% 3.53% 3.45% 3.09%
- -----------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth - - 25.21%+ (5.92)% 25.65%
- -----------------------------------------------------------------------------------------------------------
BT Equity 500 Index - - - 23.19% 18.44%
- -----------------------------------------------------------------------------------------------------------
BT International Equity Index - - - 18.23% 25.49%
- -----------------------------------------------------------------------------------------------------------
BT Small Company Index - - - (3.82)% 18.86%
- -----------------------------------------------------------------------------------------------------------
EQ/Evergreen - - - - 8.02%
- -----------------------------------------------------------------------------------------------------------
EQ/Evergreen Foundation - - - - 5.70%
- -----------------------------------------------------------------------------------------------------------
J.P. Morgan Core Bond - - - 7.34% (3.12)%
- -----------------------------------------------------------------------------------------------------------
Lazard Large Cap Value - - - 18.20% 1.93%
- -----------------------------------------------------------------------------------------------------------
Lazard Small Cap Value - - - (8.51)% 0.16%
- -----------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies - - 21.15%+ 32.43% 70.98%
- -----------------------------------------------------------------------------------------------------------
MFS Growth with Income - - - - 7.03%
- -----------------------------------------------------------------------------------------------------------
MFS Research - - 14.84%+ 22.18% 21.21%
- -----------------------------------------------------------------------------------------------------------
Mercury Basic Value Equity - - 15.81%+ 9.85% 17.10%
- -----------------------------------------------------------------------------------------------------------
Mercury World Strategy - - 3.62%+ 5.17% 19.47%
- -----------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity - - (20.64)%+ (28.15)% 92.71%
- -----------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value - - 15.00%+ 11.07% (2.89)%
- -----------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity - - 8.44%+ 17.62% 57.77%
- -----------------------------------------------------------------------------------------------------------
EQ/Putnam Investors Growth - - 23.36%+ 34.18% 28.25%
- -----------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
+ Returns for these portfolios represent less than 12 months of
performance. The returns are as of each portfolio inception date as shown
in Table 1.
<PAGE>
84
- --------------------------------------------------------------------------------
COMMUNICATING PERFORMANCE DATA
In reports or other communications to contract owners or in advertising
material, we may describe general economic and market conditions affecting our
variable investment options and the portfolios and may compare the performance
or ranking of those options and the portfolios with:
o those of other insurance company separate accounts or mutual funds included
in the rankings prepared by Lipper Analytical Services, Inc., Morningstar,
Inc., VARDS, or similar investment services that monitor the performance of
insurance company separate accounts or mutual funds;
o other appropriate indices of investment securities and averages for peer
universes of mutual funds; or
o data developed by us derived from such indices or averages.
We also may furnish to present or prospective contract owners advertisements or
other communications that include evaluations of a variable investment option or
portfolio by nationally recognized financial publications. Examples of such
publications are:
- --------------------------------------------------------------------------------
Barron's Investment Management Weekly
Morningstar's Variable Annuity Money Management Letter
Sourcebook Investment Dealers Digest
Business Week National Underwriter
Forbes Pension & Investments
Fortune USA Today
Institutional Investor Investor's Business Daily
Money The New York Times
Kiplinger's Personal Finance The Wall Street Journal
Financial Planning The Los Angeles Times
Investment Adviser The Chicago Tribune
- --------------------------------------------------------------------------------
Lipper compiles performance data for peer universes of funds with similar
investment objectives in its Lipper Survey. Morningstar, Inc. compiles similar
data in the Morningstar Variable Annuity/Life Report (Morningstar Report).
The Lipper Survey records performance data as reported to it by over 800 mutual
funds underlying variable annuity and life insurance products. It divides these
actively managed portfolios into 25 categories by portfolio objectives. The
Lipper Survey contains two different universes, which reflect different types of
fees in performance data:
o The "separate account" universe reports performance data net of investment
management fees, direct operating expenses and asset-based charges
applicable under variable life and annuity contracts, and
o The "mutual fund" universe reports performance net only of investment
management fees and direct operating expenses, and therefore reflects only
charges that relate to the underlying mutual fund.
The Morningstar Variable Annuity/Life Report consists of nearly 700 variable
life and annuity funds, all of which report their data net of investment
management fees, direct operating expenses and separate account level charges.
VARDS is a monthly reporting service that monitors approximately 2,500 variable
life and variable annuity funds on performance and account information.
YIELD INFORMATION
Current yield for the Alliance Money Market option will be based on net changes
in a hypothetical investment over a given seven-day period, exclusive of capital
changes, and then "annualized" (assuming that the same seven-day result would
occur each week for 52 weeks). Current yield for the Alliance High Yield option
will be based on net changes in a hypothetical investment over a given 30-day
period, exclusive of capital changes, and then "annualized" (assuming that the
same 30-day result would occur each month for 12 months).
"Effective yield" is calculated in a similar manner, but when annualized, any
income earned by the investment is assumed to be reinvested. The "effective
yield" will be slightly higher than the "current yield" because any earnings are
compounded weekly for the Alliance Money Market option. The current yields and
effective yields assume the deduction of all current contract charges and
expenses other than the withdrawal charge, the optional baseBUILDER benefits
charge, the annual administrative charge, and any charge
<PAGE>
85
- --------------------------------------------------------------------------------
designed to approximate certain taxes that may be imposed on us, such as premium
taxes in your state. The yields and effective yields for the Alliance Money
Market option, when used for the special dollar cost averaging program, assume
that no contract charges are deducted. For more information, see "Yield
Information for the Alliance Money Market Option and Alliance High Yield Option"
in the SAI.
<PAGE>
86
10 Incorporation of certain documents by reference
- --------------------------------------------------------------------------------
Equitable Life's Annual Report on Form 10-K for the year ended December 31, 1999
is considered to be a part of this prospectus because it is incorporated by
reference.
After the date of this prospectus and before we terminate the offering of the
securities under this prospectus, all documents or reports we file with the SEC
under the Securities Exchange Act of 1934 ("Exchange Act"), will be considered
to become part of this prospectus because they are incorporated by reference.
Any statement contained in a document that is, or becomes part of this
prospectus, will be considered changed or replaced for purposes of this
prospectus if a statement contained in this prospectus changes or is replaced.
Any statement that is considered to be a part of this prospectus because of its
incorporation will be considered changed or replaced for the purpose of this
prospectus if a statement contained in any other subsequently filed document
that is considered to be part of this prospectus changes or replaces that
statement. After that, only the statement that is changed or replaced will be
considered to be part of this prospectus.
We file our Exchange Act documents and reports, including our Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q, electronically according to EDGAR
under CIK No. 0000727920. The SEC maintains a Web site that contains reports,
proxy and information statements, and other information regarding registrants
that file electronically with the SEC. The address of the site is
http://www.sec.gov.
Upon written or oral request, we will provide, free of charge, to each person to
whom this prospectus is delivered, a copy of any or all of the documents
considered to be part of this prospectus because they are incorporated herein.
This does not include exhibits not specifically incorporated by reference into
the text of such documents. Requests for documents should be directed to The
Equitable Life Assurance Society of the United States, 1290 Avenue of the
Americas, New York, New York 10104. Attention: Corporate Secretary (telephone:
(212) 554-1234).
<PAGE>
A-1
Appendix I: Purchase considerations for QP contracts
- --------------------------------------------------------------------------------
Trustees who are considering the purchase of an Equitable Accumulator QP
contract should discuss with their tax advisers whether this is an appropriate
investment vehicle for the employer's plan. Trustees should consider whether
the plan provisions permit the investment of plan assets in the QP contract,
the distribution of such an annuity, the purchase of the guaranteed minimum
income benefit, and the payment of death benefits in accordance with the
requirements of the federal income tax rules. The QP contract and this
prospectus should be reviewed in full, and the following factors, among others,
should be noted. Assuming continued plan qualification and operation, earnings
on qualified plan assets will accumulate value on a tax-deferred basis even if
the plan is not funded by the Equitable Accumulator QP contract or another
annuity. Therefore, you should purchase an Equitable Accumulator QP contract to
fund a plan for the contract's features and benefits other than tax deferral.
This QP contract accepts transfer contributions only and not regular, ongoing
payroll contributions. For 401(k) plans under defined contribution plans, no
employee after-tax contributions are accepted.
Under defined benefit plans, we will not accept rollovers from a defined
contribution plan to a defined benefit plan. We will only accept transfers from
a defined benefit plan or a change of investment vehicles in the plan. Only one
additional contribution may be made per contract year. For defined benefit
plans, the maximum percentage of actuarial value of the plan
participant/employee's normal retirement benefit that can be funded by a QP
contract is 80%. The account value under a QP contract may at any time be more
or less than the lump sum actuarial equivalent of the accrued benefit for a
defined benefit plan participant/employee. Equitable Life does not guarantee
that the account value under a QP contract will at any time equal the actuarial
value of 80% of a participant/employee's accrued benefit. If overfunding of a
plan occurs, withdrawals from the QP contract may be required. A withdrawal
charge and/or market value adjustment may apply.
Further, Equitable Life will not perform or provide any plan recordkeeping
services with respect to the QP contracts. The plan's administrator will be
solely responsible for performing or providing for all such services. There is
no loan feature offered under the QP contracts, so if the plan provides for
loans and a participant/employee takes a loan from the plan, other plan assets
must be used as the source of the loan and any loan repayments must be credited
to other investment vehicles and/or accounts available under the plan.
Given that required minimum distributions must generally commence from the plan
for annuitants after age 70 1/2, trustees should consider that:
o the QP contract may not be an appropriate purchase for annuitants
approaching or over age 70 1/2; and
o the guaranteed minimum income benefit under baseBUILDER may not be an
appropriate feature for annuitants who are older than age 60 1/2 when the
contract is issued.
Finally, because the method of purchasing the QP contract, including the large
initial contribution, and the features of the QP contract may appeal more to
plan participants/employees who are older and tend to be highly paid, and
because certain features of the QP contract are available only to plan
participants/employees who meet certain minimum and/or maximum age
requirements, plan trustees should discuss with their advisers whether the
purchase of the QP contract would cause the plan to engage in prohibited
discrimination in contributions, benefits or otherwise.
<PAGE>
B-1
Appendix II: Market value adjustment example
- --------------------------------------------------------------------------------
The example below shows how the market value adjustment would be determined and
how it would be applied to a withdrawal, assuming that $100,000 was allocated
on February 15, 2001 to a fixed maturity option with a maturity date of
February 15, 2010 (nine years later) at a hypothetical rate to maturity of
7.00%, resulting in a maturity value of $183,846 on the maturity date. We
further assume that a withdrawal of $50,000 is made four years later on
February 15, 2005.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
HYPOTHETICAL ASSUMED
RATE TO MATURITY ON
FEBRUARY 15, 2005
--------------------------
5.00% 9.00%
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
AS OF FEBRUARY 15, 2005 (BEFORE WITHDRAWAL)
- ---------------------------------------------------------------------------------------------
(1) Market adjusted amount $144,048 $ 119,487
- ---------------------------------------------------------------------------------------------
(2) Fixed maturity amount $131,080 $ 131,080
- ---------------------------------------------------------------------------------------------
(3) Market value adjustment:
(1) - (2) $ 12,968 $ (11,593)
- ---------------------------------------------------------------------------------------------
ON FEBRUARY 15, 2005 (AFTER WITHDRAWAL)
- ---------------------------------------------------------------------------------------------
(4) Portion of market value adjustment associated with withdrawal:
(3) x [$50,000/(1)] $ 4,501 $ (4,851)
- ---------------------------------------------------------------------------------------------
(5) Reduction in fixed maturity amount:
[$50,000 - (4)] $ 45,499 $ 54,851
- ---------------------------------------------------------------------------------------------
(6) Fixed maturity amount: (2) - (5) $ 85,581 $ 76,229
- ---------------------------------------------------------------------------------------------
(7) Maturity value $120,032 $ 106,915
- ---------------------------------------------------------------------------------------------
(8) Market adjusted amount of (7) $ 94,048 $ 69,487
- ---------------------------------------------------------------------------------------------
</TABLE>
You should note that under this example if a withdrawal is made when rates have
increased from 7.00% to 9.00% (right column), a portion of a negative market
value adjustment is realized. On the other hand, if a withdrawal is made when
rates have decreased from 7.00% to 5.00% (left column), a portion of a positive
market value adjustment is realized.
<PAGE>
C-1
Appendix III: Guaranteed minimum death benefit example
- --------------------------------------------------------------------------------
The death benefit under the contracts is equal to the account value or, if
greater, the guaranteed minimum death benefit.
The following illustrates the guaranteed minimum death benefit calculation.
Assuming $100,000 is allocated to the variable investment options (with no
allocation to the Alliance Money Market option or the fixed maturity options),
no additional contributions, no transfers and no withdrawals, and no loans
under a Rollover TSA contract, the guaranteed minimum death benefit for an
annuitant age 45 would be calculated as follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
END OF 5% ROLL UP TO AGE 80 ANNUAL RATCHET TO AGE 80
CONTRACT GUARANTEED MINIMUM GUARANTEED MINIMUM
YEAR ACCOUNT VALUE DEATH BENEFIT(1) DEATH BENEFIT
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 $105,000 $105,000(1) $105,000(3)
- ------------------------------------------------------------------------------------
2 $115,500 $110,250(2) $115,500(3)
- ------------------------------------------------------------------------------------
3 $129,360 $115,763(2) $129,360(3)
- ------------------------------------------------------------------------------------
4 $103,488 $121,551(1) $129,360(4)
- ------------------------------------------------------------------------------------
5 $113,837 $127,628(1) $129,360(4)
- ------------------------------------------------------------------------------------
6 $127,497 $134,010(1) $129,360(4)
- ------------------------------------------------------------------------------------
7 $127,497 $140,710(1) $129,360(4)
- ------------------------------------------------------------------------------------
</TABLE>
The account values for contract years 1 through 7 are based on hypothetical
rates of return of 5.00%, 10.00%, 12.00%, (20.00)%, 10.00%, 12.00% and 0.00%.
We are using these rates solely to illustrate how the benefit is determined.
The return rates bear no relationship to past or future investment results.
5% ROLL UP TO AGE 80
(1) At the end of contract year 1, and again at the end of contract years 4
through 7, the death benefit will be equal to the guaranteed minimum
death benefit.
(2) At the end of contract years 2 and 3, the death benefit will be equal to
the current account value since it is higher than the current guaranteed
minimum death benefit.
ANNUAL RATCHET TO AGE 80
(3) At the end of contract years 1 through 3, the guaranteed minimum death
benefit is equal to the current account value.
(4) At the end of contract years 4 through 7, the guaranteed minimum death
benefit is equal to the guaranteed minimum death benefit at the end of
the prior year since it is equal to or higher than the current account
value.
<PAGE>
Statement of additional information
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Unit Values 2
Custodian and Independent Accountants 2
Yield Information for the Alliance Money Market Option and Alliance High Yield Option 2
Financial Statements 4
</TABLE>
HOW TO OBTAIN AN EQUITABLE ACCUMULATOR STATEMENT OF ADDITIONAL INFORMATION FOR
SEPARATE ACCOUNT NO. 49
Send this request form to:
Equitable Accumulator
P.O. Box 1547
Secaucus, NJ 07096-1547
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Please send me an Equitable Accumulator SAI for Separate Account No. 49 dated
May 1, 2000.
- ------------------------------------------------------------------------------
Name:
- ------------------------------------------------------------------------------
Address:
- ------------------------------------------------------------------------------
City State Zip
(SAI 1AMLF(2000))
<PAGE>
Equitable Accumulator
Select(SM)
A combination variable and fixed deferred
annuity contract
PROSPECTUS DATED MAY 1, 2000
Please read and keep this prospectus for future reference. It contains important
information that you should know before purchasing, or taking any other action
under your contract. Also, at the end of this prospectus you will find attached
the prospectus EQ Advisors Trust, which contains important information about its
portfolios.
- --------------------------------------------------------------------------------
WHAT IS THE EQUITABLE ACCUMULATOR SELECT?
Equitable Accumulator Select is a deferred annuity contract issued by THE
EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES. It provides for the
accumulation of retirement savings and for income. The contract offers income
and death benefit protection. It also offers a number of payout options. You
invest to accumulate value on a tax-deferred basis in one or more of our
variable investment options or fixed maturity options ("investment options").
There is no withdrawal charge under the contract. However, we deduct a
distribution charge calculated as a percentage of the amounts in the variable
investment options. We deduct this charge for the life of the contract. This
contract is not available in New York.
<TABLE>
<S> <C>
- ----------------------------------------------------------------------
VARIABLE INVESTMENT OPTIONS
- ----------------------------------------------------------------------
FIXED INCOME
- ----------------------------------------------------------------------
o Alliance High Yield o Alliance Money Market
o Alliance Intermediate
Government Securities
- ----------------------------------------------------------------------
DOMESTIC STOCKS
- ----------------------------------------------------------------------
o EQ/Aggressive Stock(1) o MFS Emerging Growth
o Alliance Common Stock Companies
o Alliance Growth and Income o MFS Growth with Income
o EQ/Alliance Premier Growth o MFS Research
o Alliance Small Cap Growth o Mercury Basic Value Equity(3)
o EQ/Alliance Technology(2) o EQ/Putnam Growth & Income
o BT Equity 500 Index Value
o BT Small Company Index o T. Rowe Price Equity Income
o Capital Guardian Research o Warburg Pincus Small
o Capital Guardian U.S. Equity Company Value
o EQ/Evergreen
- ----------------------------------------------------------------------
INTERNATIONAL STOCKS
- ----------------------------------------------------------------------
o Alliance Global o Morgan Stanley Emerging
o Alliance International Markets Equity
o BT International Equity Index o T. Rowe Price International
Stock
- ----------------------------------------------------------------------
BALANCED/HYBRID
- ----------------------------------------------------------------------
o Alliance Conservative o EQ/Evergreen Foundation
Investors o Mercury World Strategy(4)
o Alliance Growth Investors o EQ/Putnam Balanced
- ----------------------------------------------------------------------
</TABLE>
(1) Formerly named "Alliance Aggressive Stock."
(2) May not be available in California.
(3) Formerly named "Merrill Lynch Basic Value Equity."
(4) Formerly named "Merrill Lynch World Strategy."
You may allocate amounts to any of the variable investment options. Each
variable investment option is a subaccount of our Separate Account No. 45.
Each variable investment option, in turn, invests in a corresponding
securities portfolio of EQ Advisors Trust. Your investment results in a
variable investment option will depend on the investment performance of the
related portfolio.
FIXED MATURITY OPTIONS. You may allocate amounts to one or more fixed maturity
options. These amounts will receive a fixed rate of interest for a specified
period. Interest is earned at a guaranteed rate set by us. We make a market
value adjustment (up or down) if you make transfers or withdrawals from a fixed
maturity option before its maturity date.
TYPES OF CONTRACTS. We offer the contracts for use as:
o A nonqualified annuity ("NQ") for after-tax contributions only.
o An annuity that is an investment vehicle for a qualified defined
contribution or defined benefit plan ("QP").
o An individual retirement annuity ("IRA"), either traditional IRA ("Rollover
IRA") or Roth IRA ("Roth Conversion IRA").
o An Internal Revenue Code Section 403(b) Tax-Sheltered Annuity ("TSA") --
("Rollover TSA").
A contribution of at least $25,000 is required to purchase a contract.
Registration statements relating to this offering have been filed with the
Securities and Exchange Commission ("SEC"). The statement of additional
information ("SAI") dated May 1, 2000 is a part of one of the registration
statements. The SAI is available free of charge. You may request one by writing
to our processing office or calling 1-800-789-7771. The SAI has been
incorporated by reference into this prospectus. This prospectus and the SAI can
also be obtained from the SEC's Web site at http://www.sec.gov. The table of
contents for the SAI appears at the back of this prospectus.
THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. THE CONTRACTS ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY.
THEY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE NOT BANK
GUARANTEED. THEY ARE SUBJECT TO INVESTMENT RISKS AND POSSIBLE LOSS OF PRINCIPAL.
72042
<PAGE>
Contents of this prospectus
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2
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<TABLE>
<S> <C>
EQUITABLE ACCUMULATOR(SM) SELECT
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Index of key words and phrases 4
Who is Equitable Life? 5
How to reach us 6
Equitable Accumulator Select at a glance -- key features 8
- ---------------------------------------------------------------
FEE TABLE 11
- ---------------------------------------------------------------
Example 14
- ---------------------------------------------------------------
Condensed financial information 15
1
- ---------------------------------------------------------------
CONTRACT FEATURES AND BENEFITS 16
- ---------------------------------------------------------------
How you can purchase and contribute to your contract 16
Owner and annuitant requirements 19
How you can make your contributions 19
What are your investment options under the contract? 19
Allocating your contributions 23
Your benefit base 24
Annuity purchase factors 25
Our baseBUILDER option 25
Guaranteed minimum death benefit 27
Your right to cancel within a certain number of days 27
2
- ---------------------------------------------------------------
DETERMINING YOUR CONTRACT'S VALUE 29
- ---------------------------------------------------------------
Your account value and cash value 29
Your contract's value in the variable investment options 29
Your contract's value in the fixed maturity options 29
- ---------------------------------------------------------------
"We," "our," and "us" refer to Equitable Life.
When we address the reader of this prospectus with words such as "you" and
"your," we mean the person who has the right or responsibility that the
prospectus is discussing at that point. This is usually the contract owner.
When we use the word "contract" it also includes certificates that are issued
under group contracts in some states.
</TABLE>
<PAGE>
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3
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
3
- --------------------------------------------------------------------
TRANSFERRING YOUR MONEY AMONG
INVESTMENT OPTIONS 30
- --------------------------------------------------------------------
Transferring your account value 30
Market timing 30
Rebalancing your account value 30
4
- --------------------------------------------------------------------
ACCESSING YOUR MONEY 32
- --------------------------------------------------------------------
Withdrawing your account value 32
How withdrawals are taken from your account value 33
How withdrawals affect your guaranteed minimum
income benefit and guaranteed minimum death
benefit 33
Loans under Rollover TSA contracts 34
Surrendering your contract to receive its cash value 34
When to expect payments 35
Your annuity payout options 35
5
- --------------------------------------------------------------------
CHARGES AND EXPENSES 38
- --------------------------------------------------------------------
Charges that Equitable Life deducts 38
Charges that EQ Advisors Trust deducts 39
Group or sponsored arrangements 39
6
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PAYMENT OF DEATH BENEFIT 40
- --------------------------------------------------------------------
Your beneficiary and payment of benefit 40
How death benefit payment is made 41
Beneficiary continuation option 41
7
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TAX INFORMATION 43
- --------------------------------------------------------------------
Overview 43
Transfers among investment options 43
Taxation of nonqualified annuities 43
Individual retirement arrangements (IRAs) 45
Special rules for nonqualified contracts in qualified plans 55
Tax-Sheltered Annuity contracts (TSAs) 55
Federal and state income tax withholding and
information reporting 59
Impact of taxes to Equitable Life
8
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MORE INFORMATION 62
- --------------------------------------------------------------------
About our Separate Account No. 45 62
About EQ Advisors Trust 62
About our fixed maturity options 63
About the general account 64
About other methods of payment 64
Dates and prices at which contract events occur 65
About your voting rights 65
About legal proceedings 66
About our independent accountants 66
Financial statements 66
Transfers of ownership, collateral assignments, loans,
and borrowing 66
Distribution of the contracts
9
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INVESTMENT PERFORMANCE 68
- --------------------------------------------------------------------
Benchmarks 68
Communicating performance data
10
- --------------------------------------------------------------------
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE 80
- --------------------------------------------------------------------
APPENDICES
- --------------------------------------------------------------------
I -- Condensed financial information A-1
II -- Purchase considerations for QP contracts B-1
III -- Market value adjustment example C-1
IV -- Guaranteed minimum death benefit example D-1
- --------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
- --------------------------------------------------------------------
</TABLE>
<PAGE>
Index of key words and phrases
- --------
4
- --------------------------------------------------------------------------------
This index should help you locate more information on the terms used in this
prospectus.
<TABLE>
<CAPTION>
PAGE IN
TERM PROSPECTUS
<S> <C>
account value 29
annuitant 16
annuity payout options 35
Annuity purchase factor 25
baseBUILDER 25
beneficiary 40
benefit base 24
business day 65
cash value 29
conduit IRA 49
contract date 9
contract date anniversary 9
contract year 9
contributions to Roth IRAs 52
rollovers and direct transfers 52
conversion contributions 53
contributions to traditional IRAs 46
rollovers and transfers 47
EQAccess 6
ERISA 34
fixed maturity options 22
guaranteed minimum death benefit 27
guaranteed minimum income benefit 27
IRA cover
</TABLE>
<TABLE>
<CAPTION>
PAGE IN
TERM PROSPECTUS
<S> <C>
IRS 43
investment options 19
loan reserve account 34
market adjusted amount 22
market value adjustment 22
maturity value 22
NQ cover
participant 19
portfolio cover
processing office 6
QP 55
rate to maturity 21
Required Beginning Date 41
Rollover IRA cover
Rollover TSA cover
Roth IRA 45
Roth Conversion IRA cover
SAI cover
SEC cover
TOPS 6
TSA 55
traditional IRA 45
unit 29
variable investment options 19
</TABLE>
To make this prospectus easier to read, we sometimes use different words than
in the contract or supplemental materials. This is illustrated below. Although
we use different words, they have the same meaning in this prospectus as in the
contract. Your financial professional can provide further explanation about
your contract or supplemental materials.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
PROSPECTUS CONTRACT OR SUPPLEMENTAL MATERIALS
- --------------------------------------------------------------------
<S> <C>
fixed maturity options Guarantee Periods (Guaranteed Fixed Interest
Accounts in supplemental materials)
variable investment options Investment Funds
account value Annuity Account Value
rate to maturity Guaranteed Rates
unit Accumulation Unit
baseBUILDER Guaranteed Minimum Income Benefit
- --------------------------------------------------------------------
</TABLE>
<PAGE>
Who is Equitable Life?
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5
- --------------------------------------------------------------------------------
We are The Equitable Life Assurance Society of the United States ("Equitable
Life"), a New York stock life insurance corporation. We have been doing business
since 1859. Equitable Life is a subsidiary of AXA Financial, Inc. (previously,
The Equitable Companies Incorporated). The majority shareholder of AXA
Financial, Inc. is AXA, a French holding company for an international group of
insurance and related financial services companies. As a majority shareholder,
and under its other arrangements with Equitable Life and Equitable Life's
parent, AXA exercises significant influence over the operations and capital
structure of Equitable Life and its parent. No company other than Equitable
Life, however, has any legal responsibility to pay amounts that Equitable Life
owes under the contracts.
AXA Financial, Inc. and its consolidated subsidiaries managed approximately
$462.7 billion in assets as of December 31, 1999. For over 100 years Equitable
Life has been among the largest insurance companies in the United States. We are
licensed to sell life insurance and annuities in all fifty states, the District
of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our home office is
located at 1290 Avenue of the Americas, New York, N.Y. 10104.
<PAGE>
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6
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HOW TO REACH US
You may communicate with our processing office as listed below for any of the
following purposes:
- --------------------------------------------------------------------------------
FOR CONTRIBUTIONS SENT BY REGULAR MAIL:
- --------------------------------------------------------------------------------
Equitable Accumulator Select
P.O. Box 13014
Newark, NJ 07188-0014
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FOR CONTRIBUTIONS SENT BY EXPRESS DELIVERY:
- --------------------------------------------------------------------------------
Equitable Accumulator Select
c/o Bank One, N.A.
300 Harmon Meadow Boulevard, 3rd Floor
Attn: Box 13014
Secaucus, NJ 07094
- --------------------------------------------------------------------------------
FOR ALL OTHER COMMUNICATIONS (E.G.,
REQUESTS FOR TRANSFERS, WITHDRAWALS, OR
REQUIRED NOTICES) SENT BY REGULAR MAIL:
- --------------------------------------------------------------------------------
Equitable Accumulator Select
P.O. Box 1547
Secaucus, NJ 07096-1547
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FOR ALL OTHER COMMUNICATIONS (E.G.,
REQUESTS FOR TRANSFERS, WITHDRAWALS, OR
REQUIRED NOTICES) SENT BY EXPRESS DELIVERY:
- --------------------------------------------------------------------------------
Equitable Accumulator Select
200 Plaza Drive, 4th Floor
Secaucus, NJ 07094
- --------------------------------------------------------------------------------
REPORTS WE PROVIDE:
- --------------------------------------------------------------------------------
o written confirmation of financial transactions;
o statement of your contract values at the close of each calendar quarter
(four per year); and
o annual statement of your contract values as of the close of the contract
year.
- --------------------------------------------------------------------------------
TELEPHONE OPERATED PROGRAM SUPPORT
("TOPS") AND EQACCESS SYSTEMS:
- --------------------------------------------------------------------------------
TOPS is designed to provide you with up-to-date information via touch-tone
telephone. EQAccess is designed to provide this information through the
Internet. You can obtain information on:
o your current account value;
o your current allocation percentages (anticipated to be available through
EQAccess by the end of 2000);
o the number of units you have in the variable investment options;
o rates to maturity for the fixed maturity options;
o the daily unit values for the variable investment options; and
o performance information regarding the variable investment options (not
available through TOPS).
You can also:
o change your allocation percentages and/or transfer among the investment
options (anticipated to be available through EQAccess by the end of 2000);
o change your TOPS personal identification number (PIN) (not available
through EQAccess); and
o change your EQAccess password (not available through TOPS).
TOPS and EQAccess are normally available seven days a week, 24 hours a day.
You may use TOPS by calling toll free 1-888-909-7770. You may use EQAccess by
visiting our Web site at http://www.equitable.com and clicking on EQAccess. Of
course, for reasons beyond our control, these services may sometimes be
unavailable.
We have established procedures to reasonably confirm that the instructions
communicated by telephone or the Internet are genuine. For example, we will
require certain personal identification information before we will act on
telephone or
<PAGE>
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7
- --------------------------------------------------------------------------------
Internet instructions and we will provide written confirmation of your
transfers. If we do not employ reasonable procedures to confirm the genuineness
of telephone or Internet instructions, we may be liable for any losses arising
out of any act or omission that constitutes negligence, lack of good faith or
willful misconduct. In light of our procedures, we will not be liable for
following telephone or Internet instructions we reasonably believe to be
genuine.
We reserve the right to limit access to these services if we determine that you
are engaged in a market timing strategy (see "Market timing" in "Transferring
your money among investment options").
- --------------------------------------------------------------------------------
CUSTOMER SERVICE REPRESENTATIVE:
- --------------------------------------------------------------------------------
You may also use our toll-free number (1-800-789-7771) to
speak with one of our customer service representatives. Our
customer service representatives are available on any business
day from 8:30 a.m. until 5:30 p.m., Eastern time.
WE REQUIRE THAT THE FOLLOWING TYPES OF COMMUNICATIONS BE ON SPECIFIC FORMS WE
PROVIDE FOR THAT PURPOSE:
(1) conversion of a traditional IRA to a Roth Conversion IRA contract;
(2) election of the automatic investment program;
(3) election of the rebalancing program;
(4) requests for loans under Rollover TSA contracts;
(5) spousal consent for loans under Rollover TSA contracts;
(6) tax withholding election; and
(7) election of the beneficiary continuation option.
WE ALSO HAVE SPECIFIC FORMS THAT WE RECOMMEND YOU USE FOR THE FOLLOWING TYPES
OF REQUESTS:
(1) address changes;
(2) beneficiary changes;
(3) transfers between investment options; and
(4) contract surrender and withdrawal requests.
TO CANCEL OR CHANGE ANY OF THE FOLLOWING WE REQUIRE WRITTEN NOTIFICATION
GENERALLY AT LEAST SEVEN CALENDAR DAYS BEFORE THE NEXT SCHEDULED TRANSACTION:
(1) automatic investment program;
(2) general dollar cost averaging;
(3) rebalancing;
(4) special dollar cost averaging;
(5) substantially equal withdrawals;
(6) systematic withdrawals; and
(7) the date annuity payments are to begin.
You must sign and date all these requests. Any written request that is not on
one of our forms must include your name and your contract number along with
adequate details about the notice you wish to give or the action you wish us
to take.
SIGNATURES:
The proper person to sign forms, notices and requests would normally be the
owner. If there are joint owners both must sign.
<PAGE>
Equitable Accumulator Select at a glance -- key features
- --------
8
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<TABLE>
<S> <C>
- --------------------------------------------------------------------------------------------------------------------
PROFESSIONAL Equitable Accumulator Select's variable investment options invest in different portfolios
INVESTMENT managed by professional investment advisers.
MANAGEMENT
- --------------------------------------------------------------------------------------------------------------------
FIXED MATURITY o 10 fixed maturity options with maturities ranging from approximately 1 to 10 years.
OPTIONS
o Each fixed maturity option offers a guarantee of principal and interest rate if you hold
it to maturity.
- --------------------------------------------------------------------------------------------------------------------
If you make withdrawals or transfers from a fixed maturity option before maturity, there
will be a market value adjustment due to differences in interest rates. This may increase or
decrease any value that you have left in that fixed maturity option. If you surrender your
contract, a market value adjustment may also apply.
- --------------------------------------------------------------------------------------------------------------------
TAX ADVANTAGES o On earnings inside the No tax on any dividends, interest or capital gains until you
contract make withdrawals from your contract or receive annuity
payments.
---------------------------------------------------------------------------------------------
o On transfers inside the No tax on transfers among investment options.
contract
---------------------------------------------------------------------------------------------
If you are buying a contract to fund a retirement plan that already provides tax deferral
under sections of the Internal Revenue Code, you should do so for the contract's features and
benefits other than tax deferral. In such situations, the tax deferral of the contract does
not provide necessary or additional benefits.
- --------------------------------------------------------------------------------------------------------------------
BASEBUILDER baseBUILDER combines a guaranteed minimum income benefit with the guaranteed minimum
(Registered Trademark) death benefit provided under the contract. The guaranteed minimum income benefit provides
PROTECTION income protection for you while the annuitant lives. The guaranteed minimum death benefit
provides a death benefit for the beneficiary should the annuitant die.
- --------------------------------------------------------------------------------------------------------------------
CONTRIBUTION AMOUNTS o Initial minimum: $25,000
o Additional minimum: $ 1,000
$100 monthly and $300 quarterly under our automatic
investment program (NQ contracts)
---------------------------------------------------------------------------------------------
Maximum contribution limitations may apply.
- --------------------------------------------------------------------------------------------------------------------
ACCESS TO YOUR MONEY o Lump sum withdrawals
o Several withdrawal options on a periodic basis
o Loans under Rollover TSA contracts
o Contract surrender
You may incur income tax and a tax penalty.
- --------------------------------------------------------------------------------------------------------------------
PAYOUT OPTIONS o Fixed annuity payout options
o Variable Immediate Annuity payout options
o Income Manager(Registered Trademark) payout options
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
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9
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------------------------------------------
ADDITIONAL FEATURES o Guaranteed minimum death benefit even if you do not elect baseBUILDER
o Dollar cost averaging
o Automatic investment program
o Account value rebalancing (quarterly, semiannually, and annually)
o Free transfers
- --------------------------------------------------------------------------------------------------------------------
FEES AND CHARGES o Daily charges on amounts invested in the variable investment options for
mortality and expense risks, administrative charges, and distribution charges at
a current annual rate of 1.60% (1.70% maximum).
o Annual 0.30% benefit base charge for the optional baseBUILDER benefit until
you exercise your guaranteed minimum income benefit, elect another annuity
payout option, or the contract date anniversary after the annuitant reaches age
85 (age 83 in Oregon), whichever occurs first. The benefit base is described
under "Your benefit base" in "Contract features and benefits." If you don't
elect baseBUILDER, you still receive a guaranteed minimum death benefit under
your contract at no additional charge.
o No sales charge deducted at the time you make contributions, no withdrawal
charge, and no annual contract fee.
The "contract date" is the effective date of a contract. This usually is the
business day we receive the properly completed and signed application, along
with any other required documents, and your initial contribution. Your contract
date will be shown in your contract. The 12-month period beginning on your
contract date and each 12-month period after that date is a "contract year."
The end of each 12-month period is your "contract date anniversary."
o We deduct a charge designed to approximate certain taxes that may be imposed
on us, such as premium taxes in your state. This charge is generally deducted
from the amount applied to an annuity payout option.
o We deduct a $350 annuity administrative fee from amounts applied to the
Variable Immediate Annuity payout options.
o Annual expenses of EQ Advisors Trust portfolios are calculated as a percentage
of the average daily net assets invested in each portfolio. These expenses
include management fees ranging from 0.25% to 1.15% annually, 12b-1 fees of
0.25% annually, and other expenses.
- --------------------------------------------------------------------------------------------------------------------
ANNUITANT ISSUE AGES NQ: 0-85
Rollover IRA, Roth Conversion IRA, and Rollover TSA: 20-85
QP: 20-75
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ABOVE IS NOT A COMPLETE DESCRIPTION OF ALL MATERIAL PROVISIONS OF THE
CONTRACT. IN SOME CASES RESTRICTIONS OR EXCEPTIONS APPLY. ALSO, ALL FEATURES OF
THE CONTRACT ARE NOT NECESSARILY AVAILABLE IN YOUR STATE OR AT CERTAIN AGES.
For more detailed information we urge you to read the contents of this
prospectus, as well as your contract. Please feel free to speak with your
financial professional, or call us, if you have any questions.
<PAGE>
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10
- --------------------------------------------------------------------------------
OTHER CONTRACTS
We offer a variety of fixed and variable annuity contracts. They may offer
features, including investment options, fees and/or charges that are different
from those in the contracts offered by this prospectus. Not every contract is
offered through the same distributor. Upon request, your financial professional
can show you information regarding other Equitable Life annuity contracts that
he or she distributes. You can also contact us to find out more about any of
the Equitable Life annuity contracts.
<PAGE>
Fee table
- --------
11
- --------------------------------------------------------------------------------
The fee table below will help you understand the various charges and expenses
that apply to your contract. The table reflects charges you will directly incur
under the contract, as well as charges and expenses of the portfolios that you
will bear indirectly. Charges designed to approximate certain taxes that may be
imposed on us, such as premium taxes in your state, may also apply. Also, an
annuity administrative fee may apply when your annuity payments are to begin.
Each of the charges and expenses is more fully described under "Charges and
expenses" later in this prospectus.
The fixed maturity options are not covered by the fee table and examples. A
market value adjustment (up or down) may apply as a result of a withdrawal,
transfer, or surrender of amounts from a fixed maturity option.
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR VARIABLE INVESTMENT OPTIONS EXPRESSED AS AN
ANNUAL PERCENTAGE OF DAILY NET ASSETS
- ---------------------------------------------------------------------------------------------------
Mortality and expense risks(1) 1.10%
Administrative 0.25% current (0.35% maximum)
Distribution 0.25%
----
Total annual expenses 1.60% current (1.70% maximum)
- ---------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE AT THE TIME
YOU REQUEST CERTAIN TRANSACTIONS
- ---------------------------------------------------------------------------------------------------
Charge if you elect a Variable Immediate Annuity payout option $350
- ---------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE EACH YEAR IF YOU ELECT THE OPTIONAL BENEFIT
- ---------------------------------------------------------------------------------------------------
BASEBUILDER BENEFIT CHARGE (calculated as a percentage of
the benefit base. Deducted annually on each contract date
anniversary)(2) 0.30%
- ---------------------------------------------------------------------------------------------------
</TABLE>
EQ ADVISORS TRUST ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
TOTAL
OTHER ANNUAL
EXPENSES EXPENSES
MANAGEMENT (AFTER EXPENSE (AFTER EXPENSE
FEES(3) 12B-1 FEE(4) LIMITATION)(5) LIMITATION)(6)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock 0.60% 0.25% 0.04% 0.89%
Alliance Common Stock 0.46% 0.25% 0.04% 0.75%
Alliance Conservative Investors 0.60% 0.25% 0.07% 0.92%
Alliance Global 0.73% 0.25% 0.09% 1.07%
Alliance Growth and Income 0.59% 0.25% 0.05% 0.89%
Alliance Growth Investors 0.57% 0.25% 0.05% 0.87%
Alliance High Yield 0.60% 0.25% 0.05% 0.90%
Alliance Intermediate Government Securities 0.50% 0.25% 0.07% 0.82%
Alliance International 0.85% 0.25% 0.20% 1.30%
Alliance Money Market 0.34% 0.25% 0.05% 0.64%
EQ/Alliance Premier Growth 0.90% 0.25% 0.00% 1.15%
EQ/Alliance Technology 0.90% 0.25% 0.00% 1.15%
Alliance Small Cap Growth 0.75% 0.25% 0.07% 1.07%
BT Equity 500 Index 0.25% 0.25% 0.10% 0.60%
BT International Equity Index 0.35% 0.25% 0.40% 1.00%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
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12
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
TOTAL
OTHER ANNUAL
EXPENSES EXPENSES
MANAGEMENT (AFTER EXPENSE (AFTER EXPENSE
FEES(3) 12B-1 FEE(4) LIMITATION)(5) LIMITATION)(6)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BT Small Company Index 0.25% 0.25% 0.25% 0.75%
Capital Guardian Research 0.65% 0.25% 0.05% 0.95%
Capital Guardian U.S. Equity 0.65% 0.25% 0.05% 0.95%
EQ/Evergreen 0.65% 0.25% 0.05% 0.95%
EQ/Evergreen Foundation 0.60% 0.25% 0.10% 0.95%
MFS Emerging Growth Companies 0.65% 0.25% 0.10% 1.00%
MFS Growth with Income 0.60% 0.25% 0.10% 0.95%
MFS Research 0.65% 0.25% 0.05% 0.95%
Mercury Basic Value Equity 0.60% 0.25% 0.10% 0.95%
Mercury World Strategy 0.70% 0.25% 0.25% 1.20%
Morgan Stanley Emerging Markets Equity 1.15% 0.25% 0.35% 1.75%
EQ/Putnam Balanced 0.60% 0.25% 0.05% 0.90%
EQ/Putnam Growth & Income Value 0.60% 0.25% 0.10% 0.95%
T. Rowe Price Equity Income 0.60% 0.25% 0.10% 0.95%
T. Rowe Price International Stock 0.85% 0.25% 0.15% 1.25%
Warburg Pincus Small Company Value 0.75% 0.25% 0.10% 1.10%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
Notes:
(1) A portion of this charge is for providing the guaranteed minimum death
benefit.
(2) The benefit base is described under "Contract features and benefits --
Your guaranteed minimum income benefit under baseBUILDER."
(3) The management fees shown reflect revised management fees, effective on
or about May 1, 2000 which were approved by shareholders. The management
fees shown for EQ/Putnam Balanced, EQ/Putnam Growth & Income Value,
Warburg Pincus Small Company Value and T. Rowe Price International Stock
do not reflect the waiver of a portion of each portfolio's investment
management fees that are currently in effect. The management fee for each
portfolio cannot be increased without a vote of each portfolio's
shareholders.
(4) Portfolio shares are all subject to fees imposed under the distribution
plan (the "Rule 12b-1 Plan") adopted by EQ Advisors Trust pursuant to
Rule 12b-1 under the Investment Company Act of 1940. The 12b-1 fee will
not be increased for the life of the contracts. Prior to October 18,
1999, the total annual expenses for the Alliance Small Cap Growth
portfolio were limited to 1.20% under an expense limitation arrangement
related to that portfolio's Rule 12b-1 Plan. The arrangement is no longer
in effect. The amounts shown have been restated to reflect the expenses
that would have been incurred in 1999, absent the expense limitation
arrangement.
(5) The amounts shown as "Other Expenses" will fluctuate from year to year
depending on actual expenses. See footnote (6) for any expense limitation
agreements.
On October 18, 1999, the Alliance portfolios (other than EQ/Alliance
Premier Growth and EQ/Alliance Technology) became part of the portfolios of
EQ Advisors Trust. The "Other Expenses" for these portfolios have been
restated to reflect the estimated expenses that would have been incurred
had these portfolios been portfolios of EQ Advisors Trust for the entire
year ended December 31, 1999. The restated expenses reflect an increase of
0.01% for each of these portfolios.
<PAGE>
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13
- --------------------------------------------------------------------------------
(6) Equitable Life, EQ Advisors Trust's manager, has entered into an expense
limitation agreement with respect to certain portfolios. Under this
agreement Equitable Life has agreed to waive or limit its fees and assume
other expenses. Under the expense limitation agreement, total annual
operating expenses of certain portfolios (other than interest, taxes,
brokerage commissions, capitalized expenditures, extraordinary expenses
and 12b-1 fees) are limited as a percentage of the average daily net
assets of each of the following portfolios: 1.75% for Morgan Stanley
Emerging Markets Equity; 1.25% for T. Rowe Price International Stock;
1.20% for Mercury World Strategy; 1.15% for EQ/Alliance Premier Growth
and EQ/Alliance Technology; 1.10% for Warburg Pincus Small Company Value;
1.00% for BT International Equity Index and MFS Emerging Growth
Companies; 0.95% for Capital Guardian U.S. Equity, Capital Guardian
Research, EQ/Evergreen, EQ/Evergreen Foundation, MFS Growth with Income,
MFS Research, Mercury Basic Value Equity, EQ/Putnam Growth & Income Value
and T. Rowe Price Equity Income; 0.90% for EQ/Putnam Balanced; 0.75% for
BT Small Company Index; and 0.60% for BT Equity 500 Index. The expense
limitations for the BT Equity 500 Index, Mercury Basic Value Equity, MFS
Growth with Income, MFS Research, MFS Emerging Growth Companies, T. Rowe
Price Equity Income, T. Rowe Price International Stock and Warburg Pincus
Small Company Value portfolios reflect an increase effective on May 1,
2000. The expense limitation for the EQ/Evergreen portfolio reflects a
decrease effective on May 1, 2000.
Absent the expense limitation, the "Other Expenses" for 1999 on an
annualized basis for each of the portfolios would have been as follows:
1.00% for Morgan Stanley Emerging Markets Equity; 0.30% for T. Rowe Price
International Stock; 0.46% for Mercury World Strategy; 0.23% for
EQ/Alliance Premier Growth; 0.10% for EQ/Alliance Technology; 0.24% for
Warburg Pincus Small Company Value; 0.49% for BT International Equity
Index; 0.17% for MFS Emerging Growth Companies; 0.34% for Capital Guardian
U.S. Equity; 0.47% for Capital Guardian Research; 1.87% for EQ/Evergreen;
1.07% for EQ/Evergreen Foundation; 0.37% for MFS Growth with Income; 0.17%
for MFS Research and Mercury Basic Value Equity; 0.16% for EQ/Putnam
Growth & Income Value; 0.21% for T. Rowe Price Equity Income; 0.28% for
EQ/Putnam Balanced; 0.71% for BT Small Company Index; and 0.18% for BT
Equity 500 Index. Initial seed capital was invested on April 30, 1999 for
EQ/Alliance Premier Growth, Capital Guardian U.S. Equity and Capital
Guardian Research portfolios and will be invested on or about May 1, 2000
for EQ/Alliance Technology portfolio and therefore expenses have been
estimated.
Each portfolio may at a later date make a reimbursement to Equitable Life
for any of the management fees waived or limited and other expenses
assumed and paid by Equitable Life pursuant to the expense limitation
agreement provided that, among other things, such portfolio has reached
sufficient size to permit such reimbursement to be made and provided that
the portfolio's current annual operating expenses do not exceed the
operating expense limit determined for such portfolio. For more
information see the prospectus for EQ Advisors Trust.
<PAGE>
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14
- --------------------------------------------------------------------------------
EXAMPLE
The example below shows the expenses that a hypothetical contract owner (who
has elected baseBUILDER) would pay in the situation illustrated. We assume that
a $1,000 contribution is invested in one of the variable investment options
listed and a 5% annual return is earned on the assets in that option.(1) The
charges used in the examples are the maximum charge rather than the lower
current charges.
The example should not be considered a representation of past or future
expenses for each option. Actual expenses may be greater or less than those
shown. Similarly, the annual rate of return assumed in the example is not an
estimate or guarantee of future investment performance.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
AT THE END OF EACH PERIOD SHOWN,
THE EXPENSES WOULD BE:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock $ 27.09 $ 89.34 $ 154.46 $ 330.67
Alliance Common Stock $ 25.62 $ 84.96 $ 147.21 $ 316.52
Alliance Conservative Investors $ 27.51 $ 90.59 $ 156.53 $ 334.67
Alliance Global $ 29.09 $ 95.27 $ 164.23 $ 349.55
Alliance Growth and Income $ 27.20 $ 89.66 $ 154.98 $ 331.67
Alliance Growth Investors $ 26.99 $ 89.03 $ 153.95 $ 329.66
Alliance High Yield $ 27.20 $ 89.66 $ 154.98 $ 331.67
Alliance Intermediate Government Securities $ 26.46 $ 87.47 $ 151.36 $ 324.63
Alliance International $ 31.50 $ 102.41 $ 175.95 $ 371.93
Alliance Money Market $ 24.46 $ 81.51 $ 141.48 $ 305.25
EQ/Alliance Premier Growth $ 30.98 $ 100.86 $ 173.42 $ 367.11
EQ/Alliance Technology $ 29.93 $ 97.76 $ 168.32 $ 357.40
Alliance Small Cap Growth $ 28.98 $ 94.96 $ 163.72 $ 348.57
BT Equity 500 Index $ 24.15 $ 80.56 $ 139.92 $ 302.16
BT International Equity Index $ 28.35 $ 93.09 $ 160.64 $ 342.64
BT Small Company Index $ 25.72 $ 85.27 $ 147.73 $ 317.53
Capital Guardian Research $ 27.82 $ 91.53 $ 158.07 $ 337.67
Capital Guardian U.S. Equity $ 27.82 $ 91.53 $ 158.07 $ 337.67
EQ/Evergreen $ 27.82 $ 91.53 $ 158.07 $ 337.67
EQ/Evergreen Foundation $ 27.82 $ 91.53 $ 158.07 $ 337.67
MFS Emerging Growth Companies $ 28.35 $ 93.09 $ 160.64 $ 342.64
MFS Growth with Income $ 27.82 $ 91.53 $ 158.07 $ 337.67
MFS Research $ 27.82 $ 91.53 $ 158.07 $ 337.67
Mercury Basic Value Equity $ 27.82 $ 91.53 $ 158.07 $ 337.67
Mercury World Strategy $ 30.45 $ 99.31 $ 170.87 $ 362.26
Morgan Stanley Emerging Markets Equity $ 36.23 $ 116.29 $ 198.55 $ 414.19
EQ/Putnam Balanced $ 27.30 $ 89.97 $ 155.49 $ 332.67
EQ/Putnam Growth & Income Value $ 27.82 $ 91.53 $ 158.07 $ 337.67
T. Rowe Price Equity Income $ 27.82 $ 91.53 $ 158.07 $ 337.67
T. Rowe Price International Stock $ 30.98 $ 100.86 $ 173.42 $ 367.11
Warburg Pincus Small Company Value $ 29.40 $ 96.20 $ 165.77 $ 352.50
- ----------------------------------------------------------------------------------------------------
</TABLE>
(1) The amount accumulated from the $1,000 contribution could not be paid in
the form of an annuity payout option at the end of any of the periods
shown in the examples. This is because if the amount applied to purchase
an annuity payout option is less than $2,000, or the initial payment is
less than $20, we may pay the amount to you in a single sum instead of
payments under an annuity payout option. See "Accessing your money."
<PAGE>
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15
- --------------------------------------------------------------------------------
IF YOU ELECT A VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION:
Assuming an annuity payout option could be issued (see note (1) above), and you
elect a Variable Immediate Annuity payout option, the expenses shown in the
example would, in each case, be increased by $4.34 based on the average amount
applied to annuity payout options in 1999. See "Annuity administrative fee" in
"Charges and expenses."
CONDENSED FINANCIAL INFORMATION
Please see Appendix I at the end of this prospectus for the unit values and the
number of units outstanding as of the end of the periods shown for each of the
variable investment options available as of December 31, 1999.
<PAGE>
1
Contract features and benefits
- --------
16
- --------------------------------------------------------------------------------
HOW YOU CAN PURCHASE AND CONTRIBUTE TO YOUR CONTRACT
You may purchase a contract by making payments to us that we call
"contributions." We require a minimum initial contribution of $25,000 for you
to purchase a contract. You may make additional contributions of at least
$1,000 each, subject to limitations noted below. The following table summarizes
our rules regarding contributions to your contract. All ages in the table refer
to the age of the annuitant named in the contract.
- ------------------------------------------------------------------------------
The "annuitant" is the person who is the measuring life for determining
contract benefits. The annuitant is not necessarily the contract owner.
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
AVAILABLE
CONTRACT FOR ANNUITANT LIMITATIONS ON
TYPE ISSUE AGES SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NQ 0 through 85 o After-tax money. o No additional contributions after
o Paid to us by check or transfer of age 86.
contract value in a tax-deferred
exchange under Section 1035 of the
Internal Revenue Code.
- ---------------------------------------------------------------------------------------------------------------------
Rollover IRA 20 through 85 o Rollovers from a qualified plan. o No rollover or direct transfer
o Rollovers from a TSA. contributions after age 86.
o Rollovers from another traditional o Contributions after age 70 1/2 must be
net of required minimum distributions. o Regular IRA contributions limited to
individual retirement arrangement. $2,000 per year.
o Direct custodian-to-custodian transfers o Although we accept regular
from another traditional individual contributions under the Rollover IRA
retirement arrangement. contracts, we intend that this contract
o Regular IRA contributions. be used for rollover and direct transfer
contributions. Please refer to
"Withdrawals, payments and transfers
of funds out of traditional IRAs" in
"Tax information" for a discussion of
conduit IRAs.
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
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17
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
AVAILABLE
CONTRACT FOR ANNUITANT LIMITATIONS ON
TYPE ISSUE AGES SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Roth Conversion 20 through 85 o Rollovers from another Roth IRA. o No additional rollover or direct transfer
IRA o Conversion rollovers from a traditional contributions after age 86.
IRA. o Conversion rollovers after age 70 1/2
o Direct transfers from another Roth IRA. must be net of required minimum
distributions for the traditional IRA you
are rolling over.
o You cannot roll over funds from a
traditional IRA if your adjusted gross
income is $100,000 or more.
o Regular contributions are not
permitted.
o Only rollover and direct transfer
contributions are permitted
- ----------------------------------------------------------------------------------------------------------------------
Rollover TSA 20 through 85 o Rollovers from another TSA contract or o No additional rollover or direct transfer
arrangement. contributions after age 86.
o Rollovers from a traditional IRA which o Contributions after age 70 1/2 must be
was a "conduit" for TSA funds net of required minimum distributions.
previously rolled over. o Employer-remitted contributions are
o Direct transfers from another contract not permitted.
or arrangement under Section 403(b)
of the Internal Revenue Code,
complying with IRS Revenue Ruling
90-24.
- ----------------------------------------------------------------------------------------------------------------------
QP 20 through 75 o Only transfer contributions from an o Regular ongoing payroll contributions
existing qualified plan trust as a are not permitted.
change of investment vehicle under the o Only one additional contribution may
plan. be made during a contract year.
o The plan must be qualified under o No additional transfer contributions
Section 401(a) of the Internal Revenue after age 76.
Code. o For defined benefit plans, employee
o For 401(k) plans, transferred contributions are not permitted.
contributions may only include o Contributions after age 70 1/2 must be
employee pre-tax contributions. net of any required minimum
distributions.
Please refer to Appendix II for a discussion of purchase considerations of QP contracts.
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
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18
- --------------------------------------------------------------------------------
See "Tax information" for a more detailed discussion of sources of contributions
and certain contribution limitations. We may refuse to accept any contribution
if the sum of all contributions under all Equitable Accumulator contracts with
the same annuitant would then total more than $1,500,000. We reserve the right
to limit aggregate contributions made after the first contract year to 150% of
first-year contributions. We may also refuse to accept any contribution if the
sum of all contributions under all Equitable Life annuity accumulation contracts
that you own would then total more than $2,500,000.
For information on when contributions are credited under your contract see
"Dates and prices at which contract events occur" in "More information" later in
this prospectus.
<PAGE>
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19
- --------------------------------------------------------------------------------
OWNER AND ANNUITANT REQUIREMENTS
Under NQ contracts, the annuitant can be different than the owner. A joint owner
may also be named. Only natural persons can be joint owners. This means that an
entity such as a corporation cannot be a joint owner.
Under all IRA and Rollover TSA contracts, the owner and annuitant must be the
same person.
Under QP contracts, the owner must be the trustee of the qualified plan and the
annuitant must be the plan participant/employee. See Appendix II for more
information on QP contracts.
- -----------------------------------------------------------------------------
A "participant" is an individual who is currently, or was formerly,
participating in an eligible employer's QP or TSA plan.
- -----------------------------------------------------------------------------
HOW YOU CAN MAKE YOUR CONTRIBUTIONS
Except as noted below, contributions must be by check drawn on a U.S. bank, in
U.S. dollars, and made payable to Equitable Life. We do not accept third-party
checks endorsed to us except for rollover contributions, tax-free exchanges or
trustee checks that involve no refund. All checks are subject to our ability to
collect the funds. We reserve the right to reject a payment if it is received in
an unacceptable form.
Additional contributions may also be made under our automatic investment
program. This method of payment is discussed in detail in "More information"
later in this prospectus.
Your initial contribution must generally be accompanied by an application and
any other form we need to process the payments. If any information is missing or
unclear, we will try to obtain that information. If we are unable to obtain all
of the information we require within five business days after we receive an
incomplete application or form, we will inform the financial professional
submitting the application on your behalf. We will then return the contribution
to you unless you specifically direct us to keep your contribution until we
receive the required information.
- -----------------------------------------------------------------------------
Our "business day" is any day the New York Stock Exchange is open for trading
and generally ends at 4:00 p.m. Eastern Time. We may, however, close due to
emergency conditions.
- -----------------------------------------------------------------------------
SECTION 1035 EXCHANGES
You may apply the value of an existing nonqualified deferred annuity contract
(or life insurance or endowment contract) to purchase an Equitable Accumulator
Select NQ contract in a tax-free exchange if you follow certain procedures as
shown in the form that we require you to use. Also see "Tax information" later
in this prospectus.
WHAT ARE YOUR INVESTMENT OPTIONS UNDER THE CONTRACT?
Your investment options are the variable investment options and the fixed
maturity options.
VARIABLE INVESTMENT OPTIONS
Your investment results in any one of the variable investment options will
depend on the investment performance of the underlying portfolios. Listed below
are the currently available portfolios, their investment objectives, and their
advisers.
- -----------------------------------------------------------------------------
You can choose from among the variable investment options.
- -----------------------------------------------------------------------------
<PAGE>
- -----
20
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
PORTFOLIOS OF EQ ADVISORS TRUST
- ------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
EQ/Aggressive Stock Long-term growth of capital Alliance Capital Management L.P.,
Massachusetts Financial Services Company
- ------------------------------------------------------------------------------------------------------------------------------
Alliance Common Stock Long-term growth of capital and increasing Alliance Capital Management L.P.
income
- ------------------------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors High total return without, in the adviser's Alliance Capital Management L.P.
opinion, undue risk to principal
- ------------------------------------------------------------------------------------------------------------------------------
Alliance Global Long-term growth of capital Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------
Alliance Growth and Income High total return through a combination of Alliance Capital Management L.P.
current income and capital appreciation
- ------------------------------------------------------------------------------------------------------------------------------
Alliance Growth Investors High total return consistent with the adviser's Alliance Capital Management L.P.
determination of reasonable risk
- ------------------------------------------------------------------------------------------------------------------------------
Alliance High Yield High return by maximizing current income and, Alliance Capital Management L.P.
to the extent consistent with that objective,
capital appreciation
- ------------------------------------------------------------------------------------------------------------------------------
Alliance Intermediate High current income consistent with relative Alliance Capital Management L.P.
Government Securities stability of principal
- ------------------------------------------------------------------------------------------------------------------------------
Alliance International Long-term growth of capital Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------
Alliance Money Market High level of current income while preserving Alliance Capital Management L.P.
assets and maintaining liquidity
- ------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth Long-term growth of capital Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth Long-term growth of capital Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Technology Long-term growth of capital Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------
BT Equity 500 Index Replicate as closely as possible (before Bankers Trust Company
deduction of portfolio expenses) the total
return of the Standard & Poor's 500
Composite Stock Price Index
- ------------------------------------------------------------------------------------------------------------------------------
BT International Equity Index Replicate as closely as possible (before Bankers Trust Company
deduction of portfolio expenses) the total
return of the Morgan Stanley Capital
International Europe, Australia, Far East Index
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
21
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
PORTFOLIOS OF EQ ADVISORS TRUST (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BT Small Company Index Replicate as closely as possible (before Bankers Trust Company
deduction of portfolio expenses) the total
return of the Russell 2000 Index
- ------------------------------------------------------------------------------------------------------------------------------
Capital Guardian Research Long-term growth of capital Capital Guardian Trust Company
- ------------------------------------------------------------------------------------------------------------------------------
Capital Guardian U.S. Equity Long-term growth of capital Capital Guardian Trust Company
- ------------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Long-term growth of capital Evergreen Asset Management Corp.
- ------------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Foundation In order of priority, reasonable income, Evergreen Asset Management Corp.
conservation of capital, and capital appreciation
- ------------------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Long-term capital growth Massachusetts Financial Services Company
Companies
- ------------------------------------------------------------------------------------------------------------------------------
MFS Growth with Income Reasonable current income and long-term Massachusetts Financial Services Company
growth of capital and income
- ------------------------------------------------------------------------------------------------------------------------------
MFS Research Long-term growth of capital and future income Massachusetts Financial Services Company
- ------------------------------------------------------------------------------------------------------------------------------
Mercury Basic Value Equity Capital appreciation and secondarily, income Mercury Asset Management, US
- ------------------------------------------------------------------------------------------------------------------------------
Mercury World Strategy High total investment return Mercury Asset Management, US
- ------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Long-term capital appreciation Morgan Stanley Asset Management
Markets Equity
- ------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Balanced Balanced investment Putnam Investment Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Capital growth, current income is a secondary Putnam Investment Management, Inc.
Value objective
- ------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income Substantial dividend income and also capital T. Rowe Price Associates, Inc.
appreciation
- ------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price International Long-term growth of capital Rowe Price-Fleming International, Inc.
Stock
- ------------------------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Long-term capital appreciation Warburg Pincus Asset Management, Inc.
Value
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Other important information about the portfolios is included in the prospectus
for EQ Advisors Trust attached at the end of this
prospectus.
<PAGE>
- ----------
22
- --------------------------------------------------------------------------------
FIXED MATURITY OPTIONS
We offer fixed maturity options with maturity dates ranging from one to ten
years. You can allocate your contributions to one or more of these fixed
maturity options. These amounts become part of our general account assets. They
will accumulate interest at the "rate to maturity" for each fixed maturity
option. The total amount you allocate to and accumulate in each fixed maturity
option is called the "fixed maturity amount." The fixed maturity options are not
available in contracts issued in Maryland.
- -----------------------------------------------------------------------------
Fixed maturity options range from one to ten years to maturity.
- -----------------------------------------------------------------------------
The rate to maturity you will receive for each fixed maturity option is the rate
to maturity in effect for new contributions allocated to that fixed maturity
option on the date we apply your contribution. If you make any withdrawals or
transfers from a fixed maturity option before the maturity date, we will make a
"market value adjustment" that may increase or decrease any fixed maturity
amount you have left in that fixed maturity option. We discuss the market value
adjustment below and in greater detail later in this prospectus in "More
information."
On the maturity date of a fixed maturity option your fixed maturity amount,
assuming you have not made any withdrawals or transfers, will equal your
contribution to that fixed maturity option plus interest, at the rate to
maturity for that contribution, to the date of the calculation. This is the
fixed maturity option's "maturity value." Before maturity, the current value we
will report for your fixed maturity amounts will reflect a market value
adjustment. Your current value will reflect the market value adjustment that we
would make if you were to withdraw all of your fixed maturity amounts on the
date of the report. We call this your "market adjusted amount."
FIXED MATURITY OPTIONS AND MATURITY DATES. We currently offer fixed maturity
options ending on February 15th for each of the maturity years 2001 through
2010. Not all of these fixed maturity options will be available for annuitant
ages 76 and older. See "Allocating your contributions" below. As fixed maturity
options expire, we expect to add maturity years so that generally 10 fixed
maturity options are available at any time.
We will not accept allocations to a fixed maturity option if on the date the
contribution is to be applied:
o the fixed maturity option's maturity date is within the current calendar year;
or
o the rate to maturity is 3% or less.
YOUR CHOICES AT THE MATURITY DATE. We will notify you on or before December 31st
of the year before each of your fixed maturity options is scheduled to mature.
At that time, you may choose to have one of the following take place on the
maturity date, as long as none of the conditions listed above or in "Allocating
your contributions," below would apply:
(a) transfer the maturity value into another available fixed maturity option or
into any of the variable investment options; or
(b) withdraw the maturity value.
If we do not receive your choice on or before the fixed maturity option's
maturity date, we will automatically transfer your maturity value into the fixed
maturity option that will mature next.
MARKET VALUE ADJUSTMENT. If you make any withdrawals (including transfers,
surrender of your contract or when we make deductions for charges) from a fixed
maturity option before it matures we will make a market value adjustment, which
will increase or decrease any fixed maturity amount you have in that fixed
maturity option. The amount of the adjustment will depend on two factors:
(a) the difference between the rate to maturity that applies to the amount
being withdrawn and the rate to maturity in effect at that time for new
allocations to that same fixed maturity option, and
(b) the length of time remaining until the maturity date.
In general, if interest rates rise from the time that you originally allocate an
amount to a fixed maturity option to
<PAGE>
- ----------
23
- --------------------------------------------------------------------------------
the time that you take a withdrawal, the market value adjustment will be
negative. Likewise, if interest rates drop at the end of that time, the market
value adjustment will be positive. Also, the amount of the market value
adjustment, either up or down, will be greater the longer the time remaining
until the fixed maturity option's maturity date. Therefore, it is possible that
the market value adjustment could greatly reduce your value in the fixed
maturity options, particularly in the fixed maturity options with later maturity
dates.
We provide an illustration of the market adjusted amount of specified maturity
values, an explanation of how we calculate the market value adjustment, and
information concerning our general account and investments purchased with
amounts allocated to the fixed maturity options, in "More information" later in
this prospectus. Appendix III of this prospectus provides an example of how the
market value adjustment is calculated.
ALLOCATING YOUR CONTRIBUTIONS
You may choose from among three ways to allocate your contributions under your
contract: self-directed, principal assurance, or dollar cost averaging.
SELF-DIRECTED ALLOCATION
You may allocate your contributions to one or more, or all, of the variable
investment options and fixed maturity options. Allocations must be in whole
percentages and you may change your allocations at any time. However, the total
of your allocations must equal 100%. If the annuitant is age 76 or older, you
may allocate contributions to fixed maturity options if their maturities are
five years or less. Also, you may not allocate amounts to fixed maturity options
with maturity dates that are later than the February 15th immediately following
the date annuity payments are to begin.
PRINCIPAL ASSURANCE ALLOCATION
Under this allocation program you select a fixed maturity option. We specify the
portion of your initial contribution to be allocated to that fixed maturity
option in an amount that will cause the maturity value to equal the amount of
your entire initial contribution on the fixed maturity option's maturity date.
The maturity date you select generally may not be later than 10 years, or
earlier than 7 years from your contract date. You allocate the rest of your
contribution to the variable investment options however you choose.
For example, if your initial contribution is $10,000, and on March 15, 2000 you
chose the fixed maturity option with a maturity date of February 15, 2010, since
the rate to maturity was 5.98% on March 15, 2000, we would have allocated
$5,618.00 to that fixed maturity option and the balance to your choice of
variable investment options. On the maturity date your value in the fixed
maturity option would be $10,000.
The principal assurance allocation is only available for annuitant ages 75 or
younger when the contract is issued. If you are purchasing a Rollover IRA, QP,
or Rollover TSA contract, before you select a maturity year that would extend
beyond the year in which you will reach age 70 1/2, you should consider whether
your value in the variable investment options, or your other traditional IRA or
TSA funds are sufficient to meet your required minimum distributions. See "Tax
information."
You may not elect principal assurance if the special dollar cost averaging
program is in effect.
DOLLAR COST AVERAGING
We offer two dollar cost averaging programs. Each program allows you to
gradually transfer amounts from the Alliance Money Market option to the other
variable investment options by periodically transferring approximately the same
dollar amount to the other variable investment options you select. This will
cause you to purchase more units if the unit's value is low and fewer units if
the unit's value is high. Therefore, you may get a lower average cost per unit
over the long term. These plans of investing, however, do not guarantee that you
will earn a profit or be protected against losses.
<PAGE>
- ----------
24
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Units measure your value in each variable investment option.
- --------------------------------------------------------------------------------
SPECIAL DOLLAR COST AVERAGING PROGRAM. You may dollar cost average from the
Alliance Money Market option into any of the other variable investment options.
You must allocate your entire initial contribution into the Alliance Money
Market option. We will transfer your value in the Alliance Money Market option
into the other variable investment options that you select over the next 12
months or such other period we may offer. The transfer date will be the same day
of the month as the contract date, but not later than the 28th. All amounts will
be transferred out by the end of the first contract year or such other period we
may offer. Under this program we will not deduct the mortality and expense
risks, administrative, and distribution charges from assets in the Alliance
Money Market option. You may not allocate additional contributions to the
Alliance Money Market option under this program.
The only amounts that should be transferred from the Alliance Money Market
option are your regularly scheduled monthly transfers to the other variable
investment options. If you request to transfer or withdraw any other amounts, we
will transfer all of the value that you have remaining in the Alliance Money
Market option to the other investment options according to the allocation
percentages we have on file for you. As a result, you will no longer be able to
participate in the special dollar cost averaging program. You may also ask us to
cancel your participation at any time.
GENERAL DOLLAR COST AVERAGING PROGRAM. If your value in the Alliance Money
Market option is at least $5,000, you may choose, at any time, to have a
specified dollar amount or percentage of your value transferred from that option
to the other variable investment options. You can select to have transfers made
on a monthly, quarterly, or annual basis. The transfer date will be the same
calendar day of the month as the contract date, but not later than the 28th day
of the month. You can also specify the number of transfers or instruct us to
continue making the transfers until all amounts in the Alliance Money Market
option have been transferred out.
The minimum amount that we will transfer each time is $250. The maximum amount
we will transfer is equal to your value in the Alliance Money Market option at
the time the program is elected, divided by the number of transfers scheduled to
be made.
If, on any transfer date, your value in the Alliance Money Market option is
equal to or less than the amount you have elected to have transferred, the
entire amount will be transferred. The general dollar cost averaging program
will then end. You may change the transfer amount once each contract year or
cancel this program at any time.
----------------------------------------
You may not elect dollar cost averaging or special dollar cost averaging if you
are participating in the rebalancing program. See "Transferring your money among
investment options."
YOUR BENEFIT BASE
The benefit base is used to calculate the guaranteed minimum income benefit and
the 5% roll up to age 80 guaranteed minimum death benefit. See "Our baseBUILDER
option" and "Guaranteed minimum death benefit" below. The benefit base is equal
to:
o your initial contribution and any additional contributions to the contract;
plus
o daily interest; less
o a deduction that reflects any withdrawals you make (the amount of the
deduction is described under "How withdrawals affect your guaranteed
minimum income benefit and guaranteed minimum death benefit" in "Accessing
your money"); less
o a deduction for any withdrawal charge remaining when you exercise your
guaranteed minimum income benefit; and less
o a deduction for any outstanding loan plus accrued interest on the date
that you exercise your guaranteed minimum income benefit (applies to
Rollover TSA only).
The effective annual interest rate credited to the benefit base is:
<PAGE>
- ----------
25
- --------------------------------------------------------------------------------
o 5% for the benefit base with respect to the variable investment options
(other than the Alliance Money Market and the Alliance Intermediate
Government Securities options), and the account for special dollar cost
averaging; and
o 3% for the benefit base with respect to the Alliance Money Market and the
Alliance Intermediate Government Securities options, the fixed maturity
options and the loan reserve account.
No interest is credited after the annuitant is age 80.
- -----------------------------------------------------------------------------
Your benefit base is not an account value or a cash value.
- -----------------------------------------------------------------------------
ANNUITY PURCHASE FACTORS
Annuity purchase factors are the factors applied to determine your periodic
payments under the guaranteed minimum income benefit and annuity payout options.
The guaranteed minimum income benefit is discussed in "Our baseBUILDER option"
and annuity payout options are discussed in "Accessing your money" later in this
prospectus. The guaranteed annuity purchase factors are those factors specified
in your contract. The current annuity purchase factors are those factors that
are in effect at any given time. Annuity purchase factors are based on interest
rates, mortality tables, frequency of payments, the form of annuity benefit, and
the annuitant's (and any joint annuitant's) age and sex in certain instances.
OUR BASEBUILDER OPTION
The baseBUILDER option offers you a guaranteed minimum income benefit combined
with the guaranteed minimum death benefit available under the contract. The
baseBUILDER benefit is available if the annuitant is between the ages of 20 and
75 at the time the contract is issued. There is an additional charge for the
baseBUILDER benefit which is described under "baseBUILDER benefit charge" in
"Charges and expenses."
The guaranteed minimum income benefit component of baseBUILDER is described
below. Whether you elect baseBUILDER or not, the guaranteed minimum death
benefit is provided under the contract. The guaranteed minimum death benefit is
described under "Guaranteed minimum death benefit" below. baseBUILDER is
currently not available in some states. Please ask your financial professional
if baseBUILDER is available in your state.
The guaranteed minimum income benefit guarantees you a minimum amount of fixed
income under your choice of a life annuity fixed payout option or an Income
Manager level payment life with a period certain payout option, subject to state
availability (for contracts issued in Oregon, only the Income Manager life with
a period certain payout annuity contract is available). You choose which of
these payout options you want and whether you want the option to be paid on a
single or joint life basis at the time you exercise your guaranteed minimum
income benefit. The maximum period certain available under the Income Manager
payout option is 10 years. This period may be shorter, depending on the
annuitant's age when you exercise your guaranteed minimum income benefit and the
type of contract you own. We may also make other forms of payout options
available. For a description of payout options, see "Your annuity payout
options" in "Accessing your money" later in this prospectus.
- -----------------------------------------------------------------------------
The guaranteed minimum income benefit, which is also known as a living
benefit, should be regarded as a safety net only. It provides income
protection if you elect an income payout while the annuitant is alive.
- -----------------------------------------------------------------------------
When you exercise the guaranteed minimum income benefit, the annual lifetime
income that you will receive under the life annuity payout option will be the
greater of (i) your guaranteed minimum income benefit which is calculated by
applying your benefit base at guaranteed annuity purchase factors, or (ii) the
income provided by applying your actual account value at our then current
annuity purchase factors.
When you elect to receive annual lifetime income, your contract will terminate
and you will receive the annuity payout option. You will begin receiving
payments one payment period after the annuity payout option is issued. Payments
end with the last payment before the annuitant's (or joint annuitant's, if
applicable) death. There is no
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continuation of benefits following the annuitant's (or joint annuitant's, if
applicable) death.
Before you elect baseBUILDER, you should consider the fact that the guaranteed
minimum income benefit provides a form of insurance and is based on conservative
actuarial factors. Therefore, even if your account value is less than your
benefit base, you may generate more income by applying your account value to
current annuity purchase factors. We will make this comparison for you when the
need arises.
You should also consider that the guaranteed annuity purchase factors we use to
determine your Income Manager benefit under baseBUILDER are more conservative
than the guaranteed annuity purchase factors we use for the Income Manager
payout annuity option. This means that, assuming the same amount is applied to
purchase the benefit and that we use guaranteed annuity purchase factors to
compute the benefit, each periodic payment under the baseBUILDER Income Manager
will be smaller than each periodic payment under the Income Manager payout
annuity option.
ILLUSTRATIONS OF GUARANTEED MINIMUM INCOME BENEFIT
The table below illustrates the guaranteed minimum income benefit amounts per
$100,000 of initial contribution, for a male annuitant age 60 (at issue) on the
contract date anniversaries indicated, who has elected the life annuity fixed
payout option, using the guaranteed annuity purchase factors as of March 1,
2000, assuming no additional contributions, withdrawals, or loans under Rollover
TSA contracts, and assuming there were no allocations to the Alliance Money
Market option or the fixed maturity options.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------
GUARANTEED MINIMUM
CONTRACT DATE INCOME BENEFIT -- ANNUAL INCOME
ANNIVERSARY AT EXERCISE PAYABLE FOR LIFE
- ---------------------------------------------------------------
<S> <C>
10 $10,816
15 $16,132
- ---------------------------------------------------------------
</TABLE>
EXERCISE OF GUARANTEED MINIMUM INCOME BENEFIT.
On each contract date anniversary that you are eligible to exercise the
guaranteed minimum income benefit, we will send you an eligibility notice
illustrating how much income could be provided as of the contract anniversary.
You may notify us within 30 days following the contract date anniversary if you
want to exercise the guaranteed minimum income benefit. You must return your
contract to us in order to exercise this benefit. The amount of income you
actually receive will be determined when we receive your request to exercise the
benefit. You will begin receiving payments one payment period after the annuity
payout contract is issued.
You (or the successor annuitant/owner, if applicable) will be eligible to
exercise the guaranteed minimum income benefit as follows:
o If the annuitant was at least age 20 and no older than age 44 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary
beginning with the 15th contract date anniversary.
o If the annuitant was at least age 45 and no older than age 49 (age 53 in
Oregon) when the contract was issued, you are eligible to exercise the
guaranteed minimum income benefit within 30 days following each contract
date anniversary after the annuitant is age 60.
o If the annuitant was at least age 50 (age 54 in Oregon) and no older than
age 75 when the contract was issued, you are eligible to exercise the
guaranteed minimum income benefit within 30 days following each contract
date anniversary beginning with the 10th (7th in Oregon) contract date
anniversary.
Please note:
(i) the latest date you may exercise the guaranteed minimum income benefit is
the contract date anniversary following the annuitant's 85th (83rd in
Oregon) birthday;
(ii) if the annuitant was age 75 when the contract was issued, the only time you
may exercise the guaranteed minimum income benefit is within 30 days
following the first (in Oregon, the first and second contract date
anniversary) contract date anniversary that it becomes available;
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(iii) if the annuitant was older than age 60 (63 in Oregon) at the time an IRA,
QP or Rollover TSA contract was issued, the baseBUILDER may not be an
appropriate feature because the minimum distributions required by tax law
must begin before the guaranteed minimum income benefit can be exercised;
and
(iv) for QP and Rollover TSA contracts, if you are eligible to exercise your
guaranteed minimum income benefit, we will first roll over amounts in such
contract to a Rollover IRA contract. You will be the owner of the Rollover
IRA contract.
GUARANTEED MINIMUM DEATH BENEFIT
A guaranteed minimum death benefit is provided as part of the baseBUILDER
benefit. A guaranteed minimum death benefit is also provided under your contract
even if you don't elect baseBUILDER. In this case, the baseBUILDER benefit
charge does not apply.
GUARANTEED MINIMUM DEATH BENEFIT APPLICABLE FOR ANNUITANT AGES 0 THROUGH 79 AT
ISSUE OF NQ CONTRACTS; 20 THROUGH 79 AT ISSUE OF ROLLOVER IRA, ROTH CONVERSION
IRA, AND ROLLOVER TSA CONTRACTS; AND 20 THROUGH 75 AT ISSUE OF QP CONTRACTS.
You must elect either the "5% roll up to age 80" or the "annual ratchet to age
80" guaranteed minimum death benefit when you apply for a contract. Once you
have made your election, you may not change it.
5% ROLL UP TO AGE 80. This guaranteed minimum death benefit is equal to the
benefit base described earlier in "Your benefit base."
ANNUAL RATCHET TO AGE 80. On the contract date, your guaranteed minimum death
benefit equals your initial contribution. Then, on each contract date
anniversary, we will determine your guaranteed minimum death benefit by
comparing your current guaranteed minimum death benefit to your account value on
that contract date anniversary. If your account value is higher than your
guaranteed minimum death benefit, we will increase your guaranteed minimum death
benefit to equal your account value. On the other hand, if your account value on
the contract date anniversary is less than your guaranteed minimum death
benefit, we will not adjust your guaranteed minimum death benefit either up or
down. If you make additional contributions, we will increase your current
guaranteed minimum death benefit by the dollar amount of the contribution on the
date the contribution is allocated to your investment options. If you take a
withdrawal from your contract, we will reduce your guaranteed minimum death
benefit on the date you take the withdrawal.
GUARANTEED MINIMUM DEATH BENEFIT APPLICABLE FOR ANNUITANT AGES 80 THROUGH 85 AT
ISSUE OF NQ, ROLLOVER IRA, ROTH CONVERSION IRA AND ROLLOVER TSA CONTRACTS.
On the contract date, your guaranteed minimum death benefit equals your initial
contribution. Thereafter, it will be increased by the dollar amount of any
additional contributions. We will reduce your guaranteed minimum death benefit
if you take any withdrawals.
----------------------------------------
Please see "How withdrawals affect your guaranteed minimum income benefit and
guaranteed minimum death benefit" in "Accessing your money" for information on
how withdrawals affect your guaranteed minimum death benefit.
See Appendix IV for an example of how we calculate the guaranteed minimum death
benefit.
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your contract, you may return it to
us for a refund. To exercise this cancellation right you must mail the contract
directly to our processing office within 10 days after you receive it. If state
law requires, this "free look" period may be longer.
Generally, your refund will equal your account value under the contract on the
day we receive notification of your decision to cancel the contract and will
reflect (i) any investment gain or loss in the variable investment options (less
the daily charges we deduct), and (ii) any positive or negative market value
adjustments in the fixed maturity options through the date we receive your
contract. Some
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states require that we refund the full amount of your contribution (not
reflecting (i) or (ii) above). For any IRA contract returned to us within seven
days after you receive it, we are required to refund the full amount of your
contribution.
We may require that you wait six months before you may apply for a contract with
us again if:
o you cancel your contract during the free look period; or
o you change your mind before you receive your contract o whether we have
received your contribution or not.
Please see "Tax information" for possible consequences of cancelling your
contract.
In addition to the cancellation right described above, if you fully convert an
existing traditional IRA contract to a Roth Conversion IRA contract, you may
cancel your Roth Conversion IRA contract and return to a Rollover IRA contract.
Our processing office, or your financial professional, can provide you with the
cancellation instructions.
<PAGE>
2
Determining your contract's value
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29
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YOUR ACCOUNT VALUE AND CASH VALUE
Your "account value" is the total of the: (i) values you have in the variable
investment options; (ii) market adjusted amounts in the fixed maturity options;
and (iii) value you have in the loan reserve account (applies for Rollover TSA
contracts only). These amounts are subject to certain fees and charges discussed
under "Charges and expenses."
Your contract also has a "cash value." At any time before annuity payments
begin, your contract's cash value is equal to the account value less the amount
of any outstanding loan plus accrued interest (applicable to Rollover TSA
contracts only). Please see "Surrendering your contract to receive its cash
value" in "Accessing your money."
YOUR CONTRACT'S VALUE IN THE VARIABLE INVESTMENT OPTIONS
Each variable investment option invests in shares of a corresponding portfolio.
Your value in each variable investment option is measured by "units." The value
of your units will increase or decrease as though you had invested it in the
corresponding portfolio's shares directly. Your value, however, will be reduced
by the amount of the fees and charges that we deduct under the contract.
The unit value for each variable investment option depends on the investment
performance of that option, less daily charges for:
(i) mortality and expense risks;
(ii) administrative; and
(iii) distribution charges.
On any day, your value in any variable investment option equals the number of
units credited to that option, adjusted for any units purchased for or deducted
from your contract under that option, multiplied by that day's value for one
unit. The number of your contract units in any variable investment option does
not change unless they are:
(i) increased to reflect additional contributions;
(ii) decreased to reflect a withdrawal;
(iii) increased to reflect a transfer into, or decreased to reflect a transfer
out of, a variable investment option; or
(iv) decreased to reflect a transfer of your loan amount to the loan reserve
account under a Rollover TSA contract.
In addition, when we deduct the baseBUILDER benefit charge, the number of units
credited to your contract will be reduced. A description of how unit values are
calculated is found in the SAI.
YOUR CONTRACT'S VALUE IN THE FIXED MATURITY OPTIONS
Your value in each fixed maturity option at any time before the maturity date is
the market adjusted amount in each option. This is equivalent to your fixed
maturity amount increased or decreased by the market value adjustment. Your
value, therefore, may be higher or lower than your contributions (less
withdrawals) accumulated at the rate to maturity. At the maturity date, your
value in the fixed maturity option will equal its maturity value.
<PAGE>
3
Transferring your money among investment options
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30
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TRANSFERRING YOUR ACCOUNT VALUE
At any time before the date annuity payments are to begin, you can transfer some
or all of your account value among the investment options, subject to the
following:
o You may not transfer to a fixed maturity option that matures in the current
calendar year, or that has a rate to maturity of 3% or less.
o If the annuitant is 76 or older, you must limit your transfers to fixed
maturity options to those with maturities of five years or less. Also, the
maturity dates may be no later than the February 15th immediately following
the date annuity payments are to begin.
o If you make transfers out of a fixed maturity option other than at its
maturity date the transfer may cause a market value adjustment.
You may request a transfer in writing or by telephone using TOPS. We anticipate
that transfers will be available online by using EQAccess by the end of 2000.
You must send in all written transfer requests directly to our processing
office. Transfer requests should specify:
(1) the contract number,
(2) the dollar amounts or percentages of your current account value to be
transferred, and
(3) the investment options to and from which you are transferring.
We will confirm all transfers in writing.
MARKET TIMING
You should note that the product is not designed for professional "market
timing" organizations, or other organizations or individuals engaging in a
market timing strategy, making programmed transfers, frequent transfers or
transfers that are large in relation to the total assets of the underlying
mutual fund portfolios in which the variable investment options invest. Market
timing strategies are disruptive to the underlying mutual fund portfolios in
which the variable investment options invest. If we determine that your transfer
patterns among the variable investment options reflect a market timing strategy,
we reserve the right to take action including but not limited to: restricting
the availability of transfers through telephone requests, facsimile
transmissions, automated telephone services, Internet services or any electronic
transfer services. We may also refuse to act on transfer instructions of an
agent acting under a power of attorney who is acting on behalf of more than one
owner.
REBALANCING YOUR ACCOUNT VALUE
We currently offer a rebalancing program that you can use to automatically
reallocate your account value among the variable investment options. You must
tell us:
(a) the percentage you want invested in each variable investment option (whole
percentages only), and
(b) how often you want the rebalancing to occur (quarterly, semiannually, or
annually on a contract year basis. Rebalancing will occur on the same day
of the month as the contract date).
While your rebalancing program is in effect, we will transfer amounts among each
variable investment option so that the percentage of your account value that you
specify is invested in each option at the end of each rebalancing date. Your
entire account value in the variable investment options must be included in the
rebalancing program.
- -----------------------------------------------------------------------------
Rebalancing does not assure a profit or protect against loss. You should
periodically review your allocation percentages as your needs change. You may
want to discuss the rebalancing program with your financial professional or
other financial professional before electing the program.
- -----------------------------------------------------------------------------
You may elect the rebalancing program at any time. You may also change your
allocation instructions or cancel the program at any time. If you request a
transfer while the rebalancing program is in effect, we will process the
transfer as requested; the rebalancing program will remain in effect unless you
request that it be cancelled in writing.
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You may not elect the rebalancing program if you are participating in the dollar
cost averaging or special dollar cost averaging program.
<PAGE>
4
Accessing your money
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32
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WITHDRAWING YOUR ACCOUNT VALUE
You have several ways to withdraw your account value before annuity payments
begin. The table below shows the methods available under each type of contract.
More information follows the table. For the tax consequences of withdrawals, see
"Tax information."
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
METHOD OF WITHDRAWAL
- --------------------------------------------------------------------------------
SUBSTANTIALLY MINIMUM
CONTRACT LUMP SUM SYSTEMATIC EQUAL DISTRIBUTION
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NQ Yes Yes No No
- --------------------------------------------------------------------------------
Rollover IRA Yes Yes Yes Yes
- --------------------------------------------------------------------------------
Roth Conversion IRA Yes Yes Yes No
- --------------------------------------------------------------------------------
QP Yes No No Yes
- --------------------------------------------------------------------------------
Rollover TSA* Yes No No Yes
- --------------------------------------------------------------------------------
</TABLE>
* For some Rollover TSA contracts, your ability to take withdrawals, loans or
surrender your contract may be limited. You must provide withdrawal
restriction information when you apply for a contract. See "Tax Sheltered
Annuity contracts (TSAs)" in "Tax information."
LUMP SUM WITHDRAWALS
(All contracts)
You may take lump sum withdrawals from your account value at any time. (Rollover
TSA contracts may have restrictions.) The minimum amount you may withdraw is
$300. If you request to withdraw more than 90% of a contract's current cash
value we will treat it as a request to surrender the contract for its cash
value. See "Surrendering your contract to receive its cash value" below.
Under Rollover TSA contracts, if a loan is outstanding, you may only take lump
sum withdrawals as long as the cash value remaining after any withdrawal equals
at least 10% of the outstanding loan plus accrued interest.
SYSTEMATIC WITHDRAWALS
(NQ, Rollover IRA, and Roth Conversion IRA contracts only)
You may take systematic withdrawals of a particular dollar amount or a
particular percentage of your account value.
You may take systematic withdrawals on a monthly, quarterly, or annual basis as
long as the withdrawals do not exceed the following percentages of your account
value: 1.2% monthly, 3.6% quarterly, and 15.0% annually. The minimum amount you
may take in each systematic withdrawal is $250. If the amount withdrawn would be
less than $250 on the date a withdrawal is to be taken, we will not make a
payment and we will terminate your systematic withdrawal election.
We will make the withdrawals on any day of the month that you select as long as
it is not later than the 28th day of the month. If you do not select a date, we
will make the withdrawals on the same calendar day of the month as the contract
date. You must wait at least 28 days after your contract is issued before your
systematic withdrawals can begin.
You may elect to take systematic withdrawals at any time. If you own an IRA
contract, you may elect this withdrawal method only if you are between ages
59 1/2 and 70 1/2.
You may change the payment frequency, or the amount or percentage of your
systematic withdrawals, once each contract year. However, you may not change the
amount or percentage in any contract year in which you have already taken a lump
sum withdrawal. You can cancel the systematic withdrawal option at any time.
SUBSTANTIALLY EQUAL WITHDRAWALS
(Rollover IRA and Roth Conversion IRA contracts only)
The substantially equal withdrawals option allows you to receive distributions
from your account value without triggering the 10% additional federal tax
penalty, which normally applies to distributions made before age 59 1/2. See
"Tax information." Once you begin to take substantially equal withdrawals, you
should not stop them or change the pattern of your withdrawals until after the
later of age 59 1/2 or five full years after the first withdrawal. If you stop
or change the withdrawals or take a lump sum withdrawal, you may be liable for
the 10% federal tax penalty that would have otherwise been due on prior
withdrawals made under this option and for any interest on those withdrawals.
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You may elect to take substantially equal withdrawals at any time before age
59 1/2. We will make the withdrawal on any day of the month that you select as
long as it is not later than the 28th day of the month. You may not elect to
receive the first payment in the same contract year in which you took a lump sum
withdrawal. We will calculate the amount of your substantially equal
withdrawals. The payments will be made monthly, quarterly, or annually as you
select. These payments will continue until we receive written notice from you to
cancel this option or you take a lump sum withdrawal. You may elect to start
receiving substantially equal withdrawals again, but the payments may not
restart in the same contract year in which you took a lump sum withdrawal. We
will calculate the new withdrawal amount.
MINIMUM DISTRIBUTION WITHDRAWALS
(Rollover IRA, QP, and Rollover TSA contracts only -- See "Tax information")
We offer the minimum distribution withdrawal option to help you meet lifetime
required minimum distributions under federal income tax rules. You may elect
this option in the year in which you reach age 70 1/2. The minimum amount we
will pay out is $250. You may elect the method you want us to use to calculate
your minimum distribution withdrawals from the choices we offer. Currently,
minimum distribution withdrawal payments will be made annually.
We will calculate your annual payment based on your account value at the end
of the prior calendar year based on the method you choose.
Under Rollover TSA contracts, you may not elect minimum distribution
withdrawals if a loan is outstanding.
- -----------------------------------------------------------------------------
For Rollover IRA, QP, and Rollover TSA contracts, we will send a form outlining
the distribution options available in the year you reach age 70 1/2 (if you have
not begun your annuity payments before that time).
- -----------------------------------------------------------------------------
HOW WITHDRAWALS ARE TAKEN FROM YOUR ACCOUNT VALUE
Unless you specify otherwise, we will subtract your withdrawals on a pro rata
basis from your value in the variable investment options. If there is
insufficient value or no value in the variable investment options, any
additional amount of the withdrawal required or the total amount of the
withdrawal will be withdrawn from the fixed maturity options in order of the
earliest maturity date(s) first. A market value adjustment may apply to
withdrawals from the fixed maturity options.
HOW WITHDRAWALS AFFECT YOUR GUARANTEED MINIMUM INCOME BENEFIT AND GUARANTEED
MINIMUM DEATH BENEFIT
Withdrawals will reduce your guaranteed benefits on either a dollar-for-dollar
basis or on a pro rata basis as explained below:
INCOME BENEFIT AND DEATH BENEFIT
5% roll up to age 80 -- If you elect the 5% roll up to age 80 guaranteed minimum
death benefit, your benefit base will be reduced on a dollar-for-dollar basis as
long as the sum of your withdrawals in a contract year is 5% or less of the
guaranteed minimum death benefit on the most recent contract date anniversary.
Once you take a withdrawal that causes the sum of your withdrawals in a contract
year to exceed 5% of the guaranteed minimum death benefit on the most recent
contract date anniversary, that withdrawal and any subsequent withdrawals in
that same contract year will reduce your benefit base on a pro rata basis.
The timing of your withdrawals and whether they exceed the 5% threshold
described above can have a significant impact on your guaranteed minimum income
benefit or guaranteed minimum death benefit.
Annual ratchet to age 80 -- If you elect the annual ratchet to age 80 guaranteed
minimum death benefit, each withdrawal will always reduce your benefit base and
current guaranteed minimum death benefit on a pro rata basis.
<PAGE>
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Annuitant issue ages 80 through 85 -- If your contract was issued when the
annuitant was between ages 80 and 85, each withdrawal will always reduce your
current guaranteed minimum death benefit on a pro rata basis.
----------------------------------------
Reduction on a dollar-for-dollar basis means that your current benefit will be
reduced by the dollar amount of the withdrawal. Reduction on a pro rata basis
means that we calculate the percentage of your current account value that is
being withdrawn and we reduce your current benefit by that same percentage. For
example, if your account value is $30,000 and you withdraw $12,000, you have
withdrawn 40% of your account value. If your guaranteed minimum death benefit
was $40,000 before the withdrawal, it would be reduced by $16,000 ($40,000 x
.40) and your new guaranteed minimum death benefit after the withdrawal would be
$24,000 ($40,000 - $16,000).
LOANS UNDER ROLLOVER TSA CONTRACTS
You may take loans from a Rollover TSA unless restricted by the employer who
provided the Rollover TSA funds. If you cannot take a loan, or cannot take a
loan without approval from the employer who provided the funds, we will have
this information in our records based on what you and the employer who provided
the funds told us when you purchased your contract. The employer must also tell
us whether special employer plan rules of the Employee Retirement Income
Security Act of 1974 ("ERISA") apply. We will not permit you to take a loan
while you are taking minimum distribution withdrawals.
You should read the terms and conditions on our loan request form carefully
before taking out a loan. Under Rollover TSA contracts subject to ERISA, you may
only take a loan with the written consent of your spouse. Your contract contains
further details of the loan provision. Also, see "Tax information" for general
rules applicable to loans.
We will permit you to have only one loan outstanding at a time. The minimum loan
amount is $1,000. The maximum amount is $50,000 or, if less, 50% of your account
value, subject to any limits under the federal income tax rules. The term of a
loan is five years. However, if you use the loan to acquire your primary
residence, the term is 10 years. The term may not extend beyond the earliest of:
(1) the date annuity payments begin,
(2) the date the contract terminates, and
(3) the date a death benefit is paid (the outstanding loan will be deducted
from the death benefit amount).
Interest will accrue daily on your outstanding loan at a rate we set. The loan
interest rate will be equal to the Moody's Corporate Bond Yield Averages for Baa
bonds for the calendar month ending two months before the first day of the
calendar quarter in which the rate is determined.
LOAN RESERVE ACCOUNT. On the date your loan is processed, we will transfer the
amount of your loan to the loan reserve account. Unless you specify otherwise,
we will subtract your loan on a pro rata basis from your value in the variable
investment options. If there is insufficient value or no value in the variable
investment options, any additional amount of the loan will be subtracted from
the fixed maturity options in order of the earliest maturity date(s) first. A
market value adjustment may apply.
We will credit interest to the amount in the loan reserve account at a rate of
2% lower than the loan interest rate that applies for the time your loan is
outstanding. On each contract date anniversary after the date the loan is
processed, we will transfer the amount of interest earned in the loan reserve
account to the variable investment options on a pro rata basis. When you make a
loan repayment, unless you specify otherwise, we will transfer the dollar amount
of the loan repaid from the loan reserve account to the investment options
according to the allocation percentages we have on our records.
SURRENDERING YOUR CONTRACT TO RECEIVE ITS CASH VALUE
You may surrender your contract to receive its cash value at any time while the
annuitant is living and before you begin to receive annuity payments. (Rollover
TSA contracts may
<PAGE>
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35
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have restrictions.) For a surrender to be effective, we must receive your
written request and your contract at our processing office. We will determine
your cash value on the date we receive the required information. All benefits
under the contract will terminate as of that date.
You may receive your cash value in a single sum payment or apply it to one or
more of the annuity payout options. See "Your annuity payout options" below. For
the tax consequences of surrenders, see "Tax information."
WHEN TO EXPECT PAYMENTS
Generally, we will fulfill requests for payments out of the variable investment
options within seven calendar days after the date of the transaction to which
the request relates. These transactions may include applying proceeds to a
variable annuity, payment of a death benefit, payment of any amount you withdraw
and, upon surrender, payment of the cash value. We may postpone such payments or
applying proceeds for any period during which:
(1) the New York Stock Exchange is closed or restricts trading,
(2) sales of securities or determination of the fair value of a variable
investment option's assets is not reasonably practicable because of an
emergency, or
(3) the SEC, by order, permits us to defer payment to protect people remaining
in the variable investment options.
We can defer payment of any portion of your value in the fixed maturity options
(other than for death benefits) for up to six months while you are living. We
also may defer payments for a reasonable amount of time (not to exceed 10 days)
while we are waiting for a contribution check to clear.
All payments are made by check and are mailed to you (or the payee named in a
tax-free exchange) by U.S. mail, unless you request that we use an express
delivery service at your expense.
YOUR ANNUITY PAYOUT OPTIONS
Equitable Accumulator Select offers you several choices of annuity payout
options. Some enable you to receive fixed annuity payments, which can be either
level or increasing, and others enable you to receive variable annuity payments.
You can choose from among the annuity payout options listed below. Restrictions
may apply, depending on the type of contract you own or the annuitant's age at
contract issue. In addition, if you are exercising your guaranteed minimum
income benefit under baseBUILDER, your choice of payout options are those that
are available under baseBUILDER (see "Our baseBUILDER option").
<TABLE>
<S> <C>
- -----------------------------------------------------------
Fixed annuity payout options Life annuity
Life annuity with period certain
Life annuity with refund certain
Period certain annuity
-----------------------------------------------------------
Variable Immediate Annuity Life annuity
payout options Life annuity with period certain
- -----------------------------------------------------------
Income Manager payout Life annuity with period certain
options (available for
annuitants age 83 or less Period certain annuity
at contract issue)
- -----------------------------------------------------------
</TABLE>
o Life annuity: An annuity that guarantees payments for the rest of the
annuitant's life. Payments end with the last monthly payment before the
annuitant's death. Because there is no continuation of benefits following
the annuitant's death with this payout option, it provides the highest
monthly payment of any of the life annuity options, so long as the
annuitant is living.
o Life annuity with period certain: An annuity that guarantees payments for
the rest of the annuitant's life. If the annuitant dies before the end of a
selected period of time ("period certain"), payments continue to the
beneficiary for the balance of the period certain. The period certain
cannot extend beyond the annuitant's life expectancy. A life annuity with a
period certain of 10 years is the form of annuity under the contracts that
you will receive if you do not elect a different payout option. In this
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case, the period certain will be based on the annuitant's age and will
not exceed 10 years.
o Life annuity with refund certain: An annuity that guarantees payments for
the rest of the annuitant's life. If the annuitant dies before the amount
applied to purchase the annuity option has been recovered, payments to the
beneficiary will continue until that amount has been recovered. This payout
option is available only as a fixed annuity.
o Period certain annuity: An annuity that guarantees payments for a specific
period of time, usually 5, 10, 15, or 20 years. This guaranteed period may
not exceed the annuitant's life expectancy. This option does not guarantee
payments for the rest of the annuitant's life. It does not permit any
repayment of the unpaid principal, so you cannot elect to receive part of
the payments as a single sum payment with the rest paid in monthly annuity
payments. This payout option is available only as a fixed annuity.
The life annuity, life annuity with period certain, and life annuity with refund
certain payout options are available on a single life or joint and survivor life
basis. The joint and survivor life annuity guarantees payments for the rest of
the annuitant's life and, after the annuitant's death, payments continue to the
survivor. We may offer other payout options not outlined here. Your financial
professional can provide details.
FIXED ANNUITY PAYOUT OPTIONS
With fixed annuities, we guarantee fixed annuity payments will be based either
on the tables of guaranteed annuity purchase factors in your contract or on our
then current annuity purchase factors, whichever is more favorable for you.
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTIONS
Variable Immediate Annuities are described in a separate prospectus that is
available from your financial professional. Before you select a Variable
Immediate Annuity payout option, you should read the prospectus which contains
important information that you should know.
Variable annuities may be funded through your choice of variable investment
options investing in portfolios of EQ Advisors Trust. The contract also offers a
fixed annuity option that can be elected in combination with the variable
annuity payout options. The amount of each variable annuity payment will
fluctuate, depending upon the performance of the variable investment options,
and whether the actual rate of investment return is higher or lower than an
assumed base rate.
INCOME MANAGER PAYOUT OPTIONS
The Income Manager payout annuity contracts differ from the other payout annuity
contracts. The other payout annuity contracts may provide higher or lower income
levels, but do not have all the features of the Income Manager payout annuity
contract. You may request an illustration of the Income Manager payout annuity
contract from your financial professional. Income Manager payout options are
described in a separate prospectus that is available from your financial
professional. Before you select an Income Manager payout option, you should read
the prospectus which contains important information that you should know.
Both Income Manager payout options provide guaranteed level payments (NQ and IRA
contracts). The Income Manager (life annuity with period certain) also provides
guaranteed increasing payments (NQ contracts only).
For QP and Rollover TSA contracts, if you want to elect an Income Manager payout
option, we will first roll over amounts in such contract to a Rollover IRA
contract. You will be the owner of the Rollover IRA contract.
You may choose to apply only part of the account value of your Equitable
Accumulator Select contract to an Income Manager payout annuity. In this case,
we will consider any amounts applied as a withdrawal from your Equitable
Accumulator Select. For the tax consequences of withdrawals, see "Tax
information."
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Depending upon your circumstances, the purchase of an Income Manager contract
may be done on a tax-free basis. Please consult your tax adviser.
THE AMOUNT APPLIED TO PURCHASE AN ANNUITY PAYOUT OPTION
The amount applied to purchase an annuity payout option varies, depending on the
payout option that you choose and the timing of your purchase as it relates to
any market value adjustments.
If amounts in a fixed maturity option are used to purchase any annuity payout
option, prior to the maturity date, a market value adjustment will apply.
SELECTING AN ANNUITY PAYOUT OPTION
When you select a payout option, we will issue you a separate written agreement
confirming your right to receive annuity payments. We require you to return your
contract before annuity payments begin unless you are applying only some of your
account value to an Income Manager contract. The contract owner and annuitant
must meet the issue age and payment requirements.
You can choose the date annuity payments begin but it may not be earlier than
thirteen months from the Equitable Accumulator Select contract date. Except with
respect to the Income Manager annuity payout options, where payments are made on
the 15th day of each month, you can change the date your annuity payments are to
begin anytime before that date as long as you do not choose a date later than
the 28th day of any month. Also, that date may not be later than the contract
date anniversary that follows the annuitant's 90th birthday. This may be
different in some states.
Before the last day by which annuity payments must begin, we will notify you by
letter. Once you have selected an annuity payout option and payments have begun,
no change can be made other than: (i) transfers (if permitted in the future)
among the variable investment options if a Variable Immediate Annuity payout
option is selected; and (ii) withdrawals (subject to a market value adjustment)
if an Income Manager annuity payout option is chosen.
The amount of the annuity payments will depend on the amount applied to purchase
the annuity and the applicable annuity purchase factors, discussed earlier.
In no event will you ever receive payments under a fixed option or an initial
payment under a variable option of less than the minimum amounts guaranteed by
the contract.
If, at the time you elect a payout option, the amount to be applied is less than
$2,000 or the initial payment under the form elected is less than $20 monthly,
we reserve the right to pay the account value in a single sum rather than as
payments under the payout option chosen.
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5
Charges and expenses
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CHARGES THAT EQUITABLE LIFE DEDUCTS
We deduct the following charges each day from the net assets of each variable
investment option. These charges are reflected in the unit values of each
variable investment option:
o A mortality and expense risks charge
o An administrative charge
o A distribution charge
We deduct the following charges from your account value. When we deduct these
charges from your variable investment options, we reduce the number of units
credited to your contract:
o If you elect the optional benefit a charge for the optional baseBUILDER
benefit.
o At the time annuity payments are to begin -- charges designed to
approximate certain taxes that may be imposed on us, such as premium taxes
in your state. An annuity administrative fee may also apply.
More information about these charges appears below. We will not increase these
charges for the life of your contract, except as noted. We may reduce certain
charges under group or sponsored arrangements. See "Group or sponsored
arrangements" below.
To help with your retirement planning, we may offer other annuities, with
different charges, benefits and features. Please contact your financial
professional for more information.
MORTALITY AND EXPENSE RISKS CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for mortality and expense risks, including the guaranteed
minimum death benefit. The daily charge is equivalent to an annual rate of 1.10%
of the net assets in each variable investment option.
The mortality risk we assume is the risk that annuitants as a group will live
for a longer time than our actuarial tables predict. If that happens, we would
be paying more in annuity income than we planned. We also assume a risk that the
mortality assumptions reflected in our guaranteed annuity payment tables, shown
in each contract, will differ from actual mortality experience. Lastly, we
assume a mortality risk to the extent that at the time of death, the guaranteed
minimum death benefit exceeds the cash value of the contract. The expense risk
we assume is the risk that it will cost us more to issue and administer the
contracts than we expect.
ADMINISTRATIVE CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for administrative expenses under the contracts. The daily
charge is equivalent to an annual rate of 0.25% of the net assets in each
variable investment option. We reserve the right under the contracts to increase
this charge to an annual rate of 0.35%.
DISTRIBUTION CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for a portion of our sales expenses under the contracts. The
daily charge is equivalent to an annual rate of 0.25% of the net assets in each
variable investment option.
BASEBUILDER BENEFIT CHARGE
If you elect the baseBUILDER, we deduct a charge annually from your account
value on each contract date anniversary until such time as you exercise the
guaranteed minimum income benefit, elect another annuity payout option, or the
contract date anniversary after the annuitant reaches 85 (83 in Oregon),
whichever occurs first. The charge is equal to 0.30% of the benefit base in
effect on the contract date anniversary.
We will deduct this charge from your value in the variable investment options on
a pro rata basis. If there is not enough value in the variable investment
options, we will deduct all or a portion of the charge from the fixed maturity
options in order of the earliest maturity date(s) first. A market value
adjustment may apply.
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CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES
We deduct a charge designed to approximate certain taxes that may be imposed on
us, such as premium taxes in your state. Generally, we deduct the charge from
the amount applied to provide an annuity payout option. The current tax charge
that might be imposed varies by state and ranges from 0% to 3.5% (1% in Puerto
Rico and 5% in the U.S. Virgin Islands).
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION ADMINISTRATIVE FEE
We deduct a fee of $350 from the amount to be applied to the Variable Immediate
Annuity payout option.
CHARGES THAT EQ ADVISORS TRUST DEDUCTS
EQ Advisors Trust deducts charges for the following types of fees and expenses:
o Management fees ranging from 0.25% to 1.15%.
o 12b-1 fees of 0.25%.
o Operating expenses, such as trustees' fees, independent auditors' fees,
legal counsel fees, administrative service fees, custodian fees, and
liability insurance.
o Investment-related expenses, such as brokerage commissions.
These charges are reflected in the daily share price of each portfolio. Since
shares of EQ Advisors Trust are purchased at their net asset value, these fees
and expenses are, in effect, passed on to the variable investment options and
are reflected in their unit values. For more information about these charges,
please refer to the prospectus for EQ Advisors Trust following this prospectus.
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce the mortality and
expense risks charge or change the minimum initial contribution requirements. We
also may change the guaranteed minimum income benefit and the guaranteed minimum
death benefit, or offer variable investment options that invest in shares of EQ
Advisors Trust that are not subject to the 12b-1 fee. Group arrangements include
those in which a trustee or an employer, for example, purchases contracts
covering a group of individuals on a group basis. Group arrangements are not
available for Rollover IRA and Roth Conversion IRA contracts. Sponsored
arrangements include those in which an employer allows us to sell contracts to
its employees or retirees on an individual basis.
Our costs for sales, administration, and mortality generally vary with the size
and stability of the group or sponsoring organization, among other factors. We
take all these factors into account when reducing charges. To qualify for
reduced charges, a group or sponsored arrangement must meet certain
requirements, such as requirements for size and number of years in existence.
Group or sponsored arrangements that have been set up solely to buy contracts or
that have been in existence less than six months will not qualify for reduced
charges.
We also may establish different rates to maturity for the fixed maturity options
under different classes of contracts for group or sponsored arrangements.
We will make these and any similar reductions according to our rules in effect
when we approve a contract for issue. We may change these rules from time to
time. Any variation will reflect differences in costs or services and will not
be unfairly discriminatory.
Group or sponsored arrangements may be governed by federal income tax rules,
ERISA, or both. We make no representations with regard to the impact of these
and other applicable laws on such programs. We recommend that employers,
trustees, and others purchasing or making contracts available for purchase under
such programs seek the advice of their own legal and benefits advisers.
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6
Payment of death benefit
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YOUR BENEFICIARY AND PAYMENT OF BENEFIT
You designate your beneficiary when you apply for your contract. You may change
your beneficiary at any time. The change will be effective on the date the
written request for the change is received in our processing office. We are not
responsible for any beneficiary change request that we do not receive. We will
send you written confirmation when we receive your request. Under jointly owned
contracts, the surviving owner is considered the beneficiary, and will take the
place of any other beneficiary. You may be limited as to the beneficiary you can
designate in a Rollover TSA contract. In a QP contract, the beneficiary must be
the trustee.
The death benefit is equal to your account value, or, if greater, the guaranteed
minimum death benefit. The guaranteed minimum death benefit is part of your
contract, whether you select the baseBUILDER benefit or not. We determine the
amount of the death benefit (other than the guaranteed minimum death benefit) as
of the date we receive satisfactory proof of the annuitant's death and any
required instructions for the method of payment. We determine the amount of the
guaranteed minimum death benefit as of the date of the annuitant's death. Under
Rollover TSA contracts we will deduct the amount of any outstanding loan plus
accrued interest from the amount of the death benefit.
EFFECT OF THE ANNUITANT'S DEATH
If the annuitant dies before the annuity payments begin, we will pay the death
benefit to your beneficiary.
Generally, the death of the annuitant terminates the contract. However, a
beneficiary spouse of the owner/annuitant can choose to be treated as the
successor owner/annuitant and continue the contract. Only a spouse can be a
successor owner/annuitant. A successor owner/annuitant can only be named under
NQ and IRA contracts.
For IRA contracts, a beneficiary may be able to have limited ownership as
discussed under "Beneficiary continuation option" below.
WHEN AN NQ CONTRACT OWNER DIES BEFORE THE ANNUITANT
Under certain conditions the owner changes after the original owner's death.
When you are not the annuitant under an NQ contract and you die before annuity
payments begin, the beneficiary named to receive the death benefit upon the
annuitant's death will automatically become the successor owner. If you do not
want this beneficiary to be the successor owner, you should name a specific
successor owner. You may name a successor owner at any time by sending
satisfactory notice to our processing office. If the contract is jointly owned
and the first owner to die is not the annuitant, the surviving owner becomes the
sole contract owner. This person will be considered the successor owner for
purposes of the distribution rules described in this section. The surviving
owner automatically takes the place of any other beneficiary designation.
Unless the surviving spouse of the owner who has died (or in the case of a joint
ownership situation, the surviving spouse of the first owner to die) is the
successor owner for this purpose, the entire interest in the contract must be
distributed under the following rules:
o The cash value of the contract must be fully paid to the successor owner
(new owner) by December 31st of the fifth calendar year after your death
(or in a joint ownership situation, the death of the first owner to die).
o The successor owner may instead elect to receive the cash value as a life
annuity (or payments for a period certain of not longer than the new
owner's life expectancy). Payments must begin no later than December 31st
following the calendar year of the non-annuitant owner's death. Unless this
alternative is elected, we will pay any cash value on December 31st of the
fifth calendar year following the year of your death (or the death of the
first owner to die).
If the surviving spouse is the successor owner or joint owner, the spouse may
elect to continue the contract. No distributions are required as long as the
surviving spouse and annuitant are living.
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HOW DEATH BENEFIT PAYMENT IS MADE
We will pay the death benefit to the beneficiary in the form of the annuity
payout option you have chosen. If you have not chosen an annuity payout option
as of the time of the annuitant's death, the beneficiary will receive the death
benefit in a single sum. However, subject to any exceptions in the contract, our
rules and any applicable requirements under federal income tax rules, the
beneficiary may elect to apply the death benefit to one or more annuity payout
options we offer at the time. See "Your annuity payout options" in "Accessing
your money" earlier in this prospectus. Please note that any annuity payout
option chosen may not extend beyond the life expectancy of the beneficiary.
SUCCESSOR OWNER AND ANNUITANT
If you are both the contract owner and the annuitant, and your spouse is the
sole beneficiary or the joint owner, then your spouse may elect to receive the
death benefit or continue the contract as successor owner/annuitant.
If your surviving spouse decides to continue the contract, then on the contract
date anniversary following your death, we will increase the account value to
equal your current guaranteed minimum death benefit, if it is higher than the
account value. The increase in the account value will be allocated to the
investment options according to the allocation percentages we have on file for
your contract. In determining whether the guaranteed minimum death benefit will
continue to grow, we will use your surviving spouse's age (as of the contract
date anniversary).
BENEFICIARY CONTINUATION OPTION
Upon your death under an IRA contract, a beneficiary may generally elect to keep
the contract in your name and receive distributions under the contract instead
of receiving the death benefit in a single sum. In order to elect this option,
the beneficiary must be an individual. Certain trusts with only individual
beneficiaries will be treated as individuals. This election must be made within
60 days following the date we receive proof of your death. We will increase the
account value to equal the death benefit if the death benefit is greater than
the account value. Except as noted in the next sentence, the beneficiary
continuation option will be available on or after May 1, 2000, depending on when
we receive regulatory clearance in your state. For Rollover IRA contracts, a
similar beneficiary continuation option will be available until the beneficiary
continuation option described in this prospectus is available. Please contact
our processing office for further information.
Under the beneficiary continuation option:
o The contract continues in your name for the benefit of your beneficiary.
o The beneficiary may make transfers among the investment options but no
additional contributions will be permitted.
o The guaranteed minimum income benefit and the death benefit (including the
guaranteed minimum death benefit) provisions will no longer be in effect.
o The beneficiary may choose at any time to withdraw all or a portion of the
account value and no withdrawal charges will apply. Any partial withdrawal
must be at least $300.
o Upon the death of the beneficiary, any remaining death benefit will be paid
in a lump sum to the person the beneficiary chooses.
For traditional IRA contracts only, if you die AFTER the "Required Beginning
Date" for required minimum distributions (see "Tax information"), the contract
will continue if:
(a) You were receiving minimum distribution withdrawals from this contract; and
(b) The pattern of minimum distribution withdrawals you chose was based in part
on the life of the designated beneficiary.
The withdrawals will then continue to be paid to the beneficiary on the same
basis as you chose before your death. We will be able to tell your beneficiary
whether this option is available. You should contact our processing office for
further information.
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For both kinds of IRA contracts, if you die BEFORE the Required Beginning Date
(and, for a Rollover IRA, therefore you were not taking minimum distribution
withdrawals under the contract) the beneficiary may choose one of the following
two beneficiary continuation options:
1. Payments over life expectancy period. The beneficiary can receive annual
minimum distributions based on the beneficiary's life expectancy. If there
is more than one beneficiary, the shortest life expectancy is used. These
minimum distributions must begin by December 31st of the calendar year
following the year of your death. In some situations, a spouse beneficiary
who elects to continue the contract in your name under the beneficiary
continuation option instead of electing successor owner/annuitant status
may choose to delay beginning these minimum distributions until the
December 31st of the calendar year in which you would have turned age
70 1/2.
2. Five Year Rule. The beneficiary can take withdrawals as desired. If the
beneficiary does not withdraw the entire account value by the December 31st
of the fifth calendar year following your death, we will pay any amounts
remaining under the contract to the beneficiary by that date. If you have
more than one beneficiary, and one of them elects this option, then all of
your beneficiaries will receive this option.
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7
Tax information
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OVERVIEW
In this part of the prospectus, we discuss the current federal income tax rules
that generally apply to Equitable Accumulator Select contracts owned by United
States taxpayers. The tax rules can differ, depending on the type of contract,
whether NQ, Rollover IRA, Roth Conversion IRA, QP, or Rollover TSA. Therefore,
we discuss the tax aspects of each type of contract separately.
Federal income tax rules include the United States laws in the Internal Revenue
Code, and Treasury Department Regulations and Internal Revenue Service ("IRS")
interpretations of the Internal Revenue Code. These tax rules may change. We
cannot predict whether, when, or how these rules could change. Any change could
affect contracts purchased before the change.
We cannot provide detailed information on all tax aspects of the contracts.
Moreover, the tax aspects that apply to a particular person's contract may vary
depending on the facts applicable to that person. We do not discuss state income
and other state taxes, federal income tax, and withholding rules for non-U.S.
taxpayers, or federal gift and estate taxes. Transfers of the contract, rights
under the contract, or payments under the contract may be subject to gift or
estate taxes. You should not rely only on this document, but should consult your
tax adviser before your purchase.
If you are buying a contract to fund a retirement plan that already provides tax
deferral under sections of the Internal Revenue Code (IRA, QP, and Rollover
TSA), you should do so for the contract's features and benefits other than tax
deferral. In such situations, the tax deferral of the contract does not provide
additional benefits.
TRANSFERS AMONG INVESTMENT OPTIONS
You can make transfers among investment options inside the contract without
triggering taxable income.
TAXATION OF NONQUALIFIED ANNUITIES
CONTRIBUTIONS
You may not deduct the amount of your contributions to a nonqualified annuity
contract.
CONTRACT EARNINGS
Generally, you are not taxed on contract earnings until you receive a
distribution from your contract, whether as a withdrawal or as an annuity
payment. However, earnings are taxable, even without a distribution:
o if a contract fails investment diversification requirements as specified in
federal income tax rules (these rules are based on or are similar to those
specified for mutual funds under the securities laws);
o if you transfer a contract, for example, as a gift to someone other than
your spouse (or former spouse);
o if you use a contract as security for a loan (in this case, the amount
pledged will be treated as a distribution); and
o if the owner is other than an individual (such as a corporation,
partnership, trust, or other non-natural person).
All nonqualified deferred annuity contracts that Equitable Life and its
affiliates issue to you during the same calendar year are linked together and
treated as one contract for calculating the taxable amount of any distribution
from any of those contracts.
ANNUITY PAYMENTS
Once annuity payments begin, a portion of each payment is taxable as ordinary
income. You get back the remaining portion without paying taxes on it. This is
your "investment in the contract." Generally, your investment in the contract
equals the contributions you made, less any amounts you previously withdrew that
were not taxable.
For fixed annuity payments, the tax-free portion of each payment is determined
by (1) dividing your investment in the contract by the total amount you are
expected to receive out
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of the contract, and (2) multiplying the result by the amount of the payment.
For variable annuity payments, your tax-free portion of each payment is your
investment in the contract divided by the number of expected payments.
Once you have received the amount of your investment in the contract, all
payments after that are fully taxable. If payments under a life annuity stop
because the annuitant dies, there is an income tax deduction for any unrecovered
investment in the contract.
PAYMENTS MADE BEFORE ANNUITY PAYMENTS BEGIN
If you make withdrawals before annuity payments begin under your contract, they
are taxable to you as ordinary income if there are earnings in the contract.
Generally, earnings are your account value less your investment in the contract.
If you withdraw an amount which is more than the earnings in the contract as of
the date of the withdrawal, the balance of the distribution is treated as a
return of your investment in the contract and is not taxable.
CONTRACTS PURCHASED THROUGH EXCHANGES
You may purchase your NQ contract through an exchange of another contract.
Normally, exchanges of contracts are taxable events. The exchange will not be
taxable under Section 1035 of the Internal Revenue Code if:
o the contract that is the source of the funds you are using to purchase the
NQ contract is another nonqualified deferred annuity contract or life
insurance or endowment contract.
o the owner and the annuitant are the same under the source contract and the
Equitable Accumulator Select NQ contract. If you are using a life insurance
or endowment contract the owner and the insured must be the same on both
sides of the exchange transaction.
The tax basis of the source contract carries over to the Equitable Accumulator
Select NQ contract.
A recent case permitted an owner to direct the proceeds of a partial withdrawal
from one nonqualified deferred annuity contract to a different insurer to
purchase a new nonqualified deferred annuity contract on a tax-deferred basis.
Special forms, agreement between the carriers, and provision of cost basis
information may be required to process this type of exchange.
SURRENDERS
If you surrender or cancel the contract, the distribution is taxable as ordinary
income (not capital gain) to the extent it exceeds your investment in the
contract.
DEATH BENEFIT PAYMENTS MADE TO A BENEFICIARY AFTER YOUR DEATH
For the rules applicable to death benefits, see "Payment of death benefit"
earlier in this prospectus. The tax treatment of a death benefit taken as a
single sum is generally the same as the tax treatment of a withdrawal from or
surrender of your contract. The tax treatment of a death benefit taken as
annuity payments is generally the same as the tax treatment of annuity payments
under your contract.
EARLY DISTRIBUTION PENALTY TAX
If you take distributions before you are age 59 1/2 a penalty tax of 10% of the
taxable portion of your distribution applies in addition to the income tax. The
extra penalty tax does not apply to pre-age 59 1/2 distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o in the form of substantially equal periodic annuity payments for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and a beneficiary.
OTHER INFORMATION
The Treasury Department has the authority to issue guidelines prescribing the
circumstances in which your ability to direct your investment to particular
portfolios within a separate account may cause you, rather than the insurance
company, to be treated as the owner of the portfolio shares attributable to your
nonqualified annuity contract. In that case, income and gains attributable to
such portfolio shares would be included in your gross income for federal income
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tax purposes. Under current rules, however, we believe that Equitable Life, and
not the owner of a nonqualified annuity contract, would be considered the owner
of the portfolio shares.
SPECIAL RULES FOR NQ CONTRACTS ISSUED IN PUERTO RICO
Under current law we treat income from NQ contracts as U.S. source. A Puerto
Rico resident is subject to U.S. taxation on such U.S. source income. Only
Puerto Rico source income of Puerto Rico residents is excludable from U.S.
taxation. Income from NQ contracts is also subject to Puerto Rico tax. The
calculation of the taxable portion of amounts distributed from a contract may
differ in the two jurisdictions. Therefore, you might have to file both U.S. and
Puerto Rico tax returns, showing different amounts of income from the contract
for each tax return. Puerto Rico generally provides a credit against Puerto Rico
tax for U.S. tax paid. Depending on your personal situation and the timing of
the different tax liabilities, you may not be able to take full advantage of
this credit.
INDIVIDUAL RETIREMENT ARRANGEMENTS (IRAS)
GENERAL
"IRA" stands for individual retirement arrangement. There are two basic types of
such arrangements, individual retirement accounts and individual retirement
annuities. In an individual retirement account, a trustee or custodian holds the
assets for the benefit of the IRA owner. The assets can include mutual funds and
certificates of deposit. In an individual retirement annuity, an insurance
company issues an annuity contract that serves as the IRA.
There are two basic types of IRAs, as follows:
o Traditional IRAs, typically funded on a pre-tax basis including SEP-IRAs
and SIMPLE-IRAs, issued and funded in connection with employer-sponsored
retirement plans; and
o Roth IRAs, first available in 1998, funded on an after-tax basis.
Regardless of the type of IRA, your ownership interest in the IRA cannot be
forfeited. You or your beneficiaries who survive you are the only ones who can
receive the IRA's benefits or payments.
You can hold your IRA assets in as many different accounts and annuities as you
would like, as long as you meet the rules for setting up and making
contributions to IRAs. However, if you own multiple IRAs, you may be required to
combine IRA values or contributions for tax purposes. For further information
about individual retirement arrangements, you can read Internal Revenue Service
Publication 590 ("Individual Retirement Arrangements (IRAs)"). This publication
is usually updated annually, and can be obtained from any IRS district office or
the IRS Web site (http:// www.irs.gov).
Equitable Life designs its traditional contracts to qualify as individual
retirement annuities under Section 408(b) of the Internal Revenue Code. You may
purchase the contract as a traditional IRA ("Rollover IRA") or Roth IRA ("Roth
Conversion IRA"). This prospectus contains the information that the IRS requires
you to have before you purchase an IRA. This section of the prospectus covers
some of the special tax rules that apply to IRAs. The next section covers Roth
IRAs. Education IRAs are not discussed in this prospectus because they are not
available in individual retirement annuity form.
The Equitable Accumulator Select IRA contract has been approved by the IRS as to
form for use as a traditional IRA. This IRS approval is a determination only as
to the form of the annuity. It does not represent a determination of the merits
of the annuity as an investment. The IRS approval does not address every feature
possibly available under the Equitable Accumulator Select IRA contract. Although
we do not have IRS approval as to form, we believe that the version of the Roth
IRA currently offered complies with the requirements of the Internal Revenue
Code.
CANCELLATION
You can cancel an Equitable Accumulator Select IRA contract by following the
directions under "Your right to cancel
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within a certain number of days" in "Contract features and benefits" earlier in
the prospectus. You can cancel an Equitable Accumulator Select Roth Conversion
IRA contract issued as a result of a full conversion of an Equitable Accumulator
Select Rollover IRA contract by following the instructions in the request for
full conversion form. The form is available from our processing office or your
financial professional. If you cancel an IRA contract, we may have to withhold
tax, and we must report the transaction to the IRS. A contract cancellation
could have an unfavorable tax impact.
TRADITIONAL INDIVIDUAL RETIREMENT ANNUITIES (TRADITIONAL IRAS)
CONTRIBUTIONS TO TRADITIONAL IRAS. Individuals may make three different types of
contributions to a traditional IRA:
o regular contributions out of earned income or compensation; or
o tax-free "rollover" contributions; or
o direct custodian-to-custodian transfers from other traditional IRAs
("direct transfers").
REGULAR CONTRIBUTIONS TO TRADITIONAL IRAS
LIMITS ON CONTRIBUTIONS. Generally, $2,000 is the maximum amount that you may
contribute to all IRAs (including Roth IRAs) in any taxable year. When your
earnings are below $2,000, your earned income or compensation for the year is
the most you can contribute. This $2,000 limit does not apply to rollover
contributions or direct custodian-to-custodian transfers into a traditional IRA.
You cannot make regular traditional IRA contributions for the tax year in which
you reach age 70 1/2 or any tax year after that.
SPECIAL RULES FOR SPOUSES. If you are married and file a joint income tax
return, you and your spouse may combine your compensation to determine the
amount of regular contributions you are permitted to make to traditional IRAs
(and Roth IRAs discussed below). Even if one spouse has no compensation or
compensation under $2,000, married individuals filing jointly can contribute up
to $4,000 for any taxable year to any combination of traditional IRAs and Roth
IRAs. (Any contributions to Roth IRAs reduce the ability to contribute to
traditional IRAs and vice versa.) The maximum amount may be less if earned
income is less and the other spouse has made IRA contributions. No more than a
combined total of $2,000 can be contributed annually to either spouse's
traditional and Roth IRAs. Each spouse owns his or her traditional IRAs and Roth
IRAs even if the other spouse funded the contributions. A working spouse age
70 1/2 or over can contribute up to the lesser of $2,000 or 100% of "earned
income" to a traditional IRA for a nonworking spouse until the year in which the
nonworking spouse reaches age 70 1/2.
DEDUCTIBILITY OF CONTRIBUTIONS. The amount of traditional IRA contributions that
you can deduct for a tax year depends on whether you are covered by an
employer-sponsored tax-favored retirement plan, as defined under special federal
income tax rules. Your Form W-2 will indicate whether or not you are covered by
such a retirement plan.
IF YOU ARE NOT COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, you can
make fully deductible contributions to your traditional IRAs for each tax year
up to $2,000, or, if less, your earned income.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
adjusted gross income (AGI) is BELOW THE LOWER DOLLAR FIGURE IN A PHASE-OUT
RANGE, you can make fully deductible contributions to your traditional IRAs. For
each tax year, your fully deductible contribution can be up to $2,000 or, if
less, your earned income.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
AGI falls within a PHASE-OUT range, you can make PARTIALLY DEDUCTIBLE
CONTRIBUTIONS to your traditional IRAs.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
AGI falls ABOVE THE HIGHER
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FIGURE IN THE PHASE-OUT RANGE, you may not deduct any of your regular
contributions to your traditional IRAs.
If you are single and covered by a retirement plan during any part of the
taxable year, the deduction for traditional IRA contributions phases out with
AGI between $32,000 and $42,000 in 2000. This range will increase every year
until 2005 when the range is $50,000-$60,000.
If you are married and file a joint return, and you are covered by a retirement
plan during any part of the taxable year, the deduction for traditional IRA
contributions phases out with AGI between $52,000 and $62,000 in 2000. This
range will increase every year until 2007 when the range is $80,000-$100,000.
Married individuals filing separately and living apart at all times are not
considered married for purposes of this deductible contribution calculation.
Generally, the active participation in an empoyer-sponsored retirement plan of
an individual is determined independently for each spouse. Where spouses have
"married filing jointly" status, however, the maximum deductible traditional IRA
contribution for an individual who is not an active participant (but whose
spouse is an active participant) is phased out for taxpayers with AGI of between
$150,000 and $160,000.
To determine the deductible amount of the contribution in 2000, you determine
AGI and subtract $32,000 if you are single, or $52,000 if you are married and
file a joint return with your spouse. The resulting amount is your excess AGI.
You then determine the limit on the deduction for traditional IRA contributions
using the following formula:
<TABLE>
<S> <C> <C> <C> <C>
($10,000-excess (AGI) times $2,000 (or earned Equals the adjusted
divided by $10,000 x income, if less) = deductible
contribution
limit
</TABLE>
NONDEDUCTIBLE REGULAR CONTRIBUTIONS. If you are not eligible to deduct part or
all of the traditional IRA contribution, you may still make nondeductible
contributions on which earnings will accumulate on a tax-deferred basis. The
combined deductible and nondeductible contributions to your traditional IRA (or
the nonworking spouse's traditional IRA) may not, however, exceed the maximum
$2,000 per person limit. See "Excess contributions" below. You must keep your
own records of deductible and nondeductible contributions in order to prevent
double taxation on the distribution of previously taxed amounts. See
"Withdrawals, payments and transfers of funds out of traditional IRAs" below.
If you are making nondeductible contributions in any taxable year, or you have
made nondeductible contributions to a traditional IRA in prior years and are
receiving distributions from any traditional IRA, you must file the required
information with the IRS. Moreover, if you are making nondeductible traditional
IRA contributions, you must retain all income tax returns and records pertaining
to such contributions until interests in all traditional IRAs are fully
distributed.
WHEN YOU CAN MAKE REGULAR CONTRIBUTIONS. If you file your tax returns on a
calendar year basis like most taxpayers, you have until the April 15 return
filing deadline (without extensions) of the following calendar year to make your
regular traditional IRA contributions for a tax year.
ROLLOVERS AND TRANSFERS
Rollover contributions may be made to a traditional IRA from these sources:
o qualified plans;
o TSAs (including Internal Revenue Code Section 403(b)(7) custodial
accounts); and
o other traditional IRAs.
Any amount contributed to a traditional IRA after you reach age 70 1/2 must
be net of your required minimum distribution for the year in which the rollover
or direct transfer contribution is made.
ROLLOVERS FROM QUALIFIED PLANS OR TSAS
There are two ways to do rollovers:
o Do it yourself
You actually receive a distribution that can be rolled over
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and you roll it over to a traditional IRA within 60 days after the date you
receive the funds. The distribution from your qualified plan or TSA will be net
of 20% mandatory federal income tax withholding. If you want, you can replace
the withheld funds yourself and roll over the full amount.
o Direct rollover
You tell your qualified plan trustee or TSA issuer/custodian/fiduciary to send
the distribution directly to your traditional IRA issuer. Direct rollovers are
not subject to mandatory federal income tax withholding.
All distributions from a TSA or qualified plan are eligible rollover
distributions, unless the distribution is:
o only after-tax contributions you made to the plan; or
o "required minimum distributions" after age 70 1/2 or separation from
service; or
o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancies) of you
and your designated beneficiary; or
o a hardship withdrawal; or
o substantially equal periodic payments made for a specified period of 10
years or more; or
o corrective distributions that fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse;
or
o a qualified domestic relations order distribution to a beneficiary who is
not your current spouse or former spouse.
ROLLOVERS FROM TRADITIONAL IRAS TO TRADITIONAL IRAS
You may roll over amounts from one traditional IRA to one or more of your other
traditional IRAs if you complete the transaction within 60 days after you
receive the funds. You may make such a rollover only once in every 12-month
period for the same funds. Trustee-to-trustee or custodian-to-custodian direct
transfers are not rollover transactions. You can make these more frequently than
once in every 12-month period.
The surviving spouse beneficiary of a deceased individual can roll over or
directly transfer an inherited traditional IRA to one or more other traditional
IRAs. Also, in some cases, traditional IRAs can be transferred on a tax-free
basis between spouses or former spouses as a result of a court ordered divorce
or separation decree.
EXCESS CONTRIBUTIONS
Excess contributions to IRAs are subject to a 6% excise tax for the year in
which made and for each year after until withdrawn. The following are excess
contributions to IRAs:
o regular contributions of more than $2,000; or
o regular contributions of more than earned income for the year, if that
amount is under $2,000; or
o regular contributions to a traditional IRA made after you reach age
70 1/2; or
o rollover contributions of amounts which are not eligible to be rolled over.
For example, after-tax contributions to a qualified plan or minimum
distributions required to be made after age 70 1/2.
You can avoid the excise tax by withdrawing an excess contribution (rollover or
regular) before the due date (including extensions) for filling your federal
income tax return for the year. If it is an excess regular traditional IRA
contribution, you cannot take a tax deduction for the amount withdrawn. You do
not have to include the excess contribution withdrawn as part of your income. It
is also not subject to the 10% additional penalty tax on early distributions,
discussed below under "Early distribution penalty tax." You do have to withdraw
any earnings that are attributed to the excess contribution. The withdrawn
earnings would be included in your gross income and could be subject to the 10%
penalty tax.
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Even after the due date for filing your return, you may withdraw an excess
rollover contribution, without income inclusion or 10% penalty, if:
(1) the rollover was from a qualified retirement plan to a traditional IRA;
(2) the excess contribution was due to incorrect information that the plan
provided; and
(3) you took no tax deduction for the excess contribution.
RECHARACTERIZATIONS
Amounts that have been contributed as traditional IRA funds may subsequently be
treated as Roth IRA funds. Special federal income tax rules allow you to change
your mind again and have amounts that are subsequently treated as Roth IRA
funds, once again treated as traditional IRA funds. You do this by using the
forms we prescribe. This is referred to as having "recharacterized" your
contribution.
WITHDRAWALS, PAYMENTS AND TRANSFERS OF FUNDS OUT OF TRADITIONAL IRAS
NO FEDERAL INCOME TAX LAW RESTRICTIONS ON WITHDRAWALS. You can withdraw any or
all of your funds from a traditional IRA at any time. You do not need to wait
for a special event like retirement.
TAXATION OF PAYMENTS. Earnings in traditional IRAs are not subject to federal
income tax until you or your beneficiary receive them. Taxable payments or
distributions include withdrawals from your contract, surrender of your
contract, and annuity payments from your contract. Death benefits are also
taxable. Except as discussed below, the total amount of any distribution from a
traditional IRA must be included in your gross income as ordinary income.
If you have ever made nondeductible IRA contributions to any traditional IRA (it
does not have to be to this particular traditional IRA contract), those
contributions are recovered tax free when you get distributions from any
traditional IRA. You must keep permanent tax records of all of your
nondeductible contributions to traditional IRAs. At the end of any year in which
you have received a distribution from any traditional IRA, you calculate the
ratio of your total nondeductible traditional IRA contributions (less any
amounts previously withdrawn tax free) to the total account balances of all
traditional IRAs you own at the end of the year plus all traditional IRA
distributions made during the year. Multiply this by all distributions from the
traditional IRA during the year to determine the nontaxable portion of each
distribution.
In addition, a distribution is not taxable if:
o the amount received is a withdrawal of excess contributions, as described
under "Excess contributions" above; or
o the entire amount received is rolled over to another traditional IRA (see
"Rollovers and transfers" above); or
o in certain limited circumstances, where the traditional IRA acts as a
"conduit," you roll over the entire amount into a qualified plan or TSA
that accepts rollover contributions. To get this conduit traditional IRA
treatment:
o the source of funds you used to establish the traditional IRA must have
been a rollover contribution from a qualified plan; and
o the entire amount received from the traditional IRA (including any
earnings on the rollover contribution) must be rolled over into another
qualified plan within 60 days of the date received.
Similar rules apply in the case of a TSA.
However, you may lose conduit treatment if you make an eligible rollover
distribution contribution to a traditional IRA and you commingle this
contribution with other contributions. In that case, you may not be able to roll
over these eligible rollover distribution contributions and earnings to another
qualified plan or TSA at a future date. The Rollover IRA contract can be used as
a conduit IRA if amounts are not commingled.
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Distributions from a traditional IRA are not eligible for favorable ten-year
averaging and long-term capital gain treatment available to certain
distributions from qualified plans.
REQUIRED MINIMUM DISTRIBUTIONS
LIFETIME REQUIRED MINIMUM DISTRIBUTIONS. You must start taking annual
distributions from your traditional IRAs beginning at age 70 1/2.
WHEN YOU HAVE TO TAKE THE FIRST REQUIRED MINIMUM DISTRIBUTION. The first
required minimum distribution is for the calendar year in which you turn age
70 1/2. You have the choice to take this first required minimum distribution
during the calendar year you actually reach age 70 1/2, or to delay taking it
until the first three-month period in the next calendar year (January 1 - April
1). Distributions must start no later than your "required beginning date," which
is April 1st of the calendar year after the calendar year in which you turn age
70 1/2. If you choose to delay taking the first annual minimum distribution,
then you will have to take two minimum distributions in that year -- the delayed
one for the first year and the one actually for that year. Once minimum
distributions begin, they must be made at some time each year.
HOW YOU CAN CALCULATE REQUIRED MINIMUM DISTRIBUTIONS. There are two approaches
to taking required minimum distributions -- "account-based" or "annuity-based."
Account-based method. If you choose an account-based method, you divide the
value of your traditional IRA as of December 31st of the past calendar year by a
life expectancy factor from IRS tables. This gives you the required minimum
distribution amount for that particular IRA for that year. The required minimum
distribution amount will vary each year as the account value and your life
expectancy factors change.
You have a choice of life expectancy factors, depending on whether you choose a
method based only on your life expectancy, or the joint life expectancies of you
and another individual. You can decide to "recalculate" your life expectancy
every year by using your current life expectancy factor. You can decide instead
to use the "term certain" method, where you reduce your life expectancy by one
every year after the initial year. If your spouse is your designated beneficiary
for the purpose of calculating annual account-based required minimum
distributions, you can also annually recalculate your spouse's life expectancy
if you want. If you choose someone who is not your spouse as your designated
beneficiary for the purpose of calculating annual account-based required minimum
distributions, you have to use the term certain method of calculating that
person's life expectancy. If you pick a nonspouse designated beneficiary, you
may also have to do another special calculation.
You can later apply your traditional IRA funds to a life annuity-based payout.
You can only do this if you already chose to recalculate your life expectancy
annually (and your spouse's life expectancy if you select a spousal joint
annuity). For example, if you anticipate exercising your guaranteed minimum
income benefit or selecting any other form of life annuity payout after you are
age 70 1/2, you must have elected to recalculate life expectancies.
Annuity-based method. If you choose an annuity-based method, you do not have to
do annual calculations. You apply the account value to an annuity payout for
your life or the joint lives of you and a designated beneficiary, or for a
period certain not extending beyond applicable life expectancies.
DO YOU HAVE TO PICK THE SAME METHOD TO CALCULATE YOUR REQUIRED MINIMUM
DISTRIBUTIONS FOR ALL OF YOUR TRADITIONAL IRAS AND OTHER RETIREMENT PLANS? No.
If you want, you can choose a different method and a different beneficiary for
each of your traditional IRAs and other retirement plans. For example, you can
choose an annuity payout from one IRA, a different annuity payout from a
qualified plan, and an account-based annual withdrawal from another IRA.
WILL WE PAY YOU THE ANNUAL AMOUNT EVERY YEAR FROM YOUR TRADITIONAL IRA BASED ON
THE METHOD YOU CHOOSE? No, unless you affirmatively select an annuity payout
option or an account-based withdrawal option such as our minimum distribution
withdrawal option. Because the
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options we offer do not cover every option permitted under federal income tax
rules, you may prefer to do your own required minimum distribution calculations
for one or more of your traditional IRAs.
WHAT IF YOU TAKE MORE THAN YOU NEED TO FOR ANY YEAR? The required minimum
distribution amount for your traditional IRAs is calculated on a year-by-year
basis. There are no carry-back or carry-forward provisions. Also, you cannot
apply required minimum distribution amounts you take from your qualified plans
to the amounts you have to take from your traditional IRAs and vice versa.
However, the IRS will let you calculate the required minimum distribution for
each traditional IRA that you maintain, using the method that you picked for
that particular IRA. You can add these required minimum distribution amount
calculations together. As long as the total amount you take out every year
satisfies your overall traditional IRA required minimum distribution amount, you
may choose to take your annual required minimum distribution from any one or
more traditional IRAs that you own.
WHAT IF YOU TAKE LESS THAN YOU NEED TO FOR ANY YEAR? Your IRA could be
disqualified, and you could have to pay tax on the entire value. Even if your
IRA is not disqualified, you could have to pay a 50% penalty tax on the
shortfall (required amount for traditional IRAs less amount actually taken). It
is your responsibility to meet the required minimum distribution rules. We will
remind you when our records show that your age 70 1/2 is approaching. If you
do not select a method with us, we will assume you are taking your required
minimum distribution from another traditional IRA that you own.
WHAT ARE THE REQUIRED MINIMUM DISTRIBUTION PAYMENTS AFTER YOU DIE? If you die
after either (a) the start of annuity payments, or (b) your Required Beginning
Date, your beneficiary must receive payment of the remaining values in the
contract at least as rapidly as under the distribution method before your death.
In some circumstances, your surviving spouse may elect to become the owner of
the traditional IRA and halt distributions until he or she reaches age
70 1/2.
If you die before your Required Beginning Date and before annuity payments
begin, federal income tax rules require complete distribution of your entire
value in the contract within five years after your death. Payments to a
designated beneficiary over the beneficiary's life or over a period certain that
does not extend beyond the beneficiary's life expectancy are also permitted, if
these payments start within one year of your death. A surviving spouse
beneficiary can also (a) delay starting any payments until you would have
reached age 70 1/2 or (b) roll over your traditional IRA into his or her own
traditional IRA.
SUCCESSOR ANNUITANT AND OWNER
If your spouse is the sole primary beneficiary and elects to become the
successor annuitant and owner, no death benefit is payable until your surviving
spouse's death.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
IRA death benefits are taxed the same as IRA distributions.
BORROWING AND LOANS ARE PROHIBITED TRANSACTIONS
You cannot get loans from a traditional IRA. You cannot use a traditional IRA as
collateral for a loan or other obligation. If you borrow against your IRA or use
it as collateral, its tax-favored status will be lost as of the first day of the
tax year in which this prohibited event occurs. If this happens, you must
include the value of the traditional IRA in your federal gross income. Also, the
early distribution penalty tax of 10% will apply if you have not reached age
59 1/2 before the first day of that tax year.
EARLY DISTRIBUTION PENALTY TAX
A penalty tax of 10% of the taxable portion of a distribution applies to
distributions from a traditional IRA made before you reach age 59 1/2. The
extra penalty tax does not apply to pre-age 59 1/2 distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
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o used to pay certain extraordinary medical expenses (special federal income
tax definition); or
o used to pay medical insurance premiums for unemployed individuals (special
federal income tax definition); or
o used to pay certain first-time home buyer expenses (special federal income
tax definition; $10,000 lifetime total limit for these distributions from
all your traditional and Roth IRAs); or
o used to pay certain higher education expenses (special federal income tax
definition); or
o in the form of substantially equal periodic payments made at least annually
over your life (or your life expectancy), or over the joint lives of you
and your beneficiary (or your joint life expectancy) using an IRS-approved
distribution method.
To meet this last exception, you could elect to apply your contract value to an
Income Manager (life annuity with a period certain) payout annuity contract
(level payments version). You could also elect the substantially equal
withdrawals option. We will calculate the substantially equal annual payments
under a method we select based on guidelines issued by the IRS (currently
contained in IRS Notice 89-25, Question and Answer 12). Although substantially
equal withdrawals and Income Manager payments are not subject to the 10% penalty
tax, they are taxable as discussed in "Withdrawals, payments and transfers of
funds out of traditional IRAs" above. Once substantially equal withdrawals or
Income Manager annuity payments begin, the distributions should not be stopped
or changed until after the later of your reaching age 59 1/2 or five years
after the date of the first distribution, or the penalty tax, including an
interest charge for the prior penalty avoidance, may apply to all prior
distributions under this option. Also, it is possible that the IRS could view
any additional withdrawal or payment you take from your contract as changing
your pattern of substantially equal withdrawals or Income Manager payments for
purposes of determining whether the penalty applies.
ROTH INDIVIDUAL RETIREMENT ANNUITIES (ROTH IRAS)
This section of the prospectus covers some of the special tax rules that apply
to Roth IRAs. If the rules are the same as those that apply to the traditional
IRA, we will refer you to the same topic under "traditional IRAs."
The Equitable Accumulator Select Roth Conversion IRA contract is designed to
qualify as a Roth individual retirement annuity under Sections 408A and 408(b)
of the Internal Revenue Code.
CONTRIBUTIONS TO ROTH IRAS
Individuals may make three different types of contributions to a Roth IRA:
o taxable rollover contributions from traditional IRAs ("conversion"
contributions); or
o tax-free rollover contributions from other Roth IRAs; or
o tax-free direct custodian-to-custodian transfers from other Roth IRAs
("direct transfers").
Since we only permit direct transfer and rollover contributions under the
Equitable Accumulator Select Roth Conversion IRA contract, we do not discuss
regular after-tax contributions here.
If you use the forms we require, we will also accept traditional IRA funds which
are subsequently recharacterized as Roth IRA funds following special federal
income tax rules.
ROLLOVERS AND DIRECT TRANSFERS
WHAT IS THE DIFFERENCE BETWEEN ROLLOVER AND DIRECT TRANSFER TRANSACTIONS? You
may make rollover contributions to a Roth IRA from only two sources:
o another Roth IRA ("tax-free rollover contribution"); or
o another traditional IRA, including a SEP-IRA or SIMPLE-IRA, in a taxable
conversion rollover ("conversion contribution").
You may not make contributions to a Roth IRA from a qualified plan under Section
401(a) of the Internal Revenue Code, or a TSA under Section 403(b) of the
Internal Revenue
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Code. You may make direct transfer contributions to a Roth IRA only from another
Roth IRA.
The difference between a rollover transaction and a direct transfer transaction
is the following: in a rollover transaction you actually take possession of the
funds rolled over, or are considered to have received them under tax law in the
case of a change from one type of plan to another. In a direct transfer
transaction, you never take possession of the funds, but direct the first Roth
IRA custodian, trustee, or issuer to transfer the first Roth IRA funds directly
to Equitable Life, as the Roth IRA issuer. You can make direct transfer
transactions only between identical plan types (for example, Roth IRA to Roth
IRA). You can also make rollover transactions between identical plan types.
However, you can only use rollover transactions between different plan types
(for example, traditional IRA to Roth IRA).
You may make both Roth IRA to Roth IRA rollover transactions and Roth IRA to
Roth IRA direct transfer transactions. This can be accomplished on a completely
tax-free basis. However, you may make Roth IRA to Roth IRA rollover transactions
only once in any 12-month period for the same funds. Trustee-to-trustee or
custodian-to-custodian direct transfers can be made more frequently than once a
year. Also, if you send us the rollover contribution to apply it to a Roth IRA,
you must do so within 60 days after you receive the proceeds from the original
IRA to get rollover treatment.
The surviving spouse beneficiary of a deceased individual can roll over or
directly transfer an inherited Roth IRA to one or more other Roth IRAs. In some
cases, Roth IRAs can be transferred on a tax-free basis between spouses or
former spouses as a result of a court-ordered divorce or separation decree.
CONVERSION CONTRIBUTIONS TO ROTH IRAS
In a conversion rollover transaction, you withdraw (or are considered to have
withdrawn) all or a portion of funds from a traditional IRA you maintain and
convert it to a Roth IRA within 60 days after you receive (or are considered to
have received) the traditional IRA proceeds. Unlike a rollover from a
traditional IRA to another traditional IRA, the conversion rollover transaction
is not tax free. Instead, the distribution from the traditional IRA is generally
fully taxable. For this reason, we are required to withhold 10% federal income
tax from the amount converted unless you elect out of such withholding. If you
have ever made nondeductible regular contributions to any traditional IRA --
whether or not it is the traditional IRA you are converting -- a pro rata
portion of the distribution is tax free.
There is, however, no early distribution penalty tax on the traditional IRA
withdrawal that you are converting to a Roth IRA, even if you are under age
59 1/2.
You cannot make conversion contributions to a Roth IRA for any taxable year in
which your adjusted gross income exceeds $100,000. For this purpose, your
adjusted gross income is calculated without the gross income stemming from the
traditional IRA conversion. You also cannot make conversion contributions to a
Roth IRA for any taxable year in which your federal income tax filing status is
"married filing separately."
Finally, you cannot make conversion contributions to a Roth IRA to the extent
that the funds in your traditional IRA are subject to the annual required
minimum distribution rule applicable to traditional IRAs beginning at age
70 1/2.
WITHDRAWALS, PAYMENTS AND TRANSFERS OF FUNDS OUT OF ROTH IRAS
NO FEDERAL INCOME TAX LAW RESTRICTIONS ON WITHDRAWALS. You can withdraw any or
all of your funds from a Roth IRA at any time; you do not need to wait for a
special event like retirement.
DISTRIBUTIONS FROM ROTH IRAS
Distributions include withdrawals from your contract, surrender of your
contract, and annuity payments from your contract. Death benefits are also
distributions.
The following distributions from Roth IRAs are free of income tax:
o Rollover from a Roth IRA to another Roth IRA;
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o Direct transfer from a Roth IRA to another Roth IRA;
o Qualified distribution from a Roth IRA; and
o Return of excess contributions or amounts recharacterized to a traditional
IRA.
QUALIFIED DISTRIBUTIONS FROM ROTH IRAS. Qualified distributions from Roth IRAs
made because of one of the following four qualifying events or reasons are not
includable in income:
o you reach age 59 1/2; or
o you die; or
o you become disabled (special federal income tax definition); or
o your distribution is a "qualified first-time homebuyer distribution"
(special federal income tax definition; $10,000 lifetime total limit for
these distributions from all of your traditional and Roth IRAs).
You also have to meet a five-year aging period. A qualified distribution is any
distribution made after the five-taxable-year period beginning with the first
taxable year for which you made any contribution to any Roth IRA (whether or not
the one from which the distribution is being made). It is not possible to have a
tax-free qualified distribution before the year 2003 because of the five-year
aging requirement.
NONQUALIFIED DISTRIBUTIONS FROM ROTH IRAS. Nonqualified distributions from Roth
IRAs are distributions that do not meet the qualifying event and five-year aging
period tests described above. Such distributions are potentially taxable as
ordinary income. Nonqualified distributions receive return-of-investment-first
treatment. Only the difference between the amount of the distribution and the
amount of contributions to all of your Roth IRAs is taxable. You have to reduce
the amount of contributions to all of your Roth IRAs to reflect any previous
tax-free recoveries.
You must keep your own records of regular and conversion contributions to all
Roth IRAs to assure appropriate taxation. You may have to file information on
your contributions to and distributions from any Roth IRA on your tax return.
You may have to retain all income tax returns and records pertaining to such
contributions and distributions until your interests in all Roth IRAs are
distributed.
Like traditional IRAs, taxable distributions from a Roth IRA are not entitled to
the special favorable five-year averaging method (or, in certain cases,
favorable ten-year averaging and long-term capital gain treatment) available in
certain cases to distributions from qualified plans.
REQUIRED MINIMUM DISTRIBUTIONS AT DEATH
Same as traditional IRA under "What are the required minimum distribution
payments after you die?" Lifetime required minimum distributions do not apply.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
Distributions to a beneficiary generally receive the same tax treatment as if
the distribution had been made to you.
BORROWING AND LOANS ARE PROHIBITED TRANSACTIONS
Same as traditional IRA.
EXCESS CONTRIBUTIONS
Generally the same as traditional IRA.
Excess rollover contributions to Roth IRAs are contributions not eligible to be
rolled over (for example, conversion contributions from a traditional IRA if
your adjusted gross income is in excess of $100,000 in the conversion year).
You can withdraw or recharacterize any contribution to a Roth IRA before the due
date (including extensions) for filing your federal income tax return for the
tax year. If you do this, you must also withdraw or recharacterize any earnings
attributable to the contribution.
EARLY DISTRIBUTION PENALTY TAX
Same as traditional IRA.
For Roth IRAs, special penalty rules may apply to amounts withdrawn attributable
to 1998 conversion rollovers.
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SPECIAL RULES FOR NONQUALIFIED CONTRACTS IN QUALIFIED PLANS
Under QP contracts your plan administrator or trustee notifies you as to tax
consequences. See Appendix II.
TAX-SHELTERED ANNUITY CONTRACTS (TSAS)
GENERAL
This section of the prospectus covers some of the special tax rules that apply
to TSA contracts under Section 403(b) of the Internal Revenue Code (TSAs). If
the rules are the same as those that apply to another kind of contract, for
example, traditional IRAs, we will refer you to the same topic under
"traditional IRAs."
CONTRIBUTIONS TO TSAS
There are two ways you can make contributions to this Equitable Accumulator
Select Rollover TSA contract:
o a rollover from another TSA contract or arrangement that meets the
requirements of Section 403(b) of the Internal Revenue Code, or
o a full or partial direct transfer of assets ("direct transfer") from
another contract or arrangement that meets the requirements of Section
403(b) of the Internal Revenue Code by means of IRS Revenue Ruling 90-24.
With appropriate written documentation satisfactory to us, we will accept
rollover contributions from "conduit IRAs" for TSA funds.
If you make a direct transfer, you must fill out our transfer form.
EMPLOYER-REMITTED CONTRIBUTIONS. The Equitable Accumulator Select Rollover TSA
contract does not accept employer-remitted contributions. However, we provide
the following discussion as part of our description of restrictions on the
distribution of funds directly transferred, which include employer-remitted
contributions to other TSAs.
Employer-remitted contributions to TSAs made through the employer's payroll are
subject to annual limits. (Tax-free transfer or tax-deferred rollover
contributions from another 403(b) arrangement are not subject to these annual
contribution limits.) Commonly, some or all of the contributions made to a TSA
are made under a salary reduction agreement between the employee and the
employer. These contributions are called "salary reduction" or "elective
deferral" contributions. However, a TSA can also be wholly or partially funded
through nonelective employer contributions or after-tax employee contributions.
Amounts attributable to salary reduction contributions to TSAs are generally
subject to withdrawal restrictions. Also, all amounts attributable to
investments in a 403(b)(7) custodial account are subject to withdrawal
restrictions discussed below.
ROLLOVER OR DIRECT TRANSFER CONTRIBUTIONS. You may make rollover contributions
to your Equitable Accumulator Select Rollover TSA contract from TSAs under
Section 403(b) of the Internal Revenue Code. Generally, you may make a rollover
contribution to a TSA when you have a distributable event from an existing TSA
as a result of your:
o termination of employment with the employer who provided the TSA funds; or
o reaching age 59 1/2 even if you are still employed; or
o disability (special federal income tax definition).
A transfer occurs when changing the funding vehicle, even if there is no
distributable event. Under a direct transfer, you do not receive a distribution.
We accept direct transfers of TSA funds under Revenue Ruling 90-24 only if:
o you give us acceptable written documentation as to the source of the funds,
and
o the Equitable Accumulator Select contract receiving the funds has
provisions at least as restrictive as the source contract.
Before you transfer funds to an Equitable Accumulator Select Rollover TSA
contract, you may have to obtain your employer's authorization or demonstrate
that you do not
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need employer authorization. For example, the transferring TSA may be subject to
Title I of ERISA, if the employer makes matching contributions to salary
reduction contributions made by employees. In that case, the employer must
continue to approve distributions from the plan or contract.
Your contribution to the Equitable Accumulator Select TSA must be net of the
required minimum distribution for the tax year in which we issue the contract
if:
o you are or will be at least age 70 1/2 in the current calendar year, and
o you have separated from service with the employer who provided the funds to
purchase the TSA you are transferring or rolling over to the Equitable
Accumulator Select Rollover TSA.
This rule applies regardless of whether the source of funds is a:
o rollover by check of the proceeds from another TSA; or
o direct rollover from another TSA; or
o direct transfer under Revenue Ruling 90-24 from another TSA.
Further, you must use the same elections regarding recalculation of your life
expectancy (and if applicable, your spouse's life expectancy), if you have
already begun to receive required minimum distributions from or with respect to
the TSA from which you are making your contribution to the Equitable Accumulator
Select Rollover TSA. You must also elect or have elected a minimum distribution
calculation method requiring recalculation of your life expectancy (and if
applicable, your spouse's life expectancy) if you elect an annuity payout for
the funds in this contract subsequent to this year.
DISTRIBUTIONS FROM TSAS
GENERAL. Depending on the terms of the employer plan and your employment status,
you may have to get your employer's consent to take a loan or withdrawal. Your
employer will tell us this when you establish the TSA through a direct transfer.
WITHDRAWAL RESTRICTIONS. If this is a Revenue Ruling 90-24 direct transfer, we
will treat all amounts transferred to this contract and any future earnings on
the amount transferred as not eligible for withdrawal until one of the following
events happens:
o you are separated from service with the employer who provided the funds to
purchase the TSA you are transferring to the Equitable Accumulator Select
Rollover TSA; or
o you reach age 59 1/2; or
o you die; or
o you become disabled (special federal income tax definition); or
o you take a hardship withdrawal (special federal income tax definition).
If any portion of the funds directly transferred to your TSA contract is
attributable to amounts that you invested in a 403(b)(7) custodial account, such
amounts, including earnings, are subject to withdrawal restrictions. With
respect to the portion of the funds that were never invested in a 403(b)(7)
custodial account, these restrictions apply to the salary reduction (elective
deferral) contributions to a TSA annuity contract you made and any earnings on
them. These restrictions do not apply to the amount directly transferred to your
TSA contract that represents your December 31, 1988 account balance attributable
to salary reduction contributions to a TSA annuity contract and earnings. To
take advantage of this grandfathering you must properly notify us in writing at
our processing office of your December 31, 1988 account balance if you have
qualifying amounts transferred to your TSA contract.
THIS PARAGRAPH APPLIES ONLY TO PARTICIPANTS IN A TEXAS OPTIONAL RETIREMENT
PROGRAM. Texas Law permits withdrawals only after one of the following
distributable events occur:
(1) the requirements for minimum distribution (discussed under "Required
minimum distributions" below) are met; or
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(2) death; or
(3) retirement; or
(4) termination of employment in all Texas public institutions of higher
education.
For you to make a withdrawal, we must receive a properly completed written
acknowledgement from the employer. If a distributable event occurs before you
are vested, we will refund to the employer any amounts provided by an employer's
first-year matching contribution. We reserve the right to change these
provisions without your consent, but only to the extent necessary to maintain
compliance with applicable law. Loans are not permitted under Texas Optional
Retirement Programs.
TAX TREATMENT OF DISTRIBUTIONS. Amounts held under TSAs are generally not
subject to federal income tax until benefits are distributed. Distributions
include withdrawals from your TSA contract and annuity payments from your TSA
contract. Death benefits paid to a beneficiary are also taxable distributions.
Unless an exception applies, amounts distributed from TSAs are includable in
gross income as ordinary income. Distributions from TSAs may be subject to 20%
federal income tax withholding. See "Federal and state income tax withholding
and information reporting" below. In addition, TSA distributions may be subject
to additional tax penalties.
If you have made after-tax contributions, you will have a tax basis in your TSA
contract, which will be recovered tax-free. Since we do not track your
investment in the contract, if any, it is your responsibility to determine how
much of the distribution is taxable.
DISTRIBUTIONS BEFORE ANNUITY PAYMENTS BEGIN. On a total surrender, the amount
received in excess of the investment in the contract is taxable. We will report
the total amount of the distribution. The amount of any partial distribution
from a TSA prior to the annuity starting date is generally taxable, except to
the extent that the distribution is treated as a withdrawal of after-tax
contributions. Distributions are normally treated as pro rata withdrawals of
after-tax contributions and earnings on those contributions.
ANNUITY PAYMENTS. If you elect an annuity payout option, you will recover any
investment in the contract as each payment is received by dividing the
investment in the contract by an expected return determined under an IRS table
prescribed for qualified annuities. The amount of each payment not excluded from
income under this exclusion ratio is fully taxable. The full amount of the
payments received after your investment in the contract is recovered is fully
taxable. If you (and your beneficiary under a joint and survivor annuity) die
before recovering the full investment in the contract, a deduction is allowed on
your (or your beneficiary's) final tax return.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
Death benefit distributions from a TSA generally receive the same tax treatment
as distributions during your lifetime. In some instances, distributions from a
TSA made to your surviving spouse may be rolled over to a traditional IRA.
LOANS FROM TSAS
You may take loans from a TSA unless restricted by the employer (for example,
under an employer plan subject to ERISA). If you cannot take a loan, or cannot
take a loan without approval from the employer who provided the funds, we will
have this information in our records based on what you and the employer who
provided the TSA funds told us when you purchased your contract.
Loans are generally not treated as a taxable distribution. If the amount of the
loan exceeds permissible limits under federal income tax rules when made, the
amount of the excess is treated (solely for tax purposes) as a taxable
distribution. Additionally, if the loan is not repaid at least quarterly,
amortizing (paying down) interest and principal, the amount not repaid when due
will be treated as a taxable distribution. Under Proposed Treasury Regulations
the entire unpaid balance of the loan is includable in income in the year of the
default.
TSA loans are subject to federal income tax limits and may also be subject to
the limits of the plan from which the funds came. Federal income tax rule
requirements apply even if the
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plan is not subject to ERISA. For example, loans offered by TSAs are subject to
the following conditions:
o The amount of a loan to a participant, when combined with all other loans
to the participant from all qualified plans of the employer, cannot exceed
the lesser of:
(1) the greater of $10,000 or 50% of the participant's nonforfeitable accrued
benefits; and
(2) $50,000 reduced by the excess (if any) of the highest outstanding loan
balance over the previous twelve months over the outstanding loan balance
of plan loans on the date the loan was made.
o In general, the term of the loan cannot exceed five years unless the loan
is used to acquire the participant's primary residence. Equitable
Accumulator Select Rollover TSA contracts have a term limit of 10 years for
loans used to acquire the participant's primary residence.
o All principal and interest must be amortized in substantially level
payments over the term of the loan, with payments being made at least
quarterly.
The amount borrowed and not repaid may be treated as a distribution if:
o the loan does not qualify under the conditions above;
o the participant fails to repay the interest or principal when due; or
o in some instances, the participant separates from service with the employer
who provided the funds or the plan is terminated.
In this case, the participant may have to include the unpaid amount due as
ordinary income. In addition, the 10% early distribution penalty tax may apply.
The amount of the unpaid loan balance is reported to the IRS on Form 1099-R as a
distribution.
TAX-DEFERRED ROLLOVERS AND DIRECT TRANSFERS
You may roll over any "eligible rollover distribution" from a TSA into another
eligible retirement plan, either directly or within 60 days of your receiving
the distribution. To the extent rolled over, a distribution remains
tax-deferred.
You may roll over a distribution from a TSA to another TSA or to a traditional
IRA. A spousal beneficiary may roll over death benefits only to a traditional
IRA.
The taxable portion of most distributions will be eligible for rollover, except
as specifically excluded under federal income tax rules. Distributions that you
cannot roll over generally include periodic payments for life or for a period of
10 years or more, hardship withdrawals, and required minimum distributions under
federal income tax rules.
Direct transfers of TSA funds from one TSA to another under Revenue Ruling 90-24
are not distributions.
REQUIRED MINIMUM DISTRIBUTIONS
Generally the same as traditional IRA with these differences:
WHEN YOU HAVE TO TAKE THE FIRST REQUIRED MINIMUM DISTRIBUTION. The minimum
distribution rules force TSA participants to start calculating and taking annual
distributions from their TSAs by a required date. Generally, you must take the
first required minimum distribution for the calendar year in which you turn age
70 1/2. You may be able to delay the start of required minimum distributions
for all or part of your account balance until after age 70 1/2, as follows:
o For TSA participants who have not retired from service with the employer
who provided the funds for the TSA by the calendar year the participant
turns age 70 1/2, the required beginning date for minimum distributions
is extended to April 1 following the calendar year of retirement.
o TSA plan participants may also delay the start of required minimum
distributions to age 75 of the portion of their account value attributable
to their December 31, 1986 TSA account balance, even if retired at age 70
1/2. We will know whether or not you qualify for this exception because it
will only apply to people who establish their Equitable Accumulator Select
Rollover TSA by direct Revenue Ruling 90-24 transfers. If you do not give
us the amount of your
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December 31, 1986 account balance that is being transferred to the
Equitable Accumulator Select Rollover TSA on the form used to establish
the TSA, you do not qualify.
SPOUSAL CONSENT RULES
This will only apply to you if you establish your Equitable Accumulator Select
Rollover TSA by direct Revenue Ruling 90-24 transfer. Your employer will tell us
on the form used to establish the TSA whether or not you need to get spousal
consent for loans, withdrawals, or other distributions. If you do, you will need
such consent if you are married when you request a withdrawal under the TSA
contract. In addition, unless you elect otherwise with the written consent of
your spouse, the retirement benefits payable under the plan must be paid in the
form of a qualified joint and survivor annuity. A qualified joint and survivor
annuity is payable for the life of the annuitant with a survivor annuity for the
life of the spouse in an amount not less than one-half of the amount payable to
the annuitant during his or her lifetime. In addition, if you are married, the
beneficiary must be your spouse, unless your spouse consents in writing to the
designation of another beneficiary.
If you are married and you die before annuity payments have begun, payments will
be made to your surviving spouse in the form of a life annuity unless at the
time of your death a contrary election was in effect. However, your surviving
spouse may elect, before payments begin, to receive payments in any form
permitted under the terms of the TSA contract and the plan of the employer who
provided the funds for the TSA.
EARLY DISTRIBUTION PENALTY TAX
A penalty tax of 10% of the taxable portion of a distribution applies to
distributions from a TSA before you reach age 59 1/2. This is in addition to
any income tax. There are exceptions to the extra penalty tax. No penalty tax
applies to pre-age 59 1/2 distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o to pay for certain extraordinary medical expenses (special federal income
tax definition); or
o if you are separated from service, any form of payout after you are age 55;
or
o only if you are separated from service, a payout in the form of
substantially equal periodic payments made at least annually over your life
(or your life expectancy), or over the joint lives of you and your
beneficiary (or your joint life expectancy) using an IRS-approved
distribution method.
FEDERAL AND STATE INCOME TAX WITHHOLDING AND INFORMATION REPORTING
We must withhold federal income tax from distributions from annuity contracts.
You may be able to elect out of this income tax withholding in some cases.
Generally, we do not have to withhold if your distributions are not taxable. The
rate of withholding will depend on the type of distribution and, in certain
cases, the amount of your distribution. Any income tax withheld is a credit
against your income tax liability. If you do not have sufficient income tax
withheld or do not make sufficient estimated income tax payments, you may incur
penalties under the estimated income tax rules.
You must file your request not to withhold in writing before the payment or
distribution is made. Our processing office will provide forms for this purpose.
You cannot elect out of withholding unless you provide us with your correct
Taxpayer Identification Number and a United States residence address. You cannot
elect out of withholding if we are sending the payment out of the United States.
You should note the following special situations:
o We might have to withhold and/or report on amounts we pay under a free look
or cancellation.
o We are generally required to withhold on conversion rollovers of
traditional IRAs to Roth IRAs, as it is considered a withdrawal from the
traditional IRA and is taxable.
o We are required to withhold on the gross amount of a
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distribution from a Roth IRA unless you elect out of withholding. This may
result in tax being withheld even though the Roth IRA distribution is not
taxable in whole or in part.
Special withholding rules apply to foreign recipients and United States citizens
residing outside the United States. We do not discuss these rules here. Certain
states have indicated that state income tax withholding will also apply to
payments from the contracts made to residents. In some states, you may elect out
of state withholding, even if federal withholding applies. Generally, an
election out of federal withholding will also be considered an election out of
state withholding. If you need more information concerning a particular state or
any required forms, call our processing office at the toll-free number.
FEDERAL INCOME TAX WITHHOLDING ON PERIODIC ANNUITY PAYMENTS
We withhold differently on "periodic" and "non-periodic" payments. For a
periodic annuity payment, for example, unless you specify a different number of
withholding exemptions, we withhold assuming that you are married and claiming
three withholding exemptions. If you do not give us your correct Taxpayer
Identification Number, we withhold as if you are single with no exemptions.
Based on the assumption that you are married and claiming three withholding
exemptions, if you receive less than $14,880 in periodic annuity payments in
2000, your payments will generally be exempt from federal income tax
withholding. You could specify a different choice of withholding exemption or
request that tax be withheld. Your withholding election remains effective unless
and until you revoke it. You may revoke or change your withholding election at
any time.
FEDERAL INCOME TAX WITHHOLDING ON NON-PERIODIC ANNUITY PAYMENTS (WITHDRAWALS)
For a non-periodic distribution (total surrender or partial withdrawal), we
generally withhold at a flat 10% rate. We apply that rate to the taxable amount
in the case of nonqualified contracts, and to the payment amount in the case of
IRAs and Roth IRAs.
You cannot elect out of withholding if the payment is an eligible rollover
distribution from a qualified plan or TSA. If a non-periodic distribution from a
qualified plan or TSA is not an eligible rollover distribution then the 10%
withholding rate applies.
MANDATORY WITHHOLDING FROM TSA AND QUALIFIED PLAN DISTRIBUTIONS
Unless you have the distribution go directly to the new plan, eligible rollover
distributions from qualified plans and TSAs are subject to mandatory 20%
withholding. An eligible rollover distribution from a TSA can be rolled over to
another TSA or a traditional IRA. An eligible rollover distribution from a
qualified plan can be rolled over to another qualified plan or traditional IRA.
All distributions from a TSA or qualified plan are eligible rollover
distributions unless they are on the following list of exceptions:
o any after-tax contributions you made to the plan; or
o any distributions which are required minimum distributions after age
70 1/2 or separation from service; or
o hardship withdrawals; or
o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and your designated beneficiary; or
o substantially equal periodic payments made for a specified period of 10
years or more; or
o corrective distributions that fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse;
or
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o a qualified domestic relations order distribution to a beneficiary who is
not your current spouse or former spouse.
A death benefit payment to your surviving spouse, or a qualified domestic
relations order distribution to your current or former spouse, may be a
distribution subject to mandatory 20% withholding.
IMPACT OF TAXES TO EQUITABLE LIFE
The contracts provide that we may charge Separate Account No. 45 for taxes. We
do not now, but may in the future set up reserves for such taxes.
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ABOUT OUR SEPARATE ACCOUNT NO. 45
Each variable investment option is a subaccount of our Separate Account No. 45.
We established Separate Account No. 45 in 1994 under special provisions of the
New York Insurance Law. These provisions prevent creditors from any other
business we conduct from reaching the assets we hold in our variable investment
options for owners of our variable annuity contracts. We are the legal owner of
all of the assets in Separate Account No. 45 and may withdraw any amounts that
exceed our reserves and other liabilities with respect to variable investment
options under our contracts. The results of Separate Account No. 45's operations
are accounted for without regard to Equitable Life's other operations.
Separate Account No. 45 is registered under the Investment Company Act of 1940
and is classified by that act as a "unit investment trust." The SEC, however,
does not manage or supervise Equitable Life or Separate Account No. 45.
Each subaccount (variable investment option) within Separate Account No. 45
invests solely in class IB shares issued by the corresponding portfolio of EQ
Advisors Trust.
We reserve the right subject to compliance with laws that apply:
(1) to add variable investment options to, or to remove variable investment
options from, Separate Account No. 45, or to add other separate accounts;
(2) to combine any two or more variable investment options;
(3) to transfer the assets we determine to be the shares of the class of
contracts to which the contracts belong from any variable investment option
to another variable investment option;
(4) to operate Separate Account No. 45 or any variable investment option as a
management investment company under the Investment Company Act of 1940 (in
which case, charges and expenses that otherwise would be assessed against
an underlying mutual fund would be assessed against Separate Account No. 45
or a variable investment option directly);
(5) to deregister Separate Account No. 45 under the Investment Company Act of
1940;
(6) to restrict or eliminate any voting rights as to Separate Account No. 45;
and
(7) to cause one or more variable investment options to invest some or all of
their assets in one or more other trusts or investment companies.
ABOUT EQ ADVISORS TRUST
EQ Advisors Trust is registered under the Investment Company Act of 1940. It is
classified as an "open-end management investment company," more commonly called
a mutual fund. EQ Advisors Trust issues different shares relating to each
portfolio.
Equitable Life serves as the investment manager of EQ Advisors Trust. As such,
Equitable Life oversees the activities of the investment advisers with respect
to EQ Advisors Trust and is responsible for retaining or discontinuing the
services of those advisers. (Prior to September 1999 EQ Financial Consultants,
Inc., the predecessor to AXA Advisors, LLC and an affiliate of Equitable Life,
served as investment manager to EQ Advisors Trust.)
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999 the Alliance portfolios (other than EQ/Alliance Premier Growth)
were part of The Hudson River Trust. On October 18, 1999, these portfolios
became corresponding portfolios of EQ Advisors Trust.
EQ Advisors Trust does not impose sales charges or "loads" for buying and
selling its shares. All dividends and other distributions on Trust shares are
reinvested in full. The Board of Trustees of EQ Advisors Trust may establish
additional portfolios or eliminate existing portfolios at any time. More
detailed information about EQ Advisors Trust, the portfolio investment
objectives, policies, restrictions, risks, expenses, Rule 12b-1 Plan relating to
its Class IB shares, and other aspects of its operations, appears in the
prospectus for EQ Advisors Trust attached at the end of this prospectus, or in
its SAI which is available upon request.
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ABOUT OUR FIXED MATURITY OPTIONS
RATES TO MATURITY AND PRICE PER $100 OF MATURITY VALUE
We can determine the amount required to be allocated to one or more fixed
maturity options in order to produce specified maturity values. For example, we
can tell you how much you need to allocate per $100 of maturity value.
The rates to maturity for new allocations as of March 15, 2000 and the related
price per $100 of maturity value were as follows:
<TABLE>
<CAPTION>
FIXED MATURITY
OPTIONS
WITH FEBRUARY 15TH RATE TO MATURITY PRICE
MATURITY DATE OF AS OF PER $100 OF
MATURITY YEAR MARCH 15, 2000 MATURITY VALUE
- -------------------- -------------------- ---------------
<S> <C> <C>
2001 4.20% $ 96.27
2002 4.91% $ 91.19
2003 5.43% $ 85.68
2004 5.51% $ 81.02
2005 5.62% $ 76.39
2006 5.70% $ 72.00
2007 5.77% $ 67.81
2008 5.83% $ 63.82
2009 5.92% $ 59.84
2010 5.98% $ 56.18
</TABLE>
HOW WE DETERMINE THE MARKET VALUE ADJUSTMENT
We use the following procedure to calculate the market value adjustment (up or
down) we make if you withdraw all of your value from a fixed maturity option
before its maturity date.
(1) We determine the market adjusted amount on the date of the withdrawal as
follows:
(a) We determine the fixed maturity amount that would be payable on the
maturity date, using the rate to maturity for the fixed maturity
option.
(b) We determine the period remaining in your fixed maturity
option (based on the withdrawal date) and convert it to
fractional years based on a 365-day year. For example, three
years and 12 days becomes 3.0329.
(c) We determine the current rate to maturity that applies on the
withdrawal date to new allocations to the same fixed maturity
option.
(d) We determine the present value of the fixed maturity amount
payable at the maturity date, using the period determined in
(b) and the rate determined in (c).
(2) We determine the fixed maturity amount as of the current date.
(3) We subtract (2) from the result in (1)(d). The result is the market value
adjustment applicable to such fixed maturity option, which may be positive
or negative.
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Your market adjusted amount is the present value of the maturity value
discounted at the rate to maturity in effect for new contributions to that same
fixed maturity option on the date of the calculation.
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If you withdraw only a portion of the amount in a fixed maturity option, the
market value adjustment will be a percentage of the market value adjustment that
would have applied if you had withdrawn the entire value in that fixed maturity
option. This percentage is equal to the percentage of the value in the fixed
maturity option that you are withdrawing. See Appendix III for an example.
For purposes of calculating the rate to maturity for new allocations to a fixed
maturity option (see (1)(c) above), we use the rate we have in effect for new
allocations to that fixed maturity option. We use this rate even if new
allocations to that option would not be accepted at that time. This rate will
not be less than 3%. If we do not have a rate to maturity in effect for a fixed
maturity option to which the "current rate to maturity" in (1)(c) above would
apply, we will use the rate at the next closest maturity date. If we are no
longer offering new fixed maturity options, the "current rate to maturity" will
be determined in accordance with our procedures then in effect. We reserve the
right to
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add up to 0.25% to the current rate in (1)(c) above for purposes of calculating
the market value adjustment only.
INVESTMENTS UNDER THE FIXED MATURITY OPTIONS
Amounts allocated to the fixed maturity options are held in a "nonunitized"
separate account we have established under the New York Insurance Law. This
separate account provides an additional measure of assurance that we will make
full payment of amounts due under the fixed maturity options. Under New York
Insurance Law, the portion of the separate account's assets equal to the
reserves and other contract liabilities relating to the contracts are not
chargeable with liabilities from any other business we may conduct. We own the
assets of the separate account, as well as any favorable investment performance
on those assets. You do not participate in the performance of the assets held in
this separate account. We may, subject to state law that applies, transfer all
assets allocated to the separate account to our general account. We guarantee
all benefits relating to your value in the fixed maturity options, regardless of
whether assets supporting fixed maturity options are held in a separate account
or our general account.
We have no specific formula for establishing the rates to maturity for the fixed
maturity options. We expect the rates to be influenced by, but not necessarily
correspond to, among other things, the yields that we can expect to realize on
the separate account's investments from time to time. Our current plans are to
invest in fixed-income obligations, including corporate bonds, mortgage-backed
and asset-backed securities, and government and agency issues having durations
in the aggregate consistent with those of the fixed maturity options.
Although the above generally describes our plans for investing the assets
supporting our obligations under the fixed maturity options under the contracts,
we are not obligated to invest those assets according to any particular plan
except as we may be required to by state insurance laws. We will not determine
the rates to maturity we establish by the performance of the nonunitized
separate account.
ABOUT THE GENERAL ACCOUNT
Our general account supports all of our policy and contract guarantees,
including those that apply to the fixed maturity options, as well as our general
obligations.
The general account is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations of
all jurisdictions where we are authorized to do business. Because of exemptions
and exclusionary provisions that apply, interests in the general account have
not been registered under the Securities Act of 1933, nor is the general account
an investment company under the Investment Company Act of 1940. However, the
market value adjustment interests under the contracts are registered under the
Securities Act of 1933.
We have been advised that the staff of the SEC has not reviewed the portions of
this prospectus that relate to the general account (other than market value
adjustment interests). The disclosure with regard to the general account,
however, may be subject to certain provisions of the federal securities laws
relating to the accuracy and completeness of statements made in prospectuses.
ABOUT OTHER METHODS OF PAYMENT
AUTOMATIC INVESTMENT PROGRAM - FOR NQ CONTRACTS ONLY
You may use our automatic investment program, or "AIP," to have a specified
amount automatically deducted from a checking account, money market account, or
credit union checking account and contributed as an additional contribution into
an NQ contract on a monthly or quarterly basis. AIP is not available for
Rollover IRA, Roth Conversion IRA, QP, or Rollover TSA contracts.
The minimum amounts we will deduct are $100 monthly and $300 quarterly. AIP
additional contributions may be allocated to any of the variable investment
options and available fixed maturity options. You choose the day of the month
you wish to have your account debited. However, you may not choose a date later
than the 28th day of the month.
<PAGE>
- ----------
65
- --------------------------------------------------------------------------------
You may cancel AIP at any time by notifying our processing office. We are not
responsible for any debits made to your account before the time written notice
of cancellation is received at our processing office.
DATES AND PRICES AT WHICH CONTRACT EVENTS OCCUR
We describe below the general rules for when, and at what prices, events under
your contract will occur. Other portions of this prospectus describe
circumstances that may cause exceptions. We generally do not repeat those
exceptions below.
BUSINESS DAY
Our business day is any day the New York Stock Exchange is open for trading. Our
business day generally ends at 4:00 p.m., Eastern Time for purposes of
determining the date when contributions are applied and any other transaction
requests are processed. We may, however, close due to emergency conditions.
Contributions will be applied and any other transaction requests will be
processed when they are received along with all the required information.
o If your contribution, transfer, or any other transaction request,
containing all the required information, reaches us on a non-business day
or after 4:00 p.m. on a business day, we will use the next business day.
o A loan request under your Rollover TSA contract will be processed on the
first business day of the month following the date on which the properly
completed loan request form is received.
o If your transaction is set to occur on the same day of the month as the
contract date and that date is the 29th, 30th or 31st of the month, then
the transaction will occur on the 1st day of the next month.
o When a charge is to be deducted on a contract date anniversary that is a
non-business day, we will deduct the charge on the next business day.
CONTRIBUTIONS AND TRANSFERS
o Contributions allocated to the variable investment options are invested at
the value next determined after the close of the business day.
o Contributions allocated to a fixed maturity option will receive the rate to
maturity in effect for that fixed maturity option on that business day.
o Transfers to or from variable investment options will be made at the value
next determined after the close of the business day.
o Transfers to a fixed maturity option will be based on the rate to maturity
in effect for that fixed maturity option on the business day of the
transfer.
ABOUT YOUR VOTING RIGHTS
As the owner of the shares of EQ Advisors Trust we have the right to vote on
certain matters involving the portfolios, such as:
o the election of trustees; or
o the formal approval of independent auditors selected for EQ Advisors Trust;
or
o any other matters described in the prospectus for EQ Advisors Trust or
requiring a shareholders' vote under the Investment Company Act of 1940.
We will give contract owners the opportunity to instruct us how to vote the
number of shares attributable to their contracts if a shareholder vote is taken.
If we do not receive instructions in time from all contract owners, we will vote
the shares of a portfolio for which no instructions have been received in the
same proportion as we vote shares of that portfolio for which we have received
instructions. We will also vote any shares that we are entitled to vote directly
because of amounts we have in a portfolio in the same proportions that contract
owners vote.
VOTING RIGHTS OF OTHERS
Currently, we control EQ Advisors Trust. Its shares are sold to our separate
accounts and an affiliated qualified plan trust.
<PAGE>
- ----------
66
- --------------------------------------------------------------------------------
In addition, shares of EQ Advisors Trust are held by separate accounts of
insurance companies both affiliated and unaffiliated with us. Shares held by
these separate accounts will probably be voted according to the instructions of
the owners of insurance policies and contracts issued by those insurance
companies. While this will dilute the effect of the voting instructions of the
contract owners, we currently do not foresee any disadvantages because of this.
The Board of Trustees of EQ Advisors Trust intends to monitor events in order to
identify any material irreconcilable conflicts that may arise and to determine
what action, if any, should be taken in response. If we believe that a response
to any of those events insufficiently protects our contract owners, we will see
to it that appropriate action is taken.
SEPARATE ACCOUNT NO. 45 VOTING RIGHTS
If actions relating to Separate Account No. 45 require contract owner approval,
contract owners will be entitled to one vote for each unit they have in the
variable investment options. Each contract owner who has elected a variable
annuity payout option may cast the number of votes equal to the dollar amount of
reserves we are holding for that annuity in a variable investment option divided
by the annuity unit value for that option. We will cast votes attributable to
any amounts we have in the variable investment options in the same proportion as
votes cast by contract owners.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under applicable
federal securities laws. To the extent that those laws or the regulations
published under those laws eliminate the necessity to submit matters for
approval by persons having voting rights in separate accounts of insurance
companies, we reserve the right to proceed in accordance with those laws or
regulations.
ABOUT LEGAL PROCEEDINGS
Equitable Life and its affiliates are parties to various legal proceedings. In
our view, none of these proceedings is likely to have a material adverse effect
upon Separate Account No. 49, our ability to meet our obligations under the
contracts, or the distribution of the contracts.
ABOUT OUR INDEPENDENT ACCOUNTANTS
The consolidated financial statements of Equitable Life at December 31, 1999 and
1998, and for the three years ended December 31, 1999 incorporated in this
prospectus by reference to the 1999 Annual Report on Form 10-K are incorporated
in reliance on the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
FINANCIAL STATEMENTS
The financial statements of Separate Account No. 45, as well as the consolidated
financial statements of Equitable Life, are in the SAI. The SAI is available
free of charge. You may request one by writing to our processing office or
calling 1-800-789-7771.
TRANSFERS OF OWNERSHIP, COLLATERAL ASSIGNMENTS, LOANS, AND BORROWING
You can transfer ownership of an NQ contract at any time before annuity payments
begin. We will continue to treat you as the owner until we receive written
notification of any change at our processing office. You cannot assign your NQ
contract as collateral or security for a loan. Loans are also not available
under your NQ contract. In some cases, an assignment or change of ownership may
have adverse tax consequences. See "Tax information" earlier in this prospectus.
You cannot assign or transfer ownership of Rollover IRA, Roth Conversion IRA,
QP, or Rollover TSA contract except by surrender to us. Loans are not available
and you cannot assign Rollover IRA, Roth Conversion IRA and QP contracts as
security for a loan or other obligation. If the employer that provided the funds
does not restrict them, loans are available under a Rollover TSA contract.
For limited transfers of ownership after the owner's death see "Beneficiary
continuation option" in "Payment of death
<PAGE>
- ----------
67
- --------------------------------------------------------------------------------
benefit" earlier in this prospectus. You may direct the transfer of the values
under your Rollover IRA, Roth Conversion IRA, QP, or Rollover TSA contract to
another similar arrangement.
DISTRIBUTION OF THE CONTRACTS
AXA Advisors, LLC ("AXA Advisors"), the successor to EQ Financial Consultants,
Inc. and an affiliate of Equitable Life, is the distributor of the contracts and
has responsibility for sales and marketing functions for Separate Account No.
45. AXA Advisors serves as the principal underwriter of Separate Account No. 45.
AXA Advisors is registered with the SEC as a broker-dealer and is a member of
the National Association of Securities Dealers, Inc. AXA Advisors' principal
business address is 1290 Avenue of the Americas, New York, New York 10104.
Pursuant to a Distribution and Servicing Agreement between AXA Advisors,
Equitable Life, and certain of Equitable Life's separate accounts, including
Separate Account No. 45, Equitable Life paid AXA Advisors distribution fees of
$325,380 for 1999, and $325,380 for 1998, as the distributor of certain
contracts and as the principal underwriter of certain separate accounts
including Separate Account No. 45. Before May 1, 1998, Equitable Distributors,
Inc. ("EDI"), also an indirect, wholly owned subsidiary of Equitable Life,
served as the distributor of the contracts and the principal underwriter of
Separate Account No. 45. Pursuant to a Distribution Agreement between Equitable
Life, certain of Equitable Life's separate accounts, including Separate Account
No. 45, and EDI, Equitable Life paid EDI distribution fees of $9,444,621 for
1997 as the distributor of certain contracts and as the principal underwriter of
certain separate accounts including Separate Account No. 45.
The contracts will be sold by financial professionals who are financial
professionals of AXA Advisors and its affiliates, who are also our licensed
agents. AXA Advisors may also receive compensation and reimbursement for its
marketing services under the terms of its distribution agreement with Equitable
Life. The offering of the contracts is intended to be continuous.
<PAGE>
9
Investment performance
- ----------------
68
- --------------------------------------------------------------------------------
We provide the following tables to show five different measurements of the
investment performance of the variable investment options and/or the portfolios
in which they invest. We include these tables because they may be of general
interest to you.
Table 1 shows the average annual total return of the variable investment
options. Average annual total return is the annual rate of growth that would be
necessary to achieve the ending value of a contribution invested in the variable
investment options for the periods shown.
Table 2 shows the growth of a hypothetical $1,000 investment in the variable
investment options over the periods shown. Both Tables 1 and 2 take into account
all current fees and charges under the contract, including the optional
baseBUILDER benefits charge, but do not reflect the charges designed to
approximate certain taxes imposed on us, such as premium taxes in your state or
any applicable annuity administrative fee.
Tables 3, 4, and 5 show the rates of return of the variable investment options
on an annualized, cumulative, and year-by-year basis. These tables take into
account all current fees and charges under the contract, but do not reflect the
optional baseBUILDER benefits charge or the charges designed to approximate
certain taxes imposed on us, such as premium taxes in your state or any
applicable annuity administrative fee. If the charges were reflected they would
effectively reduce the rates of return shown.
In all cases the results shown are based on the actual historical investment
experience of the portfolios in which the variable investment options invest. In
some cases, the results shown relate to periods when the variable investment
options and/or the contracts were not available. In those cases, we adjusted the
results of the portfolios to reflect the charges under the contracts that would
have applied had the investment options and/or contracts been available. The
contracts are being offered for the first time in 1999.
For the "Alliance" portfolios (other than EQ/Alliance Premier Growth), we have
adjusted the results prior to October 1996, when Class IB shares for these
portfolios were not available, to reflect the 12b-1 fees currently imposed.
Finally, the results shown for the Alliance Money Market and Alliance Common
Stock options for periods before March 22, 1985 reflect the results of the
variable investment options that preceded them. The "Since portfolio inception"
figures for these options are based on the date of inception of the preceding
variable investment options. We have adjusted these results to reflect the
maximum investment advisory fee payable for the portfolios, as well as an
assumed charge of 0.06% for direct operating expenses.
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999 the Alliance portfolios (other than EQ/Alliance Premier Growth)
were part of The Hudson River Trust. On October 18, 1999, these portfolios
became corresponding portfolios of EQ Advisors Trust. In each case, the
performance shown is for the indicated EQ Advisors Trust portfolio and any
predecessors that it may have had.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends.
From time to time, we may advertise different measurements of the investment
performance of the variable investment options and/or the portfolios, including
the measurements reflected in the tables below.
THE PERFORMANCE INFORMATION SHOWN BELOW AND THE PERFORMANCE INFORMATION THAT WE
ADVERTISE REFLECT PAST PERFORMANCE AND DOES NOT INDICATE HOW THE VARIABLE
INVESTMENT OPTIONS MAY PERFORM IN THE FUTURE. SUCH INFORMATION ALSO DOES NOT
REPRESENT THE RESULTS EARNED BY ANY PARTICULAR INVESTOR. YOUR RESULTS WILL
DIFFER.
BENCHMARKS
Tables 3 and 4 compare the performance of variable investment options to market
indices that serve as benchmarks. Market indices are not subject to any charges
for investment advisory fees, brokerage commission or other operating expenses
typically associated with a managed
<PAGE>
- ----------
69
- --------------------------------------------------------------------------------
portfolio. Also, they do not reflect other contract charges such as the
mortality and expense risks charge, administrative charge, distribution charge,
or optional benefit charge. Comparisons with these benchmarks, therefore, may be
of limited use. We include them because they are widely known and may help you
to understand the universe of securities from which each portfolio is likely to
select its holdings. Benchmark data reflect the reinvestment of dividend income.
The benchmarks include:
- --------------------------------------------------------------------------------
EQ/AGGRESSIVE STOCK: 50% Russell 2000 Index and 50%
Standard & Poor's Mid-Cap Total Return Index.
- --------------------------------------------------------------------------------
ALLIANCE COMMON STOCK: Standard & Poor's 500 Index.
- --------------------------------------------------------------------------------
ALLIANCE CONSERVATIVE INVESTORS: 70% Lehman Treasury Bond
Composite Index and 30% Standard & Poor's 500 Index.
- --------------------------------------------------------------------------------
ALLIANCE GLOBAL: Morgan Stanley Capital International World Index.
- --------------------------------------------------------------------------------
ALLIANCE GROWTH AND INCOME: 75% Standard & Poor's 500 Index
and 25% Value Line Convertibles Index.
- --------------------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS: 70% Standard & Poor's 500 Index
and 30% Lehman Government/Corporate Bond Index.
- --------------------------------------------------------------------------------
ALLIANCE HIGH YIELD: Benchmark #1 - Merrill Lynch High Yield
Master Index and Benchmark #2 - Credit Suisse First Boston
Global High Yield Index.
- --------------------------------------------------------------------------------
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES: Lehman
Intermediate Government Bond Index.
- --------------------------------------------------------------------------------
ALLIANCE INTERNATIONAL: Morgan Stanley Capital International
Europe, Australia, Far East Index.
- --------------------------------------------------------------------------------
ALLIANCE MONEY MARKET: Salomon Brothers Three-Month T-Bill
Index.
- --------------------------------------------------------------------------------
EQ/ALLIANCE PREMIER GROWTH: Standard & Poor's 500 Index.
- --------------------------------------------------------------------------------
EQ/ALLIANCE TECHNOLOGY: Lipper Specialty Funds Average
- --------------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH: Russell 2000 Growth Index.
- --------------------------------------------------------------------------------
BT EQUITY 500 INDEX: Standard & Poor's 500 Index.
- --------------------------------------------------------------------------------
BT INTERNATIONAL EQUITY INDEX: Morgan Stanley Capital
International Europe, Australia, Far East Index.
- --------------------------------------------------------------------------------
BT SMALL COMPANY INDEX: Russell 2000 Index.
- --------------------------------------------------------------------------------
CAPITAL GUARDIAN RESEARCH: Standard & Poor's 500 Index.
- --------------------------------------------------------------------------------
CAPITAL GUARDIAN U.S. EQUITY: Standard & Poor's 500 Index.
- --------------------------------------------------------------------------------
EQ/EVERGREEN: Benchmark #1 - Russell 2000 Index, and
Benchmark #2 - Standard & Poor's 500 Index..
- --------------------------------------------------------------------------------
EQ/EVERGREEN FOUNDATION: 60% Standard & Poor's 500
Index/40% Lehman Brothers Aggregate Bond Index.
- --------------------------------------------------------------------------------
MERCURY BASIC VALUE EQUITY: Standard & Poor's 500 Index.
- --------------------------------------------------------------------------------
MERCURY WORLD STRATEGY: 36% Standard & Poor's 500 Index/24%
Morgan Stanley Capital International Europe, Australia, Far East
Index/21% Salomon Brothers U.S. Treasury Bond 1 Year + 14%
Salomon Brothers World Government Bond (excluding U.S.) and
5% Three-Month U.S. Treasury Bill.
- --------------------------------------------------------------------------------
MFS EMERGING GROWTH COMPANIES: Russell 2000 Index.
- --------------------------------------------------------------------------------
MFS GROWTH WITH INCOME: Standard & Poor's 500 Index.
- --------------------------------------------------------------------------------
MFS RESEARCH: Standard & Poor's 500 Index.
- --------------------------------------------------------------------------------
MORGAN STANLEY EMERGING MARKETS EQUITY: Morgan Stanley
Capital International Emerging Markets Free Price Return Index.
- --------------------------------------------------------------------------------
EQ/PUTNAM BALANCED: 60% Standard & Poor's 500 Index and
40% Lehman Government/Corporate Bond Index.
- --------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME VALUE: Standard & Poor's 500
Index.
- --------------------------------------------------------------------------------
T. ROWE PRICE EQUITY INCOME: Standard & Poor's 500 Index.
- --------------------------------------------------------------------------------
T. ROWE PRICE INTERNATIONAL STOCK: Morgan Stanley Capital
International Europe, Australia, Far East Index.
- --------------------------------------------------------------------------------
WARBURG PINCUS SMALL COMPANY VALUE: Benchmark #1 -
Russell 2000 Index and Benchmark #2 - Russell 2000 Value
Index.
- --------------------------------------------------------------------------------
LIPPER SURVEY. The Lipper Variable Insurance Products Performance Analysis
Survey (Lipper Survey) records the performance of a large group of variable
annuity products, including managed separate accounts of insurance companies.
According to Lipper Analytical Services, Inc. (Lipper), the data are presented
net of investment management fees, direct operating expenses and asset-based
charges applicable under annuity contracts. Lipper data provide a more
accurate picture than market benchmarks of the Equitable Accumulator Select
performance relative to other variable annuity products.
<PAGE>
- -----
70
- --------------------------------------------------------------------------------
TABLE 1
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
LENGTH OF INVESTMENT PERIOD
--------------------------------------------------------------------------
SINCE SINCE
1 3 5 10 OPTION PORTFOLIO
VARIABLE INVESTMENT OPTIONS YEAR YEARS YEARS YEARS INCEPTION** INCEPTION*
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EQ/Aggressive Stock 16.65% 7.48% 13.92% 14.33% 15.51% 13.84%
- ------------------------------------------------------------------------------------------------------------------------
Alliance Common Stock 22.89% 25.37% 25.51% 16.16% 14.41% 25.62%
- ------------------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors 8.11% 10.14% 10.16% 7.64% 7.68% 9.73%
- ------------------------------------------------------------------------------------------------------------------------
Alliance Global 35.96% 20.97% 18.25% 13.44% 12.05% 19.06%
- ------------------------------------------------------------------------------------------------------------------------
Alliance Growth and Income 16.48% 19.61% 19.60% - 14.67% 19.64%
- ------------------------------------------------------------------------------------------------------------------------
Alliance Growth Investors 24.25% 18.33% 17.74% 14.70% 14.65% 17.61%
- ------------------------------------------------------------------------------------------------------------------------
Alliance High Yield (5.13)% 0.70% 7.63% 7.96% 7.08% 6.58%
- ------------------------------------------------------------------------------------------------------------------------
Alliance Intermediate Government Securities (1.71)% 2.86% 4.16% - 4.05% 3.57%
- ------------------------------------------------------------------------------------------------------------------------
Alliance International 35.25% 11.54% - - 10.89% 10.79%
- ------------------------------------------------------------------------------------------------------------------------
Alliance Money Market 3.05% 3.10% 3.16% 2.92% 4.71% 3.10%
- ------------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth 25.58% - - - 15.53% 15.53%
- ------------------------------------------------------------------------------------------------------------------------
BT Equity 500 Index 18.38% - - - 20.58% 20.58%
- ------------------------------------------------------------------------------------------------------------------------
BT International Equity Index 25.43% - - - 21.58% 21.58%
- ------------------------------------------------------------------------------------------------------------------------
BT Small Company Index 18.80% - - - 6.69% 6.69%
- ------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen 7.97% - - - 7.97% 7.97%
- ------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Foundation 5.64% - - - 5.64% 5.64%
- ------------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies 70.90% - - - 45.64% 45.64%
- ------------------------------------------------------------------------------------------------------------------------
MFS Growth with Income 6.98% - - - 6.98% 6.98%
- ------------------------------------------------------------------------------------------------------------------------
MFS Research 21.15% - - - 21.72% 21.72%
- ------------------------------------------------------------------------------------------------------------------------
Mercury Basic Value Equity 17.04% - - - 15.82% 15.82%
- ------------------------------------------------------------------------------------------------------------------------
Mercury World Strategy 19.40% - - - 10.08% 10.08%
- ------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity 92.62% - - - 3.58% 7.07%
- ------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Balanced (1.56)% - - - 7.73% 7.73%
- ------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value (2.94)% - - - 8.14% 8.14%
- ------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income 1.90% - - - 10.79% 10.79%
- ------------------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock 29.76% - - - 13.61% 13.61%
- ------------------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Value 0.17% - - - 1.45% 1.45%
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
* The variable investment option inception dates are: EQ/Aggressive Stock,
Alliance Common Stock, Alliance Conservative Investors, Alliance Global,
Alliance Growth and Income, Alliance Growth Investors, Alliance High Yield,
Alliance Intermediate Government Securities, Alliance International, and
Alliance Money Market (May 1, 1995); Alliance Small Cap Growth, Mercury
Basic Value Equity, Mercury World Strategy, MFS Emerging Growth Companies,
MFS Research, EQ/Putnam Balanced, EQ/Putnam Growth & Income Value, T. Rowe
Price Equity Income, T. Rowe Price International Stock, and Warburg Pincus
Small Company Value (May 1, 1997); Morgan Stanley Emerging Markets Equity
(September 2, 1997); BT Equity 500 Index, BT International Equity Index, BT
Small Company Index (December 31, 1997); EQ/Evergreen, EQ/Evergreen
Foundation, and MFS Growth with Income (December 31, 1998). The inception
dates for the variable investment options that became available after
December 31, 1998 and are therefore not shown in this table are:
EQ/Alliance Premier Growth, Capital Guardian Research, and Capital Guardian
U.S. Equity (April 30, 1999); EQ/Alliance Technology (May 1, 2000).
** The inception dates for the portfolios underlying the Alliance variable
investment options are for portfolios of The Hudson River Trust, the assets
of which became assets of corresponding portfolios of EQ Advisors Trust on
October 18, 1999. The portfolio inception dates are: EQ/Aggressive Stock
(January 27, 1986); Alliance Common Stock (January 13, 1976); Alliance
Conservative Investors and Alliance Growth Investors (October 2, 1989);
Alliance Global (August 27, 1987); Alliance Growth and Income (October 1,
1993); Alliance High Yield (January 2, 1987); Alliance Intermediate
Government Securities (April 1, 1991); Alliance International (April 3,
1995); Alliance Money Market (July 13, 1981); Alliance Small Cap Growth,
Mercury Basic Value Equity, Mercury World Strategy, MFS Emerging Growth
Companies, MFS Research, EQ/Putnam Balanced, EQ/Putnam Growth & Income
Value, T. Rowe Price Equity Income, T. Rowe Price International Stock, and
Warburg Pincus Small Company Value (May 1, 1997); BT Equity 500 Index, BT
International Equity Index, and BT Small Company Index (January 1, 1998);
and Morgan Stanley Emerging Markets Equity (August 20, 1997); EQ/Evergreen,
EQ/Evergreen Foundation, and MFS Growth with Income (December 31, 1998).
The inception dates for the portfolios that became available after December
31, 1998 and are therefore not shown in the tables are: EQ/Alliance Premier
Growth, Capital Guardian Research, and Capital Guardian U.S. Equity (April
30, 1999); EQ/Alliance Technology (May 1, 2000).
<PAGE>
- -----
71
- --------------------------------------------------------------------------------
TABLE 2
GROWTH OF $1,000 UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 1999:
<TABLE>
<CAPTION>
LENGTH OF INVESTMENT PERIOD
-------------------------------------------------------------------------
SINCE
1 3 5 10 PORTFOLIO
VARIABLE INVESTMENT OPTIONS YEAR YEARS YEARS YEARS INCEPTION*
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
EQ/Aggressive Stock $ 1,166.50 $ 1,241.66 $ 1,918.59 $ 3,814.75 $ 7,446.18
- -------------------------------------------------------------------------------------------------------------------------
Alliance Common Stock $ 1,228.90 $ 1,970.61 $ 3,115.05 $ 4,473.29 $ 25,180.87
- -------------------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors $ 1,081.10 $ 1,335.93 $ 1,622.31 $ 2,087.99 $ 2,134.49
- -------------------------------------------------------------------------------------------------------------------------
Alliance Global $ 1,359.60 $ 1,770.14 $ 2,311.82 $ 3,527.56 $ 4,073.92
- -------------------------------------------------------------------------------------------------------------------------
Alliance Growth and Income $ 1,164.80 $ 1,711.03 $ 2,446.70 - $ 2,351.98
- -------------------------------------------------------------------------------------------------------------------------
Alliance Growth Investors $ 1,242.50 $ 1656.72 $ 2,262.19 3,941.81 $ 4,060.01
- -------------------------------------------------------------------------------------------------------------------------
Alliance High Yield $ 948.70 $ 1,021.10 $ 1,444.12 $ 2,150.45 $ 2,433.05
- -------------------------------------------------------------------------------------------------------------------------
Alliance Intermediate Government Securities $ 982.90 $ 1,088.19 $ 1,225.96 - $ 1,415.13
- -------------------------------------------------------------------------------------------------------------------------
Alliance International $ 1,352.50 $ 1,387.72 - - $ 1,632.89
- -------------------------------------------------------------------------------------------------------------------------
Alliance Money Market $ 1,030.50 $ 1,095.85 $ 1,168.38 $ 1,333.83 $ 2,338.07
- -------------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth $ 1,255.80 - - - $ 1,470.05
- -------------------------------------------------------------------------------------------------------------------------
BT Equity 500 Index $ 1,183.80 - - - $ 1,453.88
- -------------------------------------------------------------------------------------------------------------------------
BT International Equity Index $ 1,254.30 - - - $ 1,478.26
- -------------------------------------------------------------------------------------------------------------------------
BT Small Company Index $ 1,188.00 - - - $ 1,138.28
- -------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen $ 1,079.70 - - - $ 1,079.70
- -------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Foundation $ 1,056.40 - - - $ 1,056.40
- -------------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies $ 1,709.00 - - - $ 2,726.97
- -------------------------------------------------------------------------------------------------------------------------
MFS Growth with Income $ 1,069.80 - - - $ 1,069.80
- -------------------------------------------------------------------------------------------------------------------------
MFS Research $ 1,211.50 - - - $ 1,689.78
- -------------------------------------------------------------------------------------------------------------------------
Mercury Basic Value Equity $ 1,170.40 - - - $ 1,479.84
- -------------------------------------------------------------------------------------------------------------------------
Mercury World Strategy $ 1,194.00 - - - $ 1,292.04
- -------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity $ 1,926.20 - - - $ 1,086.70
- -------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Balanced $ 984.40 - - - $ 1,219.76
- -------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value $ 970.60 - - - $ 1,232.16
- -------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income $ 1,019.00 - - - $ 1,314.47
- -------------------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock $ 1,297.60 - - - $ 1,405.57
- -------------------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Value $ 1,001.70 - - - $ 1,039.13
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* Portfolio inception dates are shown in Table 1.
<PAGE>
- -----
72
- --------------------------------------------------------------------------------
TABLE 3
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EQ/AGGRESSIVE STOCK 16.65% 7.69% 14.12% 14.51% - 15.67%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap 51.65% 24.68% 19.97% 14.78% - 15.86%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 18.09% 17.48% 19.92% 15.41% - 14.58%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK 22.89% 25.56% 25.70% 16.41% 16.21% 14.59%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Growth 29.78% 26.87% 25.55% 16.90% 15.83% 15.16%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 21.04% 27.56% 28.56% 18.21% 17.88% 16.19%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE CONSERVATIVE INVESTORS 8.11% 10.34% 10.39% 7.90% - 7.98%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Flexible Portfolio 4.42% 11.65% 13.70% 10.10% - 10.15%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 4.19% 12.07% 13.60% 10.75% - 10.68%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE GLOBAL 35.96% 21.19% 18.48% 13.69% - 12.35%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Global 44.62% 23.92% 20.57% 11.65% - 11.06%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 24.93% 21.61% 19.76% 11.42% - 10.74%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH AND INCOME 16.48% 19.80% 19.80% - - 14.97%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 12.90% 17.23% 20.50% - - 16.45%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 20.71% 23.10% 25.01% - - 18.77%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS 24.25% 18.53% 17.95% 14.91% - 14.89%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Flexible Portfolio 10.45% 14.19% 15.15% 11.65% - 11.68%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 13.77% 20.90% 22.15% 15.13% - 15.15%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE HIGH YIELD (5.13)% 0.90% 7.83% 8.19% - 7.34%
- ---------------------------------------------------------------------------------------------------------------------
Lipper High Current Yield 3.65% 4.82% 8.59% 9.61% - 7.79%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark #1 1.57% 5.91% 9.61% 10.79% - 9.99%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark #2 3.28% 5.37% 9.07% 11.06% - 10.04%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERMEDIATE GOVERNMENT
SECURITIES (1.71)% 3.06% 4.40% - - 4.33%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Intermediate Government (2.60)% 4.04% 5.81% - - 5.89%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 0.49% 5.50% 6.93% - - 6.76%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERNATIONAL 35.25% 11.78% - - - 11.16%
- ---------------------------------------------------------------------------------------------------------------------
Lipper International 43.24% 18.74% - - - 16.13%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 26.96% 15.74% - - - 13.11%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE MONEY MARKET 3.05% 3.31% 3.42% 3.23% - 5.00%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Money Market 3.78% 4.05% 4.16% 3.96% - 5.70%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 4.74% 5.01% 5.20% 5.06% - 6.65%
- ---------------------------------------------------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH 25.58% - - - - 15.77%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Small Cap 34.26% - - - - 19.49%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 43.09% - - - - 25.88%
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
73
- --------------------------------------------------------------------------------
TABLE 3 (CONTINUED)
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BT EQUITY 500 INDEX 18.38% - - - - 20.73%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Standard and Poor's 500 Index 19.36% - - - - 23.16%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 24.76%
- ---------------------------------------------------------------------------------------------------------------------
BT INTERNATIONAL EQUITY INDEX 25.43% - - - - 21.75%
- ---------------------------------------------------------------------------------------------------------------------
Lipper International 43.24% - - - - 26.76%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 26.96% - - - - 23.43%
- ---------------------------------------------------------------------------------------------------------------------
BT SMALL COMPANY INDEX 18.80% - - - - 6.86%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Small Cap 34.26% - - - - 16.02%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 21.26% - - - - 8.70%
- ---------------------------------------------------------------------------------------------------------------------
EQ/EVERGREEN 7.97% - - - - 7.97%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Growth 29.78% - - - - 29.78%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark #1 21.26% - - - - 21.26%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark #2 21.03% - - - - 21.03%
- ---------------------------------------------------------------------------------------------------------------------
EQ/EVERGREEN FOUNDATION 5.64% - - - - 5.64%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Balanced 8.69% - - - - 8.69%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 11.15% - - - - 11.15%
- ---------------------------------------------------------------------------------------------------------------------
MFS EMERGING GROWTH COMPANIES 70.90% - - - - 45.89%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap 51.65% - - - - 32.50%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 21.26% - - - - 16.99%
- ---------------------------------------------------------------------------------------------------------------------
MFS GROWTH WITH INCOME 6.98% - - - - 6.98%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Growth and Income 12.90% - - - - 12.90%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 21.03%
- ---------------------------------------------------------------------------------------------------------------------
MFS RESEARCH 21.15% - - - - 21.96%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Growth 29.78% - - - - 29.33%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 27.36%
- ---------------------------------------------------------------------------------------------------------------------
MERCURY BASIC VALUE EQUITY 17.04% - - - - 16.05%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 12.90% - - - - 18.00%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 27.36%
- ---------------------------------------------------------------------------------------------------------------------
MERCURY WORLD STRATEGY 19.40% - - - - 10.33%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Global Flexible Portfolio 12.93% - - - - 11.91%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 13.07% - - - - 16.18%
- ---------------------------------------------------------------------------------------------------------------------
MORGAN STANLEY EMERGING MARKETS
EQUITY 92.62% - - - - 4.01%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Emerging Markets 82.53% - - - - 2.90%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 66.41% - - - - (0.88)%
- ---------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM BALANCED -1.56% - - - - 7.95%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Balanced 8.69% - - - - 13.91%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 11.39% - - - - 18.81%
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
74
- --------------------------------------------------------------------------------
TABLE 3 (CONTINUED)
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EQ/PUTNAM GROWTH & INCOME VALUE -2.94% - - - - 8.35%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 12.90% - - - - 18.00%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 27.36%
- ---------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE EQUITY INCOME 1.90% - - - - 11.00%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Equity Income 6.90% - - - - 14.28%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 27.36%
- ---------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE INTERNATIONAL STOCK 29.76% - - - - 13.87%
- ---------------------------------------------------------------------------------------------------------------------
Lipper International 43.24% - - - - 20.38%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark 26.96% - - - - 18.32%
- ---------------------------------------------------------------------------------------------------------------------
WARBURG PINCUS SMALL COMPANY VALUE 0.17% - - - - 1.67%
- ---------------------------------------------------------------------------------------------------------------------
Lipper Small Cap 34.26% - - - - 24.22%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark #1 21.26% - - - - 16.99%
- ---------------------------------------------------------------------------------------------------------------------
Benchmark #2 (1.49) - - - - 7.06%
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* Portfolio inception dates are shown in Table 1. Lipper survey and
benchmark "since portfolio inception" information are as of the month-end
closest to the actual date of portfolio inception.
<PAGE>
- -----
75
- --------------------------------------------------------------------------------
TABLE 4
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EQ/AGGRESSIVE STOCK 16.65% 24.90% 93.56% 287.60% - 658.94%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap Growth 51.65% 102.87% 158.98% 311.69% - 683.45%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 18.09% 62.12% 147.96% 319.19% - 595.55%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK 22.89% 97.94% 213.88% 356.81% 1,916.29% 2,513.58%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Growth 29.78% 106.30% 216.51% 386.68% 1,816.52% 2,838.39%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 21.04% 107.56% 251.12% 432.78% 2,584.39% 3,555.48%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE CONSERVATIVE INVESTORS 8.11% 34.33% 63.92% 113.94% - 119.53%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Income Portfolio 4.42% 39.31% 91.71% 163.35% - 169.02%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 4.19% 40.74% 89.21% 177.71% - 186.90%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE GLOBAL 35.96% 77.98% 133.46% 260.79% - 320.97%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Global 44.62% 93.38% 162.57% 205.54% - 273.03%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 24.93% 79.83% 146.35% 194.99% - 252.80%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH AND INCOME 16.48% 71.92% 146.77% - - 139.09%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 12.90% 62.52% 157.04% - - 158.01%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 20.71% 86.55% 205.26% - - 204.09%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS 24.25% 66.54% 128.31% 301.37% - 314.82%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Flexible Portfolio 10.45% 49.38% 103.90% 204.29% - 211.11%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 13.77% 76.71% 171.92% 309.28% - 352.50%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE HIGH YIELD (5.13)% 2.71% 45.81% 119.82% - 151.11%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper High Current Yield 3.65% 15.25% 51.19% 151.82% - 166.74%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark #1 1.57% 18.80% 58.22% 178.72% - 245.03%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark #2 3.28% 17.00% 54.39% 185.43% - 246.92%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERMEDIATE GOVERNMENT
SECURITIES (1.71)% 9.47% 24.03% - - 44.94%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Intermediate Government (2.60)% 12.55% 32.56% - - 64.40%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 0.49% 17.43% 39.81% - - 77.41%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE INTERNATIONAL 35.25% 39.68% - - - 65.23%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper International 43.24% 69.17% - - - 103.07%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 26.96% 55.06% - - - 79.52%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE MONEY MARKET 3.05% 10.26% 18.30% 37.39% - 146.07%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Money Market 3.78% 12.64% 22.65% 47.52% - 178.18%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 4.74% 15.79% 28.88% 63.79% - 229.35%
- ------------------------------------------------------------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH 25.58% - - - - 47.80%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Small Company Growth 34.26% - - - - 62.98%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 43.09% - - - - 84.91%
- ------------------------------------------------------------------------------------------------------------------------------
BT EQUITY 500 INDEX 18.38% - - - - 45.76%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Standard and Poor's 500 Index 19.36% - - - - 51.69%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 55.65%
- ------------------------------------------------------------------------------------------------------------------------------
BT INTERNATIONAL EQUITY INDEX 25.43% - - - - 48.22%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper International 43.24% - - - - 61.58%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 26.96% - - - - 52.35%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
76
- --------------------------------------------------------------------------------
TABLE 4 (CONTINUED)
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BT SMALL COMPANY INDEX 18.80% - - - - 14.20%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Small Cap 34.26% - - - - 37.82%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 21.26% - - - - 18.17%
- ------------------------------------------------------------------------------------------------------------------------------
EQ/EVERGREEN 7.97% - - - - 7.97%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Growth 29.78% - - - - 29.78%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark #1 21.26% - - - - 21.26%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark #2 21.03% - - - - 21.03%
- ------------------------------------------------------------------------------------------------------------------------------
EQ/EVERGREEN FOUNDATION 5.64% - - - - 5.64%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Balanced 8.69% - - - - 8.69%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 11.15% - - - - 11.15%
- ------------------------------------------------------------------------------------------------------------------------------
MFS EMERGING GROWTH COMPANIES 70.90% - - - - 173.96%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap 51.65% - - - - 120.85%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 21.26% - - - - 52.05%
- ------------------------------------------------------------------------------------------------------------------------------
MFS GROWTH WITH INCOME 6.98% - - - - 6.98%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 12.90% - - - - 12.90%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 21.03%
- ------------------------------------------------------------------------------------------------------------------------------
MFS RESEARCH 21.15% - - - - 69.84%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Growth 29.78% - - - - 101.13%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 90.75%
- ------------------------------------------------------------------------------------------------------------------------------
MERCURY BASIC VALUE EQUITY 17.04% - - - - 48.77%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 12.90% - - - - 56.85%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 90.75%
- ------------------------------------------------------------------------------------------------------------------------------
MERCURY WORLD STRATEGY 19.40% - - - - 30.00%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Global Flexible Portfolio 12.93% - - - - 35.69%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 13.07% - - - - 49.16%
- ------------------------------------------------------------------------------------------------------------------------------
MORGAN STANLEY EMERGING MARKETS
EQUITY 92.62% - - - - 9.74%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Emerging Markets 82.53% - - - - 7.48%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 66.41% - - - - 5.32%
- ------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM BALANCED -1.56% - - - - 22.65%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Balanced 8.69% - - - - 42.44%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 11.39% - - - - 61.21%
- ------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME VALUE -2.94% - - - - 23.87%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 12.90% - - - - 56.85%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 90.75%
- ------------------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE EQUITY INCOME 1.90% - - - - 32.12%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Equity Income 6.90% - - - - 43.31%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 90.75%
- ------------------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE INTERNATIONAL STOCK 29.76% - - - - 41.44%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper International 43.24% - - - - 65.44%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark 26.96% - - - - 56.70%
- ------------------------------------------------------------------------------------------------------------------------------
WARBURG PINCUS SMALL COMPANY VALUE 0.17% - - - - 4.53%
- ------------------------------------------------------------------------------------------------------------------------------
Lipper Small Cap 34.26% - - - - 83.94%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark #1 21.26% - - - - 52.05%
- ------------------------------------------------------------------------------------------------------------------------------
Benchmark #2 (1.49)% - - - - 19.99%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* Portfolio inception dates are shown in Table 1. Lipper survey and benchmark
"since portfolio inception" information are as month-end closest to the
actual date of portfolio inception.
<PAGE>
- -----
77
- --------------------------------------------------------------------------------
TABLE 5
YEAR-BY-YEAR RATES OF RETURN:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
1990 1991 1992 1993
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock 6.16% 83.43% (4.95)% 14.59%
- ---------------------------------------------------------------------------------------------
Alliance Common Stock (9.82)% 35.34% 1.31% 22.52%
- ---------------------------------------------------------------------------------------------
Alliance Conservative Investors 4.40% 17.67% 3.76% 8.77%
- ---------------------------------------------------------------------------------------------
Alliance Global (7.81)% 28.15% (2.35)% 29.68%
- ---------------------------------------------------------------------------------------------
Alliance Growth and Income - - - (0.72)%+
- ---------------------------------------------------------------------------------------------
Alliance Growth Investors 8.61% 46.16% 2.96% 13.15%
- ---------------------------------------------------------------------------------------------
Alliance High Yield (2.95)% 22.17% 10.23% 20.88%
- ---------------------------------------------------------------------------------------------
Alliance Intermediate Government
Securities - 10.71%+ 3.64% 8.50%
- ---------------------------------------------------------------------------------------------
Alliance International - - - -
- ---------------------------------------------------------------------------------------------
Alliance Money Market 6.23% 4.23% 1.65% 1.06%
- ---------------------------------------------------------------------------------------------
Alliance Small Cap Growth - - - -
- ---------------------------------------------------------------------------------------------
BT Equity 500 Index - - - -
- ---------------------------------------------------------------------------------------------
BT International Equity Index - - - -
- ---------------------------------------------------------------------------------------------
BT Small Company Index - - - -
- ---------------------------------------------------------------------------------------------
EQ/Evergreen - - - -
- ---------------------------------------------------------------------------------------------
EQ/Evergreen Foundation - - - -
- ---------------------------------------------------------------------------------------------
MFS Emerging Growth Companies - - - -
- ---------------------------------------------------------------------------------------------
MFS Growth with Income - - - -
- ---------------------------------------------------------------------------------------------
MFS Research - - - -
- ---------------------------------------------------------------------------------------------
Mercury Basic Value Equity - - - -
- ---------------------------------------------------------------------------------------------
Mercury World Strategy - - - -
- ---------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity - - - -
- ---------------------------------------------------------------------------------------------
EQ/Putnam Balanced - - - -
- ---------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value - - - -
- ---------------------------------------------------------------------------------------------
T. Rowe Price Equity Income - - - -
- ---------------------------------------------------------------------------------------------
T. Rowe Price International Stock - - - -
- ---------------------------------------------------------------------------------------------
Warburg Pincus Small Company Value - - - -
- ---------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
1994 1995 1996 1997 1998 1999
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EQ/Aggressive Stock (5.59)% 29.21% 19.93% 8.77% (1.55)% 16.65%
- -----------------------------------------------------------------------------------------------------------------------
Alliance Common Stock (3.94)% 30.01% 21.97% 26.84% 27.00% 22.89%
- -----------------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors (5.86)% 18.19% 3.25% 11.15% 11.79% 8.11%
- -----------------------------------------------------------------------------------------------------------------------
Alliance Global 3.29% 16.63% 12.47% 9.49% 19.56% 35.96%
- -----------------------------------------------------------------------------------------------------------------------
Alliance Growth and Income (2.41)% 21.79% 17.86% 24.42% 18.63% 16.48%
- -----------------------------------------------------------------------------------------------------------------------
Alliance Growth Investors (4.94)% 24.05% 10.51% 14.63% 16.93% 24.25%
- -----------------------------------------------------------------------------------------------------------------------
Alliance High Yield (4.58)% 17.71% 20.60% 16.28% (6.90)% (5.13)%
- -----------------------------------------------------------------------------------------------------------------------
Alliance Intermediate Government
Securities (6.13)% 11.24% 1.85% 5.31% 5.76% (1.71)%
- -----------------------------------------------------------------------------------------------------------------------
Alliance International - 9.76%+ 7.77% (4.84)% 8.53% 35.25%
- -----------------------------------------------------------------------------------------------------------------------
Alliance Money Market 2.10% 3.80% 3.37% 3.48% 3.40% 3.05%
- -----------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth - - - 25.16%+ (5.97)% 25.58%
- -----------------------------------------------------------------------------------------------------------------------
BT Equity 500 Index - - - - 23.13% 18.38%
- -----------------------------------------------------------------------------------------------------------------------
BT International Equity Index - - - - 18.17% 25.43%
- -----------------------------------------------------------------------------------------------------------------------
BT Small Company Index - - - - (3.87)% 18.80%
- -----------------------------------------------------------------------------------------------------------------------
EQ/Evergreen - - - - - 7.97%
- -----------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Foundation - - - - - 5.64%
- -----------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies - - - 21.11%+ 32.37% 70.90%
- -----------------------------------------------------------------------------------------------------------------------
MFS Growth with Income - - - - - 6.98%
- -----------------------------------------------------------------------------------------------------------------------
MFS Research - - - 14.80%+ 22.12% 21.15%
- -----------------------------------------------------------------------------------------------------------------------
Mercury Basic Value Equity - - - 15.77%+ 9.80% 17.04%
- -----------------------------------------------------------------------------------------------------------------------
Mercury World Strategy - - - 3.58%+ 5.11% 19.40%
- -----------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity - - - (20.66)%+ (28.19)% 92.62%
- -----------------------------------------------------------------------------------------------------------------------
EQ/Putnam Balanced - - - 13.24%+ 10.02% (1.56)%
- -----------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value - - - 14.96%+ 11.02% (2.94)%
- -----------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income - - - 20.81%+ 7.33% 1.90%
- -----------------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock - - - (2.57)%+ 11.88% 29.76%
- -----------------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Value - - - 17.84%+ (11.45)% 0.17%
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
+ Returns for these portfolios represent less than 12 months of performance.
The returns are as of each portfolio inception date as shown in Table 1.
<PAGE>
- ----------
78
- --------------------------------------------------------------------------------
COMMUNICATING PERFORMANCE DATA
In reports or other communications to contract owners or in advertising
material, we may describe general economic and market conditions affecting our
variable investment options and the portfolios and may compare the performance
or ranking of those options and the portfolios with:
o those of other insurance company separate accounts or mutual funds included
in the rankings prepared by Lipper Analytical Services, Inc., Morningstar,
Inc., VARDS, or similar investment services that monitor the performance of
insurance company separate accounts or mutual funds;
o other appropriate indices of investment securities and averages for peer
universes of mutual funds; or
o data developed by us derived from such indices or averages.
We also may furnish to present or prospective contract owners advertisements or
other communications that include evaluations of a variable investment option or
portfolio by nationally recognized financial publications. Examples of such
publications are:
<TABLE>
<S> <C>
Barron's Investment Management Weekly
Morningstar's Variable Annuity Money Management Letter
Sourcebook Investment Dealers Digest
Business Week National Underwriter
Forbes Pension & Investments
Fortune USA Today
Institutional Investor Investor's Business Daily
Money The New York Times
Kiplinger's Personal Finance The Wall Street Journal
Financial Planning The Los Angeles Times
Investment Adviser The Chicago Tribune
</TABLE>
Lipper compiles performance data for peer universes of funds with similar
investment objectives in its Lipper Survey. Morningstar, Inc. compiles similar
data in the Morningstar Variable Annuity/Life Report (Morningstar Report).
The Lipper Survey records performance data as reported to it by over 800 mutual
funds underlying variable annuity and life insurance products. It divides these
actively managed portfolios into 25 categories by portfolio objectives. The
Lipper Survey contains two different universes, which reflect different types of
fees in performance data:
o The "separate account" universe reports performance data net of investment
management fees, direct operating expenses and asset-based charges
applicable under variable life and annuity contracts, and
o The "mutual fund" universe reports performance net only of investment
management fees and direct operating expenses, and therefore reflects only
charges that relate to the underlying mutual fund.
The Morningstar Variable Annuity/Life Report consists of nearly 700 variable
life and annuity funds, all of which report their data net of investment
management fees, direct operating expenses and separate account level charges.
VARDS is a monthly reporting service that monitors approximately 2,500 variable
life and variable annuity funds on performance and account information.
YIELD INFORMATION
Current yield for the Alliance Money Market option will be based on net changes
in a hypothetical investment over a given seven-day period, exclusive of capital
changes, and then "annualized" (assuming that the same seven-day result would
occur each week for 52 weeks). Current yield for the Alliance High Yield option
and Alliance Intermediate Government Securities option will be based on net
changes in a hypothetical investment over a given 30-day period, exclusive of
capital changes, and then "annualized" (assuming that the same 30-day result
would occur each month for 12 months).
"Effective yield" is calculated in a similar manner, but when annualized, any
income earned by the investment is assumed to be reinvested. The "effective
yield" will be slightly higher than the "current yield" because any earnings are
compounded weekly for the Alliance Money Market option. The current yields and
effective yields assume the deduction of all current contract charges and
expenses other than the optional baseBUILDER benefits charge, and any charge
<PAGE>
- ----------
79
- --------------------------------------------------------------------------------
designed to approximate certain taxes imposed on us, such as premium taxes in
your state. The yields and effective yields for the Alliance Money Market
option, when used for the special dollar cost averaging program, assume that no
contract charges are deducted. For more information, see "Yield Information for
the Alliance Money Market Option, Alliance High Yield Option, and Alliance
Intermediate Government Securities Option" in the SAI.
<PAGE>
10
Incorporation of certain documents by reference
- ----------------
80
- --------------------------------------------------------------------------------
Equitable Life's Annual Report on Form 10-K for the year ended December 31, 1999
is considered to be a part of this prospectus because it is incorporated by
reference.
After the date of this prospectus and before we terminate the offering of the
securities under this prospectus, all documents or reports we file with the SEC
under the Securities Exchange Act of 1934 ("Exchange Act") will be considered to
become part of this prospectus because they are incorporated by reference.
Any statement contained in a document that is or becomes part of this
prospectus, will be considered changed or replaced for purposes of this
prospectus if a statement contained in this prospectus changes or is replaced.
Any statement that is considered to be a part of this prospectus because of its
incorporation will be considered changed or replaced for the purpose of this
prospectus if a statement contained in any other subsequently filed document
that is considered to be part of this prospectus changes or replaces that
statement. After that, only the statement that is changed or replaced will be
considered to be part of this prospectus.
We file our Exchange Act documents and reports, including our Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q, electronically according to EDGAR
under CIK No. 0000727920. The SEC maintains a Web site that contains reports,
proxy and information statements, and other information regarding registrants
that file electronically with the SEC. The address of the site is
http://www.sec.gov.
Upon written or oral request, we will provide, free of charge, to each person to
whom this prospectus is delivered, a copy of any or all of the documents
considered to be part of this prospectus because they are incorporated herein.
This does not include exhibits not specifically incorporated by reference into
the text of such documents. Requests for documents should be directed to The
Equitable Life Assurance Society of the United States, 1290 Avenue of the
Americas, New York, New York 10104. Attention: Corporate Secretary (telephone :
(212) 554-1234).
<PAGE>
Appendix I: Condensed financial information
- --------
A-1
- --------------------------------------------------------------------------------
The unit values and number of units outstanding shown below are for contracts
offered under Separate Account No. 45 with the same daily asset based charges of
1.60%.
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION, EXCEPT EQ/ALLIANCE TECHNOLOGY WHICH IS BEING OFFERED FOR THE
FIRST TIME ON MAY 1, 2000.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FOR THE YEAR ENDING
DEC. 31, 1999
- --------------------------------------------------------------------------------
EQ/AGGRESSIVE STOCK
- --------------------------------------------------------------------------------
<S> <C>
Unit value $ 78.30
- --------------------------------------------------------------------------------
Number of units outstanding (000s) 16
- --------------------------------------------------------------------------------
ALLIANCE COMMON STOCK
- --------------------------------------------------------------------------------
Unit value $ 275.01
- --------------------------------------------------------------------------------
Number of units outstanding (000s) 66
- --------------------------------------------------------------------------------
ALLIANCE CONSERVATIVE INVESTORS
- --------------------------------------------------------------------------------
Unit value $ 22.38
- --------------------------------------------------------------------------------
Number of units outstanding (000s) 216
- --------------------------------------------------------------------------------
ALLIANCE GLOBAL
- --------------------------------------------------------------------------------
Unit value $ 43.04
- --------------------------------------------------------------------------------
Number of units outstanding (000s) 97
- --------------------------------------------------------------------------------
ALLIANCE GROWTH AND INCOME
- --------------------------------------------------------------------------------
Unit value $ 24.13
- --------------------------------------------------------------------------------
Number of units outstanding (000s) 342
- --------------------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS
- --------------------------------------------------------------------------------
Unit value $ 42.29
- --------------------------------------------------------------------------------
Number of units outstanding (000s) 149
- --------------------------------------------------------------------------------
ALLIANCE HIGH YIELD
- --------------------------------------------------------------------------------
Unit value $ 25.73
- --------------------------------------------------------------------------------
Number of units outstanding (000s) 35
- --------------------------------------------------------------------------------
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES
- --------------------------------------------------------------------------------
Unit value $ 14.70
- --------------------------------------------------------------------------------
Number of units outstanding (000s) 59
- --------------------------------------------------------------------------------
ALLIANCE INTERNATIONAL
- --------------------------------------------------------------------------------
Unit value $ 16.61
- --------------------------------------------------------------------------------
Number of units outstanding (000s) 38
- --------------------------------------------------------------------------------
ALLIANCE MONEY MARKET
- --------------------------------------------------------------------------------
Unit value $ 25.55
- --------------------------------------------------------------------------------
Number of units outstanding (000s) 549
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
A-2
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------
FOR THE YEAR ENDING
DEC. 31, 1999
- --------------------------------------------------------------
<S> <C>
EQ/ALLIANCE PREMIER GROWTH
- --------------------------------------------------------------
Unit value $ 11.77
- --------------------------------------------------------------
Number of units outstanding (000s) 1,112
- --------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH
- --------------------------------------------------------------
Unit value $ 14.78
- --------------------------------------------------------------
Number of units outstanding (000s) 30
- --------------------------------------------------------------
BT EQUITY 500 INDEX
- --------------------------------------------------------------
Unit value $ 14.58
- --------------------------------------------------------------
Number of units outstanding (000s) 385
- --------------------------------------------------------------
BT INTERNATIONAL EQUITY INDEX
- --------------------------------------------------------------
Unit value $ 14.82
- --------------------------------------------------------------
Number of units outstanding (000s) 33
- --------------------------------------------------------------
BT SMALL COMPANY INDEX
- --------------------------------------------------------------
Unit value $ 11.42
- --------------------------------------------------------------
Number of units outstanding (000s) 23
- --------------------------------------------------------------
CAPITAL GUARDIAN RESEARCH
- --------------------------------------------------------------
Unit value $ 10.60
- --------------------------------------------------------------
Number of units outstanding (000s) 13
- --------------------------------------------------------------
CAPITAL GUARDIAN U.S. EQUITY
- --------------------------------------------------------------
Unit value $ 10.26
- --------------------------------------------------------------
Number of units outstanding (000s) 31
- --------------------------------------------------------------
EQ/EVERGREEN
- --------------------------------------------------------------
Unit value $ 10.56
- --------------------------------------------------------------
Number of units outstanding (000s) 8
- --------------------------------------------------------------
EQ/EVERGREEN FOUNDATION
- --------------------------------------------------------------
Unit value $ 10.56
- --------------------------------------------------------------
Number of units outstanding (000s) 44
- --------------------------------------------------------------
MFS EMERGING GROWTH COMPANIES
- --------------------------------------------------------------
Unit value $ 27.40
- --------------------------------------------------------------
Number of units outstanding (000s) 383
- --------------------------------------------------------------
MFS GROWTH WITH INCOME
- --------------------------------------------------------------
Unit value $ 10.70
- --------------------------------------------------------------
Number of units outstanding (000s) 103
- --------------------------------------------------------------
MFS RESEARCH
- --------------------------------------------------------------
Unit value $ 16.99
- --------------------------------------------------------------
Number of units outstanding (000s) 71
- --------------------------------------------------------------
</TABLE>
<PAGE>
- -----
A-3
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
FOR THE YEAR ENDING
DEC. 31, 1999
- ------------------------------------------------------------------
<S> <C>
MERCURY BASIC VALUE EQUITY
- ------------------------------------------------------------------
Unit value $ 14.88
- ------------------------------------------------------------------
Number of units outstanding (000s) 163
- ------------------------------------------------------------------
MERCURY WORLD STRATEGY
- ------------------------------------------------------------------
Unit value $ 13.00
- ------------------------------------------------------------------
Number of units outstanding (000s) 13
- ------------------------------------------------------------------
MORGAN STANLEY EMERGING MARKETS EQUITY
- ------------------------------------------------------------------
Unit value $ 10.97
- ------------------------------------------------------------------
Number of units outstanding (000s) 126
- ------------------------------------------------------------------
EQ/PUTNAM BALANCED
- ------------------------------------------------------------------
Unit value $ 12.27
- ------------------------------------------------------------------
Number of units outstanding (000s) 19
- ------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME VALUE
- ------------------------------------------------------------------
Unit value $ 12.39
- ------------------------------------------------------------------
Number of units outstanding (000s) 12
- ------------------------------------------------------------------
T. ROWE PRICE EQUITY INCOME
- ------------------------------------------------------------------
Unit value $ 13.21
- ------------------------------------------------------------------
Number of units outstanding (000s) 117
- ------------------------------------------------------------------
T. ROWE PRICE INTERNATIONAL STOCK
- ------------------------------------------------------------------
Unit value $ 14.15
- ------------------------------------------------------------------
Number of units outstanding (000s) 37
- ------------------------------------------------------------------
WARBURG PINCUS SMALL COMPANY VALUE
- ------------------------------------------------------------------
Unit value $ 10.45
- ------------------------------------------------------------------
Number of units outstanding (000s) 18
- ------------------------------------------------------------------
</TABLE>
<PAGE>
Appendix II: Purchase considerations for QP contracts
- --------
B-1
- --------------------------------------------------------------------------------
Trustees who are considering the purchase of an Equitable Accumulator Select QP
contract should discuss with their tax advisers whether this is an appropriate
investment vehicle for the employer's plan. Trustees should consider whether the
plan provisions permit the investment of plan assets in the QP contract, the
distribution of such an annuity, the purchase of the guaranteed minimum income
benefit, and the payment of death benefits in accordance with the requirements
of the federal income tax rules. The QP contract and this prospectus should be
reviewed in full, and the following factors, among others, should be noted.
Assuming continued plan qualification and operation, earnings on qualified plan
assets will accumulate value on a tax-deferred basis even if the plan is not
funded by the Equitable Accumulator Select QP contract or another annuity.
Therefore, you should purchase an Equitable Accumulator QP contract to fund a
plan for the contract's features and benefits other than tax deferral. This QP
contract accepts transfer contributions only and not regular, ongoing payroll
contributions. For 401(k) plans under defined contribution plans, no employee
after-tax contributions are accepted.
Under defined benefit plans, we will not accept rollovers from a defined
contribution plan to a defined benefit plan. We will only accept transfers from
a defined benefit plan or a change of investment vehicles in the plan. Only one
additional contribution may be made per contract year. For defined benefit
plans, the maximum percentage of actuarial value of the plan
participant/employee's normal retirement benefit that can be funded by a QP
contract is 80%. The account value under a QP contract may at any time be more
or less than the lump sum actuarial equivalent of the accrued benefit for a
defined benefit plan participant/employee. Equitable Life does not guarantee
that the account value under a QP contract will at any time equal the actuarial
value of 80% of a participant/employee's accrued benefit. If overfunding of a
plan occurs, withdrawals from the QP contract may be required. A market value
adjustment may apply.
Further, Equitable Life will not perform or provide any plan recordkeeping
services with respect to the QP contracts. The plan's administrator will be
solely responsible for performing or providing for all such services. There is
no loan feature offered under the QP contracts, so if the plan provides for
loans and a participant/employee takes a loan from the plan, other plan assets
must be used as the source of the loan and any loan repayments must be credited
to other investment vehicles and/or accounts available under the plan.
Given that required minimum distributions must generally commence from the plan
for annuitants after age 70 1/2, trustees should consider that:
o the QP contract may not be an appropriate purchase for annuitants
approaching or over age 70 1/2; and
o the guaranteed minimum income benefit under baseBUILDER may not be an
appropriate feature for annuitants who are older than age 60 1/2 when the
contract is issued.
Finally, because the method of purchasing the QP contract including the large
initial contribution and the features of the QP contract may appeal more to plan
participants/employees who are older and tend to be highly paid, and because
certain features of the QP contract are available only to plan
participants/employees who meet certain minimum and/or maximum age requirements,
plan trustees should discuss with their advisers whether the purchase of the QP
contract would cause the plan to engage in prohibited discrimination in
contributions, benefits or otherwise.
<PAGE>
Appendix III: Market value adjustment example
- --------
C-1
- --------------------------------------------------------------------------------
The example below shows how the market value adjustment would be determined and
how it would be applied to a withdrawal, assuming that $100,000 was allocated on
February 15, 2001 to a fixed maturity option with a maturity date of February
15, 2010 (nine years later) at a hypothetical rate to maturity of 7.00%,
resulting in a maturity value of $183,846 on the maturity date. We further
assume that a withdrawal of $50,000 is made four years later on February 15,
2005.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
HYPOTHETICAL ASSUMED
RATE TO MATURITY ON
FEBRUARY 15, 2005
----------------------
5.00% 9.00%
- ------------------------------------------------------------------------------------------
<S> <C> <C>
AS OF FEBRUARY 15, 2005 (BEFORE WITHDRAWAL)
- ------------------------------------------------------------------------------------------
(1) Market adjusted amount $144,048 $ 119,487
- ------------------------------------------------------------------------------------------
(2) Fixed maturity amount $131,080 $ 131,080
- ------------------------------------------------------------------------------------------
(3) Market value adjustment:
(1) - (2) $ 12,968 $ (11,593)
- ------------------------------------------------------------------------------------------
ON FEBRUARY 15, 2005 (AFTER WITHDRAWAL)
- ------------------------------------------------------------------------------------------
(4) Portion of market value adjustment associated with withdrawal:
(3) x [$50,000/(1)] $ 4,501 $ (4,851)
- ------------------------------------------------------------------------------------------
(5) Reduction in fixed maturity amount:
[$50,000 - (4)] $ 45,499 $ 54,851
- ------------------------------------------------------------------------------------------
(6) Fixed maturity amount: (2) - (5) $ 85,581 $ 76,229
- ------------------------------------------------------------------------------------------
(7) Maturity value $120,032 $ 106,915
- ------------------------------------------------------------------------------------------
(8) Market adjusted amount of (7) $ 94,048 $ 69,487
- ------------------------------------------------------------------------------------------
</TABLE>
You should note that under this example if a withdrawal is made when rates have
increased from 7.00% to 9.00% (right column), a portion of a negative market
value adjustment is realized. On the other hand, if a withdrawal is made when
rates have decreased from 7.00% to 5.00% (left column), a portion of a positive
market value adjustment is realized.
<PAGE>
Appendix IV: Guaranteed minimum death benefit example
- --------
D-1
- --------------------------------------------------------------------------------
The death benefit under the contracts is equal to the account value or, if
greater, the guaranteed minimum death benefit.
The following illustrates the guaranteed minimum death benefit calculation.
Assuming $100,000 is allocated to the variable investment options (with no
allocation to the Alliance Money Market option, Alliance Intermediate Government
Securities option, or the fixed maturity options), no additional contributions,
no transfers and no withdrawals, and no loans under a Rollover TSA contract, the
guaranteed minimum death benefit for an annuitant age 45 would be calculated as
follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
END OF 5% ROLL UP TO AGE 80 ANNUAL RATCHET TO AGE 80
CONTRACT GUARANTEED MINIMUM GUARANTEED MINIMUM
YEAR ACCOUNT VALUE DEATH BENEFIT(1) DEATH BENEFIT
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 $105,000 $ 105,000(1) $ 105,000(3)
- ---------------------------------------------------------------------------------------
2 $115,500 $ 110,250(2) $ 115,500(3)
- ---------------------------------------------------------------------------------------
3 $129,360 $ 115,763(2) $ 129,360(3)
- ---------------------------------------------------------------------------------------
4 $103,488 $ 121,551(1) $ 129,360(4)
- ---------------------------------------------------------------------------------------
5 $113,837 $ 127,628(1) $ 129,360(4)
- ---------------------------------------------------------------------------------------
6 $127,497 $ 134,010(1) $ 129,360(4)
- ---------------------------------------------------------------------------------------
7 $127,497 $ 140,710(1) $ 129,360(4)
- ---------------------------------------------------------------------------------------
</TABLE>
The account values for contract years 1 through 7 are based on hypothetical
rates of return of 5.00%, 10.00%, 12.00%, (20.00)%, 10.00%, 12.00% and 0.00%. We
are using these rates solely to illustrate how the benefit is determined. The
return rates bear no relationship to past or future investment results.
5% ROLL UP TO AGE 80
(1) At the end of contract year 1, and again at the end of contract years 4
through 7, the death benefit will be equal to the guaranteed minimum death
benefit.
(2) At the end of contract years 2 and 3, the death benefit will be equal to
the current account value since it is higher than the current guaranteed
minimum death benefit.
ANNUAL RATCHET TO AGE 80
(3) At the end of contract years 1 through 3, the guaranteed minimum death
benefit is equal to the current account value.
(4) At the end of contract years 4 through 7, the guaranteed minimum death
benefit is equal to the guaranteed minimum death benefit at the end of the
prior year since it is equal to or higher than the current account value.
<PAGE>
Statement of additional
information
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Unit Values 2
Custodian and Independent Accountants 3
Yield Information for the Alliance Money Market Option, Alliance High Yield Option, and
Alliance Intermediate Government Securities Option 3
Financial Statements 5
</TABLE>
HOW TO OBTAIN AN EQUITABLE ACCUMULATOR SELECT STATEMENT OF ADDITIONAL
INFORMATION FOR SEPARATE ACCOUNT NO. 45
Send this request form to:
Equitable Accumulator Select
P.O. Box 1547 Secaucus, NJ 07096-1547
Please send me an Equitable Accumulator Select SAI for Separate Account No. 45
dated May 1, 2000:
- ------------------------------------------------------------------------------
Name
- ------------------------------------------------------------------------------
Address
- ------------------------------------------------------------------------------
City State Zip
(IM-99-01 SAI (5/00))
<PAGE>
Equitable Accumulator
Select(SM)
A combination variable and fixed deferred annuity contract
PROSPECTUS DATED MAY 1, 2000
Please read and keep this prospectus for future reference. It contains important
information that you should know before purchasing, or taking any other action
under your contract. Also, at the end of this prospectus you will find attached
the prospectus EQ Advisors Trust, which contains important information about its
portfolios.
- --------------------------------------------------------------------------------
WHAT IS THE EQUITABLE ACCUMULATOR SELECT?
Equitable Accumulator Select is a deferred annuity contract issued by THE
EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES. It provides for the
accumulation of retirement savings and for income. The contract offers income
and death benefit protection. It also offers a number of payout options. You
invest to accumulate value on a tax-deferred basis in one or more of our
variable investment options or fixed maturity options ("investment options").
There is no withdrawal charge under the contract. However, we deduct a
distribution charge calculated as a percentage of the amounts in the variable
investment options. We deduct this charge for the life of the contract. This
contract is not available in New York.
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
VARIABLE INVESTMENT OPTIONS
- --------------------------------------------------------------------------------
o EQ/Aggressive Stock(1) o J.P. Morgan Core Bond(3)
o Alliance Common Stock o Lazard Large Cap Value
o Alliance High Yield o Lazard Small Cap Value
o Alliance Money Market o MFS Emerging Growth
o EQ/Alliance Premier Growth Companies
o Alliance Small Cap Growth o MFS Growth with Income
o EQ/Alliance Technology(2) o MFS Research
o BT Equity 500 Index o Mercury Basic Value Equity(4)
o BT Small Company Index o Mercury World Strategy(5)
o BT International Equity Index o Morgan Stanley Emerging
o Capital Guardian International Markets Equity
o Capital Guardian Research o EQ/Putnam Growth & Income
o Capital Guardian U.S. Equity Value
o EQ/Evergreen o EQ/Putnam International Equity
o EQ/Evergreen Foundation o EQ/Putnam Investors Growth
--------------------------------------------------------------------------------
</TABLE>
(1) Formerly named "Alliance Aggressive Stock."
(2) May not be available in California.
(3) Formerly named "JPM Core Bond."
(4) Formerly named "Merrill Lynch Basic Value Equity."
(5) Formerly named "Merrill Lynch World Strategy."
You may allocate amounts to any of the variable investment options. Each
variable investment option is a subaccount of our Separate Account No. 49. Each
variable investment option, in turn, invests in a corresponding securities
portfolio of EQ Advisors Trust. Your investment results in a variable investment
option will depend on the investment performance of the related portfolio.
FIXED MATURITY OPTIONS. You may allocate amounts to one or more fixed maturity
options. These amounts will receive a fixed rate of interest for a specified
period.
Interest is earned at a guaranteed rate set by us. We make a market value
adjustment (up or down) if you make transfers or withdrawals from a fixed
maturity option before its maturity date.
TYPES OF CONTRACTS. We offer the contracts for use as:
o A nonqualified annuity ("NQ") for after-tax contributions only.
o An annuity that is an investment vehicle for a qualified defined
contribution or defined benefit plan ("QP").
o An individual retirement annuity ("IRA"), either traditional IRA ("Rollover
IRA") or Roth IRA ("Roth Conversion IRA").
o An Internal Revenue Code Section 403(b) Tax-Sheltered Annuity ("TSA") -
("Rollover TSA").
A contribution of at least $25,000 is required to purchase a contract.
Registration statements relating to this offering have been filed with the
Securities and Exchange Commission ("SEC"). The statement of additional
information ("SAI") dated May 1, 2000 is a part of one of the registration
statements. The SAI is available free of charge. You may request one by writing
to our processing office or calling 1-800-789-7771. The SAI has been
incorporated by reference into this prospectus. This prospectus and the SAI can
also be obtained from the SEC's Web site at http://www.sec.gov. The table of
contents for the SAI appears at the back of this prospectus.
THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. THE CONTRACTS ARE NOT INSURED BY THE FDIC OR ANY OTHER
AGENCY. THEY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE NOT
BANK GUARANTEED. THEY ARE SUBJECT TO INVESTMENT RISKS AND POSSIBLE LOSS OF
PRINCIPAL.
72197
<PAGE>
Contents of this prospectus
- ----------------
2
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
EQUITABLE ACCUMULATOR(SM) SELECT
- -----------------------------------------------------------------
Index of key words and phrases 4
Who is Equitable Life? 5
How to reach us 6
Equitable Accumulator Select at a glance - key features 8
- -----------------------------------------------------------------
FEE TABLE 11
- -----------------------------------------------------------------
Example 14
Condensed financial information 15
- -----------------------------------------------------------------
1
CONTRACT FEATURES AND BENEFITS 16
- -----------------------------------------------------------------
How you can purchase and contribute to your contract 16
Owner and annuitant requirements 19
How you can make your contributions 19
What are your investment options under the contract? 19
Allocating your contributions 23
Your benefit base 24
Annuity purchase factors 25
Our baseBUILDER option 25
Guaranteed minimum death benefit 27
Your right to cancel within a certain number of days 27
- -----------------------------------------------------------------
2
DETERMINING YOUR CONTRACT'S VALUE 29
- -----------------------------------------------------------------
Your account value and cash value 29
Your contract's value in the variable investment options 29
Your contract's value in the fixed maturity options 29
- -----------------------------------------------------------------
3
TRANSFERRING YOUR MONEY AMONG
INVESTMENT OPTIONS 30
- -----------------------------------------------------------------
Transferring your account value 30
Market timing 30
Rebalancing your account value 30
- -----------------------------------------------------------------
"We," "our," and "us" refer to Equitable Life.
When we address the reader of this prospectus with words. such as "you" and
"your," we mean the person who has the right or responsibility that the
prospectus is discussing at that point. This is usually the contract owner.
When we use the word "contract" it also includes certificates that are issued
under group contracts in some states
</TABLE>
<PAGE>
Contents of this prospectus
- ----------
3
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
- --------------------------------------------------------------------
4
ACCESSING YOUR MONEY 32
- --------------------------------------------------------------------
Withdrawing your account value 32
How withdrawals are taken from your account value 33
How withdrawals affect your guaranteed minimum
income benefit and guaranteed minimum death
benefit 33
Loans under Rollover TSA contracts 34
Surrendering your contract to receive its cash value 34
When to expect payments 35
Your annuity payout options 35
- --------------------------------------------------------------------
5
CHARGES AND EXPENSES 38
- --------------------------------------------------------------------
Charges that Equitable Life deducts 38
Charges that EQ Advisors Trust deducts 39
Group or sponsored arrangements 39
- --------------------------------------------------------------------
6
PAYMENT OF DEATH BENEFIT 40
- --------------------------------------------------------------------
Your beneficiary and payment of benefit 40
How death benefit payment is made 41
Beneficiary continuation option 41
- --------------------------------------------------------------------
7
TAX INFORMATION 43
- --------------------------------------------------------------------
Overview 43
Transfers among investment options 43
Taxation of nonqualified annuities 43
Individual retirement arrangements (IRAs) 45
Special rules for nonqualified contracts in qualified plans 55
Tax-Sheltered Annuity contracts (TSAs) 55
Federal and state income tax withholding and
information reporting 59
Impact of taxes to Equitable Life 61
- --------------------------------------------------------------------
8
MORE INFORMATION 62
- --------------------------------------------------------------------
About our Separate Account No. 49 62
About EQ Advisors Trust 62
About our fixed maturity options 63
About the general account 64
About other methods of payment 64
Dates and prices at which contract events occur 65
About your voting rights 66
About legal proceedings 66
About our independent accountants 66
Financial statements 66
Transfers of ownership, collateral assignments, loans,
and borrowing 67
Distribution of the contracts 67
- --------------------------------------------------------------------
9
INVESTMENT PERFORMANCE 68
- --------------------------------------------------------------------
Benchmarks 68
Communicating performance data 78
- --------------------------------------------------------------------
- --------------------------------------------------------------------
10
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE 80
- --------------------------------------------------------------------
- --------------------------------------------------------------------
APPENDICES
- --------------------------------------------------------------------
I - Condensed financial information A-1
II - Purchase considerations for QP contracts B-1
III - Market value adjustment example C-1
IV - Guaranteed minimum death benefit example D-1
- --------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
- --------------------------------------------------------------------
</TABLE>
<PAGE>
Index of key words and phrases
- --------
4
- --------------------------------------------------------------------------------
This index should help you locate more information on the terms used in this
prospectus.
<TABLE>
<CAPTION>
PAGE IN
TERM PROSPECTUS
<S> <C>
account value 29
annuitant 16
annuity payout options 35
annuity purchase factors 24
baseBUILDER 24
beneficiary 40
benefit base 24
business day 65
cash value 29
conduit IRA 29
contract date 9
contract date anniversary 9
contract year 9
contributions to Roth IRAs 52
rollovers and direct transfers 52
conversion contributions 53
contributions to traditional IRAs 46
rollovers and transfers 47
EQAccess 6
ERISA 34
fixed maturity options 21
guaranteed minimum death benefit 26
guaranteed minimum income benefit 25
IRA cover
IRS 43
investment options 19
loan reserve account 34
market adjusted amount 22
market value adjustment 22
maturity value 22
NQ cover
participant 19
portfolio cover
processing office 6
QP cover
rate to maturity 21
Required Beginning Date 41
Rollover IRA cover
Rollover TSA cover
Roth IRA 52
Roth Conversion IRA cover
SAI cover
SEC cover
TOPS 6
TSA 55
traditional IRA 45
unit 29
variable investment options 19
</TABLE>
To make this prospectus easier to read, we sometimes use different words than in
the contract or supplemental materials. This is illustrated below. Although we
use different words, they have the same meaning in this prospectus as in the
contract. Your registered representative can provide further explanation about
your contract or supplemental materials.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
PROSPECTUS CONTRACT OR SUPPLEMENTAL MATERIALS
- --------------------------------------------------------------------------------
<S> <C>
fixed maturity options Guarantee Periods (Guaranteed Fixed Interest
Accounts in supplemental materials)
variable investment options Investment Funds
account value Annuity Account Value
rate to maturity Guaranteed Rates
unit Accumulation Unit
baseBUILDER Guaranteed Minimum Income Benefit
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
Who is Equitable Life?
- ------------
5
- --------------------------------------------------------------------------------
We are The Equitable Life Assurance Society of the United States ("Equitable
Life"), a New York stock life insurance corporation. We have been doing business
since 1859. Equitable Life is a subsidiary of AXA Financial, Inc. (previously,
The Equitable Companies Incorporated). The majority shareholder of AXA
Financial, Inc. is AXA, a French holding company for an international group of
insurance and related financial services companies. As a majority shareholder,
and under its other arrangements with Equitable Life and Equitable Life's
parent, AXA exercises significant influence over the operations and capital
structure of Equitable Life and its parent. No company other than Equitable
Life, however, has any legal responsibility to pay amounts that Equitable Life
owes under the contracts.
AXA Financial, Inc. and its consolidated subsidiaries managed approximately
$462.7 billion in assets as of December 31, 1999. For over 100 years Equitable
Life has been among the largest insurance companies in the United States. We are
licensed to sell life insurance and annuities in all fifty states, the District
of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our home office is
located at 1290 Avenue of the Americas, New York, N.Y. 10104.
<PAGE>
- ----------
6
- --------------------------------------------------------------------------------
HOW TO REACH US
You may communicate with our processing office as listed below for any of the
following purposes:
- --------------------------------------------------------------------------------
FOR CONTRIBUTIONS SENT BY REGULAR MAIL:
- --------------------------------------------------------------------------------
Equitable Accumulator Select
P.O. Box 13014
Newark, NJ 07188-0014
- --------------------------------------------------------------------------------
FOR CONTRIBUTIONS SENT BY EXPRESS DELIVERY:
- --------------------------------------------------------------------------------
Equitable Accumulator Select
c/o Bank One, N.A.
300 Harmon Meadow Boulevard, 3rd Floor
Attn: Box 13014
Secaucus, NJ 07094
- --------------------------------------------------------------------------------
FOR ALL OTHER COMMUNICATIONS (E.G.,
REQUESTS FOR TRANSFERS, WITHDRAWALS, OR
REQUIRED NOTICES) SENT BY REGULAR MAIL:
- --------------------------------------------------------------------------------
Equitable Accumulator Select
P.O. Box 1547
Secaucus, NJ 07096-1547
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOR ALL OTHER COMMUNICATIONS (E.G.,
REQUESTS FOR TRANSFERS, WITHDRAWALS, OR
REQUIRED NOTICES) SENT BY EXPRESS DELIVERY:
- --------------------------------------------------------------------------------
Equitable Accumulator Select
200 Plaza Drive, 4th Floor
Secaucus, NJ 07094
- --------------------------------------------------------------------------------
REPORTS WE PROVIDE:
- --------------------------------------------------------------------------------
o written confirmation of financial transactions;
o statement of your contract values at the close of each calendar quarter
(four per year); and
o annual statement of your contract values as of the close of the contract
year.
- --------------------------------------------------------------------------------
TELEPHONE OPERATED PROGRAM SUPPORT ("TOPS") AND EQACCESS SYSTEMS:
- --------------------------------------------------------------------------------
TOPS is designed to provide you with up-to-date information via touch-tone
telephone. EQAccess is designed to provide this information through the
Internet. You can obtain information on:
o your current account value;
o your current allocation percentages (anticipated to be available through
EQAccess by the end of 2000);
o the number of units you have in the variable investment options;
o rates to maturity for the fixed maturity options (not available through
EQAccess);
o the daily unit values for the variable investment options; and
o performance information regarding the variable investment options (not
availabe through TOPS).
You can also:
o change your allocation percentages and/or transfer among the investment
options (anticipated to be available through EQAccess by the end 2000);
o change your TOPS personal identification number (PIN) (not available
through EQAccess); and
o change your EQAccess password (not available through TOPS).
TOPS and EQAccess are normally available seven days a week, 24 hours a day. You
may use TOPS by calling toll free 1-888-909-7770. You may use EQAccess by
visiting our Web site at http://www.equitable.com and clicking on EQAccess. Of
course, for reasons beyond our control, these services may sometimes be
unavailable.
We have established procedures to reasonably confirm that the instructions
communicated by telephone or the Internet are genuine. For example, we will
require certain personal identification information before we will act on
telephone or
<PAGE>
Who is Equitable Life?
- ----------
7
- --------------------------------------------------------------------------------
Internet instructions and we will provide written confirmation of your
transfers. If we do not employ reasonable procedures to confirm the genuineness
of telephone or Internet instructions, we may be liable for any losses arising
out of any act or omission that constitutes negligence, lack of good faith, or
willful misconduct. In light of our procedures, we will not be liable for
following telephone or Internet instructions we reasonably believe to be
genuine.
We reserve the right to limit access to these services if we determine that you
are engaged in a market timing strategy (see "Market timing" in "Transferring
your money among investment options").
- --------------------------------------------------------------------------------
CUSTOMER SERVICE REPRESENTATIVE:
- --------------------------------------------------------------------------------
You may also use our toll-free number (1-800-789-7771) to speak with one of our
customer service representatives. Our customer service representatives are
available on any business day from 8:30 a.m. until 5:30 p.m., Eastern time.
- --------------------------------------------------------------------------------
WE REQUIRE THAT THE FOLLOWING TYPES OF COMMUNICATIONS BE ON SPECIFIC FORMS WE
PROVIDE FOR THAT PURPOSE:
- --------------------------------------------------------------------------------
(1) authorization for telephone transfers by your registered representative;
(2) conversion of a traditional IRA to a Roth Conversion IRA contract;
(3) election of the automatic investment program;
(4) election of the rebalancing program;
(5) requests for loans under Rollover TSA contracts;
(6) spousal consent for loans under Rollover TSA contracts;
(7) tax withholding election; and
(8) election of the beneficiary continuation option.
WE ALSO HAVE SPECIFIC FORMS THAT WE RECOMMEND YOU USE FOR THE FOLLOWING TYPES OF
REQUESTS:
(1) address changes;
(2) beneficiary changes;
(3) transfers between investment options; and
(4) contract surrender and withdrawal requests.
TO CANCEL OR CHANGE ANY OF THE FOLLOWING WE REQUIRE WRITTEN NOTIFICATION
GENERALLY AT LEAST SEVEN CALENDAR DAYS BEFORE THE NEXT SCHEDULED TRANSACTION:
(1) automatic investment program;
(2) general dollar cost averaging;
(3) rebalancing;
(4) special dollar cost averaging;
(5) substantially equal withdrawals;
(6) systematic withdrawals; and
(7) the date annuity payments are to begin.
You must sign and date all these requests. Any written request that is not on
one of our forms must include your name and your contract number along with
adequate details about the notice you wish to give or the action you wish us to
take.
SIGNATURES:
The proper person to sign forms, notices and requests would normally be the
owner. If there are joint owners both must sign.
<PAGE>
Equitable Accumulator Select at a glance - key features
- ---------
8
- --------------------------------------------------------------------------------
<TABLE>
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PROFESSIONAL Equitable Accumulator Select's variable investment options invest
INVESTMENT in different portfolios managed by professional investment advisers.
MANAGEMENT
- ------------------------------------------------------------------------------------------------------------------
FIXED MATURITY o 10 fixed maturity options with maturities ranging from approximately 1 to 10 years.
OPTIONS
o Each fixed maturity option offers a guarantee of principal and interest rate if you hold
it to maturity.
-------------------------------------------------------------------------------------------
If you make withdrawals or transfers from a fixed maturity option before maturity, there
will be a market value adjustment due to differences in interest rates. This may increase
or decrease any value that you have left in that fixed maturity option. If you surrender
your contract, a market value adjustment may also apply.
- ------------------------------------------------------------------------------------------------------------------
TAX ADVANTAGES o On earnings inside the No tax on any dividends, interest or capital gains
contract until you make withdrawals from your contract or
receive annuity payments.
-------------------------------------------------------------------------------------------
o On transfers inside the No tax on transfers among investment options.
contract
- ------------------------------------------------------------------------------------------------------------------
If you are buying a contract to fund a retirement plan that already provides tax
deferral under sections of the Internal Revenue Code you should do so for the contract's
features and benefits other than tax deferral. In such situations, the tax deferral of the
contract does not provide necessary or additional benefits.
- ------------------------------------------------------------------------------------------------------------------
BASEBUILDER(R) baseBUILDER combines a guaranteed minimum income benefit with the guaranteed minimum
PROTECTION death benefit provided under the contract. The guaranteed minimum income benefit provides
income protection for you while the annuitant lives. The guaranteed minimum death benefit
provides a death benefit for the beneficiary should the annuitant die.
- ------------------------------------------------------------------------------------------------------------------
CONTRIBUTION AMOUNTS o Initial minimum: $25,000
o Additional minimum: $ 1,000
$100 monthly and $300 quarterly under our automatic
investment program (NQ contracts)
-------------------------------------------------------------------------------------------
Maximum contribution limitations may apply.
- ------------------------------------------------------------------------------------------------------------------
ACCESS TO YOUR MONEY o Lump sum withdrawals
o Several withdrawal options on a periodic basis
o Loans under Rollover TSA contracts
o Contract surrender
You may incur income tax and a tax penalty.
- ------------------------------------------------------------------------------------------------------------------
PAYOUT OPTIONS o Fixed annuity payout options
o Variable Immediate Annuity payout options
o Income Manager(R) payout options
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Equitable Accumulator Select at a glance - key features
- ----------
9
- --------------------------------------------------------------------------------
<TABLE>
- ------------------------------------------------------------------------------------------------------------------
<S> <C>
ADDITIONAL FEATURES o Guaranteed minimum death benefit even if you do not elect baseBUILDER
o Dollar cost averaging
o Automatic investment program
o Account value rebalancing (quarterly, semiannually, and annually)
o Free transfers
- ------------------------------------------------------------------------------------------------------------------
FEES AND CHARGES o Daily charges on amounts invested in the variable investment options for mortality
and expense risks, administrative charges, and distribution charges at a current annual
rate of 1.60% (1.70% maximum).
o Annual 0.30% benefit base charge for the optional baseBUILDER benefit until you exercise
your guaranteed minimum income benefit, elect another annuity payout option, or the
contract date anniversary after the annuitant reaches age 85 (age 83 in Oregon), whichever
occurs first. The benefit base is described under "Your benefit base" in "Contract
features and benefits." If you don't elect baseBUILDER, you still receive a guaranteed
minimum death benefit under your contract at no additional charge.
o No sales charge deducted at the time you make contributions, no withdrawal charge, and
no annual contract fee.
-------------------------------------------------------------------------------------------
The "contract date" is the effective date of a contract. This usually is the business day
we receive the properly completed and signed application, along with any other required
documents, and your initial contribution. Your contract date will be shown in your
contract. The 12-month period beginning on your contract date and each 12-month period
after that date is a "contract year." The end of each 12-month period is your "contract
date anniversary."
- ------------------------------------------------------------------------------------------------------------------
o We deduct a charge designed to approximate certain taxes that may be imposed on us, such
as premium taxes in your state. This charge is generally deducted from the amount
applied to an annuity payout option.
o We deduct a $350 annuity administrative fee from amounts applied to the Variable Immediate
Annuity payout options.
o Annual expenses of EQ Advisors Trust portfolios are calculated as a percentage of the
average daily net assets invested in each portfolio. These expenses include management
fees ranging from 0.25% to 1.15% annually, 12b-1 fees of 0.25% annually, and other
expenses.
- ------------------------------------------------------------------------------------------------------------------
ANNUITANT ISSUE AGES NQ: 0-85
Rollover IRA, Roth Conversion IRA, and Rollover TSA: 20-85
QP: 20-75
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ABOVE IS NOT A COMPLETE DESCRIPTION OF ALL MATERIAL PROVISIONS OF THE
CONTRACT. IN SOME CASES RESTRICTIONS OR EXCEPTIONS APPLY. ALSO, ALL FEATURES OF
THE CONTRACT ARE NOT NECESSARILY AVAILABLE IN YOUR STATE OR AT CERTAIN AGES.
For more detailed information we urge you to read the contents of this
prospectus, as well as your contract. Please feel free to speak with your
registered representative, or call us, if you have any questions.
<PAGE>
Equitable Accumulator Select at a glance - key features
- ----------
10
- --------------------------------------------------------------------------------
OTHER CONTRACTS
We offer a variety of fixed and variable annuity contracts. They may offer
features, including investment options, fees and/or charges that are different
from those in the contracts offered by this prospectus. Not every contract is
offered through the same distributor. Upon request, your registered
representative can show you information regarding other Equitable Life annuity
contracts that he or she distributes. You can also contact us to find out more
about any of the Equitable Life annuity contracts.
<PAGE>
Fee table
- ---------
11
- --------------------------------------------------------------------------------
The fee table below will help you understand the various charges and expenses
that apply to your contract. The table reflects charges you will directly incur
under the contract, as well as charges and expenses of the portfolios that you
will bear indirectly. Charges designed to approximate certain taxes that may be
imposed on us, such as premium taxes in your state, may also apply. Also, an
annuity administrative fee may apply when your annuity payments are to begin.
Each of the charges and expenses is more fully described under "Charges and
expenses" later in this prospectus.
The fixed maturity options are not covered by the fee table and examples. A
market value adjustment (up or down) may apply as a result of a withdrawal,
transfer, or surrender of amounts from a fixed maturity option.
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR VARIABLE INVESTMENT OPTIONS EXPRESSED AS AN ANNUAL
PERCENTAGE OF DAILY NET ASSETS
- ---------------------------------------------------------------------------------------------------------------
Mortality and expense risks(1) 1.10%
Administrative 0.25% current (0.35% maximum)
Distribution 0.25%
----
Total annual expenses 1.60% current (1.70% maximum)
- ---------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE AT THE
TIME YOU REQUEST CERTAIN TRANSACTIONS
- ---------------------------------------------------------------------------------------------------------------
Charge if you elect a Variable Immediate Annuity payout option $350
- ---------------------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE EACH YEAR IF YOU ELECT THE
OPTIONAL BENEFIT
- ---------------------------------------------------------------------------------------------------------------
BASEBUILDER BENEFIT CHARGE (calculated as a percentage of
the benefit base. Deducted annually on each contract date
anniversary)(2) 0.30%
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
EQ ADVISORS TRUST ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
TOTAL
OTHER ANNUAL
EXPENSES EXPENSES
MANAGEMENT (AFTER EXPENSE (AFTER EXPENSE
FEES(3) 12b-1 FEES(4) LIMITATION)(5) LIMITATION)(6)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock 0.60% 0.25% 0.04% 0.89%
Alliance Common Stock 0.46% 0.25% 0.04% 0.75%
Alliance High Yield 0.60% 0.25% 0.05% 0.90%
Alliance Money Market 0.34% 0.25% 0.05% 0.64%
EQ/Alliance Premier Growth 0.90% 0.25% 0.00% 1.15%
Alliance Small Cap Growth 0.75% 0.25% 0.07% 1.07%
EQ/Alliance Technology 0.90% 0.25% 0.00% 1.15%
BT Equity 500 Index 0.25% 0.25% 0.10% 0.60%
BT International Equity Index 0.35% 0.25% 0.40% 1.00%
BT Small Company Index 0.25% 0.25% 0.25% 0.75%
Capital Guardian International 0.85% 0.25% 0.10% 1.20%
Capital Guardian Research 0.65% 0.25% 0.05% 0.95%
EQ/Evergreen 0.65% 0.25% 0.05% 0.95%
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Fee table
- ---------
12
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
TOTAL
OTHER ANNUAL
EXPENSES EXPENSES
MANAGEMENT (AFTER EXPENSE (AFTER EXPENSE
FEES(3) 12b-1 FEES(4) LIMITATION)(5) LIMITATION)(6)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EQ/Evergreen Foundation 0.60% 0.25% 0.10% 0.95%
Capital Guardian U.S. Equity 0.65% 0.25% 0.05% 0.95%
J.P. Morgan Core Bond 0.45% 0.25% 0.10% 0.80%
Lazard Large Cap Value 0.65% 0.25% 0.05% 0.95%
Lazard Small Cap Value 0.75% 0.25% 0.10% 1.10%
MFS Emerging Growth Companies 0.65% 0.25% 0.10% 1.00%
MFS Growth with Income 0.60% 0.25% 0.10% 0.95%
MFS Research 0.65% 0.25% 0.05% 0.95%
Mercury Basic Value Equity 0.60% 0.25% 0.10% 0.95%
Mercury World Strategy 0.70% 0.25% 0.25% 1.20%
Morgan Stanley Emerging Markets Equity 1.15% 0.25% 0.35% 1.75%
EQ/Putnam Growth & Income Value 0.60% 0.25% 0.10% 0.95%
EQ/Putnam International Equity 0.85% 0.25% 0.15% 1.25%
EQ/Putnam Investors Growth 0.65% 0.25% 0.05% 0.95%
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
Notes:
(1) A portion of this charge is for providing the guaranteed minimum death
benefit.
(2) The benefit base is described under "Contract features and benefits - Your
guaranteed minimum income benefit under baseBUILDER."
(3) The management fees shown reflect revised management fees, effective on or
about May 1, 2000 by shareholders. The management fees shown for EQ/Putnam
Growth & Income Value and Lazard Large Cap Value do not reflect the waiver
of a portion of each portfolio's investment management fees that are
currently in effect. The management fee for each portfolio cannot be
increased without a vote of each portfolio's shareholders.
(4) Portfolio shares are all subject to fees imposed under the distribution
plan (the "Rule 12b-1 Plan") adopted by EQ Advisors Trust pursuant to Rule
12b-1 under the Investment Company Act of 1940. The 12b-1 fee will not be
increased for the life of the contracts. Prior to October 18, 1999, the
total annual expenses for the Alliance Small Cap Growth portfolio were
limited to 1.20% under an expense limitation arrangement related to that
portfolio's Rule 12b-1 Plan. The arrangement is no longer in effect. The
amounts shown have been restated to reflect the expenses that would have
been incurred in 1999, absent the expense limitation arrangement.
(5) The amounts shown as "Other Expenses" will fluctuate from year to year
depending on actual expenses. See footnote (6) for any expense limitation
agreements.
On October 18, 1999, the Alliance portfolios (other than EQ/Alliance
Premier Growth and EQ/Alliance Technology) became part of the
portfolios of EQ Advisors Trust. The "Other Expenses" for these
portfolios have been restated to reflect the estimated expenses that
would have been incurred had these portfolios been portfolios of EQ
Advisors Trust for the entire year ended December 31, 1999. The
restated expenses reflect an increase of 0.01% for each of these
portfolios.
(6) Equitable Life, EQ Advisors Trust's manager, has entered into an expense
limitation agreement with respect to certain portfolios. Under this
agreement Equitable Life has agreed to waive or limit its fees and assume
other expenses. Under the expense limitation agreement, total annual
operating expenses of certain portfolios (other than interest, taxes,
brokerage commissions, capitalized expenditures, extraordinary expenses
and 12b-1 fees) are limited as a percentage of the average
<PAGE>
Fee table
- ---------
13
- --------------------------------------------------------------------------------
daily net assets of each of the following portfolios: 1.75% for Morgan
Stanley Emerging Markets Equity; 1.25% for EQ/Putnam International
Equity; 1.20% for Capital Guardian International and Mercury World
Strategy; 1.15% for EQ/Alliance Premier Growth and EQ/Alliance
Technology; 1.10% for Lazard Small Cap Value; 1.00% for BT
International Equity Index and MFS Emerging Growth Companies; 0.95% for
Capital Guardian U.S. Equity, Capital Guardian Research, EQ/Evergreen,
EQ/Evergreen Foundation, Lazard Large Cap Value, MFS Growth with
Income, MFS Research, Mercury Basic Value Equity, EQ/Putnam Growth &
Income Value and EQ/Putnam Investors Growth; 0.80% for J.P. Morgan Core
Bond; 0.75% for BT Small Company Index; and 0.60% for BT Equity 500
Index. The expense limitations for the BT Equity 500 Index, EQ/Putnam
Growth & Income Value, EQ/Putnam International Equity, MFS Growth with
Income, MFS Research, Mercury Basic Value Equity and MFS Emerging
Growth Companies portfolios reflect an increase effective on May 1,
2000. The expense limitation for the EQ/Evergreen and Lazard Small Cap
Value portfolio reflects a decrease effective on May 1, 2000.
Absent the expense limitation, the "Other Expenses" for 1999 on an
annualized basis for each of the portfolios would have been as follows:
1.00% for Morgan Stanley Emerging Markets Equity; 0.32% for EQ/Putnam
International Equity; 0.66% for Capital Guardian International; 0.46% for
Mercury World Strategy; 0.23% for EQ/Alliance Premier Growth; 0.10% for
EQ/Alliance Technology; 0.26% for Lazard Small Cap Value; 0.49% for BT
International Equity Index; 0.17% for MFS Emerging Growth Companies; 0.34%
for Capital Guardian U.S. Equity; 0.47% for Capital Guardian Research;
1.87% for EQ/Evergreen; 1.07% for EQ/Evergreen Foundation; 0.21% for
Lazard Large Cap Value; 0.37% for MFS Growth with Income; 0.17% for MFS
Research and Mercury Basic Value Equity; 0.16% for EQ/Putnam Growth &
Income Value; 0.19% for EQ/Putnam Investors Growth; 0.20% for J.P. Morgan
Core Bond; 0.71% for BT Small Company Index; and 0.18% for BT Equity 500
Index. Initial seed capital was invested on April 30, 1999 for Alliance
Premier Growth, Capital Guardian U.S. Equity and Capital Guardian Research
portfolios and will be invested on or about May 1, 2000 for EQ/Alliance
Technology portfolio and therefore expenses have been estimated.
Each portfolio may at a later date make a reimbursement to Equitable Life
for any of the management fees waived or limited and other expenses
assumed and paid by Equitable Life pursuant to the expense limitation
agreement provided that, among other things, such portfolio has reached
sufficient size to permit such reimbursement to be made and provided that
the portfolio's current annual operating expenses do not exceed the
operating expense limit determined for such portfolio. For more
information see the prospectus for EQ Advisors Trust.
<PAGE>
Fee table
- ----------
14
- --------------------------------------------------------------------------------
EXAMPLE
The example below shows the expenses that a hypothetical contract owner (who has
elected baseBUILDER) would pay in the situation illustrated. We assume that a
$1,000 contribution is invested in one of the variable investment options listed
and a 5% annual return is earned on the assets in that option.(1) The charges
used in the examples are the maximum charges rather than the lower current
charges.
The example should not be considered a representation of past or future expenses
for each option. Actual expenses may be greater or less than those shown.
Similarly, the annual rate of return assumed in the example is not an estimate
or guarantee of future investment performance.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
AT THE END OF EACH PERIOD SHOWN,
THE EXPENSES WOULD BE:
----------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock $ 27.09 $ 89.34 $ 154.46 $ 330.67
Alliance Common Stock $ 25.62 $ 84.96 $ 147.21 $ 316.52
Alliance High Yield $ 27.20 $ 89.66 $ 154.98 $ 331.67
Alliance Money Market $ 24.46 $ 81.51 $ 141.48 $ 305.25
EQ/Alliance Premier Growth $ 30.98 $ 100.86 $ 173.42 $ 367.11
Alliance Small Cap Growth $ 28.98 $ 94.96 $ 163.72 $ 348.57
EQ/Alliance Technology $ 29.93 $ 97.76 $ 168.32 $ 357.40
BT Equity 500 Index $ 24.15 $ 80.56 $ 139.92 $ 302.16
BT International Equity Index $ 28.35 $ 93.09 $ 160.64 $ 342.64
BT Small Company Index $ 25.72 $ 85.27 $ 147.73 $ 317.53
Capital Guardian International $ 30.45 $ 99.31 $ 170.87 $ 362.26
Capital Guardian Research $ 27.82 $ 91.53 $ 158.07 $ 337.67
Capital Guardian U.S. Equity $ 27.82 $ 91.53 $ 158.07 $ 337.67
EQ/Evergreen $ 27.82 $ 91.53 $ 158.07 $ 337.67
EQ/Evergreen Foundation $ 27.82 $ 91.53 $ 158.07 $ 337.67
J.P. Morgan Core Bond $ 26.25 $ 86.84 $ 150.32 $ 322.61
Lazard Large Cap Value $ 27.82 $ 91.53 $ 158.07 $ 337.67
Lazard Small Cap Value $ 29.40 $ 96.20 $ 165.77 $ 352.50
MFS Emerging Growth Companies $ 28.35 $ 93.09 $ 160.64 $ 342.64
MFS Growth with Income $ 27.82 $ 91.53 $ 158.07 $ 337.67
MFS Research $ 27.82 $ 91.53 $ 158.07 $ 337.67
Mercury Basic Value Equity $ 27.82 $ 91.53 $ 158.07 $ 337.67
Mercury World Strategy $ 30.45 $ 99.31 $ 170.87 $ 362.26
Morgan Stanley Emerging Markets Equity $ 36.23 $ 116.29 $ 198.55 $ 414.19
EQ/Putnam Growth & Income Value $ 27.82 $ 91.53 $ 158.07 $ 337.67
EQ/Putnam International Equity $ 30.98 $ 100.86 $ 173.42 $ 367.11
EQ/Putnam Investors Growth $ 28.88 $ 94.65 $ 163.21 $ 347.58
- -----------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) The amount accumulated from the $1,000 contribution could not be paid in
the form of an annuity payout option at the end of any of the periods
shown in the examples. This is because if the amount applied to purchase
an annuity payout option is less than $2,000, or the initial payment is
less than $20, we may pay the amount to you in a single sum instead of
payments under an annuity payout option. See "Accessing your money."
<PAGE>
Fee table
- ---------
15
- --------------------------------------------------------------------------------
IF YOU ELECT A VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION:
Assuming an annuity payout option could be issued (see note (1) above), and you
elect a Variable Immediate Annuity payout option, the expenses shown in the
example would, in each case, be increased by $4.34 based on the average amount
applied to annuity payout options in 1999. See "Annuity administrative fee" in
"Charges and expenses."
CONDENSED FINANCIAL INFORMATION
Please see Appendix I at the end of this prospectus for the unit values and the
number of units outstanding as of the end of the periods shown for each of the
variable investment options available as of December 31, 1999.
<PAGE>
1
CONTRACT FEATURES AND
BENEFITS
Contract features and benefits
- ---------
16
- --------------------------------------------------------------------------------
HOW YOU CAN PURCHASE AND CONTRIBUTE TO YOUR CONTRACT
You may purchase a contract by making payments to us that we call
"contributions." We require a minimum initial contribution of $25,000 for you to
purchase a contract. You may make additional contributions of at least $1,000
each, subject to limitations noted below. The following table summarizes our
rules regarding contributions to your contract. All ages in the table refer to
the age of the annuitant named in the contract.
- ------------------------------------------------------------------------------
The "annuitant" is the person who is the measuring life for determining contract
benefits. The annuitant is not necessarily the contract owner.
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
AVAILABLE
CONTRACT FOR ANNUITANT LIMITATIONS ON
TYPE ISSUE AGES SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NQ 0 through 85 o After-tax money. o No additional contributions after
age 86.
o Paid to us by check or transfer of
contract value in a tax-deferred
exchange under Section 1035 of the
Internal Revenue Code.
- -------------------------------------------------------------------------------------------------------------------------
Rollover IRA 20 through 85 o Rollovers from a qualified plan. o No rollover or direct transfer
contributions after age 86.
o Rollovers from a TSA.
o Contributions after age 70 1/2 must be
o Rollovers from another traditional net of required minimum distributions.
individual retirement arrangement.
o Regular IRA contributions limited to
o Direct custodian-to-custodian $2,000 per year.
transfers from another traditional
individual retirement arrangement. o Although we accept regular
contributions under the Rollover IRA
o Regular IRA contributions contracts, we intend that this contract
be used for rollover and direct transfer
contributions. Please refer to
"Withdrawals, payments and transfers
of funds out of traditional IRAs" in
"Tax information" for a discussion of
conduit IRAs.
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Contract features and benefits
- ---------
17
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
AVAILABLE
CONTRACT FOR ANNUITANT LIMITATIONS ON
TYPE ISSUE AGES SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Roth Conversion 20 through 85 o Rollovers from another Roth IRA. o No additional rollover or direct transfer
IRA contributions after age 86.
o Conversion rollovers from a traditional
IRA. o Conversion rollovers after age 70 1/2
must be net of required minimum
o Direct transfers from another Roth IRA. distributions for the traditional IRA
you are rolling over.
o You cannot roll over funds from a
traditional IRA if your adjusted gross
income is $100,000 or more.
o Regular contributions are not permitted.
o Only rollover and direct transfer
contributions are permitted.
- -------------------------------------------------------------------------------------------------------------------------
Rollover TSA 20 through 85 o Rollovers from another TSA contract or o No additional rollover or direct transfer
arrangement. contributions after age 86.
o Rollovers from a traditional IRA which o Contributions after age 70 1/2 must be
was a "conduit" for TSA funds net of required minimum distributions.
previously rolled over. o Employer-remitted contributions are
o Direct transfers from another contract not permitted.
or arrangement under Section 403(b)
of the Internal Revenue Code,
complying with IRS Revenue Ruling
90-24.
- -------------------------------------------------------------------------------------------------------------------------
QP 20 through 75 o Only transfer contributions from an o Regular ongoing payroll contributions
existing qualified plan trust as a are not permitted.
change of investment vehicle under the o Only one additional contribution may
plan. be made during a contract year.
o The plan must be qualified under o No additional transfer contributions
Section 401(a) of the Internal Revenue after age 76.
Code. o For defined benefit plans, employee
o For 401(k) plans, transferred contributions are not permitted.
contributions may only include o Contributions after age 70 1/2 must be
employee pre-tax contributions. net of any required minimum distributions.
Please refer to Appendix II for a discussion of purchase considerations of QP contracts.
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
See "Tax information" for a more detailed discussion of sources of contributions
and certain contribution limitations. We may refuse to accept any contribution
if the sum of all contributions under all Equitable Accumulator contracts with
the same
<PAGE>
Contract features and benefits
- --------
18
- --------------------------------------------------------------------------------
annuitant would then total more than $1,500,000. We reserve the right to limit
aggregate contributions made after the first contract year to 150% of first-year
contributions. We may also refuse to accept any contribution if the sum of all
contributions under all Equitable Life annuity accumulation contracts that you
own would then total more than $2,500,000.
For information on when contributions are credited under your contract see
"Dates and prices at which contract events occur" in "More information" later in
this prospectus.
<PAGE>
Contract features and benefits
- ----------
19
- --------------------------------------------------------------------------------
OWNER AND ANNUITANT REQUIREMENTS
Under NQ contracts, the annuitant can be different than the owner. A joint owner
may also be named. Only natural persons can be joint owners. This means that an
entity such as a corporation cannot be a joint owner.
Under all IRA and Rollover TSA contracts, the owner and annuitant must be the
same person.
Under QP contracts, the owner must be the trustee of the qualified plan and the
annuitant must be the plan participant/employee. See Appendix II for more
information on QP contracts.
- --------------------------------------------------------------------------------
A "participant" is an individual who is currently, or was formerly,
participating in an eligible employer's QP or TSA plan.
- --------------------------------------------------------------------------------
HOW YOU CAN MAKE YOUR CONTRIBUTIONS
Except as noted below, contributions must be by check drawn on a U.S. bank, in
U.S. dollars, and made payable to Equitable Life. We do not accept third-party
checks endorsed to us except for rollover contributions, tax-free exchanges or
trustee checks that involve no refund. All checks are subject to our ability to
collect the funds. We reserve the right to reject a payment if it is received in
an unacceptable form.
For your convenience, we will accept initial and additional contributions by
wire transmittal from certain broker-dealers who have agreements with us for
this purpose. Additional contributions may also be made under our automatic
investment program. These methods of payment are discussed in detail in "More
information" later in this prospectus.
Your initial contribution must generally be accompanied by an application and
any other form we need to process the payments. If any information is missing or
unclear, we will try to obtain that information. If we are unable to obtain all
of the information we require within five business days after we receive an
incomplete application or form, we will inform the registered representative
submitting the application on your behalf. We will then return the contribution
to you unless you specifically direct us to keep your contribution until we
receive the required information.
- -----------------------------------------------------------------------------
Our "business day" is any day the New York Stock Exchange is open for trading
and generally ends at 4:00 p.m. Eastern Time. We may, however, close due to
emergency conditions.
- -----------------------------------------------------------------------------
SECTION 1035 EXCHANGES
You may apply the value of an existing nonqualified deferred annuity contract
(or life insurance or endowment contract) to purchase an Equitable Accumulator
Select NQ contract in a tax-free exchange if you follow certain procedures as
shown in the form that we require you to use. Also see "Tax information" later
in this prospectus.
WHAT ARE YOUR INVESTMENT OPTIONS UNDER THE CONTRACT?
Your investment options are the variable investment options and the fixed
maturity options.
VARIABLE INVESTMENT OPTIONS
Your investment results in any one of the variable investment options will
depend on the investment performance of the underlying portfolios. Listed below
are the currently available portfolios, their investment objectives, and their
advisers.
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You can choose from among the variable investment options.
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<TABLE>
<CAPTION>
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PORTFOLIOS OF EQ ADVISORS TRUST
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PORTFOLIO NAME OBJECTIVE ADVISER
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<S> <C> <C>
EQ/Aggressive Stock Long-term growth of capital Alliance Capital Management L.P.,
Massachusetts Financial Services Company
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Alliance Common Stock Long-term growth of capital and increasing Alliance Capital Management L.P.
income
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Alliance High Yield High return by maximizing current income Alliance Capital Management L.P.
and, to the extent consistent with that
objective, capital appreciation
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Alliance Money Market High level of current income while preserving Alliance Capital Management L.P.
assets and maintaining liquidity
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EQ/Alliance Premier Growth Long-term growth of capital Alliance Capital Management L.P.
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Alliance Small Cap Growth Long-term growth of capital Alliance Capital Management L.P.
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EQ/Alliance Technology Long-term growth of capital Alliance Capital Management L.P.
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BT Equity 500 Index Replicate as closely as possible (before Bankers Trust Company
deduction of portfolio expenses) the total
return of the Standard & Poor's 500
Composite Stock Price Index
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BT Small Company Index Replicate as closely as possible (before Bankers Trust Company
deduction of portfolio expenses) the total
return of the Russell 2000 Index
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BT International Equity Index Replicate as closely as possible (before Bankers Trust Company
deduction of portfolio expenses) the total
return of the Morgan Stanley Capital
International Europe, Australia, Far East Index
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Capital Guardian International Long-term growth of
capital by investing Capital Guardian Trust
Company primarily in non-United States equity
securities
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Capital Guardian Research Long-term growth of capital Capital Guardian Trust Company
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Capital Guardian U.S. Equity Long-term growth of capital Capital Guardian Trust Company
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EQ/Evergreen Long-term growth of capital Evergreen Asset Management Corp.
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</TABLE>
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<TABLE>
<CAPTION>
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PORTFOLIOS OF EQ ADVISORS TRUST (CONTINUED)
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PORTFOLIO NAME OBJECTIVE ADVISER
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<S> <C> <C>
EQ/Evergreen Foundation In order of priority, reasonable income, Evergreen Asset Management Corp.
conservation of capital, and capital appreciation
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J.P. Morgan Core Bond High total return consistent with moderate risk J.P. Morgan Investment Management Inc.
of capital and maintenance of liquidity
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Lazard Large Cap Value Capital appreciation Lazard Asset Management
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Lazard Small Cap Value Capital appreciation Lazard Asset Management
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MFS Emerging Growth Long-term capital growth Massachusetts Financial Services Company
Companies
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MFS Growth with Income Reasonable current income and long-term Massachusetts Financial Services Company
growth of capital and income
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MFS Research Long-term growth of capital and future income Massachusetts Financial Services Company
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Mercury Basic Value Equity Capital appreciation and secondarily, income Mercury Asset Management US
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Mercury World Strategy High total investment return Mercury Asset Management US
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Morgan Stanley Emerging Long-term capital appreciation Morgan Stanley Asset Management
Markets Equity
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EQ/Putnam Growth Capital growth, current income is a secondary Putnam Investment Management, Inc.
& Income Value objective
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EQ/Putnam International Capital appreciation Putnam Investment Management, Inc.
Equity
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EQ/Putnam Investors Long-term growth of capital and any increased Putnam Investment Management, Inc.
Growth income that results from this growth
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</TABLE>
Other important information about the portfolios is included in the prospectus
for EQ Advisors Trust attached at the end of this prospectus.
FIXED MATURITY OPTIONS
We offer fixed maturity options with maturity dates ranging from one to ten
years. You can allocate your contributions to one or more of these fixed
maturity options. These amounts become part of our general account assets. They
will accumulate interest at the "rate to maturity" for each fixed maturity
option. The total amount you allocate to and accumulate in each fixed maturity
option is called the "fixed maturity amount." The fixed maturity options are not
available in contracts issued in Maryland.
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Fixed maturity options range from one to ten years to maturity.
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The rate to maturity you will receive for each fixed maturity option is the rate
to maturity in effect for new contributions allocated to that fixed maturity
option on the date we apply your contribution. If you make any withdrawals or
transfers from a fixed maturity option before the maturity date, we will make a
"market value adjustment" that may increase or decrease any fixed maturity
amount you have left in that fixed maturity option. We discuss the market value
adjustment below and in greater detail later in this prospectus in "More
information."
On the maturity date of a fixed maturity option your fixed maturity amount,
assuming you have not made any withdrawals or transfers, will equal your
contribution to that fixed maturity option plus interest, at the rate to
maturity for that contribution, to the date of the calculation. This is the
fixed maturity option's "maturity value." Before maturity, the current value we
will report for your fixed maturity amounts will reflect a market value
adjustment. Your current value will reflect the market value adjustment that we
would make if you were to withdraw all of your fixed maturity amounts on the
date of the report. We call this your "market adjusted amount."
FIXED MATURITY OPTIONS AND MATURITY DATES. We currently offer fixed maturity
options ending on February 15th for each of the maturity years 2001 through
2010. Not all of these fixed maturity options will be available for annuitant
ages 76 and older. See "Allocating your contributions" below. As fixed maturity
options expire, we expect to add maturity years so that generally 10 fixed
maturity options are available at any time.
We will not accept allocations to a fixed maturity option if on the date the
contribution is to be applied:
o the fixed maturity option's maturity date is within the current calendar
year; or
o the rate to maturity is 3% or less.
YOUR CHOICES AT THE MATURITY DATE. We will notify you on or before December 31st
of the year before each of your fixed maturity options is scheduled to mature.
At that time, you may choose to have one of the following take place on the
maturity date, as long as none of the conditions listed above or in "Allocating
your contributions," below would apply:
(a) transfer the maturity value into another available fixed maturity option
or into any of the variable investment options; or
(b) withdraw the maturity value.
If we do not receive your choice on or before the fixed maturity option's
maturity date, we will automatically transfer your maturity value into the fixed
maturity option that will mature next.
MARKET VALUE ADJUSTMENT. If you make any withdrawals (including transfers,
surrender of your contract or when we make deductions for charges) from a fixed
maturity option before it matures we will make a market value adjustment, which
will increase or decrease any fixed maturity amount you have in that fixed
maturity option. The amount of the adjustment will depend on two factors:
(a) the difference between the rate to maturity that applies to the amount
being withdrawn and the rate to maturity in effect at that time for new
allocations to that same fixed maturity option, and
(b) the length of time remaining until the maturity date.
In general, if interest rates rise from the time that you originally allocate an
amount to a fixed maturity option to the time that you take a withdrawal, the
market value adjustment will be negative. Likewise, if interest rates drop at
the end of that time, the market value adjustment will be positive. Also, the
amount of the market value adjustment, either up or down, will be greater the
longer the time remaining until the fixed maturity option's maturity date.
Therefore, it is possible that the market value adjustment could greatly reduce
your value in the fixed maturity options, particularly in the fixed maturity
options with later maturity dates.
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We provide an illustration of the market adjusted amount of specified maturity
values, an explanation of how we calculate the market value adjustment, and
information concerning our general account and investments purchased with
amounts allocated to the fixed maturity options, in "More information" later in
this prospectus. Appendix III of this prospectus provides an example of how the
market value adjustment is calculated.
ALLOCATING YOUR CONTRIBUTIONS
You may choose from among three ways to allocate your contributions under your
contract: self-directed, principal assurance, or dollar cost averaging.
SELF-DIRECTED ALLOCATION
You may allocate your contributions to one or more, or all, of the variable
investment options and fixed maturity options. Allocations must be in whole
percentages and you may change your allocations at any time. However, the total
of your allocations must equal 100%. If the annuitant is age 76 or older, you
may allocate contributions to fixed maturity options if their maturities are
five years or less. Also, you may not allocate amounts to fixed maturity options
with maturity dates that are later than the February 15th immediately following
the date annuity payments are to begin.
PRINCIPAL ASSURANCE ALLOCATION
Under this allocation program you select a fixed maturity option. We specify the
portion of your initial contribution to be allocated to that fixed maturity
option in an amount that will cause the maturity value to equal the amount of
your entire initial contribution on the fixed maturity option's maturity date.
The maturity date you select generally may not be later than 10 years, or
earlier than 7 years from your contract date. You allocate the rest of your
contribution to the variable investment options however you choose.
For example, if your initial contribution is $10,000, and on March 15, 2000 you
chose the fixed maturity option with a maturity date of February 15, 2010, since
the rate to maturity was 5.98% on March 15, 2000, we would have allocated
$5,618.00 to that fixed maturity option and the balance to your choice of
variable investment options. On the maturity date your value in the fixed
maturity option would be $10,000.
The principal assurance allocation is only available for annuitant ages 75 or
younger when the contract is issued. If you are purchasing a Rollover IRA, QP,
or Rollover TSA contract, before you select a maturity year that would extend
beyond the year in which you will reach age 70 1/2, you should consider whether
your value in the variable investment options, or your other traditional IRA or
TSA funds are sufficient to meet your required minimum distributions. See "Tax
information."
You may not elect principal assurance if the special dollar cost averaging
program is in effect.
DOLLAR COST AVERAGING
We offer two dollar cost averaging programs. Each program allows you to
gradually transfer amounts from the Alliance Money Market option to the other
variable investment options by periodically transferring approximately the same
dollar amount to the other variable investment options you select. This will
cause you to purchase more units if the unit's value is low and fewer units if
the unit's value is high. Therefore, you may get a lower average cost per unit
over the long term. These plans of investing, however, do not guarantee that you
will earn a profit or be protected against losses.
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Units measure your value in each variable investment option.
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SPECIAL DOLLAR COST AVERAGING PROGRAM. You may dollar cost average from the
Alliance Money Market option into any of the other variable investment options.
You must allocate your entire initial contribution into the Alliance Money
Market option. We will transfer your value in the Alliance Money Market option
into the other variable investment options that you select over the next 12
months or such other period we may offer. The transfer date will be the same day
of the month as the contract date, but not
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Contract features and benefits
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later than the 28th. All amounts will be transferred out by the end of the first
contract year or such other period we may offer. Under this program we will not
deduct the mortality and expense risks, administrative, and distribution charges
from assets in the Alliance Money Market option. You may not allocate additional
contributions to the Alliance Money Market option under this program.
The only amounts that should be transferred from the Alliance Money Market
option are your regularly scheduled monthly transfers to the other variable
investment options. If you request to transfer or withdraw any other amounts, we
will transfer all of the value that you have remaining in the Alliance Money
Market option to the other investment options according to the allocation
percentages we have on file for you. As a result, you will no longer be able to
participate in the special dollar cost averaging program. You may also ask us to
cancel your participation at any time.
GENERAL DOLLAR COST AVERAGING PROGRAM. If your value in the Alliance Money
Market option is at least $5,000, you may choose, at any time, to have a
specified dollar amount or percentage of your value transferred from that option
to the other variable investment options. You can select to have transfers made
on a monthly, quarterly, or annual basis. The transfer date will be the same
calendar day of the month as the contract date, but not later than the 28th day
of the month. You can also specify the number of transfers or instruct us to
continue making the transfers until all amounts in the Alliance Money Market
option have been transferred out.
The minimum amount that we will transfer each time is $250. The maximum amount
we will transfer is equal to your value in the Alliance Money Market option at
the time the program is elected, divided by the number of transfers scheduled to
be made.
If, on any transfer date, your value in the Alliance Money Market option is
equal to or less than the amount you have elected to have transferred, the
entire amount will be transferred. The general dollar cost averaging program
will then end. You may change the transfer amount once each contract year or
cancel this program at any time.
----------------------------------------
You may not elect dollar cost averaging or special dollar cost averaging if you
are participating in the rebalancing program. See "Transferring your money among
investment options."
YOUR BENEFIT BASE
The benefit base is used to calculate the guaranteed minimum income benefit and
the 5% roll up to age 80 guaranteed minimum death benefit. See "Our baseBUILDER
option" and "Guaranteed minimum death benefit" below. The benefit base is equal
to:
o your initial contribution and any additional contributions to the
contract; plus
o daily interest; less
o a deduction that reflects any withdrawals you make (the amount of the
deduction is described under "How withdrawals affect your guaranteed
minimum income benefit and guaranteed minimum death benefit" in "Accessing
your money"); less
o a deduction for any withdrawal charge remaining when you exercise your
guaranteed minimum income benefit; and less
o a deduction for any outstanding loan plus accrued interest on the date
that you exercise your guaranteed minimum income benefit (applies to
Rollover TSA only).
The effective annual interest rate credited to the benefit base is:
o 5% for the benefit base with respect to the variable investment options
(other than the Alliance Money Market option), and the account for special
dollar cost averaging; and
o 3% for the benefit base with respect to the Alliance Money Market option,
the fixed maturity options and the loan reserve account.
No interest is credited after the annuitant is age 80.
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Contract features and benefits
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Your benefit base is not an account value or a cash value.
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ANNUITY PURCHASE FACTORS
Annuity purchase factors are the factors applied to determine your periodic
payments under the guaranteed minimum income benefit and annuity payout options.
The guaranteed minimum income benefit is discussed in "Our baseBUILDER option"
and annuity payout options are discussed in "Accessing your money" later in this
prospectus. The guaranteed annuity purchase factors are those factors specified
in your contract. The current annuity purchase factors are those factors that
are in effect at any given time. Annuity purchase factors are based on interest
rates, mortality tables, frequency of payments, the form of annuity benefit, and
the annuitant's (and any joint annuitant's) age and sex in certain instances.
OUR BASEBUILDER OPTION
The baseBUILDER option offers you a guaranteed minimum income benefit combined
with the guaranteed minimum death benefit available under the contract. The
baseBUILDER benefit is available if the annuitant is between the ages of 20 and
75 at the time the contract is issued. There is an additional charge for the
baseBUILDER benefit which is described under "baseBUILDER benefit charge" in
"Charges and expenses."
The guaranteed minimum income benefit component of baseBUILDER is described
below. Whether you elect baseBUILDER or not, the guaranteed minimum death
benefit is provided under the contract. The guaranteed minimum death benefit is
described under "Guaranteed minimum death benefit" below. baseBUILDER is
currently not available in some states. Please ask your registered
representative if baseBUILDER is available in your state.
The guaranteed minimum income benefit guarantees you a minimum amount of fixed
income under your choice of a life annuity fixed payout option or an Income
Manager level payment life with a period certain payout option, subject to state
availability (for contracts issued in Oregon, only the income manager life with
a period certain payout annuity contract is available). You choose which of
these payout options you want and whether you want the option to be paid on a
single or joint life basis at the time you exercise your guaranteed minimum
income benefit. The maximum period certain available under the Income Manager
payout option is 10 years. This period may be shorter, depending on the
annuitant's age when you exercise your guaranteed minimum income benefit and the
type of contract you own. We may also make other forms of payout options
available. For a description of payout options, see "Your annuity payout
options" in "Accessing your money" later in this prospectus.
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The guaranteed minimum income benefit, which is also known as a living benefit,
should be regarded as a safety net only. It provides income protection if you
elect an income payout while the annuitant is alive.
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When you exercise the guaranteed minimum income benefit, the annual lifetime
income that you will receive under the life annuity payout option will be the
greater of (i) your guaranteed minimum income benefit which is calculated by
applying your benefit base at guaranteed annuity purchase factors, or (ii) the
income provided by applying your actual account value at our then current
annuity purchase factors.
When you elect to receive annual lifetime income, your contract will terminate
and you will receive an annuity payout option. You will begin receiving payments
one payment period after the annuity payout option is issued. Payments end with
the last payment before the annuitant's (or joint annuitant's, if applicable)
death. There is no continuation of benefits following the annuitant's (or joint
annuitant's, if applicable) death.
Before you elect baseBUILDER, you should consider the fact that the guaranteed
minimum income benefit provides a form of insurance and is based on conservative
actuarial factors. Therefore, even if your account value is less than your
benefit base, you may generate more income by applying your account value to
current annuity purchase factors. We will make this comparison for you when the
need arises.
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You should also consider that the guaranteed annuity purchase factors we use to
determine your Income Manager benefit under baseBUILDER are more conservative
than the guaranteed annuity purchase factors we use for the Income Manager
payout annuity option. This means that, assuming the same amount is applied to
purchase the benefit and that we use guaranteed annuity purchase factors to
compute the benefit, each periodic payment under the baseBUILDER Income Manager
will be smaller than each periodic payment under the Income Manager payout
annuity option.
ILLUSTRATIONS OF GUARANTEED MINIMUM INCOME BENEFIT. The table below illustrates
the guaranteed minimum income benefit amounts per $100,000 of initial
contribution, for a male annuitant age 60 (at issue) on the contract date
anniversaries indicated, who has elected the life annuity fixed payout option,
using the guaranteed annuity purchase factors as of March 1, 2000, assuming no
additional contributions, withdrawals, or loans under Rollover TSA contracts,
and assuming there were no allocations to the Alliance Money Market option or
the fixed maturity options.
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GUARANTEED MINIMUM
CONTRACT DATE INCOME BENEFIT - ANNUAL INCOME
ANNIVERSARY AT EXERCISE PAYABLE FOR LIFE
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10 $10,816
15 $16,132
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EXERCISE OF GUARANTEED MINIMUM INCOME BENEFIT. On each contract date anniversary
that you are eligible to exercise the guaranteed minimum income benefit, we will
send you an eligibility notice illustrating how much income could be provided as
of the contract anniversary. You may notify us within 30 days following the
contract date anniversary if you want to exercise the guaranteed minimum income
benefit. You must return your contract to us in order to exercise this benefit.
The amount of income you actually receive will be determined when we receive
your request to exercise the benefit. You will begin receiving payments one
payment period after the annuity payout contract is issued.
You (or the successor annuitant/owner, if applicable) will be eligible to
exercise the guaranteed minimum income benefit as follows:
o If the annuitant was at least age 20 and no older than age 44 when the
contract was issued, you are eligible to exercise the guaranteed minimum
income benefit within 30 days following each contract date anniversary
beginning with the 15th contract date anniversary.
o If the annuitant was at least age 45 and no older than age 49 (age 53 in
Oregon) when the contract was issued, you are eligible to exercise the
guaranteed minimum income benefit within 30 days following each contract
date anniversary after the annuitant is age 60.
o If the annuitant was at least age 50 (age 54 in Oregon) and no older than
age 75 when the contract was issued, you are eligible to exercise the
guaranteed minimum income benefit within 30 days following each contract
date anniversary beginning with the 10th (7th in Oregon) contract date
anniversary.
Please note:
(i) the latest date you may exercise the guaranteed minimum income benefit is
the contract date anniversary following the annuitant's 85th (83rd in
Oregon) birthday; and
(ii) if the annuitant was age 75 when the contract was issued, the only time
you may exercise the guaranteed minimum income benefit is within 30 days
following the first (in Oregon, the first and second contract date
anniversary) contract date anniversary that it becomes available;
(iii) if the annuitant was older than age 60 (63 in Oregon) at the time an IRA,
QP or Rollover TSA contract was issued, the baseBUILDER may not be an
appropriate feature because the minimum distributions required by tax law
must begin before the guaranteed minimum income benefit can be exercised;
and
(iv) for QP and Rollover TSA contracts, if you are eligible to exercise your
guaranteed minimum income benefit, we will first roll over amounts in such
contract to a Rollover IRA contract. You will be the owner of the Rollover
IRA contract.
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GUARANTEED MINIMUM DEATH BENEFIT
A guaranteed minimum death benefit is provided as part of the baseBUILDER
benefit. A guaranteed minimum death benefit is also provided under your contract
even if you don't elect baseBUILDER. In this case, the baseBUILDER benefit
charge does not apply.
GUARANTEED MINIMUM DEATH BENEFIT APPLICABLE FOR ANNUITANT AGES 0 THROUGH 79 AT
ISSUE OF NQ CONTRACTS; 20 THROUGH 79 AT ISSUE OF ROLLOVER IRA, ROTH CONVERSION
IRA, AND ROLLOVER TSA CONTRACTS; AND 20 THROUGH 75 AT ISSUE OF QP CONTRACTS.
You must elect either the "5% roll up to age 80" or the "annual ratchet to age
80" guaranteed minimum death benefit when you apply for a contract. Once you
have made your election, you may not change it.
5% ROLL UP TO AGE 80. The guaranteed minimum death benefit is equal to the
benefit base described earlier in "Your benefit base."
ANNUAL RATCHET TO AGE 80. On the contract date, your guaranteed minimum death
benefit equals your initial contribution. Then, on each contract date
anniversary, we will determine your guaranteed minimum death benefit by
comparing your current guaranteed minimum death benefit to your account value on
that contract date anniversary. If your account value is higher than your
guaranteed minimum death benefit, we will increase your guaranteed minimum death
benefit to equal your account value. On the other hand, if your account value on
the contract date anniversary is less than your guaranteed minimum death
benefit, we will not adjust your guaranteed minimum death benefit either up or
down. If you make additional contributions, we will increase your current
guaranteed minimum death benefit by the dollar amount of the contribution on the
date the contribution is allocated to your investment options. If you take a
withdrawal from your contract, we will reduce your guaranteed minimum death
benefit on the date you take the withdrawal.
GUARANTEED MINIMUM DEATH BENEFIT APPLICABLE FOR ANNUITANT AGES 80 THROUGH 85 AT
ISSUE OF NQ, ROLLOVER IRA, ROTH CONVERSION IRA AND ROLLOVER TSA CONTRACTS.
On the contract date, your guaranteed minimum death benefit equals your initial
contribution. Thereafter, it will be increased by the dollar amount of any
additional contributions. We will reduce your guaranteed minimum death benefit
if you take any withdrawals.
----------------------------------------
Please see "How withdrawals affect your guaranteed minimum income benefit and
guaranteed minimum death benefit" in "Accessing your money" for information on
how withdrawals affect your guaranteed minimum death benefit.
See Appendix IV for an example of how we calculate the guaranteed minimum death
benefit.
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your contract, you may return it to
us for a refund. To exercise this cancellation right you must mail the contract
directly to our processing office within 10 days after you receive it. If state
law requires, this "free look" period may be longer.
Generally, your refund will equal your account value under the contract on the
day we receive notification of your decision to cancel the contract and will
reflect (i) any investment gain or loss in the variable investment options (less
the daily charges we deduct), and (ii) any positive or negative market value
adjustments in the fixed maturity options through the date we receive your
contract. Some states require that we refund the full amount of your
contribution (not reflecting (i) or (ii) above). For any IRA contract returned
to us within seven days after you receive it, we are required to refund the full
amount of your contribution.
We may require that you wait six months before you may apply for a contract with
us again if:
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o you cancel your contract during the free look period; or
o you change your mind before you receive your contract whether we have
received your contribution or not.
Please see "Tax information" for possible consequences of cancelling your
contract.
In addition to the cancellation right described above, if you fully convert an
existing traditional IRA contract to a Roth Conversion IRA contract, you may
cancel your Roth Conversion IRA contract and return to a Rollover IRA contract.
Our processing office, or your registered representative, can provide you with
the cancellation instructions.
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2
DETERMINING YOUR CONTRACT'S
VALUE
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YOUR ACCOUNT VALUE AND CASH VALUE
Your "account value" is the total of the: (i) values you have in the variable
investment options; (ii) market adjusted amounts in the fixed maturity options;
and (iii) value you have in the loan reserve account (applicable to Rollover TSA
contracts only). These amounts are subject to certain fees and charges discussed
under "Charges and expenses."
Your contract also has a "cash value." At any time before annuity payments
begin, your contract's cash value is equal to the account value, less the amount
of any outstanding loan plus accrued interest (applicable to Rollover TSA
contracts only). Please see "Surrendering your contract to receive its cash
value" in "Accessing your money."
YOUR CONTRACT'S VALUE IN THE VARIABLE INVESTMENT OPTIONS
Each variable investment option invests in shares of a corresponding portfolio.
Your value in each variable investment option is measured by "units." The value
of your units will increase or decrease as though you had invested it in the
corresponding portfolio's shares directly. Your value, however, will be reduced
by the amount of the fees and charges that we deduct under the contract.
The unit value for each variable investment option depends on the investment
performance of that option, less daily charges for:
(i) mortality and expense;
(ii) administrative expenses; and
(iii) distribution charges.
On any day, your value in any variable investment option equals the number of
units credited to that option, adjusted for any units purchased for or deducted
from your contract under that option, multiplied by that day's value for one
unit. The number of your contract units in any variable investment option does
not change unless they are:
(i) increased to reflect additional contributions;
(ii) decreased to reflect a withdrawal;
(iii) increased to reflect a transfer into, or decreased to reflect a transfer
out of, a variable investment option; or
(iv) decreased to reflect a transfer of your loan amount to the loan reserve
account under a Rollover TSA contract.
In addition, when we deduct the baseBUILDER benefit charge, the number of units
credited to your contract will be reduced. A description of how unit values are
calculated is found in the SAI.
YOUR CONTRACT'S VALUE IN THE FIXED MATURITY OPTIONS
Your value in each fixed maturity option at any time before the maturity date is
the market adjusted amount in each option. This is equivalent to your fixed
maturity amount increased or decreased by the market value adjustment. Your
value, therefore, may be higher or lower than your contributions (less
withdrawals) accumulated at the rate to maturity. At the maturity date, your
value in the fixed maturity option will equal its maturity value.
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3
TRANSFERRING YOUR MONEY
AMONG
INVESTMENT OPTIONS
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TRANSFERRING YOUR ACCOUNT VALUE
At any time before the date annuity payments are to begin, you can transfer some
or all of your account value among the investment options, subject to the
following:
o You may not transfer to a fixed maturity option that matures in the
current calendar year, or that has a rate to maturity of 3% or less.
o If the annuitant is 76 or older, you must limit your transfers to fixed
maturity options to those with maturities of five years or less. Also, the
maturity dates may be no later than the February 15th immediately
following the date annuity payments are to begin.
o If you make transfers out of a fixed maturity option other than at its
maturity date the transfer may cause a market value adjustment.
You may request a transfer in writing or by telephone using TOPS. (We anticipate
that transfers will be available online by using EQ Access by the end of 2000.)
You must send in all written transfer requests directly to our processing
office. Transfer requests should specify:
(1) the contract number,
(2) the dollar amounts or percentages of your current account value to be
transferred, and
(3) the investment options to and from which you are transferring.
We will confirm all transfers in writing.
MARKET TIMING
You should note that the product is not designed for professional "market
timing" organizations, or other organizations or individuals engaging in a
market timing strategy, making programmed transfers, frequent transfers or
transfers that are large in relation to the total assets of the underlying
mutual fund portfolio. Market timing strategies are disruptive to the underlying
mutual fund portfolios in which the variable investment options invest. If we
determine that your transfer patterns among the variable investment options
reflect a market timing strategy, we reserve the right to take action including,
but not limited to: restricting the availability of transfers through telephone
requests, facsimile transmissions, automated telephone services, Internet
services or any electronic transfer services. We may also refuse to act on
transfer instructions of an agent acting under a power of attorney who is acting
on behalf of more than one owner.
REBALANCING YOUR ACCOUNT VALUE
We currently offer a rebalancing program that you can use to automatically
reallocate your account value among the variable investment options. You must
tell us:
(a) the percentage you want invested in each variable investment option (whole
percentages only), and
(b) how often you want the rebalancing to occur (quarterly, semiannually, or
annually on a contract year basis. Rebalancing will occur on the same day
of the month as the contract date).
While your rebalancing program is in effect, we will transfer amounts among each
variable investment option so that the percentage of your account value that you
specify is invested in each option at the end of each rebalancing date. Your
entire account value in the variable investment options must be included in the
rebalancing program.
- -----------------------------------------------------------------------------
Rebalancing does not assure a profit or protect against loss. You should
periodically review your allocation percentages as your needs change. You may
want to discuss the rebalancing program with your registered representative or
other registered representative before electing the program.
- -----------------------------------------------------------------------------
You may elect the rebalancing program at any time. You may also change your
allocation instructions or cancel the program at any time. If you request a
transfer while the rebalancing program is in effect, we will process the
transfer as requested; the rebalancing program will remain in effect unless you
request that it be canceled in writing.
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Transferring your money among investment options
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You may not elect the rebalancing program if you are participating in the dollar
cost averaging or special dollar cost averaging program.
<PAGE>
4
ACCESSING YOUR MONEY
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WITHDRAWING YOUR ACCOUNT VALUE
You have several ways to withdraw your account value before annuity payments
begin. The table below shows the methods available under each type of contract.
More information follows the table. For the tax consequences of withdrawals, see
"Tax information."
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
METHOD OF WITHDRAWAL
- -----------------------------------------------------------------------------------
SUBSTANTIALLY MINIMUM
CONTRACT LUMP SUM SYSTEMATIC EQUAL DISTRIBUTION
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NQ Yes Yes No No
- -----------------------------------------------------------------------------------
Rollover IRA Yes Yes Yes Yes
- -----------------------------------------------------------------------------------
Roth
Conversion
IRA Yes Yes Yes No
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QP Yes No No Yes
- -----------------------------------------------------------------------------------
Rollover
TSA* Yes No No Yes
- -----------------------------------------------------------------------------------
</TABLE>
* For some Rollover TSA contracts, your ability to take withdrawals, loans or
surrender your contract may be limited. You must provide withdrawal
restriction information when you apply for a contract. See "Tax Sheltered
Annuity contracts (TSAs)" in "Tax information."
LUMP SUM WITHDRAWALS
(All contracts)
You may take lump sum withdrawals from your account value at any time. (Rollover
TSA contracts may have restrictions.) The minimum amount you may withdraw is
$300. If you request to withdraw more than 90% of a contract's current cash
value we will treat it as a request to surrender the contract for its cash
value. See "Surrendering your contract to receive its cash value" below.
Under Rollover TSA contracts, if a loan is outstanding, you may only take lump
sum withdrawals as long as the cash value remaining after any withdrawal equals
at least 10% of the outstanding loan plus accrued interest.
SYSTEMATIC WITHDRAWALS
(NQ, Rollover IRA, and Roth Conversion IRA contracts only)
You may take systematic withdrawals of a particular dollar amount or a
particular percentage of your account value.
You may take systematic withdrawals on a monthly, quarterly, or annual basis as
long as the withdrawals do not exceed the following percentages of your account
value: 1.2% monthly, 3.6% quarterly, and 15.0% annually. The minimum amount you
may take in each systematic withdrawal is $250. If the amount withdrawn would be
less than $250 on the date a withdrawal is to be taken, we will not make a
payment and we will terminate your systematic withdrawal election.
We will make the withdrawals on any day of the month that you select as long as
it is not later than the 28th day of the month. If you do not select a date, we
will make the withdrawals on the same calendar day of the month as the contract
date. You must wait at least 28 days after your contract is issued before your
systematic withdrawals can begin.
You may elect to take systematic withdrawals at any time. If you own an IRA
contract, you may elect this withdrawal method only if you are between ages
59 1/2 and 70 1/2.
You may change the payment frequency, or the amount or percentage of your
systematic withdrawals, once each contract year. However, you may not change the
amount or percentage in any contract year in which you have already taken a lump
sum withdrawal. You can cancel the systematic withdrawal option at any time.
SUBSTANTIALLY EQUAL WITHDRAWALS
(Rollover IRA and Roth Conversion IRA contracts only)
The substantially equal withdrawals option allows you to receive distributions
from your account value without triggering the 10% additional federal tax
penalty, which normally applies to distributions made before age 59 1/2. See
"Tax information." Once you begin to take substantially equal withdrawals, you
should not stop them or change the pattern of your withdrawals until after the
later of age 59 1/2 or five full years after the first withdrawal. If you stop
or change the withdrawals or take a lump sum withdrawal, you may be liable for
the 10% federal tax penalty that would have otherwise been due on prior
withdrawals made under this option and for any interest on those withdrawals.
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You may elect to take substantially equal withdrawals at any time before age
59 1/2. We will make the withdrawal on any day of the month that you select as
long as it is not later than the 28th day of the month. You may not elect to
receive the first payment in the same contract year in which you took a lump
sum withdrawal. We will calculate the amount of your substantially equal
withdrawals. The payments will be made monthly, quarterly, or annually as you
select. These payments will continue until we receive written notice from you to
cancel this option or you take a lump sum withdrawal. You may elect to start
receiving substantially equal withdrawals again, but the payments may not
restart in the same contract year in which you took a lump sum withdrawal. We
will calculate the new withdrawal amount.
MINIMUM DISTRIBUTION WITHDRAWALS
(Rollover IRA, QP, and Rollover TSA contracts only - See "Tax information")
We offer the minimum distribution withdrawal option to help you meet lifetime
required minimum distributions under federal income tax rules. You may elect
this option in the year in which you reach age 70 1/2. The minimum amount we
will pay out is $250. You may elect the method you want us to use to calculate
your minimum distribution withdrawals from the choices we offer. Currently,
minimum distribution withdrawal payments will be made annually.
We will calculate your annual payment based on your account value at the end of
the prior calendar year based on the method you choose.
Under Rollover TSA contracts, you may not elect minimum distribution
withdrawals if a loan is outstanding.
- -----------------------------------------------------------------------------
For Rollover IRA, QP, and Rollover TSA contracts, we will send a form outlining
the distribution options available in the year you reach age 70 1/2 (if you have
not begun your annuity payments before that time).
- -----------------------------------------------------------------------------
HOW WITHDRAWALS ARE TAKEN FROM YOUR ACCOUNT VALUE
Unless you specify otherwise, we will subtract your withdrawals on a pro rata
basis from your value in the variable investment options. If there is
insufficient value or no value in the variable investment options, any
additional amount of the withdrawal required or the total amount of the
withdrawal will be withdrawn from the fixed maturity options in order of the
earliest maturity date(s) first. A market value adjustment may apply to
withdrawals from the fixed maturity options.
HOW WITHDRAWALS AFFECT YOUR GUARANTEED MINIMUM INCOME BENEFIT AND GUARANTEED
MINIMUM DEATH BENEFIT
Withdrawals will reduce your guaranteed benefits on either a dollar-for-dollar
basis or on a pro rata basis as explained below:
INCOME BENEFIT AND DEATH BENEFIT
5% roll up to age 80 - If you elect the 5% roll up to age 80 guaranteed minimum
death benefit, your benefit base will be reduced on a dollar-for-dollar basis as
long as the sum of your withdrawals in a contract year is 5% or less of the
guaranteed minimum death benefit on the most recent contract date anniversary.
Once you take a withdrawal that causes the sum of your withdrawals in a contract
year to exceed 5% of the guaranteed minimum death benefit on the most recent
contract date anniversary, that withdrawal and any subsequent withdrawals in
that same contract year will reduce your benefit base on a pro rata basis.
The timing of your withdrawals and whether they exceed the 5% threshold
described above can have significant impact on your guaranteed minimum income
benefit or guaranteed minimum death benefit.
Annual ratchet to age 80 - If you elect the annual ratchet to age 80 guaranteed
minimum death benefit, each withdrawal will always reduce your benefit base and
current guaranteed minimum death benefit on a pro rata basis.
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Annuitant issue ages 80 through 85 - If your contract was issued when the
annuitant was between ages 80 and 85, each withdrawal will always reduce your
current guaranteed minimum death benefit on a pro rata basis.
----------------------------------------
Reduction on a dollar-for-dollar basis means that your current benefit will be
reduced by the dollar amount of the withdrawal. Reduction on a pro rata basis
means that we calculate the percentage of your current account value that is
being withdrawn and we reduce your current benefit by that same percentage. For
example, if your account value is $30,000 and you withdraw $12,000, you have
withdrawn 40% of your account value. If your guaranteed minimum death benefit
was $40,000 before the withdrawal, it would be reduced by $16,000 ($40,000 x
.40) and your new guaranteed minimum death benefit after the withdrawal would be
$24,000 ($40,000 - $16,000).
LOANS UNDER ROLLOVER TSA CONTRACTS
You may take loans from a Rollover TSA unless restricted by the employer who
provided the Rollover TSA funds. If you cannot take a loan, or cannot take a
loan without approval from the employer who provided the funds, we will have
this information in our records based on what you and the employer who provided
the funds told us when you purchased your contract. The employer must also tell
us whether special employer plan rules of the Employee Retirement Income
Security Act of 1974 ("ERISA") apply. We will not permit you to take a loan
while you are taking minimum distribution withdrawals.
You should read the terms and conditions on our loan request form carefully
before taking out a loan. Under Rollover TSA contracts subject to ERISA, you may
only take a loan with the written consent of your spouse. Your contract contains
further details of the loan provision. Also, see "Tax information" for general
rules applicable to loans.
We will permit you to have only one loan outstanding at a time. The minimum loan
amount is $1,000. The maximum amount is $50,000 or, if less, 50% of your account
value, subject to any limits under the federal income tax rules. The term of a
loan is five years. However, if you use the loan to acquire your primary
residence, the term is 10 years. The term may not extend beyond the earliest of:
(1) the date annuity payments begin,
(2) the date the contract terminates, and
(3) the date a death benefit is paid (the outstanding loan will be deducted
from the death benefit amount).
Interest will accrue daily on your outstanding loan at a rate we set. The loan
interest rate will be equal to the Moody's Corporate Bond Yield Averages for Baa
bonds for the calendar month ending two months before the first day of the
calendar quarter in which the rate is determined.
LOAN RESERVE ACCOUNT. On the date your loan is processed, we will transfer the
amount of your loan to the loan reserve account. Unless you specify otherwise,
we will subtract your loan on a pro rata basis from your value in the variable
investment options. If there is insufficient value or no value in the variable
investment options, any additional amount of the loan will be subtracted from
the fixed maturity options in order of the earliest maturity date(s) first. A
market value adjustment may apply.
We will credit interest to the amount in the loan reserve account at a rate of
2% lower than the loan interest rate that applies for the time your loan is
outstanding. On each contract date anniversary after the date the loan is
processed, we will transfer the amount of interest earned in the loan reserve
account to the variable investment options on a pro rata basis. When you make a
loan repayment, unless you specify otherwise, we will transfer the dollar amount
of the loan repaid from the loan reserve account to the investment options
according to the allocation percentages we have on our records.
SURRENDERING YOUR CONTRACT TO RECEIVE ITS CASH VALUE
You may surrender your contract to receive its cash value at any time while the
annuitant is living and before you begin to receive annuity payments. (Rollover
TSA contracts may
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35
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have restrictions.) For a surrender to be effective, we must receive your
written request and your contract at our processing office. We will determine
your cash value on the date we receive the required information. All benefits
under the contract will terminate as of that date.
You may receive your cash value in a single sum payment or apply it to one or
more of the annuity payout options. See "Your annuity payout options" below. For
the tax consequences of surrenders, see "Tax information."
WHEN TO EXPECT PAYMENTS
Generally, we will fulfill requests for payments out of the variable investment
options within seven calendar days after the date of the transaction to which
the request relates. These transactions may include applying proceeds to a
variable annuity, payment of a death benefit, payment of any amount you withdraw
and, upon surrender, payment of the cash value. We may postpone such payments or
applying proceeds for any period during which:
(1) the New York Stock Exchange is closed or restricts trading,
(2) sales of securities or determination of the fair value of a variable
investment option's assets is not reasonably practicable because of an
emergency, or
(3) the SEC, by order, permits us to defer payment to protect people remaining
in the variable investment options.
We can defer payment of any portion of your value in the fixed maturity options
(other than for death benefits) for up to six months while you are living. We
also may defer payments for a reasonable amount of time (not to exceed 10 days)
while we are waiting for a contribution check to clear.
All payments are made by check and are mailed to you (or the payee named in a
tax-free exchange) by U.S. mail, unless you request that we use an express
delivery service at your expense.
YOUR ANNUITY PAYOUT OPTIONS
Equitable Accumulator Select offers you several choices of annuity payout
options. Some enable you to receive fixed annuity payments, which can be either
level or increasing, and others enable you to receive variable annuity payments.
You can choose from among the annuity payout options listed below. Restrictions
may apply, depending on the type of contract you own or the annuitant's age at
contract issue. In addition, if you are exercising your guaranteed minimum
income benefit under baseBUILDER, your choice of payout options are those that
are available under baseBUILDER (see "Our baseBUILDER option").
<TABLE>
<S> <C>
- ----------------------------------------------------------------------------
Fixed annuity payout options Life annuity
Life annuity with period
certain
Life annuity with refund
certain
Period certain annuity
- ----------------------------------------------------------------------------
Variable Immediate Annuity Life annuity
payout options Life annuity with period
certain
- ----------------------------------------------------------------------------
Income Manager payout Life annuity with period
options (available for certain
annuitants age 83 or less Period certain annuity
at contract issue)
- ----------------------------------------------------------------------------
</TABLE>
o Life annuity: An annuity that guarantees payments for the rest of the
annuitant's life. Payments end with the last monthly payment before the
annuitant's death. Because there is no continuation of benefits following
the annuitant's death with this payout option, it provides the highest
monthly payment of any of the life annuity options, so long as the
annuitant is living.
o Life annuity with period certain: An annuity that guarantees payments for
the rest of the annuitant's life. If the annuitant dies before the end of
a selected period of time ("period certain"), payments continue to the
beneficiary for the balance of the period certain. The period certain
cannot extend beyond the annuitant's life expectancy. A life annuity with
a period certain is the form of annuity under the contracts that you will
receive if you
<PAGE>
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do not elect a different payout option. In this case, the period certain
will be based on the annuitant's age and will not exceed 10 years.
o Life annuity with refund certain: An annuity that guarantees payments for
the rest of the annuitant's life. If the annuitant dies before the amount
applied to purchase the annuity option has been recovered, payments to the
beneficiary will continue until that amount has been recovered. This
payout option is available only as a fixed annuity.
o Period certain annuity: An annuity that guarantees payments for a specific
period of time, usually 5, 10, 15, or 20 years. This guaranteed period may
not exceed the annuitant's life expectancy. This option does not guarantee
payments for the rest of the annuitant's life. It does not permit any
repayment of the unpaid principal, so you cannot elect to receive part of
the payments as a single sum payment with the rest paid in monthly annuity
payments. This payout option is available only as a fixed annuity.
The life annuity, life annuity with period certain, and life annuity with refund
certain payout options are available on a single life or joint and survivor life
basis. The joint and survivor life annuity guarantees payments for the rest of
the annuitant's life and, after the annuitant's death, payments continue to the
survivor. We may offer other payout options not outlined here. Your registered
representative can provide details.
FIXED ANNUITY PAYOUT OPTIONS
With fixed annuities, we guarantee fixed annuity payments will be based either
on the tables of guaranteed annuity purchase factors in your contract or on our
then current annuity purchase factors, whichever is more favorable for you.
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTIONS
Variable Immediate Annuities are described in a separate prospectus that is
available from your registered representative. Before you select a Variable
Immediate Annuity payout option, you should read the prospectus which contains
important information that you should know.
Variable annuities may be funded through your choice of variable investment
options investing in portfolios of EQ Advisors Trust. The contract also offers a
fixed annuity option that can be elected in combination with the variable
annuity payout options. The amount of each variable annuity payment will
fluctuate, depending upon the performance of the variable investment options,
and whether the actual rate of investment return is higher or lower than an
assumed base rate.
INCOME MANAGER PAYOUT OPTIONS
The Income Manager payout annuity contracts differ from the other payout annuity
contracts. The other payout annuity contracts may provide higher or lower income
levels, but do not have all the features of the Income Manager payout annuity
contract. You may request an illustration of the Income Manager payout annuity
contract from your registered representative. Income Manager payout options are
described in a separate prospectus that is available from your registered
representative. Before you select an Income Manager payout option, you should
read the prospectus which contains important information that you should know.
Both Income Manager payout options provide guaranteed level payments (NQ and IRA
contracts). The Income Manager (life annuity with period certain) also provides
guaranteed increasing payments (NQ contracts only).
For QP and Rollover TSA contracts, if you want to elect an Income Manager payout
option, we will first roll over amounts in such contract to a Rollover IRA
contract. You will be the owner of the Rollover IRA contract.
You may choose to apply only part of the account value of your Equitable
Accumulator Select contract to an Income Manager payout annuity. In this case,
we will consider any amounts applied as a withdrawal from your Equitable
Accumulator Select. For the tax consequences of withdrawals, see "Tax
information."
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Depending upon your circumstances, the purchase of an Income Manager contract
may be done on a tax-free basis. Please consult your tax adviser.
THE AMOUNT APPLIED TO PURCHASE AN ANNUITY PAYOUT OPTION
The amount applied to purchase an annuity payout option varies, depending on the
payout option that you choose, and the timing of your purchase as it relates to
any market value adjustments.
If amounts in a fixed maturity option are used to purchase any annuity payout
option, prior to the maturity date, a market value adjustment will apply.
SELECTING AN ANNUITY PAYOUT OPTION
When you select a payout option, we will issue you a separate written agreement
confirming your right to receive annuity payments. We require you to return your
contract before annuity payments begin unless you are applying only some of your
account value to an Income Manager contract. The contract owner and annuitant
must meet the issue age and payment requirements.
You can choose the date annuity payments begin but it may not be earlier than
thirteen months from the Equitable Accumulator Select contract date. Except with
respect to the Income Manager annuity payout options, where payments are made on
the 15th day of each month, you can change the date your annuity payments are to
begin anytime before that date as long as you do not choose a date later than
the 28th day of any month. Also, that date may not be later than the contract
date anniversary that follows the annuitant's 90th birthday. This may be
different in some states.
Before the last date by which your annuity payments must begin, we will notify
you by letter. Once you have selected an annuity payout option and payments have
begun, no change can be made other than: (i) transfers (if permitted in the
future) among the variable investment options if a Variable Immediate Annuity
payout option is selected; and (ii) withdrawals (subject to a market value
adjustment) if an Income Manager payout option is chosen.
The amount of the annuity payments will depend on the amount applied to purchase
the annuity and the applicable annuity purchase factors, discussed earlier.
In no event will you ever receive payments under a fixed option or an initial
payment under a variable option of less than the minimum amounts guaranteed by
the contract.
If, at the time you elect a payout option, the amount to be applied is less than
$2,000 or the initial payment under the form elected is less than $20 monthly,
we reserve the right to pay the account value in a single sum rather than as
payments under the payout option chosen.
<PAGE>
5
CHARGES AND EXPENSES
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CHARGES THAT EQUITABLE LIFE DEDUCTS
We deduct the following charges each day from the net assets of each variable
investment option. These charges are reflected in the unit values of each
variable investment option:
o A mortality and expense risks charge
o An administrative charge
o A distribution charge
We deduct the following charges from your account value. When we deduct these
charges from your variable investment options, we reduce the number of units
credited to your contract:
o If you elect the optional benefit a charge for the optional baseBUILDER
benefit.
o At the time annuity payments are to begin - charges designed to
approximate certain taxes that may be imposed on us, such as premium taxes
in your state. An annuity administrative fee may also apply.
More information about these charges appears below. We will not increase these
charges for the life of your contract, except as noted. We may reduce certain
charges under group or sponsored arrangements. See "Group or sponsored
arrangements" below.
To help with your retirement planning, we may offer other annuities with
different charges, benefits and features. Please contact your financial
professional for more information.
MORTALITY AND EXPENSE RISKS CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for mortality and expense risks, including the guaranteed
minimum death benefit. The daily charge is equivalent to an annual rate of 1.10%
of the net assets in each variable investment option.
The mortality risk we assume is the risk that annuitants as a group will live
for a longer time than our actuarial tables predict. If that happens, we would
be paying more in annuity income than we planned. We also assume a risk that the
mortality assumptions reflected in our guaranteed annuity payment tables, shown
in each contract, will differ from actual mortality experience. Lastly, we
assume a mortality risk to the extent that at the time of death, the guaranteed
minimum death benefit exceeds the cash value of the contract. The expense risk
we assume is the risk that it will cost us more to issue and administer the
contracts than we expect.
ADMINISTRATIVE CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for administrative expenses under the contracts. The daily
charge is equivalent to an annual rate of 0.25% of the net assets in each
variable investment option. We reserve the right under the contracts to increase
this charge to an annual rate of 0.35%.
DISTRIBUTION CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for a portion of our sales expenses under the contracts. The
daily charge is equivalent to an annual rate of 0.25% of the net assets in each
variable investment option.
BASEBUILDER BENEFIT CHARGE
If you elect the baseBUILDER, we deduct a charge annually from your account
value on each contract date anniversary until such time as you exercise the
guaranteed minimum income benefit, elect another annuity payout option, or the
contract date anniversary after the annuitant reaches 85 (83 in Oregon),
whichever occurs first. The charge is equal to 0.30% of the benefit base in
effect on the contract date anniversary.
We will deduct this charge from your value in the variable investment options on
a pro rata basis. If there is not enough value in the variable investment
options, we will deduct all or a portion of the charge from the fixed maturity
options in order of the earliest maturity date(s) first. A market value
adjustment may apply.
<PAGE>
Charges and expenses
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39
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CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES
We deduct a charge designed to approximate certain taxes that may be imposed on
us, such as premium taxes in your state. Generally, we deduct the charge from
the amount applied to provide an annuity payout option. The current tax charge
that might be imposed varies by state and ranges from 0% to 3.5% (1% in Puerto
Rico and 5% in the U.S. Virgin Islands).
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION ADMINISTRATIVE FEE
We deduct a fee of $350 from the amount to be applied to the Variable Immediate
Annuity payout option.
CHARGES THAT EQ ADVISORS TRUST DEDUCTS
EQ Advisors Trust deducts charges for the following types of fees and expenses:
o Management fees ranging from 0.25% to 1.15%.
o 12b-1 fees of 0.25%.
o Operating expenses, such as trustees' fees, independent auditors' fees,
legal counsel fees, administrative service fees, custodian fees, and
liability insurance.
o Investment-related expenses, such as brokerage commissions.
These charges are reflected in the daily share price of each portfolio. Since
shares of EQ Advisors Trust are purchased at their net asset value, these fees
and expenses are, in effect, passed on to the variable investment options and
are reflected in their unit values. For more information about these charges,
please refer to the prospectus for EQ Advisors Trust following this prospectus.
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce the mortality and
expense risks charge or change the minimum initial contribution requirements. We
also may change the guaranteed minimum income benefit and the guaranteed minimum
death benefit, or offer variable investment options that invest in shares of EQ
Advisors Trust that are not subject to the 12b-1 fee. Group arrangements include
those in which a trustee or an employer, for example, purchases contracts
covering a group of individuals on a group basis. Group arrangements are not
available for Rollover IRA and Roth Conversion IRA contracts. Sponsored
arrangements include those in which an employer allows us to sell contracts to
its employees or retirees on an individual basis.
Our costs for sales, administration, and mortality generally vary with the size
and stability of the group or sponsoring organization, among other factors. We
take all these factors into account when reducing charges. To qualify for
reduced charges, a group or sponsored arrangement must meet certain
requirements, such as requirements for size and number of years in existence.
Group or sponsored arrangements that have been set up solely to buy contracts or
that have been in existence less than six months will not qualify for reduced
charges.
We also may establish different rates to maturity for the fixed maturity options
under different classes of contracts for group or sponsored arrangements.
We will make these and any similar reductions according to our rules in effect
when we approve a contract for issue. We may change these rules from time to
time. Any variation will reflect differences in costs or services and will not
be unfairly discriminatory.
Group or sponsored arrangements may be governed by federal income tax rules,
ERISA, or both. We make no representations with regard to the impact of these
and other applicable laws on such programs. We recommend that employers,
trustees, and others purchasing or making contracts available for purchase under
such programs seek the advice of their own legal and benefits advisers.
<PAGE>
6
PAYMENT OF DEATH BENEFIT
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40
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YOUR BENEFICIARY AND PAYMENT OF BENEFIT
You designate your beneficiary when you apply for your contract. You may change
your beneficiary at any time. The change will be effective on the date the
written request for the change is received in our processing office. We are not
responsible for any beneficiary change request that we do not receive. We will
send you written confirmation when we receive your request. Under jointly owned
contracts, the surviving owner is considered the beneficiary, and will take the
place of any other beneficiary. You may be limited as to the beneficiary you can
designate in a Rollover TSA contract. In a QP contract, the beneficiary must be
the trustee.
The death benefit is equal to your account value, or, if greater, the guaranteed
minimum death benefit. The guaranteed minimum death benefit is part of your
contract, whether you select the baseBUILDER benefit or not. We determine the
amount of the death benefit (other than the guaranteed minimum death benefit) as
of the date we receive satisfactory proof of the annuitant's death and any
required instructions for the method of payment. We determine the amount of the
guaranteed minimum death benefit as of the date of the annuitant's death. Under
Rollover TSA contracts we will deduct the amount of any outstanding loan plus
accrued interest from the amount of the death benefit.
EFFECT OF THE ANNUITANT'S DEATH
If the annuitant dies before the annuity payments begin, we will pay the death
benefit to your beneficiary.
Generally, the death of the annuitant terminates the contract. However, a
beneficiary spouse of the owner/annuitant can choose to be treated as the
successor owner/annuitant and continue the contract. Only a spouse can be a
successor owner/annuitant. A successor owner/annuitant can only be named under
NQ and IRA contracts.
For IRA contracts, a beneficiary may be able to have limited ownership as
discussed under "Beneficiary continuation option" below.
WHEN AN NQ CONTRACT OWNER DIES BEFORE THE ANNUITANT
Under certain conditions the owner changes after the original owner's death.
When you are not the annuitant under an NQ contract and you die before annuity
payments begin, the beneficiary named to receive this death benefit upon the
annuitant's death will automatically become the successor owner. If you do not
want this beneficiary to be the successor owner, you should name a specific
successor owner. You may name a successor owner at any time by sending
satisfactory notice to our processing office. If the contract is jointly owned
and the first owner to die is not the annuitant, the surviving owner becomes the
sole contract owner. This person will be considered the successor owner for
purposes of the distribution rules described in this section. The surviving
owner automatically takes the place of any other beneficiary designation.
Unless the surviving spouse of the owner who has died (or in the case of a joint
ownership situation, the surviving spouse of the first owner to die) is the
successor owner for this purpose, the entire interest in the contract must be
distributed under the following rules:
o The cash value of the contract must be fully paid to the successor owner
(new owner) by December 31st of the fifth calendar year after your death
(or in a joint ownership situation, the death of the first owner to die).
o The successor owner may instead elect to receive the cash value as a life
annuity (or payments for a period certain of not longer than the new
owner's life expectancy). Payments must begin no later than December 31st
following the calendar year of the non-annuitant owner's death. Unless
this alternative is elected, we will pay any cash value on December 31st
of the fifth calendar year following the year of your death (or the death
of the first owner to die).
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If the surviving spouse is the successor owner or joint owner, the spouse may
elect to continue the contract. No distributions are required as long as the
surviving spouse and annuitant are living.
HOW DEATH BENEFIT PAYMENT IS MADE
We will pay the death benefit to the beneficiary in the form of the annuity
payout option you have chosen. If you have not chosen an annuity payout option
as of the time of the annuitant's death, the beneficiary will receive the death
benefit in a single sum. However, subject to any exceptions in the contract, our
rules and any applicable requirements under federal income tax rules, the
beneficiary may elect to apply the death benefit to one or more annuity payout
options we offer at the time. See "Your annuity payout options" in "Accessing
your money" earlier in this prospectus. Please note that any annuity payout
option chosen may not extend beyond the life expectancy of the beneficiary.
SUCCESSOR OWNER AND ANNUITANT
If you are both the contract owner and the annuitant, and your spouse is the
sole beneficiary or the joint owner, then your spouse may elect to receive the
death benefit or continue the contract as successor owner/annuitant.
If your surviving spouse decides to continue the contract, then on the contract
date anniversary following your death, we will increase the account value to
equal your current guaranteed minimum death benefit, if it is higher than the
account value. The increase in the account value will be allocated to the
investment option according to the allocation percentages we have on file for
your contract. In determining whether the guaranteed minimum death benefit will
continue to grow, we will use your surviving spouse's age (as of the contract
date anniversary).
BENEFICIARY CONTINUATION OPTION
Upon your death under an IRA contract, a beneficiary may generally elect to keep
the contract in your name and receive distributions under the contract instead
of receiving the death benefit in a single sum. In order to elect this option,
the beneficiary must be an individual. Certain trusts with only individual
beneficiaries will be treated as individuals. This election must be made within
60 days following the date we receive proof of your death. We will increase the
account value to equal the death benefit if the death benefit is greater than
the account value. Except as noted in the next sentence, the beneficiary
continuation option will be available on or after May 1, 2000 depending on when
we receive regulatory clearance in your state. For Rollover IRA contracts, a
similar beneficiary continuation option will be available until the beneficiary
continuation option described in this prospectus is available. Please contact
our processing office for further information.
Under the beneficiary continuation option:
o The contract continues in your name for the benefit of your beneficiary.
o The beneficiary may make transfers among the investment options but no
additional contributions will be permitted.
o The guaranteed minimum income benefit and the death benefit (including the
guaranteed minimum death benefit) provisions will no longer be in effect.
o The beneficiary may choose at any time to withdraw all or a portion of the
account value and no withdrawal charges will apply. Any partial withdrawal
must be at least $300.
o Upon the death of the beneficiary, any remaining death benefit will be
paid in a lump sum to the person the beneficiary chooses.
For traditional IRA contracts only, if you die AFTER the "Required Beginning
Date" for required minimum distributions (see "Tax information"), the contract
will continue if:
(a) You were receiving minimum distribution withdrawals from this contract;
and
(b) The pattern of minimum distribution withdrawals you chose was based in
part on the life of the designated beneficiary.
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The withdrawals will then continue to be paid to the beneficiary on the same
basis as you chose before your death. We will be able to tell your beneficiary
whether this option is available. You should contact our processing office for
further information.
For both kinds of IRA contracts, if you die BEFORE the Required Beginning Date
(and, for a traditional IRA, therefore you were not taking minimum distribution
withdrawals under the contract) the beneficiary may choose one of the following
two beneficiary continuation options:
1. Payments over life expectancy period. The beneficiary can receive annual
minimum distributions based on the beneficiary's life expectancy. If there is
more than one beneficiary, the shortest life expectancy is used. These minimum
distributions must begin by December 31st of the calendar year following the
year of your death. In some situations, a surviving spouse beneficiary who
elects to continue the contract in your name under the beneficiary continuation
option instead of electing successor owner/annuitant status may also choose to
delay beginning the minimum distributions until the December 31st of the
calendar year in which you would have turned age 70 1/2.
2. Five Year Rule. The beneficiary can take withdrawals as desired. If the
beneficiary does not withdraw the entire account value by the December 31st of
the fifth calendar year following your death, we will pay any amounts remaining
under the contract to the beneficiary by that date. If you have more than one
beneficiary, and one of them elects this option, then all of your beneficiaries
will receive this option.
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7
TAX INFORMATION
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OVERVIEW
In this part of the prospectus, we discuss the current federal income tax rules
that generally apply to Equitable Accumulator Select contracts owned by United
States taxpayers. The tax rules can differ, depending on the type of contract,
whether NQ, Rollover IRA, Roth Conversion IRA, QP, or Rollover TSA. Therefore,
we discuss the tax aspects of each type of contract separately.
Federal income tax rules include the United States laws in the Internal Revenue
Code, and Treasury Department Regulations and Internal Revenue Service ("IRS")
interpretations of the Internal Revenue Code. These tax rules may change. We
cannot predict whether, when, or how these rules could change. Any change could
affect contracts purchased before the change.
We cannot provide detailed information on all tax aspects of the contracts.
Moreover, the tax aspects that apply to a particular person's contract may vary
depending on the facts applicable to that person. We do not discuss state income
and other state taxes, federal income tax, and withholding rules for non-U.S.
taxpayers, or federal gift and estate taxes. Transfers of the contract, rights
under the contract, or payments under the contract may be subject to gift or
estate taxes. You should not rely only on this document, but should consult your
tax adviser before your purchase.
If you are buying a contract to fund a retirement plan that already provides tax
deferral under sections of the Internal Revenue Code (IRA, QP, and Rollover
TSA), you should do so for the contract's features and benefits other than tax
deferral. In such situations, the tax deferral of the contract does not provide
additional benefits.
TRANSFERS AMONG INVESTMENT OPTIONS
You can make transfers among investment options inside the contract without
triggering taxable income.
TAXATION OF NONQUALIFIED ANNUITIES
CONTRIBUTIONS
You may not deduct the amount of your contributions to a nonqualified annuity
contract.
CONTRACT EARNINGS
Generally, you are not taxed on contract earnings until you receive a
distribution from your contract, whether as a withdrawal or as an annuity
payment. However, earnings are taxable, even without a distribution:
o if a contract fails investment diversification requirements as specified
in federal income tax rules (these rules are based on or are similar to
those specified for mutual funds under the securities laws);
o if you transfer a contract, for example, as a gift to someone other than
your spouse (or former spouse);
o if you use a contract as security for a loan (in this case, the amount
pledged will be treated as a distribution); and
o if the owner is other than an individual (such as a corporation,
partnership, trust, or other non-natural person).
All nonqualified deferred annuity contracts that Equitable Life and its
affiliates issue to you during the same calendar year are linked together and
treated as one contract for calculating the taxable amount of any distribution
from any of those contracts.
ANNUITY PAYMENTS
Once annuity payments begin, a portion of each payment is taxable as ordinary
income. You get back the remaining portion without paying taxes on it. This is
your "investment in the contract." Generally, your investment in the contract
equals the contributions you made, less any amounts you previously withdrew that
were not taxable.
For fixed annuity payments, the tax-free portion of each payment is determined
by (1) dividing your investment in the contract by the total amount you are
expected to receive out
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of the contract, and (2) multiplying the result by the amount of the payment.
For variable annuity payments, your tax-free portion of each payment is your
investment in the contract divided by the number of expected payments.
Once you have received the amount of your investment in the contract, all
payments after that are fully taxable. If payments under a life annuity stop
because the annuitant dies, there is an income tax deduction for any unrecovered
investment in the contract.
PAYMENTS MADE BEFORE ANNUITY PAYMENTS BEGIN
If you make withdrawals before annuity payments begin under your contract, they
are taxable to you as ordinary income if there are earnings in the contract.
Generally, earnings are your account value less your investment in the contract.
If you withdraw an amount which is more than the earnings in the contract as of
the date of the withdrawal, the balance of the distribution is treated as a
return of your investment in the contract and is not taxable.
CONTRACTS PURCHASED THROUGH EXCHANGES
You may purchase your NQ contract through an exchange of another contract.
Normally, exchanges of contracts are taxable events. The exchange will not be
taxable under Section 1035 of the Internal Revenue Code if:
o the contract that is the source of the funds you are using to purchase the
NQ contract is another nonqualified deferred annuity contract (or life
insurance or endowment contract).
o the owner and the annuitant are the same under the source contract and the
Equitable Accumulator Select NQ contract. If you are using a life
insurance or endowment contract the owner and the insured must be the same
on both sides of the exchange transaction.
The tax basis of the source contract carries over to the Equitable Accumulator
Select NQ contract.
A recent case permitted an owner to direct the proceeds of a partial withdrawal
from one nonqualified deferred annuity contract to a different insurer to
purchase a new nonqualified deferred annuity contract on a tax-deferred basis.
Special forms, agreement between carriers, and provision of cost basis
information may be required to process this type of an exchange.
SURRENDERS
If you surrender or cancel the contract, the distribution is taxable as ordinary
income (not capital gain) to the extent it exceeds your investment in the
contract.
DEATH BENEFIT PAYMENTS MADE TO A BENEFICIARY AFTER YOUR DEATH
For the rules applicable to death benefits, see "Payment of death benefit"
earlier in this prospectus. The tax treatment of a death benefit taken as a
single sum is generally the same as the tax treatment of a withdrawal from or
surrender of your contract. The tax treatment of a death benefit taken as
annuity payments is generally the same as the tax treatment of annuity payments
under your contract.
EARLY DISTRIBUTION PENALTY TAX
If you take distributions before you are age 59 1/2 a penalty tax of 10% of the
taxable portion of your distribution applies in addition to the income tax. The
extra penalty tax does not apply to pre-age 59 1/2 distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o in the form of substantially equal periodic annuity payments for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and a beneficiary.
OTHER INFORMATION
The Treasury Department has the authority to issue guidelines prescribing the
circumstances in which your ability to direct your investment to particular
portfolios within a separate account may cause you, rather than the insurance
company, to be treated as the owner of the portfolio shares attributable to your
nonqualified annuity contract. In that case, income and gains attributable to
such portfolio shares would be included in your gross income for federal income
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tax purposes. Under current rules, however, we believe that Equitable Life, and
not the owner of a nonqualified annuity contract, would be considered the owner
of the portfolio shares.
SPECIAL RULES FOR NQ CONTRACTS ISSUED IN PUERTO RICO
Under current law we treat income from NQ contracts as U.S. source. A Puerto
Rico resident is subject to U.S. taxation on such U.S. source income. Only
Puerto Rico source income of Puerto Rico residents is excludable from U.S.
taxation. Income from NQ contracts is also subject to Puerto Rico tax. The
calculation of the taxable portion of amounts distributed from a contract may
differ in the two jurisdictions. Therefore, you might have to file both U.S. and
Puerto Rico tax returns, showing different amounts of income from the contract
for each tax return. Puerto Rico generally provides a credit against Puerto Rico
tax for U.S. tax paid. Depending on your personal situation and the timing of
the different tax liabilities, you may not be able to take full advantage of
this credit.
INDIVIDUAL RETIREMENT ARRANGEMENTS (IRAS)
GENERAL
"IRA" stands for individual retirement arrangement. There are two basic types of
such arrangements, individual retirement accounts and individual retirement
annuities. In an individual retirement account, a trustee or custodian holds the
assets for the benefit of the IRA owner. The assets can include mutual funds and
certificates of deposit. In an individual retirement annuity, an insurance
company issues an annuity contract that serves as the IRA.
There are two basic types of IRAs, as follows:
o Traditional IRAs, typically funded on a pre-tax basis including SEP-IRAs
and SIMPLE-IRAs, issued and funded in connection with employer-sponsored
retirement plans; and
o Roth IRAs, first available in 1998, funded on an after-tax basis.
Regardless of the type of IRA, your ownership interest in the IRA cannot be
forfeited. You or your beneficiaries who survive you are the only ones who can
receive the IRA's benefits or payments.
You can hold your IRA assets in as many different accounts and annuities as you
would like, as long as you meet the rules for setting up and making
contributions to IRAs. However, if you own multiple IRAs, you may be required to
combine IRA values or contributions for tax purposes. For further information
about individual retirement arrangements, you can read Internal Revenue Service
Publication 590 ("Individual Retirement Arrangements (IRAs)"). This publication
is usually updated annually, and can be obtained from any IRS district office or
the IRS Web site (http:// www.irs.gov).
Equitable Life designs its traditional contracts to qualify as individual
retirement annuities under Section 408(b) of the Internal Revenue Code. You may
purchase the contract as a traditional IRA ("Rollover IRA") or Roth IRA ("Roth
Conversion IRA"). This prospectus contains the information that the IRS requires
you to have before you purchase an IRA. This section of the prospectus covers
some of the special tax rules that apply to IRAs. The next section covers Roth
IRAs. Education IRAs are not discussed in this prospectus because they are not
available in individual retirement annuity form.
The Equitable Accumulator Select IRA contract has been approved by the IRS as to
form for use as a traditional IRA. This IRS approval is a determination only as
to the form of the annuity. It does not represent a determination of the merits
of the annuity as an investment. The IRS approval does not address every feature
possibly available under the Equitable Accumulator Select IRA contract. Although
we do not have IRS approval as to form, we believe that the version of the Roth
IRA currently offered complies with the requirements of the Internal Revenue
Code.
CANCELLATION
You can cancel an Equitable Accumulator Select IRA contract by following the
directions under "Your right to cancel
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within a certain number of days" in "Contract features and benefits" earlier in
the prospectus. You can cancel an Equitable Accumulator Select Roth Conversion
IRA contract issued as a result of a full conversion of an Equitable Accumulator
Select Rollover IRA contract by following the instructions in the request for
full conversion form. The form is available from our processing office or your
registered representative. If you cancel an IRA contract, we may have to
withhold tax, and we must report the transaction to the IRS. A contract
cancellation could have an unfavorable tax impact.
TRADITIONAL INDIVIDUAL RETIREMENT ANNUITIES (TRADITIONAL IRAS)
CONTRIBUTIONS TO TRADITIONAL IRAS. Individuals may make three different types of
contributions to a traditional IRA:
o regular contributions out of earned income or compensation; or
o tax-free "rollover" contributions; or
o direct custodian-to-custodian transfers from other traditional IRAs
("direct transfers").
REGULAR CONTRIBUTION TO TRADITIONAL IRAS
LIMITS ON CONTRIBUTIONS. Generally, $2,000 is the maximum amount that you may
contribute to all IRAs (including Roth IRAs) in any taxable year. When your
earnings are below $2,000, your earned income or compensation for the year is
the most you can contribute. This $2,000 limit does not apply to rollover
contributions or direct custodian-to-custodian transfers into a traditional IRA.
You cannot make regular traditional IRA contributions for the tax year in which
you reach age 70 1/2 or any tax year after that.
SPECIAL RULES FOR SPOUSES. If you are married and file a joint income tax
return, you and your spouse may combine your compensation to determine the
amount of regular contributions you are permitted to make to traditional IRAs
(and Roth IRAs discussed below). Even if one spouse has no compensation under
$2,000, married individuals filing jointly can contribute up to $4,000 for any
taxable year to any combination of traditional IRAs and Roth IRAs. (Any
contributions to Roth IRAs reduce the ability to contribute to traditional IRAs
and vice versa.) The maximum amount may be less if earned income is less and the
other spouse has made IRA contributions. No more than a combined total of $2,000
can be contributed annually to either spouse's traditional and Roth IRAs. Each
spouse owns his or her traditional IRAs and Roth IRAs even if the other spouse
funded the contributions. A working spouse age 70 1/2 or over can contribute up
to the lesser of $2,000 or 100% of "earned income" to a traditional IRA for a
nonworking spouse until the year in which the nonworking spouse reaches age
70 1/2.
DEDUCTIBILITY OF CONTRIBUTIONS. The amount of traditional IRA contributions that
you can deduct for a tax year depends on whether you are covered by an
employer-sponsored-tax-favored retirement plan, as defined under special federal
income tax rules. Your Form W-2 will indicate whether or not you are covered by
such a retirement plan.
IF YOU ARE NOT COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, you can
make fully deductible contributions to your traditional IRAs for each tax year
up to $2,000 or, if less, your earned income.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
adjusted gross income (AGI) is BELOW THE LOWER DOLLAR FIGURE IN A PHASE-OUT
RANGE, you can make fully deductible contributions to your traditional IRAs. For
each tax year, your fully deductible contribution can be up to $2,000 or, if
less, your earned income.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
AGI falls within a PHASE-OUT range, you can make PARTIALLY DEDUCTIBLE
CONTRIBUTIONS to your traditional IRAs.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
AGI falls ABOVE THE HIGHER
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FIGURE IN THE PHASE-OUT RANGE, you may not deduct any of your regular
contributions to your traditional IRAs.
If you are single and covered by a retirement plan during any part of the
taxable year, the deduction for traditional IRA contributions phases out with
the AGI between $32,000 and $42,000 in 2000. This range will increase every year
until 2005 when the range is $50,000-$60,000.
If you are married and file a joint return, and you are covered by a retirement
plan during any part of the taxable year, the deduction for traditional IRA
contributions phases out with AGI between $52,000 and $62,000 in 2000. This
range will increase every year until 2007 when the range is $80,000-$100,000.
Married individuals filing separately and living apart at all times are not
considered married for purposes of this deductible contribution calculation.
Generally, the active participation in an employer-sponsored retirement plan of
an individual is determined independently for each spouse. Where spouses have
"married filing jointly" status, however, the maximum deductible traditional IRA
contribution for an individual who is not an active participant (but whose
spouse is an active participant) is phased out for taxpayers with AGI of between
$150,000 and $160,000.
To determine the deductible amount of the contribution in 2000, you determine
AGI and subtract $32,000 if you are single, or $52,000 if you are married and
file a joint return with your spouse. The resulting amount is your excess AGI.
You then determine the limit on the deduction for traditional IRA contributions
using the following formula:
($10,000-excess AGI) times $2,000 (or earned Equals the adjusted
- -------------------- x income, if less) = deductible
divided by $10,000 contribution
limit
NONDEDUCTIBLE REGULAR CONTRIBUTIONS. If you are not eligible to deduct part or
all of the traditional IRA contribution, you may still make nondeductible
contributions on which earnings will accumulate on a tax-deferred basis. The
combined deductible and nondeductible contributions to your traditional IRA (or
the nonworking spouse's traditional IRA) may not, however, exceed the maximum
$2,000 per person limit. See "Excess contributions" below. You must keep your
own records of deductible and nondeductible contributions in order to prevent
double taxation on the distribution of previously taxed amounts. See
"Withdrawals, payments and transfers of funds out of traditional IRAs" below.
If you are making nondeductible contributions in any taxable year, or you have
made nondeductible contributions to a traditional IRA in prior years and are
receiving distributions from any traditional IRA, you must file the required
information with the IRS. Moreover, if you are making nondeductible traditional
IRA contributions, you must retain all income tax returns and records pertaining
to such contributions until interests in all traditional IRAs are fully
distributed.
WHEN YOU CAN MAKE REGULAR CONTRIBUTIONS. If you file your tax returns on a
calendar year basis like most taxpayers, you have until the April 15 return
filing deadline (without extensions) of the following calendar year to make your
regular traditional IRA contributions for a tax year.
ROLLOVERS AND TRANSFERS
Rollover contributions may be made to a traditional IRA from these sources:
o qualified plans;
o TSAs (including Internal Revenue Code Section 403(b)(7) custodial
accounts); and
o other traditional IRAs.
Any amount contributed to a traditional IRA after you reach age 70 1/2 must be
net of your required minimum distribution for the year in which the rollover or
direct transfer contribution is made.
ROLLOVERS FROM QUALIFIED PLANS OR TSAS
There are two ways to do rollovers:
o Do it yourself
You actually receive a distribution that can be rolled over and you roll it over
to a traditional IRA within 60 days after
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the date you receive the funds. The distribution from your qualified plan or TSA
will be net of 20% mandatory federal income tax withholding. If you want, you
can replace the withheld funds yourself and roll over the full amount.
o Direct rollover
You tell your qualified plan trustee or TSA issuer/custodian/fiduciary to
send the distribution directly to your traditional IRA issuer. Direct
rollovers are not subject to mandatory federal income tax withholding.
All distributions from a TSA or qualified plan are eligible rollover
distributions, unless the distribution is:
o only after-tax contributions you made to the plan; or
o "required minimum distributions" after age 70 1/2 or separation from
service; or
o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancies) of
you and your designated beneficiary; or
o a hardship withdrawal; or
o substantially equal periodic payments made for a specified period of 10
years or more; or
o corrective distributions that fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse;
or
o a qualified domestic relations order distribution to a beneficiary who is
not your current spouse or former spouse.
ROLLOVERS FROM TRADITIONAL IRAS TO TRADITIONAL IRAS
You may roll over amounts from one traditional IRA to one or more of your other
traditional IRAs if you complete the transaction within 60 days after you
receive the funds. You may make such a rollover only once in every 12-month
period for the same funds. Trustee-to-trustee or custodian-to-custodian direct
transfers are not rollover transactions. You can make these more frequently than
once in every 12-month period.
The surviving spouse beneficiary of a deceased individual can roll over or
directly transfer an inherited traditional IRA to one or more other traditional
IRAs. Also, in some cases, traditional IRAs can be transferred on a tax-free
basis between spouses or former spouses as a result of a court ordered divorce
or separation decree.
EXCESS CONTRIBUTIONS
Excess contributions to IRAs are subject to a 6% excise tax for the year in
which made and for each year after until withdrawn. The following are excess
contributions to IRAs:
o regular contributions of more than $2,000; or
o regular contributions of more than earned income for the year, if that
amount is under $2,000; or
o regular contributions to a traditional IRA made after you reach age
70 1/2; or
o rollover contributions of amounts which are not eligible to be rolled
over. For example, after-tax contributions to a qualified plan or minimum
distributions required to be made after age 70 1/2.
You can avoid the excise tax by withdrawing an excess contribution (rollover or
regular) before the due date (including extensions) for filing your federal
income tax return for the year. If it is an excess regular traditional IRA
contribution, you cannot take a tax deduction for the amount withdrawn. You do
not have to include the excess contribution withdrawn as part of your income. It
is also not subject to the 10% additional penalty tax on early distributions,
discussed below under "Early distribution penalty tax." You do have to withdraw
any earnings that are attributed to the excess contribution. The withdrawn
earnings would be included in your gross income and could be subject to the 10%
penalty tax.
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Even after the due date for filing your return, you may withdraw an excess
rollover contribution, without income inclusion or 10% penalty, if:
(1) the rollover was from a qualified retirement plan to a traditional IRA;
(2) the excess contribution was due to incorrect information that the plan
provided; and
(3) you took no tax deduction for the excess contribution.
RECHARACTERIZATIONS
Amounts that have been contributed as traditional IRA funds may subsequently be
treated as Roth IRA funds. Special federal income tax rules allow you to change
your mind again and have amounts that are subsequently treated as Roth IRA
funds, once again treated as traditional IRA funds. You do this by using the
forms we prescribe. This is referred to as having "recharacterized" your
contribution.
WITHDRAWALS, PAYMENTS AND TRANSFERS OF FUNDS OUT OF TRADITIONAL IRAS
NO FEDERAL INCOME TAX LAW RESTRICTIONS ON WITHDRAWALS. You can withdraw any or
all of your funds from a traditional IRA at any time. You do not need to wait
for a special event like retirement.
TAXATION OF PAYMENTS. Earnings in traditional IRAs are not subject to federal
income tax until you or your beneficiary receive them. Taxable payments or
distributions include withdrawals from your contract, surrender of your
contract, and annuity payments from your contract. Death benefits are also
taxable. Except as discussed below, the total amount of any distribution from a
traditional IRA must be included in your gross income as ordinary income.
If you have ever made nondeductible IRA contributions to any traditional IRA (it
does not have to be to this particular traditional IRA contract), those
contributions are recovered tax free when you get distributions from any
traditional IRA. You must keep permanent tax records of all of your
nondeductible contributions to traditional IRAs. At the end of any year in which
you have received a distribution from any traditional IRA, you calculate the
ratio of your total nondeductible traditional IRA contributions (less any
amounts previously withdrawn tax free) to the total account balances of all
traditional IRAs you own at the end of the year plus all traditional IRA
distributions made during the year. Multiply this by all distributions from the
traditional IRA during the year to determine the nontaxable portion of each
distribution.
In addition, a distribution is not taxable if:
o the amount received is a withdrawal of excess contributions, as described
under "Excess contributions" above; or
o the entire amount received is rolled over to another traditional IRA (see
"Rollovers and transfers" above); or
o in certain limited circumstances, where the traditional IRA acts as a
"conduit," you roll over the entire amount into a qualified plan or TSA
that accepts rollover contributions. To get this conduit traditional IRA
treatment:
o the source of funds you used to establish the traditional IRA must
have been a rollover contribution from a qualified plan; and
o the entire amount received from the traditional IRA (including any
earnings on the rollover contribution) must be rolled over into
another qualified plan within 60 days of the date received.
Similar rules apply in the case of a TSA.
However, you may lose conduit treatment if you make an eligible rollover
distribution contribution to a traditional IRA and you commingle this
contribution with other contributions. In that case, you may not be able to roll
over these eligible rollover distribution contributions and earnings to another
qualified plan or TSA at a future date. The Rollover IRA contract can be used as
a conduit IRA if amounts are not commingled.
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Distributions from a traditional IRA are not eligible for favorable ten-year
averaging and long-term capital gain treatment available to certain
distributions from qualified plans.
REQUIRED MINIMUM DISTRIBUTIONS
LIFETIME REQUIRED MINIMUM DISTRIBUTIONS. You must start taking annual
distributions from your traditional IRAs beginning at age 70 1/2.
WHEN YOU HAVE TO TAKE THE FIRST REQUIRED MINIMUM DISTRIBUTION. The first
required minimum distribution is for the calendar year in which you turn age
70 1/2. You have the choice to take this first required minimum distribution
during the calendar year you actually reach age 70 1/2, or to delay taking it
until the first three-month period in the next calendar year (January 1 -
April 1). Distributions must start no later than your "Required Beginning Date,"
which is April 1st of the calendar year after the calendar year in which you
turn age 70 1/2. If you choose to delay taking the first annual minimum
distribution, then you will have to take two minimum distributions in that
year - the delayed one for the first year and the one actually for that year.
Once minimum distributions begin, they must be made at some time each year.
HOW YOU CAN CALCULATE REQUIRED MINIMUM DISTRIBUTIONS. There are two approaches
to taking required minimum distributions - "account-based" or "annuity-based."
Account-based method. If you choose an account-based method, you divide the
value of your traditional IRA as of December 31st of the past calendar year by a
life expectancy factor from IRS tables. This gives you the required minimum
distribution amount for that particular IRA for that year. The required minimum
distribution amount will vary each year as the account value and your life
expectancy factors change.
You have a choice of life expectancy factors, depending on whether you choose a
method based only on your life expectancy, or the joint life expectancies of you
and another individual. You can decide to "recalculate" your life expectancy
every year by using your current life expectancy factor. You can decide instead
to use the "term certain" method, where you reduce your life expectancy by one
every year after the initial year. If your spouse is your designated beneficiary
for the purpose of calculating annual account-based required minimum
distributions, you can also annually recalculate your spouse's life expectancy
if you want. If you choose someone who is not your spouse as your designated
beneficiary for the purpose of calculating annual account-based required minimum
distributions, you have to use the term certain method of calculating that
person's life expectancy. If you pick a nonspouse designated beneficiary, you
may also have to do another special calculation.
You can later apply your traditional IRA funds to a life annuity-based payout.
You can only do this if you already chose to recalculate your life expectancy
annually (and your spouse's life expectancy if you select a spousal joint
annuity). For example, if you anticipate exercising your guaranteed minimum
income benefit or selecting any other form of life annuity payout after you are
age 70 1/2, you must have elected to recalculate life expectancies.
Annuity-based method. If you choose an annuity-based method, you do not have to
do annual calculations. You apply the account value to an annuity payout for
your life or the joint lives of you and a designated beneficiary, or for a
period certain not extending beyond applicable life expectancies.
DO YOU HAVE TO PICK THE SAME METHOD TO CALCULATE YOUR REQUIRED MINIMUM
DISTRIBUTIONS FOR ALL OF YOUR TRADITIONAL IRAS AND OTHER RETIREMENT PLANS? No.
If you want, you can choose a different method and a different beneficiary for
each of your traditional IRAs and other retirement plans. For example, you can
choose an annuity payout from one IRA, a different annuity payout from a
qualified plan, and an account-based annual withdrawal from another IRA.
WILL WE PAY YOU THE ANNUAL AMOUNT EVERY YEAR FROM YOUR TRADITIONAL IRA BASED ON
THE METHOD YOU CHOOSE? No, unless you affirmatively select an annuity payout
option or an account-based withdrawal option such as our minimum distribution
withdrawal option. Because the
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options we offer do not cover every option permitted under federal income tax
rules, you may prefer to do your own required minimum distribution calculations
for one or more of your traditional IRAs.
WHAT IF YOU TAKE MORE THAN YOU NEED TO FOR ANY YEAR? The required minimum
distribution amount for your traditional IRAs is calculated on a year-by-year
basis. There are no carry-back or carry-forward provisions. Also, you cannot
apply required minimum distribution amounts you take from your qualified plans
to the amounts you have to take from your traditional IRAs and vice versa.
However, the IRS will let you calculate the required minimum distribution for
each traditional IRA that you maintain, using the method that you picked for
that particular IRA. You can add these required minimum distribution amount
calculations together. As long as the total amount you take out every year
satisfies your overall traditional IRA required minimum distribution amount, you
may choose to take your annual required minimum distribution from any one or
more traditional IRAs that you own.
WHAT IF YOU TAKE LESS THAN YOU NEED TO FOR ANY YEAR? Your IRA could be
disqualified, and you could have to pay tax on the entire value. Even if your
IRA is not disqualified, you could have to pay a 50% penalty tax on the
shortfall (required amount for traditional IRAs less amount actually taken). It
is your responsibility to meet the required minimum distribution rules. We will
remind you when our records show that your age 70 1/2 is approaching. If you
do not select a method with us, we will assume you are taking your required
minimum distribution from another traditional IRA that you own.
WHAT ARE THE REQUIRED MINIMUM DISTRIBUTION PAYMENTS AFTER YOU DIE? If you die
after either (a) the start of annuity payments, or (b) your Required Beginning
Date, your beneficiary must receive payment of the remaining values in the
contract at least as rapidly as under the distribution method before your death.
In some circumstances, your surviving spouse may elect to become the owner of
the traditional IRA and halt distributions until he or she reaches age
70 1/2.
If you die before your Required Beginning Date and before annuity payments
begin, federal income tax rules require complete distribution of your entire
value in the contract within five years after your death. Payments to a
designated beneficiary over the beneficiary's life or over a period certain that
does not extend beyond the beneficiary's life expectancy are also permitted, if
these payments start within one year of your death. A surviving spouse
beneficiary can also (a) delay starting any payments until you would have
reached age 70 1/2 or (b) roll over your traditional IRA into his or her own
traditional IRA.
SUCCESSOR ANNUITANT AND OWNER
If your spouse is the sole primary beneficiary and elects to become the
successor annuitant and owner, no death benefit is payable until your surviving
spouse's death.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
IRA death benefits are taxed the same as IRA distributions.
BORROWING AND LOANS ARE PROHIBITED TRANSACTIONS
You cannot get loans from a traditional IRA. You cannot use a traditional IRA as
collateral for a loan or other obligation. If you borrow against your IRA or use
it as collateral, its tax-favored status will be lost as of the first day of the
tax year in which this prohibited event occurs. If this happens, you must
include the value of the traditional IRA in your federal gross income. Also, the
early distribution penalty tax of 10% will apply if you have not reached age
59 1/2 before the first day of that tax year.
EARLY DISTRIBUTION PENALTY TAX
A penalty tax of 10% of the taxable portion of a distribution applies to
distributions from a traditional IRA made before you reach age 59 1/2. The
extra penalty tax does not apply to pre-age 59 1/2 distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
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o used to pay certain extraordinary medical expenses (special federal income
tax definition); or
o used to pay medical insurance premiums for unemployed individuals (special
federal income tax definition); or
o used to pay certain first-time home buyer expenses (special federal income
tax definition; $10,000 lifetime total limit for these distributions from
all your traditional and Roth IRAs); or
o used to pay certain higher education expenses (special federal income tax
definition); or
o in the form of substantially equal periodic payments made at least
annually over your life (or your life expectancy), or over the joint lives
of you and your beneficiary (or your joint life expectancy) using an
IRS-approved distribution method.
To meet this last exception, you could elect to apply your contract value to an
Income Manager (life annuity with a period certain) payout annuity contract
(level payments version). You could also elect the substantially equal
withdrawals option. We will calculate the substantially equal annual payments
under a method we select based on guidelines issued by the IRS (currently
contained in IRS Notice 89-25, Question and Answer 12). Although substantially
equal withdrawals and Income Manager payments are not subject to the 10% penalty
tax, they are taxable as discussed in "Withdrawals, payments and transfers of
funds out of traditional IRAs" above. Once substantially equal withdrawals or
Income Manager annuity payments begin, the distributions should not be stopped
or changed until after the later of your reaching age 59 1/2 or five years
after the date of the first distribution, or the penalty tax, including an
interest charge for the prior penalty avoidance, may apply to all prior
distributions under this option. Also, it is possible that the IRS could view
any additional withdrawal or payment you take from your contract as changing
your pattern of substantially equal withdrawals or Income Manager payments for
purposes of determining whether the penalty applies.
ROTH INDIVIDUAL RETIREMENT ANNUITIES (ROTH IRAS)
This section of the prospectus covers some of the special tax rules that apply
to Roth IRAs. If the rules are the same as those that apply to the traditional
IRA, we will refer you to the same topic under "traditional IRAs."
The Equitable Accumulator Select Roth Conversion IRA contract is designed to
qualify as a Roth individual retirement annuity under Sections 408A and 408(b)
of the Internal Revenue Code.
CONTRIBUTIONS TO ROTH IRAS
Individuals may make three different types of contributions to a Roth IRA:
o taxable rollover contributions from traditional IRAs ("conversion"
contributions); or
o tax-free rollover contributions from other Roth IRAs; or
o tax-free direct custodian-to-custodian transfers from other Roth IRAs
("direct transfers").
Since we only permit direct transfer and rollover contributions under the
Equitable Accumulator Select Roth Conversion IRA contract, we do not discuss
regular after-tax contributions here.
If you use the forms we require, we will also accept traditional IRA funds which
are subsequently recharacterized as Roth IRA funds following special federal
income tax rules.
ROLLOVERS AND DIRECT TRANSFERS
WHAT IS THE DIFFERENCE BETWEEN ROLLOVER AND DIRECT TRANSFER TRANSACTIONS? You
may make rollover contributions to a Roth IRA from only two sources:
o another Roth IRA ("tax-free rollover contribution"); or
o another traditional IRA, including a SEP-IRA or SIMPLE-IRA, in a taxable
conversion rollover ("conversion contribution").
You may not make contributions to a Roth IRA from a qualified plan under Section
401(a) of the Internal Revenue Code, or a TSA under Section 403(b) of the
Internal Revenue
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Code. You may make direct transfer contributions to a Roth IRA only from another
Roth IRA.
The difference between a rollover transaction and a direct transfer transaction
is the following: in a rollover transaction you actually take possession of the
funds rolled over, or are considered to have received them under tax law in the
case of a change from one type of plan to another. In a direct transfer
transaction, you never take possession of the funds, but direct the first Roth
IRA custodian, trustee, or issuer to transfer the first Roth IRA funds directly
to Equitable Life, as the Roth IRA issuer. You can make direct transfer
transactions only between identical plan types (for example, Roth IRA to Roth
IRA). You can also make rollover transactions between identical plan types.
However, you can only use rollover transactions between different plan types
(for example, traditional IRA to Roth IRA).
You may make both Roth IRA to Roth IRA rollover transactions and Roth IRA to
Roth IRA direct transfer transactions. This can be accomplished on a completely
tax-free basis. However, you may make Roth IRA to Roth IRA rollover transactions
only once in any 12-month period for the same funds. Trustee-to-trustee or
custodian-to-custodian direct transfers can be made more frequently than once a
year. Also, if you send us the rollover contribution to apply it to a Roth IRA,
you must do so within 60 days after you receive the proceeds from the original
IRA to get rollover treatment.
The surviving spouse beneficiary of a deceased individual can roll over or
directly transfer an inherited Roth IRA to one or more other Roth IRAs. In some
cases, Roth IRAs can be transferred on a tax-free basis between spouses or
former spouses as a result of a court-ordered divorce or separation decree.
CONVERSION CONTRIBUTIONS TO ROTH IRAS
In a conversion rollover transaction, you withdraw (or are considered to have
withdrawn) all or a portion of funds from a traditional IRA you maintain and
convert it to a Roth IRA within 60 days after you receive (or are considered to
have received) the traditional IRA proceeds. Unlike a rollover from a
traditional IRA to another traditional IRA, the conversion rollover transaction
is not tax free. Instead, the distribution from the traditional IRA is generally
fully taxable. For this reason, we are required to withhold 10% federal income
tax from the amount converted unless you elect out of such withholding. If you
have ever made nondeductible regular contributions to any traditional IRA -
whether or not it is the traditional IRA you are converting - a pro rata portion
of the distribution is tax free.
There is, however, no early distribution penalty tax on the traditional IRA
withdrawal that you are converting to a Roth IRA, even if you are under age
59 1/2.
You cannot make conversion contributions to a Roth IRA for any taxable year in
which your adjusted gross income exceeds $100,000. For this purpose, your
adjusted gross income is calculated without the gross income stemming from the
traditional IRA conversion. You also cannot make conversion contributions to a
Roth IRA for any taxable year in which your federal income tax filing status is
"married filing separately."
Finally, you cannot make conversion contributions to a Roth IRA to the extent
that the funds in your traditional IRA are subject to the annual required
minimum distribution rule applicable to traditional IRAs beginning at age
70 1/2.
WITHDRAWALS, PAYMENTS AND TRANSFERS OF FUNDS OUT OF ROTH IRAS
NO FEDERAL INCOME TAX LAW RESTRICTIONS ON WITHDRAWALS. You can withdraw any or
all of your funds from a Roth IRA at any time; you do not need to wait for a
special event like retirement.
DISTRIBUTIONS FROM ROTH IRAS
Distributions include withdrawals from your contract, surrender of your
contract, and annuity payments from your contract. Death benefits are also
distributions.
The following distributions from Roth IRAs are free of income tax:
o Rollover from a Roth IRA to another Roth IRA;
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o Direct transfer from a Roth IRA to another Roth IRA;
o Qualified distribution from a Roth IRA; and
o Return of excess contributions or amounts recharacterized to a traditional
IRA.
QUALIFIED DISTRIBUTIONS FROM ROTH IRAS. Qualified distributions from Roth IRAs
made because of one of the following four qualifying events or reasons are not
includable in income:
o you reach age 59 1/2; or
o you die; or
o you become disabled (special federal income tax definition); or
o your distribution is a "qualified first-time homebuyer distribution"
(special federal income tax definition; $10,000 lifetime total limit for
these distributions from all of your traditional and Roth IRAs).
You also have to meet a five-year aging period. A qualified distribution is any
distribution made after the five-taxable-year period beginning with the first
taxable year for which you made any contribution to any Roth IRA (whether or not
the one from which the distribution is being made). It is not possible to have a
tax-free qualified distribution before the year 2003 because of the five-year
aging requirement.
NONQUALIFIED DISTRIBUTIONS FROM ROTH IRAS. Nonqualified distributions from Roth
IRAs are distributions that do not meet the qualifying event and five-year aging
period tests described above. Such distributions are potentially taxable as
ordinary income. Nonqualified distributions receive return-of-investment-first
treatment. Only the difference between the amount of the distribution and the
amount of contributions to all of your Roth IRAs is taxable. You have to reduce
the amount of contributions to all of your Roth IRAs to reflect any previous
tax-free recoveries.
You must keep your own records of regular and conversion contributions to all
Roth IRAs to assure appropriate taxation. You may have to file information on
your contributions to and distributions from any Roth IRA on your tax return.
You may have to retain all income tax returns and records pertaining to such
contributions and distributions until your interests in all Roth IRAs are
distributed.
Like traditional IRAs, taxable distributions from a Roth IRA are not entitled to
the special favorable five-year averaging method (or, in certain cases,
favorable ten-year averaging and long-term capital gain treatment) available in
certain cases to distributions from qualified plans.
REQUIRED MINIMUM DISTRIBUTIONS AT DEATH
Same as traditional IRA under "What are the required minimum distribution
payments after you die?" Lifetime required minimum distributions do not apply.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
Distributions to a beneficiary generally receive the same tax treatment as if
the distribution had been made to you.
BORROWING AND LOANS ARE PROHIBITED TRANSACTIONS
Same as traditional IRA.
EXCESS CONTRIBUTIONS
Generally the same as traditional IRA.
Excess rollover contributions to Roth IRAs are contributions not eligible to be
rolled over (for example, conversion contributions from a traditional IRA if
your adjusted gross income is in excess of $100,000 in the conversion year).
You can withdraw or recharacterize any contribution to a Roth IRA before the due
date (including extensions) for filing your federal income tax return for the
tax year. If you do this, you must also withdraw or recharacterize any earnings
attributable to the contribution.
EARLY DISTRIBUTION PENALTY TAX
Same as traditional IRA.
For Roth IRAs, special penalty rules may apply to amounts withdrawn attributable
to 1998 conversion rollovers.
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SPECIAL RULES FOR NONQUALIFIED CONTRACTS IN QUALIFIED PLANS
Under QP contracts your plan administrator or trustee notifies you as to tax
consequences. See Appendix II.
TAX-SHELTERED ANNUITY CONTRACTS (TSAS)
GENERAL
This section of the prospectus covers some of the special tax rules that apply
to TSA contracts under Section 403(b) of the Internal Revenue Code (TSAs). If
the rules are the same as those that apply to another kind of contract, for
example, traditional IRAs, we will refer you to the same topic under
"traditional IRAs."
CONTRIBUTIONS TO TSAS
There are two ways you can make contributions to this Equitable Accumulator
Select Rollover TSA contract:
o a rollover from another TSA contract or arrangement that meets the
requirements of Section 403(b) of the Internal Revenue Code, or
o a full or partial direct transfer of assets ("direct transfer") from
another contract or arrangement that meets the requirements of Section
403(b) of the Internal Revenue Code by means of IRS Revenue Ruling 90-24.
With appropriate written documentation satisfactory to us, we will accept
rollover contributions from "conduit IRAs" for TSA funds.
If you make a direct transfer, you must fill out our transfer form.
EMPLOYER-REMITTED CONTRIBUTIONS. The Equitable Accumulator Select Rollover TSA
contract does not accept employer-remitted contributions. However, we provide
the following discussion as part of our description of restrictions on the
distribution of funds directly transferred, which include employer-remitted
contributions to other TSAs.
Employer-remitted contributions to TSAs made through the employer's payroll are
subject to annual limits. (Tax-free transfer or tax-deferred rollover
contributions from another 403(b) arrangement are not subject to these annual
contribution limits.) Commonly, some or all of the contributions made to a TSA
are made under a salary reduction agreement between the employee and the
employer. These contributions are called "salary reduction" or "elective
deferral" contributions. However, a TSA can also be wholly or partially funded
through nonelective employer contributions or after-tax employee contributions.
Amounts attributable to salary reduction contributions to TSAs are generally
subject to withdrawal restrictions. Also, all amounts attributable to
investments in a 403(b)(7) custodial account are subject to withdrawal
restrictions discussed below.
ROLLOVER OR DIRECT TRANSFER CONTRIBUTIONS. You may make rollover contributions
to your Equitable Accumulator Select Rollover TSA contract from TSAs under
Section 403(b) of the Internal Revenue Code. Generally, you may make a rollover
contribution to a TSA when you have a distributable event from an existing TSA
as a result of your:
o termination of employment with the employer who provided the TSA funds; or
o reaching age 59 1/2 even if you are still employed; or
o disability (special federal income tax definition).
A transfer occurs when changing the funding vehicle, even if there is no
distributable event. Under a direct transfer, you do not receive a distribution.
We accept direct transfers of TSA funds under Revenue Ruling 90-24 only if:
o you give us acceptable written documentation as to the source of the
funds, and
o the Equitable Accumulator Select contract receiving the funds has
provisions at least as restrictive as the source contract.
Before you transfer funds to an Equitable Accumulator Select Rollover TSA
contract, you may have to obtain your employer's authorization or demonstrate
that you do not
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need employer authorization. For example, the transferring TSA may be subject to
Title I of ERISA, if the employer makes matching contributions to salary
reduction contributions made by employees. In that case, the employer must
continue to approve distributions from the plan or contract.
Your contribution to the Equitable Accumulator Select TSA must be net of the
required minimum distribution for the tax year in which we issue the contract
if:
o you are or will be at least age 70 1/2 in the current calendar year, and
o you have separated from service with the employer who provided the funds
to purchase the TSA you are transferring or rolling over to the Equitable
Accumulator Select Rollover TSA.
This rule applies regardless of whether the source of funds is a:
o rollover by check of the proceeds from another TSA; or
o direct rollover from another TSA; or
o direct transfer under Revenue Ruling 90-24 from another TSA.
Further, you must use the same elections regarding recalculation of your life
expectancy (and if applicable, your spouse's life expectancy), if you have
already begun to receive required minimum distributions from or with respect to
the TSA from which you are making your contribution to the Equitable Accumulator
Select Rollover TSA. You must also elect or have elected a minimum distribution
calculation method requiring recalculation of your life expectancy (and if
applicable, your spouse's life expectancy) if you elect an annuity payout for
the funds in this contract subsequent to this year.
DISTRIBUTIONS FROM TSAS
GENERAL. Depending on the terms of the employer plan and your employment status,
you may have to get your employer's consent to take a loan or withdrawal. Your
employer will tell us this when you establish the TSA through a direct transfer.
WITHDRAWAL RESTRICTIONS. If this is a Revenue Ruling 90-24 direct transfer, we
will treat all amounts transferred to this contract and any future earnings on
the amount transferred as not eligible for withdrawal until one of the following
events happens:
o you are separated from service with the employer who provided the funds to
purchase the TSA you are transferring to the Equitable Accumulator Select
Rollover TSA; or
o you reach age 59 1/2; or
o you die; or
o you become disabled (special federal income tax definition); or
o you take a hardship withdrawal (special federal income tax definition).
If any portion of the funds directly transferred to your TSA contract is
attributable to amounts that you invested in a 403(b)(7) custodial account, such
amounts, including earnings, are subject to withdrawal restrictions. With
respect to the portion of the funds that were never invested in a 403(b)(7)
custodial account, these restrictions apply to the salary reduction (elective
deferral) contributions to a TSA annuity contract you made and any earnings on
them. These restrictions do not apply to the amount directly transferred to your
TSA contract that represents your December 31, 1988 account balance attributable
to salary reduction contributions to a TSA annuity contract and earnings. To
take advantage of this grandfathering you must properly notify us in writing at
our processing office of your December 31, 1988 account balance if you have
qualifying amounts transferred to your TSA contract.
THIS PARAGRAPH APPLIES ONLY TO PARTICIPANTS IN A TEXAS OPTIONAL RETIREMENT
PROGRAM. Texas Law permits withdrawals only after one of the following
distributable events occur:
(1) the requirements for minimum distribution (discussed under "Required
minimum distributions" below) are met; or
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(2) death; or
(3) retirement; or
(4) termination of employment in all Texas public institutions of higher
education.
For you to make a withdrawal, we must receive a properly completed written
acknowledgement from the employer. If a distributable event occurs before you
are vested, we will refund to the employer any amounts provided by an employer's
first-year matching contribution. We reserve the right to change these
provisions without your consent, but only to the extent necessary to maintain
compliance with applicable law. Loans are not permitted under Texas Optional
Retirement Programs.
TAX TREATMENT OF DISTRIBUTIONS. Amounts held under TSAs are generally not
subject to federal income tax until benefits are distributed. Distributions
include withdrawals from your TSA contract and annuity payments from your TSA
contract. Death benefits paid to a beneficiary are also taxable distributions.
Unless an exception applies, amounts distributed from TSAs are includable in
gross income as ordinary income. Distributions from TSAs may be subject to 20%
federal income tax withholding. See "Federal and state income tax withholding
and information reporting" below. In addition, TSA distributions may be subject
to additional tax penalties.
If you have made after-tax contributions, you will have a tax basis in your TSA
contract, which will be recovered tax-free. Since we do not track your
investment in the contract, if any, it is your responsibility to determine how
much of the distribution is taxable.
DISTRIBUTIONS BEFORE ANNUITY PAYMENTS BEGIN. On a total surrender, the amount
received in excess of the investment in the contract is taxable. We will report
the total amount of the distribution. The amount of any partial distribution
from a TSA prior to the annuity starting date is generally taxable, except to
the extent that the distribution is treated as a withdrawal of after-tax
contributions. Distributions are normally treated as pro rata withdrawals of
after-tax contributions and earnings on those contributions.
ANNUITY PAYMENTS. If you elect an annuity payout option, you will recover any
investment in the contract as each payment is received by dividing the
investment in the contract by an expected return determined under an IRS table
prescribed for qualified annuities. The amount of each payment not excluded from
income under this exclusion ratio is fully taxable. The full amount of the
payments received after your investment in the contract is recovered is fully
taxable. If you (and your beneficiary under a joint and survivor annuity) die
before recovering the full investment in the contract, a deduction is allowed on
your (or your beneficiary's) final tax return.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
Death benefit distributions from a TSA generally receive the same tax treatment
as distributions during your lifetime. In some instances, distributions from a
TSA made to your surviving spouse may be rolled over to a traditional IRA.
LOANS FROM TSAS
You may take loans from a TSA unless restricted by the employer (for example,
under an employer plan subject to ERISA). If you cannot take a loan, or cannot
take a loan without approval from the employer who provided the funds, we will
have this information in our records based on what you and the employer who
provided the TSA funds told us when you purchased your contract.
Loans are generally not treated as a taxable distribution. If the amount of the
loan exceeds permissible limits under federal income tax rules when made, the
amount of the excess is treated (solely for tax purposes) as a taxable
distribution. Additionally, if the loan is not repaid at least quarterly,
amortizing (paying down) interest and principal, the amount not repaid when due
will be treated as a taxable distribution. Under Proposed Treasury Regulations
the entire unpaid balance of the loan is includable in income in the year of the
default.
TSA loans are subject to federal income tax limits and may also be subject to
the limits of the plan from which the funds came. Federal income tax rule
requirements apply even if the
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plan is not subject to ERISA. For example, loans offered by TSAs are subject to
the following conditions:
o The amount of a loan to a participant, when combined with all other loans
to the participant from all qualified plans of the employer, cannot exceed
the lesser of:
(1) the greater of $10,000 or 50% of the participant's nonforfeitable accrued
benefits; and
(2) $50,000 reduced by the excess (if any) of the highest outstanding loan
balance over the previous twelve months over the outstanding loan balance
of plan loans on the date the loan was made.
o In general, the term of the loan cannot exceed five years unless the loan
is used to acquire the participant's primary residence. Equitable
Accumulator Select Rollover TSA contracts have a term limit of 10 years
for loans used to acquire the participant's primary residence.
o All principal and interest must be amortized in substantially level
payments over the term of the loan, with payments being made at least
quarterly.
The amount borrowed and not repaid may be treated as a distribution if:
o the loan does not qualify under the conditions above;
o the participant fails to repay the interest or principal when due; or
o in some instances, the participant separates from service with the
employer who provided the funds or the plan is terminated.
In this case, the participant may have to include the unpaid amount due as
ordinary income. In addition, the 10% early distribution penalty tax may apply.
The amount of the unpaid loan balance is reported to the IRS on Form 1099-R as a
distribution.
TAX-DEFERRED ROLLOVERS AND DIRECT TRANSFERS
You may roll over any "eligible rollover distribution" from a TSA into another
eligible retirement plan, either directly or within 60 days of your receiving
the distribution. To the extent rolled over, a distribution remains
tax-deferred.
You may roll over a distribution from a TSA to another TSA or to a traditional
IRA. A spousal beneficiary may roll over death benefits only to a traditional
IRA.
The taxable portion of most distributions will be eligible for rollover, except
as specifically excluded under federal income tax rules. Distributions that you
cannot roll over generally include periodic payments for life or for a period of
10 years or more, hardship withdrawals, and required minimum distributions under
federal income tax rules.
Direct transfers of TSA funds from one TSA to another under Revenue Ruling 90-24
are not distributions.
REQUIRED MINIMUM DISTRIBUTIONS
Generally the same as traditional IRA with these differences:
WHEN YOU HAVE TO TAKE THE FIRST REQUIRED MINIMUM DISTRIBUTION. The minimum
distribution rules force TSA participants to start calculating and taking annual
distributions from their TSAs by a required date. Generally, you must take the
first required minimum distribution for the calendar year in which you turn age
70 1/2. You may be able to delay the start of required minimum distributions
for all or part of your account balance until after age 70 1/2, as follows:
o For TSA participants who have not retired from service with the employer
who provided the funds for the TSA by the calendar year the participant
turns age 70 1/2, the required beginning date for minimum distributions is
extended to April 1 following the calendar year of retirement.
o TSA plan participants may also delay the start of required minimum
distributions to age 75 of the portion of their account value attributable
to their December 31, 1986 TSA account balance, even if retired at age
70 1/2. We will know whether or not you qualify for this exception
because it will only apply to people who establish their Equitable
Accumulator Select Rollover TSA by direct Revenue Ruling 90-24 transfers.
If you do not give us the amount of your
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December 31, 1986 account balance that is being transferred to the Equitable
Accumulator Select Rollover TSA on the form used to establish the TSA, you do
not qualify.
SPOUSAL CONSENT RULES
This will only apply to you if you establish your Equitable Accumulator Select
Rollover TSA by direct Revenue Ruling 90-24 transfer. Your employer will tell us
on the form used to establish the TSA whether or not you need to get spousal
consent for loans, withdrawals, or other distributions. If you do, you will need
such consent if you are married when you request a withdrawal under the TSA
contract. In addition, unless you elect otherwise with the written consent of
your spouse, the retirement benefits payable under the plan must be paid in the
form of a qualified joint and survivor annuity. A qualified joint and survivor
annuity is payable for the life of the annuitant with a survivor annuity for the
life of the spouse in an amount not less than one-half of the amount payable to
the annuitant during his or her lifetime. In addition, if you are married, the
beneficiary must be your spouse, unless your spouse consents in writing to the
designation of another beneficiary.
If you are married and you die before annuity payments have begun, payments will
be made to your surviving spouse in the form of a life annuity unless at the
time of your death a contrary election was in effect. However, your surviving
spouse may elect, before payments begin, to receive payments in any form
permitted under the terms of the TSA contract and the plan of the employer who
provided the funds for the TSA.
EARLY DISTRIBUTION PENALTY TAX
A penalty tax of 10% of the taxable portion of a distribution applies to
distributions from a TSA before you reach age 59 1/2. This is in addition to any
income tax. There are exceptions to the extra penalty tax. No penalty tax
applies to pre-age 59 1/2 distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o to pay for certain extraordinary medical expenses (special federal income
tax definition); or
o if you are separated from service, any form of payout after you are age
55; or
o only if you are separated from service, a payout in the form of
substantially equal periodic payments made at least annually over your
life (or your life expectancy), or over the joint lives of you and your
beneficiary (or your joint life expectancy) using an IRS-approved
distribution method.
FEDERAL AND STATE INCOME TAX WITHHOLDING AND INFORMATION REPORTING
We must withhold federal income tax from distributions from annuity contracts.
You may be able to elect out of this income tax withholding in some cases.
Generally, we do not have to withhold if your distributions are not taxable. The
rate of withholding will depend on the type of distribution and, in certain
cases, the amount of your distribution. Any income tax withheld is a credit
against your income tax liability. If you do not have sufficient income tax
withheld or do not make sufficient estimated income tax payments, you may incur
penalties under the estimated income tax rules.
You must file your request not to withhold in writing before the payment or
distribution is made. Our processing office will provide forms for this purpose.
You cannot elect out of withholding unless you provide us with your correct
Taxpayer Identification Number and a United States residence address. You cannot
elect out of withholding if we are sending the payment out of the United States.
You should note the following special situations:
o We might have to withhold and/or report on amounts we pay under a free
look or cancellation.
o We are generally required to withhold on conversion rollovers of
traditional IRAs to Roth IRAs, as it is considered a withdrawal from the
traditional IRA and is taxable.
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o We are required to withhold on the gross amount of a distribution from a
Roth IRA unless you elect out of withholding. This may result in tax being
withheld even though the Roth IRA distribution is not taxable in whole or
in part.
Special withholding rules apply to foreign recipients and United States citizens
residing outside the United States. We do not discuss these rules here. Certain
states have indicated that state income tax withholding will also apply to
payments from the contracts made to residents. In some states, you may elect out
of state withholding, even if federal withholding applies. Generally, an
election out of federal withholding will also be considered an election out of
state withholding. If you need more information concerning a particular state or
any required forms, call our processing office at the toll-free number.
FEDERAL INCOME TAX WITHHOLDING ON PERIODIC ANNUITY PAYMENTS
We withhold differently on "periodic" and "non-periodic" payments. For a
periodic annuity payment, for example, unless you specify a different number of
withholding exemptions, we withhold assuming that you are married and claiming
three withholding exemptions. If you do not give us your correct Taxpayer
Identification Number, we withhold as if you are single with no exemptions.
Based on the assumption that you are married and claiming three withholding
exemptions, if you receive less than $14,880 in periodic annuity payments in
2000, your payments will generally be exempt from federal income tax
withholding. You could specify a different choice of withholding exemption or
request that tax be withheld. Your withholding election remains effective unless
and until you revoke it. You may revoke or change your withholding election at
any time.
FEDERAL INCOME TAX WITHHOLDING ON NON-PERIODIC ANNUITY PAYMENTS (WITHDRAWALS)
For a non-periodic distribution (total surrender or partial withdrawal), we
generally withhold at a flat 10% rate. We apply that rate to the taxable amount
in the case of nonqualified contracts, and to the payment amount in the case of
IRAs and Roth IRAs.
You cannot elect out of withholding if the payment is an eligible rollover
distribution from a qualified plan or TSA. If a non-periodic distribution from a
qualified plan or TSA is not an eligible rollover distribution then the 10%
withholding rate applies.
MANDATORY WITHHOLDING FROM TSA AND QUALIFIED PLAN DISTRIBUTIONS
Unless you have the distribution go directly to the new plan, eligible rollover
distributions from qualified plans and TSAs are subject to mandatory 20%
withholding. An eligible rollover distribution from a TSA can be rolled over to
another TSA or a traditional IRA. An eligible rollover distribution from a
qualified plan can be rolled over to another qualified plan or traditional IRA.
All distributions from a TSA or qualified plan are eligible rollover
distributions unless they are on the following list of exceptions:
o any after-tax contributions you made to the plan; or
o any distributions which are required minimum distributions after age
70 1/2 or separation from service; or
o hardship withdrawals; or
o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and your designated beneficiary; or
o substantially equal periodic payments made for a specified period of 10
years or more; or
o corrective distributions that fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse;
or
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o a qualified domestic relations order distribution to a beneficiary who is
not your current spouse or former spouse.
A death benefit payment to your surviving spouse, or a qualified domestic
relations order distribution to your current or former spouse, may be a
distribution subject to mandatory 20% withholding.
IMPACT OF TAXES TO EQUITABLE LIFE
The contracts provide that we may charge Separate Account No. 49 for taxes. We
do not now, but may in the future set up reserves for such taxes.
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ABOUT OUR SEPARATE ACCOUNT NO. 49
Each variable investment option is a subaccount of our Separate Account No. 49.
We established Separate Account No. 49 in 1996 under special provisions of the
New York Insurance Law. These provisions prevent creditors from any other
business we conduct from reaching the assets we hold in our variable investment
options for owners of our variable annuity contracts. We are the legal owner of
all of the assets in Separate Account No. 49 and may withdraw any amounts that
exceed our reserves and other liabilities with respect to variable investment
options under our contracts. The results of Separate Account No. 49's operations
are accounted for without regard to Equitable Life's other operations.
Separate Account No. 49 is registered under the Investment Company Act of 1940
and is classified by that act as a "unit investment trust." The SEC, however,
does not manage or supervise Equitable Life or Separate Account No. 49.
Each subaccount (variable investment option) within Separate Account No. 49
invests solely in class IB shares issued by the corresponding portfolio of EQ
Advisors Trust.
We reserve the right subject to compliance with laws that apply:
(1) to add variable investment options to, or to remove variable investment
options from, Separate Account No. 49, or to add other separate accounts;
(2) to combine any two or more variable investment options;
(3) to transfer the assets we determine to be the shares of the class of
contracts to which the contracts belong from any variable investment
option to another variable investment option;
(4) to operate Separate Account No. 49 or any variable investment option as a
management investment company under the Investment Company Act of 1940 (in
which case, charges and expenses that otherwise would be assessed against
an underlying mutual fund would be assessed against Separate Account No.
49 or a variable investment option directly);
(5) to deregister Separate Account No. 49 under the Investment Company Act of
1940;
(6) to restrict or eliminate any voting rights as to Separate Account No. 49;
and
(7) to cause one or more variable investment options to invest some or all of
their assets in one or more other trusts or investment companies.
ABOUT EQ ADVISORS TRUST
EQ Advisors Trust is registered under the Investment Company Act of 1940. It is
classified as an "open-end management investment company," more commonly called
a mutual fund. EQ Advisors Trust issues different shares relating to each
portfolio.
Equitable Life serves as the investment manager of EQ Advisors Trust. As such,
Equitable Life oversees the activities of the investment advisers with respect
to EQ Advisors Trust and is responsible for retaining or discontinuing the
services of those advisers. (Prior to September 1999 EQ Financial Consultants,
Inc., the predecessor to AXA Advisors, LLC and an affiliate of Equitable Life,
served as investment manager to EQ Advisors Trust.)
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999 the Alliance portfolios (other than EQ/Alliance Premier Growth)
were part of The Hudson River Trust. On October 18, 1999, these portfolios
became corresponding portfolios of EQ Advisors Trust.
EQ Advisors Trust does not impose sales charges or "loads" for buying and
selling its shares. All dividends and other distributions on Trust shares are
reinvested in full. The Board of Trustees of EQ Advisors Trust may establish
additional portfolios or eliminate existing portfolios at any time. More
detailed information about EQ Advisors Trust, the portfolio investment
objectives, policies, restrictions, risks, expenses, Rule 12b-1 Plan relating to
its Class IB shares, and other aspects of its operations, appears in the
prospectus for EQ Advisors Trust, attached at the end of this prospectus, or in
its SAI which is available upon request.
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ABOUT OUR FIXED MATURITY OPTIONS
RATES TO MATURITY AND PRICE PER $100 OF MATURITY VALUE
We can determine the amount required to be allocated to one or more fixed
maturity options in order to produce specified maturity values. For example, we
can tell you how much you need to allocate per $100 of maturity value.
The rates to maturity for new allocations as of March 15, 2000 and the related
price per $100 of maturity value were as follows:
<TABLE>
<CAPTION>
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FIXED MATURITY
OPTIONS
WITH FEBRUARY 15TH RATE TO MATURITY PRICE
MATURITY DATE OF AS OF PER $100 OF
MATURITY YEAR MARCH 15, 2000 MATURITY VALUE
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<S> <C> <C>
2001 4.20% $ 96.27
2002 4.91% $ 91.19
2003 5.43% $ 85.68
2004 5.51% $ 81.02
2005 5.62% $ 76.39
2006 5.70% $ 72.00
2007 5.77% $ 67.81
2008 5.83% $ 63.82
2009 5.92% $ 59.84
2010 5.98% $ 56.18
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HOW WE DETERMINE THE MARKET VALUE ADJUSTMENT
We use the following procedure to calculate the market value adjustment (up or
down) we make if you withdraw all of your value from a fixed maturity option
before its maturity date.
(1) We determine the market adjusted amount on the date of the withdrawal as
follows:
(a) We determine the fixed maturity amount that would be payable on the
maturity date, using the rate to maturity for the fixed maturity
option.
(b) We determine the period remaining in your fixed maturity option
(based on the withdrawal date) and convert it to fractional years
based on a 365-day year. For example, three years and 12 days
becomes 3.0329.
(c) We determine the current rate to maturity that applies on the
withdrawal date to new allocations to the same fixed maturity
option.
(d) We determine the present value of the fixed maturity amount payable
at the maturity date, using the period determined in (b) and the
rate determined in (c).
(2) We determine the fixed maturity amount as of the current date.
(3) We subtract (2) from the result in (1)(d). The result is the market value
adjustment applicable to such fixed maturity option, which may be positive
or negative.
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Your market adjusted amount is the present value of the maturity value
discounted at the rate to maturity in effect for new contributions to that same
fixed maturity option on the date of the calculation.
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If you withdraw only a portion of the amount in a fixed maturity option, the
market value adjustment will be a percentage of the market value adjustment that
would have applied if you had withdrawn the entire value in that fixed maturity
option. This percentage is equal to the percentage of the value in the fixed
maturity option that you are withdrawing. See Appendix III for an example.
For purposes of calculating the rate to maturity for new allocations to a fixed
maturity option (see (1)(c) above), we use the rate we have in effect for new
allocations to that fixed maturity option. We use this rate even if new
allocations to that option would not be accepted at that time. This rate will
not be less than 3%. If we do not have a rate to maturity in effect for a fixed
maturity option to which the "current rate to maturity" in (1)(c) above would
apply, we will use the rate at the next closest maturity date. If we are no
longer offering new fixed maturity options, the "current rate to maturity" will
be determined in accordance with our procedures then in effect. We reserve the
right to
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add up to 0.25% to the current rate in (1)(c) above for purposes of calculating
the market value adjustment only.
INVESTMENTS UNDER THE FIXED MATURITY OPTIONS
Amounts allocated to the fixed maturity options are held in a "nonunitized"
separate account we have established under the New York Insurance Law. This
separate account provides an additional measure of assurance that we will make
full payment of amounts due under the fixed maturity options. Under New York
Insurance Law, the portion of the separate account's assets equal to the
reserves and other contract liabilities relating to the contracts are not
chargeable with liabilities from any other business we may conduct. We own the
assets of the separate account, as well as any favorable investment performance
on those assets. You do not participate in the performance of the assets held in
this separate account. We may, subject to state law that applies, transfer all
assets allocated to the separate account to our general account. We guarantee
all benefits relating to your value in the fixed maturity options, regardless of
whether assets supporting fixed maturity options are held in a separate account
or our general account.
We have no specific formula for establishing the rates to maturity for the fixed
maturity options. We expect the rates to be influenced by, but not necessarily
correspond to, among other things, the yields that we can expect to realize on
the separate account's investments from time to time. Our current plans are to
invest in fixed-income obligations, including corporate bonds, mortgage-backed
and asset-backed securities, and government and agency issues having durations
in the aggregate consistent with those of the fixed maturity options.
Although the above generally describes our plans for investing the assets
supporting our obligations under the fixed maturity options under the contracts,
we are not obligated to invest those assets according to any particular plan
except as we may be required to by state insurance laws. We will not determine
the rates to maturity we establish by the performance of the nonunitized
separate account.
ABOUT THE GENERAL ACCOUNT
Our general account supports all of our policy and contract guarantees,
including those that apply to the fixed maturity options, as well as our general
obligations.
The general account is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations of
all jurisdictions where we are authorized to do business. Because of exemptions
and exclusionary provisions that apply, interests in the general account have
not been registered under the Securities Act of 1933, nor is the general account
an investment company under the Investment Company Act of 1940. However, the
market value adjustment interests under the contracts are registered under the
Securities Act of 1933.
We have been advised that the staff of the SEC has not reviewed the portions of
this prospectus that relate to the general account (other than market value
adjustment interests). The disclosure with regard to the general account,
however, may be subject to certain provisions of the federal securities laws
relating to the accuracy and completeness of statements made in prospectuses.
ABOUT OTHER METHODS OF PAYMENT
WIRE TRANSMITTALS
We accept initial contributions sent by wire to our processing office by
agreement with certain broker-dealers. The transmittals must be accompanied by
information we require to allocate your contribution. Wire orders not
accompanied by complete information may be retained as described under "How you
can make your contributions" in "Contract features and benefits."
Even if we accept the wire order and essential information, a contract generally
will not be issued until we receive and accept a properly completed application.
In certain cases we may issue a contract based on information forwarded
electronically. In these cases, you must sign our Acknowledgement of Receipt
form.
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Where we require a signed application, no financial transactions will be
permitted until we receive the signed application and have issued the contract.
Where we require an Acknowledgement of Receipt form, financial transactions are
only permitted if you request them in writing, sign the request and have it
signature guaranteed, until we receive the signed Acknowledgement of Receipt
form.
After your contract has been issued, additional contributions may be
transmitted by wire.
AUTOMATIC INVESTMENT PROGRAM - FOR NQ CONTRACTS ONLY
You may use our automatic investment program, or "AIP," to have a specified
amount automatically deducted from a checking account, money market account, or
credit union checking account and contributed as an additional contribution into
an NQ contract on a monthly or quarterly basis. AIP is not available for
Rollover IRA, Roth Conversion IRA, QP, or Rollover TSA contracts.
The minimum amounts we will deduct are $100 monthly and $300 quarterly. AIP
additional contributions may be allocated to any of the variable investment
options and available fixed maturity options. You choose the day of the month
you wish to have your account debited. However, you may not choose a date later
than the 28th day of the month.
You may cancel AIP at any time by notifying our processing office. We are not
responsible for any debits made to your account before the time written notice
of cancellation is received at our processing office.
DATES AND PRICES AT WHICH CONTRACT EVENTS OCCUR
We describe below the general rules for when, and at what prices, events under
your contract will occur. Other portions of this prospectus describe
circumstances that may cause exceptions. We generally do not repeat those
exceptions below.
BUSINESS DAY
Our business day is any day the New York Stock Exchange is open for trading. Our
business day generally ends at 4:00 p.m., Eastern Time for purposes of
determining the date when contributions are applied and any other transaction
requests are processed. We may, however, close due to emergency conditions.
Contributions will be applied and any other transaction requests will be
processed when they are received along with all the required information.
o If your contribution, transfer, or any other transaction request,
containing all the required information, reaches us on a non-business day
or after 4:00 p.m. on a business day, we will use the next business day.
o A loan request under your Rollover TSA contract will be processed on the
first business day of the month following the date on which the properly
completed loan request form is received.
o If your transaction is set to occur on the same day of the month as the
contract date and that date is the 29th, 30th or 31st of the month, then
the transaction will occur on the 1st day of the next month.
o When a charge is to be deducted on a contract date anniversary that is a
non-business day, we will deduct the charge on the next business day.
CONTRIBUTIONS AND TRANSFERS
o Contributions allocated to the variable investment options are invested at
the value next determined after the close of the business day.
o Contributions allocated to a fixed maturity option will receive the rate
to maturity in effect for that fixed maturity option on that business day.
o Transfers to or from variable investment options will be made at the value
next determined after the close of the business day.
o Transfers to a fixed maturity option will be based on the rate to maturity
in effect for that fixed maturity option on the business day of the
transfer.
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ABOUT YOUR VOTING RIGHTS
As the owner of the shares of EQ Advisors Trust we have the right to vote on
certain matters involving the portfolios, such as:
o the election of trustees; or
o the formal approval of independent auditors selected for EQ Advisors
Trust; or
o any other matters described in the prospectus for EQ Advisors Trust or
requiring a shareholders' vote under the Investment Company Act of 1940.
We will give contract owners the opportunity to instruct us how to vote the
number of shares attributable to their contracts if a shareholder vote is taken.
If we do not receive instructions in time from all contract owners, we will vote
the shares of a portfolio for which no instructions have been received in the
same proportion as we vote shares of that portfolio for which we have received
instructions. We will also vote any shares that we are entitled to vote directly
because of amounts we have in a portfolio in the same proportions that contract
owners vote.
VOTING RIGHTS OF OTHERS
Currently, we control EQ Advisors Trust. Its shares are sold to our separate
accounts and an affiliated qualified plan trust. In addition, shares of EQ
Advisors Trust are held by separate accounts of insurance companies both
affiliated and unaffiliated with us. Shares held by these separate accounts will
probably be voted according to the instructions of the owners of insurance
policies and contracts issued by those insurance companies. While this will
dilute the effect of the voting instructions of the contract owners, we
currently do not foresee any disadvantages because of this. The Board of
Trustees of EQ Advisors Trust intends to monitor events in order to identify any
material irreconcilable conflicts that may arise and to determine what action,
if any, should be taken in response. If we believe that a response to any of
those events insufficiently protects our contract owners, we will see to it that
appropriate action is taken.
SEPARATE ACCOUNT NO. 49 VOTING RIGHTS
If actions relating to Separate Account No. 49 require contract owner approval,
contract owners will be entitled to one vote for each unit they have in the
variable investment options. Each contract owner who has elected a variable
annuity payout option may cast the number of votes equal to the dollar amount of
reserves we are holding for that annuity in a variable investment option divided
by the annuity unit value for that option. We will cast votes attributable to
any amounts we have in the variable investment options in the same proportion as
votes cast by contract owners.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under applicable
federal securities laws. To the extent that those laws or the regulations
published under those laws eliminate the necessity to submit matters for
approval by persons having voting rights in separate accounts of insurance
companies, we reserve the right to proceed in accordance with those laws or
regulations.
ABOUT LEGAL PROCEEDINGS
Equitable Life and its affiliates are parties to various legal proceedings. In
our view, none of these proceedings is likely to have a material adverse effect
upon Separate Account No. 49, our ability to meet our obligations under the
contracts, or the distribution of the contracts.
ABOUT OUR INDEPENDENT ACCOUNTANTS
The consolidated financial statements of Equitable Life at December 31, 1999 and
1998, and for the three years ended December 31, 1999 in this prospectus by
reference to the 1999 Annual Report on Form 10-K are incorporated in reliance on
the report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
FINANCIAL STATEMENTS
The financial statements of Separate Account No. 49, as well as the consolidated
financial statements of Equitable Life,
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are in the SAI. The SAI is available free of charge. You may request one by
writing to our processing office or calling 1-800-789-7771.
TRANSFERS OF OWNERSHIP, COLLATERAL ASSIGNMENTS, LOANS, AND BORROWING
You can transfer ownership of an NQ contract at any time before annuity payments
begin. We will continue to treat you as the owner until we receive written
notification of any change at our processing office. You cannot assign your NQ
contract as collateral or security for a loan. Loans are also not available
under your NQ contract. In some cases, an assignment or change of ownership may
have adverse tax consequences. See "Tax information" earlier in this prospectus.
You cannot assign or transfer ownership of Rollover IRA, Roth Conversion IRA,
QP, or Rollover TSA contract except by surrender to us. Loans are not available
and you cannot assign Rollover IRA, Roth Conversion IRA, QP or Rollover TSA
contracts as security for a loan or other obligation. If the employer that
provided the funds does not restrict them, loans are available under a Rollover
TSA contract.
For limited transfers of ownership after the owner's death see "Beneficiary
continuation option" in "Payment of death benefit" earlier in this prospectus.
You may direct the transfer of the values under your Rollover IRA, Roth
Conversion IRA, QP, or Rollover TSA contract to another similar arrangement.
DISTRIBUTION OF THE CONTRACTS
Equitable Distributors, Inc. ("EDI"), an indirect, wholly owned subsidiary of
Equitable Life, is the distributor of the contracts and has responsibility for
sales and marketing functions for Separate Account No. 49. EDI serves as the
principal underwriter of Separate Account No. 49. EDI also acts as distributor
for other Equitable Life annuity products with different features, expenses, and
fees. EDI is registered with the SEC as a broker-dealer and is a member of the
National Association of Securities Dealers, Inc. EDI's principal business
address is 1290 Avenue of the Americas, New York, New York 10104. Under a
distribution agreement between EDI, Equitable Life, and certain of Equitable
Life's separate accounts, including Separate Account No. 49, Equitable Life paid
EDI distribution fees of $46,957,345 for 1999, $35,452,793 for 1998, and
$9,566,343 for 1997 as the distributor of certain contracts, including these
contracts, and as the principal underwriter of several Equitable Life separate
accounts, including Separate Account No. 49.
The contracts will be sold by registered representatives of EDI, as well as by
affiliated and unaffiliated broker-dealers with which EDI has entered into
selling agreements. We pay broker-dealer sales compensation that will not exceed
an amount equal to 1% annually of the account value on a contract date
anniversary. EDI may also receive compensation and reimbursement for its
marketing services under the terms of its distribution agreement with Equitable
Life. Broker-dealers receiving sales compensation will generally pay a portion
of it to their registered representatives as commissions related to sales of the
contracts. The offering of the contracts is intended to be continuous.
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We provide the following tables to show five different measurements of the
investment performance of the variable investment options and/or the portfolios
in which they invest. We include these tables because they may be of general
interest to you.
Table 1 shows the average annual total return of the variable investment
options. Average annual total return is the annual rate of growth that would be
necessary to achieve the ending value of a contribution invested in the variable
investment options for the periods shown.
Table 2 shows the growth of a hypothetical $1,000 investment in the variable
investment options over the periods shown. Both Tables 1 and 2 take into account
all current fees and charges under the contract, including the optional
baseBUILDER benefits charge, but do not reflect the charges designed to
approximate certain taxes imposed on us, such as premium taxes in your state or
any applicable annuity administrative fee.
Tables 3, 4, and 5 show the rates of return of the variable investment options
on an annualized, cumulative, and year-by-year basis. These tables take into
account all current fees and charges under the contract, but do not reflect the
optional baseBUILDER benefits charge or the charges designed to approximate
certain taxes imposed on us, such as premium taxes in your state or any
applicable annuity administrative fee. If the charges were reflected they would
effectively reduce the rates of return shown.
In all cases the results shown are based on the actual historical investment
experience of the portfolios in which the variable investment options invest. In
some cases, the results shown relate to periods when the variable investment
options and/or the contracts were not available. In those cases, we adjusted the
results of the portfolios to reflect the charges under the contracts that would
have applied had the investment options and/or contracts been available. The
contracts were first offered on October 1, 1997.
For the "Alliance" portfolios (other than EQ/Alliance Premier Growth), we have
adjusted the results prior to October 1996, when Class IB shares for these
portfolios were not available, to reflect the 12b-1 fees currently imposed.
Finally, the results shown for the Alliance Money Market and Alliance Common
Stock options for periods before March 22, 1985 reflect the results of the
variable investment options that preceded them. The "Since portfolio inception"
figures for these options are based on the date of inception of the preceding
variable investment options. We have adjusted these results to reflect the
maximum investment advisory fee payable for the portfolios, as well as an
assumed charge of 0.06% for direct operating expenses.
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999 the Alliance portfolios (other than EQ/Alliance Premier Growth)
were part of The Hudson River Trust. On October 18, 1999, these portfolios
became corresponding portfolios of EQ Advisors Trust. In each case, the
performance shown is for the indicated EQ Advisors Trust portfolio and any
predecessors that it may have had.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends.
From time to time, we may advertise different measurements of the investment
performance of the variable investment options and/or the portfolios, including
the measurements reflected in the tables below.
THE PERFORMANCE INFORMATION SHOWN BELOW AND THE PERFORMANCE INFORMATION THAT WE
ADVERTISE REFLECT PAST PERFORMANCE AND DO NOT INDICATE HOW THE VARIABLE
INVESTMENT OPTIONS MAY PERFORM IN THE FUTURE. SUCH INFORMATION ALSO DOES NOT
REPRESENT THE RESULTS EARNED BY ANY PARTICULAR INVESTOR. YOUR RESULTS WILL
DIFFER.
BENCHMARKS
Tables 3 and 4 compare the performance of variable investment options to market
indices that serve as benchmarks. Market indices are not subject to any charges
for investment advisory fees, brokerage commission or other operating expenses
typically associated with a managed
<PAGE>
Investment performance
- ----------
69
- --------------------------------------------------------------------------------
portfolio. Also, they do not reflect other contract charges such as the
mortality and expense risks charge, administrative charge, distribution charge,
or optional benefit charge. Comparisons with these benchmarks, therefore, may be
of limited use. We include them because they are widely known and may help you
to understand the universe of securities from which each portfolio is likely to
select its holdings. Benchmark data reflect the reinvestment of dividend income.
The benchmarks include:
- --------------------------------------------------------------------------------
EQ/AGGRESSIVE STOCK: 50% Russell 2000 Index and 50%
Standard & Poor's Mid-Cap Total Return Index.
ALLIANCE COMMON STOCK: Standard & Poor's 500 Index.
ALLIANCE HIGH YIELD: Benchmark #1 - Merrill Lynch High Yield
Master Index and Benchmark #2 - Credit Suisse First Boston
Global High Yield Index.
ALLIANCE MONEY MARKET: Salomon Brothers Three-Month T-Bill
Index.
EQ/ALLIANCE PREMIER GROWTH: Standard & Poor's 500 Index.
ALLIANCE SMALL CAP GROWTH: Russell 2000 Growth Index.
EQ/ALLIANCE TECHNOLOGY: Lipper Specialty Funds Average.
BT EQUITY 500 INDEX: Standard & Poor's 500 Index.
BT SMALL COMPANY INDEX: Russell 2000 Index.
BT INTERNATIONAL EQUITY INDEX: Morgan Stanley Capital
International Europe, Australia, Far East Index.
CAPITAL GUARDIAN INTERNATIONAL: Morgan Stanley Capital
International Europe, Australia, Far East Index.
CAPITAL GUARDIAN RESEARCH: Standard & Poor's 500 Index.
CAPITAL GUARDIAN U.S. EQUITY: Standard & Poor's 500 Index.
EQ/EVERGREEN: Benchmark #1 - Russell 2000 Index, and
Benchmark #2 - Standard & Poor's 500 Index.
EQ/EVERGREEN FOUNDATION: 60% Standard & Poor's 500
Index/40% Lehman Brothers Aggregate Bond Index.
J.P. MORGAN CORE BOND: Salomon Brothers Broad Investment
Grade Bond.
LAZARD LARGE CAP VALUE: Standard & Poor's 500 Index.
LAZARD SMALL CAP VALUE: Russell 2000 Index.
MFS EMERGING GROWTH COMPANIES: Russell 2000 Index.
MFS GROWTH WITH INCOME: Standard & Poor's 500 Index.
MFS RESEARCH: Standard & Poor's 500 Index.
MERCURY BASIC VALUE EQUITY: Standard & Poor's 500 Index.
MERCURY WORLD STRATEGY: 36% Standard & Poor's 500 Index/24%
Morgan Stanley Capital International Europe, Australia, Far East
Index/21% Salomon Brothers U.S. Treasury Bond 1 Year+14%
Salomon Brothers World Government Bond (excluding U.S.)/ and
5% Three-Month U.S. Treasury Bill.
MORGAN STANLEY EMERGING MARKETS EQUITY: Morgan Stanley
Capital International Emerging Markets Free Price Return Index.
EQ/PUTNAM GROWTH & INCOME VALUE: Standard & Poor's 500
Index.
EQ/PUTNAM INTERNATIONAL EQUITY: Morgan Stanley Capital
International Europe, Australia, Far East Index.
EQ/PUTNAM INVESTORS GROWTH: Standard & Poor's 500 Index.
- --------------------------------------------------------------------------------
LIPPER SURVEY. The Lipper Variable Insurance Products Performance Analysis
Survey (Lipper Survey) records the performance of a large group of variable
annuity products, including managed separate accounts of insurance companies.
According to Lipper Analytical Services, Inc. (Lipper), the data are presented
net of investment management fees, direct operating expenses and asset-based
charges applicable under annuity contracts. Lipper data provide a more accurate
picture than market benchmarks of the Equitable Accumulator Select performance
relative to other variable annuity products.
<PAGE>
Investment performance
- --------
70
- --------------------------------------------------------------------------------
TABLE 1
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 1999:
<TABLE>
- -------------------------------------------------------------------------------------------------------------------
<CAPTION>
LENGTH OF INVESTMENT PERIOD
--------------------------------------------------------------------------
SINCE SINCE
1 3 5 10 OPTION PORTFOLIO
VARIABLE INVESTMENT OPTIONS YEAR YEARS YEARS YEARS INCEPTION* INCEPTION**
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EQ/Aggressive Stock 16.65% 7.48% 13.92% 14.33% 7.02% 15.51%
- -------------------------------------------------------------------------------------------------------------------
Alliance Common Stock 22.89% 25.37% 25.51% 16.16% 25.37% 14.41%
- -------------------------------------------------------------------------------------------------------------------
Alliance High Yield (5.13)% 0.70% 7.63% 7.96% 1.28% 7.08%
- -------------------------------------------------------------------------------------------------------------------
Alliance Money Market 3.05% 3.10% 3.16% 2.92% 3.02% 4.71%
- -------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth 25.58% - - - 15.53% 15.53%
- -------------------------------------------------------------------------------------------------------------------
BT Equity 500 Index 18.38% - - - 20.58% 20.58%
- -------------------------------------------------------------------------------------------------------------------
BT Small Company Index 18.80% - - - 6.69% 6.69%
- -------------------------------------------------------------------------------------------------------------------
BT International Equity Index 25.43% - - - 21.58% 21.58%
- -------------------------------------------------------------------------------------------------------------------
EQ/Evergreen 7.97% - - - 7.97% 7.97%
- -------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Foundation 5.64% - - - 5.64% 5.64%
- -------------------------------------------------------------------------------------------------------------------
J.P. Morgan Core Bond (3.17)% - - - 1.77% 1.77%
- -------------------------------------------------------------------------------------------------------------------
Lazard Large Cap Value 1.88% - - - 9.56% 9.56%
- -------------------------------------------------------------------------------------------------------------------
Lazard Small Cap Value 0.11% - - - (4.49)% (4.49)%
- -------------------------------------------------------------------------------------------------------------------
Mercury Basic Value Equity 17.04% - - - 15.82% 15.82%
- -------------------------------------------------------------------------------------------------------------------
Mercury World Strategy 19.40% - - - 10.08% 10.08%
- -------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies 70.90% - - - 45.64% 45.64%
- -------------------------------------------------------------------------------------------------------------------
MFS Growth with Income 6.98% - - - 6.98% 6.98%
- -------------------------------------------------------------------------------------------------------------------
MFS Research 21.15% - - - 21.72% 21.72%
- -------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity 92.62% - - - 17.35% 3.58%
- -------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value (2.94)% - - - 8.14% 8.14%
- -------------------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity 57.69% - - - 29.62% 29.62%
- -------------------------------------------------------------------------------------------------------------------
EQ/Putnam Investors Growth 28.18% - - - 32.29% 32.29%
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
* The variable investment option inception dates are: Alliance Money
Market, Alliance High Yield, Alliance Common Stock, and EQ/Aggressive
Stock (October 16, 1996); Alliance Small Cap Growth, MFS Research, MFS
Emerging Growth Companies, Mercury Basic Value Equity, Mercury World
Strategy, EQ/Putnam Growth & Income Value, EQ/Putnam Investors Growth,
and EQ/Putnam International Equity (May 1, 1997); BT Equity 500 Index, BT
Small Company Index, BT International Equity Index, J.P. Morgan Core
Bond, Lazard Large Cap Value, Lazard Small Cap Value, Morgan Stanley
Emerging Markets Equity (December 31, 1997); EQ/Evergreen, EQ/Evergreen
Foundation and MFS Growth with Income (December 31, 1998). The inception
dates for the variable investment options that became available after
December 31, 1998, and are therefore not shown in this table are:
EQ/Alliance Premier Growth, Capital Guardian U.S. Equity, Capital
Guardian Research, Capital Guardian International (April 30, 1999); and
EQ/Alliance Technology (May 1, 2000).
** The inception dates for the portfolios underlying the Alliance variable
investment options shown in the tables are for portfolios of The Hudson
River Trust, the assets of which became assets of corresponding portfolios
of EQ Advisors Trust on October 18, 1999. The portfolio inception dates
are: Alliance Money Market (July 13, 1981); Alliance High Yield (January
2, 1987); Alliance Common Stock (January 13, 1976); EQ/Aggressive Stock
(January 27, 1986); Alliance Small Cap Growth,
<PAGE>
Investment performance
- ---------
71
- --------------------------------------------------------------------------------
MFS Research, MFS Emerging Growth Companies, Mercury Basic Value Equity,
Mercury World Strategy, EQ/Putnam Growth & Income Value, EQ/Putnam
Investors Growth, and EQ/Putnam International Equity (May 1, 1997); BT
Equity 500 Index, BT Small Company Index, BT International Equity Index,
J.P. Morgan Core Bond, Lazard Large Cap Value, and Lazard Small Cap Value
(January 1, 1998); Morgan Stanley Emerging Markets Equity (August 20,
1997);EQ/Evergreen, EQ/Evergreen Foundation and MFS Growth with Income
(December 31, 1998). The inception dates for the portfolios that became
available after December 31, 1998 and are therefore not shown in the
tables are: EQ/Alliance Premier Growth, Capital Guardian U.S. Equity,
Capital Guardian Research, Capital Guardian International (April 30,
1999); and EQ/Alliance Technology (May 1, 2000).
<PAGE>
Investment performance
- --------
72
- --------------------------------------------------------------------------------
TABLE 2
GROWTH OF $1,000 UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
LENGTH OF INVESTMENT PERIOD
-------------------------------------------------------------------------
SINCE
1 3 5 10 PORTFOLIO
VARIABLE INVESTMENT OPTIONS YEAR YEARS YEARS YEARS INCEPTION*
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
EQ/Aggressive Stock $ 1,166.50 $ 1,241.66 $ 1,918.59 $ 3,814.75 $ 7,446.18
- ------------------------------------------------------------------------------------------------------------------
Alliance Common Stock $ 1,228.90 $ 1,970.61 $ 3,115.05 $ 4,473.29 $ 25,180.87
- ------------------------------------------------------------------------------------------------------------------
Alliance High Yield $ 948.70 $ 1,021.10 $ 1,444.12 $ 2,150.45 $ 2,433.05
- ------------------------------------------------------------------------------------------------------------------
Alliance Money Market $ 1,030.50 $ 1,095.85 $ 1,168.38 $ 1,333.83 $ 2,338.07
- ------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth $ 1,255.80 - - - $ 1,470.05
- ------------------------------------------------------------------------------------------------------------------
BT Equity 500 Index $ 1,183.80 - - - $ 1,453.88
- ------------------------------------------------------------------------------------------------------------------
BT Small Company Index $ 1,188.00 - - - $ 1,138.28
- ------------------------------------------------------------------------------------------------------------------
BT International Equity Index $ 1,254.30 - - - $ 1,478.26
- ------------------------------------------------------------------------------------------------------------------
EQ/Evergreen $ 1,079.70 - - - $ 1,079.70
- ------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Foundation $ 1,056.40 - - - $ 1,056.40
- ------------------------------------------------------------------------------------------------------------------
J.P. Morgan Core Bond $ 968.30 - - - $ 1,035.74
- ------------------------------------------------------------------------------------------------------------------
Lazard Large Cap Value $ 1,018.80 - - - $ 1,200.40
- ------------------------------------------------------------------------------------------------------------------
Lazard Small Cap Value $ 1,001.10 - - - $ 912.25
- ------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies $ 1,709.00 - - - $ 2,726.97
- ------------------------------------------------------------------------------------------------------------------
MFS Growth with Income $ 1,069.80 - - - $ 1,069.80
- ------------------------------------------------------------------------------------------------------------------
MFS Research $ 1,211.50 - - - $ 1,689.78
- ------------------------------------------------------------------------------------------------------------------
Mercury Basic Value Equity $ 1,170.40 - - - $ 1,479.84
- ------------------------------------------------------------------------------------------------------------------
Mercury World Strategy $ 1,194.00 - - - $ 1,292.04
- ------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity $ 1,926.20 - - - $ 1,086.70
- ------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value $ 970.60 - - - $ 1,232.16
- ------------------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity $ 1,576.90 - - - $ 1,998.47
- ------------------------------------------------------------------------------------------------------------------
EQ/Putnam Investors Growth $ 1,281.80 - - - $ 2,110.24
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* Portfolio inception dates are shown in Table 1.
<PAGE>
Investment performance
- -----
73
- --------------------------------------------------------------------------------
TABLE 3
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EQ/AGGRESSIVE STOCK 16.65% 7.69% 14.12% 14.51% - 15.67%
- --------------------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap Growth 51.65% 24.68% 19.97% 14.78% - 15.86%
- --------------------------------------------------------------------------------------------------------------------------------
Benchmark 18.09% 17.48% 19.92% 15.41% - 14.58%
- --------------------------------------------------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK 22.89% 25.56% 25.70% 16.41% 16.21% 14.59%
- --------------------------------------------------------------------------------------------------------------------------------
Lipper Growth 29.78% 26.87% 25.55% 16.90% 15.83% 15.16%
- --------------------------------------------------------------------------------------------------------------------------------
Benchmark 21.04% 27.56% 28.56% 18.21% 17.88% 16.19%
- --------------------------------------------------------------------------------------------------------------------------------
ALLIANCE HIGH YIELD (5.13)% 0.90% 7.83% 8.19% - 7.34%
- --------------------------------------------------------------------------------------------------------------------------------
Lipper High Current Yield 3.65% 4.82% 8.59% 9.61% - 7.79%
- --------------------------------------------------------------------------------------------------------------------------------
Benchmark #1 1.57% 5.91% 9.61% 10.79% - 9.99%
- --------------------------------------------------------------------------------------------------------------------------------
Benchmark #2 3.28% 5.37% 9.07% 11.06% - 10.04%
- --------------------------------------------------------------------------------------------------------------------------------
ALLIANCE MONEY MARKET 3.05% 3.31% 3.42% 3.23% - 5.00%
- --------------------------------------------------------------------------------------------------------------------------------
Lipper Money Market 3.78% 4.05% 4.16% 3.96% - 5.70%
- --------------------------------------------------------------------------------------------------------------------------------
Benchmark 4.74% 5.01% 5.20% 5.06% - 6.65%
- --------------------------------------------------------------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH 25.58% - - - - 15.77%
- --------------------------------------------------------------------------------------------------------------------------------
Lipper Small Cap 34.26% - - - - 19.49%
- --------------------------------------------------------------------------------------------------------------------------------
Benchmark 43.09% - - - - 25.88%
- --------------------------------------------------------------------------------------------------------------------------------
BT EQUITY 500 INDEX 18.38% - - - - 20.73%
- --------------------------------------------------------------------------------------------------------------------------------
Lipper S&P 500 Index 19.36% - - - - 23.16%
- --------------------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 24.76%
- --------------------------------------------------------------------------------------------------------------------------------
BT SMALL COMPANY INDEX 18.80% - - - - 6.86%
- --------------------------------------------------------------------------------------------------------------------------------
Lipper Small Cap 34.26% - - - - 16.02%
- --------------------------------------------------------------------------------------------------------------------------------
Benchmark 21.26% - - - - 8.70%
- --------------------------------------------------------------------------------------------------------------------------------
BT INTERNATIONAL EQUITY INDEX 25.43% - - - - 21.75%
- --------------------------------------------------------------------------------------------------------------------------------
Lipper International 43.24% - - - - 26.76%
- --------------------------------------------------------------------------------------------------------------------------------
Benchmark 26.96% - - - - 23.43%
- --------------------------------------------------------------------------------------------------------------------------------
EQ/EVERGREEN 7.97% - - - - 7.97%
- --------------------------------------------------------------------------------------------------------------------------------
Lipper 29.78% - - - - 29.78%
- --------------------------------------------------------------------------------------------------------------------------------
Benchmark #1 21.26% - - - - 21.26%
- --------------------------------------------------------------------------------------------------------------------------------
Benchmark #2 21.03% - - - - 21.03%
- --------------------------------------------------------------------------------------------------------------------------------
EQ/EVERGREEN FOUNDATION 5.64% - - - - 5.64%
- --------------------------------------------------------------------------------------------------------------------------------
Lipper 8.69% - - - - 8.69%
- --------------------------------------------------------------------------------------------------------------------------------
Benchmark 11.15% - - - - 11.15%
- --------------------------------------------------------------------------------------------------------------------------------
J.P. MORGAN CORE BOND (3.17)% - - - - 1.92%
- --------------------------------------------------------------------------------------------------------------------------------
Lipper Intermediate Investment Grade Debt (0.83)% - - - - 3.84%
- --------------------------------------------------------------------------------------------------------------------------------
Benchmark (1.77)% - - - - 2.64%
- --------------------------------------------------------------------------------------------------------------------------------
LAZARD LARGE CAP VALUE 1.88% - - - - 9.71%
- --------------------------------------------------------------------------------------------------------------------------------
Lipper Capital Appreciation 43.66% - - - - 32.61%
- --------------------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 24.76%
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Investment performance
- --------
74
- --------------------------------------------------------------------------------
TABLE 3 (CONTINUED)
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
LAZARD SMALL CAP VALUE 0.11% - - - - (4.32)%
- -------------------------------------------------------------------------------------------------------------------
Lipper Small Cap 34.26% - - - - 16.02%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 21.26% - - - - 8.70%
- -------------------------------------------------------------------------------------------------------------------
MFS EMERGING GROWTH COMPANIES 70.90% - - - - 45.89%
- -------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap 51.65% - - - - 32.50%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 21.26% - - - - 16.99%
- -------------------------------------------------------------------------------------------------------------------
MFS GROWTH WITH INCOME 6.98% - - - - 6.98%
- -------------------------------------------------------------------------------------------------------------------
Lipper Growth and Income 12.90% - - - - 12.90%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 21.03%
- -------------------------------------------------------------------------------------------------------------------
MFS RESEARCH 21.15% - - - - 21.96%
- -------------------------------------------------------------------------------------------------------------------
Lipper Growth 29.78% - - - - 29.33%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 27.36%
- -------------------------------------------------------------------------------------------------------------------
MERCURY BASIC VALUE EQUITY 17.04% - - - - 16.05%
- -------------------------------------------------------------------------------------------------------------------
Lipper 12.90% - - - - 18.00%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 27.36%
- -------------------------------------------------------------------------------------------------------------------
MERCURY WORLD STRATEGY 19.40% - - - - 10.33%
- -------------------------------------------------------------------------------------------------------------------
Lipper 12.93% - - - - 11.91%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 13.07% - - - - 16.18%
- -------------------------------------------------------------------------------------------------------------------
MORGAN STANLEY EMERGING MARKETS
EQUITY 92.62% - - - - 4.01%
- -------------------------------------------------------------------------------------------------------------------
Lipper Emerging Markets 82.53% - - - - 2.90%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 66.41% - - - - (0.88)%
- -------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME VALUE (2.94)% - - - - 8.35%
- -------------------------------------------------------------------------------------------------------------------
Lipper Growth & Income 12.90% - - - - 18.00%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 27.36%
- -------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM INTERNATIONAL EQUITY 57.69% - - - - 29.89%
- -------------------------------------------------------------------------------------------------------------------
Lipper International 43.24% - - - - 20.38%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 26.96% - - - - 18.32%
- -------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM INVESTORS GROWTH 28.18% - - - - 32.52%
- -------------------------------------------------------------------------------------------------------------------
Lipper Growth 29.78% - - - - 29.33%
- -------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 27.36%
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* Portfolio inception dates are shown in Table 1. Lipper survey and
benchmark "since portfolio inception" information are as of the month-end
closest to the actual date of portfolio inception.
<PAGE>
Investment performance
- --------
75
- --------------------------------------------------------------------------------
TABLE 4
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EQ/AGGRESSIVE STOCK 16.65% 24.90% 93.56% 287.60% - 658.94%
- ----------------------------------------------------------------------------------------------------------------------------------
Lipper 51.65% 102.87% 158.98% 311.69% - 683.45%
- ----------------------------------------------------------------------------------------------------------------------------------
Benchmark 18.09% 62.12% 147.96% 319.19% - 595.55%
- ----------------------------------------------------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK 22.89% 97.94% 213.88% 356.81% 1,916.29% 2,513.58%
- ----------------------------------------------------------------------------------------------------------------------------------
Lipper Growth 29.78% 106.30% 216.51% 386.68% 1,816.52% 2,838.39%
- ----------------------------------------------------------------------------------------------------------------------------------
Benchmark 21.04% 107.56% 251.12% 432.78% 2,584.39% 3,555.46%
- ----------------------------------------------------------------------------------------------------------------------------------
ALLIANCE HIGH YIELD (5.13)% 2.71% 45.81% 119.82% - 151.11%
- ----------------------------------------------------------------------------------------------------------------------------------
Lipper High Current Yield 3.65% 15.25% 51.19% 151.82% - 166.74%
- ----------------------------------------------------------------------------------------------------------------------------------
Benchmark #1 1.57% 18.80% 58.22% 178.72% - 245.03%
- ----------------------------------------------------------------------------------------------------------------------------------
Benchmark #2 3.28% 17.00% 54.39% 185.43% - 246.92%
- ----------------------------------------------------------------------------------------------------------------------------------
ALLIANCE MONEY MARKET 3.05% 10.26% 18.30% 37.39% - 146.07%
- ----------------------------------------------------------------------------------------------------------------------------------
Lipper Money Market 3.78% 12.64% 22.65% 47.52% - 178.18%
- ----------------------------------------------------------------------------------------------------------------------------------
Benchmark 4.74% 15.79% 28.88% 63.79% - 229.35%
- ----------------------------------------------------------------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH 25.58% - - - - 47.80%
- ----------------------------------------------------------------------------------------------------------------------------------
Lipper Small Cap 34.26% - - - - 62.98%
- ----------------------------------------------------------------------------------------------------------------------------------
Benchmark 43.09% - - - - 84.91%
- ----------------------------------------------------------------------------------------------------------------------------------
BT EQUITY 500 INDEX 18.38% - - - - 45.76%
- ----------------------------------------------------------------------------------------------------------------------------------
Lipper S&P 500 Index 19.36% - - - - 51.69%
- ----------------------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 55.65%
- ----------------------------------------------------------------------------------------------------------------------------------
BT SMALL COMPANY INDEX 18.80% - - - - 14.20%
- ----------------------------------------------------------------------------------------------------------------------------------
Lipper Small Cap 34.26% - - - - 37.82%
- ----------------------------------------------------------------------------------------------------------------------------------
Benchmark 21.26% - - - - 18.17%
- ----------------------------------------------------------------------------------------------------------------------------------
BT INTERNATIONAL EQUITY INDEX 25.43% - - - - 48.22%
- ----------------------------------------------------------------------------------------------------------------------------------
Lipper International 43.24% - - - - 61.58%
- ----------------------------------------------------------------------------------------------------------------------------------
Benchmark 26.96% - - - - 52.35%
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/EVERGREEN 7.97% - - - - 7.97%
- ----------------------------------------------------------------------------------------------------------------------------------
Lipper 29.78% - - - - 29.78%
- ----------------------------------------------------------------------------------------------------------------------------------
Benchmark #1 21.26% - - - - 29.78%
- ----------------------------------------------------------------------------------------------------------------------------------
Benchmark #2 21.03% - - 21.03%
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/EVERGREEN FOUNDATION 5.64% - - - - 5.64%
- ----------------------------------------------------------------------------------------------------------------------------------
Lipper 8.69% - - - - 8.69%
- ----------------------------------------------------------------------------------------------------------------------------------
Benchmark 11.15% - - - - 11.15%
- ----------------------------------------------------------------------------------------------------------------------------------
J.P. MORGAN CORE BOND (3.17)% - - - - 3.88%
- ----------------------------------------------------------------------------------------------------------------------------------
Lipper Intermediate Investment Grade Debt (0.83)% - - - - 7.83%
- ----------------------------------------------------------------------------------------------------------------------------------
Benchmark (1.77)% - - - - 5.96%
- ----------------------------------------------------------------------------------------------------------------------------------
LAZARD LARGE CAP VALUE 1.88% - - - - 20.36%
- ----------------------------------------------------------------------------------------------------------------------------------
Lipper Capital Appreciation 43.66% - - - - 79.44%
- ----------------------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 55.65%
- ----------------------------------------------------------------------------------------------------------------------------------
LAZARD SMALL CAP VALUE 0.11% - - - - (8.45)%
- ----------------------------------------------------------------------------------------------------------------------------------
Lipper Small Cap 34.26% - - - - 37.82%
- ----------------------------------------------------------------------------------------------------------------------------------
Benchmark 21.26% - - - - 18.17%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Investment performance
- --------
76
- --------------------------------------------------------------------------------
TABLE 4 (CONTINUED)
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
MFS EMERGING GROWTH COMPANIES 70.90% - - - - 173.96%
- --------------------------------------------------------------------------------------------------------------------
Lipper Mid-Cap 51.65% - - - - 120.85%
- --------------------------------------------------------------------------------------------------------------------
Benchmark 21.26% - - - - 52.05%
- --------------------------------------------------------------------------------------------------------------------
MFS GROWTH WITH INCOME 6.98% - - - - 6.98%
- --------------------------------------------------------------------------------------------------------------------
Lipper Growth and Income 12.90% - - - - 12.90%
- --------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 21.03%
- --------------------------------------------------------------------------------------------------------------------
MFS RESEARCH 21.15% - - - - 69.84%
- --------------------------------------------------------------------------------------------------------------------
Lipper Growth 29.78% - - - - 101.13%
- --------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 90.75%
- --------------------------------------------------------------------------------------------------------------------
MERCURY BASIC VALUE EQUITY 17.04% - - - - 48.77%
- --------------------------------------------------------------------------------------------------------------------
Lipper 12.90% - - - - 56.85%
- --------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 90.75%
- --------------------------------------------------------------------------------------------------------------------
MERCURY WORLD STRATEGY 19.40% - - - - 30.00%
- --------------------------------------------------------------------------------------------------------------------
Lipper 12.93% - - - - 35.69%
- --------------------------------------------------------------------------------------------------------------------
Benchmark 13.07% - - - - 49.16%
- --------------------------------------------------------------------------------------------------------------------
MORGAN STANLEY EMERGING MARKETS
EQUITY 92.62% - - - - 9.74%
- --------------------------------------------------------------------------------------------------------------------
Lipper Emerging Markets 82.53% - - - - 7.48%
- --------------------------------------------------------------------------------------------------------------------
Benchmark 66.41% - - - - 5.32%
- --------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME VALUE (2.94)% - - - - 23.87%
- --------------------------------------------------------------------------------------------------------------------
Lipper 12.90% - - - - 56.85%
- --------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 90.75%
- --------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM INTERNATIONAL EQUITY 57.69% - - - - 100.96%
- --------------------------------------------------------------------------------------------------------------------
Lipper 43.24% - - - - 65.44%
- --------------------------------------------------------------------------------------------------------------------
Benchmark 26.96% - - - - 56.70%
- --------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM INVESTORS GROWTH 28.18% - - - - 111.99%
- --------------------------------------------------------------------------------------------------------------------
Lipper 29.78% - - - - 101.13%
- --------------------------------------------------------------------------------------------------------------------
Benchmark 21.03% - - - - 90.75%
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* Portfolio inception dates are shown in Table 1. Lipper survey and
benchmark "since portfolio inception" information are as month-end closest
to the actual date of portfolio inception.
<PAGE>
Investment performance
- ---------
77
- --------------------------------------------------------------------------------
TABLE 5
YEAR-BY-YEAR RATES OF RETURN:
<TABLE>
- ------------------------------------------------------------------------------------------------------------
1990 1991 1992 1993 1994
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
EQ/Aggressive Stock 6.16% 83.43% (4.95)% 14.59% (5.59)%
- ------------------------------------------------------------------------------------------------------------
Alliance Common Stock (9.82)% 35.34% 1.31% 22.52% (3.94)%
- ------------------------------------------------------------------------------------------------------------
Alliance High Yield (2.95)% 22.17% 10.23% 20.88% (4.58)%
- ------------------------------------------------------------------------------------------------------------
Alliance Money Market 6.23% 4.23% 1.65% 1.06% 2.10%
- ------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth - - - - -
- ------------------------------------------------------------------------------------------------------------
BT Equity 500 Index - - - - -
- ------------------------------------------------------------------------------------------------------------
BT Small Company Index - - - - -
- ------------------------------------------------------------------------------------------------------------
BT International Equity Index - - - - -
- ------------------------------------------------------------------------------------------------------------
EQ/Evergreen - - - - -
- ------------------------------------------------------------------------------------------------------------
EQ/Evergreen Foundation - - - - -
- ------------------------------------------------------------------------------------------------------------
J.P. Morgan Core Bond - - - - -
- ------------------------------------------------------------------------------------------------------------
Lazard Large Cap Value - - - - -
- ------------------------------------------------------------------------------------------------------------
Lazard Small Cap Value - - - - -
- ------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies - - - - -
- ------------------------------------------------------------------------------------------------------------
MFS Growth with Income - - - - -
- ------------------------------------------------------------------------------------------------------------
MFS Research - - - - -
- ------------------------------------------------------------------------------------------------------------
Mercury Basic Value Equity - - - - -
- ------------------------------------------------------------------------------------------------------------
Mercury World Strategy - - - - -
- ------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity - - - - -
- ------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value - - - - -
- ------------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity - - - - -
- ------------------------------------------------------------------------------------------------------------
EQ/Putnam Investors Growth - - - - -
- ------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
1995 1996 1997 1998 1999
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
EQ/Aggressive Stock 29.21% 19.93% 8.77% (1.55)% 16.65%
- ------------------------------------------------------------------------------------------------------------
Alliance Common Stock 30.01% 21.97% 26.84% 27.00% 22.89%
- ------------------------------------------------------------------------------------------------------------
Alliance High Yield 17.71% 20.60% 16.28% (6.90)% (5.13)%
- ------------------------------------------------------------------------------------------------------------
Alliance Money Market 3.80% 3.37% 3.48% 3.40% 3.05%
- ------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth - - 25.16%+ (5.97)% 25.58%
- ------------------------------------------------------------------------------------------------------------
BT Equity 500 Index - - - 23.13% 18.38%
- ------------------------------------------------------------------------------------------------------------
BT Small Company Index - - - (3.87)% 18.80%
- ------------------------------------------------------------------------------------------------------------
BT International Equity Index - - - 18.17% 25.43%
- ------------------------------------------------------------------------------------------------------------
EQ/Evergreen - - - - 7.97%
- ------------------------------------------------------------------------------------------------------------
EQ/Evergreen Foundation - - - - 5.64%
- ------------------------------------------------------------------------------------------------------------
J.P. Morgan Core Bond - - - 7.28% (3.17)%
- ------------------------------------------------------------------------------------------------------------
Lazard Large Cap Value - - - 18.14% 1.88%
- ------------------------------------------------------------------------------------------------------------
Lazard Small Cap Value - - - (8.56)% 0.11%
- ------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies - - 21.11%+ 32.37% 70.90%
- ------------------------------------------------------------------------------------------------------------
MFS Growth with Income - - - - 6.98%
- ------------------------------------------------------------------------------------------------------------
MFS Research - - 14.80%+ 22.12% 21.15%
- ------------------------------------------------------------------------------------------------------------
Mercury Basic Value Equity - - 15.77%+ 9.80% 17.04%
- ------------------------------------------------------------------------------------------------------------
Mercury World Strategy - - 3.58%+ 5.11% 19.40%
- ------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity - - (20.66)%+ (28.19)% 92.62%
- ------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value - - 14.96%+ 11.02% (2.94)%
- ------------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity - - 8.40%+ 17.56% 57.69%
- ------------------------------------------------------------------------------------------------------------
EQ/Putnam Investors Growth - - 23.32%+ 34.11% 28.18%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
+ Returns for these portfolios represent less than 12 months of performance.
The returns are as of each portfolio inception date as shown in Table 1.
<PAGE>
Investment performance
- -----------
78
- --------------------------------------------------------------------------------
COMMUNICATING PERFORMANCE DATA
In reports or other communications to contract owners or in advertising
material, we may describe general economic and market conditions affecting our
variable investment options and the portfolios and may compare the performance
or ranking of those options and the portfolios with:
o those of other insurance company separate accounts or mutual funds
included in the rankings prepared by Lipper Analytical Services, Inc.,
Morningstar, Inc., VARDS, or similar investment services that monitor
the performance of insurance company separate accounts or mutual funds;
o other appropriate indices of investment securities and averages for
peer universes of mutual funds; or
o data developed by us derived from such indices or averages.
We also may furnish to present or prospective contract owners advertisements or
other communications that include evaluations of a variable investment option or
portfolio by nationally recognized financial publications. Examples of such
publications are:
<TABLE>
- ------------------------------------------------------------------------
<S> <C>
Barron's Investment Management Weekly
Morningstar's Variable Annuity Money Management Letter
Sourcebook Investment Dealers Digest
Business Week National Underwriter
Forbes Pension & Investments
Fortune USA Today
Institutional Investor Investor's Business Daily
Money The New York Times
Kiplinger's Personal Finance The Wall Street Journal
Financial Planning The Los Angeles Times
Investment Adviser The Chicago Tribune
- -------------------------------------------------------------------------
</TABLE>
Lipper compiles performance data for peer universes of funds with similar
investment objectives in its Lipper Survey. Morningstar, Inc. compiles similar
data in the Morningstar Variable Annuity/Life Report (Morningstar Report).
The Lipper Survey records performance data as reported to it by over 800 mutual
funds underlying variable annuity and life insurance products. It divides these
actively managed portfolios into 25 categories by portfolio objectives. The
Lipper Survey contains two different universes, which reflect different types of
fees in performance data:
o The "separate account" universe reports performance data net of
investment management fees, direct operating expenses and asset-based
charges applicable under variable life and annuity contracts, and
o The "mutual fund" universe reports performance net only of investment
management fees and direct operating expenses, and therefore reflects
only charges that relate to the underlying mutual fund.
The Morningstar Variable Annuity/Life Report consists of nearly 700 variable
life and annuity funds, all of which report their data net of investment
management fees, direct operating expenses and separate account level charges.
VARDS is a monthly reporting service that monitors approximately 2,500 variable
life and variable annuity funds on performance and account information.
YIELD INFORMATION
Current yield for the Alliance Money Market option will be based on net changes
in a hypothetical investment over a given seven-day period, exclusive of capital
changes, and then "annualized" (assuming that the same seven-day result would
occur each week for 52 weeks). Current yield for the Alliance High Yield option
will be based on net changes in a hypothetical investment over a given 30-day
period, exclusive of capital changes, and then "annualized" (assuming that the
same 30-day result would occur each month for 12 months).
"Effective yield" is calculated in a similar manner, but when annualized, any
income earned by the investment is assumed to be reinvested. The "effective
yield" will be slightly higher than the "current yield" because any earnings are
compounded weekly for the Alliance Money Market option. The current yields and
effective yields assume the deduction of all current contract charges and
expenses other than the optional baseBUILDER benefits charge, and any charge
designed to approximate certain taxes that may be imposed
<PAGE>
Investment performance
- ----------
79
- --------------------------------------------------------------------------------
on us, such as premium taxes in your state. The yields and effective yields for
the Alliance Money Market option, when used for the special dollar cost
averaging program, assume that no contract charges are deducted. For more
information, see "Yield Information for the Alliance Money Market Option and
Alliance High Yield Option" in the SAI.
<PAGE>
10
INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE
- ------------
80
- --------------------------------------------------------------------------------
Equitable Life's Annual Report on Form 10-K for the year ended December 31,
1999, is considered to be a part of this prospectus because it is incorporated
by reference.
After the date of this prospectus and before we terminate the offering of the
securities under this prospectus, all documents or reports we file with the SEC
under the Securities Exchange Act of 1934 ("Exchange Act"), will be considered
to become part of this prospectus because they are incorporated by reference.
Any statement contained in a document that is or becomes part of this
prospectus, will be considered changed or replaced for purposes of this
prospectus if a statement contained in this prospectus changes or is replaced.
Any statement that is considered to be a part of this prospectus because of its
incorporation will be considered changed or replaced for the purpose of this
prospectus if a statement contained in any other subsequently filed document
that is considered to be part of this prospectus changes or replaces that
statement. After that, only the statement that is changed or replaced will be
considered to be part of this prospectus.
We file our Exchange Act documents and reports, including our Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q, electronically according to EDGAR
under CIK No. 0000727920. The SEC maintains a Web site that contains reports,
proxy and information statements, and other information regarding registrants
that file electronically with the SEC. The address of the site is
http://www.sec.gov.
Upon written or oral request, we will provide, free of charge, to each person to
whom this prospectus is delivered, a copy of any or all of the documents
considered to be part of this prospectus because they are incorporated herein.
This does not include exhibits not specifically incorporated by reference into
the text of such documents. Requests for documents should be directed to The
Equitable Life Assurance Society of the United States, 1290 Avenue of the
Americas, New York, New York 10104. Attention: Corporate Secretary (telephone :
(212) 554-1234).
<PAGE>
APPENDIX I: CONDENSED
FINANCIAL INFORMATION
- --------
A-1
- --------------------------------------------------------------------------------
The unit values and number of units outstanding shown below are for contracts
offered under Separate Account 49 with the same daily asset charges of 1.60%.
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION, EXCEPT EQ/ALLIANCE TECHNOLOGY WHICH IS BEING OFFERED FOR THE
FIRST TIME ON MAY 1, 2000.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------
FOR THE YEAR ENDING
DECEMBER 31, 1999
- ------------------------------------------------------------------------
<S> <C>
EQ/AGGRESSIVE STOCK
- ------------------------------------------------------------------------
Unit value $ 78.30
- ------------------------------------------------------------------------
Number of units outstanding (000s) 141
- ------------------------------------------------------------------------
ALLIANCE COMMON STOCK
- ------------------------------------------------------------------------
Unit value $ 275.01
- ------------------------------------------------------------------------
Number of units outstanding (000s) 255
- ------------------------------------------------------------------------
ALLIANCE HIGH YIELD
- ------------------------------------------------------------------------
Unit value $ 25.73
- ------------------------------------------------------------------------
Number of units outstanding (000s) 574
- ------------------------------------------------------------------------
ALLIANCE MONEY MARKET
- ------------------------------------------------------------------------
Unit value $ 25.55
- ------------------------------------------------------------------------
Number of units outstanding (000s) 5,805
- ------------------------------------------------------------------------
EQ/ALLIANCE PREMIER GROWTH
- ------------------------------------------------------------------------
Unit value $ 11.77
- ------------------------------------------------------------------------
Number of units outstanding (000s) 5,630
- ------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH
- ------------------------------------------------------------------------
Unit value $ 14.78
- ------------------------------------------------------------------------
Number of units outstanding (000s) 818
- ------------------------------------------------------------------------
BT EQUITY 500 INDEX
- ------------------------------------------------------------------------
Unit value $ 14.58
- ------------------------------------------------------------------------
Number of units outstanding (000s) 6,216
- ------------------------------------------------------------------------
BT INTERNATIONAL EQUITY INDEX
- ------------------------------------------------------------------------
Unit value $ 14.82
- ------------------------------------------------------------------------
Number of units outstanding (000s) 992
- ------------------------------------------------------------------------
BT SMALL COMPANY INDEX
- ------------------------------------------------------------------------
Unit value $ 11.42
- ------------------------------------------------------------------------
Number of units outstanding (000s) 522
- ------------------------------------------------------------------------
CAPITAL GUARDIAN INTERNATIONAL
- ------------------------------------------------------------------------
Unit value $ 13.93
- ------------------------------------------------------------------------
Number of units outstanding (000s) 1,286
- ------------------------------------------------------------------------
CAPITAL GUARDIAN RESEARCH
- ------------------------------------------------------------------------
Unit value $ 10.60
- ------------------------------------------------------------------------
Number of units outstanding (000s) 987
- ------------------------------------------------------------------------
CAPITAL GUARDIAN U.S. EQUITY
- ------------------------------------------------------------------------
Unit value $ 10.26
- ------------------------------------------------------------------------
Number of units outstanding (000s) 2,436
- ------------------------------------------------------------------------
</TABLE>
<PAGE>
Appendix I: Condensed financial information
- ---------
A-2
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------
FOR THE YEAR ENDING
DECEMBER 31, 1999
- ------------------------------------------------------------------------
<S> <C>
EQ/EVERGREEN
- ------------------------------------------------------------------------
Unit value $ 10.80
- ------------------------------------------------------------------------
Number of units outstanding (000s) 8
- ------------------------------------------------------------------------
EQ/EVERGREEN FOUNDATION
- ------------------------------------------------------------------------
Unit value $ 10.56
- ------------------------------------------------------------------------
Number of units outstanding (000s) 44
- ------------------------------------------------------------------------
J.P. MORGAN CORE BOND
- ------------------------------------------------------------------------
Unit value $ 10.39
- ------------------------------------------------------------------------
Number of units outstanding (000s) 2,026
- ------------------------------------------------------------------------
LAZARD LARGE CAP VALUE
- ------------------------------------------------------------------------
Unit value $ 12.04
- ------------------------------------------------------------------------
Number of units outstanding (000s) 1,532
- ------------------------------------------------------------------------
LAZARD SMALL CAP VALUE
- ------------------------------------------------------------------------
Unit value $ 9.15
- ------------------------------------------------------------------------
Number of units outstanding (000s) 988
- ------------------------------------------------------------------------
MFS EMERGING GROWTH COMPANIES
- ------------------------------------------------------------------------
Unit value $ 27.40
- ------------------------------------------------------------------------
Number of units outstanding (000s) 1,680
- ------------------------------------------------------------------------
MFS GROWTH WITH INCOME
- ------------------------------------------------------------------------
Unit value $ 10.70
- ------------------------------------------------------------------------
Number of units outstanding (000s) 2,906
- ------------------------------------------------------------------------
MFS RESEARCH
- ------------------------------------------------------------------------
Unit value $ 16.99
- ------------------------------------------------------------------------
Number of units outstanding (000s) 1,725
- ------------------------------------------------------------------------
MERCURY BASIC VALUE EQUITY
- ------------------------------------------------------------------------
Unit value $ 14.88
- ------------------------------------------------------------------------
Number of units (000s) 163
- ------------------------------------------------------------------------
MERCURY WORLD STRATEGY
- ------------------------------------------------------------------------
Unit value $ 13.00
- ------------------------------------------------------------------------
Number of units outstanding (000s) 13
- ------------------------------------------------------------------------
MORGAN STANLEY EMERGING MARKETS EQUITY
- ------------------------------------------------------------------------
Unit value $ 10.97
- ------------------------------------------------------------------------
Number of units outstanding (000s) 962
- ------------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME VALUE
- ------------------------------------------------------------------------
Unit value $ 12.39
- ------------------------------------------------------------------------
Number of units outstanding (000s) 978
- ------------------------------------------------------------------------
EQ/PUTNAM INTERNATIONAL EQUITY
- ------------------------------------------------------------------------
Unit value $ 20.10
- ------------------------------------------------------------------------
Number of units outstanding (000s) 771
- ------------------------------------------------------------------------
EQ/PUTNAM INVESTORS GROWTH
- ------------------------------------------------------------------------
Unit value $ 16.54
- ------------------------------------------------------------------------
Number of units outstanding (000s) 576
- ------------------------------------------------------------------------
</TABLE>
<PAGE>
APPENDIX II: PURCHASE
CONSIDERATIONS FOR
QP CONTRACTS
- ----------
B-1
- --------------------------------------------------------------------------------
Trustees who are considering the purchase of an Equitable Accumulator Select QP
contract should discuss with their tax advisers whether this is an appropriate
investment vehicle for the employer's plan. Trustees should consider whether the
plan provisions permit the investment of plan assets in the QP contract, the
distribution of such an annuity, the purchase of the guaranteed minimum income
benefit, and the payment of death benefits in accordance with the requirements
of the federal income tax rules. The QP contract and this prospectus should be
reviewed in full, and the following factors, among others, should be noted.
Assuming continued plan qualification and operation, earnings on qualified plan
assets will accumulate value on a tax-deferred basis even if the plan is not
funded by the Equitable Accumulator Select QP contract or another annuity.
Therefore, you should purchase an Equitable Accumulator QP contract to fund a
plan for the contract's features and benefits other than tax deferral. This QP
contract accepts transfer contributions only and not regular, ongoing payroll
contributions. For 401(k) plans under defined contribution plans, no employee
after-tax contributions are accepted.
Under defined benefit plans, we will not accept rollovers from a defined
contribution plan to a defined benefit plan. We will only accept transfers from
a defined benefit plan or a change of investment vehicles in the plan. Only one
additional contribution may be made per contract year. For defined benefit
plans, the maximum percentage of actuarial value of the plan
participant/employee's normal retirement benefit that can be funded by a QP
contract is 80%. The account value under a QP contract may at any time be more
or less than the lump sum actuarial equivalent of the accrued benefit for a
defined benefit plan participant/employee. Equitable Life does not guarantee
that the account value under a QP contract will at any time equal the actuarial
value of 80% of a participant/employee's accrued benefit. If overfunding of a
plan occurs, withdrawals from the QP contract may be required. A market value
adjustment may apply.
Further, Equitable Life will not perform or provide any plan recordkeeping
services with respect to the QP contracts. The plan's administrator will be
solely responsible for performing or providing for all such services. There is
no loan feature offered under the QP contracts, so if the plan provides for
loans and a participant/employee takes a loan from the plan, other plan assets
must be used as the source of the loan and any loan repayments must be credited
to other investment vehicles and/or accounts available under the plan.
Given that required minimum distributions must generally commence from the plan
for annuitants after age 70 1/2, trustees should consider that:
o the QP contract may not be an appropriate purchase for annuitants
approaching or over age 70 1/2; and
o the guaranteed minimum income benefit under baseBUILDER may not be an
appropriate feature for annuitants who are older than age 60 1/2
(63 1/2 in Oregon) when the contract is issued.
Finally, because the method of purchasing the QP contract, including the large
initial contribution and the features of the QP contract may appeal more to plan
participants/employees who are older and tend to be highly paid, and because
certain features of the QP contract are available only to plan
participants/employees who meet certain minimum and/or maximum age requirements,
plan trustees should discuss with their advisers whether the purchase of the QP
contract would cause the plan to engage in prohibited discrimination in
contributions, benefits or otherwise.
<PAGE>
APPENDIX III: MARKET VALUE
ADJUSTMENT
EXAMPLE
- ---------
C-1
- --------------------------------------------------------------------------------
The example below shows how the market value adjustment would be determined and
how it would be applied to a withdrawal, assuming that $100,000 was allocated on
February 15, 2001 to a fixed maturity option with a maturity date of February
15, 2010 (nine years later) at a hypothetical rate to maturity of 7.00%,
resulting in a maturity value of $183,846 on the maturity date. We further
assume that a withdrawal of $50,000 is made four years later on February 15,
2005.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
HYPOTHETICAL ASSUMED
RATE TO MATURITY ON
FEBRUARY 15, 2005
----------------------------
5.00% 9.00%
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
AS OF FEBRUARY 15, 2005 (BEFORE WITHDRAWAL)
- ------------------------------------------------------------------------------------------------
(1) Market adjusted amount $144,048 $119,487
- ------------------------------------------------------------------------------------------------
(2) Fixed maturity amount $131,080 $131,080
- ------------------------------------------------------------------------------------------------
(3) Market value adjustment:
(1) - (2) $ 12,968 $(11,593)
- ------------------------------------------------------------------------------------------------
ON FEBRUARY 15, 2005 (AFTER WITHDRAWAL)
- ------------------------------------------------------------------------------------------------
(4) Portion of market value adjustment associated with withdrawal:
(3) x [$50,000/(1)] $ 4,501 $ (4,851)
- ------------------------------------------------------------------------------------------------
(5) Reduction in fixed maturity amount:
[$50,000 - (4)] $ 45,499 $ 54,851
- ------------------------------------------------------------------------------------------------
(6) Fixed maturity amount: (2) - (5) $ 85,581 $ 76,229
- ------------------------------------------------------------------------------------------------
(7) Maturity value $120,032 $106,915
- ------------------------------------------------------------------------------------------------
(8) Market adjusted amount of (7) $ 94,048 $ 69,487
- ------------------------------------------------------------------------------------------------
</TABLE>
You should note that under this example if a withdrawal is made when rates have
increased from 7.00% to 9.00% (right column), a portion of a negative market
value adjustment is realized. On the other hand, if a withdrawal is made when
r-ates have decreased from 7.00% to 5.00% (left column), a portion of a positive
market value adjustment is realized.
<PAGE>
APPENDIX IV: GUARANTEED
MINIMUM DEATH
BENEFIT EXAMPLE
- ----------
D-1
- --------------------------------------------------------------------------------
The death benefit under the contracts is equal to the account value or, if
greater, the guaranteed minimum death benefit.
The following illustrates the guaranteed minimum death benefit calculation.
Assuming $100,000 is allocated to the variable investment options (with no
allocation to the Alliance Money Market option or the fixed maturity options),
no additional contributions, no transfers and no withdrawals, and no loans under
a Rollover TSA contract, the guaranteed minimum death benefit for an annuitant
age 45 would be calculated as follows:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
END OF 5% ROLL UP TO AGE 80 ANNUAL RATCHET TO AGE 80
CONTRACT GUARANTEED MINIMUM GUARANTEED MINIMUM
YEAR ACCOUNT VALUE DEATH BENEFIT(1) DEATH BENEFIT
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 $105,000 $105,000(1) $105,000(3)
- -----------------------------------------------------------------------------------------
2 $115,500 $110,250(2) $115,500(3)
- -----------------------------------------------------------------------------------------
3 $129,360 $115,763(2) $129,360(3)
- -----------------------------------------------------------------------------------------
4 $103,488 $121,551(1) $129,360(4)
- -----------------------------------------------------------------------------------------
5 $113,837 $127,628(1) $129,360(4)
- -----------------------------------------------------------------------------------------
6 $127,497 $134,010(1) $129,360(4)
- -----------------------------------------------------------------------------------------
7 $127,497 $140,710(1) $129,360(4)
- -----------------------------------------------------------------------------------------
</TABLE>
The account values for contract years 1 through 7 are based on hypothetical
rates of return of 5.00%, 10.00%, 12.00%, (20.00)%, 10.00%, 12.00% and 0.00%. We
are using these rates solely to illustrate how the benefit is determined. The
return rates bear no relationship to past or future investment results.
5% ROLL UP TO AGE 80
(1) At the end of contract year 1, and again at the end of contract years 4
through 7, the death benefit will be equal to the guaranteed minimum
death benefit.
(2) At the end of contract years 2 and 3, the death benefit will be equal
to the current account value since it is higher than the current
guaranteed minimum death benefit.
ANNUAL RATCHET TO AGE 80
(3) At the end of contract years 1 through 3, the guaranteed minimum death
benefit is equal to the current account value.
(4) At the end of contract years 4 through 7, the guaranteed minimum death
benefit is equal to the guaranteed minimum death benefit at the end of
the prior year since it is equal to or higher than the current account
value.
<PAGE>
STATEMENT OF ADDITIONAL
INFORMATION
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
PAGE
<S> <C>
Unit Values 2
Custodian and Independent Accountants 3
Yield Information for the Alliance Money Market Option and Alliance
High Yield Option 3
Financial Statements 5
</TABLE>
HOW TO OBTAIN AN EQUITABLE ACCUMULATOR SELECT STATEMENT OF ADDITIONAL
INFORMATION FOR SEPARATE ACCOUNT NO. 49
Send this request form to:
Equitable Accumulator Select
P.O. Box 1547
Secaucus, NJ 07096-1547
- --------------------------------------------------------------------------------
Please send me an Equitable Accumulator Select SAI for Separate Account No. 49
dated May 1, 2000:
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
City State Zip
(SAI 4ACS(5/00))
<PAGE>
Equitable Accumulator
Express(SM)
A combination variable and fixed deferred
annuity contract
PROSPECTUS DATED MAY 1, 2000
- --------------------------------------------------------------------------------
WHAT IS THE EQUITABLE ACCUMULATOR EXPRESS?
Equitable Accumulator Express is a deferred annuity contract issued by THE
EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES. It provides for the
accumulation of retirement savings and for income. The contract offers death
benefit protection. It also offers a number of payout options. You invest to
accumulate value on a tax-deferred basis in one or more of our variable
investment options and the fixed maturity options ("investment options"). This
contract may not currently be available in all states.
<TABLE>
<S> <C>
-------------------------------------------------------------------------
VARIABLE INVESTMENT OPTIONS
-------------------------------------------------------------------------
o EQ/Aggressive Stock(1) o J.P. Morgan Core Bond(3)
o Alliance Common Stock o Lazard Large Cap Value
o Alliance High Yield o Lazard Small Cap Value
o Alliance Money Market o MFS Emerging Growth
o EQ/Alliance Premier Growth Companies
o Alliance Small Cap Growth o MFS Growth with Income
o EQ/Alliance Technology(2) o MFS Research
o BT Equity 500 Index o Mercury Basic Value(4)
o BT International Equity Index o Mercury World Strategy(5)
o BT Small Company Index o Morgan Stanley Emerging
o Capital Guardian International Markets Equity
o Capital Guardian Research o EQ/Putnam Growth & Income
o Capital Guardian U.S. Equity Value
o EQ/Evergreen o EQ/Putnam International Equity
o EQ/Evergreen Foundation o EQ/Putnam Investors Growth
- --------------------------------------------------------------------------
</TABLE>
(1) Formerly named "Alliance Aggressive Stock."
(2) May not be available in California.
(3) Formerly named JPM Core Bond.
(4) Formerly named "Merrill Lynch Basic Value."
(5) Formerly named "Merrill Lynch World Strategy."
You may allocate amounts to any of the variable investment options. Each
variable investment option is a subaccount of our Separate Account No. 49.
Each variable investment option, in turn, invests in a corresponding
securities portfolio of EQ Advisors Trust. Your investment results in a
variable investment option will depend on the investment performance of the
related portfolio.
FIXED MATURITY OPTIONS. You may allocate amounts to one or more fixed maturity
options. These amounts will receive a fixed rate of interest for a specified
period. Interest is earned at a guaranteed rate we set. We make a market value
adjustment (up or down) if you make transfers or withdrawals from a fixed
maturity option before its maturity date.
TYPES OF CONTRACTS. We offer the contracts for use as:
o A nonqualified annuity ("NQ") for after-tax contributions only.
o An individual retirement annuity ("IRA"), either traditional IRA or Roth
IRA.
We offer two versions of the traditional IRA: "Rollover IRA" and "Flexible
Premium IRA." We also offer two versions of the Roth IRA: "Roth Conversion
IRA" and "Flexible Premium Roth IRA."
o An Internal Revenue Code Section 403(b) Tax-Sheltered Annuity ("TSA") -
("Rollover TSA").
A contribution of at least $50 is required to purchase a contract.
Registration statements relating to this offering have been filed with the
Securities and Exchange Commission ("SEC"). The statement of additional
information ("SAI") dated May 1, 2000, is a part of one of the registration
statements. The SAI is available free of charge. You may request one by writing
to our processing office or calling 1-800-789-7771. The SAI has been
incorporated by reference into this prospectus. This prospectus and the SAI can
also be obtained from the SEC's Web site at http://www.sec.gov. The table of
contents for the SAI appears at the back of this prospectus.
THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. THE CONTRACTS ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY.
THEY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE NOT BANK
GUARANTEED. THEY ARE SUBJECT TO INVESTMENT RISKS AND POSSIBLE LOSS OF PRINCIPAL.
72092
<PAGE>
- ----------------
2 Contents of this prospectus
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
EQUITABLE ACCUMULATOR EXPRESS(SM)
Index of key words and phrases 4
Who is Equitable Life? 5
How to reach us 6
Equitable Accumulator Express at a glance - key
features 8
- ---------------------------------------------------------- --
FEE TABLE 10
- ---------------------------------------------------------- --
Examples 13
Condensed financial information 14
- ---------------------------------------------------------- --
- ---------------------------------------------------------- --
1
CONTRACT FEATURES AND BENEFITS 15
- ---------------------------------------------------------- --
How you can purchase and contribute to your contract 15
Owner and annuitant requirements 18
How you can make your contributions 18
What are your investment options under the contract? 18
Allocating your contributions 21
Your right to cancel within a certain number of days 22
- ---------------------------------------------------------- --
2
DETERMINING YOUR CONTRACT'S VALUE 23
- ---------------------------------------------------------- --
Your account value and cash value 23
Your contract's value in the variable investment options 23
Your contract's value in the fixed maturity options 23
- ---------------------------------------------------------- --
3
TRANSFERRING YOUR MONEY AMONG
INVESTMENT OPTIONS 24
- ---------------------------------------------------------- --
Transferring your account value 24
Market timing 24
Dollar cost averaging 24
Rebalancing your account value 25
- --------------------------------------------------------------------------------
"We," "our," and "us" refer to Equitable Life. When we use the word "contract" it also includes certificates
When we address the reader of this prospectus that are issued under group contracts in some states.
with words such as "you"and "your," we mean the
person who has the right or responsibility that
the prospectus is discussing at that point.
This is usually the contract owner.
</TABLE>
<PAGE>
- ----------
3 Contents of this prospectus
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
- -------------------------------------------------------- ----
4
ACCESSING YOUR MONEY 26
- ------------------------------------------------------- ----
Withdrawing your account value 26
How withdrawals are taken from your account value 27
Loans under Rollover TSA contracts 27
Surrendering your contract to receive its cash value 28
When to expect payments 28
Annuity purchase factors 29
Your annuity payout options 29
- ------------------------------------------------------- ----
5
CHARGES AND EXPENSES 32
- ------------------------------------------------------- ----
Charges that Equitable Life deducts 32
Charges that EQ Advisors Trust deducts 33
Group or sponsored arrangements 34
Other distribution arrangements 34
- ------------------------------------------------------- ----
6
PAYMENT OF DEATH BENEFIT 35
- ------------------------------------------------------- ----
Your beneficiary and payment of benefit 35
How death benefit payment is made 35
Beneficiary continuation option 36
- ------------------------------------------------------- ----
7
TAX INFORMATION 38
- ------------------------------------------------------- ----
Overview 38
Transfers among investment options 38
Taxation of nonqualified annuities 38
Individual retirement arrangements (IRAs) 40
Tax-Sheltered Annuity contracts (TSAs) 50
Federal and state income tax withholding and
information reporting 55
Impact of taxes to Equitable Life 56
</TABLE>
<TABLE>
<S> <C>
- ------------------------------------------------------- ----
8
MORE INFORMATION 57
- ------------------------------------------------------- ----
About our Separate Account No. 49 57
About EQ Advisors Trust 57
About our fixed maturity options 58
About the general account 59
About other methods of payment 59
Dates and prices at which contract events occur 60
About your voting rights 61
About legal proceedings 61
About our independent accountants 61
Financial Statements 62
Transfers of ownership, collateral assignments, loans,
and borrowing 62
Distribution of the contracts 62
- ------------------------------------------------------- ----
9
INVESTMENT PERFORMANCE 63
- ------------------------------------------------------- ----
Benchmarks 63
Communicating performance data 72
- ------------------------------------------------------- ----
10
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE 74
- ------------------------------------------------------- ----
- ------------------------------------------------------- ----
APPENDIX
- ------------------------------------------------------- ----
Condensed financial information A-1
Market value adjustment example B-1
- ------------------------------------------------------- ----
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
- -------------------------------------------------------
</TABLE>
<PAGE>
Index of key words and phrases
- --------
4 Index of key words and phrases
- --------------------------------------------------------------------------------
This index should help you locate more information on the terms used in this
prospectus.
<TABLE>
<CAPTION>
PAGE PAGE
<S> <C> <C> <C>
account value 23 IRS 38
annuitant 15 investment options 18
annuity payout options 29 market adjusted amount 21
beneficiary 35 market value adjustment 21
business day 60 maturity value 21
cash value 23 minimum death benefit 35
conduit IRA 44 NQ cover
contract date 9 portfolio cover
contract date anniversary 9 processing office 6
contract year 9 rate to maturity 20
contributions to Roth IRAs 47 Required Beginning Date 36
regular contributions 47 Rollover IRA cover
rollovers and direct transfers 48 Rollover TSA cover
conversion contributions 48 Roth Conversion IRA cover
contributions to traditional IRAs 41 Roth IRA 47
regular contributions 41 SAI cover
rollovers and transfers 42 SEC cover
EQAccess 6 TOPS 6
fixed maturity options 20 TSA 50
Flexible Premium IRA cover traditional IRA 41
Flexible Premium Roth IRA cover unit 33
IRA 40 variable investment options 18
</TABLE>
To make this prospectus easier to read, we sometimes use different words than
in the contract or supplemental materials. This is illustrated below. Although
we use different words, they have the same meaning in this prospectus as in the
contract or supplemental materials. Your registered representative can provide
further explanation about your contract.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
PROSPECTUS CONTRACT OR SUPPLEMENTAL MATERIALS
- --------------------------------------------------------------------------------
<S> <C>
fixed maturity options Guarantee Periods (Guaranteed Fixed
Interest Accounts in supplemental materials)
variable investment options Investment Funds
account value Annuity Account Value
rate to maturity Guaranteed Rates
unit Accumulation Unit
</TABLE>
<PAGE>
Who is Equitable Life?
- ----------------
5 Who is Equitable Life?
- --------------------------------------------------------------------------------
We are The Equitable Life Assurance Society of the United States ("Equitable
Life"), a New York stock life insurance corporation. We have been doing business
since 1859. Equitable Life is a subsidiary of AXA Financial, Inc. (previously,
The Equitable Companies Incorporated). The majority shareholder of AXA
Financial, Inc. is AXA, a French holding company for an international group of
insurance and related financial services companies. As a majority shareholder,
and under its other arrangements with Equitable Life and Equitable Life's
parent, AXA exercises significant influence over the operations and capital
structure of Equitable Life and its parent. No company other than Equitable
Life, however, has any legal responsibility to pay amounts that Equitable Life
owes under the contract.
AXA Financial, Inc. and its consolidated subsidiaries managed approximately
$462.7 billion in assets as of December 31, 1999. For over 100 years Equitable
Life has been among the largest insurance companies in the United States. We are
licensed to sell life insurance and annuities in all fifty states, the District
of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our home office is
located at 1290 Avenue of the Americas, New York, N.Y. 10104.
<PAGE>
- ----------
6 Who is Equitable Life?
- --------------------------------------------------------------------------------
HOW TO REACH US
You may communicate with our processing office as listed below for any of the
following purposes:
- ---------------------------------------------
FOR CONTRIBUTIONS SENT BY REGULAR MAIL:
- ---------------------------------------------
Equitable Accumulator Express
P.O. Box 13014
Newark, NJ 07188-0014
- ---------------------------------------------
FOR CONTRIBUTIONS SENT BY EXPRESS DELIVERY:
- ---------------------------------------------
Equitable Accumulator Express
c/o Bank One, N.A.
300 Harmon Meadow Boulevard, 3rd Floor
Attn: Box 13014
Secaucus, NJ 07094
- ---------------------------------------------
FOR ALL OTHER COMMUNICATIONS (E.G.,
REQUESTS FOR TRANSFERS, WITHDRAWALS, OR
REQUIRED NOTICES) SENT BY REGULAR MAIL:
- ---------------------------------------------
Equitable Accumulator Express
P.O. Box 1547
Secaucus, NJ 07096-1547
- ---------------------------------------------
FOR ALL OTHER COMMUNICATIONS (E.G.,
REQUESTS FOR TRANSFERS, WITHDRAWALS, OR
REQUIRED NOTICES) SENT BY EXPRESS DELIVERY:
- ---------------------------------------------
Equitable Accumulator Express
200 Plaza Drive, 4th Floor
Secaucus, NJ 07094
- ---------------------------------------------
REPORTS WE PROVIDE:
- ---------------------------------------------
o written confirmation of financial transactions;
o statement of your contract values at the close of each calendar quarter
(four per year); and
o annual statement of your contract values as of the close of the contract
year.
- ------------------------------------
TELEPHONE OPERATED PROGRAM SUPPORT
("TOPS") AND EQACCESS SYSTEMS:
- ------------------------------------
TOPS is designed to provide you with up-to-date information via touch-tone
telephone. EQAccess is designed to provide this information through the
Internet. You can obtain information on:
o your current account value;
o your current allocation percentages (anticipated to be available through
EQAccess by the end of 2000);
o the number of units you have in the variable investment options;
o rates to maturity for the fixed maturity options;
o the daily unit values for the variable investment options; and
o performance information regarding the variable investment options (not
available through TOPS).
You can also:
o change your allocation percentages and/or transfer among the investment
options (anticipated to be available through EQAccess by the end of 2000);
o change your TOPS personal identification number (PIN) (not available
through EQAccess); and
o change your EQAccess password (not available through TOPS).
TOPS and EQAccess are normally available seven days a week, 24 hours a day. You
may use TOPS by calling toll free 1-888-909-7770. You may use EQAccess by
visiting our Web site at http://www.equitable.com and clicking on EQAccess. Of
course, for reasons beyond our control, these services may sometimes be
unavailable.
We have established procedures to reasonably confirm that the instructions
communicated by telephone or the Internet are genuine. For example, we will
require certain personal
<PAGE>
- ----------
7 Who is Equitable Life?
- --------------------------------------------------------------------------------
identification information before we will act on telephone or Internet
instructions and we will provide written confirmation of your transfers. If we
do not employ reasonable procedures to confirm the genuineness of telephone or
Internet instructions, we may be liable for any losses arising out of any act or
omission that constitutes negligence, lack of good faith, or willful misconduct.
In light of our procedures, we will not be liable for following telephone or
Internet instructions we reasonably believe to be genuine.
We reserve the right to limit access to these services if we determine that you
are engaged in a market timing strategy (see "Market timing" in "Transferring
your money among investment options").
- ----------------------------------------------
CUSTOMER SERVICE REPRESENTATIVE:
- ----------------------------------------------
You may also use our toll-free number (1-800-789-7771) to
speak with one of our customer service representatives. Our
customer service representatives are available on any business
day from 8:30 a.m. until 5:30 p.m., Eastern Time.
WE REQUIRE THAT THE FOLLOWING TYPES OF COMMUNICATIONS BE ON SPECIFIC FORMS WE
PROVIDE FOR THAT PURPOSE:
(1) authorization for telephone transfers by your registered representative;
(2) conversion of a traditional IRA to a Roth Conversion IRA or Flexible
Premium Roth IRA contract;
(3) election of the automatic investment program;
(4) election of the rebalancing program;
(5) requests for loans under Rollover TSA contracts;
(6) spousal consent for loans under Rollover TSA contracts;
(7) tax withholding election; and
(8) election of the beneficiary continuation option.
WE ALSO HAVE SPECIFIC FORMS THAT WE RECOMMEND YOU USE FOR THE FOLLOWING TYPES
OF REQUESTS:
(1) address changes;
(2) beneficiary changes;
(3) transfers between investment options; and
(4) contract surrender and withdrawal requests.
TO CANCEL OR CHANGE ANY OF THE FOLLOWING WE REQUIRE WRITTEN NOTIFICATION
GENERALLY AT LEAST SEVEN CALENDAR DAYS BEFORE THE NEXT SCHEDULED TRANSACTION:
(1) automatic investment program;
(2) dollar cost averaging;
(3) rebalancing;
(4) substantially equal withdrawals;
(5) systematic withdrawals; and
(6) the date annuity payments are to begin.
You must sign and date all these requests. Any written request that is not on
one of our forms must include your name and your contract number along with
adequate details about the notice you wish to give or the action you wish us to
take.
SIGNATURES:
The proper person to sign forms, notices and requests would normally be the
owner. If there are joint owners both must sign.
<PAGE>
Equitable Accumulator Express at a glance - key features
- --------
8 Equitable Accumulator Express at a glance - key features
- --------------------------------------------------------------------------------
<TABLE>
- ----------------------------------------------------------------------------------------------------------------------
<S> <C>
PROFESSIONAL Equitable Accumulator Express' variable investment options invest in different portfolios
INVESTMENT managed by professional investment advisers.
MANAGEMENT
- ----------------------------------------------------------------------------------------------------------------------
FIXED MATURITY o 10 fixed maturity options with maturities ranging from approximately 1 to 10 years.
OPTIONS o Each fixed maturity option offers a guarantee of principal and interest rate if you hold
it to maturity.
-----------------------------------------------------------------------------------------------
If you make withdrawals or transfers from a fixed maturity option before maturity, there
will be a market value adjustment due to differences in interest rates. This may increase or
decrease any value that you have left in that fixed maturity option. If you surrender your
contract, a market value adjustment may also apply.
- ----------------------------------------------------------------------------------------------------------------------
TAX ADVANTAGES o On earnings inside the No tax on any dividends, interest, or capital gains until you
contract make withdrawals from your contract or receive annuity
payments.
-----------------------------------------------------------------------------------------------
o On transfers inside the No tax on transfers among investment options.
contract
-----------------------------------------------------------------------------------------------
If you are buying a contract to fund a retirement plan that already provides tax deferral
under sections of the Internal Revenue Code, you should do so for the contract's features
and benefits other than tax deferral. In such situations, the tax deferral of the contract
does not provide necessary or additional benefits.
- ----------------------------------------------------------------------------------------------------------------------
CONTRIBUTION AMOUNTS Minimum: $50 ($20 under our automatic investment program)
Maximum contribution limitations may apply.
- ----------------------------------------------------------------------------------------------------------------------
ACCESS TO YOUR MONEY o Lump sum withdrawals
o Several withdrawal options on a periodic basis
o Loans under Rollover TSA contracts
o Contract surrender
You may incur a withdrawal charge for certain withdrawals or if you surrender your contract.
You may also incur income tax and a tax penalty.
- ----------------------------------------------------------------------------------------------------------------------
PAYOUT OPTIONS o Fixed annuity payout options
o Variable Immediate Annuity payout options
o Income Manager(Reg. TM) payout annuity options
- ----------------------------------------------------------------------------------------------------------------------
ADDITIONAL FEATURES o Dollar cost averaging
o Automatic investment program
o Account value rebalancing (quarterly, semiannually, and annually)
o Free transfers
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
9 Equitable Accumulator Express at a glance - key features
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
FEES AND CHARGES o Daily charges on amounts invested in variable investment
options for mortality and expense risks and administrative
charges at a current annual rate of 0.95% (1.05% maximum).
o If your account value at the end of the contract year
is less than $25,000 for NQ contracts (or less than
$20,000 for IRA contracts), we deduct an annual
administrative charge equal to $30 or during the first
two contract years 2% of your account value, if less.
If your account value is $25,000 or more for NQ
contracts (or $20,000 or more for IRA contracts), we
will not deduct the charge.
o No sales charge deducted at the time you make
contributions.
o During the first seven contract years following a
contribution, a charge will be deducted from amounts
that you withdraw that exceed 10% of your account
value. We use the account value on the most recent
contract date anniversary to calculate the 10% amount
available. The charge begins at 7% in the first
contract year following a contribution. It declines by
1% each year to 1% in the seventh contract year. There
is no withdrawal charge in the eighth and later
contract years following a contribution.
---------------------------------------------------------
The "contract date" is the effective date of a contract.
This usually is the business day we receive the properly
completed and signed application, along with any other
required documents, and your initial contribution. Your
contract date will be shown in your contract. The 12-month
period beginning on your contract date and each 12-month
period after that date is a "contract year." The end of
each 12-month period is your "contract date anniversary."
---------------------------------------------------------
o We deduct a charge designed to approximate certain
taxes that may be imposed on us, such as premium taxes
in your state. This charge is generally deducted from
the amount applied to an annuity payout option.
o We deduct a $350 annuity administrative fee from
amounts applied to the Variable Immediate Annuity
payout options.
o Annual expenses of EQ Advisors Trust portfolios are
calculated as a percentage of the average daily net
assets invested in each portfolio. These expenses
include management fees ranging from 0.25% to 1.15%
annually, 12b-1 fees of 0.25% annually, and other
expenses.
ANNUITANT ISSUE AGES
NQ: 0-83
Rollover IRA, Flexible Premium Roth IRA, Roth Conversion IRA
and Rollover TSA: 20-83 Flexible Premium IRA: 20-70
</TABLE>
THE ABOVE IS NOT A COMPLETE DESCRIPTION OF ALL MATERIAL PROVISIONS OF THE
CONTRACT. IN SOME CASES RESTRICTIONS OR EXCEPTIONS APPLY. ALSO, ALL FEATURES OF
THE CONTRACT ARE NOT NECESSARILY AVAILABLE IN YOUR STATE OR AT CERTAIN AGES.
For more detailed information we urge you to read the contents of this
prospectus, as well as your contract. Please feel free to speak with your
registered representative, or call us, if you have any questions.
OTHER CONTRACTS
We offer a variety of fixed and variable annuity contracts. They may offer
features, including investment options, fees and/or charges that are different
from those in the contracts offered by this prospectus. Not every contract is
offered through the same distributor. Upon request, your registered
representative can show you information regarding other Equitable Life annuity
contracts that he or she distributes. You can also contact us to find out more
about any of the Equitable Life annuity contracts.
<PAGE>
Fee table
- --------
10 Fee table
- --------------------------------------------------------------------------------
The fee table below will help you understand the various charges and expenses
that apply to your contract. The table reflects charges you will directly incur
under the contract, as well as charges and expenses of the portfolios that you
will bear indirectly. Charges designed to approximate certain taxes imposed on
us, such as premium taxes in your state may also apply. Also, an annuity
administrative fee may apply when your annuity payments are to begin. Each of
the charges and expenses is more fully described in "Charges and expenses"
later in this prospectus.
The fixed maturity options are not covered by the fee table and examples.
However, the annual administrative charge and the withdrawal charge do apply to
the fixed maturity options. A market value adjustment (up or down) may apply as
a result of a withdrawal, transfer or surrender of amounts from a fixed
maturity option.
<TABLE>
<S> <C>
CHARGES WE DEDUCT FROM YOUR VARIABLE INVESTMENT OPTIONS EXPRESSED AS AN
ANNUAL PERCENTAGE OF DAILY NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------------
Mortality and expense risks(1) 0.70%
Administrative 0.25% current (0.35% maximum)
------------------------------
Total annual expenses 0.95% current (1.05% maximum)
- ---------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE ON EACH CONTRACT DATE ANNIVERSARY
- -----------------------------------------------------------------------------------------------------------------------------
Maximum annual administrative charge
If your account value on a contract date anniversary is less than $25,000(2)
for NQ contracts (or less than $20,000 for IRA contracts) $30
If your account value on a contract date anniversary is $25,000 or more for NQ
contracts (or $20,000 or more for IRA contracts) $0
- ---------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE AT THE TIME YOU REQUEST CERTAIN TRANSACTIONS
- -----------------------------------------------------------------------------------------------------------------------------
WITHDRAWAL CHARGE AS A PERCENTAGE OF CONTRIBUTIONS (deducted if you Contract
surrender your contract or make certain withdrawals. The withdrawal charge year
percentage we use is determined by the contract year in which you make the 1... 7.00%
withdrawal or surrender your contract. For each contribution, we consider the 2... 6.00%
contract year in which we receive that contribution to be "contract year 1")(3) 3... 5.00%
4... 4.00%
5... 3.00%
6... 2.00%
7... 1.00%
8+.. 0.00%
Charge if you elect a Variable Immediate Annuity payout option $350
</TABLE>
<PAGE>
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11 Fee table
- --------------------------------------------------------------------------------
EQ ADVISORS TRUST ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
TOTAL
OTHER ANNUAL
EXPENSES EXPENSES
MANAGEMENT (AFTER EXPENSE (AFTER EXPENSE
FEES(4) 12B-1 FEES(5) LIMITATION)(6) LIMITATION)(7)
-------------- ----------------- --------------- ---------------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock 0.60% 0.25% 0.04% 0.89%
Alliance Common Stock 0.46% 0.25% 0.04% 0.75%
Alliance High Yield 0.60% 0.25% 0.05% 0.90%
Alliance Money Market 0.34% 0.25% 0.05% 0.64%
EQ/Alliance Premier Growth 0.90% 0.25% 0.00% 1.15%
Alliance Small Cap Growth 0.75% 0.25% 0.07% 1.07%
EQ/Alliance Technology 0.90% 0.25% 0.00% 1.15%
BT Equity 500 Index 0.25% 0.25% 0.10% 0.60%
BT International Equity Index 0.35% 0.25% 0.40% 1.00%
BT Small Company Index 0.25% 0.25% 0.25% 0.75%
Capital Guardian International 0.85% 0.25% 0.10% 1.20%
Capital Guardian Research 0.65% 0.25% 0.05% 0.95%
Capital Guardian U.S. Equity 0.65% 0.25% 0.05% 0.95%
EQ/Evergreen 0.65% 0.25% 0.05% 0.95%
EQ/Evergreen Foundation 0.60% 0.25% 0.10% 0.95%
J.P. Morgan Core Bond 0.45% 0.25% 0.10% 0.80%
Lazard Large Cap Value 0.65% 0.25% 0.05% 0.95%
Lazard Small Cap Value 0.75% 0.25% 0.10% 1.10%
MFS Emerging Growth Companies 0.65% 0.25% 0.10% 1.00%
MFS Growth with Income 0.60% 0.25% 0.10% 0.95%
MFS Research 0.65% 0.25% 0.05% 0.95%
Mercury Basic Value Equity 0.60% 0.25% 0.10% 0.95%
Mercury World Strategy 0.70% 0.25% 0.25% 1.20%
Morgan Stanley Emerging Markets Equity 1.15% 0.25% 0.35% 1.75%
EQ/Putnam Growth & Income Value 0.60% 0.25% 0.10% 0.95%
EQ/Putnam International Equity 0.85% 0.25% 0.15% 1.25%
EQ/Putnam Investors Growth 0.65% 0.25% 0.05% 0.95%
</TABLE>
- ----------
Notes:
(1) A portion of this charge is for providing the death benefit.
(2) During the first two contract years this charge is equal to the lesser of
$30 or 2% of your account value if it applies. Thereafter, the charge is
$30 for each contract year.
(3) Deducted upon a withdrawal of amounts in excess of the 10% free
withdrawal amount, and upon surrender of a contract.
(4) The management fees shown reflect revised management fees, effective on
or about May 1, 2000 which were approved by shareholders. The management
fee shown for Lazard Large Cap Value does not reflect the waiver of a
portion of each portfolio's investment management fees that are currently
in effect. The management fee for each portfolio cannot be increased
without a vote of each portfolio's shareholders.
<PAGE>
- -----
12 Fee table
- --------------------------------------------------------------------------------
(5) Portfolio shares are all subject to fees imposed under the distribution
plan (the "Rule 12b-1 Plan") adopted by EQ Advisors Trust pursuant to
Rule 12b-1 under the Investment Company Act of 1940. The 12b-1 fee will
not be increased for the life of the contracts. Prior to October 18,
1999, the total annual expenses for the Alliance Small Cap Growth
portfolio were limited to 1.20% under an expense limitation arrangement
related to that portfolio's Rule 12b-1 Plan. The arrangement is no longer
in effect. The amounts shown have been restated to reflect the expenses
that would have been incurred in 1999, absent the expense limitation
agreement.
(6) The amounts shown as "Other Expenses" will fluctuate from year to year
depending on actual expenses. See footnote (7) for any expense limitation
agreements.
On October 18, 1999, the Alliance portfolios (other than EQ/Alliance
Premier Growth and EQ/Alliance Technology) became part of the portfolios
of EQ Advisors Trust. The "Other Expenses" for these portfolios have been
restated to reflect the estimated expenses that would have been incurred
had these portfolios been portfolios of EQ Advisors Trust for the entire
year ended December 31, 1999. The restated expenses reflect an increase of
0.01% for each of these portfolios.
(7) Equitable Life, EQ Advisors Trust's manager, has entered into an expense
limitation agreement with respect to certain portfolios. Under this
agreement Equitable Life has agreed to waive or limit its fees and assume
other expenses. Under the expense limitation agreement, total annual
operating expenses of certain portfolios (other than interest, taxes,
brokerage commissions, capitalized expenditures, extraordinary expenses
and 12b-1 fees) are limited as a percentage of the average daily net
assets of each of the following portfolios: 1.75% for Morgan Stanley
Emerging Markets Equity; 1.25% for EQ/Putnam International Equity; 1.20%
for Capital Guardian International and Mercury World Strategy; 1.15% for
EQ/Alliance Premier Growth and EQ/Alliance Technology; 1.10% for Lazard
Small Cap Value; 1.00% for BT International Equity Index and MFS Emerging
Growth Companies; 0.95% for Capital Guardian U.S. Equity, Capital
Guardian Research, EQ/Evergreen, EQ/Evergreen Foundation, Lazard Large
Cap Value, MFS Growth with Income, MFS Research, Mercury Basic Value
Equity, EQ/Putnam Growth & Income Value and EQ/Putnam Investors Growth;
0.80% for J.P. Morgan Core Bond; 0.75% for BT Small Company Index; and
0.60% for BT Equity 500 Index. The expense limitations for the BT Equity
500 Index, EQ/Putnam Growth & Income Value, EQ/Putnam International
Equity, Mercury Basic Value Equity, MFS Growth with Income, MFS Research
and MFS Emerging Growth Companies portfolios reflect an increase
effective on May 1, 2000. The expense limitation for the EQ/Evergreen and
Lazard Small Cap Value portfolio reflects a decrease effective on May 1,
2000.
Absent the expense limitation, the "Other Expenses" for 1999 on an
annualized basis for each of the portfolios would have been as follows:
1.00% for Morgan Stanley Emerging Markets Equity; 0.32% for EQ/Putnam
International Equity; 0.66% for Capital Guardian International; 0.46% for
Mercury World Strategy; 0.23% for EQ/Alliance Premier Growth; 0.10% for
EQ/Alliance Technology; 0.26% for Lazard Small Cap Value; 0.49% for BT
International Equity Index; 0.17% for MFS Emerging Growth Companies; 0.34%
for Capital Guardian U.S. Equity; 0.47% for Capital Guardian Research;
1.87% for EQ/Evergreen; 1.07% for EQ/Evergreen Foundation; 0.21% for
Lazard Large Cap Value; 0.37% for MFS Growth with Income; 0.17% for MFS
Research; 0.17% for Mercury Basic Value Equity; 0.16% for EQ/Putnam Growth
& Income Value; 0.19% for EQ/Putnam Investors Growth; 0.20% for J.P.
Morgan Core Bond; 0.71% for BT Small Company Index; and 0.18% for BT
Equity 500 Index. Initial seed capital was invested on April 30, 1999 for
EQ/Alliance Premier Growth, Capital Guardian U.S. Equity and Capital
Guardian Research portfolios and will be invested on or about May 1, 2000
for EQ/Alliance Technology Portfolio and therefore expenses have been
estimated.
Each portfolio may at a later date make a reimbursement to Equitable Life
for any of the management fees waived or limited and other expenses
assumed and paid by Equitable Life pursuant to the expense limitation
agreement provided that, among other things, such portfolio has reached
sufficient size to permit such reimbursement to be made and provided that
the portfolio's current annual operating expenses do not exceed the
operating expense limit determined for such portfolio. For more
information see the prospectus for EQ Advisors Trust.
<PAGE>
- -----
13 Fee table
- --------------------------------------------------------------------------------
EXAMPLES
The examples below show the expenses that a hypothetical contract owner would
pay in the situations illustrated. We assume that a $1,000 contribution is
invested in one of the variable investment options listed and a 5% annual
return is earned on the assets in that option.(1) The annual administrative
charge is based on the charges applicable to a mix of estimated contract sizes,
resulting in an administrative charge of $0.14 per $1,000. Other than as
indicated above, the charges used in the examples are the maximum charges
rather than the lower current charges. The administrative and annual
administrative charges used in the examples are the maximum charges.
These examples should not be considered a representation of past or future
expenses for each option. Actual expenses may be greater or less than those
shown. Similarly, the annual rate of return assumed in the examples is not an
estimate or guarantee of future investment performance.
<TABLE>
<CAPTION>
IF YOU SURRENDER YOUR CONTRACT
AT THE END OF EACH PERIOD SHOWN,
THE EXPENSES WOULD BE:
-------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ------------ ------------ -----------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock $ 90.79 $ 114.21 $ 140.20 $ 237.47
Alliance Common Stock $ 89.32 $ 109.76 $ 132.72 $ 222.19
Alliance High Yield $ 90.90 $ 114.53 $ 140.74 $ 238.55
Alliance Money Market $ 88.17 $ 106.25 $ 126.80 $ 210.03
EQ/Alliance Premier Growth $ 94.67 $ 125.91 $ 159.78 $ 276.84
Alliance Small Cap Growth $ 92.68 $ 119.91 $ 149.76 $ 256.81
EQ/Alliance Technology $ 93.62 $ 122.76 $ 154.52 $ 266.34
BT Equity 500 Index $ 87.85 $ 105.30 $ 125.18 $ 206.69
BT International Equity Index $ 92.05 $ 118.01 $ 146.59 $ 250.40
BT Small Company Index $ 89.43 $ 110.08 $ 133.25 $ 223.29
Capital Guardian International $ 94.15 $ 124.33 $ 157.15 $ 271.60
Capital Guardian Research $ 91.52 $ 116.43 $ 143.93 $ 245.03
Capital Guardian U.S. Equity $ 91.52 $ 116.43 $ 143.93 $ 245.03
EQ/Evergreen $ 91.52 $ 116.43 $ 143.93 $ 245.03
EQ/Evergreen Foundation $ 91.52 $ 116.43 $ 143.93 $ 245.03
J.P. Morgan Core Bond $ 89.95 $ 111.67 $ 135.93 $ 228.76
Lazard Large Cap Value $ 91.52 $ 116.43 $ 143.93 $ 245.03
Lazard Small Cap Value $ 93.10 $ 121.18 $ 151.88 $ 261.06
MFS Emerging Growth Companies $ 92.05 $ 118.01 $ 146.59 $ 250.40
MFS Growth with Income $ 91.52 $ 116.43 $ 143.19 $ 245.03
MFS Research $ 91.52 $ 116.43 $ 143.93 $ 245.03
Mercury Basic Value Equity $ 91.52 $ 116.43 $ 143.93 $ 245.03
Mercury World Strategy $ 94.15 $ 124.33 $ 157.15 $ 271.60
Morgan Stanley Emerging Markets Equity $ 99.92 $ 141.58 $ 185.73 $ 327.74
EQ/Putnam Growth & Income Value $ 91.52 $ 116.43 $ 143.93 $ 245.03
EQ/Putnam International Equity $ 94.67 $ 125.91 $ 159.78 $ 276.84
EQ/Putnam Investors Growth $ 92.57 $ 119.60 $ 149.23 $ 255.74
<CAPTION>
IF YOU DO NOT SURRENDER YOUR CONTRACT
AT THE END OF EACH PERIOD SHOWN,
THE EXPENSES WOULD BE:
------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock $ 20.79 $ 64.21 $ 110.20 $ 237.47
Alliance Common Stock $ 19.32 $ 59.76 $ 102.72 $ 222.19
Alliance High Yield $ 20.90 $ 64.53 $ 110.74 $ 238.55
Alliance Money Market $ 18.17 $ 56.25 $ 96.80 $ 210.03
EQ/Alliance Premier Growth $ 24.67 $ 75.91 $ 129.78 $ 276.84
Alliance Small Cap Growth $ 22.68 $ 69.91 $ 119.76 $ 256.81
EQ/Alliance Technology $ 23.62 $ 72.76 $ 124.52 $ 266.34
BT Equity 500 Index $ 17.85 $ 55.30 $ 95.18 $ 206.69
BT International Equity Index $ 22.05 $ 68.01 $ 116.59 $ 250.40
BT Small Company Index $ 19.43 $ 60.08 $ 103.25 $ 223.29
Capital Guardian International $ 24.15 $ 74.33 $ 127.15 $ 271.60
Capital Guardian Research $ 21.52 $ 66.43 $ 113.93 $ 245.03
Capital Guardian U.S. Equity $ 21.52 $ 66.43 $ 113.93 $ 245.03
EQ/Evergreen $ 21.52 $ 66.43 $ 113.93 $ 245.03
EQ/Evergreen Foundation $ 21.52 $ 66.43 $ 113.93 $ 245.03
J.P. Morgan Core Bond $ 19.95 $ 61.67 $ 105.93 $ 228.76
Lazard Large Cap Value $ 21.52 $ 66.43 $ 113.93 $ 245.03
Lazard Small Cap Value $ 23.10 $ 71.18 $ 121.88 $ 261.06
MFS Emerging Growth Companies $ 22.05 $ 68.01 $ 116.59 $ 250.40
MFS Growth with Income $ 21.52 $ 66.43 $ 113.93 $ 245.03
MFS Research $ 21.52 $ 66.43 $ 113.93 $ 245.03
Mercury Basic Value Equity $ 21.52 $ 66.43 $ 113.93 $ 245.03
Mercury World Strategy $ 24.15 $ 74.33 $ 127.15 $ 271.60
Morgan Stanley Emerging Markets Equity $ 29.92 $ 91.58 $ 155.73 $ 327.74
EQ/Putnam Growth & Income Value $ 21.52 $ 66.43 $ 113.93 $ 245.03
EQ/Putnam International Equity $ 24.67 $ 75.91 $ 129.78 $ 276.84
EQ/Putnam Investors Growth $ 22.57 $ 69.60 $ 119.23 $ 255.74
</TABLE>
<PAGE>
- -----
14 Fee table
- --------------------------------------------------------------------------------
- ----------
(1) The amount accumulated from the $1,000 contribution could not be paid in
the form of an annuity payout option at the end of any of the periods
shown in the examples. This is because if the amount applied to purchase
an annuity payout option is less than $2,000, or the initial payment is
less than $20, we may pay the amount to you in a single sum instead of as
payments under an annuity payout option. See "Accessing your money."
IF YOU ELECT A VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION:
Assuming an annuity payout option could be issued (see note (1) above), and you
elect a Variable Immediate Annuity payout option, the expenses shown in the
example for "if you do not surrender your contract" would, in each case, be
increased by $4.34 based on the average amount applied to annuity payout
options in 1999. See "Annuity administrative fee" in "Charges and expenses."
CONDENSED FINANCIAL INFORMATION
Please see Appendix I at the end of this prospectus for the unit values and the
number of units outstanding as of the end of the periods shown for each of the
variable investment options available as of December 31, 1999.
<PAGE>
1
Contract features and benefits
- --------
15 Contract features and benefits
- --------------------------------------------------------------------------------
HOW YOU CAN PURCHASE AND CONTRIBUTE TO YOUR CONTRACT
You may purchase a contract by making payments to us that we call
"contributions." We require a minimum contribution amount of $50 to purchase a
contract. The minimum contribution amount under our automatic investment
program is $20. We discuss the automatic investment program under "About other
methods of payment" in "More information" later in this prospectus. The
following table summarizes our rules regarding contributions to your contract.
All ages in the table refer to the age of the annuitant named in the contract.
- ------------------------------------------------------------------------------
The "annuitant" is the person who is the measuring life for determining
contract benefits. The annuitant is not necessarily the contract owner.
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVAILABLE
CONTRACT FOR ANNUITANT LIMITATIONS ON
TYPE ISSUE AGES SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NQ 0 through 83 o After-tax money. o No additional contributions after
age 84.
o Paid to us by check or transfer of
contract value in a tax-deferred
exchange under Section 1035 of the
Internal Revenue Code.
- --------------------------------------------------------------------------------------------------------------------------
Rollover IRA 20 through 83 o Rollovers from a qualified plan. o No rollover or direct transfer
contributions after age 84.
o Rollovers from a TSA.
o Contributions after age 70 1/2 must be
o Rollovers from another traditional net of required minimum distributions.
individual retirement arrangement.
o Regular IRA contributions are limited to
o Direct custodian-to-custodian transfers $2,000 per year
from another traditional individual
retirement arrangement. o Although we accept regular IRA
contributions under Rollover IRA
o Regular IRA contributions. contracts we intend that this contract
be used for rollover and direct transfer
contributions. Please refer to
"Withdrawals, payments and transfer of
funds out of traditional IRA's" in "Tax
Information" for a discussion of conduit
IRAs.
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
16 Contract features and benefits
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVAILABLE
CONTRACT FOR ANNUITANT LIMITATIONS ON
TYPE ISSUE AGES SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Roth 20 through 83 o Rollovers from another Roth IRA. o No additional rollover or direct transfer
Conversion IRA contributions after age 84.
o Conversion rollovers from a traditional
IRA. o Conversion rollovers after age 70 1/2
must be net of required minimum
o Direct transfers from another Roth IRA. distributions for the traditional IRA you
are rolling over.
o You cannot roll over funds from a
traditional IRA if your adjusted gross
income is $100,000 or more.
o Regular contributions are not permitted.
o Only rollover and direct transfer
contributions are permitted.
- --------------------------------------------------------------------------------------------------------------------------
Rollover TSA 20 through 83 o Rollovers from another TSA contract or o Additional contributions may be made
arrangement up to age 84.
o Rollovers from a traditional IRA which o Contributions after age 70 1/2 must be
was a "conduit" for TSA funds net of required minimum distributions
previously rolled over.
o Employer-remitted contributions are not
o Direct transfer from another contract or permitted.
arrangement under Section 403(b) of
the Internal Revenue Code, complying
with IRS Revenue Ruling 90-24.
This contract may not be available in your state.
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
17 Contract features and benefits
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVAILABLE
CONTRACT FOR ANNUITANT LIMITATIONS ON
TYPE ISSUE AGES SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Flexible 20 through 70 o Regular traditional IRA contributions. o No regular IRA contributions in the
Premium IRA calendar year you turn age 70 1/2 and
o Rollovers from a qualified plan. thereafter.
o Rollovers from a TSA.
o Total regular contributions may not
o Rollovers from another traditional exceed $2,000 for a year.
individual retirement arrangement.
o No additional rollover or direct transfer
o Direct custodian-to-custodian transfers contributions after age 71.
from another traditional individual
retirement arrangement. o Rollover and direct transfer
contributions after age 70 1/2 must
be net of required minimum
distributions.
o Although we accept rollover and direct
transfer contributions under the Flexible
Premium IRA contract, we intend that
this contract be used for ongoing
regular contributions. Please refer to
"Withdrawals, payments and transfers
of funds out of traditional IRAs," in
"Tax information" for a discussion of
conduit IRAs.
- --------------------------------------------------------------------------------------------------------------------------
Flexible 20 through 83 o Regular after-tax contributions. o No additional regular after-tax
Premium Roth contributions after age 84.
IRA o Rollovers from another Roth IRA.
o No additional rollover or direct transfer
o Conversion rollovers from a traditional contributions after age 84.
IRA.
o Contributions are subject to income
o Direct transfers from another Roth IRA. limits and other tax rules. See "Tax
information - Contributions to
Roth IRAs."
o Although we accept rollover and direct
transfer contributions under the Flexible
Premium Roth IRA contract, we intend
that this contract be used for ongoing
regular contributions.
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
See "Tax information" for a more detailed discussion of sources of contributions
and certain contribution limitations. We may refuse to accept any contribution
if the sum of all contributions under all Equitable Accumulator contracts with
the same annuitant would then total more than $1,500,000. We may also refuse to
accept any contribution if the sum of all contributions under all Equitable Life
annuity accumulation contracts that you own would then total more than
$2,500,000.
<PAGE>
- ----------
18 Contract features and benefits
- --------------------------------------------------------------------------------
For information on when contributions are credited under your contract see
"Dates and prices at which contract events occur" in "More information" later in
this prospectus.
OWNER AND ANNUITANT REQUIREMENTS
Under NQ contracts, the annuitant can be different than the owner. A joint owner
may also be named. Only natural persons can be joint owners. This means that an
entity such as a corporation cannot be a joint owner.
Under all IRA and Rollover TSA contracts the owner and annuitant must be the
same person.
HOW YOU CAN MAKE YOUR CONTRIBUTIONS
Except as noted below, contributions must be by check drawn on a U.S. bank, in
U.S. dollars, and made payable to Equitable Life. We do not accept third-party
checks endorsed to us except for rollover contributions, tax-free exchanges or
trustee checks that involve no refund. All checks are subject to our ability to
collect the funds. We reserve the right to reject a payment if it is received in
an unacceptable form.
For your convenience, we will accept initial and additional contributions by
wire transmittal from certain broker-dealers who have agreements with us for
this purpose. Additional contributions may also be made under our automatic
investment program. These methods of payment are discussed in detail in "More
information" later in this prospectus.
Your initial contribution must generally be accompanied by an application and
any other form we need to process the payments. If any information is missing or
unclear, we will try to obtain that information. If we are unable to obtain all
of the information we require within five business days after we receive an
incomplete application or form, we will inform the registered representative
submitting the application on your behalf. We will then return the contribution
to you unless you specifically direct us to keep your contribution until we
receive the required information.
- --------------------------------------------------------------------------------
Our "business day" is any day the New York Stock Exchange is open for trading
and generally ends at 4:00 p.m. Eastern time. We may, however, close due to
emergency conditions.
- --------------------------------------------------------------------------------
SECTION 1035 EXCHANGES
You may apply the value of an existing nonqualified deferred annuity contract
(or life insurance or endowment contract) to purchase an Equitable Accumulator
Express NQ contract in a tax-free exchange if you follow certain procedures as
shown in the form that we require you to use. Also see "Tax information" later
in this prospectus.
WHAT ARE YOUR INVESTMENT OPTIONS UNDER THE CONTRACT?
Your investment options are the variable investment options and the fixed
maturity options.
VARIABLE INVESTMENT OPTIONS
Your investment results in any one of the variable investment options will
depend on the investment performance of the underlying portfolios. Listed below
are the currently available portfolios, their investment objectives, and their
advisers.
- --------------------------------------------------------------------------------
You can choose from among the variable investment options.
- --------------------------------------------------------------------------------
<PAGE>
- -----
19 Contract features and benefits
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PORTFOLIOS OF EQ ADVISORS TRUST
- ------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- --------------------------------- -------------------------------------------------- -----------------------------------------
<S> <C> <C>
EQ/Aggressive Stock Long-term growth of capital Alliance Capital Management L.P.,
Massachusetts Financial Services Company
- ------------------------------------------------------------------------------------------------------------------------------
Alliance Common Stock Long-term growth of capital and increasing Alliance Capital Management L.P.
income
- ------------------------------------------------------------------------------------------------------------------------------
Alliance High Yield High return by maximizing current income and, Alliance Capital Management L.P.
to the extent consistent with that objective,
capital appreciation
- ------------------------------------------------------------------------------------------------------------------------------
Alliance Money Market High level of current income while preserving Alliance Capital Management L.P.
assets and maintaining liquidity
- ------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth Long-term growth of capital Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth Long-term growth of capital Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Technology Long-term growth of capital Alliance Capital Management L.P.
- ------------------------------------------------------------------------------------------------------------------------------
BT Equity 500 Index Replicate as closely as possible (before Bankers Trust Company
deduction of portfolio expenses) the total return
of the Standard & Poor's 500 Composite Stock
Price Index
- ------------------------------------------------------------------------------------------------------------------------------
BT International Equity Index Replicate as closely as possible (before Bankers Trust Company
deduction of portfolio expenses) the total return
of the Morgan Stanley Capital International
Europe, Australia, Far East Index
- ------------------------------------------------------------------------------------------------------------------------------
BT Small Company Index Replicate as closely as possible (before Bankers Trust Company
deduction of portfolio expenses) the total return
of the Russell 2000 Index
- ------------------------------------------------------------------------------------------------------------------------------
Capital Guardian International Long-term growth of capital by investing Capital Guardian Trust Company
primarily in non-United States equity securities
- ------------------------------------------------------------------------------------------------------------------------------
Capital Guardian Research Long-term growth of capital Capital Guardian Trust Company
- ------------------------------------------------------------------------------------------------------------------------------
Capital Guardian U.S. Equity Long-term growth of capital Capital Guardian Trust Company
- ------------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Long-term growth of capital Evergreen Asset Management Corp.
- ------------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Foundation In order of priority, reasonable income, Evergreen Asset Management Corp.
conservation of capital, and capital appreciation
- ------------------------------------------------------------------------------------------------------------------------------
J.P. Morgan Core Bond High total return consistent with moderate risk J. P. Morgan Investment Management Inc.
of capital and maintenance of liquidity
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- ----------
20 Contract features and benefits
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PORTFOLIOS OF EQ ADVISORS TRUST
- -------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- --------------------------------- ----------------------------------------------- -----------------------------------------
<S> <C> <C>
Lazard Large Cap Value Capital appreciation Lazard Asset Management
- -------------------------------------------------------------------------------------------------------------------------------
Lazard Small Cap Value Capital appreciation Lazard Asset Management
- -------------------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Long-term capital growth Massachusetts Financial Services Company
Companies
- -------------------------------------------------------------------------------------------------------------------------------
MFS Growth with Income Reasonable current income and long-term Massachusetts Financial Services Company
growth of capital and income
- -------------------------------------------------------------------------------------------------------------------------------
MFS Research Long-term growth of capital and future income Massachusetts Financial Services Company
- -------------------------------------------------------------------------------------------------------------------------------
Mercury Basic Value Equity Capital appreciation and secondarily, income Mercury Asset Management, US
- -------------------------------------------------------------------------------------------------------------------------------
Mercury World Strategy High total investment return Mercury Asset Management, US
- -------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Long-term capital appreciation Morgan Stanley Asset Management
Markets Equity
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Capital growth, current income is a secondary Putnam Investment Management, Inc.
Value objective
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity Capital appreciation Putnam Investment Management, Inc.
- -------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Investors Growth Long-term growth of capital and any increased Putnam Investment Management, Inc.
income that results from this growth
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Other important information about the portfolios is included in the prospectus
for EQ Advisors Trust attached at the end of this prospectus.
FIXED MATURITY OPTIONS
We offer fixed maturity options with maturity dates ranging from one to ten
years. You can allocate your contributions to one or more of these fixed
maturity options. These amounts become part of our general account assets.
They will accumulate interest at the "rate to maturity" for each fixed
maturity option. The total amount you allocate to and accumulate in each fixed
maturity option is called the "fixed maturity amount." The fixed maturity
options are not available in contracts issued in Maryland.
- -----------------------------------------------------------------------------
Fixed maturity options ranging from one to ten years to maturity
- -----------------------------------------------------------------------------
The rate to maturity you will receive for each fixed maturity option is the rate
to maturity in effect for new contributions allocated to that fixed maturity
option on the date we apply your contribution. If you make any withdrawals or
transfers from a fixed maturity option before the maturity date, we will make a
"market value adjustment" that may increase or decrease any fixed maturity
amount you have left in that fixed maturity option. We discuss the market value
adjustment below and in greater detail later in this prospectus in "More
information."
On the maturity date of a fixed maturity option your fixed maturity amount,
assuming you have not made any withdrawals or transfers, will equal your
contribution to that
<PAGE>
- ----------
21 Contract features and benefits
- --------------------------------------------------------------------------------
fixed maturity option plus interest, at the rate to maturity for that
contribution, to the date of the calculation. This is the fixed maturity
option's "maturity value." Before maturity, the current value we will report
for your fixed maturity amounts will reflect a market value adjustment. Your
current value will reflect the market value adjustment that we would make if
you were to withdraw all of your fixed maturity amounts on the date of the
report. We call this your "market adjusted amount."
FIXED MATURITY OPTIONS AND MATURITY DATES. We currently offer fixed maturity
options ending on February 15th for each of the maturity years 2001 through
2010. Not all of these fixed maturity options will be available for annuitant
ages 76 and older. See "Allocating your contributions" below. As fixed
maturity options expire, we expect to add maturity years so that generally 10
fixed maturity options are available at any time.
We will not accept allocations to a fixed maturity option if on the date the
contribution is to be applied:
o the fixed maturity option's maturity date is within the current calendar
year; or
o the rate to maturity is 3% or less.
YOUR CHOICES AT THE MATURITY DATE. We will notify you on or before December
31st of the year before each of your fixed maturity options is scheduled to
mature. At that time, you may choose to have one of the following take place
on the maturity date, as long as none of the conditions listed above or in
"Allocating your contributions," below would apply:
(a) transfer the maturity value into another available fixed maturity option,
or into any of the variable investment options; or
(b) withdraw the maturity value (there may be a withdrawal charge).
If we do not receive your choice on or before the fixed maturity option's
maturity date, we will automatically transfer your maturity value into the
fixed maturity option that will mature next.
MARKET VALUE ADJUSTMENT. If you make any withdrawals (including transfers,
surrender of your contract or when we make deductions for charges) from a
fixed maturity option before it matures we will make a market value
adjustment, which will increase or decrease any fixed maturity amount you have
in that fixed maturity option. The amount of the adjustment will depend on two
factors:
(a) the difference between the rate to maturity that applies to the amount
being withdrawn and the rate to maturity in effect at that time for new
allocations to that same fixed maturity option, and
(b) the length of time remaining until the maturity date.
In general, if interest rates rise from the time that you originally allocate an
amount to a fixed maturity option to the time that you take a withdrawal, the
market value adjustment will be negative. Likewise, if interest rates drop at
the end of that time, the market value adjustment will be positive. Also, the
amount of the market value adjustment, either up or down, will be greater the
longer the time remaining until the fixed maturity option's maturity date.
Therefore, it is possible that the market value adjustment could greatly reduce
your value in the fixed maturity options, particularly in the fixed maturity
options with later maturity dates.
We provide an illustration of the market adjusted amount of specified maturity
values, an explanation of how we calculate the market value adjustment, and
information concerning our general account and investments purchased with
amounts allocated to the fixed maturity options, in "More information" later in
this prospectus. Appendix II to this prospectus provides an example of how the
market value adjustment is calculated.
ALLOCATING YOUR CONTRIBUTIONS
You may choose from among two ways to allocate your contributions under your
contract: self-directed and principal assurance.
<PAGE>
- ----------
22 Contract features and benefits
- --------------------------------------------------------------------------------
SELF-DIRECTED ALLOCATION
You may allocate your contributions to one or more, or all, of the variable
investment options and fixed maturity options. Allocations must be in whole
percentages and you may change your allocations at any time. However, the total
of your allocations must equal 100%. If the annuitant is age 76 or older, you
may allocate contributions to fixed maturity options if their maturities are
five years or less. Also, you may not allocate amounts to fixed maturity options
with maturity dates that are later than the February 15th immediately following
the date annuity payments are to begin.
PRINCIPAL ASSURANCE ALLOCATION
You can elect this allocation program with a minimum initial contribution of
$5,000. You select a fixed maturity option and we specify the portion of your
initial contribution to be allocated to that fixed maturity option in an amount
that will cause the maturity value to equal the amount of your entire initial
contribution on the fixed maturity option's maturity date. The maturity date you
select generally may not be later than 10 years, or earlier than 7 years from
your contract date. You allocate the rest of your contribution to the variable
investment options however you choose.
For example, if your initial contribution is $10,000, and on March 15, 2000 you
chose the fixed maturity option with a maturity date of February 15, 2010, since
the rate to maturity was 6.23% on March 15, 2000, we would have allocated
$5,488.00 to that fixed maturity option and the balance to your choice of
variable investment options. On the maturity date your value in the fixed
maturity option would be $10,000.
The principal assurance allocation is only available for annuitant ages 75 or
younger when the contract is issued. If you are purchasing a Rollover IRA,
Flexible Premium IRA or Rollover TSA contract, before you select a maturity year
that would extend beyond the year in which you will reach age 70 1/2, you should
consider whether your value in the variable investment options, or your other
traditional IRA or TSA funds, are sufficient to meet your required minimum
distributions. See "Tax information."
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your contract, you may return it to
us for a refund. To exercise this cancellation right you must mail the contract
directly to our processing office within 10 days after you receive it. If state
law requires, this "free look" period may be longer.
Generally, your refund will equal your account value under the contract on the
day we receive notification of your decision to cancel the contract and will
reflect (i) any investment gain or loss in the variable investment options (less
the daily charges we deduct), and (ii) any positive or negative market value
adjustments in the fixed maturity options through the date we receive your
contract. However, some states require that we refund the full amount of your
contribution (not reflecting (i) and (ii) above). Some states require that we
refund the full amount of your contribution (not reflecting (i) or (ii) above).
For any IRA contract returned to us within seven days after you receive it, we
are required to refund the full amount of your contribution.
We may require that you wait six months before you may apply for a contract with
us again if:
o you cancel your contract during the free look period; or
o you change your mind before you receive your contract whether we have
received your contribution or not.
Please see "Tax information" for possible consequences of cancelling your
contract.
In addition to the cancellation right described above, if you fully convert an
existing traditional IRA contract to a Roth Conversion IRA or Flexible Premium
Roth IRA contract, you may cancel your Roth Conversion IRA or Flexible Premium
Roth IRA contract and return to a Rollover IRA or Flexible Premium IRA contract,
whichever applies. Our processing office or your registered representative can
provide you with the cancellation instructions.
<PAGE>
2
Determining your contract's value
- ----------------
23 Determining your contract's value
- --------------------------------------------------------------------------------
YOUR ACCOUNT VALUE AND CASH VALUE
Your "account value" is the total of the: (i) values you have in the variable
investment options; (ii) market adjusted amounts in the fixed maturity options;
and (iii) value you have in the loan reserve account (applies for Rollover TSA
contracts only). These amounts are subject to certain fees and charges discussed
in "Charges and expenses."
Your contract also has a "cash value." At any time before annuity payments
begin, your contract's cash value is equal to the account value, less (i) the
total amount or pro rata portion of the annual administrative charge; (ii) any
applicable withdrawal charges; and, (iii) the amount of any outstanding loan
plus accrued interest (applicable to Rollover TSA contracts only). Please see
"Surrendering your contract to receive its cash value" in "Accessing your
money."
YOUR CONTRACT'S VALUE IN THE VARIABLE INVESTMENT OPTIONS
Each variable investment option invests in shares of a corresponding portfolio.
Your value in each variable investment option is measured by "units." The value
of your units will increase or decrease as though you had invested it in the
corresponding portfolio's shares directly. The number of units you own will be
reduced by the amount of the fees and charges that we deduct under the contract.
- -----------------------------------------------------------------------------
Units measure your value in each variable investment option.
- -----------------------------------------------------------------------------
The unit value for each variable investment option depends on the investment
performance of that option less daily charges for:
(i) mortality and expense risks; and
(ii) administrative expenses.
On any day, your value in any variable investment option equals the number of
units credited to that option, adjusted for any units purchased for or deducted
from your contract under that option, multiplied by that day's value for one
unit. The number of your contract units in any variable investment option does
not change unless they are:
(i) increased to reflect additional contributions;
(ii) decreased to reflect a withdrawal (plus applicable withdrawal charges);
(iii) increased to reflect a transfer into, or decreased to reflect a transfer
out of, a variable investment option; or
(iv) decreased to reflect a transfer of your loan amount to the loan reserve
account under a Rollover TSA contract.
In addition, when we deduct the annual administrative charge the number of units
credited to your contract will be reduced. A description of how unit values are
calculated is found in the SAI.
YOUR CONTRACT'S VALUE IN THE FIXED MATURITY OPTIONS
Your value in each fixed maturity option at any time before the maturity date is
the market adjusted amount in each option. This is equivalent to your fixed
maturity amount increased or decreased by the market value adjustment. Your
value, therefore, may be higher or lower than your contributions (less
withdrawals) accumulated at the rate to maturity. At the maturity date, your
value in the fixed maturity option will equal its maturity value.
<PAGE>
3
Transferring your money among investment options
- ----------------
24 Transferring your money among investment options
- --------------------------------------------------------------------------------
TRANSFERRING YOUR ACCOUNT VALUE
At any time before the date annuity payments are to begin, you can transfer some
or all of your account value among the investment options, subject to the
following:
o You may not transfer to a fixed maturity option that matures in the current
calendar year, or that has a rate to maturity of 3% or less.
o If the annuitant is 76 or older, you must limit your transfers to fixed
maturity options to those with maturities of five years or less. Also, the
maturity dates may be no later than the February 15th immediately following
the date annuity payments are to begin.
o If you make transfers out of a fixed maturity option other than at its
maturity date the transfer may cause a market value adjustment.
You may request a transfer in writing or by telephone using TOPS. (We anticipate
that transfers will be available online by using EQAccess by the end of 2000).
You must send in all written transfer requests directly to our processing
office. Transfer requests should specify:
(1) the contract number,
(2) the dollar amounts or percentages of your current account value to be
transferred, and
(3) the investment options to and from which you are transferring.
We will confirm all transfers in writing.
MARKET TIMING
You should note that the product is not designed for professional "market
timing" organizations, or other organizations or individuals engaging in a
market timing strategy, making programmed transfers, frequent transfers or
transfers that are large in relation to the total assets of the underlying
mutual fund portfolio. Market timing strategies are disruptive to the underlying
mutual fund portfolios in which the variable investment options invest. If we
determine that your transfer patterns among the variable investment options
reflect a market timing strategy, we reserve the right to take action that will
prevent the use of a market timing strategy including, but not limited to:
restricting the availability of transfers through telephone requests, facsimile
transmissions, automated telephone services, Internet services or any electronic
transfer services. We may also refuse to act on transfer instructions of an
agent acting under a power of attorney who is acting on behalf of more than one
owner.
DOLLAR COST AVERAGING
Dollar cost averaging allows you to gradually transfer amounts from the Alliance
Money Market option to the other variable investment options by periodically
transferring approximately the same dollar amount to the other variable
investment options you select. This will cause you to purchase more units if the
unit's value is low and fewer units if the unit's value is high. Therefore, you
may get a lower average cost per unit over the long term. This plan of
investing, however, does not guarantee that you will earn a profit or be
protected against losses.
If your value in the Alliance Money Market option is at least $2,000, you may
choose, at any time, to have a specified dollar amount of your value transferred
from that option to the other variable investment options. You can select to
have transfers made on a monthly, quarterly or annual basis. The transfer date
will be the same calendar day of the month as the contract date, but not later
than the 28th day of the month. You can also specify the number of transfers or
instruct us to continue making the transfers until all amounts in the Alliance
Money Market option have been transferred out.
The minimum amount that we will transfer each time is $50. The maximum amount we
will transfer is equal to your value in the Alliance Money Market option at the
time the program is elected, divided by the number of transfers scheduled to be
made.
If, on any transfer date, your value in the Alliance Money Market option is
equal to or less than the amount you have elected to have transferred, the
entire amount will be
<PAGE>
- ----------
25 Transferring your money among investment options
- --------------------------------------------------------------------------------
transferred. The dollar cost averaging program will then end. You may change the
transfer amount once each contract year, or cancel this program at any time.
----------------------------------------
You may not elect dollar cost averaging if you are participating in the
rebalancing program.
REBALANCING YOUR ACCOUNT VALUE
We currently offer a rebalancing program that you can use to automatically
reallocate your account value among the variable investment options. You must
tell us:
(a) the percentage you want invested in each variable investment option (whole
percentages only), and
(b) how often you want the rebalancing to occur (quarterly, semiannually, or
annually on a contract year basis. Rebalancing will occur on the same day
of the month as the contract date).
While your rebalancing program is in effect, we will transfer amounts among each
variable investment option so that the percentage of your account value that you
specify is invested in each option at the end of each rebalancing date. Your
entire account value in the variable investment options must be included in the
rebalancing program.
- -----------------------------------------------------------------------------
Rebalancing does not assure a profit or protect against loss. You should
periodically review your allocation percentages as your needs change. You may
want to discuss the rebalancing program with your registered representative or
other financial adviser before electing the program.
- -----------------------------------------------------------------------------
You may elect the rebalancing program at any time. You may also change your
allocation instructions or cancel the program at any time. If you request a
transfer while the rebalancing program is in effect, we will process the
transfer as requested; the rebalancing program will remain in effect unless you
request that it be canceled in writing.
You may not elect the rebalancing program if you are participating in the dollar
cost averaging program.
<PAGE>
4
Accessing your money
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26 Accessing your money
- --------------------------------------------------------------------------------
WITHDRAWING YOUR ACCOUNT VALUE
You have several ways to withdraw your account value before annuity payments
begin. The table below shows the methods available under each type of contract.
More information follows the table. For the tax consequences of withdrawals, see
"Tax information."
<TABLE>
<CAPTION>
METHOD OF WITHDRAWAL
- -------------------------------------------------------------------------------
SUBSTANTIALLY MINIMUM
CONTRACT LUMP SUM SYSTEMATIC EQUAL DISTRIBUTION
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NQ Yes Yes No No
Rollover IRA Yes Yes Yes Yes
- -------------------------------------------------------------------------------
Roth Conversion
IRA Yes Yes Yes No
Rollover TSA* Yes No No Yes
Flexible
Premium IRA Yes Yes Yes Yes
Flexible
Premium
Roth IRA Yes Yes Yes No
</TABLE>
* For some Rollover TSA contracts, your ability to take withdrawals, loans or
surrender your contract may be limited. You must provide withdrawal
restriction information when you apply for a contract. See "Tax Sheltered
Annuity contracts (TSAs)" in "Tax Information."
LUMP SUM WITHDRAWALS
(All contracts)
You may take lump sum withdrawals from your account value at any time.
(Rollover TSA contracts may have restrictions). The minimum amount you may
withdraw is $300. If your account value is less than $500 after a withdrawal,
we will treat it as a request to surrender the contract for its cash value.
See "Surrendering your contract to receive its cash value" below.
Lump sum withdrawals in excess of the 10% free withdrawal amount (see "10%
free withdrawal amount" in "Charges and Expenses") may be subject to a
withdrawal charge. Under Rollover TSA contracts, if a loan is outstanding, you
may only take lump sum withdrawals as long as the cash value remaining after
any withdrawal equals at least 10% of the outstanding loan plus accrued
interest.
SYSTEMATIC WITHDRAWALS
(NQ and all IRA contracts only)
You may take systematic withdrawals of a particular dollar amount or a
particular percentage of your account value.
You may take systematic withdrawals on a monthly, quarterly or annual basis as
long as the withdrawals do not exceed the following percentages of your
account value: 0.8% monthly, 2.4% quarterly, and 10.0% annually. The minimum
amount you may take in each systematic withdrawal is $250. If the amount
withdrawn would be less than $250 on the date a withdrawal is to be taken, we
will not make a payment and we will terminate your systematic withdrawal
election.
We will make the withdrawals on any day of the month that you select as long
as it is not later than the 28th day of the month. If you do not select a
date, we will make the withdrawals on the same calendar day of the month as
the contract date. You must wait at least 28 days after your contract is
issued before your systematic withdrawals can begin.
You may elect to take systematic withdrawals at any time. If you own an IRA
contract, you may elect this withdrawal method only if you are between ages 59
1/2 and 70 1/2.
You may change the payment frequency, or the amount or percentage of your
systematic withdrawals, once each contract year. However, you may not change
the amount or percentage in any contract year in which you have already taken
a lump sum withdrawal. You can cancel the systematic withdrawal option at any
time.
Systematic withdrawals are not subject to a withdrawal charge, except to the
extent that, when added to a lump sum withdrawal previously taken in the same
contract year, the systematic withdrawal exceeds the 10% free withdrawal
amount.
SUBSTANTIALLY EQUAL WITHDRAWALS
(All IRA contracts)
The substantially equal withdrawals option allows you to receive distributions
from your account value without
<PAGE>
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27 Accessing your money
- --------------------------------------------------------------------------------
triggering the 10% additional federal tax penalty, which normally applies to
distributions made before age 59 1/2. See "Tax information." Once you begin to
take substantially equal withdrawals, you should not stop them or change the
pattern of your withdrawals until after the later of age 59 1/2 or five full
years after the first withdrawal. If you stop or change the withdrawals or
take a lump sum withdrawal, you may be liable for the 10% federal tax penalty
that would have otherwise been due on prior withdrawals made under this option
and for any interest on those withdrawals.
You may elect to take substantially equal withdrawals at any time before age
59 1/2. We will make the withdrawal on any day of the month that you select as
long as it is not later than the 28th day of the month. You may not elect to
receive the first payment in the same contract year in which you took a lump
sum withdrawal. We will calculate the amount of your substantially equal
withdrawals. The payments will be made monthly, quarterly or annually as you
select. These payments will continue until we receive written notice from you
to cancel this option or you take a lump sum withdrawal. You may elect to
start receiving substantially equal withdrawals again, but the payments may
not restart in the same contract year in which you took a lump sum withdrawal.
We will calculate the new withdrawal amount.
Substantially equal withdrawals are not subject to a withdrawal charge.
MINIMUM DISTRIBUTION WITHDRAWALS
(Rollover IRA, Flexible Premium IRA and Rollover TSA contracts only - See "Tax
information")
We offer the minimum distribution withdrawal option to help you meet lifetime
required minimum distributions under federal income tax rules. You may elect
this option in the year in which you reach age 70 1/2. The minimum amount we
will pay out is $250, or if less your account value. If your account value is
less than $500 after the withdrawal, we will treat it as a request to
surrender the contract for its cash value. See "Surrendering your contract to
receive its cash value" below. You may elect the method you want us to use to
calculate your minimum distribution withdrawals from the choices we offer.
Currently, minimum distribution withdrawal payments will be made annually.
We do not impose a withdrawal charge on minimum distribution withdrawals
except if when added to a lump sum withdrawal previously taken in the same
contract year, the minimum distribution withdrawal exceeds the 10% free
withdrawal amount.
We will calculate your annual payment based on your account value at the end
of the prior calendar year based on the method you choose.
Under Rollover TSA contracts, you may not elect minimum distribution
withdrawals if a loan is outstanding.
-----------------------------------------------------------------------------
For Rollover IRA, Flexible Premium IRA and Rollover TSA contracts, we will
send a form outlining the distribution options available in the year you reach
age 701/2 (if you have not begun your annuity payments before that time).
-----------------------------------------------------------------------------
HOW WITHDRAWALS ARE TAKEN FROM YOUR ACCOUNT VALUE
Unless you specify otherwise, we will subtract your withdrawals on a pro rata
basis from your value in the variable investment options. If there is
insufficient value or no value in the variable investment options, any
additional amount of the withdrawal required or the total amount of the
withdrawal will be withdrawn from the fixed maturity options in order of the
earliest maturity date(s) first. A market value adjustment may apply to
withdrawals from the fixed maturity options.
LOANS UNDER ROLLOVER TSA CONTRACTS
You may take loans from a Rollover TSA unless restricted by the employer who
provided the Rollover TSA funds. If you cannot take a loan, or cannot take a
loan without approval from the employer who provided the funds, we will have
this information in our records based on what you and the employer who
provided the funds told us when you purchased your contract. The employer must
also tell us whether special employer plan rules of the Employee
<PAGE>
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28 Accessing your money
- --------------------------------------------------------------------------------
Retirement Income Security Act of 1974 ("ERISA") apply. We will not permit you
to take a loan while you are taking minimum distribution withdrawals.
You should read the terms and conditions on our loan request form carefully
before taking out a loan. Under Rollover TSA contracts subject to ERISA, you
may only take a loan with the written consent of your spouse. Your contract
contains further details of the loan provision. Also, see "Tax information"
for general rules applicable to loans.
We will permit you to have only one loan outstanding at a time. The minimum
loan amount is $1,000. The maximum amount is $50,000 or, if less, 50% of your
account value, subject to any limits under the federal income tax rules. The
term of a loan is five years. However, if you use the loan to acquire your
primary residence, the term is 10 years. The term may not extend beyond the
earliest of:
(1) the date annuity payments begin,
(2) the date the contract terminates, and
(3) the date a death benefit is paid (the outstanding loan will be deducted
from the death benefit amount).
Interest will accrue daily on your outstanding loan at a rate we set. The loan
interest rate will be equal to the Moody's Corporate Bond Yield Averages for
Baa bonds for the calendar month ending two months before the first day of the
calendar quarter in which the rate is determined.
LOAN RESERVE ACCOUNT. On the date your loan is processed, we will transfer the
amount of your loan to the loan reserve account. Unless you specify otherwise,
we will subtract your loan on a pro rata basis from your value in the variable
investment options. If there is insufficient value or no value in the variable
investment options, any additional amount of the loan will be subtracted from
the fixed maturity options in order of the earliest maturity date(s) first. A
market value adjustment may apply.
We will credit interest to the amount in the loan reserve account at a rate of
2% lower than the loan interest rate that applies for the time your loan is
outstanding. On each contract date anniversary after the date the loan is
processed, we will transfer the amount of interest earned in the loan reserve
account to the variable investment options on a pro rata basis. When you make
a loan repayment, unless you specify otherwise, we will transfer the dollar
amount of the loan repaid from the loan reserve account to the investment
options according to the allocation percentages we have on our records.
SURRENDERING YOUR CONTRACT TO RECEIVE ITS CASH VALUE
You may surrender your contract to receive its cash value at any time while
the annuitant is living and before you begin to receive annuity payments
(Rollover TSA contracts may have restrictions). For a surrender to be
effective, we must receive your written request and your contract at our
processing office. We will determine your cash value on the date we receive
the required information. All benefits under the contract will terminate as of
that date.
You may receive your cash value in a single sum payment or apply it to one or
more of the annuity payout options. See "Your annuity payout options" below.
For the tax consequences of surrenders, see "Tax information."
WHEN TO EXPECT PAYMENTS
Generally, we will fulfill requests for payments out of the variable
investment options within seven calendar days after the date of the
transaction to which the request relates. These transactions may include
applying proceeds to a variable annuity, payment of a death benefit, payment
of any amount you withdraw (less any withdrawal charge) and, upon surrender,
payment of the cash value. We may postpone such payments or applying proceeds
for any period during which:
(1) the New York Stock Exchange is closed or restricts trading,
(2) sales of securities or determination of the fair value of a variable
investment option's assets is not reasonably practicable because of an
emergency, or
<PAGE>
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29 Accessing your money
- --------------------------------------------------------------------------------
(3) the SEC, by order, permits us to defer payment to protect people remaining
in the variable investment options.
We can defer payment of any portion of your value in the fixed maturity
options (other than for death benefits) for up to six months while you are
living. We also may defer payments for a reasonable amount of time (not to
exceed 10 days) while we are waiting for a contribution check to clear.
All payments are made by check and are mailed to you (or the payee named in a
tax-free exchange) by U.S. mail, unless you request that we use an express
delivery service at your expense.
ANNUITY PURCHASE FACTORS
Annuity purchase factors are the factors applied to determine your periodic
payments under the annuity payout options. The annuity payout options are
discussed under "Your annuity payout options" below. The guaranteed annuity
purchase factors are those factors specified in your contract. The current
annuity purchase factors are those factors that are in effect at any given
time. Annuity purchase factors are based on interest rates, mortality tables,
frequency of payments, the form of annuity benefit, and the annuitant's (and
any joint annuitant's) age and sex in certain instances.
YOUR ANNUITY PAYOUT OPTIONS
Equitable Accumulator Express offers you several choices of annuity payout
options. Some enable you to receive fixed annuity payments, which can be
either level or increasing, and others enable you to receive variable annuity
payments.
You can choose from among the annuity payout options listed below.
Restrictions may apply, depending on the type of contract you own or the
annuitant's age at contract issue.
<TABLE>
- ------------------------------------------------------------------
<S> <C>
Fixed annuity payout options Life annuity
Life annuity with period
certain
Life annuity with refund
certain
Period certain annuity
- ------------------------------------------------------------------
Variable Immediate Annuity Life annuity (not available
payout options in New York)
Life annuity with period
certain
- ------------------------------------------------------------------
Income Manager payout Life annuity with period
options certain
Period certain annuity
- ------------------------------------------------------------------
</TABLE>
o Life annuity: An annuity that guarantees payments for the rest of the
annuitant's life. Payments end with the last monthly payment before the
annuitant's death. Because there is no continuation of benefits following
the annuitant's death with this payout option, it provides the highest
monthly payment of any of the life annuity options, so long as the
annuitant is living.
o Life annuity with period certain: An annuity that guarantees payments for
the rest of the annuitant's life. If the annuitant dies before the end of
a selected period of time ("period certain"), payments continue to the
beneficiary for the balance of the period certain. The period certain
cannot extend beyond the annuitant's life expectancy. A life annuity with
a period certain is the form of annuity under the contract that you will
receive if you do not elect a different payout option. In this case, the
period certain will be based on the annuitant's age and will not exceed 10
years.
o Life annuity with refund certain: An annuity that guarantees payments for
the rest of the annuitant's life. If the annuitant dies before the amount
applied to purchase the annuity option has been recovered, payments to the
beneficiary will continue until that amount has been recovered. This
payout option is available only as a fixed annuity.
o Period certain annuity: An annuity that guarantees payments for a specific
period of time, usually 5, 10, 15 or 20 years. This guaranteed period may
not exceed the annuitant's life expectancy. This option does not guarantee
<PAGE>
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30 Accessing your money
- --------------------------------------------------------------------------------
payments for the rest of the annuitant's life. It does not permit any
repayment of the unpaid principal, so you cannot elect to receive part of
the payments as a single sum payment with the rest paid in monthly annuity
payments. This payout option is available only as a fixed annuity.
The life annuity, life annuity with period certain, and life annuity with
refund certain payout options are available on a single life or joint and
survivor life basis. The joint and survivor life annuity guarantees payments
for the rest of the annuitant's life and, after the annuitant's death,
payments continue to the survivor. We may offer other payout options not
outlined here. Your registered representative can provide details.
FIXED ANNUITY PAYOUT OPTIONS
With fixed annuities, we guarantee fixed annuity payments will be based either
on the tables of guaranteed annuity purchase factors in your contract or on
our then current annuity purchase factors, whichever is more favorable for
you.
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTIONS
Variable Immediate Annuities are described in a separate prospectus that is
available from your registered representative. Before you select a Variable
Immediate Annuity payout option, you should read the prospectus which contains
important information that you should know.
Variable annuities may be funded through your choice of variable investment
options investing in portfolios of EQ Advisors Trust. The contract also offers
a fixed annuity option that can be elected in combination with the variable
annuity payout options. The amount of each variable annuity payment will
fluctuate, depending upon the performance of the variable investment options,
and whether the actual rate of investment return is higher or lower than an
assumed base rate.
INCOME MANAGER PAYOUT OPTIONS
The Income Manager payout annuity contracts differ from the other payout
annuity contracts. The other payout annuity contracts may provide higher or
lower income levels, but do not have all the features of the Income Manager
payout annuity contract. You may request an illustration of the Income Manager
payout annuity contract from your registered representative. Income Manager
payout options are described in a separate prospectus that is available from
your registered representative. Before you select an Income Manager payout
option, you should read the prospectus which contains important information
that you should know.
Both Income Manager payout options provide guaranteed level payments (NQ and
IRA contracts). The Income Manager (life annuity with period certain) also
provides guaranteed increasing payments (NQ contracts only). You may not elect
a period certain Income Manager payout option unless withdrawal charges are no
longer in effect under your Equitable Accumulator Express.
For Rollover TSA contracts, if you want to elect an Income Manager payout
option, we will first roll over amounts in such contract to a Rollover IRA
contract. You will be the owner of the Rollover IRA contract.
You may choose to apply only part of the account value of your Equitable
Accumulator Express contract to an Income Manager payout annuity. In this
case, we will consider any amounts applied as a withdrawal from your Equitable
Accumulator Express and we will deduct any applicable withdrawal charge. For
the tax consequences of withdrawals, see "Tax information."
Depending upon your circumstances, the purchase of an Income Manager contract
may be done on a tax-free basis. Please consult your tax adviser.
THE AMOUNT APPLIED TO PURCHASE AN ANNUITY PAYOUT OPTION
The amount applied to purchase an annuity payout option varies, depending on
the payout option that you choose, and
<PAGE>
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31 Accessing your money
- --------------------------------------------------------------------------------
the timing of your purchase as it relates to any withdrawal charges or market
value adjustments.
If amounts in a fixed maturity option are used to purchase any annuity payout
option, prior to the maturity date, a market value adjustment will apply.
For the fixed annuity payout options and Variable Immediate Annuity payout
options, no withdrawal charge is imposed if you select a life annuity, life
annuity with period certain or life annuity with refund certain.
For the fixed annuity payout option, the withdrawal charge applicable under
your Equitable Accumulator Express is imposed if you select a period certain.
If the period certain is more than 5 years, then the withdrawal charge
deducted will not exceed 5% of the account value.
For the Income Manager payout options no withdrawal charge is imposed under
the Equitable Accumulator Express. If the withdrawal charge that otherwise
would have been applied to your account value under your Equitable Accumulator
Express is greater than 2% of the contributions that remain in your contract
at the time you purchase your payout option, the withdrawal charges under the
Income Manager will apply. For this purpose, the year in which your account
value is applied to the payout option will be "contract year 1."
SELECTING AN ANNUITY PAYOUT OPTION
When you select a payout option, we will issue you a separate written
agreement confirming your right to receive annuity payments. We require you to
return your contract before annuity payments begin, unless you are applying
only some of your account value to an Income Manager contract. The contract
owner and annuitant must meet the issue age and payment requirements.
You can choose the date annuity payments begin but it may not be earlier than
thirteen months from the Equitable Accumulator Express contract date. Except
with respect to the Income Manager annuity payout options, where payments are
made on the 15th day of each month, you can change the date your annuity
payments are to begin anytime before that date as long as you do not choose a
date later than the 28th day of any month. Also, that date may not be later
than the contract date anniversary that follows the annuitant's 90th birthday.
This may be different in some states.
Before the last date by which annuity payments must begin, we will notify you
by letter. Once you have selected an annuity payout option and payments have
begun, no change can be made other than: (i) transfers (if permitted in the
future) among the variable investment options if a Variable Immediate Annuity
payout option is selected; and (ii) withdrawals or contract surrender (subject
to a market value adjustment) if an Income Manager annuity payout option is
chosen.
The amount of the annuity payments will depend on the amount applied to
purchase the annuity and the applicable annuity purchase factors, discussed
earlier.
In no event will you ever receive payments under a fixed option or an initial
payment under a variable option of less than the minimum amounts guaranteed by
the contract.
If, at the time you elect a payout option, the amount to be applied is less
than $2,000 or the initial payment under the form elected is less than $20
monthly, we reserve the right to pay the account value in a single sum rather
than as payments under the payout option chosen.
<PAGE>
5
Charges and expenses
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32 Charges and expenses
- --------------------------------------------------------------------------------
CHARGES THAT EQUITABLE LIFE DEDUCTS
We deduct the following charges each day from the net assets of each variable
investment option. These charges are reflected in the unit values of each
variable investment option:
o A mortality and expense risks charge
o An administrative charge
We deduct the following charges from your account value. When we deduct these
charges from your variable investment options, we reduce the number of units
credited to your contract.
o On each contract date anniversary - an annual administrative charge, if
applicable.
o At the time you make certain withdrawals or surrender your contract - a
withdrawal charge.
o At the time annuity payments are to begin - charges designed to approximate
certain taxes that may be imposed on us, such as premium taxes in your
state. An annuity administrative fee may also apply.
More information about these charges appears below. We will not increase these
charges for the life of your contract, except as noted. We may reduce certain
charges under group or sponsored arrangements. See "Group or sponsored
arrangements" below.
To help with your retirement planning, we may offer other annuities with
different charges, benefits, and features. Please contact your registered
representative for more information.
MORTALITY AND EXPENSE RISKS CHARGE
We deduct a daily charge from the net assets in each variable investment option
to compensate us for mortality and expense risks, including the minimum death
benefit. The daily charge is equivalent to an annual rate of 0.70% of the net
assets in each variable investment option.
The mortality risk we assume is the risk that annuitants as a group will live
for a longer time than our actuarial tables predict. If that happens, we would
be paying more in annuity income than we planned. We also assume a risk that
the mortality assumptions reflected in our guaranteed annuity payment tables,
shown in each contract, will differ from actual mortality experience. Lastly,
we assume a mortality risk to the extent that at the time of death, the
minimum death benefit exceeds the cash value of the contract. The expense risk
we assume is the risk that it will cost us more to issue and administer the
contracts than we expect.
ADMINISTRATIVE CHARGE
We deduct a daily charge from the net assets in each variable investment
option. The charge, together with the annual administrative charges described
below, is to compensate us for administrative expenses under the contracts.
The daily charge is equivalent to an annual rate of 0.25% of the net assets in
each variable investment option. We reserve the right under the contracts to
increase this charge to an annual rate of 0.35%.
ANNUAL ADMINISTRATIVE CHARGE
We deduct an administrative charge from your account value on each contract
date anniversary. We deduct the charge if your account value on the last
business day of the contract year, is less than $25,000 under NQ contracts and
$20,000 under IRA contracts. If your account value on such date is $25,000 or
more for NQ ($20,000 or more for IRA) contracts, we do not deduct the charge.
During the first two contract years, the charge is equal to $30 or, if less,
2% of your account value. The charge is $30 for contract years three and
later.
We will deduct this charge from your value in the variable investment options
on a pro rata basis. If there is not enough value in the variable investment
options, we will deduct all or a portion of the charge from the fixed maturity
options in order of the earliest maturity date(s) first. If you surrender your
contract during the contract year we will deduct a pro rata portion of the
charge.
<PAGE>
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33 Charges and expenses
- --------------------------------------------------------------------------------
WITHDRAWAL CHARGE
A withdrawal charge applies in two circumstances:
(1) if you make one or more withdrawals during a contract year that, in total,
exceed the 10% free withdrawal amount, described below, or (2) if you
surrender your contract to receive its cash value.
The withdrawal charge equals a percentage of the contributions withdrawn. The
percentage that applies depends on how long each contribution has been
invested in the contract. We determine the withdrawal charge separately for
each contribution according to the following table:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
CONTRACT YEAR
- --------------------------------------------------------------------------------
1 2 3 4 5 6 7 8+
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Percentage of
contribution 7% 6% 5% 4% 3% 2% 1% 0%
- --------------------------------------------------------------------------------
</TABLE>
For purposes of calculating the withdrawal charge, we treat the contract year
in which we receive a contribution as "contract year 1." Amounts withdrawn up
to the free withdrawal amount are not considered withdrawal of any
contribution. We also treat contributions that have been invested the longest
as being withdrawn first. We treat contributions as withdrawn before earnings
for purposes of calculating the withdrawal charge. However, federal income tax
rules treat earnings under your contract as withdrawn first. See "Tax
information."
In order to give you the exact dollar amount of the withdrawal you request, we
deduct the amount of the withdrawal and the withdrawal charge from your
account value. Any amount deducted to pay withdrawal charges is also subject
to the same withdrawal charge percentage. We deduct the charge in proportion
to the amount of the withdrawal subtracted from each investment option. The
withdrawal charge helps cover our sales expenses.
The withdrawal charge does not apply in the circumstances described below.
10% FREE WITHDRAWAL AMOUNT. Each contract year you can withdraw up to 10% of
your account value without paying a withdrawal charge. The 10% free withdrawal
amount is determined using your account value on the most recent contract date
anniversary, minus any other withdrawals made during the contract year. The
10% free withdrawal amount does not apply if you surrender your contract.
Note the following special rule for NQ contracts issued to a charitable
remainder trust, the free withdrawal amount will equal the greater of: (1) the
current account value, less contributions that have not been withdrawn
(earnings in the contract), and (2) the 10% free withdrawal amount defined
above.
MINIMUM DISTRIBUTIONS. The withdrawal charge does not apply to withdrawals
taken under our minimum distribution withdrawal option. However, those
withdrawals are counted towards the 10% free withdrawal amount if you also
make a lump sum withdrawal in any contract year.
CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES
We deduct a charge designed to approximate certain taxes that may be imposed
on us, such as premium taxes in your state. Generally, we deduct the charge
from the amount applied to provide an annuity payout option. The current tax
charge that might be imposed by us varies by state and ranges from 0% to 3.5%
(1% in Puerto Rico and 5% in the U.S. Virgin Islands).
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION ADMINISTRATIVE FEE
We deduct a fee of $350 from the amount to be applied to the Variable
Immediate Annuity payout option.
CHARGES THAT EQ ADVISORS TRUST DEDUCTS
EQ Advisors Trust deducts charges for the following types of fees and
expenses:
o Management fees ranging from 0.25% to 1.15%.
o 12b-1 fees of 0.25%.
<PAGE>
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34 Charges and expenses
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o Operating expenses, such as trustees' fees, independent auditors' fees,
legal counsel fees, administrative service fees, custodian fees, and
liability insurance.
o Investment-related expenses, such as brokerage commissions.
These charges are reflected in the daily share price of each portfolio. Since
shares of EQ Advisors Trust are purchased at their net asset value, these fees
and expenses are, in effect, passed on to the variable investment options and
are reflected in their unit values. For more information about these charges,
please refer to the prospectus for EQ Advisors Trust following this
prospectus.
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce the withdrawal
charge or the mortality and expense risks charge, or change the minimum
contribution requirements. We also may change the minimum death benefit or
offer variable investment options that invest in shares of EQ Advisors Trust
that are not subject to the 12b-1 fee. Group arrangements include those in
which a trustee or an employer, for example, purchases contracts covering a
group of individuals on a group basis. Group arrangements are not available
for IRA contracts. Sponsored arrangements include those in which an employer
allows us to sell contracts to its employees or retirees on an individual
basis.
Our costs for sales, administration, and mortality generally vary with the
size and stability of the group or sponsoring organization, among other
factors. We take all these factors into account when reducing charges. To
qualify for reduced charges, a group or sponsored arrangement must meet
certain requirements, such as requirements for size and number of years in
existence. Group or sponsored arrangements that have been set up solely to buy
contracts or that have been in existence less than six months will not qualify
for reduced charges.
We also may establish different rates to maturity for the fixed maturity
options under different classes of contracts for group or sponsored
arrangements.
We will make these and any similar reductions according to our rules in effect
when we approve a contract for issue. We may change these rules from time to
time. Any variation will reflect differences in costs or services and will not
be unfairly discriminatory.
Group or sponsored arrangements may be governed by federal income tax rules,
the Employee Retirement Income Security Act of 1974, or both. We make no
representations with regard to the impact of these and other applicable laws
on such programs. We recommend that employers, trustees, and others purchasing
or making contracts available for purchase under such programs seek the advice
of their own legal and benefits advisers.
OTHER DISTRIBUTION ARRANGEMENTS
We may reduce or eliminate charges when sales are made in a manner that result
in savings of sales and administrative expenses, such as sales through persons
who are compensated by clients for recommending investments and who receive no
commission or reduced commissions in connection with the sale of the
contracts. We will not permit a reduction or elimination of charges where it
would be unfairly discriminatory.
<PAGE>
6
Payment of death benefit
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35 Payment of death benefit
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YOUR BENEFICIARY AND PAYMENT OF BENEFIT
You designate your beneficiary when you apply for your contract. You may
change your beneficiary at any time. The change will be effective on the date
the written request for the change is received in our processing office. We
are not responsible for any beneficiary change request that we do not receive.
We will send you a written confirmation when we receive your request. Under
jointly owned contracts, the surviving owner is considered the beneficiary,
and will take the place of any other beneficiary. You may be limited as to the
beneficiary you can designate in a Rollover TSA contract.
The death benefit is equal to your account value, or, if greater, the minimum
death benefit. The minimum death benefit is equal to your total contributions
less withdrawals. We determine the amount of the death benefit as of the date
we receive satisfactory proof of the annuitant's death and any required
instructions for the method of payment. Under Rollover TSA contracts, we will
deduct the amount of any outstanding loan plus accrued interest from the
amount of the death benefit.
EFFECT OF THE ANNUITANT'S DEATH
If the annuitant dies before the annuity payments begin, we will pay the death
benefit to your beneficiary.
Generally, the death of the annuitant terminates the contract. However, a
beneficiary spouse of the owner/annuitant can choose to be treated as the
successor owner/annuitant and continue the contract. Only a spouse can be a
successor owner/annuitant. A successor owner/annuitant can only be named under
NQ and IRA contracts.
For IRA contracts, a beneficiary may be able to have limited ownership as
discussed under "Beneficiary continuation option" below.
WHEN AN NQ CONTRACT OWNER DIES BEFORE THE ANNUITANT
Under certain conditions the owner can change after the original owner's
death. When you are not the annuitant under an NQ contract and you die before
annuity payments begin, the beneficiary named to receive the death benefit
upon the annuitant's death will automatically become the successor owner. If
you do not want this beneficiary to be the successor owner, you should name a
specific successor owner. You may name a specific successor owner at any time
by sending satisfactory notice to our processing office. If the contract is
jointly owned and the first owner to die is not the annuitant, the surviving
owner becomes the sole contract owner. This person will be considered the
successor owner for purposes of the distribution rules described in this
section. The surviving owner automatically takes the place of any other
beneficiary designation.
Unless the surviving spouse of the owner who has died (or in the case of a
joint ownership situation, the surviving spouse of the first owner to die) is
the successor owner for this purpose, the entire interest in the contract must
be distributed under the following rules:
o The cash value of the contract must be fully paid to the designated
beneficiary successor owner (new owner) by December 31st of the fifth
calendar year after your death (or in a joint ownership situation, the
death of the first owner to die).
o The successor owner may instead elect to receive the cash value as a life
annuity (or payments for a period certain of not longer than the new
owner's life expectancy). Payments must begin no later than December 31st
following the calendar year of the non-annuitant owner's death. Unless this
alternative is elected, we will pay any cash value on December 31st of the
fifth calendar year following the year of your death (or the death of the
first owner to die).
o If the surviving spouse is the successor owner or joint owner, the spouse
may elect to continue the contract. No distributions are required as long
as the surviving spouse and annuitant are living.
HOW DEATH BENEFIT PAYMENT IS MADE
We will pay the death benefit to the beneficiary in the form of the annuity
payout option you have chosen. If you have
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36 Payment of death benefit
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not chosen an annuity payout option as of the time of the annuitant's death,
the beneficiary will receive the death benefit in a single sum. However,
subject to any exceptions in the contract, our rules and any applicable
requirements under federal income tax rules, the beneficiary may elect to
apply the death benefit to one or more annuity payout options we offer at the
time. See "Your annuity payout options" in "Accessing your money" earlier in
this prospectus. Please note that any annuity payout option chosen may not
extend beyond the life expectancy of the beneficiary.
SUCCESSOR OWNER AND ANNUITANT
If you are both the contract owner and the annuitant, and your spouse is the
sole beneficiary or the joint owner, then your spouse may elect to receive the
death benefit or continue the contract as successor owner/annuitant.
If your surviving spouse decides to continue the contract, then on the
contract date anniversary following your death, we will increase the account
value to equal your current minimum death benefit, if it is higher than the
account value. The increase in the account value will be allocated to the
investment options according to the allocation percentages we have on file for
your contract. Thereafter, withdrawal charges will no longer apply to this
amount. Withdrawal charges will apply if you make additional contributions.
These additional contributions will be withdrawn only after all other amounts
have been withdrawn. In determining whether the minimum death benefit will
continue to grow, we will use your surviving spouse's age (as of the contract
date anniversary).
BENEFICIARY CONTINUATION OPTION
Upon your death under an IRA contract, a beneficiary may generally elect to
keep the contract in your name and receive distributions under the contract
instead of receiving the death benefit in a single sum. In order to elect this
option, the beneficiary must be an individual. Certain trusts with only
individual beneficiaries will be treated as individual. This election must be
made within 60 days following the date we receive proof of your death. We will
increase the account value to equal the death benefit if the death benefit is
greater than the account value. Except as noted in the next sentence, the
beneficiary continuation option will be available on or after May 1, 2000
depending on when we receive regulatory clearance in your state. For Rollover
IRA and Flexible Premium IRA contracts, a similar beneficiary continuation
option will be available until the beneficiary continuation option described
in this prospectus is available. Please contact our processing office for
further information.
Under the beneficiary continuation option:
o The contract continues in your name for the benefit of your beneficiary.
o The beneficiary may make transfers among the investment options but no
additional contributions will be permitted.
o The guaranteed death benefit provisions will no longer be in effect.
o The beneficiary may choose at any time to withdraw all or a portion of the
account value and no withdrawal charges will apply. Any partial withdrawal
must be at least $300.
o Upon the death of the beneficiary, any remaining death benefit will be paid
in a lump sum to the person the beneficiary chooses.
For Traditional IRA contracts only, if you die AFTER the "Required Beginning
Date" for required minimum distributions (see "Tax information"), the contract
will continue if:
(a) You were receiving minimum distribution withdrawals from this contract; and
(b) The pattern of minimum distribution withdrawals you chose was based in part
on the life of the designated beneficiary.
The withdrawals will then continue to be paid to the beneficiary on the same
basis as you chose before your death. We will be able to tell your beneficiary
whether this option is available. You should contact our processing office for
further information.
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37 Payment of death benefit
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For all of the above contracts, if you die BEFORE the Required Beginning Date
(and for traditional IRA, therefore you were not taking minimum distribution
withdrawals under the contract) the beneficiary may choose one of the
following two beneficiary continuation options:
1. Payments over life expectancy period. The beneficiary can receive annual
minimum distributions based on the beneficiary's life expectancy. If there is
more than one beneficiary, the shortest life expectancy is used. These minimum
distributions must begin by December 31st of the calendar year following the
year of your death. In some situations, a spouse beneficiary who elects to
continue the contract in your name under the beneficiary continuation option
instead of electing successor owner/annuitant status may also choose to delay
beginning these minimum distributions until the December 31st of the calendar
year in which you would have turned age 70 1/2.
2. Five Year Rule. The beneficiary can take withdrawals as desired. If the
beneficiary does not withdraw the entire account value by the December 31st of
the fifth calendar year following your death, we will pay any amounts
remaining under the contract to the beneficiary by that date. If you have more
than one beneficiary, and one of them elects this option, then all of your
beneficiaries will receive this option.
<PAGE>
7
Tax information
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38 Tax information
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OVERVIEW
In this part of the prospectus, we discuss the current federal income tax
rules that generally apply to Equitable Accumulator Express contracts owned by
United States taxpayers. The tax rules can differ, depending on the type of
contract, whether NQ, Rollover IRA, Flexible Premium IRA, Roth Conversion IRA,
Flexible Premium Roth IRA, or Rollover TSA. Therefore, we discuss the tax
aspects of each type of contract separately.
Federal income tax rules include the United States laws in the Internal
Revenue Code, and Treasury Department Regulations and Internal Revenue Service
("IRS") interpretations of the Internal Revenue Code. These tax rules may
change. We cannot predict whether, when, or how these rules could change. Any
change could affect contracts purchased before the change.
We cannot provide detailed information on all tax aspects of the contracts.
Moreover, the tax aspects that apply to a particular person's contract may
vary depending on the facts applicable to that person. We do not discuss state
income and other state taxes, federal income tax and withholding rules for
non-U.S. taxpayers, or federal gift and estate taxes. Transfers of the
contract, rights under the contract, or payments under the contract may be
subject to gift or estate taxes. You should not rely only on this document,
but should consult your tax adviser before your purchase.
If you are buying a contract to fund a retirement plan that already provides
tax deferral under sections of the Internal Revenue Code (IRA and Rollover
TSA), you should do so for the contract's features and benefits other than tax
deferral. In such situations, the tax deferral of the contract does not
provide additional benefits.
TRANSFERS AMONG INVESTMENT OPTIONS
You can make transfers among investment options inside the contract without
triggering taxable income.
TAXATION OF NONQUALIFIED ANNUITIES
CONTRIBUTIONS
You may not deduct the amount of your contributions to a nonqualified annuity
contract.
CONTRACT EARNINGS
Generally, you are not taxed on contract earnings until you receive a
distribution from your contract, whether as a withdrawal or as an annuity
payment. However, earnings are taxable, even without a distribution:
o if a contract fails investment diversification requirements as specified in
federal income tax rules (these rules are based on or are similar to those
specified for mutual funds under the securities laws);
o if you transfer a contract, for example, as a gift to someone other than
your spouse (or former spouse);
o if you use a contract as security for a loan (in this case, the amount
pledged will be treated as a distribution); and
o if the owner is other than an individual (such as a corporation,
partnership, trust, or other non-natural person).
All nonqualified deferred annuity contracts that Equitable Life and its
affiliates issue to you during the same calendar year are linked together and
treated as one contract for calculating the taxable amount of any distribution
from any of those contracts.
ANNUITY PAYMENTS
Once annuity payments begin, a portion of each payment is taxable as ordinary
income. You get back the remaining portion without paying taxes on it. This is
your "investment in the contract." Generally, your investment in the contract
equals the contributions you made, less any amounts you previously withdrew
that were not taxable.
For fixed annuity payments, the tax-free portion of each payment is determined
by (1) dividing your investment in the contract by the total amount you are
expected to receive out of the contract, and (2) multiplying the result by the
amount
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39 Tax information
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of the payment. For variable annuity payments, your tax-free portion of each
payment is your investment in the contract divided by the number of expected
payments.
Once you have received the amount of your investment in the contract, all
payments after that are fully taxable. If payments under a life annuity stop
because the annuitant dies, there is an income tax deduction for any
unrecovered investment in the contract.
PAYMENTS MADE BEFORE ANNUITY PAYMENTS BEGIN
If you make withdrawals before annuity payments begin under your contract,
they are taxable to you as ordinary income if there are earnings in the
contract. Generally, earnings are your account value less your investment in
the contract. If you withdraw an amount which is more than the earnings in the
contract as of the date of the withdrawal, the balance of the distribution is
treated as a return of your investment in the contract and is not taxable.
CONTRACTS PURCHASED THROUGH EXCHANGES
You may purchase your NQ contract through an exchange of another contract.
Normally, exchanges of contracts are taxable events. The exchange will not be
taxable under Section 1035 of the Internal Revenue Code if:
o The contract that is the source of the funds you are using to purchase the
NQ contract is another nonqualified deferred annuity contract or life
insurance or endowment contract.
o The owner and the annuitant are the same under the source contract and the
Equitable Accumulator Express NQ contract. If you are using a life
insurance or endowment contract the owner and the insured must be the same
on both sides of the exchange transaction.
The tax basis of the source contract carries over to the Equitable Accumulator
Express NQ contract.
A recent case permitted an owner to direct the proceeds of a partial
withdrawal from one nonqualified deferred annuity contract to a different
insurer to purchase a new nonqualified deferred annuity contract on a
tax-deferred basis. Special forms, agreement between the carriers and
provision of cost basis information may be required to process this type of an
exchange.
SURRENDERS
If you surrender or cancel the contract, the distribution is taxable as
ordinary income (not capital gain) to the extent it exceeds your investment in
the contract.
DEATH BENEFIT PAYMENTS MADE TO A BENEFICIARY AFTER YOUR DEATH
For the rules applicable to death benefits, see "Payment of death benefit"
earlier in this prospectus. The tax treatment of a death benefit taken as a
single sum is generally the same as the tax treatment of a withdrawal from or
surrender of your contract. The tax treatment of a death benefit taken as
annuity payments is generally the same as the tax treatment of annuity
payments under your contract.
EARLY DISTRIBUTION PENALTY TAX
If you take distributions before you are age 59 1/2 a penalty tax of 10% of
the taxable portion of your distribution applies in addition to the income
tax. The extra penalty tax does not apply to pre-age 59 1/2 distributions
made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o in the form of substantially equal periodic annuity payments for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and a beneficiary.
OTHER INFORMATION
The Treasury Department has the authority to issue guidelines prescribing the
circumstances in which your ability to direct your investment to particular
portfolios within a separate account may cause you, rather than the insurance
company, to be treated as the owner of the portfolio shares attributable to
your nonqualified annuity. In that case, income and gains attributable to such
portfolio shares would be included in your gross income for federal income tax
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40 Tax information
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purposes. Under current rules, however, we believe that Equitable Life, and
not the owner of a nonqualified annuity contract, would be considered the
owner of the portfolio shares.
SPECIAL RULES FOR NQ CONTRACTS ISSUED IN PUERTO RICO
Under current law we treat income from NQ contracts as U.S. source. A Puerto
Rico resident is subject to U.S. taxation on such U.S. source income. Only
Puerto Rico source income of Puerto Rico residents is excludable from U.S.
taxation. Income from NQ contracts is also subject to Puerto Rico tax. The
calculation of the taxable portion of amounts distributed from a contract may
differ in the two jurisdictions. Therefore, you might have to file both U.S.
and Puerto Rico tax returns, showing different amounts of income from the
contract for each tax return. Puerto Rico generally provides a credit against
Puerto Rico tax for U.S. tax paid. Depending on your personal situation and
the timing of the different tax liabilities, you may not be able to take full
advantage of this credit.
INDIVIDUAL RETIREMENT ARRANGEMENTS (IRAS)
GENERAL
"IRA" stands for individual retirement arrangement. There are two basic types
of such arrangements, individual retirement accounts and individual retirement
annuities. In an individual retirement account, a trustee or custodian holds
the assets for the benefit of the IRA owner. The assets can include mutual
funds and certificates of deposit. In an individual retirement annuity, an
insurance company issues an annuity contract that serves as the IRA.
There are two basic types of IRAs, as follows:
o Traditional IRAs, typically funded on a pre-tax basis including SEP-IRAs
and SIMPLE-IRAs, issued and funded in connection with employer-sponsored
retirement plans; and
o Roth IRAs, first available in 1998, funded on an after-tax basis.
Regardless of the type of IRA, your ownership interest in the IRA cannot be
forfeited. You or your beneficiaries who survive you are the only ones who can
receive the IRA's benefits or payments.
You can hold your IRA assets in as many different accounts and annuities as
you would like, as long as you meet the rules for setting up and making
contributions to IRAs. However, if you own multiple IRAs, you may be required
to combine IRA values or contributions for tax purposes. For further
information about individual retirement arrangements, you can read Internal
Revenue Service Publication 590 ("Individual Retirement Arrangements (IRAs)").
This publication is usually updated annually, and can be obtained from any IRS
district office or the IRS Web site (http://www.irs.gov).
Equitable Life designs its traditional IRA contracts to qualify as individual
retirement annuities under Section 408(b) of the Internal Revenue Code. You
may purchase the contract as a traditional IRA or Roth IRA. The traditional
IRAs we offer are the Rollover IRA and Flexible Premium IRA. The versions of
the Roth IRA available are the Roth Conversion IRA and Flexible Premium Roth
IRA. This prospectus contains the information that the IRS requires you to
have before you purchase an IRA. This section of the prospectus covers some of
the special tax rules that apply to IRAs. The next section covers Roth IRAs.
Education IRAs are not discussed in this prospectus because they are not
available in individual retirement annuity form.
The Equitable Accumulator Express IRA contract has been approved by the IRS as
to form for use as a traditional IRA. We have submitted the Roth IRA version
for formal IRS approval. This IRS approval is a determination only as to the
form of the annuity. It does not represent a determination of the merits of
the annuity as an investment. The IRS approval does not address every feature
possibly available under the Equitable Accumulator Express IRA contract.
Although we do not have IRS approval as to form, we believe that the version
of the Roth IRA currently offered complies with the requirements of the
Internal Revenue Code.
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41 Tax information
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CANCELLATION
You can cancel an Equitable Accumulator Express IRA contract by following the
directions in "Your right to cancel within a certain number of days" under
"Contract features and benefits" earlier in the prospectus. You can cancel an
Equitable Accumulator Express Roth Conversion IRA contract issued as a result
of a full conversion of an Equitable Accumulator Express Rollover IRA or
Flexible Premium IRA contract by following the instructions in the request for
full conversion form. The form is available from our processing office or your
registered representative. If you cancel an IRA contract, we may have to
withhold tax, and we must report the transaction to the IRS. A contract
cancellation could have an unfavorable tax impact.
TRADITIONAL INDIVIDUAL RETIREMENT ANNUITIES (TRADITIONAL IRAS)
CONTRIBUTIONS TO TRADITIONAL IRAS. Individuals may make three different types
of contributions to a traditional IRA:
o regular contributions out of earned income or compensation; or
o tax-free "rollover" contributions; or
o direct custodian-to-custodian transfers from other traditional IRAs
("direct transfers").
REGULAR CONTRIBUTIONS TO TRADITIONAL IRAS
LIMITS ON CONTRIBUTIONS. Generally, $2,000 is the maximum amount that you may
contribute to all IRAs (including Roth IRAs) in any taxable year. When your
earnings are below $2,000, your earned income or compensation for the year is
the most you can contribute. This $2,000 limit does not apply to rollover
contributions or direct custodian-to-custodian transfers into a traditional
IRA. You cannot make regular traditional IRA contributions for the tax year in
which you reach age 70 1/2 or any tax year after that.
SPECIAL RULES FOR SPOUSES. If you are married and file a joint income tax
return, you and your spouse may combine your compensation to determine the
amount of regular contributions you are permitted to make to traditional IRAs
(and Roth IRAs discussed below). Even if one spouse has no compensation or
compensation under $2,000, married individuals filing jointly can contribute
up to $4,000 for any taxable year to any combination of traditional IRAs and
Roth IRAs. (Any contributions to Roth IRAs reduce the ability to contribute to
traditional IRAs and vice versa.) The maximum amount may be less if earned
income is less and the other spouse has made IRA contributions. No more than a
combined total of $2,000 can be contributed annually to either spouse's
traditional and Roth IRAs. Each spouse owns his or her traditional IRAs and
Roth IRAs even if the other spouse funded the contributions. A working spouse
age 70 1/2 or over can contribute up to the lesser of $2,000 or 100% of
"earned income" to a traditional IRA for a nonworking spouse until the year in
which the nonworking spouse reaches age 70 1/2.
DEDUCTIBILITY OF CONTRIBUTIONS. The amount of traditional IRA contributions
that you can deduct for a tax year depends on whether you are covered by an
employer-sponsored tax-favored retirement plan, as defined under special
federal income tax rules. Your Form W-2 will indicate whether or not you are
covered by such a retirement plan.
IF YOU ARE NOT COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, you
can make fully deductible contributions to your traditional IRAs for each tax
year up to $2,000 or, if less, your earned income.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
adjusted gross income (AGI) is BELOW THE LOWER DOLLAR FIGURE IN A PHASE-OUT
RANGE, you can make fully deductible contributions to your traditional IRAs.
For each tax year, your fully deductible contribution can be up to $2,000 or,
if less, your earned income.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
AGI falls within a PHASE-OUT range, you can make PARTIALLY DEDUCTIBLE
CONTRIBUTIONS to your traditional IRAs.
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42 Tax information
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IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
AGI falls ABOVE THE HIGHER FIGURE IN THE PHASE-OUT RANGE, you may not deduct
any of your regular contributions to your traditional IRAs.
If you are single and covered by a retirement plan during any part of the
taxable year, the deduction for traditional IRA contributions phases out with
AGI between $32,000 and $42,000 in 2000. This range will increase every year
until 2005 when the range is $50,000-$60,000.
If you are married and file a joint return, and you are covered by a
retirement plan during any part of the taxable year, the deduction for
traditional IRA contributions phases out with AGI between $52,000 and $62,000
in 2000. This range will increase every year until 2007 when the range is
$80,000-$100,000.
Married individuals filing separately and living apart at all times are not
considered married for purposes of this deductible contribution calculation.
Generally, the active participation in an employer-sponsored retirement plan
of an individual is determined independently for each spouse. Where spouses
have "married filing jointly" status, however, the maximum deductible
traditional IRA contribution for an individual who is not an active
participant (but whose spouse is an active participant) is phased out for
taxpayers with AGI of between $150,000 and $160,000.
To determine the deductible amount of the contribution in 2000, you determine
AGI and subtract $32,000 if you are single, or $52,000 if you are married and
file a joint return with your spouse. The resulting amount is your excess AGI.
You then determine the limit on the deduction for traditional IRA
contributions using the following formula:
<TABLE>
<S> <C> <C> <C> <C>
times $2,000 (or earned Equals the adjusted
($10,000-excess AGI) deductible
- ----------------------------- contribution
divided by $10,000 x income, if less) = limit
</TABLE>
NONDEDUCTIBLE REGULAR CONTRIBUTIONS. If you are not eligible to deduct part or
all of the traditional IRA contribution, you may still make nondeductible
contributions on which earnings will accumulate on a tax-deferred basis. The
combined deductible and nondeductible contributions to your traditional IRA
(or the nonworking spouse's traditional IRA) may not, however, exceed the
maximum $2,000 per person limit. See "Excess contributions" below. You must
keep your own records of deductible and nondeductible contributions in order
to prevent double taxation on the distribution of previously taxed amounts.
See "Withdrawals, payments and transfers of funds out of traditional IRAs"
below.
If you are making nondeductible contributions in any taxable year, or you have
made nondeductible contributions to a traditional IRA in prior years and are
receiving distributions from any traditional IRA, you must file the required
information with the IRS. Moreover, if you are making nondeductible
traditional IRA contributions, you must retain all income tax returns and
records pertaining to such contributions until interests in all traditional
IRAs are fully distributed.
WHEN YOU CAN MAKE REGULAR CONTRIBUTIONS. If you file your tax returns on a
calendar year basis like most taxpayers, you have until the April 15 return
filing deadline (without extensions) of the following calendar year to make
your regular traditional IRA contributions for a tax year.
ROLLOVERS AND TRANSFERS
Rollover contributions may be made to a traditional IRA from these sources:
o qualified plans;
o TSAs (including Internal Revenue Code Section 403(b)(7) custodial
accounts); and
o other traditional IRAs.
Any amount contributed to a traditional IRA after you reach age 70 1/2 must be
net of your required minimum distribution for the year in which the rollover
or direct transfer contribution is made.
ROLLOVERS FROM QUALIFIED PLANS OR TSAS
There are two ways to do rollovers:
o Do it yourself
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43 Tax information
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You actually receive a distribution that can be rolled over and you roll it
over to a traditional IRA within 60 days after the date you receive the funds.
The distribution from your qualified plan or TSA will be net of 20% mandatory
federal income tax withholding. If you want, you can replace the withheld funds
yourself and roll over the full amount.
o Direct rollover You tell your qualified plan trustee or TSA
issuer/custodian/fiduciary to send the distribution directly to your
traditional IRA issuer. Direct rollovers are not subject to mandatory
federal income tax withholding.
All distributions from a TSA or qualified plan are eligible
rollover distributions, unless the distribution is:
o only after-tax contributions you made to the plan; or
o "required minimum distributions" after age 70 1/2 or separation from
service; or
o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancies) of
you and your designated beneficiary; or
o a hardship withdrawal; or
o substantially equal periodic payments made for a specified period of 10
years or more; or
o corrective distributions that fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse;
or
o a qualified domestic relations order distribution to a beneficiary who is
not your current spouse or former spouse.
ROLLOVERS FROM TRADITIONAL IRAS TO TRADITIONAL IRAS
You may roll over amounts from one traditional IRA to one or more of your
other traditional IRAs if you complete the transaction within 60 days after
you receive the funds. You may make such a rollover only once in every
12-month period for the same funds. Trustee-to-trustee or
custodian-to-custodian direct transfers are not rollover transactions. You can
make these more frequently than once in every 12-month period.
The surviving spouse beneficiary of a deceased individual can roll over or
directly transfer an inherited traditional IRA to one or more other
traditional IRAs. Also, in some cases, traditional IRAs can be transferred on
a tax-free basis between spouses or former spouses as a result of a
court-ordered divorce or separation decree.
EXCESS CONTRIBUTIONS
Excess contributions to IRAs are subject to a 6% excise tax for the year in
which made and for each year after until withdrawn. The following are excess
contributions to IRAs:
o regular contributions of more than $2,000; or
o regular contributions of more than earned income for the year, if that
amount is under $2,000; or
o regular contributions to a traditional IRA made after you reach age 70 1/2;
or
o rollover contributions of amounts which are not eligible to be rolled over.
For example, after-tax contributions to a qualified plan or minimum
distributions required to be made after age 70 1/2.
You can avoid the excise tax by withdrawing an excess contribution (rollover
or regular) before the due date (including extensions) for filing your federal
income tax return for the year. If it is an excess regular traditional IRA
contribution, you cannot take a tax deduction for the amount withdrawn. You do
not have to include the excess contribution withdrawn as part of your income.
It is also not subject to the 10% additional penalty tax on early
distributions, discussed below under "Early distribution penalty tax." You do
have to withdraw any earnings that are attributed to the excess contribution.
The withdrawn earnings would be included in your gross income and could be
subject to the 10% penalty tax.
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Even after the due date for filing your return, you may withdraw an excess
rollover contribution, without income inclusion or 10% penalty, if:
(1) the rollover was from a qualified retirement plan to a traditional IRA;
(2) the excess contribution was due to incorrect information that the plan
provided; and
(3) you took no tax deduction for the excess contribution.
RECHARACTERIZATIONS
Amounts that have been contributed as traditional IRA funds may subsequently
be treated as Roth IRA funds. Special federal income tax rules allow you to
change your mind again and have amounts that are subsequently treated as Roth
IRA funds, once again treated as traditional IRA funds. You do this by using
the forms we prescribe. This is referred to as having "recharacterized" your
contribution.
WITHDRAWALS, PAYMENTS AND TRANSFERS OF FUNDS OUT OF TRADITIONAL IRAS
NO FEDERAL INCOME TAX LAW RESTRICTIONS ON WITHDRAWALS. You can withdraw any or
all of your funds from a traditional IRA at any time. You do not need to wait
for a special event like retirement.
TAXATION OF PAYMENTS. Earnings in traditional IRAs are not subject to federal
income tax until you or your beneficiary receive them. Taxable payments or
distributions include withdrawals from your contract, surrender of your
contract and annuity payments from your contract. Death benefits are also
taxable. Except as discussed below, the total amount of any distribution from
a traditional IRA must be included in your gross income as ordinary income.
If you have ever made nondeductible IRA contributions to any traditional IRA
(it does not have to be to this particular traditional IRA contract), those
contributions are recovered tax free when you get distributions from any
traditional IRA. You must keep permanent tax records of all of your
nondeductible contributions to traditional IRAs. At the end of any year in
which you have received a distribution from any traditional IRA, you calculate
the ratio of your total nondeductible traditional IRA contributions (less any
amounts previously withdrawn tax free) to the total account balances of all
traditional IRAs you own at the end of the year plus all traditional IRA
distributions made during the year. Multiply this by all distributions from
the traditional IRA during the year to determine the nontaxable portion of
each distribution.
In addition, a distribution is not taxable if:
o the amount received is a withdrawal of excess contributions, as described
under "Excess contributions" above; or
o the entire amount received is rolled over to another traditional IRA (see
"Rollovers and transfers" above); or
o in certain limited circumstances, where the traditional IRA acts as a
"conduit," you roll over the entire amount into a qualified plan or TSA
that accepts rollover contributions. To get this conduit traditional IRA
treatment:
o the source of funds you used to establish the traditional IRA must have
been a rollover contribution from a qualified plan, and
o the entire amount received from the traditional IRA (including any
earnings on the rollover contribution) must be rolled over into another
qualified plan within 60 days of the date received.
Similar rules apply in the case of a TSA.
However, you may lose conduit treatment if you make an eligible rollover
distribution contribution to a traditional IRA and you commingle this
contribution with other contributions. In that case, you may not be able to
roll over these eligible rollover distribution contributions and earnings to
another qualified plan or TSA at a future date. The Rollover IRA contract can
be used as a conduit IRA if amounts are not commingled.
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Distributions from a traditional IRA are not eligible for favorable ten-year
averaging and long-term capital gain treatment) available to certain
distributions from qualified plans.
REQUIRED MINIMUM DISTRIBUTIONS
LIFETIME REQUIRED MINIMUM DISTRIBUTIONS. You must start taking annual
distributions from your traditional IRAs beginning at age 70 1/2.
WHEN YOU HAVE TO TAKE THE FIRST REQUIRED MINIMUM
DISTRIBUTION. The first required minimum distribution is for the calendar year
in which you turn age 70 1/2. You have the choice to take this first required
minimum distribution during the calendar year you actually reach age 70 1/2,
or to delay taking it until the first three-month period in the next calendar
year (January 1 - April 1). Distributions must start no later than your
"required beginning date," which is April 1st of the calendar year after the
calendar year in which you turn age 70 1/2. If you choose to delay taking the
first annual minimum distribution, then you will have to take two minimum
distributions in that year - the delayed one for the first year and the one
actually for that year. Once minimum distributions begin, they must be made at
some time each year.
HOW YOU CAN CALCULATE REQUIRED MINIMUM DISTRIBUTIONS. There are two approaches
to taking required minimum distributions - "account-based" or "annuity-based."
Account-based method. If you choose an account-based method, you divide the
value of your traditional IRA as of December 31st of the past calendar year by
a life expectancy factor from IRS tables. This gives you the required minimum
distribution amount for that particular IRA for that year. The required
minimum distribution amount will vary each year as the account value and your
life expectancy factors change.
You have a choice of life expectancy factors, depending on whether you choose
a method based only on your life expectancy, or the joint life expectancies of
you and another individual. You can decide to "recalculate" your life
expectancy every year by using your current life expectancy factor. You can
decide instead to use the "term certain" method, where you reduce your life
expectancy by one every year after the initial year. If your spouse is your
designated beneficiary for the purpose of calculating annual account-based
required minimum distributions, you can also annually recalculate your
spouse's life expectancy if you want. If you choose someone who is not your
spouse as your designated beneficiary for the purpose of calculating annual
account-based required minimum distributions, you have to use the term certain
method of calculating that person's life expectancy. If you pick a nonspouse
designated beneficiary, you may also have to do another special calculation.
You can later apply your traditional IRA funds to a life annuity-based payout.
You can only do this if you already chose to recalculate your life expectancy
annually (and your spouse's life expectancy if you select a spousal joint
annuity). For example, if you anticipate exercising your guaranteed minimum
income benefit or selecting any other form of life annuity payout after you
are age 70 1/2, you must have elected to recalculate life expectancies.
Annuity-based method. If you choose an "annuity-based" method, you do not have
to do annual calculations. You apply the account value to an annuity payout
for your life or the joint lives of you and a designated beneficiary, or for a
period certain not extending beyond applicable life expectancies.
DO YOU HAVE TO PICK THE SAME METHOD TO CALCULATE YOUR REQUIRED MINIMUM
DISTRIBUTIONS FOR ALL OF YOUR TRADITIONAL IRAS AND OTHER RETIREMENT PLANS? No.
If you want, you can choose a different method and a different beneficiary for
each of your traditional IRAs and other retirement plans. For example, you can
choose an annuity payout from one IRA, a different annuity payout from a
qualified plan, and an account-based annual withdrawal from another IRA.
WILL WE PAY YOU THE ANNUAL AMOUNT EVERY YEAR FROM YOUR TRADITIONAL IRA BASED
ON THE METHOD YOU CHOOSE? No, unless you affirmatively select an annuity
payout option or an account-based withdrawal option such as our minimum
distribution withdrawal option. Because
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the options we offer do not cover every option permitted under federal income
tax rules, you may prefer to do your own required minimum distribution
calculations for one or more of your traditional IRAs.
WHAT IF YOU TAKE MORE THAN YOU NEED TO FOR ANY YEAR? The required minimum
distribution amount for your traditional IRAs is calculated on a year-by-year
basis. There are no carry-back or carry-forward provisions. Also, you cannot
apply required minimum distribution amounts you take from your qualified plans
to the amounts you have to take from your traditional IRAs and vice versa.
However, the IRS will let you calculate the required minimum distribution for
each traditional IRA that you maintain, using the method that you picked for
that particular IRA. You can add these required minimum distribution amount
calculations together. As long as the total amount you take out every year
satisfies your overall traditional IRA required minimum distribution amount,
you may choose to take your annual required minimum distribution from any one
or more traditional IRAs that you own.
WHAT IF YOU TAKE LESS THAN YOU NEED TO FOR ANY YEAR? Your IRA could be
disqualified, and you could have to pay tax on the entire value. Even if your
IRA is not disqualified, you could have to pay a 50% penalty tax on the
shortfall (required amount for traditional IRAs less amount actually taken). It
is your responsibility to meet the required minimum distribution rules. We will
remind you when our records show that your age 70 1/2 is approaching. If you do
not select a method with us, we will assume you are taking your required
minimum distribution from another traditional IRA that you own.
WHAT ARE THE REQUIRED MINIMUM DISTRIBUTION PAYMENTS AFTER YOU DIE? If you die
after either (a) the start of annuity payments, or (b) your required beginning
date, your beneficiary must receive payment of the remaining values in the
contract at least as rapidly as under the distribution method before your
death. In some circumstances, your surviving spouse may elect to become the
owner of the traditional IRA and halt distributions until he or she reaches age
70 1/2.
If you die before your required beginning date and before annuity payments
begin, federal income tax rules require complete distribution of your entire
value in the contract within five years after your death. Payments to a
designated beneficiary over the beneficiary's life or over a period certain
that does not extend beyond the beneficiary's life expectancy are also
permitted, if these payments start within one year of your death. A surviving
spouse beneficiary can also (a) delay starting any payments until you would
have reached age 70 1/2 or (b) roll over your traditional IRA into his or her
own traditional IRA.
SUCCESSOR ANNUITANT AND OWNER
If your spouse is the sole primary beneficiary and elects to become the
successor annuitant and owner, no death benefit is payable until your
surviving spouse's death.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
IRA death benefits are taxed the same as IRA distributions.
BORROWING AND LOANS ARE PROHIBITED TRANSACTIONS
You cannot get loans from a traditional IRA. You cannot use a traditional IRA
as collateral for a loan or other obligation. If you borrow against your IRA
or use it as collateral, its tax-favored status will be lost as of the first
day of the tax year in which this prohibited event occurs. If this happens,
you must include the value of the traditional IRA in your federal gross
income. Also, the early distribution penalty tax of 10% will apply if you have
not reached age 59 1/2 before the first day of that tax year.
EARLY DISTRIBUTION PENALTY TAX
A penalty tax of 10% of the taxable portion of a distribution applies to
distributions from a traditional IRA made before you reach age 59 1/2. The
extra penalty tax does not apply to pre-age 59 1/2 distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o used to pay certain extraordinary medical expenses (special federal income
tax definition); or
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o used to pay medical insurance premiums for unemployed individuals (special
federal income tax definition); or
o used to pay certain first-time home buyer expenses (special federal income
tax definition; $10,000 lifetime total limit for these distributions from
all your traditional and Roth IRAs); or
o used to pay certain higher education expenses (special federal income tax
definition); or
o in the form of substantially equal periodic payments made at least annually
over your life (or your life expectancy), or over the joint lives of you
and your beneficiary (or your joint life expectancy) using an IRS-approved
distribution method.
To meet this last exception, you could elect to apply your contract value to
an Income Manager (Life Annuity with a Period Certain) payout annuity contract
(level payments version). You could also elect the substantially equal
withdrawals option. We will calculate the substantially equal annual payments
under a method we select based on guidelines issued by the IRS (currently
contained in IRS Notice 89-25, Question and Answer 12). Although substantially
equal withdrawals and Income Manager payments are not subject to the 10%
penalty tax, they are taxable as discussed in "Withdrawals, payments and
transfers of funds out of traditional IRAs" above. Once substantially equal
withdrawals or Income Manager annuity payments begin, the distributions should
not be stopped or changed until after the later of your reaching age 59 1/2 or
five years after the date of the first distribution, or the penalty tax,
including an interest charge for the prior penalty avoidance, may apply to all
prior distributions under either option. Also, it is possible that the IRS
could view any additional withdrawal or payment you take from your contract as
changing your pattern of substantially equal withdrawals or Income Manager
payments for purposes of determining whether the penalty applies.
ROTH INDIVIDUAL RETIREMENT ANNUITIES (ROTH IRAS)
This section of the prospectus covers some of the special tax rules that apply
to Roth IRAs. If the rules are the same as those that apply to the traditional
IRA, we will refer you to the same topic under "traditional IRAs."
The Equitable Accumulator Express Roth IRA contract is designed to qualify as
a Roth individual retirement annuity under Sections 408A and 408(b) of the
Internal Revenue Code.
CONTRIBUTIONS TO ROTH IRAS
Individuals may make four different types of contributions to a Roth IRA:
o regular after-tax contributions out of earnings; or
o taxable rollover contributions from traditional IRAs ("conversion"
contributions); or
o tax-free rollover contributions from other Roth IRAs; or
o tax-free direct custodian-to-custodian transfers from other Roth IRAs
("direct transfers").
Regular after-tax, direct transfer, and rollover contributions may be made to
a Flexible Premium Roth IRA contract. We only permit direct transfer and
rollover contributions under the Roth Conversion IRA contract. See "Rollovers
and direct transfers" below. If you use the forms we require, we will also
accept traditional IRA funds which are subsequently recharacterized as Roth
IRA funds following special federal income tax rules.
REGULAR CONTRIBUTIONS TO ROTH IRAS
LIMITS ON REGULAR CONTRIBUTIONS. Generally, $2,000 is the maximum amount that
you may contribute to all IRAs (including Roth IRAs) in any taxable year. This
$2,000 limit does not apply to rollover contributions or direct
custodian-to-custodian transfers into a Roth IRA. Any contributions to Roth
IRAs reduce your ability to contribute to traditional IRAs and vice versa.
When your earnings are below $2,000, your earned income or compensation for
the year is the most you can contribute. If you are married and file a joint
income tax return, you and your spouse may combine your compensation to
determine the amount of
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regular contributions you are permitted to make to Roth IRAs and traditional
IRAs. See the discussion above under traditional IRAs.
With a Roth IRA, you can make regular contributions when you reach 70 1/2, as
long as you have sufficient earnings. But, you cannot make contributions for
any year that:
o your federal income tax filing status is "married filing jointly" and your
adjusted gross income is over $160,000; or
o your federal income tax filing status is "single" and your adjusted gross
income is over $110,000.
However, you can make regular Roth IRA contributions in
reduced amounts when:
o your federal income tax filing status is "married filing jointly" and your
adjusted gross income is between $150,000 and $160,000; or
o your federal income tax filing status is "single" and your adjusted gross
income is between $95,000 and $110,000.
If you are married and filing separately and your adjusted gross income is
between $0 and $10,000 the amount of regular contributions you are permitted
to make is phased out. If your adjusted gross income is more than $10,000 you
cannot make regular Roth IRA contributions.
WHEN YOU CAN MAKE CONTRIBUTIONS. Same as traditional IRAs.
DEDUCTIBILITY OF CONTRIBUTIONS. Roth IRA contributions are not tax deductible.
ROLLOVERS AND DIRECT TRANSFERS
WHAT IS THE DIFFERENCE BETWEEN ROLLOVER AND DIRECT TRANSFER TRANSACTIONS? You
may make rollover
contributions to a Roth IRA from only two sources:
o another Roth IRA ("tax-free rollover contribution"); or
o another traditional IRA, including a SEP-IRA or SIMPLE-IRA, in a taxable
"conversion" rollover ("conversion contribution").
You may not make contributions to a Roth IRA from a qualified plan under
Section 401(a) of the Internal Revenue Code, or a TSA under Section 403(b) of
the Internal Revenue Code. You may make direct transfer contributions to a
Roth IRA only from another Roth IRA.
The difference between a rollover transaction and a direct transfer
transaction is the following: in a rollover transaction you actually take
possession of the funds rolled over, or are considered to have received them
under tax law in the case of a change from one type of plan to another. In a
direct transfer transaction, you never take possession of the funds, but
direct the first Roth IRA custodian, trustee, or issuer to transfer the first
Roth IRA funds directly to Equitable Life, as the Roth IRA issuer. You can
make direct transfer transactions only between identical plan types (for
example, Roth IRA to Roth IRA). You can also make rollover transactions
between identical plan types. However, you can only use rollover transactions
between different plan types (for example, traditional IRA to Roth IRA).
You may make both Roth IRA to Roth IRA rollover transactions and Roth IRA to
Roth IRA direct transfer transactions. This can be accomplished on a
completely tax-free basis. However, you may make Roth IRA to Roth IRA rollover
transactions only once in any 12-month period for the same funds.
Trustee-to-trustee or custodian-to-custodian direct transfers can be made more
frequently than once a year. Also, if you send us the rollover contribution to
apply it to a Roth IRA, you must do so within 60 days after you receive the
proceeds from the original IRA to get rollover treatment.
The surviving spouse beneficiary of a deceased individual can roll over or
directly transfer an inherited Roth IRA to one or more other Roth IRAs. In
some cases, Roth IRAs can be transferred on a tax-free basis between spouses
or former spouses as a result of a court-ordered divorce or separation decree.
CONVERSION CONTRIBUTIONS TO ROTH IRAS
In a conversion rollover transaction, you withdraw (or are considered to have
withdrawn) all or a portion of funds from
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a traditional IRA you maintain and convert it to a Roth IRA within 60 days
after you receive (or are considered to have received) the traditional IRA
proceeds. Unlike a rollover from a traditional IRA to another traditional IRA,
the conversion rollover transaction is not tax-free. Instead, the distribution
from the traditional IRA is generally fully taxable. For this reason, we are
required to withhold 10% federal income tax from the amount converted unless
you elect out of such withholding. (If you have ever made nondeductible
regular contributions to any traditional IRA - whether or not it is the
traditional IRA you are converting - a pro rata portion of the distribution is
tax free.)
There is, however, no early distribution penalty tax on the traditional IRA
withdrawal that you are converting to a Roth IRA, even if you are under age
59 1/2.
You cannot make conversion contributions to a Roth IRA for any taxable year in
which your adjusted gross income exceeds $100,000. (For this purpose, your
adjusted gross income is computed without the gross income stemming from the
traditional IRA conversion.) You also cannot make conversion contributions to
a Roth IRA for any taxable year in which your federal income tax filing status
is "married filing separately."
Finally, you cannot make conversion contributions to a Roth IRA to the extent
that the funds in your traditional IRA are subject to the annual required
minimum distribution rule applicable to traditional IRAs beginning at age
70 1/2.
WITHDRAWALS, PAYMENTS AND TRANSFERS OF FUNDS OUT OF ROTH IRAS
NO FEDERAL INCOME TAX LAW RESTRICTIONS ON WITHDRAWALS. You can withdraw any or
all of your funds from a Roth IRA at any time; you do not need to wait for a
special event like retirement.
DISTRIBUTIONS FROM ROTH IRAS
Distributions include withdrawals from your contract, surrender of your
contract and annuity payments from your contract. Death benefits are also
distributions.
The following distributions from Roth IRAs are free of income tax:
o Rollovers from a Roth IRA to another Roth IRA;
o Direct transfers from a Roth IRA to another Roth IRA;
o "Qualified Distributions" from Roth IRAs; and
o Return of excess contributions or amounts recharacterized to a traditional
IRA.
QUALIFIED DISTRIBUTIONS FROM ROTH IRAS. Qualified distributions from Roth IRAs
made because of one of the following four qualifying events or reasons are not
includable in income:
o you reach age 59 1/2; or
o you die; or
o you become disabled (special federal income tax definition); or
o your distribution is a "qualified first-time homebuyer distribution"
(special federal income tax definition; $10,000 lifetime total limit for
these distributions from all of your traditional and Roth IRAs).
You also have to meet a five-year aging period. A qualified distribution is
any distribution made after the five-taxable-year period beginning with the
first taxable year for which you made any contribution to any Roth IRA
(whether or not the one from which the distribution is being made). It is not
possible to have a tax-free qualified distribution before the year 2003
because of the five-year aging requirement.
NONQUALIFIED DISTRIBUTIONS FROM ROTH IRAS. Non- qualified distributions from
Roth IRAs are distributions that do not meet the qualifying event and
five-year aging period tests described above. Such distributions are
potentially taxable as ordinary income. Nonqualified distributions receive
return-of-investment-first treatment. Only the difference between the amount
of the distribution and the amount of contributions to all of your Roth IRAs
is taxable. You have to reduce the amount of contributions to all of your Roth
IRAs to reflect any previous tax-free recoveries.
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You must keep your own records of regular and conversion contributions to all
Roth IRAs to assure appropriate taxation. You may have to file information on
your contributions to and distributions from any Roth IRA on your tax return.
You may have to retain all income tax returns and records pertaining to such
contributions and distributions until your interests in all Roth IRAs are
distributed.
Like traditional IRAs, taxable distributions from a Roth IRA are not entitled
to the special favorable five-year averaging method (or, in certain cases,
favorable ten-year averaging and long-term capital gain treatment) available
in certain cases to distributions from qualified plans.
REQUIRED MINIMUM DISTRIBUTIONS AT DEATH
Same as traditional IRA under "What are the required minimum distribution
payments after you die?" Lifetime required minimum distributions do not apply.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
Distributions to a beneficiary generally receive the same tax treatment as if
the distribution had been made to you.
BORROWING AND LOANS ARE PROHIBITED TRANSACTIONS
Same as traditional IRA.
EXCESS CONTRIBUTIONS
Generally the same as traditional IRA.
Excess rollover contributions to Roth IRAs are contributions not eligible to
be rolled over (for example, conversion contributions from a traditional IRA
if your adjusted gross income is in excess of $100,000 in the conversion
year).
You can withdraw or recharacterize any contribution to a Roth IRA before the
due date (including extensions) for filing your federal income tax return for
the tax year. If you do this, you must also withdraw or recharacterize any
earnings attributable to the contribution.
EARLY DISTRIBUTION PENALTY TAX
Same as traditional IRA.
For Roth IRAs, special penalty rules may apply to amounts withdrawn
attributable to 1998 conversion rollovers.
TAX-SHELTERED ANNUITY CONTRACTS (TSAS)
GENERAL
This section covers some of the special tax rules that apply to TSA contracts
under Section 403(b) of the Internal Revenue Code (TSAs). If the rules are the
same as those that apply to another kind of contract, for example, traditional
IRAs, we will refer you to the same topic under "traditional IRAs."
CONTRIBUTIONS TO TSAS
There are two ways you can make contributions to your Rollover TSA contract:
o a rollover from another TSA contract or arrangement that meets the
requirements of Section 403(b) of the Internal Revenue Code, or
o a full or partial direct transfer of assets ("direct transfer") from
another contract or arrangement that meets the requirements of Section
403(b) of the Internal Revenue Code by means of IRS Revenue Ruling 90-24.
With appropriate written documentation satisfactory to us, we will accept
rollover contributions from "conduit IRAs" for TSA funds.
If you make a direct transfer, you must fill out our transfer form.
EMPLOYER-REMITTED CONTRIBUTIONS. The Rollover TSA contract does not accept
employer-remitted contributions. However, we provide the following discussion
as part of our description of restrictions on the distribution of funds
directly transferred, which include employer-remitted contributions to other
TSAs.
Employer-remitted contributions to TSAs made through the employer's payroll
are subject to annual limits. (Tax-free transfer or tax-deferred rollover
contributions from another 403(b) arrangement are not subject to these annual
contribution limits). Commonly, some or all of the contributions made to a TSA
are made under a salary
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reduction agreement between the employee and the employer. These contributions
are called "salary reduction" or "elective deferral" contributions. However, a
TSA can also be wholly or partially funded through non-elective employer
contributions or after-tax employee contributions. Amounts attributable to
salary reduction contributions to TSAs are generally subject to withdrawal
restrictions. Also, all amounts attributable to investments in a 403(b)(7)
custodial account are subject to withdrawal restrictions discussed below.
ROLLOVER OR DIRECT TRANSFER CONTRIBUTIONS. You may make rollover contributions
to your Rollover TSA contract from TSAs under Section 403(b) of the Internal
Revenue Code. Generally, you may make a rollover contribution to a TSA when
you have a distributable event from an existing TSA as a result of your:
o termination of employment with the employer who provided the TSA funds; or
o reaching age 59 1/2 even if you are still employed; or
o disability (special federal income tax definition).
A transfer occurs when changing the funding vehicle, even if there is no
distributable event. Under a direct transfer, you do not receive a
distribution. We accept direct transfers of TSA funds under Revenue Ruling
90-24 only if:
o you give us acceptable written documentation as to the source of the funds,
and
o the contract receiving the funds has provisions at least as restrictive as
the source contract.
Before you transfer funds to a Rollover TSA contract, you may have to obtain
your employer's authorization or demonstrate that you do not need employer
authorization. For example, the transferring TSA may be subject to Title I of
ERISA if the employer makes matching contributions to salary reduction
contributions made by employees. In that case, the employer must continue to
approve distributions from the plan or contract.
Your contribution to the Rollover TSA must be net of the required minimum
distribution for the tax year in which we issue the contract if:
o you are or will be at least age 70 1/2 in the current calendar year, and
o you have separated from service with the employer who provided the funds to
purchase the TSA you are transferring or rolling over to the Rollover TSA.
This rule applies regardless of whether the source of funds
is a:
o rollover by check of the proceeds from another TSA; or
o direct rollover from another TSA; or
o direct transfer under Revenue Ruling 90-24 from another TSA.
Further, you must use the same elections regarding recalculation of your life
expectancy (and if applicable, your spouse's life expectancy) if you have
already begun to receive required minimum distribution from or with respect to
the TSA from which you are making your contribution to the Rollover TSA. You
must also elect or have elected a minimum distribution calculation method
requiring recalculation of your life expectancy (and if applicable, your
spouse's life expectancy) if you elect an annuity payout for the funds in this
contract subsequent to this year.
DISTRIBUTIONS FROM TSAS
GENERAL. Depending on the terms of the employer plan and your employment
status, you may have to get your employer's consent to take a loan or
withdrawal. Your employer will tell us this when you establish the TSA through
a direct transfer.
WITHDRAWAL RESTRICTIONS. If this is a Revenue Ruling 90-24 direct transfer, we
will treat all amounts transferred to this contract and any future earnings on
the amount transferred as not eligible for withdrawal until one of the
following events happens:
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o you are separated from service with the employer who provided the funds to
purchase the TSA you are transferring to the Rollover TSA; or
o you reach age 59 1/2; or
o you die; or
o you become disabled (special federal income tax definition); or
o you take a hardship withdrawal (special federal income tax definition).
If any portion of the funds directly transferred to your TSA contract is
attributable to the amounts that you invested in a 403(b)(7) custodial
account, such amounts, including earnings, are subject to withdrawal
restrictions. With respect to the portion of the funds that were never
invested in a 403(b)(7) custodial account, these restrictions apply to the
salary reduction (elective deferral) contributions to a TSA annuity contract
you made and any earnings on them. These restrictions do not apply to the
amount directly transferred to your TSA contract that represents your December
31, 1988 account balance attributable to salary reduction contributions to a
TSA annuity contract and earnings. To take advantage of this grandfathering,
you must properly notify us in writing at our processing office of your
December 31, 1988 account balance if you have qualifying amounts transferred
to your TSA contract.
THIS PARAGRAPH APPLIES ONLY TO PARTICIPANTS IN A TEXAS OPTIONAL RETIREMENT
PROGRAM. Texas Law permits withdrawals only after one of the following
distributable events occurs:
1. the requirements for minimum distribution (discussed under "Required
minimum distributions" below and in each prospectus) are met; or
2. death; or
3. retirement; or
4. termination of employment in all Texas public institutions of higher
education.
For you to make a withdrawal, we must receive a properly completed written
acknowledgement from the employer. If a distributable event occurs before you
are vested, we will refund to the employer any amounts provided by an
employer's first-year matching contributions. We reserve the right to change
these provisions without your consent, but only to the extent necessary to
maintain compliance with applicable law. Loans are not permitted under Texas
Optional Retirement Programs.
TAX TREATMENT OF DISTRIBUTIONS. Amounts held under TSAs are generally not
subject to federal income tax until benefits are distributed. Distributions
include withdrawals from your TSA contract and annuity payments from your TSA
contract. Death benefits paid to a beneficiary are also taxable distributions.
Unless an exception applies, amounts distributed from TSAs are includable in
gross income as ordinary income. Distributions from TSAs may be subject to 20%
federal income tax withholding. See "Federal and state income tax withholding
and information reporting" below. In addition, TSA distributions may be
subject to additional tax penalties.
If you have made after-tax contributions, you will have a tax basis in your
TSA contract, which will be recovered tax-free. Since we do not track your
investment in the contract, if any, it is your responsibility to determine how
much of the distribution is taxable.
DISTRIBUTIONS BEFORE ANNUITY PAYMENTS BEGIN. On a total surrender, the amount
received in excess of the investment in the contract is taxable. We will
report the total amount of the distribution. The amount of any partial
distribution from a TSA prior to the annuity starting date is generally
taxable, except to the extent that the distribution is treated as a withdrawal
of after-tax contributions. Distributions are normally treated as pro rata
withdrawals of after-tax contributions and earnings on those contributions.
ANNUITY PAYMENTS. If you elect an annuity payout option, you will recover any
investment in the contract as each payment is received by dividing the
investment in the contract by an expected return determined under an IRS
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table prescribed for qualified annuities. The amount of each payment not
excluded from income under this exclusion ratio is fully taxable. The full
amount of the payments received after your investment in the contract is
recovered is fully taxable. If you (and your beneficiary under a joint and
survivor annuity) die before recovering the full investment in the contract, a
deduction is allowed on your (or your beneficiary's) final tax return.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
Death benefit distributions from a TSA generally receive the same tax
treatment as distribution during your lifetime. In some instances,
distributions from a TSA made to your surviving spouse may be rolled over to a
traditional IRA.
LOANS FROM TSAS
You may take loans from a TSA unless restricted by the employer (for example,
under an employer plan subject to ERISA). If you cannot take a loan, or cannot
take a loan without approval from the employer who provided the funds, we will
have this information in our records based on what you and the employer who
provided the TSA funds told us when you purchased your contract.
Loans are generally not treated as a taxable distribution. If the amount of
the loan when made exceeds permissible limits under federal income tax rules,
the amount of the excess is treated (solely for tax purposes) as a taxable
distribution. Additionally, if the loan is not repaid at least quarterly,
amortizing (paying down) interest and principal, the amount not repaid when
due will be treated as a taxable distribution. Under Proposed Treasury
Regulations the entire unpaid balance of the loan is includable in income in
the year of the default.
TSA loans are subject to federal income tax limits and may also be subject to
limits of the plan from which the funds came. Federal income tax rule
requirements apply even if the plan is not subject to ERISA. For example,
loans offered by TSAs are subject to the following conditions:
o The amount of a loan to a participant, when combined with all other loans
to the participant from all qualified plans of the employer, cannot exceed
the lesser of:
(1) the greater of $10,000 or 50% of the participant's nonforfeitable
accrued benefits; and
(2) $50,000 reduced by the excess (if any) of the highest outstanding loan
balance over the previous twelve months over the outstanding loan balance
of plan loans on the date the loan was made.
o In general, the term of the loan cannot exceed five years unless the loan
is used to acquire the participant's primary residence. Rollover TSA
contracts have a term limit of 10 years for loans used to acquire the
participant's primary residence.
All principal and interest must be amortized in substantially level payments
over the term of the loan, with payments being made at least quarterly.
The amount borrowed and not repaid may be treated as a distribution if:
o the loan does not qualify under the conditions above;
o the participant fails to repay the interest or principal when due; or
o in some instances, the participant separates from service with the employer
who provided the funds or the plan is terminated.
In this case, the participant may have to include the unpaid amount due as
ordinary income. In addition, the 10% early distribution penalty tax may
apply. The amount of the unpaid loan balance is reported to the IRS on Form
1099-R as a distribution.
TAX-DEFERRED ROLLOVERS AND DIRECT TRANSFERS
You may roll over any "eligible rollover distribution" from a TSA into another
eligible retirement plan, either directly or within 60 days of your receiving
the distribution. To the extent rolled over, a distribution remains
tax-deferred.
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You may roll over a distribution from a TSA to another TSA or to a traditional
IRA. A spousal beneficiary may roll over death benefits only to a traditional
IRA.
The taxable portion of most distributions will be eligible for rollover,
except as specifically excluded under federal income tax rules. Distributions
that you cannot roll over generally include periodic payments for life or for
a period of 10 years or more, hardship withdrawals, and required minimum
distributions under federal income tax rules.
Direct transfers of TSA funds from one TSA to another under Revenue Ruling
90-24 are not distributions.
REQUIRED MINIMUM DISTRIBUTIONS
Generally the same as traditional IRA with these differences:
WHEN YOU HAVE TO TAKE THE FIRST REQUIRED MINIMUM DISTRIBUTION. The minimum
distribution rules force TSA participants to start calculating and taking
annual distributions from their TSAs by a required date. Generally you must
take the first required minimum distribution for the calendar year in which
you turn age 70 1/2. You may be able to delay the start of required minimum
distributions for all or part of your account balance until after age 70 1/2,
as follows:
o For TSA participants who have not retired from service with the employer
who provided the funds for the TSA by the calendar year the participant
turns age 70 1/2, the required beginning date for minimum distribution is
extended to April I following the calendar year of retirement.
o TSA plan participants may also delay the start of required minimum
distribution to age 75 of the portion of their account value attributable
to their December 31, 1986 TSA account balance, even if retired at age
70 1/2. We will know whether or not you qualify for this exception because
it will only apply to people who establish their Rollover TSA by direct
Revenue Ruling 90-24 transfers. If you do not give us the amount of your
December 31, 1986 account balance that is being transferred to the
Rollover TSA on the form used to establish the TSA, you do not qualify.
SPOUSAL CONSENT RULES
This will only apply to you if you establish your Rollover TSA by direct
Revenue Ruling 90-24 transfer. Your employer will tell us on the form used to
establish the TSA whether or not you need to get spousal consent for loans,
withdrawals, or other distributions. If you do, you will need such consent if
you are married when you request a withdrawal under the TSA contract. In
addition, unless you elect otherwise with the written consent of your spouse,
the retirement benefits payable under the plan must be paid in the form of a
qualified joint and survivor annuity. A qualified joint and survivor annuity
is payable for the life of the annuitant with a survivor annuity for the life
of the spouse in an amount not less than one-half of the amount payable to the
annuitant during his or her lifetime. In addition, if you are married, the
beneficiary must be your spouse, unless your spouse consents in writing to the
designation of another beneficiary.
If you are married and you die before annuity payments have begun, payments
will be made to your surviving spouse in the form of a life annuity unless at
the time of your death a contrary election was in effect. However, your
surviving spouse may elect, before payments begin, to receive payments in any
form permitted under the terms of the TSA contract and the plan of the
employer who provided the funds for the TSA.
EARLY DISTRIBUTION PENALTY TAX
A penalty tax of 10% of the taxable portion of a distribution applies to
distribution from a TSA before you reach age 59 1/2. This is in addition to
any income tax. There are exceptions to the extra penalty tax. No penalty tax
applies to pre-age 59 1/2 distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o to pay for certain extraordinary medical expenses (special federal income
tax definition); or
o if you are separated from service, any form of payout after you are age 55;
or
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o only if you are separated from service, a payout in the form of
substantially equal periodic payments made at least annually over your
life (or your life expectancy), or over the joint lives of you and your
beneficiary (or your joint life expectancy) using an IRS-approved
distribution method.
FEDERAL AND STATE INCOME TAX WITHHOLDING AND INFORMATION REPORTING
We must withhold federal income tax from distributions from annuity contracts.
You may be able to elect out of this income tax withholding in some cases.
Generally, we do not have to withhold if your distributions are not taxable.
The rate of withholding will depend on the type of distribution and, in
certain cases, the amount of your distribution. Any income tax withheld is a
credit against your income tax liability. If you do not have sufficient income
tax withheld or do not make sufficient estimated income tax payments, you may
incur penalties under the estimated income tax rules.
You must file your request not to withhold in writing before the payment or
distribution is made. Our processing office will provide forms for this
purpose. You cannot elect out of withholding unless you provide us with your
correct Taxpayer Identification Number and a United States residence address.
You cannot elect out of withholding if we are sending the payment out of the
United States.
You should note the following special situations:
o We might have to withhold and/or report on amounts we pay under a free look
or cancellation.
o We are generally required to withhold on conversion rollovers of
traditional IRAs to Roth IRAs, as it is considered a withdrawal from the
traditional IRA and is taxable.
o We are required to withhold on the gross amount of a distribution from a
Roth IRA unless you elect out of withholding. This may result in tax being
withheld even though the Roth IRA distribution is not taxable in whole or
in part.
Special withholding rules apply to foreign recipients and United States
citizens residing outside the United States. We do not discuss these rules
here. Certain states have indicated that state income tax withholding will
also apply to payments from the contracts made to residents. In some states,
you may elect out of state withholding, even if federal withholding applies.
Generally, an election out of federal withholding will also be considered an
election out of state withholding. If you need more information concerning a
particular state or any required forms, call our processing office at the
toll-free number.
FEDERAL INCOME TAX WITHHOLDING ON PERIODIC ANNUITY PAYMENTS
We withhold differently on "periodic" and "non-periodic" payments. For a
periodic annuity payment, for example, unless you specify a different number
of withholding exemptions, we withhold assuming that you are married and
claiming three withholding exemptions. If you do not give us your correct
Taxpayer Identification Number, we withhold as if you are single with no
exemptions.
Based on the assumption that you are married and claiming three withholding
exemptions, if you receive less than $14,880 in periodic annuity payments in
2000, your payments will generally be exempt from federal income tax
withholding. You could specify a different choice of withholding exemption or
request that tax be withheld. Your withholding election remains effective
unless and until you revoke it. You may revoke or change your withholding
election at any time.
FEDERAL INCOME TAX WITHHOLDING ON NON-PERIODIC ANNUITY PAYMENTS (WITHDRAWALS)
For a non-periodic distribution (total surrender or partial withdrawal), we
generally withhold at a flat 10% rate. We apply that rate to the taxable
amount in the case of nonqualified contracts, and to the payment amount in the
case of IRAs and Roth IRAs.
You cannot elect out of withholding if the payment is an eligible rollover
distribution from a TSA. If a non-periodic distribution from a TSA is not an
"eligible rollover distribution" then the 10% withholding rate applies.
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MANDATORY WITHHOLDING FROM TSA DISTRIBUTIONS
Unless you have the distribution go directly to the new plan, eligible
rollover distributions from TSAs are subject to mandatory 20% withholding. An
eligible rollover distribution from a TSA can be rolled over to another TSA or
a traditional IRA. All distributions from a TSA are eligible rollover
distributions unless they are on the following list of exceptions:
o any after-tax contributions you made to the plan; or
o any distributions which are required minimum distributions after age 70 1/2
or separation from service; or
o hardship withdrawals; or
o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and your designated beneficiary; or
o substantially equal periodic payments made for a specified period of 10
years or more; or
o corrective distributions that fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse;
or
o a qualified domestic relations order distribution to a beneficiary who is
not your current spouse or former spouse.
A death benefit payment to your surviving spouse, or a qualified domestic
relations order distribution to your current or former spouse, may be a
distribution subject to mandatory 20% withholding.
IMPACT OF TAXES TO EQUITABLE LIFE
The contracts provide that we may charge Separate Account No. 49 for taxes. We
do not now, but may in the future set up reserves for such taxes.
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ABOUT OUR SEPARATE ACCOUNT NO. 49
Each variable investment option is a subaccount of our Separate Account No.
49. We established Separate Account No. 49 in 1996 under special provisions of
the New York Insurance Law. These provisions prevent creditors from any other
business we conduct from reaching the assets we hold in our variable
investment options for owners of our variable annuity contracts, including
these contracts. We are the legal owner of all of the assets in Separate
Account No. 49 and may withdraw any amounts that exceed our reserves and other
liabilities with respect to variable investment options under our contracts.
The results of Separate Account No. 49's operations are accounted for without
regard to Equitable Life's other operations.
Separate Account No. 49 is registered under the Investment Company Act of 1940
and is classified by that act as a "unit investment trust." The SEC, however,
does not manage or supervise Equitable Life or Separate Account No. 49.
Each subaccount (variable investment option) within Separate Account No. 49
invests solely in class IB shares issued by the corresponding portfolio of EQ
Advisors Trust.
We reserve the right subject to compliance with laws that apply:
(1) to add variable investment options to, or to remove variable investment
options from, Separate Account No. 49, or to add other separate accounts;
(2) to combine any two or more variable investment options;
(3) to transfer the assets we determine to be the shares of the class of
contracts to which the contracts belong from any variable investment option
to another variable investment option;
(4) to operate Separate Account No. 49 or any variable investment option as a
management investment company under the Investment Company Act of 1940 (in
which case, charges and expenses that otherwise would be assessed against
an underlying mutual fund would be assessed against Separate Account No. 49
or a variable investment option directly);
(5) to deregister Separate Account No. 49 under the Investment Company Act of
1940;
(6) to restrict or eliminate any voting rights as to Separate Account No. 49;
and
(7) to cause one or more variable investment options to invest some or all of
their assets in one or more other trusts or investment companies.
ABOUT EQ ADVISORS TRUST
EQ Advisors Trust is registered under the Investment Company Act of 1940. It
is classified as an "open-end management investment company," more commonly
called a mutual fund. EQ Advisors Trust issues different shares relating to
each portfolio.
Equitable Life serves as the investment manager of EQ Advisors Trust. As such,
Equitable Life oversees the activities of the investment advisers with respect
to EQ Advisors Trust and is responsible for retaining or discontinuing the
services of those advisers. (Prior to September 1999 EQ Financial Consultants,
Inc., the predecessor to AXA Advisors, LLC and an affiliate of Equitable Life,
served as investment manager to EQ Advisors Trust.)
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999 the Alliance portfolios (other than EQ/Alliance Premier
Growth) were part of The Hudson River Trust. On October 18, 1999, these
portfolios became corresponding portfolios of EQ Advisors Trust.
EQ Advisors Trust does not impose sales charges or "loads" for buying and
selling its shares. All dividends and other distributions on Trust shares are
reinvested in full. The Board of Trustees of EQ Advisors Trust may establish
additional portfolios or eliminate existing portfolios at any time. More
detailed information about EQ Advisors Trust, the portfolio investment
objectives, policies, restrictions, risks, expenses, the Rule 12b-1 Plan
relating to its Class IB shares, and other
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aspects of its operations, appears in the prospectus for EQ Advisors Trust
attached at the end of this prospectus, or in its SAI which is available upon
request.
ABOUT OUR FIXED MATURITY OPTIONS
RATES TO MATURITY AND PRICE PER $100 OF MATURITY VALUE
We can determine the amount required to be allocated to one or more fixed
maturity options in order to produce specified maturity values. For example,
we can tell you how much you need to allocate per $100 of maturity value.
The rates to maturity for new allocations as of March 15, 2000 and the related
price per $100 of maturity value were as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------
FIXED MATURITY
OPTIONS WITH
FEBRUARY 15TH RATE TO MATURITY PRICE
MATURITY DATE OF AS OF PER $100 OF
MATURITY YEAR MARCH 15, 2000 MATURITY VALUE
- -------------------------------------------------------------
<S> <C> <C>
2001 4.45% $ 96.06
2002 5.16% $ 90.78
2003 5.68% $ 85.09
2004 5.76% $ 80.27
2005 5.87% $ 75.50
2006 5.95% $ 71.00
2007 6.02% $ 66.71
2008 6.08% $ 62.64
2009 6.17% $ 58.59
2010 6.23% $ 54.88
- -------------------------------------------------------------
</TABLE>
HOW WE DETERMINE THE MARKET VALUE ADJUSTMENT
We use the following procedure to calculate the market value adjustment (up or
down) we make if you withdraw all of your value from a fixed maturity option
before its maturity date.
(1) We determine the market adjusted amount on the date of the withdrawal as
follows:
(a) We determine the fixed maturity amount that would be payable on the
maturity date, using the rate to maturity for the fixed maturity
option.
(b) We determine the period remaining in your fixed maturity option (based
on the withdrawal date) and convert it to fractional years based on
a 365-day year. For example, three years and 12 days becomes 3.0329.
(c) We determine the current rate to maturity that applies on the withdrawal
date to new allocations to the same fixed maturity option.
(d) We determine the present value of the fixed maturity amount payable at
the maturity date, using the period determined in (b) and the rate
determined in (c).
(2) We determine the fixed maturity amount as of the current date.
(3) We subtract (2) from the result in (1)(d). The result is the market value
adjustment applicable to such fixed maturity option, which may be
positive or negative.
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Your market adjusted amount is the present value of the maturity value
discounted at the rate to maturity in effect for new contributions to that
same fixed maturity option on the date of the calculation.
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If you withdraw only a portion of the amount in a fixed maturity option, the
market value adjustment will be a percentage of the market value adjustment
that would have applied if you had withdrawn the entire value in that fixed
maturity option. This percentage is equal to the percentage of the value in
the fixed maturity option that you are withdrawing. Any withdrawal charges
that are deducted from a fixed maturity option will result in a market value
adjustment calculated in the same way. See Appendix I for an example.
For purposes of calculating the rate to maturity for new allocations to a
fixed maturity option (see (1)(c) above), we use the rate we have in effect
for new allocations to that fixed maturity option. We use this rate even if
new allocations to that option would not be accepted at that time. This rate
will not be less than 3%. If we do not have a rate to maturity in effect for a
fixed maturity option to which
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the "current rate to maturity" in (1)(c) would apply, we will use the rate at
the next closest maturity date. If we are no longer offering new fixed
maturity options, the "current rate to maturity" will be determined in
accordance with our procedures then in effect. We reserve the right to add up
to 0.25% to the current rate in (1)(c) above for purposes of calculating the
market value adjustment only.
INVESTMENTS UNDER THE FIXED MATURITY OPTIONS
Amounts allocated to the fixed maturity options are held in a "nonunitized"
separate account we have established under the New York Insurance Law. This
separate account provides an additional measure of assurance that we will make
full payment of amounts due under the fixed maturity options. Under New York
Insurance Law, the portion of the separate account's assets equal to the
reserves and other contract liabilities relating to the contracts are not
chargeable with liabilities from any other business we may conduct. We own the
assets of the separate account, as well as any favorable investment
performance on those assets. You do not participate in the performance of the
assets held in this separate account. We may, subject to state law that
applies, transfer all assets allocated to the separate account to our general
account. We guarantee all benefits relating to your value in the fixed
maturity options, regardless of whether assets supporting fixed maturity
options are held in a separate account or our general account.
We have no specific formula for establishing the rates to maturity for the
fixed maturity options. We expect the rates to be influenced by, but not
necessarily correspond to, among other things, the yields that we can expect
to realize on the separate account's investments from time to time. Our
current plans are to invest in fixed-income obligations, including corporate
bonds, mortgage-backed and asset-backed securities, and government and agency
issues having durations in the aggregate consistent with those of the fixed
maturity options.
Although the above generally describes our plans for investing the assets
supporting our obligations under the fixed maturity options under the
contracts, we are not obligated to invest those assets according to any
particular plan except as we may be required to by state insurance laws. We
will not determine the rates to maturity we establish by the performance of
the nonunitized separate account.
ABOUT THE GENERAL ACCOUNT
Our general account supports all of our policy and contract guarantees,
including those that apply to the fixed maturity options, as well as our
general obligations.
The general account is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations
of all jurisdictions where we are authorized to do business. Because of
exemptions and exclusionary provisions that apply, interests in the general
account have not been registered under the Securities Act of 1933, nor is the
general account an investment company under the Investment Company Act of
1940. However, the market value adjustment interests under the contracts are
registered under the Securities Act of 1933.
We have been advised that the staff of the SEC has not reviewed the portions
of this prospectus that relate to the general account (other than market value
adjustment interests). The disclosure with regard to the general account,
however, may be subject to certain provisions of the federal securities laws
relating to the accuracy and completeness of statements made in prospectuses.
ABOUT OTHER METHODS OF PAYMENT
WIRE TRANSMITTALS
We accept initial contributions sent by wire to our processing office by
agreement with certain broker-dealers. The transmittals must be accompanied by
information we require to allocate your contribution. Wire orders not
accompanied by complete information may be retained as described in "How you
can make your contributions."
Even if we accept the wire order and essential information, a contract
generally will not be issued until we receive and accept a properly completed
application. In certain cases we may issue a contract based on information
forwarded
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electronically. In these cases, you must sign our Acknowledgement of Receipt
form.
Where we require a signed application, no financial transactions will be
permitted until we receive the signed application and have issued the
contract. Where we require an Acknowledgement of Receipt form, financial
transactions are only permitted if you request them in writing, sign the
request and have it signature guaranteed, until we receive the signed
Acknowledgement of Receipt form.
After your contract has been issued, additional contributions may be
transmitted by wire.
AUTOMATIC INVESTMENT PROGRAM - FOR NQ, FLEXIBLE PREMIUM IRA, AND FLEXIBLE
PREMIUM ROTH IRA CONTRACTS ONLY
You may use our automatic investment program, or "AIP," to have a specified
amount automatically deducted from a checking account, money market account,
or credit union checking account and contributed as an additional contribution
into an NQ, Flexible Premium IRA or Flexible Premium Roth IRA contract on a
monthly or quarterly basis. AIP is not available for Rollover IRA, Roth
Conversion IRA, or Rollover TSA contracts.
AIP additional contributions may be allocated to any of the variable
investment options and available fixed maturity options. Our minimum
contribution amount requirement is $20. You choose the day of the month you
wish to have your account debited. However, you may not choose a date later
than the 28th day of the month.
You may cancel AIP at any time by notifying our processing office. We are not
responsible for any debits made to your account before the time written notice
of cancellation is received at our processing office.
DATES AND PRICES AT WHICH CONTRACT EVENTS OCCUR
We describe below the general rules for when, and at what prices, events under
your contract will occur. Other portions of this prospectus describe
circumstances that may cause exceptions. We generally do not repeat those
exceptions below.
BUSINESS DAY
Our business day is any day the New York Stock Exchange is open for trading.
Our business day generally ends at 4:00 p.m., Eastern Time for purposes of
determining the date when contributions are applied and any other transaction
requests are processed. We may, however, close due to emergency conditions.
Contributions will be applied and any other transaction requests will be
processed when they are received along with all the required information.
o If your contribution, transfer or any other transaction request, containing
all the required information, reaches us on a non-business day or after
4:00 p.m. on a business day, we will use the next business day.
o A loan request under your Rollover TSA contract will be processed on the
first business day of the month following the date on which the properly
completed loan request form is received.
o If your transaction is set to occur on the same day of the month as the
contract date and that date is the 29th, 30th or 31st of the month, then
the transaction will occur on the 1st day of the next month.
o When a charge is to be deducted on a contract date anniversary that is a
non-business day, we will deduct the charge on the next business day.
CONTRIBUTIONS AND TRANSFERS
o Contributions allocated to the variable investment options are invested at
the unit value next determined after the close of the business day.
o Contributions allocated to a fixed maturity option will receive the rate to
maturity in effect for that fixed maturity option on that business day.
o Transfers to or from variable investment options will be made at the unit
value next determined after the close of the business day.
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o Transfers to a fixed maturity option will be based on the rate to maturity
in effect for that fixed maturity option on the business day of the
transfer.
ABOUT YOUR VOTING RIGHTS
As the owner of the shares of EQ Advisors Trust we have the right to vote on
certain matters involving the portfolios, such as:
o the election of trustees;
o the formal approval of independent auditors selected for EQ Advisors Trust;
or
o any other matters described in the prospectus for EQ Advisors Trust or
requiring a shareholders' vote under the Investment Company Act of 1940.
We will give contract owners the opportunity to instruct us how to vote the
number of shares attributable to their contracts if a shareholder vote is
taken. If we do not receive instructions in time from all contract owners, we
will vote the shares of a portfolio for which no instructions have been
received in the same proportion as we vote shares of that portfolio for which
we have received instructions. We will also vote any shares that we are
entitled to vote directly because of amounts we have in a portfolio in the
same proportions that contract owners vote.
VOTING RIGHTS OF OTHERS
Currently, we control EQ Advisors Trust. EQ Advisors Trust shares are sold to
our separate accounts and an affiliated qualified plan trust. In addition, EQ
Advisors Trust shares are held by separate accounts of insurance companies
both affiliated and unaffiliated with us. Shares held by these separate
accounts will probably be voted according to the instructions of the owners of
insurance policies and contracts issued by those insurance companies. While
this will dilute the effect of the voting instructions of the contract owners,
we currently do not foresee any disadvantages because of this. The Board of
Trustees of EQ Advisors Trust intends to monitor events in order to identify
any material irreconcilable conflicts that may arise and to determine what
action, if any, should be taken in response. If we believe that a response to
any of those events insufficiently protects our contract owners, we will see
to it that appropriate action is taken.
SEPARATE ACCOUNT NO. 49 VOTING RIGHTS
If actions relating to Separate Account No. 49 require contract owner
approval, contract owners will be entitled to one vote for each unit they have
in the variable investment options. Each contract owner who has elected a
variable annuity payout option may cast the number of votes equal to the
dollar amount of reserves we are holding for that annuity in a variable
investment option divided by the annuity unit value for that option. We will
cast votes attributable to any amounts we have in the variable investment
options in the same proportion as votes cast by contract owners.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under applicable
federal securities laws. To the extent that those laws or the regulations
published under those laws eliminate the necessity to submit matters for
approval by persons having voting rights in separate accounts of insurance
companies, we reserve the right to proceed in accordance with those laws or
regulations.
ABOUT LEGAL PROCEEDINGS
Equitable Life and its affiliates are parties to various legal proceedings. In
our view, none of these proceedings is likely to have a material adverse
effect upon Separate Account No. 49, our ability to meet our obligations under
the contracts, or the distribution of the contracts.
ABOUT OUR INDEPENDENT ACCOUNTANTS
The consolidated financial statements of Equitable Life at December 31, 1999
and 1998, and for the three years ended December 31, 1999 incorporated in this
prospectus by reference to the 1999 Annual Report on Form 10-K are
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
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FINANCIAL STATEMENTS
The financial statements of Separate Account No. 49, as well as the
consolidated financial statements of Equitable Life, are in the SAI. The SAI
is available free of charge. You may request one by writing to our processing
office or calling 1-800-789-7771.
TRANSFERS OF OWNERSHIP, COLLATERAL ASSIGNMENTS, LOANS, AND BORROWING
You can transfer ownership of an NQ contract at any time before annuity
payments begin. We will continue to treat you as the owner until we receive
notification of any change at our processing office. You cannot assign your NQ
contract as collateral or security for a loan. Loans are also not available
under your NQ contract. In some cases, an assignment or change of ownership
may have adverse tax consequences. See "Tax information" earlier in this
prospectus.
You cannot assign or transfer ownership of an IRA or Rollover TSA contract
except by surrender to us. Loans are not available and you cannot assign IRA
contracts as security for a loan or other obligation. If the employer that
provided the funds does not restrict them, loans are available under a
Rollover TSA contract.
For limited transfers of ownership after the owner's death see "Beneficiary
continuation option" in "Payment of death benefit" earlier in this prospectus.
You may direct the transfer of the values under your IRA or Rollover TSA
contract to another similar arrangement under federal income tax rules. In the
case of such a transfer, we will impose a withdrawal charge, if one applies.
DISTRIBUTION OF THE CONTRACTS
Equitable Distributors, Inc. ("EDI"), an indirect, wholly owned subsidiary of
Equitable Life, is the distributor of the contracts and has responsibility for
sales and marketing functions for Separate Account No. 49. EDI serves as the
principal underwriter of Separate Account No. 49. EDI is registered with the
SEC as a broker-dealer and is a member of the National Association of
Securities Dealers, Inc. EDI's principal business address is 1290 Avenue of
the Americas, New York, New York 10104. Under a distribution agreement between
EDI, Equitable Life, and certain of Equitable Life's separate accounts,
including Separate Account No. 49, Equitable Life paid EDI distribution fees
of $46,957,345 for 1999, $35,452,793 for 1998, and $9,566,343 for 1997, as the
distributor of certain contracts, including these contracts, and as the
principal underwriter of several Equitable Life separate accounts, including
Separate Account No. 49.
The contracts will be sold by registered representatives of EDI, as well as by
affiliated and unaffiliated broker-dealers with which EDI has entered into
selling agreements. We pay broker-dealer sales compensation that will
generally not exceed 7% of total contributions made under the contracts. EDI
may also receive compensation and reimbursement for its marketing services
under the terms of its distribution agreement with Equitable Life.
Broker-dealers receiving sales compensation will generally pay a portion of it
to their registered representatives as commissions related to sales of the
contracts. The offering of the contracts is intended to be continuous.
<PAGE>
9
Investment performance
- ----------------
63 Investment performance
- --------------------------------------------------------------------------------
We provide the following tables to show five different measurements of the
investment performance of the variable investment options and/or the
portfolios in which they invest. We include these tables because they may be
of general interest to you.
Table 1 shows the average annual total return of the variable investment
options. Average annual total return is the annual rate of growth that would
be necessary to achieve the ending value of a contribution invested in the
variable investment options for the periods shown.
Table 2 shows the growth of a hypothetical $1,000 investment in the variable
investment options over the periods shown. Both Tables 1 and 2 take into
account all current fees and charges under the contract, including the
withdrawal charge, the annual administrative charge but do not reflect the
charges designed to approximate certain taxes that may be imposed on us, such
as premium taxes in your state or any applicable annuity administrative fee.
Tables 3, 4, and 5 show the rates of return of the variable investment options
on an annualized, cumulative, and year-by-year basis. These tables take into
account all current fees and charges under the contract, but do not reflect
the withdrawal charge, the annual administrative charge or the charges
designed to approximate certain taxes that may be imposed on us, such as
premium taxes in your state or any applicable annuity administrative fee. If
the charges were reflected they would effectively reduce the rates of return
shown.
In all cases the results shown are based on the actual historical investment
experience of the portfolios in which the variable investment options invest.
In some cases, the results shown relate to periods when the variable
investment options and/or the contracts were not available. In those cases, we
adjusted the results of the portfolios to reflect the charges under the
contracts that would have applied had the investment options and/or contracts
been available.
For the "Alliance" portfolios (other than EQ/Alliance Premier Growth), we have
adjusted the results prior to October 1996, when Class IB shares for these
portfolios were not available, to reflect the 12b-1 fees currently imposed.
Finally, the results shown for the Alliance Money Market and Alliance Common
Stock options for periods before March 22, 1985 reflect the results of the
variable investment options that preceded them. The "Since portfolio
inception" figures for these options are based on the date of inception of the
preceding variable investment options. We have adjusted these results to
reflect the maximum investment advisory fee payable for the portfolios, as
well as an assumed charge of 0.06% for direct operating expenses.
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999 the Alliance portfolios (other than EQ/Alliance Premier
Growth) were part of The Hudson River Trust. On October 18, 1999, these
portfolios became corresponding portfolios of EQ Advisors Trust. In each case,
the performance shown is for the indicated EQ Advisors Trust portfolio and any
predecessor that it may have had.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends.
From time to time, we may advertise different measurements of the investment
performance of the variable investment options and/or the portfolios,
including the measurements reflected in the tables below.
THE PERFORMANCE INFORMATION SHOWN BELOW AND THE PERFORMANCE INFORMATION THAT
WE ADVERTISE REFLECTS PAST PERFORMANCE AND DOES NOT INDICATE HOW THE VARIABLE
INVESTMENT OPTIONS MAY PERFORM IN THE FUTURE. SUCH INFORMATION ALSO DOES NOT
REPRESENT THE RESULTS EARNED BY ANY PARTICULAR INVESTOR. YOUR RESULTS WILL
DIFFER.
BENCHMARKS
Tables 3 and 4 compare the performance of variable investment options to
market indices that serve as
<PAGE>
- ----------
64 Investment performance
- --------------------------------------------------------------------------------
benchmarks. Market indices are not subject to any charges for investment
advisory fees, brokerage commission or other operating expenses typically
associated with a managed portfolio. Also, they do not reflect other contract
charges such as the mortality and expense risks charge, administrative
charges, or any withdrawal or optional benefit charge. Comparisons with these
benchmarks, therefore, may be of limited use. We include them because they are
widely known and may help you to understand the universe of securities from
which each portfolio is likely to select its holdings. Benchmark data reflect
the reinvestment of dividend income. The benchmarks include:
EQ/AGGRESSIVE STOCK: 50% Russell 2000 Index and 50% Standard & Poor's Mid-Cap
Total Return Index.
ALLIANCE COMMON STOCK: Standard & Poor's 500 Index.
ALLIANCE HIGH YIELD: Benchmark #1 - Merrill Lynch High Yield Master Index, and
Benchmark #2 - Credit Suisse First Boston Global High Yield Index.
ALLIANCE MONEY MARKET: Salomon Brothers Three-Month T-Bill Index.
EQ/ALLIANCE PREMIER GROWTH: Standard & Poor's 500 Index.
ALLIANCE SMALL CAP GROWTH: Russell 2000 Growth Index.
EQ/ALLIANCE TECHNOLOGY: Lipper Specialty Fund Average
BT EQUITY 500 INDEX:
Standard & Poor's 500 Index.
BT INTERNATIONAL EQUITY INDEX: Morgan Stanley Capital International Europe,
Australia, Far East Index.
BT SMALL COMPANY INDEX: Russell 2000 Index.
CAPITAL GUARDIAN INTERNATIONAL:
Morgan Stanley Capital International Europe, Australia, Far East Index.
CAPITAL GUARDIAN RESEARCH: Standard & Poor's 500 Index.
CAPITAL GUARDIAN U.S. EQUITY: Standard & Poor's 500 Index.
EQ/EVERGREEN: Benchmark #1 - Russell 2000 Index, and Benchmark #2 - Standard &
Poor's 500 Index.
EQ/EVERGREEN FOUNDATION: 60% Standard & Poor's 500 Index/40% Lehman Brothers
Aggregate Bond Index.
J.P. MORGAN CORE BOND: Salomon Brothers Broad Investment Grade Bond.
LAZARD LARGE CAP VALUE: Standard & Poor's 500 Index. LAZARD SMALL CAP VALUE:
Russell 2000 Index.
MFS EMERGING GROWTH COMPANIES: Russell 2000 Index. MFS GROWTH WITH INCOME:
Standard & Poor's 500 Index.
MFS RESEARCH: Standard & Poor's 500 Index.
MERCURY BASIC VALUE EQUITY: Standard & Poor's 500 Index.
MERCURY WORLD STRATEGY: 36% Standard & Poor's 500 Index/24% Morgan Stanley
Capital International Europe, Australia, Far East Index/21% Salomon Brothers
U.S. Treasury Bond 1 Year and 14% Salomon Brothers World Government Bond
(excluding U.S.)/and 5% Three-Month U.S. Treasury Bill.
MORGAN STANLEY EMERGING MARKETS EQUITY: Morgan Stanley Capital International
Emerging Markets Free Price Return Index.
EQ/PUTNAM GROWTH & INCOME VALUE: Standard & Poor's 500 Index.
EQ/PUTNAM INTERNATIONAL EQUITY: Morgan Stanley Capital International Europe,
Australia, Far East Index.
EQ/PUTNAM INVESTORS GROWTH: Standard & Poor's 500 Index.
LIPPER SURVEY. The Lipper Variable Insurance Products Performance Analysis
Survey (Lipper Survey) records the performance of a large group of variable
annuity products, including managed separate accounts of insurance companies.
According to Lipper Analytical Services, Inc., the data are presented net of
investment management fees, direct operating expenses and asset-based charges
applicable under annuity contracts. Lipper data provide a more accurate
picture than market benchmarks of the Equitable Accumulator Express
performance relative to other variable annuity products.
<PAGE>
- -----
65 Investment performance
- --------------------------------------------------------------------------------
TABLE 1
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 1999:
<TABLE>
<CAPTION>
LENGTH OF INVESTMENT PERIOD
- -----------------------------------------------------------------------------------------------------------------------
SINCE SINCE
1 3 5 10 OPTION PORTFOLIO
VARIABLE INVESTMENT OPTIONS YEAR YEARS YEARS YEARS INCEPTION* INCEPTION**
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EQ/Aggressive Stock 8.07% 4.57% 12.38% 13.75% 4.33% 15.18%
Alliance Common Stock 14.23% 23.01% 24.36% 15.23% 23.47% 14.15%
Alliance High Yield (13.41)% (2.53)% 5.90% 6.95% (1.61)% 5.99%
Alliance Money Market (5.35)% - 0.99% 1.27% 0.19% 3.73%
Alliance Small Cap Growth 16.88% - - - 12.65% 12.65%
BT Equity 500 Index 9.78% - - - 16.55% 16.55%
BT International Equity Index 16.73% - - - 17.58% 17.58%
BT Small Company Index 10.19% - - - 2.53% 2.53%
EQ/Evergreen (0.49)% - - - (0.49)% (0.49)%
EQ/Evergreen Foundation (2.79)% - - - (2.79)% (2.79)%
J.P. Morgan Core Bond (11.48)% - - - (2.49)% (2.49)%
Lazard Large Cap Value (6.50)% - - - 5.42% 5.42%
Lazard Small Cap Value (8.25)% - - - (8.85)% (8.85)%
MFS Emerging Growth Companies 62.02% - - - 43.45% 43.45%
MFS Growth with Income (1.47)% - - - (1.47)% (1.47)%
MFS Research 12.51% - - - 19.02% 19.02%
Mercury Basic Value Equity 8.45% - - - 12.95% 12.95%
Mercury World Strategy 10.79% - - - 7.05% 7.05%
Morgan Stanley Emerging Markets Equity 83.89% - - - 13.41% 0.19%
EQ/Putnam Growth & Income Value (11.24)% - - - 5.00% 5.00%
EQ/Putnam International Equity 48.73% - - - 27.13% 27.13%
EQ/Putnam Investors Growth 19.45% - - - 29.90% 29.90%
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
* The variable investment option inception dates are: Alliance Money Market,
Alliance High Yield, Alliance Common Stock, and EQ/Aggressive Stock
(October 16, 1996); Alliance Small Cap Growth, MFS Research, MFS Emerging
Growth Companies, Mercury Basic Value Equity and Mercury World Strategy,
EQ/Putnam Growth & Income Value, EQ/Putnam Investors Growth, and EQ/Putnam
International Equity (May 1, 1997); BT Equity 500 Index, BT Small Company
Index, BT International Equity Index, J.P. Morgan Core Bond, Lazard Large
Cap Value, Lazard Small Cap Value, and Morgan Stanley Emerging Markets
Equity (December 31, 1997); EQ/Evergreen, EQ/Evergreen Foundation, MFS
Growth with Income (December 31, 1998). The inception dates for the
variable investment options that became available after December 31, 1998,
and are therefore not shown in this table are: EQ/Alliance Premier Growth,
Capital Guardian U.S. Equity, Capital Guardian Research; Capital Guardian
International (April 30, 1999); and EQ/Alliance Technology (May 1, 2000).
** The inception dates for the portfolios underlying Alliance variable
investment options shown in the table are for portfolios of The Hudson
River Trust, the assets of which became assets of corresponding portfolios
of EQ Advisors Trust on October 18, 1999. The portfolio inception dates
are: Alliance Money Market (July 13, 1981); Alliance High Yield (January 2,
1987); Alliance Common Stock (January 13, 1976); EQ/Aggressive Stock
(January 27, 1986); Alliance Small Cap Growth, MFS Research, MFS Emerging
Growth Companies, Mercury Basic Value Equity, and Mercury World Strategy,
EQ/Putnam Growth & Income Value, EQ/Putnam Investors Growth, and EQ/Putnam
International Equity (May 1, 1997); BT Equity 500 Index, BT Small Company
Index, BT International Equity Index, J.P. Morgan Core Bond, Lazard Large
Cap Value, and Lazard Small Cap Value (January 1, 1998); and Morgan Stanley
Emerging Markets Equity (August 20, 1997); EQ/Evergreen, EQ/Evergreen
Foundation, MFS Growth with Income (December 31, 1998). The inception dates
for the portfolios that became available after December 31, 1998, and are
therefore not shown in the tables are: EQ/Alliance Premier Growth, Capital
Guardian U.S. Equity, Capital Guardian Research, Capital Guardian
International (April 30, 1999), and EQ/Alliance Technology (May 1, 2000).
<PAGE>
- -----
66 Investment performance
- --------------------------------------------------------------------------------
TABLE 2
GROWTH OF $1,000 UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 1999:
<TABLE>
<CAPTION>
LENGTH OF INVESTMENT PERIOD
- -----------------------------------------------------------------------------------------------------------------
SINCE
1 3 5 10 PORTFOLIO
VARIABLE INVESTMENT OPTIONS YEAR YEARS YEARS YEARS INCEPTION*
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
EQ/Aggressive Stock $ 1,080.72 $ 1,143.49 $ 1,792.16 $ 3,627.59 $ 7,155.38
Alliance Common Stock $ 1,142.26 $ 1,861.31 $ 2,973.87 $ 4,128.72 $ 23,842.44
Alliance High Yield $ 865.90 $ 926.14 $ 1,331.81 $ 1,958.34 $ 2,129.53
Alliance Money Market $ 946.55 $ 1,000.01 $ 1,050.69 $ 1,134.27 $ 1,965.98
Alliance Small Cap Growth $ 1,168.82 - - - $ 1,374.28
BT Equity 500 Index $ 1,097.77 - - - $ 1,358.38
BT International Equity Index $ 1,167.35 - - - $ 1,382.39
BT Small Company Index $ 1,101.88 - - - $ 1,051.24
EQ/Evergreen $ 995.06 - - - $ 995.06
EQ/Evergreen Foundation $ 972.13 - - - $ 972.13
J.P. Morgan Core Bond $ 885.21 - - - $ 950.90
Lazard Large Cap Value $ 934.99 - - - $ 1,111.24
Lazard Small Cap Value $ 917.55 - - - $ 830.86
MFS Emerging Growth Companies $ 1,620.20 - - - $ 2,619.11
MFS Growth with Income $ 985.26 - - - $ 985.26
MFS Research $ 1,125.11 - - - $ 1,591.28
Mercury Basic Value Equity $ 1,084.54 - - - $ 1,383.88
Mercury World Strategy $ 1,107.86 - - - $ 1,199.31
Morgan Stanley Emerging Markets Equity $ 1,838.90 - - - $ 1,004.47
EQ/Putnam Growth & Income Value $ 887.56 - - - $ 1,138.98
EQ/Putnam International Equity $ 1,487.30 - - - $ 1,897.51
EQ/Putnam Investors Growth $ 1,194.49 - - - $ 2,009.81
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* Portfolio inception dates are shown in Table 1.
<PAGE>
- -----
67 Investment performance
- --------------------------------------------------------------------------------
TABLE 3
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EQ/AGGRESSIVE STOCK 17.42% 8.41% 14.87% 15.27% - 16.43%
Lipper Mid-Cap Growth 51.65% 24.68% 19.97% 14.78% - 15.86%
Benchmark 18.09% 17.48% 19.92% 15.41% - 14.58%
ALLIANCE COMMON STOCK 23.70% 26.39% 26.54% 17.17% 16.97% 15.34%
Lipper Growth 29.78% 26.87% 25.55% 16.90% 15.83% 15.16%
Benchmark 21.04% 27.56% 28.56% 18.21% 17.88% 16.19%
ALLIANCE HIGH YIELD (4.50)% 1.56% 8.55% 8.91% - 8.05%
Lipper High Current Yield 3.65% 4.82% 8.59% 9.61% - 7.79%
Benchmark #1 1.57% 5.91% 9.61% 10.79% - 9.99%
Benchmark #2 3.28% 5.37% 9.07% 11.06% - 10.04%
ALLIANCE MONEY MARKET 3.73% 3.99% 4.10% 3.91% - 5.69%
Lipper Money Market 3.78% 4.05% 4.16% 3.96% - 5.70%
Benchmark 4.74% 5.01% 5.20% 5.06% - 6.65%
ALLIANCE SMALL CAP GROWTH 26.41% - - - - 16.53%
Lipper Small Company Growth 34.26% - - - - 19.49%
Benchmark 43.09% - - - - 25.88%
BT EQUITY 500 INDEX 19.16% - - - - 21.53%
Lipper S&P 500 Index 19.36% - - - - 23.16%
Benchmark 21.03% - - - - 24.76%
BT INTERNATIONAL EQUITY INDEX 26.26% - - - - 22.55%
Lipper International 43.24% - - - - 26.76%
Benchmark 26.96% - - - - 23.43%
BT SMALL COMPANY INDEX 19.58% - - - - 7.57%
Lipper Small Cap 34.26% - - - - 16.02%
Benchmark 21.26% - - - - 8.70%
EQ/EVERGREEN 8.68% 8.68%
Lipper Growth 29.78% - - - - 29.78%
Benchmark #1 21.26% - - - - 21.26%
Benchmark #2 21.03% - - - - 21.03%
EQ/EVERGREEN FOUNDATION 6.34% 6.34%
Lipper Balanced 8.69% - - - - 8.69%
Benchmark 11.15% - - - - 11.15%
J.P. MORGAN CORE BOND (2.53)% - - - - 2.60%
Lipper Intermediate Investment
Grade Debt (0.83)% - - - - 3.84%
Benchmark (1.77)% - - - - 2.64%
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
68 Investment performance
- --------------------------------------------------------------------------------
TABLE 3 (CONTINUED)
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
LAZARD LARGE CAP VALUE 2.55% - - - - 10.43%
Lipper Capital Appreciation 43.66% - - - - 32.61%
Benchmark 21.03% - - - - 24.76%
LAZARD SMALL CAP VALUE 0.77% - - - - (3.69)%
Lipper Small Cap 34.26% - - - - 16.02%
Benchmark 21.26% - - - - 8.70%
MFS EMERGING GROWTH
COMPANIES 72.02% - - - - 46.85%
Lipper Mid-Cap 51.65% - - - - 32.50%
Benchmark 21.26% - - - - 16.99%
MFS GROWTH WITH INCOME 7.68% - - - - 7.68%
Lipper Growth & Income 12.90% - - - - 12.90%
Benchmark 21.03% - - - - 21.03%
MFS RESEARCH 21.95% - - - - 22.76%
Lipper Growth 29.78% - - - - 29.33%
Benchmark 21.03% - - - - 27.36%
MERCURY BASIC VALUE EQUITY 17.81% - - - - 16.82%
Lipper Growth & Income 12.90% - - - - 18.00%
Benchmark 21.03% - - - - 27.36%
MERCURY WORLD STRATEGY 20.19% - - - - 11.06%
Lipper Global Flexible Portfolio 12.93% - - - - 11.91%
Benchmark 13.07% - - - - 16.18%
MORGAN STANLEY EMERGING
MARKETS EQUITY 93.89% - - - - 4.70%
Lipper Emerging Markets 82.53% - - - - 2.90%
Benchmark 66.41% - - - - (0.88)%
EQ/PUTNAM GROWTH & INCOME
VALUE (2.29)% - - - - 9.07%
Lipper Growth & Income 12.90% - - - - 18.00%
Benchmark 21.03% - - - - 27.36%
EQ/PUTNAM INTERNATIONAL
EQUITY 58.73% - - - - 30.75%
Lipper International 43.24% - - - - 20.38%
Benchmark 26.96% - - - - 18.32%
EQ/PUTNAM INVESTORS GROWTH 29.03% - - - - 33.40%
Lipper Growth 29.78% - - - - 29.33%
Benchmark 21.03% - - - - 27.36%
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* Portfolio inception dates are shown in Table 1. Lipper survey and
benchmark "since portfolio inception" information are as of the month-end
closest to the actual date of portfolio inception.
<PAGE>
- -----
69 Investment performance
- --------------------------------------------------------------------------------
TABLE 4
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EQ/AGGRESSIVE STOCK 17.42% 27.40% 100.04% 314.00% - 731.86%
Lipper Mid-Cap Growth 51.65% 102.87% 158.98% 311.69% - 683.45%
Benchmark 18.09% 62.12% 147.96% 319.19% - 595.55%
ALLIANCE COMMON STOCK 23.70% 101.89% 224.39% 387.92% 2,199.43% 2,959.14%
Lipper Growth 29.78% 106.30% 216.51% 386.68% 1,816.52% 2,838.39%
Benchmark 21.04% 107.56% 251.12% 432.78% 2,584.39% 3,555.46%
ALLIANCE HIGH YIELD (4.50)% 4.76% 50.70% 134.80% - 173.56%
Lipper High Current Yield 3.65% 15.25% 51.19% 151.82% - 166.74%
Benchmark #1 1.57% 18.80% 58.22% 178.72% - 245.03%
Benchmark #2 3.28% 17.00% 54.39% 185.43% - 246.92%
ALLIANCE MONEY MARKET 3.73% 12.46% 22.27% 46.75% - 177.85%
Lipper Money Market 3.78% 12.64% 22.65% 47.52% - 178.18%
Benchmark 4.74% 15.79% 28.88% 63.79% - 229.35%
ALLIANCE SMALL CAP GROWTH 26.41% - - - - 50.42%
Lipper Small Company Growth 34.26% - - - - 62.98%
Benchmark 43.09% - - - - 84.91%
BT EQUITY 500 INDEX 19.16% - - - - 47.69%
Lipper S&P 500 Index 19.36% - - - - 51.69%
Benchmark 21.03% - - - - 55.65%
BT INTERNATIONAL EQUITY
INDEX 26.26% - - - - 50.19%
Lipper International 43.24% - - - - 61.58%
Benchmark 26.96% - - - - 52.35%
BT SMALL COMPANY INDEX 19.58% - - - - 15.71%
Lipper Small Cap 34.26% - - - - 37.82%
Benchmark 21.26% - - - - 18.17%
EQ/EVERGREEN 8.68% 8.68%
Lipper Growth 29.78% - - - - 29.78%
Benchmark #1 21.26% - - - - 21.26%
Benchmark #2 21.03% - - - - 21.03%
EQ/EVERGREEN FOUNDATION 6.34% 6.34%
Lipper Balanced 8.69% - - - - 8.69%
Benchmark 11.15% - - - - 11.15%
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
70 Investment performance
- --------------------------------------------------------------------------------
TABLE 4 (CONTINUED)
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
J.P. MORGAN CORE BOND (2.53)% - - - - 5.26%
Lipper Intermediate Investment
Grade Debt (0.83)% - - - - 7.83%
Benchmark (1.77)% - - - - 5.96%
LAZARD LARGE CAP VALUE 2.55% - - - - 21.96%
Lipper Capital Appreciation 43.66% - - - - 79.44%
Benchmark 21.03% - - - - 55.65%
LAZARD SMALL CAP VALUE 0.77% - - - - (7.24)%
Lipper Small Cap 34.26% - - - - 37.82%
Benchmark 21.26% - - - - 18.17%
MFS EMERGING GROWTH
COMPANIES 72.02% - - - - 178.81%
Lipper Mid-Cap 51.65% - - - - 120.85%
Benchmark 21.26% - - - - 52.05%
MFS GROWTH WITH INCOME 7.68% - - - - 7.68%
Lipper Growth & Income 12.90% - - - - 12.90%
Benchmark 21.03% - - - - 21.03%
MFS RESEARCH 21.95% - - - - 72.84%
Lipper Growth 29.78% - - - - 101.13%
Benchmark 21.03% - - - - 90.75%
MERCURY BASIC VALUE EQUITY 17.81% - - - - 51.40%
Lipper Growth & Income 12.90% - - - - 56.85%
Benchmark 21.03% - - - - 90.75%
MERCURY WORLD STRATEGY 20.19% - - - - 32.31%
Lipper Global Flexible Portfolio 12.93% - - - - 35.69%
Benchmark 13.07% - - - - 49.16%
MORGAN STANLEY EMERGING
MARKETS EQUITY 93.89% - - - - 11.47%
Lipper Emerging Markets 82.53% - - - - 7.48%
Benchmark 66.41% - - - - 5.32%
EQ/PUTNAM GROWTH &
INCOME VALUE (2.29)% - - - - 26.07%
Lipper Growth & Income 12.90% - - - - 56.85%
Benchmark 21.03% - - - - 90.75%
EQ/PUTNAM INTERNATIONAL
EQUITY 58.73% - - - - 104.52%
Lipper International 43.24% - - - - 65.44%
Benchmark 26.96% - - - - 56.70%
EQ/PUTNAM INVESTORS
GROWTH 29.03% - - - - 115.74%
Lipper Growth 29.78% - - - - 101.13%
Benchmark 21.03% - - - - 90.75%
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* Portfolio inception dates are shown in Table 1. Lipper survey and
benchmark "since portfolio inception" information are as month-end
closest to the actual date of portfolio inception.
<PAGE>
- -----
71 Investment performance
- --------------------------------------------------------------------------------
TABLE 5
YEAR-BY-YEAR RATES OF RETURN:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
1990 1991 1992 1993 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
EQ/Aggressive Stock 6.87% 84.64% (4.32)% 15.35% (4.96)%
Alliance Common Stock (9.22)% 36.24% 1.98% 23.33% (3.31)%
Alliance High Yield (2.31)% 22.98% 10.96% 21.68% (3.95)%
Alliance Money Market 6.94% 4.92% 2.32% 1.73% 2.77%
Alliance Small Cap Growth - - - - -
BT Equity 500 Index - - - - -
BT International Equity Index - - - - -
BT Small Company Index - - - - -
EQ/Evergreen - - - - -
EQ/Evergreen Foundation - - - - -
J.P. Morgan Core Bond - - - - -
Lazard Large Cap Value - - - - -
Lazard Small Cap Value - - - - -
MFS Emerging Growth Companies - - - - -
MFS Growth with Income - - - - -
MFS Research - - - - -
Mercury Basic Value Equity - - - - -
Mercury World Strategy - - - - -
Morgan Stanley Emerging Markets Equity - - - - -
EQ/Putnam Growth & Income Value - - - - -
EQ/Putnam International Equity - - - - -
EQ/Putnam Investors Growth - - - - -
- -------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
1995 1996 1997 1998 1999
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
EQ/Aggressive Stock 30.07% 20.73% 9.48% (0.90)% 17.42%
Alliance Common Stock 30.87% 22.78% 27.67% 27.83% 23.70%
Alliance High Yield 18.49% 21.40% 17.05% (6.28)% (4.50)%
Alliance Money Market 4.48% 4.06% 4.16% 4.08% 3.73%
Alliance Small Cap Growth - - 25.71%+ (5.35)% 26.41%
BT Equity 500 Index - - - 23.94% 19.16%
BT International Equity Index - - - 18.95% 26.26%
BT Small Company Index - - - (3.24)% 19.58%
EQ/Evergreen - - - - 8.68%
EQ/Evergreen Foundation - - - - 6.34%
J.P. Morgan Core Bond - - - 7.99% (2.53)%
Lazard Large Cap Value - - - 18.92% 2.55%
Lazard Small Cap Value - - - (7.95)% 0.77%
MFS Emerging Growth Companies - - 21.64%+ 33.24% 72.02%
MFS Growth with Income - - - - 7.68%
MFS Research - - 15.30%+ 22.93% 21.95%
Mercury Basic Value Equity - - 16.28%+ 10.52% 17.81%
Mercury World Strategy - - 4.04%+ 5.81% 20.19%
Morgan Stanley Emerging Markets Equity - - (20.47)%+ (27.71)% 93.89%
EQ/Putnam Growth & Income Value - - 15.46%+ 11.75% (2.29)%
EQ/Putnam International Equity - - 8.88%+ 18.34% 58.73%
EQ/Putnam Investors Growth - - 23.86%+ 34.99% 29.03%
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
+ Returns for these portfolios represent less than 12 months of
performance. The returns are as of each portfolio inception date as shown
in Table 1.
<PAGE>
- ----------
72 Investment performance
- --------------------------------------------------------------------------------
COMMUNICATING PERFORMANCE DATA
In reports or other communications to contract owners or in advertising
material, we may describe general economic and market conditions affecting our
variable investment options and the portfolios and may compare the performance
or ranking of those options and the portfolios with:
o those of other insurance company separate accounts or mutual funds included
in the rankings prepared by Lipper Analytical Services, Inc., Morningstar,
Inc., VARDS, or similar investment services that monitor the performance
of insurance company separate accounts or mutual funds;
o other appropriate indices of investment securities and averages for peer
universes of mutual funds; or
o data developed by us derived from such indices or averages.
We also may furnish to present or prospective contract owners advertisements
or other communications that include evaluations of a variable investment
option or portfolio by nationally recognized financial publications. Examples
of such publications are:
<TABLE>
<S> <C>
--------------------------------------------------------------------
Barron's Investment Management Weekly
Morningstar's Variable Annuity Money Management Letter
Sourcebook Investment Dealers Digest
Business Week National Underwriter
Forbes Pension & Investments
Fortune USA Today
Institutional Investor Investor's Business Daily
Money The New York Times
Kiplinger's Personal Finance The Wall Street Journal
Financial Planning The Los Angeles Times
Investment Adviser The Chicago Tribune
- --------------------------------------------------------------------
</TABLE>
Lipper Analytical Services, Inc. (Lipper) compiles performance data for peer
universes of funds with similar investment objectives in its Lipper Survey.
Morningstar, Inc. compiles similar data in the Morningstar Variable
Annuity/Life Report (Morningstar Report).
The Lipper Survey records performance data as reported to it by over 800
mutual funds underlying variable annuity and life insurance products. It
divides these actively managed portfolios into 25 categories by portfolio
objectives. The Lipper Survey contains two different universes, which reflect
different types of fees in performance data:
o The "separate account" universe reports performance data net of investment
management fees, direct operating expenses and asset-based charges
applicable under variable life and annuity contracts, and
o The "mutual fund" universe reports performance net only of investment
management fees and direct operating expenses, and therefore reflects only
charges that relate to the underlying mutual fund.
The Morningstar Variable Annuity/Life Report consists of nearly 700 variable
life and annuity funds, all of which report their data net of investment
management fees, direct operating expenses and separate account level charges.
VARDS is a monthly reporting service that monitors approximately 2,500
variable life and variable annuity funds on performance and account
information.
YIELD INFORMATION
Current yield for the Alliance Money Market option will be based on net
changes in a hypothetical investment over a given seven-day period, exclusive
of capital changes, and then "annualized" (assuming that the same seven-day
result would occur each week for 52 weeks). Current yield for the Alliance
High Yield option will be based on net changes in a hypothetical investment
over a given 30-day period, exclusive of capital changes, and then
"annualized" (assuming that the same 30-day result would occur each month for
12 months).
"Effective yield" is calculated in a similar manner, but when annualized, any
income earned by the investment is assumed to be reinvested. The "effective
yield" will be slightly higher than the "current yield" because any earnings
are compounded weekly for the Alliance Money Market option.
<PAGE>
- ----------
73 Investment performance
- --------------------------------------------------------------------------------
The current yields and effective yields assume the deduction of all current
contract charges and expenses other than the withdrawal charge, the annual
administrative charge, and any charge designed to approximate certain taxes
that may be imposed on us in your state such as premium taxes. See "Yield
Information for the Alliance Money Market Option and Alliance High Yield
Option" in the SAI.
<PAGE>
10
Incorporation of certain documents by reference
- ----------------
74 Incorporation of certain documents by reference
- --------------------------------------------------------------------------------
Equitable Life's Annual Report on Form 10-K for the year ended December 31,
1999, is considered to be a part of this prospectus because it is incorporated
by reference.
After the date of this prospectus and before we terminate the offering of the
securities under this prospectus, all documents or reports we file with the
SEC under the Securities Exchange Act of 1934 ("Exchange Act"), will be
considered to become part of this prospectus because they are incorporated by
reference.
Any statement contained in a document that is, or becomes part of this
prospectus, will be considered changed or replaced for purposes of this
prospectus if a statement contained in this prospectus changes or is replaced.
Any statement that is considered to be a part of this prospectus because of
its incorporation will be considered changed or replaced for the purpose of
this prospectus if a statement contained in any other subsequently filed
document that is considered to be part of this prospectus changes or replaces
that statement. After that, only the statement that is changed or replaced
will be considered to be part of this prospectus.
We file our Exchange Act documents and reports, including our Annual Report on
Form 10-K and Quarterly Report on Form 10-Q, electronically according to EDGAR
under CIK No. 0000727920. The SEC maintains a Web site that contains reports,
proxy and information statements, and other information regarding registrants
that file electronically with the SEC. The address of the site is
http://www.sec.gov.
Upon written or oral request, we will provide, free of charge, to each person
to whom this prospectus is delivered, a copy of any or all of the documents
considered to be part of this prospectus because they are incorporated herein.
This does not include exhibits not specifically incorporated by reference into
the text of such documents. Requests for documents should be directed to The
Equitable Life Assurance Society of the United States, 1290 Avenue of the
Americas, New York, New York 10104. Attention: Corporate Secretary (telephone:
(212) 554-1234).
<PAGE>
Appendix I: Condensed financial information
- --------
A-1 Appendix I: Condensed financial information
- --------------------------------------------------------------------------------
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION, EXCEPT EQ/ALLIANCE TECHNOLOGY WHICH IS BEING OFFERED FOR THE
FIRST TIME ON MAY 1, 2000
<TABLE>
<CAPTION>
- ---------------------------------------------------------
YEAR ENDED
DEC. 31, 1999
<S> <C>
EQ/AGGRESSIVE STOCK
Unit value $ 85.83
Number of units outstanding (000s) -
ALLIANCE COMMON STOCK
Unit value $ 321.89
Number of units outstanding (000s) -
ALLIANCE HIGH YIELD
Unit value $ 28.03
Number of units outstanding (000s) -
ALLIANCE MONEY MARKET
Unit value $ 28.85
Number of units outstanding (000s) 11
EQ/ALLIANCE PREMIER GROWTH
Unit value $ 11.82
Number of units outstanding (000s) -
ALLIANCE SMALL CAP GROWTH
Unit value $ 15.04
Number of units outstanding (000s) -
BT EQUITY 500 INDEX
Unit value $ 14.77
Number of units outstanding (000s) -
BT INTERNATIONAL EQUITY INDEX
Unit value $ 15.02
Number of units outstanding (000s) -
BT SMALL COMPANY INDEX
Unit value $ 11.57
Number of units outstanding (000s) -
CAPITAL GUARDIAN INTERNATIONAL
Unit value $ 14.00
Number of units outstanding (000s) -
- ---------------------------------------------------------
</TABLE>
<PAGE>
- -----
A-2 Appendix I: Condensed financial information
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------
YEAR ENDED
DEC. 31, 1999
<S> <C>
CAPITAL GUARDIAN RESEARCH
Unit value $ 10.64
Number of units outstanding (000s) -
CAPITAL GUARDIAN U.S. EQUITY
Unit value $ 10.31
Number of units outstanding (000s) -
EQ/EVERGREEN
Unit value $ 10.87
Number of units outstanding (000s) -
EQ/EVERGREEN FOUNDATION
Unit value $ 10.63
Number of units outstanding (000s) -
J.P. MORGAN CORE BOND
Unit value $ 10.53
Number of units outstanding (000s) -
LAZARD LARGE CAP VALUE
Unit value $ 12.20
Number of units outstanding (000s) -
LAZARD SMALL CAP VALUE
Unit value $ 9.28
Number of units outstanding (000s) -
MFS EMERGING GROWTH COMPANIES
Unit value $ 27.88
Number of units outstanding (000s) -
MFS GROWTH WITH INCOME
Unit value $ 10.77
Number of units outstanding (000s) -
MFS RESEARCH
Unit value $ 17.29
Number of units outstanding (000s) -
- ---------------------------------------------------------
</TABLE>
<PAGE>
- -----
A-3 Appendix I: Condensed financial information
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------
YEAR ENDED
DEC. 31, 1999
<S> <C>
MERCURY BASIC VALUE EQUITY
Unit value $ 15.14
Number of units outstanding (000s) -
MERCURY WORLD STRATEGY
Unit value $ 13.23
Number of units outstanding (000s) -
MORGAN STANLEY EMERGING MARKETS EQUITY
Unit value $ 11.15
Number of units outstanding (000s) -
EQ/PUTNAM GROWTH AND INCOME VALUE
Unit value $ 12.61
Number of units outstanding (000s) -
EQ/PUTNAM INTERNATIONAL EQUITY FUND
Unit value $ 20.45
Number of units outstanding (000s) -
EQ/PUTNAM INVESTORS GROWTH
Unit value $ 21.58
Number of units outstanding (000s) -
- ------------------------------------------------------------
</TABLE>
<PAGE>
Appendix II: Market value adjustment example
- --------
B-1 Appendix II: Market value adjustment example
- --------------------------------------------------------------------------------
The example below shows how the market value adjustment would be determined and
how it would be applied to a withdrawal, assuming that $100,000 was allocated
on February 15, 2001 to a fixed maturity option with a maturity date of
February 15, 2010 (nine years later) at a hypothetical rate to maturity of
7.00%, resulting in a maturity value on the maturity date of $183,846. We
further assume that a withdrawal of $50,000 is made four years later on
February 15, 2005.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
HYPOTHETICAL ASSUMED
RATE TO
MATURITY ON
FEBRUARY 15, 2005
- -------------------------------------------------------------------------------------------
5.00% 9.00%
- -------------------------------------------------------------------------------------------
<S> <C> <C>
AS OF FEBRUARY 15, 2005 (BEFORE WITHDRAWAL)
(1) Market adjusted amount $144,048 $ 119,487
(2) Fixed maturity amount $131,080 $ 131,080
(3) Market value adjustment:
(1) - (2) $ 12,968 $ (11,593)
ON FEBRUARY 15, 2005 (AFTER WITHDRAWAL)
(4) Portion of market value adjustment associated with withdrawal:
(3) x [$50,000/(1)] $ 4,501 $ (4,851)
(5) Reduction in fixed maturity amount:
[$50,000 - (4)] $ 45,499 $ 54,851
(6) Fixed maturity amount: (2) - (5) $ 85,581 $ 76,229
(7) Maturity value $120,032 $ 106,915
(8) Market adjusted amount of (7) $ 94,048 $ 69,487
- -------------------------------------------------------------------------------------------
</TABLE>
You should note that under this example if a withdrawal is made when rates have
increased from 7.00% to 9.00% (right column), a portion of a negative market
value adjustment is realized. On the other hand, if a withdrawal is made when
rates have decreased from 7.00% to 5.00% (left column), a portion of a positive
market value adjustment is realized.
<PAGE>
Statement of additional information
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Unit Values 2
Custodian and Independent Accountants 3
Yield Information for the Alliance Money Market Option and Alliance High Yield Option 3
Financial Statements 5
</TABLE>
HOW TO OBTAIN AN EQUITABLE ACCUMULATOR EXPRESS STATEMENT OF ADDITIONAL
INFORMATION FOR SEPARATE ACCOUNT NO. 49
Send this request form to:
Equitable Accumulator Express
P.O. Box 1547
Secaucus, NJ 07096-1547
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Please send me an Equitable Accumulator Express SAI for Separate Account No. 49
dated May 1, 2000.
- ------------------------------------------------------------------------------
Name:
- ------------------------------------------------------------------------------
Address:
- ------------------------------------------------------------------------------
City State Zip
(SAI 9AMLF (5/00))
<PAGE>
Equitable Accumulator
Plus(Service Mark)
A variable deferred annuity contract
PROSPECTUS DATED MAY 1, 2000
Please read and keep this prospectus for future reference. It contains
important information that you should know before purchasing or taking any
other action under your contract. Also, at the end of this prospectus you will
find attached the prospectus for EQ Advisors Trust, which contains important
information about its portfolios.
- -----------------------------------------------------------------------------
WHAT IS THE EQUITABLE ACCUMULATOR PLUS?
Equitable Accumulator Plus is a deferred annuity contract issued by THE
EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES. It provides for the
accumulation of retirement savings and for income. The contract offers death
benefit protection and a number of payout options. You invest to accumulate
value on a tax-deferred basis in one or more of our variable investment
options. This contract may not currently be available in all states.
<TABLE>
<S> <C>
VARIABLE INVESTMENT OPTIONS
- --------------------------------------------------------------------------------
o EQ/Aggressive Stock(1) o J.P. Morgan Core Bond(3)
o Alliance Common Stock o Lazard Large Cap Value
o Alliance High Yield o Lazard Small Cap Value
o Alliance Money Market o MFS Growth with Income
o EQ/Alliance Premier Growth o MFS Research
o Alliance Small Cap Growth o MFS Emerging Growth Companies
o EQ/Alliance Technology(2) o Mercury Basic Value Equity(4)
o BT Equity 500 Index o Mercury World Strategy(5)
o BT International Equity Index o Morgan Stanley Emerging
o BT Small Company Index Markets Equity
o Capital Guardian International o EQ/Putnam Growth & Income
o Capital Guardian Research Value
o Capital Guardian U.S. Equity o EQ/Putnam International Value
o EQ/Evergreen Equity
o EQ/Evergreen Foundation o EQ/Putnam Investors Growth
- --------------------------------------------------------------------------------
</TABLE>
(1) Formerly named "Alliance Aggressive Stock."
(2) May not be available in California.
(3) Formerly named "JPM Core Bond."
(4) Formerly named "Merrill Lynch Basic Value Equity."
(5) Formerly named "Merrill Lynch World Strategy."
You may allocate amounts to any of the variable investment options. Each
variable investment option is a subaccount of our Separate Account No. 49.
Each variable investment option, in turn, invests in a corresponding
securities portfolio of EQ Advisors Trust. Your investment results in a
variable investment option will depend on the investment performance of the
related portfolio.
TYPES OF CONTRACTS. We offer the contracts for use as:
o A nonqualified annuity ("NQ") for after-tax contributions only.
o An individual retirement annuity ("IRA"), either traditional IRA ("Rollover
IRA") or Roth IRA ("Roth Conversion IRA").
o An annuity that is an investment vehicle for a qualified defined
contribution or defined benefit plan ("QP").
o An Internal Revenue Code Section 403(b) Tax-Sheltered Annuity ("TSA") -
("Rollover TSA").
A contribution of at least $25,000 is required to purchase a contract. We add
an amount ("credit") to your contract with each contribution you make. Over
time, the amount of the credit may be more than offset by fees and charges
associated with the credit.
A registration statement relating to this offering has been filed with the
Securities and Exchange Commission ("SEC"). The statement of additional
information ("SAI") dated May 1, 2000 is a part of the registration statement.
The SAI is available free of charge. You may request one by writing to our
processing office or calling 1-800-789-7771. The SAI has been incorporated by
reference into this prospectus. This prospectus and the SAI can also be
obtained from the SEC's Web site at http://www.sec.gov. The table of contents
for the SAI appears at the back of this prospectus.
THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. THE CONTRACTS ARE NOT INSURED BY THE FDIC OR ANY OTHER
AGENCY. THEY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE NOT
BANK GUARANTEED. THEY ARE SUBJECT TO INVESTMENT RISKS AND POSSIBLE LOSS OF
PRINCIPAL.
<PAGE>
- ----------------
2 Contents of this prospectus
Contents of this prospectus
- --------------------------------------------------------------------------------
EQUITABLE ACCUMULATOR PLUS(Service Mark)
Index of key words and phrases 4
Who is Equitable Life? 5
How to reach us 6
Equitable Accumulator Plus at a glance - key features 8
- ---------------------------------------------------------------
FEE TABLE 10
- ---------------------------------------------------------------
Examples 13
Condensed financial information 14
- ---------------------------------------------------------------
1
- ---------------------------------------------------------------
CONTRACT FEATURES AND BENEFITS 15
- ---------------------------------------------------------------
How you can purchase and contribute to your contract 15
Owner and annuitant requirements 18
How you can make your contributions 18
What are your variable investment options under the
contract? 18
Allocating your contributions 21
Credits 21
Guaranteed minimum death benefit 21
Your right to cancel within a certain number of days 22
- ---------------------------------------------------------------
2
- ---------------------------------------------------------------
DETERMINING YOUR CONTRACT'S VALUE 23
- ---------------------------------------------------------------
Your account value and cash value 23
Your contract's value in the variable investment options 23
- ---------------------------------------------------------------
"We," "our," and "us" refer to Equitable Life.
When we address the reader of this prospectus with words
such as "you" and "your," we mean the person who has the
right or responsibility that the prospectus is discussing at that
point. This is usually the contract owner.
When we use the word "contract" it also includes certificates
that are issued under group contracts in some states.
<PAGE>
Contents of this prospectus 3
- --------------------------------------------------------------------------------
3
- --------------------------------------------------------------------
TRANSFERRING YOUR MONEY AMONG THE
VARIABLE INVESTMENT OPTIONS 24
- --------------------------------------------------------------------
Transferring your account value 24
Market timing 24
Dollar cost averaging your account value 24
Rebalancing your account value 24
- --------------------------------------------------------------------
4
- --------------------------------------------------------------------
ACCESSING YOUR MONEY 26
- --------------------------------------------------------------------
Withdrawing your account value 26
How withdrawals are taken from your account value 27
How withdrawals affect your guaranteed minimum
death benefit 27
Loans under rollover TSA contracts 28
Surrendering your contract to receive its cash value 29
When to expect payments 29
Your annuity payout options 29
- --------------------------------------------------------------------
5
- --------------------------------------------------------------------
CHARGES AND EXPENSES 33
- --------------------------------------------------------------------
Charges that Equitable Life deducts 33
Charges that EQ Advisors Trust deducts 35
Group or sponsored arrangements 35
- --------------------------------------------------------------------
6
- --------------------------------------------------------------------
PAYMENT OF DEATH BENEFIT 37
- --------------------------------------------------------------------
Your beneficiary and payment of benefit 37
How death benefit payment is made 38
Beneficiary continuation option 38
- --------------------------------------------------------------------
7
- --------------------------------------------------------------------
TAX INFORMATION 40
- --------------------------------------------------------------------
Overview 40
Transfers among variable investment options 40
Taxation of nonqualified annuities 40
Individual retirement arrangements (IRAs) 42
Special rules for nonqualified contracts in qualified plans 52
Tax Sheltered Annuity contracts (TSAs) 52
Federal and state income tax withholding and
information reporting 56
Impact of taxes to Equitable Life 58
- --------------------------------------------------------------------
8
- --------------------------------------------------------------------
MORE INFORMATION 59
- --------------------------------------------------------------------
About our Separate Account No. 49 59
About EQ Advisors Trust 59
About the general account 60
About other methods of payment 60
Dates and prices at which contract events occur 60
About your voting rights 61
About legal proceedings 62
About our independent accountants 62
Financial statements 62
Transfers of ownership, collateral assignments, loans,
and borrowing 62
Distribution of the contracts 62
- --------------------------------------------------------------------
9
- --------------------------------------------------------------------
INVESTMENT PERFORMANCE 64
- --------------------------------------------------------------------
Benchmarks 64
Communicating performance data 74
- --------------------------------------------------------------------
- --------------------------------------------------------------------
APPENDICES
- --------------------------------------------------------------------
I - Condensed financial information A-1
II - Purchase considerations for QP contracts B-1
III - Guaranteed minimum death benefit example C-1
- --------------------------------------------------------------------
- --------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
- --------------------------------------------------------------------
<PAGE>
4 Index of key words and phrases
Index of key words and phrases
- --------------------------------------------------------------------------------
This index should help you locate more information on the terms used in this
prospectus.
<TABLE>
<CAPTION>
PAGE IN
TERM PROSPECTUS
<S> <C>
account value 23
annuitant 15
annuity payout options 29
beneficiary 37
business day 60
cash value 23
conduit IRA 46
contract date 9
contract date anniversary 9
contract year 9
contributions to Roth IRAs 49
rollovers and direct transfers 49
conversion contributions 50
contributions to traditional IRAs 43
rollovers and transfers 44
credit 21
EQAccess 6
guaranteed minimum death benefit 21
IRA cover
</TABLE>
<TABLE>
<CAPTION>
PAGE IN
TERM PROSPECTUS
<S> <C>
IRS 40
NQ cover
participant 18
portfolio cover
processing office 6
QP cover
recharacterizations 46
Required Beginning Date 47
Rollover IRA cover
Rollover TSA cover
Roth IRA 49
Roth Conversion IRA cover
SAI cover
SEC cover
TOPS 6
TSA cover
traditional IRA 43
unit 24
variable investment options 18
</TABLE>
To make this prospectus easier to read, we sometimes use different words than
in the contract or supplemental materials. This is illustrated below. Although
we use different words, they have the same meaning in this prospectus as in the
contract or supplemental materials. Your registered representative can provide
further explanation about your contract or supplemental materials.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
PROSPECTUS CONTRACT OR SUPPLEMENTAL MATERIALS
- --------------------------------------------------------------------------------
<S> <C>
variable investment options Investment Funds
account value Annuity Account Value
unit Accumulation Unit
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
Who is Equitable Life? 5
Who is Equitable Life?
- --------------------------------------------------------------------------------
We are The Equitable Life Assurance Society of the United States ("Equitable
Life"), a New York stock life insurance corporation. We have been doing
business since 1859. Equitable Life is a subsidiary of AXA Financial, Inc.
(previously, The Equitable Companies Incorporated). The majority shareholder
of AXA Financial, Inc. is AXA, a French holding company for an international
group of insurance and related financial services companies. As a majority
shareholder, and under its other arrangements with Equitable Life and
Equitable Life's parent, AXA exercises significant influence over the
operations and capital structure of Equitable Life and its parent. No company
other than Equitable Life, however, has any legal responsibility to pay
amounts that Equitable Life owes under the contract.
AXA Financial, Inc. and its consolidated subsidiaries managed approximately
$462.7 billion in assets as of December 31, 1999. For over 100 years Equitable
Life has been among the largest insurance companies in the United States. We
are licensed to sell life insurance and annuities in all fifty states, the
District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our home
office is located at 1290 Avenue of the Americas, New York, N.Y. 10104.
<PAGE>
6 Who is Equitable Life?
- --------------------------------------------------------------------------------
HOW TO REACH US
You may communicate with our processing office as listed below for any of the
following purposes:
FOR CONTRIBUTIONS SENT BY REGULAR MAIL:
- ---------------------------------------------
Equitable Accumulator Plus
P.O. Box 13014
Newark, NJ 07188-0014
FOR CONTRIBUTIONS SENT BY EXPRESS DELIVERY:
- ---------------------------------------------
Equitable Accumulator Plus
c/o Bank One, N.A.
300 Harmon Meadow Boulevard, 3rd Floor
Attn: Box 13014
Secaucus, NJ 07094
FOR ALL OTHER COMMUNICATIONS (E.G.,
REQUESTS FOR TRANSFERS, WITHDRAWALS, OR
REQUIRED NOTICES) SENT BY REGULAR MAIL:
- ---------------------------------------------
Equitable Accumulator Plus
P.O. Box 1547
Secaucus, NJ 07096-1547
FOR ALL OTHER COMMUNICATIONS (E.G.,
REQUESTS FOR TRANSFERS, WITHDRAWALS, OR
REQUIRED NOTICES) SENT BY EXPRESS DELIVERY:
- ---------------------------------------------
Equitable Accumulator Plus
200 Plaza Drive, 4th Floor
Secaucus, NJ 07094
REPORTS WE PROVIDE:
- ---------------------------------------------
o written confirmation of financial transactions;
o statement of your contract values at the close of each calendar quarter
(four per year); and
o annual statement of your contract values as of the close of the contract
year.
TELEPHONE OPERATED PROGRAM SUPPORT
("TOPS") AND EQACCESS SYSTEMS:
- ------------------------------------
TOPS is designed to provide you with up-to-date information via touch-tone
telephone. EQAccess is designed to provide this information through the
Internet. You can obtain information on:
o your current account value;
o your current allocation percentages (anticipated to be available through
EQAccess by the end of 2000);
o the number of units you have in the variable investment options;
o the daily unit values for the variable investment options; and
o performance information regarding the variable investment options (not
available through TOPS).
You can also:
o change your allocation percentages and/or transfer among the variable
investment options (anticipated to be available through EQAccess by the
end of 2000);
o change your personal identification number (PIN) (not available through
EQAccess); and
o change your EQAccess password (not available through TOPS).
TOPS and EQAccess are normally available seven days a week, 24 hours a day.
You may use TOPS by calling toll free 1-888-909-7770. You may use EQAccess by
visiting our web site at http://www.equitable.com and clicking on EQAccess. Of
course, for reasons beyond our control, these services may sometimes be
unavailable.
We have established procedures to reasonably confirm that the instructions
communicated by telephone or Internet are genuine. For example, we will
require certain personal identification information before we will act on
telephone or Internet instructions and we will provide written confirmation of
your transfers. If we do not employ reasonable procedures to confirm the
genuineness of
<PAGE>
Who is Equitable Life? 7
- --------------------------------------------------------------------------------
telephone or Internet instructions, we may be liable for any losses arising
out of any act or omission that constitutes negligence, lack of good faith, or
willful misconduct. In light of our procedures, we will not be liable for
following telephone or Internet instructions we reasonably believe to be
genuine.
We reserve the right to limit access to these services if we determine that
you are engaged in a market timing strategy (see "Market timing" in
"Transferring your money among investment options").
CUSTOMER SERVICE REPRESENTATIVE:
- --------------------------------------------------------------------------------
You may also use our toll-free number (1-800-789-7771) to speak with one of our
customer service representatives. Our customer service representatives are
available on any business day from 8:30 a.m. until 5:30 p.m., Eastern Time.
WE REQUIRE THAT THE FOLLOWING TYPES OF COMMUNICATIONS BE ON SPECIFIC FORMS WE
PROVIDE FOR THAT PURPOSE:
(1) authorization for telephone transfers by your registered representative;
(2) conversion of a traditional IRA to a Roth Conversion IRA contract;
(3) election of the automatic investment program;
(4) election of the rebalancing program;
(5) requests for loans under Rollover TSA contracts;
(6) spousal consent for loans under Rollover TSA contracts;
(7) tax withholding election; and
(8) election of the beneficiary continuation option.
WE ALSO HAVE SPECIFIC FORMS THAT WE RECOMMEND YOU USE FOR THE FOLLOWING TYPES
OF REQUESTS:
(1) address changes;
(2) beneficiary changes;
(3) transfers between variable investment options; and
(4) contract surrender and withdrawal requests.
TO CANCEL OR CHANGE ANY OF THE FOLLOWING WE REQUIRE WRITTEN NOTIFICATION
GENERALLY AT LEAST SEVEN CALENDAR DAYS BEFORE THE NEXT SCHEDULED TRANSACTION:
(1) automatic investment program;
(2) dollar cost averaging;
(3) rebalancing;
(4) substantially equal withdrawals;
(5) systematic withdrawals; and
(6) the date annuity payments are to begin.
You must sign and date all these requests. Any written request that is not on
one of our forms must include your name and your contract number along with
adequate details about the notice you wish to give or the action you wish us
to take.
SIGNATURES:
The proper person to sign forms, notices and requests would normally be the
owner. If there are joint owners both must sign.
<PAGE>
8 Equitable Accumulator Plus at a glance - key features
Equitable Accumulator Plus at a glance - key features
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
PROFESSIONAL Equitable Accumulator Plus' variable investment options invest in different portfolios
INVESTMENT managed by professional investment advisers.
MANAGEMENT
- ----------------------------------------------------------------------------------------------------------------------
TAX ADVANTAGES o On earnings inside the No tax on any dividends, interest, or capital gains until you
contract make withdrawals from your contract or receive annuity
payments.
-----------------------------------------------------------------------------------------
o On transfers inside the No tax on transfers among variable investment options.
contract
-----------------------------------------------------------------------------------------
If you are buying a contract to fund a retirement plan that already provides tax deferral
under sections of the Internal Revenue Code, you should do so for the contract's features and
benefits other than tax deferral. In such situations, the tax deferral of the contract does not
provide necessary or additional benefits.
CONTRIBUTION AMOUNTS o Initial minimum: $25,000
o Additional minimum: $1,000
$100 monthly and $300 quarterly under our automatic
investment program (NQ contracts)
-----------------------------------------------------------------------------------------
Maximum contribution limitations may apply.
- ----------------------------------------------------------------------------------------------------------------------
CREDIT We allocate your contributions to your account value. We allocate a credit to your account
value at the same time that we allocate your contributions. The amount of the credit is
equal to 4% of each contribution. The credit is subject to recovery by us in certain limited
circumstances.
- ----------------------------------------------------------------------------------------------------------------------
ACCESS TO YOUR MONEY o Lump sum withdrawals
o Several withdrawal options on a periodic basis
o Loans under Rollover TSA contracts
o Contract surrender
You may incur a withdrawal charge for certain withdrawals or if you surrender your contract.
You may also incur income tax and a tax penalty.
- ----------------------------------------------------------------------------------------------------------------------
PAYOUT OPTIONS o Fixed annuity payout options
o Variable Immediate Annuity payout options
o Income Manager(Reg. TM) payout options
- ----------------------------------------------------------------------------------------------------------------------
ADDITIONAL FEATURES o Guaranteed minimum death benefit
o Dollar cost averaging
o Automatic investment program
o Account value rebalancing (quarterly, semiannually, and annually)
o Free transfers
o Waiver of withdrawal charge for disability, terminal illness, or confinement to a nursing
home
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Equitable Accumulator Plus at a glance - key features 9
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
<S> <C>
FEES AND CHARGES o Daily charges on amounts invested in the variable
investment options for mortality and expense risks,
administrative, and distribution charges at a current
annual rate of 1.60% current (1.70% maximum).
o No sales charge deducted at the time you make
contributions and no annual contract fee.
o During the first nine contract years following a
contribution, a charge will be deducted from amounts
that you withdraw that exceed 15% of your account
value. We use the account value on the most recent
contract date anniversary to calculate the 15% amount
available. The charge is 8% in each of the first two
contract years following a contribution. It declines
by 1% each year beginning in the third contract year
to 1% in the ninth contract year. There is no
withdrawal charge in the tenth and later contract
years following a contribution.
-----------------------------------------------------------
The "contract date" is the effective date of a contract.
This usually is the business day we receive the properly
completed and signed application, along with any other
required documents, and your initial contribution. Your
contract date will be shown in your contract. The 12-month
period beginning on your contract date and each 12-month
period after that date is a "contract year." The end of
each 12-month period is your "contract date anniversary."
-----------------------------------------------------------
o We deduct a charge designed to approximate certain
taxes that may be imposed on us, such as premium taxes
in your state. This charge is generally deducted from
the amount applied to an annuity payout option.
o We deduct a $350 annuity administrative fee from
amounts applied to the Variable Immediate Annuity
payout options.
o Annual expenses of EQ Advisors Trust portfolios are
calculated as a percentage of the average daily net
assets invested in each portfolio. These expenses
include management fees ranging from 0.25% to 1.15%
annually, 12b-1 fees of 0.25% annually, and other
expenses.
- --------------------------------------------------------------------------------
ANNUITANT ISSUE NQ: 0-80
AGES Rollover IRA, Roth Conversion IRA, Rollover TSA: 20-78
QP: 20-70
- --------------------------------------------------------------------------------
</TABLE>
THE ABOVE IS NOT A COMPLETE DESCRIPTION OF ALL MATERIAL PROVISIONS OF THE
CONTRACT. IN SOME CASES RESTRICTIONS OR EXCEPTIONS APPLY. ALSO, ALL FEATURES OF
THE CONTRACT ARE NOT NECESSARILY AVAILABLE IN YOUR STATE OR AT CERTAIN AGES.
For more detailed information we urge you to read the contents of this
prospectus, as well as your contract. Please feel free to speak with your
registered representative, or call us, if you have any questions.
OTHER CONTRACTS
We offer a variety of fixed and variable annuity contracts. They may offer
features, including investment options, fees and/or charges that are different
from those in the contracts offered by this prospectus. Not every contract is
offered through the same distributor. Upon request, your registered
representative can show you information regarding other Equitable Life that he
or she distributes. You can also contact us to find out more about any of the
Equitable Life annuity contracts.
<PAGE>
10 Fee table
Fee table
- -------------------------------------------------------------------------------
The fee table below will help you understand the various charges and expenses
that apply to your contract. The table reflects charges you will directly incur
under the contract, as well as charges and expenses of the portfolios that you
will bear indirectly. Charges designed to approximate certain taxes that may be
imposed on us, such as premium taxes in your state, may also apply. Also, an
annuity administrative fee may apply when your annuity payments are to begin.
Each of the charges and expenses is more fully described in "Charges and
expenses" later in this prospectus.
- -------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR VARIABLE INVESTMENT OPTIONS EXPRESSED AS AN
ANNUAL PERCENTAGE OF DAILY NET ASSETS
- -------------------------------------------------------------------------------
Mortality and expense risks(1) 1.10%*
Administrative 0.25% current (0.35% maximum)
Distribution 0.25 %
-----
Total annual expenses 1.60% current (1.70% maximum)
- -------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE AT THE TIME YOU REQUEST CERTAIN
TRANSACTIONS
- -------------------------------------------------------------------------------
Withdrawal charge as a percentage of contributions* Contract year
(deducted if you surrender your contract or make 1 ............ 8.00%
certain withdrawals. The withdrawal charge 2 ............ 8.00%
percentage we use is determined by the contract 3 ............ 7.00%
year in which you make the withdrawal or surrender 4 ............ 6.00%
your contract. For each contribution, we consider the 5 ............ 5.00%
contract year in which we receive that contribution 6 ............ 4.00%
to be "contract year 1")(2) 7 ............ 3.00%
8 ............ 2.00%
9 ............ 1.00%
10+ .......... 0.00%
Charge if you elect a Variable Immediate
Annuity payout option $350
* These charges compensate us for certain risks we assume and expenses we
incur under the contract. They also compensate us for the expense
associated with the credit. We expect to make a profit from these
charges.
<PAGE>
Fee table 11
- --------------------------------------------------------------------------------
EQ ADVISORS TRUST ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
TOTAL
OTHER ANNUAL
EXPENSES EXPENSES
MANAGEMENT (AFTER EXPENSE (AFTER EXPENSE
FEES(3) 12B-1 FEES(4) LIMITATION)(5) LIMITATION)(6)
-------------- ----------------- ---------------- ---------------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock 0.60% 0.25% 0.04% 0.89%
Alliance Common Stock 0.46% 0.25% 0.04% 0.75%
Alliance High Yield 0.60% 0.25% 0.05% 0.90%
Alliance Money Market 0.34% 0.25% 0.05% 0.64%
EQ/Alliance Premier Growth 0.90% 0.25% 0.00% 1.15%
Alliance Small Cap Growth 0.75% 0.25% 0.07% 1.07%
EQ/Alliance Technology 0.90% 0.25% 0.00% 1.15%
BT Equity 500 Index 0.25% 0.25% 0.10% 0.60%
BT International Equity Index 0.35% 0.25% 0.40% 1.00%
BT Small Company Index 0.25% 0.25% 0.25% 0.75%
Capital Guardian International 0.85% 0.25% 0.10% 1.20%
Capital Guardian Research 0.65% 0.25% 0.05% 0.95%
Capital Guardian U.S. Equity 0.65% 0.25% 0.05% 0.95%
EQ/Evergreen 0.65% 0.25% 0.05% 0.95%
EQ/Evergreen Foundation 0.60% 0.25% 0.10% 0.95%
J.P. Morgan Core Bond 0.45% 0.25% 0.10% 0.80%
Lazard Large Cap Value 0.65% 0.25% 0.05% 0.95%
Lazard Small Cap Value 0.75% 0.25% 0.10% 1.10%
MFS Emerging Growth Companies 0.65% 0.25% 0.10% 1.00%
MFS Growth with Income 0.60% 0.25% 0.10% 0.95%
MFS Research 0.65% 0.25% 0.05% 0.95%
Mercury Basic Value Equity 0.60% 0.25% 0.10% 0.95%
Mercury World Strategy 0.70% 0.25% 0.25% 1.20%
Morgan Stanley Emerging Markets Equity 1.15% 0.25% 0.35% 1.75%
EQ/Putnam Growth & Income 0.60% 0.25% 0.10% 0.95%
EQ/Putnam International Value Equity 0.85% 0.25% 0.15% 1.25%
EQ/Putnam Investors Growth 0.65% 0.25% 0.05% 0.95%
</TABLE>
- ----------
Notes:
(1) A portion of this charge is for providing the guaranteed minimum death
benefit.
(2) Deducted upon a withdrawal of amounts in excess of the 15% free
withdrawal amount and upon surrender of a contract.
(3) The management fees shown reflect revised management fees, effective on
or about May 1, 2000 which were approved by shareholders. The management
fees shown for, EQ/Putnam Growth & Income Value and Lazard Large Cap
Value, do not reflect the waiver of a portion of each portfolio's
investment management fees that are currently in effect. The management
fee for each portfolio cannot be increased without a vote of each
portfolio's shareholders.
<PAGE>
12 Fee table
-------------------------------------------------------------------------------
(4) Portfolio shares are all subject to fees imposed under the distribution
plan (the "Rule 12b-1 Plan") adopted by EQ Advisors Trust pursuant to
Rule 12b-1 under the Investment Company Act of 1940. The 12b-1 fee will
not be increased for the life of the contracts. Prior to October 18,
1999, the total annual expenses for the Alliance Small Cap Growth
portfolio were limited to 1.20% under an expense limitation arrangement
related to that portfolio's Rule 12b-1 Plan. The arrangement is no longer
in effect. The amounts shown have been restated to reflect the expenses
that would have been incurred in 1999, absent the expense limitation
agreement.
(5) The amounts shown as "Other Expenses" will fluctuate from year to year
depending on actual expenses. See footnote (6) for any expense limitation
agreements.
On October 18, 1999, the Alliance portfolios (other than EQ/Alliance
Premier Growth and EQ Alliance Technology) became part of the portfolios
of EQ Advisors Trust. The "Other Expenses" for these portfolios have been
restated to reflect the estimated expenses that would have been incurred
had these portfolios been portfolios of EQ Advisors Trust for the year
ended December 31, 1999. The restated expenses reflect an increase of
0.01% for each of these portfolios.
(6) Equitable Life, EQ Advisors Trust's manager, has entered into an expense
limitation agreement with respect to certain portfolios. Under this
agreement Equitable Life has agreed to waive or limit its fees and assume
other expenses. Under the expense limitation agreement, total annual
operating expenses of certain portfolios (other than interest, taxes,
brokerage commissions, capitalized expenditures, extraordinary expenses
and 12b-1 fees) are limited as a percentage of the average daily net
assets of each of the following portfolios: 1.75% for Morgan Stanley
Emerging Markets Equity; 1.25% for EQ/Putnam International Equity; 1.20%
for Capital Guardian International and Mercury World Strategy; 1.15% for
EQ/Alliance Premier Growth and EQ/Alliance Technology; 1.10% for Lazard
Small Cap Value; 1.00% for BT International Equity Index and MFS Emerging
Growth Companies; 0.95% for Capital Guardian U.S. Equity, Capital
Guardian Research, EQ/Evergreen, EQ/Evergreen Foundation, Lazard Large
Cap Value, MFS Growth with Income, MFS Research, Mercury Basic Value
Equity, EQ/Putnam Growth & Income Value and, EQ/Putnam Investors Growth;
0.80% for J.P. Morgan Core Bond; 0.75% for BT Small Company Index; and
0.60% for BT Equity 500 Index. These expense limitations for the BT
Equity 500 Index, EQ/Putnam Growth & Income Value, and EQ/Putnam
International Value Equity, Mercury Basic Value Equity, MFS Growth with
Income, MFS Research, and MFS Emerging Growth companies, portfolios
reflect an increase effective on May 1, 2000. The expense limitation for
the EQ/Evergreen and Lazard Small Cap Value portfolios reflect a decrease
effective on May 1, 2000.
Absent the expense limitation, the "Other Expenses" for 1999 on an
annualized basis for each of the portfolios would have been as follows:
1.00% for Morgan Stanley Emerging Markets Equity; 0.32% for EQ/Putnam
International Value Equity; 0.66% for Capital Guardian International;
0.46% for Mercury World Strategy; 0.23% for EQ/Alliance Premier Growth;
0.10% for EQ/Alliance Technology; 0.26% for Lazard Small Cap Value; 0.49%
for BT International Equity Index; 0.17% for MFS Emerging Growth
Companies; 0.34% for Capital Guardian U.S. Equity; 0.47% for Capital
Guardian Research; 1.87% for EQ/Evergreen; 1.07% for EQ/Evergreen
Foundation; 0.21% for Lazard Large Cap Value; 0.37% for MFS Growth with
Income; 0.17% for MFS Research and Mercury Basic Value Equity; 0.16% for
EQ/Putnam Growth & Income Value; 0.19% for EQ/Putnam Investors Growth;
0.20% for J.P. Morgan Core Bond; 0.71% for BT Small Company Index; and
0.18% for BT Equity 500 Index. Initial seed capital was invested on April
30, 1999 for the EQ/Alliance Premier Growth, Capital Guardian U.S. Equity
and Capital Guardian Research portfolios and will be invested on or about
May 1, 2000 for the EQ/Alliance Technology portfolio and therefore
expenses have been estimated.
Each portfolio may at a later date make a reimbursement to Equitable Life
for any of the management fees waived or limited and other expenses
assumed and paid by Equitable Life pursuant to the expense limitation
agreement provided that, among other things, such portfolio has reached
sufficient size to permit such reimbursement to be made and provided that
the portfolio's current annual operating expenses do not exceed the
operating expense limit determined for such portfolio. For more
information see the prospectus for EQ Advisors Trust.
<PAGE>
Fee table 13
- --------------------------------------------------------------------------------
EXAMPLES
The examples below show the expenses that a hypothetical contract owner would
pay in the situations illustrated. We assume that a $1,000 contribution plus a
$40 credit is invested in one of the variable investment options listed and a
5% annual return is earned on the assets in that option.(1) The charges used in
the examples are the maximum charges rather than the lower current charges.
The examples should not be considered a representation of past or future
expenses for each option. Actual expenses may be greater or less than those
shown. Similarly, the annual rate of return assumed in the examples is not an
estimate or guarantee of future investment performance.
<TABLE>
<CAPTION>
IF YOU SURRENDER YOUR CONTRACT
AT THE END OF EACH PERIOD SHOWN,
THE EXPENSES WOULD BE:
--------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock $ 108.17 $ 156.47 $ 197.47 $ 312.63
Alliance Common Stock $ 106.64 $ 151.90 $ 189.88 $ 297.66
Alliance High Yield $ 108.28 $ 156.80 $ 198.01 $ 313.69
Alliance Money Market $ 105.44 $ 148.30 $ 183.88 $ 285.76
EQ/Alliance Premier Growth $ 112.21 $ 168.49 $ 217.32 $ 351.17
Alliance Small Cap Growth $ 110.14 $ 162.33 $ 207.17 $ 331.56
EQ/Alliance Technology $ 111.12 $ 165.25 $ 211.98 $ 340.89
BT Equity 500 Index $ 105.12 $ 147.31 $ 182.24 $ 282.48
BT International Equity Index $ 109.48 $ 160.38 $ 203.94 $ 325.29
BT Small Company Index $ 106.75 $ 152.23 $ 190.42 $ 298.74
Capital Guardian International $ 111.67 $ 166.87 $ 214.65 $ 346.04
Capital Guardian Research $ 108.94 $ 158.75 $ 201.25 $ 320.03
Capital Guardian U.S. Equity $ 108.94 $ 158.75 $ 201.25 $ 320.03
EQ/Evergreen $ 108.94 $ 158.75 $ 201.25 $ 320.03
EQ/Evergreen Foundation $ 108.94 $ 158.75 $ 201.25 $ 320.03
J.P. Morgan Core Bond $ 107.30 $ 153.86 $ 193.14 $ 304.10
Lazard Large Cap Value $ 108.94 $ 158.75 $ 201.25 $ 320.03
Lazard Small Cap Value $ 110.58 $ 163.63 $ 209.31 $ 335.72
MFS Growth with Income $ 108.94 $ 158.75 $ 201.25 $ 320.03
MFS Research $ 108.94 $ 158.75 $ 201.25 $ 320.03
MFS Emerging Growth Companies $ 109.48 $ 160.38 $ 203.94 $ 325.29
Mercury Basic Value Equity $ 108.94 $ 158.75 $ 201.25 $ 320.03
Mercury World Strategy $ 111.67 $ 166.87 $ 214.65 $ 346.04
Morgan Stanley Emerging Markets Equity $ 117.67 $ 184.59 $ 243.63 $ 400.97
EQ/Putnam Growth & Income Value $ 108.94 $ 158.75 $ 201.25 $ 320.03
EQ/Putnam International Value Equity $ 112.21 $ 168.49 $ 217.32 $ 351.17
EQ/Putnam Investors Growth $ 110.03 $ 162.01 $ 206.63 $ 330.52
<CAPTION>
IF YOU DO NOT SURRENDER YOUR CONTRACT
AT THE END OF EACH PERIOD SHOWN,
THE EXPENSES WOULD BE:
------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock $ 28.17 $ 86.47 $ 147.47 $ 312.63
Alliance Common Stock $ 26.64 $ 81.90 $ 139.88 $ 297.66
Alliance High Yield $ 28.28 $ 86.80 $ 148.01 $ 313.69
Alliance Money Market $ 25.44 $ 78.30 $ 133.88 $ 285.76
EQ/Alliance Premier Growth $ 32.21 $ 98.49 $ 167.32 $ 351.17
Alliance Small Cap Growth $ 30.14 $ 92.33 $ 157.17 $ 331.56
EQ/Alliance Technology $ 31.12 $ 95.25 $ 161.98 $ 340.89
BT Equity 500 Index $ 25.12 $ 77.31 $ 132.24 $ 282.48
BT International Equity Index $ 29.48 $ 90.38 $ 153.94 $ 325.29
BT Small Company Index $ 26.75 $ 82.23 $ 140.42 $ 298.74
Capital Guardian International $ 31.67 $ 96.87 $ 164.65 $ 346.04
Capital Guardian Research $ 28.94 $ 88.75 $ 151.25 $ 320.03
Capital Guardian U.S. Equity $ 28.94 $ 88.75 $ 151.25 $ 320.03
EQ/Evergreen $ 28.94 $ 88.75 $ 151.25 $ 320.03
EQ/Evergreen Foundation $ 28.94 $ 88.75 $ 151.25 $ 320.03
J.P. Morgan Core Bond $ 27.30 $ 83.86 $ 143.14 $ 304.10
Lazard Large Cap Value $ 28.94 $ 88.75 $ 151.25 $ 320.03
Lazard Small Cap Value $ 30.58 $ 93.63 $ 159.31 $ 335.72
MFS Growth with Income $ 28.94 $ 88.75 $ 151.25 $ 320.03
MFS Research $ 28.94 $ 88.75 $ 151.25 $ 320.03
MFS Emerging Growth Companies $ 29.48 $ 90.38 $ 153.94 $ 325.29
Mercury Basic Value Equity $ 28.94 $ 88.75 $ 151.25 $ 320.03
Mercury World Strategy $ 31.67 $ 96.87 $ 164.65 $ 346.04
Morgan Stanley Emerging Markets Equity $ 37.67 $ 114.59 $ 193.63 $ 400.97
EQ/Putnam Growth & Income Value $ 28.94 $ 88.75 $ 151.25 $ 320.03
EQ/Putnam International Value Equity $ 32.21 $ 98.49 $ 167.32 $ 351.17
EQ/Putnam Investors Growth $ 30.03 $ 92.01 $ 156.63 $ 330.52
</TABLE>
(1) The amount accumulated from the $1,000 contribution plus the $40 credit
could not be paid in the form of an annuity payout option at the end of
any of the periods shown in the examples. This is because if the amount
applied to purchase an annuity payout option is less than $2,000, or the
initial payment is less than $20, we may pay the amount to you in a
single sum instead of as payments under an annuity payout option. See
"Accessing your money."
<PAGE>
- -----
14 Fee table
- --------------------------------------------------------------------------------
IF YOU ELECT A VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION:
Assuming an annuity payout option could be issued (see note (1) above), and you
elect a Variable Immediate Annuity payout option, the expenses shown in the
examples for "if you do not surrender your contract" would, in each case, be
increased by $4.34 based on the average amount applied to annuity payout
options in 1999. See "Annuity administrative fee" in "Charges and expenses."
CONDENSED FINANCIAL INFORMATION
Please see Appendix I at the end of this prospectus for the unit values and the
number of units outstanding as of the end of the periods shown for each of the
variable investment options available as of December 31, 1999.
<PAGE>
Contract features and benefits 15
1
Contract features and benefits
- --------------------------------------------------------------------------------
HOW YOU CAN PURCHASE AND CONTRIBUTE TO YOUR CONTRACT
You may purchase a contract by making payments to us that we call
"contributions." We require a minimum initial contribution of $25,000 for you
to purchase a contract. You may make additional contributions of at least
$1,000 each, subject to limitations noted below. The following table summarizes
our rules regarding contributions to your contract. All ages in the table refer
to the age of the annuitant named in the contract.
- ------------------------------------------------------------------------------
The "annuitant" is the person who is the measuring life for determining
contract benefits. The annuitant is not necessarily the contract owner.
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVAILABLE
CONTRACT FOR ANNUITANT LIMITATIONS ON
TYPE ISSUE AGES SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
NQ 0 through 80 o After-tax money. o No additional contributions
after age 81.
o Paid to us by check or transfer
of contract value in a
tax-deferred exchange under
Section 1035 of the Internal
Revenue Code.
- -------------------------------------------------------------------------------------------------------------
Rollover IRA 20 through 78 o Rollovers from a qualified o No contributions after age 79.
plan. o Contributions after age 70 1/2
o Rollovers from a must be net of required
Tax-Sheltered Annuity minimum distributions.
("TSA"). o Only rollover and direct
o Rollovers from another transfer contributions are
traditional individual permitted under the Rollover
retirement arrangement. IRA contract.
o Direct custodian-to-custodian o Regular IRA contributions
transfers from another limited to $2,000 per year.
traditional individual o Although we accept regular
retirement arrangement. contributions under the
o Regular IRA contributions. Rollover IRA contracts, we
intend that this contract be
used for rollover and direct
transfer contributions. Please
refer to "Withdrawals,
payments and transfers of
funds out of traditional IRAs"
in "Tax Information" for a
discussion of conduit IRAs.
- -------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
16 Contract features and benefits
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVAILABLE
CONTRACT FOR ANNUITANT LIMITATIONS ON
TYPE ISSUE AGES SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Roth 20 through 78 o Rollovers from another Roth o No additional rollover or
Conversion IRA. direct transfer contributions
IRA after age 79.
o Conversion rollovers from a
traditional IRA. o Conversion rollovers after
age 70 1/2 must be net of
o Direct transfers from another required minimum
Roth IRA. distributions for the
traditional IRA you are rolling
over.
o You cannot roll over funds
from a traditional IRA if your
adjusted gross income is
$100,000 or more.
o Regular contributions are not
permitted.
o Only rollover and direct
transfer contributions are
permitted.
- -------------------------------------------------------------------------------------------------------------
Rollover TSA 20 through 78 o Rollovers from another TSA o Additional rollover or direct
contract or arrangement. transfer contributions may be
made up to age 79.
o Rollovers from a traditional
IRA which was a "conduit" for o Contributions after age 70 1/2
TSA funds previously rolled must be net of required
over. minimum distributions.
o Direct transfer from another o Ongoing payroll contributions
contract or arrangement are not permitted.
under Section 403(b) of the o Employer-remitted
Internal Revenue Code, contributions are not
complying with IRS Revenue permitted.
Ruling 90-24.
This contract may not be available in your state.
- -------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Contract features and benefits 17
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVAILABLE
CONTRACT FOR ANNUITANT LIMITATIONS ON
TYPE ISSUE AGES SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
QP 20 through 70 o Only transfer contributions o Regular ongoing payroll
from an existing qualified contributions are not
plan trust as a change of permitted.
investment vehicle under the o Only one additional
plan. contribution may be made
o The plan must be qualified during a contract year.
under Section 401(a) of the o No additional transfer
Internal Revenue Code. contributions after age 71.
o For 401(k) plans, transferred o For defined benefit plans,
contributions may only employee contributions are
include employee pre-tax not permitted.
contributions.
Please refer to Appendix II for a discussion of purchase considerations of QP contracts.
</TABLE>
See "Tax information" for a more detailed discussion of sources of
contributions and certain contribution limitations. We may refuse to accept any
contribution if the sum of all contributions under all Equitable Accumulator
contracts with the same annuitant would then total more than $1,500,000. We may
also refuse to accept any contribution if the sum of all contributions under
all Equitable Life annuity accumulation contracts that you own would then total
more than $2,500,000.
For information on when contributions are credited under your contract see
"Dates and prices at which contract events occur" in "More information" later
in this prospectus.
<PAGE>
18 Contract features and benefits
- --------------------------------------------------------------------------------
OWNER AND ANNUITANT REQUIREMENTS
Under NQ contracts, the annuitant can be different than the owner. A joint
owner may also be named. Only natural persons can be joint owners. This means
that an entity such as a corporation cannot be a joint owner.
Under all IRA and Rollover TSA contracts, the owner and annuitant must be the
same person.
Under QP contracts, the owner must be the trustee of the qualified plan and
the annuitant must be the plan participant/employee. See Appendix II for more
information on QP contracts.
-----------------------------------------------------------------------------
A participant is an individual who is currently, or was formerly,
participating in an eligible employer's QP or TSA plan.
-----------------------------------------------------------------------------
HOW YOU CAN MAKE YOUR CONTRIBUTIONS
Except as noted below, contributions must be by check drawn on a U.S. bank, in
U.S. dollars, and made payable to Equitable Life. We do not accept third-party
checks endorsed to us except for rollover contributions, tax-free exchanges or
trustee checks that involve no refund. All checks are subject to our ability
to collect the funds. We reserve the right to reject a payment if it is
received in an unacceptable form.
For your convenience, we will accept initial and additional contributions by
wire transmittal from certain broker-dealers who have agreements with us for
this purpose. Additional contributions may also be made under our automatic
investment program. These methods of payment are discussed in detail in "More
information" later in this prospectus.
Your initial contribution must generally be accompanied by an application and
any other form we need to process the payments. If any information is missing
or unclear, we will try to obtain that information. If we are unable to obtain
all of the information we require within five business days after we receive
an incomplete application or form, we will inform the registered
representative submitting the application on your behalf. We will then return
the contribution to you unless you specifically direct us to keep your
contribution until we receive the required information.
-----------------------------------------------------------------------------
Our "business day" is any day the New York Stock Exchange is open for trading
and generally ends at 4:00 p.m. Eastern Time. We may, however, close due to
emergency conditions.
-----------------------------------------------------------------------------
SECTION 1035 EXCHANGES
You may apply the value of an existing nonqualified deferred annuity contract
(or life insurance or endowment contract) to purchase an Equitable Accumulator
Plus NQ contract in a tax-free exchange if you follow certain procedures as
shown in the form that we require you to use. Also see "Tax information" later
in this prospectus.
WHAT ARE YOUR VARIABLE INVESTMENT OPTIONS UNDER THE CONTRACT?
Your investment results in any one of the variable investment options will
depend on the investment performance of the underlying portfolios. Listed
below are the currently available portfolios, their investment objectives, and
their advisers.
-----------------------------------------------------------------------------
You can choose from among the variable investment options.
-----------------------------------------------------------------------------
<PAGE>
Contract features and benefits 19
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PORTFOLIOS OF EQ ADVISORS TRUST
- ----------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
EQ/Aggressive Stock Long-term growth of capital Alliance Capital Management L.P.,
Massachusetts Financial Services Company
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Common Stock Long-term growth of capital and increasing Alliance Capital Management L.P.
income
- ----------------------------------------------------------------------------------------------------------------------------
Alliance High Yield High return by maximizing current income Alliance Capital Management L.P.
and, to the extent consistent with that
objective, capital appreciation
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Money Market High level of current income while preserving Alliance Capital Management L.P.
assets and maintaining liquidity
- ----------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth Long-term growth of capital Alliance Capital Management L.P.
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth Long-term growth of capital Alliance Capital Management L.P.
- ----------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Technology Long-term growth of capital Alliance Capital Management L.P.
- ----------------------------------------------------------------------------------------------------------------------------
BT Equity 500 Index Replicate as closely as possible (before Bankers Trust Company
deduction of portfolio expenses) the total
return of the Standard & Poor's 500
Composite Stock Price Index
- ----------------------------------------------------------------------------------------------------------------------------
BT International Equity Index Replicate as closely as possible (before Bankers Trust Company
deduction of portfolio expenses) the total
return of the Morgan Stanley Capital
International Europe, Australia, Far East Index
- ----------------------------------------------------------------------------------------------------------------------------
BT Small Company Index Replicate as closely as possible (before Bankers Trust Company
deduction of portfolio expenses) the total
return of the Russell 2000 Index
- ----------------------------------------------------------------------------------------------------------------------------
Capital Guardian International Long-term growth of capital by investing Capital Guardian Trust Company
primarily in non-United States equity securities
- ----------------------------------------------------------------------------------------------------------------------------
Capital Guardian Research Long-term growth of capital Capital Guardian Trust Company
- ----------------------------------------------------------------------------------------------------------------------------
Capital Guardian U.S. Equity Long-term growth of capital Capital Guardian Trust Company
- ----------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Long-term growth of capital Evergreen Asset Management Corp.
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
20
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PORTFOLIOS OF EQ ADVISORS TRUST
- ----------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
EQ/Evergreen Foundation In order of priority, reasonable income, Evergreen Asset Management Corp.
conservation of capital, and capital appreciation
- ----------------------------------------------------------------------------------------------------------------------------
J.P. Morgan Core Bond High total return consistent with moderate risk J.P. Morgan Investment Management Inc.
of capital and maintenance of liquidity
- ----------------------------------------------------------------------------------------------------------------------------
Lazard Large Cap Value Capital appreciation Lazard Asset Management
- ----------------------------------------------------------------------------------------------------------------------------
Lazard Small Cap Value Capital appreciation Lazard Asset Management
- ----------------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Long-term capital growth Massachusetts Financial Services Company
Companies
- ----------------------------------------------------------------------------------------------------------------------------
MFS Growth with Income Reasonable current income and long-term Massachusetts Financial Services Company
growth of capital and income
- ----------------------------------------------------------------------------------------------------------------------------
MFS Research Long-term growth of capital and future income Massachusetts Financial Services Company
- ----------------------------------------------------------------------------------------------------------------------------
Mercury Basic Value Equity Capital appreciation and secondarily, income Mercury Asset Management US
- ----------------------------------------------------------------------------------------------------------------------------
Mercury World Strategy High total investment return Mercury Asset Management US
- ----------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Long-term capital appreciation Morgan Stanley Asset Management
Markets Equity
- ----------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Capital growth, current income a secondary Putnam Investment Management, Inc.
Value objective
- ----------------------------------------------------------------------------------------------------------------------------
EQ/Putnam International Value Capital appreciation Putnam Investment Management, Inc.
Equity
- ----------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Investors Growth Long-term growth of capital any increased Putnam Investment Management, Inc.
income that results from this growth
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
Other important information about the portfolios is included in the prospectus
for EQ Advisors Trust attached at the end of this prospectus.
<PAGE>
Contract features and benefits 21
- --------------------------------------------------------------------------------
ALLOCATING YOUR CONTRIBUTIONS
You may allocate your contributions to one or more, or all, of the variable
investment options. Allocations must be in whole percentages and you may
change your allocations at any time. However, the total of your allocations
must equal 100%. Once contributions are allocated to the variable investment
options they become part of your account value. We discuss account value in
"Determining your contract's value."
CREDITS
A credit will also be allocated to your account value at the same time that we
allocate your contribution. The amount of the credit is equal to 4% of the
amount of each contribution. Credits are allocated to the same variable
investment options based on the same percentages used to allocate your
contributions.
We will recover the amount of the credit if you exercise your right to cancel
the contract. See "Your right to cancel within a certain number of days"
below. Also, if you start receiving annuity payments within three years of
making any additional contribution, we will recover the amount of the credit
that applies to that contribution.
We do not consider credits to be contributions for purposes of any discussion
in this prospectus. Credits are also not considered to be your investment in
the contract for tax purposes.
We use a portion of the mortality and expense risks charge and withdrawal
charge to help recover the cost of providing the credit. See "Charges and
expenses" below. Under certain circumstances (such as a period of poor market
performance), the cost associated with the credit may exceed the sum of the
credit and any related earnings. You should consider this possibility before
purchasing the contract.
GUARANTEED MINIMUM DEATH BENEFIT
GUARANTEED MINIMUM DEATH BENEFIT APPLICABLE FOR ANNUITANT AGES 0 THROUGH 79 AT
ISSUE OF NQ CONTRACTS; 20 THROUGH 78 AT ISSUE OF ROLLOVER IRA, ROTH CONVERSION
IRA AND ROLLOVER TSA CONTRACTS; AND 20 THROUGH 70 AT ISSUE OF QP CONTRACTS.
You may elect either the "5% roll up to age 80" or the "annual ratchet to age
80" guaranteed minimum death benefit when you apply for a contract. Once you
have made your election, you may not change it.
5% ROLL UP TO AGE 80. On the contract date, the guaranteed minimum death
benefit is equal to your initial contribution plus the credit. Thereafter, the
guaranteed minimum death benefit will be credited with interest each day
through the annuitant's age 80. The effective annual interest rate is 5%
except for amounts invested in the Alliance Money Market option and amounts in
the loan reserve account (applicable to Rollover TSA contracts only). Amounts
in the Alliance Money Market option and in the loan reserve account will be
credited with interest at a 3% effective annual rate. No interest is credited
after the annuitant is age 80.
If you make additional contributions, we will increase your current guaranteed
minimum death benefit by the dollar amount of the additional contribution plus
the amount of the credit on the date the contribution is allocated to your
variable investment options. If you take a withdrawal from your contract, we
will adjust your guaranteed minimum death benefit for the withdrawal on the
date you take the withdrawal.
The 5% roll up to age 80 guaranteed minimum death benefit is not available in
New York.
ANNUAL RATCHET TO AGE 80. On the contract date, your guaranteed minimum death
benefit equals your initial contribution plus the credit. Then, on each
contract date anniversary, we will determine your guaranteed minimum death
benefit by comparing your current guaranteed minimum death benefit to your
account value on that contract date anniversary. If your account value is
higher than your guaranteed minimum death benefit, we will increase your
guaranteed minimum death benefit to equal your account value. On the other
hand, if your account value on the contract date anniversary is less than your
<PAGE>
- ----------
22
- --------------------------------------------------------------------------------
guaranteed minimum death benefit, we will not adjust your guaranteed minimum
death benefit either up or down.
If you make additional contributions, we will increase your current guaranteed
minimum death benefit by the dollar amount of the contribution plus the amount
of the credit on the date the contribution is allocated to your variable
investment options. If you take a withdrawal from your contract, we will
reduce your guaranteed minimum death benefit on the date you take the
withdrawal.
GUARANTEED MINIMUM DEATH BENEFIT APPLICABLE FOR AN ANNUITANT THAT IS AGE 80 AT
ISSUE.
On the contract date, your guaranteed minimum death benefit equals your
initial contribution plus the credit. Thereafter, it will be increased by the
dollar amount of any additional contributions. We will adjust your guaranteed
minimum death benefit if you take any withdrawals.
----------------------------------------
Please see "How withdrawals affect your guaranteed minimum death benefit" in
"Accessing your money" for information on how withdrawals affect your
guaranteed minimum death benefit.
See Appendix III for an example of how we calculate the guaranteed minimum
death benefit.
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your contract, you may return it
to us for a refund. To exercise this cancellation right you must mail the
contract directly to our processing office within 10 days after you receive
it. If state law requires, this "free look" period may be longer.
Generally, your refund will equal your account value under the contract on the
day we receive notification to cancel the contract and will reflect any
investment gain or loss in the variable investment options that also reflect
the daily charges we deduct through the date we receive your contract. Please
note that you will forfeit the credit by exercising this right of
cancellation. Some states require that we refund the full amount of your
contribution (not reflecting any investment gain or loss). For any IRA
contract returned to us within seven days after you receive it, we are
required to refund the full amount of your contribution.
We may require that you wait six months before you may apply for a contract
with us again if:
o you cancel your contract during the free look period; or
o you change your mind before you receive your contract whether we have
received your contribution or not.
Please see "Tax information" for possible consequences of
cancelling your contract.
In addition to the cancellation right described above, if you fully convert an
existing traditional IRA contract to a Roth Conversion IRA contract, you may
cancel your Roth Conversion IRA contract and return to a Rollover IRA
contract. Our processing office or your registered representative can provide
you with the cancellation instructions.
<PAGE>
2
Determining your contract's value
Determining your contract's value 23
- --------------------------------------------------------------------------------
YOUR ACCOUNT VALUE AND CASH VALUE
Your "account value" is the total value you have in the variable investment
options and in the loan reserve account (applies for Rollover TSA contracts
only). These amounts are subject to certain fees and charges discussed in
"Charges and expenses."
Your contract also has a "cash value." At any time before annuity payments
begin, your contract's cash value is equal to the account value less: (i) any
applicable withdrawal charge and (ii) the amount of any outstanding loan plus
accrued interest (applicable to Rollover TSA contracts only). Please see
"Surrendering your contract to receive its cash value" in "Accessing your
money."
YOUR CONTRACT'S VALUE IN THE VARIABLE INVESTMENT OPTIONS
Each variable investment option invests in shares of a corresponding
portfolio. Your value in each variable investment option is measured by
"units." The value of your units will increase or decrease as though you had
invested it in the corresponding portfolio's shares directly. Your value,
however will be reduced by the amount of the fees and charges that we deduct
under the contract.
The unit value for each variable investment option depends on the investment
performance of that option, less daily charges for:
(i) mortality and expense risks;
(ii) administrative, and
(iii) distribution charges.
On any day, your value in any variable investment option equals the number of
units credited to that option, adjusted for any units purchased for deducted
from your contract under that option, multiplied by that day's value for one
unit. The number of your contract units in any variable investment option does
not change unless they are:
(i) increased to reflect additional contributions;
(ii) decreased to reflect a withdrawal (plus applicable withdrawal
charges);
(iii) increased to reflect transfer into, or decreased to reflect
transfer out of a variable investment option; or
(iv) decreased to reflect your laon amount to the loan reserve account
under a Rollover TSA contract.
A description of how unit values are calculated is found in the SAI.
<PAGE>
24 Transferring your money among the variable investment options
3
Transferring your money among the variable investment options
- --------------------------------------------------------------------------------
TRANSFERRING YOUR ACCOUNT VALUE
At any time before the date annuity payments are to begin, you can transfer
some or all of your account value among the variable investment options.
You may request a transfer in writing or by telephone using TOPS. (We
anticipate that transfers will be available online by using EQAccess by the
end of 2000) You must send in all written transfer requests directly to our
processing office. Transfer requests should specify:
(1) the contract number,
(2) the dollar amounts or percentages of your current account value to be
transferred, and
(3) the investment options to and from which you are transferring.
We will confirm all transfers in writing.
MARKET TIMING
You should note that the product is not designed for professional "market
timing" organizations, or other organizations or individuals engaging in a
market timing strategy, making programmed transfers, frequent transfers or
transfers that are large in relation to the total assets of the underlying
mutual fund portfolio. Market timing strategies are disruptive to the
underlying mutual fund portfolios in which the variable investment options
invest. If we determine that your transfer patterns among the variable
investment options reflect a market timing strategy, we reserve the right to
take action including, but not limited to: restricting the availability of
transfers through telephone requests, facsimile transmissions, automated
telephone services, Internet services or any electronic transfer services. We
may also refuse to act on transfer instructions of an agent acting under a
power of attorney who is acting on behalf of more than one owner.
DOLLAR COST AVERAGING YOUR ACCOUNT VALUE
Dollar cost averaging allows you to gradually transfer amounts from the
Alliance Money Market option to the other variable investment options by
periodically transferring approximately the same dollar amount to the variable
investment options you select. This will cause you to purchase more units if
the unit's value is low and fewer units if the unit's value is high.
Therefore, you may get a lower average cost per unit over the long term. This
plan of investing, however, does not guarantee that you will earn a profit or
be protected against losses.
- -----------------------------------------------------------------------------
Units measure your value in each variable investment option
- -----------------------------------------------------------------------------
If your value in the Alliance Money Market option is at least $5,000, you may
choose, at any time, to have a specified dollar amount or percentage of your
value transferred from that option to the other variable investment options.
You can select to have transfers made on a monthly, quarterly, or annual
basis. The transfer date will be the same calendar day of the month as the
contract date, but not later than the 28th day of the month. You can also
specify the number of transfers or instruct us to continue making the
transfers until all amounts in the Alliance Money Market option have been
transferred out.
The minimum amount that we will transfer each time is $250. The maximum amount
we will transfer is equal to your value in the Alliance Money Market option at
the time the program is elected, divided by the number of transfers scheduled
to be made.
If, on any transfer date, your value in the Alliance Money Market option is
equal to or less than the amount you have elected to have transferred, the
entire amount will be transferred. The dollar cost averaging program will then
end. You may change the transfer amount once each contract year or cancel this
program at any time.
You may not elect dollar cost averaging if you are participating in the
rebalancing program.
REBALANCING YOUR ACCOUNT VALUE
We currently offer a rebalancing program that you can use to automatically
reallocate your account value among the variable investment options. You must
tell us:
<PAGE>
Transferring your money among the variable investment options 25
- --------------------------------------------------------------------------------
(a) the percentage you want invested in each variable investment option (whole
percentages only), and
(b) how often you want the rebalancing to occur (quarterly, semiannually, or
annually on a contract year basis. Rebalancing will occur on the same
day of the month as the contract date).
While your rebalancing program is in effect, we will transfer amounts among
each variable investment option so that the percentage of your account value
that you specify is invested in each option at the end of each rebalancing
date. Your entire account value must be included in the rebalancing program.
-----------------------------------------------------------------------------
Rebalancing does not assure a profit or protect against loss. You should
periodically review your allocation percentages as your needs change. You may
want to discuss the rebalancing program with your registered representative or
other financial adviser before electing the program.
- -----------------------------------------------------------------------------
You may elect the rebalancing program at any time. You may also change your
allocation instructions or cancel the program at any time. If you request a
transfer while the rebalancing program is in effect, we will process the
transfer as requested; the rebalancing program will remain in effect unless
you request that it be canceled in writing.
You may not elect the rebalancing program if you are participating in the
dollar cost averaging or special dollar cost averaging program.
<PAGE>
26 Accessing your money
4
Accessing your money
- --------------------------------------------------------------------------------
WITHDRAWING YOUR ACCOUNT VALUE
You have several ways to withdraw your account value before annuity payments
begin. The table below shows the methods available under each type of
contract. More information follows the table. For the tax consequences of
withdrawals, see "Tax information."
<TABLE>
<CAPTION>
METHOD OF WITHDRAWAL
- --------------------------------------------------------------------------------
SUBSTANTIALLY MINIMUM
CONTRACT LUMP SUM SYSTEMATIC EQUAL DISTRIBUTION
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NQ Yes Yes No No
Rollover IRA Yes Yes Yes Yes
Roth
Conversion
IRA Yes Yes Yes No
Rollover
TSA* Yes No No Yes
- --------------------------------------------------------------------------------
QP Yes No No Yes
- --------------------------------------------------------------------------------
</TABLE>
* For some Rollover TSA contracts, your ability to take withdrawals, loans
or surrender your contract may be limited. You must provide withdrawal
restriction information when you apply for a contract. See "Tax
Sheltered Annuity Contracts (TSAs)" in "Tax Information."
LUMP SUM WITHDRAWALS
(All contracts)
You may take lump sum withdrawals from your account value at any time.
(Rollover TSA contracts may have restrictions). The minimum amount you may
withdraw is $300. If you request to withdraw more than 90% of a contract's
current cash value we will treat it as a request to surrender the contract for
its cash value. See "Surrendering your contract to receive its cash value"
below.
Lump sum withdrawals in excess of the 15% free withdrawal amount (see "15%
free withdrawal amount" in "Charges and expenses") may be subject to a
withdrawal charge. Under Rollover TSA contracts, if a loan is outstanding, you
may only take lump sum withdrawals as long as the cash value remaining after
any withdrawal equals at least 10% of the outstanding loan plus accrued
interest.
SYSTEMATIC WITHDRAWALS
(NQ, Rollover IRA, and Roth Conversion IRA contracts only)
You may take systematic withdrawals of a particular dollar amount or a
particular percentage of your account value.
You may take systematic withdrawals on a monthly, quarterly, or annual basis
as long as the withdrawals do not exceed the following percentages of your
account value: 1.2% monthly, 3.6% quarterly, and 15.0% annually. The minimum
amount you may take in each systematic withdrawal is $250. If the amount
withdrawn would be less than $250 on the date a withdrawal is to be taken, we
will not make a payment and we will terminate your systematic withdrawal
election.
We will make the withdrawals on any day of the month that you select as long
as it is not later than the 28th day of the month. If you do not select a
date, we will make the withdrawals on the same calendar day of the month as
the contract date. You must wait at least 28 days after your contract is
issued before your systematic withdrawals can begin.
You may elect to take systematic withdrawals at any time. If you own an IRA
contract, you may elect this withdrawal method only if you are between ages
59 1/2 and 70 1/2.
You may change the payment frequency, or the amount or percentage of your
systematic withdrawals, once each contract year. However, you may not change
the amount or percentage in any contract year in which you have already taken
a lump sum withdrawal. You can cancel the systematic withdrawal option at any
time.
Systematic withdrawals are not subject to a withdrawal charge, except to the
extent that, when added to a lump sum withdrawal previously taken in the same
contract year, the systematic withdrawal exceeds the 15% free withdrawal
amount.
SUBSTANTIALLY EQUAL WITHDRAWALS
(Rollover IRA and Roth Conversion IRA contracts only)
The substantially equal withdrawals option allows you to receive distributions
from your account value without
<PAGE>
Accessing your money 27
- --------------------------------------------------------------------------------
triggering the 10% additional federal tax penalty, which normally applies to
distributions made before age 59 1/2. See "Tax information." Once you begin to
take substantially equal withdrawals, you should not stop them or change the
pattern of your withdrawals until after the later of age 59 1/2 or five full
years after the first withdrawal. If you stop or change the withdrawals or
take a lump sum withdrawal, you may be liable for the 10% federal tax penalty
that would have otherwise been due on prior withdrawals made under this option
and for any interest on those withdrawals.
You may elect to take substantially equal withdrawals at any time before age
59 1/2. We will make the withdrawal on any day of the month that you select as
long as it is not later than the 28th day of the month. You may not elect to
receive the first payment in the same contract year in which you took a lump
sum withdrawal. We will calculate the amount of your substantially equal
withdrawals based on the method you choose from the choices we offer. The
payments will be made monthly, quarterly, or annually as you select. These
payments will continue until we receive written notice from you to cancel this
option or you take a lump sum withdrawal. You may elect to start receiving
substantially equal withdrawals again, but the payments may not restart in the
same contract year in which you took a lump sum withdrawal. We will calculate
the new withdrawal amount.
Substantially equal withdrawals are not subject to a withdrawal charge.
MINIMUM DISTRIBUTION WITHDRAWALS
(Rollover IRA, Rollover TSA and QP contracts only - See "Tax information")
We offer the minimum distribution withdrawal option to help you meet lifetime
required minimum distributions under federal income tax rules. You may elect
this option in the year in which you reach age 70 1/2. The minimum amount we
will pay out is $250. You may elect the method you want us to use to calculate
your minimum distribution withdrawals from the choices we offer. Currently,
minimum distribution withdrawal payments will be made annually.
We do not impose a withdrawal charge on minimum distribution withdrawals
except if when added to a lump sum withdrawal previously taken in the same
contract year, the minimum distribution withdrawal exceeds the 15% free
withdrawal amount.
We will calculate your annual payment based on your account value at the end
of the prior calendar year based on the method you choose.
Under Rollover TSA contracts, you may not elect minimum distribution
withdrawals if a loan is outstanding.
-----------------------------------------------------------------------------
For Rollover IRA, Rollover TSA and QP contracts, we will send a form outlining
the distribution options available in the year you reach age 70 1/2 (if you
have not begun your annuity payments before that time).
-----------------------------------------------------------------------------
HOW WITHDRAWALS ARE TAKEN FROM YOUR ACCOUNT VALUE
Unless you specify otherwise, we will subtract your withdrawals on a pro rata
basis from your value in the variable investment options.
HOW WITHDRAWALS AFFECT YOUR GUARANTEED MINIMUM DEATH BENEFIT
Withdrawals will reduce your guaranteed minimum death benefit on either a
dollar-for-dollar basis or on a pro rata basis as explained below:
5% roll up to age 80 - If you elect the 5% roll up to age 80 guaranteed
minimum death benefit, your current guaranteed minimum death benefit will be
reduced on a dollar-for-dollar basis as long as the sum of your withdrawals in
a contract year is 5% or less of the guaranteed minimum death benefit on the
most recent contract date anniversary. Once you take a withdrawal that causes
the sum of your withdrawals in a contract year to exceed 5% of the guaranteed
minimum death benefit on the most recent contract date anniversary, that
withdrawal
<PAGE>
28 Accessing your money
- --------------------------------------------------------------------------------
and any subsequent withdrawals in that same contract year will reduce your
current guaranteed minimum death benefit on a pro rata basis.
The timing of your withdrawals and whether they exceed, the 5% threshold
described above can have a significant impact on your guaranteed minimum death
benefit.
Annual ratchet to age 80 - If you elect the annual ratchet to age 80
guaranteed minimum death benefit, each withdrawal will always reduce your
current guaranteed minimum death benefit on a pro rata basis.
Annuitant issue age 80 - If your contract was issued when the annuitant was
age 80, each withdrawal will always reduce your current guaranteed minimum
death benefit on a pro rata basis.
----------------------------------------
Reduction on a dollar-for-dollar basis means that your current benefit will be
reduced by the dollar amount of the withdrawal. Reduction on a pro rata basis
means that we calculate the percentage of your current account value that is
being withdrawn and we reduce your current benefit by that same percentage.
For example, if your account value is $30,000 and you withdraw $12,000, you
have withdrawn 40% of your account value. If your guaranteed minimum death
benefit was $40,000 before the withdrawal, it would be reduced by $16,000
($40,000 x .40) and your new guaranteed minimum death benefit after the
withdrawal would be $24,000 ($40,000 - $16,000).
LOANS UNDER ROLLOVER TSA CONTRACTS
You may take loans from a Rollover TSA unless restricted by the employer who
provided the Rollover TSA funds. If you cannot take a loan, or cannot take a
loan without approval from the employer who provided the funds, we will have
this information in our records based on what you and the employer who
provided the funds told us when you purchased your contract. The employer must
also tell us whether special employer plan rules of the Employee Retirement
Income Security Act of 1974 ("ERISA") apply. We will not permit you to take a
loan while you are taking minimum distribution withdrawals.
You should read the terms and conditions on our loan request form carefully
before taking out a loan. Under Rollover TSA contracts subjected to ERISA, you
may only take a loan with the written consent of your spouse. Your contract
contains further details of the loan provision. Also, see "Tax information"
below, for general rules applicable to loans.
We will permit you to have only one loan outstanding at a time. The minimum
loan amount is $1,000. The maximum amount is $50,000 or, if less, 50% of your
account value, subject to any limits under the federal income tax rules. The
term of the loan is five years. However, if you use the loan to acquire your
primary residence, the term is 10 years. The term may not extend beyond the
earliest of:
(1) the date annuity payments begin,
(2) the date the contract terminates, and
(3) the date a death benefit is paid (the outstanding loan will be deducted
from the death benefit amounts).
Interest will accrue daily on your outstanding loan at a rate we set. The loan
interest rate will be equal to the Moody's Corporate Bond Yield Averages for
Baa bonds for the calendar month ending two months before the first day of the
calendar quarter in which the rate is determined.
LOAN RESERVE ACCOUNT
On the date your loan is processed, we will transfer the amount of your loan
to the loan reserve account. Unless you specify otherwise, we will subtract
your loan on a pro rata basis from your value in the variable investment
options.
We will credit interest to the amount in the loan reserve account at a rate of
2% lower than the loan interest rate that applies for the time your loan is
outstanding. On each contract date anniversary after the date the loan is
processed, we will transfer the amount of interest earned in the loan reserve
account to the variable investment options on a pro rata basis. When you make
a loan repayment,
<PAGE>
Accessing your money 29
- --------------------------------------------------------------------------------
unless you specify otherwise, we will transfer the dollar amount of the loan
repaid from the loan reserve account to the investment options according to
the allocation percentages we have on our records. Loan repayments are not
considered contributions and therefore are not eligible for additional
credits.
SURRENDERING YOUR CONTRACT TO RECEIVE ITS CASH VALUE
You may surrender your contract to receive its cash value at any time while
the annuitant is living and before you begin to receive annuity payments.
(Rollover TSA contracts may have restrictions). For a surrender to be
effective, we must receive your written request and your contract at our
processing office. We will determine your cash value on the date we receive
the required information. All benefits under the contract will terminate as of
that date.
You may receive your cash value in a single sum payment or apply it to one or
more of the annuity payout options. See "Your annuity payout options" below.
For the tax consequences of surrenders, see "Tax information."
WHEN TO EXPECT PAYMENTS
Generally, we will fulfill requests for payments out of the variable
investment options within seven calendar days after the date of the
transaction to which the request relates. These transactions may include
applying proceeds to a variable annuity, payment of a death benefit, payment
of any amount you withdraw (less any withdrawal charge) and, upon surrender,
payment of the cash value. We may postpone such payments or applying proceeds
for any period during which:
(1) the New York Stock Exchange is closed or restricts trading,
(2) sales of securities or determination of the fair value of a variable
investment option's assets is not reasonably practicable because of an
emergency, or
(3) the SEC, by order, permits us to defer payment to protect people remaining
in the variable investment options.
We also may defer payments for a reasonable amount of time (not to exceed 10
days) while we are waiting for a contribution check to clear.
All payments are made by check and are mailed to you (or the payee named in a
tax-free exchange) by U.S. mail, unless you request that we use an express
delivery service at your expense.
YOUR ANNUITY PAYOUT OPTIONS
Equitable Accumulator Plus offers you several choices of annuity payout
options. Some enable you to receive fixed annuity payments which can be either
level or increasing, and others enable you to receive variable annuity
payments.
You can choose from among the annuity payout options listed below.
Restrictions may apply, depending on the type of contract you own or the
annuitant's age at contract issue.
<TABLE>
- --------------------------------------------------------------------------------
<S> <C>
Fixed annuity payout options Life annuity
Life annuity with period
certain
Life annuity with refund
certain
Period certain annuity
- --------------------------------------------------------------------------------
Variable Immediate Annuity Life annuity (not available
payout options in New York)
Life annuity with period
certain
- --------------------------------------------------------------------------------
Income Manager payout Life annuity with period
options certain
Period certain annuity
- --------------------------------------------------------------------------------
</TABLE>
o Life annuity: An annuity that guarantees payments for the rest of the
annuitant's life. Payments end with the last monthly payment before the
annuitant's death. Because there is no continuation of benefits following
the annuitant's death with this payout option, it provides the highest
monthly payment of any of the life annuity options, so long as the
annuitant is living.
<PAGE>
30 Accessing your money
- --------------------------------------------------------------------------------
o Life annuity with period certain: An annuity that guarantees payments for
the rest of the annuitant's life. If the annuitant dies before the end of
a selected period of time ("period certain"), payments continue to the
beneficiary for the balance of the period certain. The period certain
cannot extend beyond the annuitant's life expectancy. A life annuity with
a period certain is the form of annuity under the contracts that you will
receive if you do not elect a different payout option. In this case, the
period certain will be based on the annuitant's age and will not exceed 10
years.
o Life annuity with refund certain: An annuity that guarantees payments for
the rest of the annuitant's life. If the annuitant dies before the amount
applied to purchase the annuity option has been recovered, payments to the
beneficiary will continue until that amount has been recovered. This
payout option is available only as a fixed annuity.
o Period certain annuity: An annuity that guarantees payments for a specific
period of time, usually 5, 10, 15, or 20 years. This guaranteed period may
not exceed the annuitant's life expectancy. This option does not guarantee
payments for the rest of the annuitant's life. It does not permit any
repayment of the unpaid principal, so you cannot elect to receive part of
the payments as a single sum payment with the rest paid in monthly annuity
payments. This payout option is available only as a fixed annuity.
The life annuity, life annuity with period certain, and life annuity with
refund certain payout options are available on a single life or joint and
survivor life basis. The joint and survivor life annuity guarantees payments
for the rest of the annuitant's life and, after the annuitant's death,
payments continue to the survivor. We may offer other payout options not
outlined here. Your financial professional can provide you with details.
FIXED ANNUITY PAYOUT OPTIONS
With fixed annuities, we guarantee fixed annuity payments will be based either
on the tables of guaranteed annuity purchase factors in your contract or on
our then current annuity purchase factors, whichever is more favorable for
you.
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTIONS
Variable Immediate Annuities are described in a separate prospectus that is
available from your registered representative. Before you select a Variable
Immediate Annuity payout option, you should read the prospectus which contains
important information that you should know.
Variable annuities may be funded through your choice of variable investment
options investing in portfolios of EQ Advisors Trust. The contract also offers
a fixed annuity payout option that can be elected in combination with the
variable annuity payout options. The amount of each variable annuity payment
will fluctuate, depending upon the performance of the variable investment
options, and whether the actual rate of investment return is higher or lower
than an assumed base rate.
INCOME MANAGER PAYOUT OPTIONS
The Income Manager payout annuity contracts differ from the other payout
annuity contracts. The other payout annuity contracts may provide higher or
lower income levels, but do not have all the features of the Income Manager
payout annuity contract. You may request an illustration of the Income Manager
payout annuity contract from your registered representative. Income Manager
payout options are described in a separate prospectus that is available from
your registered representative. Before you select an Income Manager payout
option, you should read the prospectus which contains important information
that you should know.
Both Income Manager payout options provide guaranteed level payments (NQ and
IRA contracts). The Income Manager (life annuity with period certain) also
provides guaranteed increasing payments (NQ contracts only). You may not elect
a period certain Income Manager payout option unless withdrawal charges are no
longer in effect under your Equitable Accumulator Plus.
<PAGE>
Accessing your money 31
- --------------------------------------------------------------------------------
For QP and Rollover TSA contracts,if you want to elect an Income Manager
payout option, we will first roll over amounts in such contract to a Rollover
IRA contract. You will be the owner of the Rollover IRA contract.
You may choose to apply only part of the account value of your Equitable
Accumulator Plus contract to an Income Manager payout annuity. In this case,
we will consider any amounts applied as a withdrawal from your Equitable
Accumulator Plus. For the tax consequences of withdrawals, see "Tax
information."
Depending upon your circumstances, the purchase of an Income Manager contract
may be done on a tax-free basis. Please consult you tax adviser.
THE AMOUNT APPLIED TO PURCHASE AN ANNUITY PAYOUT OPTION
The amount applied to purchase an annuity payout option varies, depending on
the payout option that you choose, and the timing of your purchase as it
relates to any withdrawal charges.
For the fixed annuity payout options and Variable Immediate Annuity payout
options, no withdrawal charge is imposed if you select a life annuity, life
annuity with period certain or life annuity with refund certain.
For the fixed annuity payout option, the withdrawal charge applicable under
your Equitable Accumulator Plus is imposed if you select a period certain. If
the period certain is more than 5 years, then the withdrawal charge deducted
will not exceed 5% of the account value.
For the Income Manager payout options, no withdrawal charge is imposed under
the Equitable Accumulator Plus. If the withdrawal charge that otherwise would
have been applied to your account value under your Equitable Accumulator Plus
is greater than 2% of the contributions that remain in your contract at the
time you purchase your payout option, the withdrawal charges under the Income
Manager will apply. For this purpose, the year in which your account value is
applied to the payout option will be "contract year 1."
SELECTING AN ANNUITY PAYOUT OPTION
When you select a payout option, we will issue you a separate written
agreement confirming your right to receive annuity payments. We require you to
return your contract before annuity payments begin, unless you are applying
only some of your account value to an Income Manager contract. The contract
owner and annuitant must meet the issue age and payment requirements.
You can choose the date annuity payments begin but it may not be earlier than
five years from the contract date. Except with respect to Income Manager
annuity payout options, where payments are made on the 15th day of each month,
you can change the date your annuity payments are to begin anytime before that
date as long as you do not choose a date later than the 28th day of any month.
Also, that date may not be later than the contract date anniversary that
follows the annuitant's 90th birthday. This may be different in some states.
If you elect to start receiving annuity payments within three years of making
an additional contribution, we will recover the amount of any credit that
applies to that contribution.
Before the last day by which your annuity payments must begin, we will notify
you by letter. Once you have selected an annuity payout option and payments
have begun, no change can be made other than: (i) transfers (if permitted in
the future) among the variable investment options if a Variable Immediate
Annuity payout option is selected; and (ii) withdrawals or contract surrender
if an Income Manager annuity payout option is chosen.
The amount of the annuity payments will depend on the amount applied to
purchase the annuity and the applicable annuity purchase factors, discussed
earlier.
In no event will you ever receive payments under a fixed option or an initial
payment under a variable option of less than the minimum amounts guaranteed by
the contract.
If, at the time you elect a payout option, the amount to be applied is less
than $2,000 or the initial payment under the form elected is less than $20
monthly, we reserve the right
<PAGE>
32 Accessing your money
- --------------------------------------------------------------------------------
to pay the account value in a single sum rather than as payments under the
payout option chosen.
<PAGE>
Charges and expenses 33
5
Charges and expenses
- --------------------------------------------------------------------------------
CHARGES THAT EQUITABLE LIFE DEDUCTS
We deduct the following charges each day from the net assets of each variable
investment option. These charges are reflected in the unit values of each
variable investment option:
o A mortality and expense risks charge
o An administrative charge
o A distribution charge
We deduct the following charges from your account value. When we deduct these
charges from your variable investment options, we reduce the number of units
credited to your contract:
o At the time you make certain withdrawals or surrender your contract - a
withdrawal charge.
o At the time annuity payments are to begin - charges designed to approximate
certain taxes that may be imposed on us, such as premium taxes in your
state. An annuity administrative fee may also apply.
More information about these charges appears below. We will not increase these
charges for the life of your contract, except as noted. We may reduce certain
charges under group or sponsored arrangements. See "Group or sponsored
arrangements" below.
To help with your retirement planning, we may offer other annuities with
different charges, benefits, and features. Please contact your registered
representative for more information.
MORTALITY AND EXPENSE RISKS CHARGE
We deduct a daily charge from the net assets in each variable investment
option to compensate us for mortality and expense risks, including the
guaranteed minimum death benefit. The daily charge is equivalent to an annual
rate of 1.10% of the net assets in each variable investment option.
The mortality risk we assume is the risk that annuitants as a group will live
for a longer time than our actuarial tables predict. If that happens, we would
be paying more in annuity income than we planned. We also assume a risk that
the mortality assumptions reflected in our guaranteed annuity payment tables,
shown in each contract, will differ from actual mortality experience. Lastly,
we assume a mortality risk to the extent that at the time of death, the
guaranteed minimum death benefit exceeds the cash value of the contract. The
expense risk we assume is the risk that it will cost us more to issue and
administer the contracts than we expect. A portion of this charge also
compensates us for the contract credit. For a discussion of the credit, see
"Credits" in "Contracts features and benefits." We expect to make a profit
from this charge.
ADMINISTRATIVE CHARGE
We deduct a daily charge from the net assets in each variable investment
option to compensate us for administrative expenses under the contracts. The
daily charge is equivalent to an annual rate of 0.25% of the net assets in
each variable investment option. We reserve the right under the contracts to
increase this charge to an annual rate of 0.35%.
DISTRIBUTION CHARGE
We deduct a daily charge from the net assets in each variable investment
option to compensate us for a portion of our sales expenses under the
contracts. The daily charge is equivalent to an annual rate of 0.25% of the
net assets in each variable investment option.
WITHDRAWAL CHARGE
A withdrawal charge applies in two circumstances: (1) if you make one or more
withdrawals during a contract year that, in total, exceed the 15% free
withdrawal amount, described below, or (2) if you surrender your contract to
receive its cash value. A portion of this charge also compensates us for the
contract credit. For a discussion of the credit, see "Credits" in "Contracts
features and benefits." We expect to make a profit from this charge.
<PAGE>
34 Charges and expenses
- --------------------------------------------------------------------------------
The withdrawal charge equals a percentage of the contributions withdrawn. We
do not consider credits to be contributions. Therefore, there is no withdrawal
charge associated with a credit.
The percentage of the withdrawal charge that applies to each contribution
depends on how long each contribution has been invested in the contract. We
determine the withdrawal charge separately for each contribution according to
the following table:
<TABLE>
<CAPTION>
CONTRACT YEAR
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 2 3 4 5 6 7 8 9 10+
Percentage of
contribution 8% 8% 7% 6% 5% 4% 3% 2% 1% 0%
</TABLE>
For purposes of calculating the withdrawal charge, we treat the contract year
in which we receive a contribution as "contract year 1." Amounts withdrawn up
to the free withdrawal amount are not considered withdrawal of any
contribution. We also treat contributions that have been invested the longest
as being withdrawn first. We treat contributions as withdrawn before earnings
for purposes of calculating the withdrawal charge. However, federal income tax
rules treat earnings under your contract as withdrawn first. See "Tax
information."
In order to give you the exact dollar amount of the withdrawal you request, we
deduct the amount of the withdrawal and the withdrawal charge from your
account value. Any amount deducted to pay withdrawal charges is also subject
to the same withdrawal charge percentage. We deduct the charge in proportion
to the amount of the withdrawal subtracted from each variable investment
option. The withdrawal charge helps cover our sales expenses.
The withdrawal charge does not apply in the circumstances described below.
15% FREE WITHDRAWAL AMOUNT. Each contract year you can withdraw up to 15% of
your account value without paying a withdrawal charge. The 15% free withdrawal
amount is determined using your account value on the most recent contract date
anniversary, minus any other withdrawals made during the contract year. The
15% free withdrawal amount does not apply if you surrender your contract.
Note the following special rule for NQ contracts issued to a charitable
remainder trust, the free withdrawal amount will equal the greater of: (1) the
current account value, less contributions that have not been withdrawn
(earnings in the contract), and (2) the 15% free withdrawal amount defined
above.
DISABILITY, TERMINAL ILLNESS, OR CONFINEMENT TO NURSING HOME. The withdrawal
charge does not apply if:
o The annuitant has qualified to receive Social Security disability benefits
as certified by the Social Security Administration; or
o We receive proof satisfactory to us (including certification by a licensed
physician) that the annuitant's life expectancy is six months or less; or
o The annuitant has been confined to a nursing home for more than 90 days (or
such other period, as required in your state) as verified by a licensed
physician. A nursing home for this purpose means one that is (a) approved
by Medicare as a provider of skilled nursing care service, or (b) licensed
as a skilled nursing home by the state or territory in which it is located
(it must be within the United States, Puerto Rico, or U.S. Virgin Islands)
and meets all of the following:
- its main function is to provide skilled, intermediate, or custodial
nursing care;
- it provides continuous room and board to three or more persons;
- it is supervised by a registered nurse or licensed practical nurse;
- it keeps daily medical records of each patient;
- it controls and records all medications dispensed; and
- its primary service is other than to provide housing for residents.
<PAGE>
Charges and expenses 35
- --------------------------------------------------------------------------------
We reserve the right to impose a withdrawal charge, in accordance with your
contract and applicable state law, if the disability is caused by a
preexisting condition or a condition that began within 12 months of the
contract date. Some states may not permit us to waive the withdrawal charge in
the above circumstances, or may limit the circumstances for which the
withdrawal charge may be waived. Your registered representative can provide
more information or you may contact our processing office.
CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES
We deduct a charge designed to approximate certain taxes that may be imposed
on us, such as premium taxes in your state. Generally, we deduct the charge
from the amount applied to provide an annuity payout option. The current tax
charge that might be imposed by us varies by state and ranges from 0% to 3.5%
(1% in Puerto Rico and 5% in the U.S. Virgin Islands).
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION ADMINISTRATIVE FEE
We deduct a fee of $350 from the amount to the Variable Immediate annuity
payout option.
CHARGES THAT EQ ADVISORS TRUST DEDUCTS
EQ Advisors Trust deducts charges for the following types of fees and
expenses:
o Management fees ranging from 0.25% to 1.15%.
o 12b-1 fees of 0.25%.
o Operating expenses, such as trustees' fees, independent auditors' fees,
legal counsel fees, administrative service fees, custodian fees, and
liability insurance.
o Investment-related expenses, such as brokerage commissions.
These charges are reflected in the daily share price of each portfolio. Since
shares of EQ Advisors Trust are purchased at their net asset value, these fees
and expenses are, in effect, passed on to the variable investment options and
are reflected in their unit values. For more information about these charges,
please refer to the prospectus for EQ Advisors Trust following this
prospectus.
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce the withdrawal
charge or the mortality and expense risks charge or change the minimum initial
contribution requirements. We also may change the guaranteed minimum death
benefit or offer variable investment options that invest in shares of EQ
Advisors Trust that are not subject to the 12b-1 fee. Group arrangements
include those in which a trustee or an employer, for example, purchases
contracts covering a group of individuals on a group basis. Group arrangements
are not available for Rollover IRA and Roth Conversion IRA contracts.
Sponsored arrangements include those in which an employer allows us to sell
contracts to its employees or retirees on an individual basis.
Our costs for sales, administration, and mortality generally vary with the
size and stability of the group or sponsoring organization, among other
factors. We take all these factors into account when reducing charges. To
qualify for reduced charges, a group or sponsored arrangement must meet
certain requirements, such as requirements for size and number of years in
existence. Group or sponsored arrangements that have been set up solely to buy
contracts or that have been in existence less than six months will not qualify
for reduced charges.
We will make these and any similar reductions according to our rules in effect
when we approve a contract for issue. We may change these rules from time to
time. Any variation will reflect differences in costs or services and will not
be unfairly discriminatory.
Group or sponsored arrangements may be governed by federal income tax rules,
the Employee Retirement Income Security Act of 1974 or both. We make no
representations with regard to the impact of these and other applicable laws
on such programs. We recommend that employers, trustees,
<PAGE>
36 Charges and expenses
- --------------------------------------------------------------------------------
and others purchasing or making contracts available for purchase under such
programs seek the advice of their own legal and benefits advisers.
<PAGE>
Payment of death benefit 37
6
Payment of death benefit
- --------------------------------------------------------------------------------
YOUR BENEFICIARY AND PAYMENT OF BENEFIT
You designate your beneficiary when you apply for your contract. You may
change your beneficiary at any time. The change will be effective on the date
the written request for the change is received in our processing office. We
are not responsible for any beneficiary change request that we do not receive.
We will send you written confirmation when we receive your request. Under
jointly owned contracts, the surviving owner is considered the beneficiary,
and will take the place of any other beneficiary. You may be limited as to the
beneficiary you can designate in a Rollover TSA contract. In a QP contract,
the beneficiary must be the trustee.
The death benefit is equal to your account value, or, if greater, the
guaranteed minimum death benefit. We determine the amount of the death benefit
(other than the guaranteed minimum death benefit) as of the date we receive
satisfactory proof of the annuitant's death and any required instructions for
the method of payment. We determine (other than the guaranteed minimum death
benefit) the amount of the guaranteed death benefit as of the date of the
annuitant's death. Under Rollover TSA contracts, we will deduct the amount of
any outstanding loan plus accrued interest from the amount of the death
benefit.
EFFECT OF THE ANNUITANT'S DEATH
If the annuitant dies before the annuity payments begin, we will pay the death
benefit to your beneficiary.
Generally, the death of the annuitant terminates the contract. However, a
beneficiary spouse of the owner/annuitant can choose to be treated as the
successor owner/annuitant and continue the contract. Only a spouse can be a
successor owner/annuitant. A successor owner/annuitant can only be named under
NQ and IRA contracts.
For IRA contracts, a beneficiary may be able to have limited ownership as
discussed under "Beneficiary continuation option" below.
WHEN AN NQ CONTRACT OWNER DIES BEFORE THE ANNUITANT
Under certain conditions the owner changes after the original owner's death.
When you are not the annuitant under an NQ contract and you die before annuity
payments begin, the beneficiary named to receive the death benefit upon the
annuitant's death will automatically become the successor owner. If you do not
want this beneficiary to be the successor owner, you should name a specific
successor owner. You may name a successor owner at any time by sending
satisfactory notice to our processing office. If the contract is jointly owned
and the first owner to die is not the annuitant, the surviving owner becomes
the sole contract owner. This person will be considered the successor owner
for purposes of the distribution rules described in this section. The
surviving owner automatically takes the place of any other beneficiary
designation.
Unless the surviving spouse of the owner who has died (or in the case of a
joint ownership situation, the surviving spouse of the first owner to die) is
the successor owner for this purpose, the entire interest in the contract must
be distributed under the following rules:
o The cash value of the contract must be fully paid to the successor owner
(new owner) by December 31st of the fifth calendar year after your death
(or in a joint ownership situation, the death of the first owner to die).
o The successor owner may instead elect to receive the cash value as a life
annuity (or payments for a period certain of not longer than the new
owner's life expectancy). Payments must begin no later than December 31st
following the calendar year of the non-annuitant owner's death. Unless
this alternative is elected, we will pay any cash value on December 31st
of the fifth calendar year following the year of your death (or the death
of the first owner to die).
If the surviving spouse is the successor owner or joint owner, the spouse may
elect to continue the contract. No distributions are required as long as the
surviving spouse and annuitant are living.
<PAGE>
38 Payment of death benefit
- --------------------------------------------------------------------------------
HOW DEATH BENEFIT PAYMENT IS MADE
We will pay the death benefit to the beneficiary in the form of the annuity
payout option you have chosen. If you have not chosen an annuity payout option
as of the time of the annuitant's death, the beneficiary will receive the
death benefit in a single sum. However, subject to any exceptions in the
contract, our rules and any applicable requirements under federal income tax
rules, the beneficiary may elect to apply the death benefit to one or more
annuity payout options we offer at the time. See "Your annuity payout options"
in "Accessing your money" earlier in this prospectus. Please note that any
annuity payout option chosen may not extend beyond the life expectancy of the
beneficiary.
SUCCESSOR OWNER AND ANNUITANT
If you are both the contract owner and the annuitant, and your spouse is the
sole beneficiary or the joint owner, then your spouse may elect to receive the
death benefit or continue the contract as successor owner/annuitant.
If your surviving spouse decides to continue the contract, then on the
contract date anniversary following your death, we will increase the account
value to equal your current guaranteed minimum death benefit, if it is higher
than the account value. The increase in the account value will be allocated to
the investment options according to the allocation percentages we have on file
for your contract. Therefore, withdrawal charges will no longer apply to this
amount. Withdrawal charges will apply if you make additional contributions.
These additional contributions will be withdrawn only after all other amounts
have been withdrawn. In determining whether the guaranteed minimum death
benefit will continue to grow, we will use your surviving spouse's age (as of
the contract date anniversary).
BENEFICIARY CONTINUATION OPTION
Upon your death, under an IRA contract, a beneficiary may generally elect to
keep the contract in your name and receive distributions under the contract
instead of receiving the death benefit in a single sum. In order to elect this
option, the beneficiary must be an individual. Certain trusts with only
individual beneficiaries will be treated as individuals. This election must be
made within 60 days following the date we receive proof of your death. We will
increase the account value to equal the death benefit if the death benefit is
greater than the account value. Except as noted in the next sentence, the
beneficiary continuation option will be available on or after May 1, 2000
depending on when we receive regulatory clearance in your state. For Rollover
IRA contracts, a similar beneficiary continuation option will be available
until the beneficiary continuation option described in this prospectus is
available. Please contract our processing office for further information.
Under the beneficiary continuation option:
o The contract continues in your name for the benefit of your beneficiary.
o The beneficiary may make transfers among the investment options but no
additional contributions will be permitted.
o The death benefit (including the guaranteed minimum death benefit)
provision will no longer be in effect.
o The beneficiary may choose at any time to withdraw all or a portion of the
account value and no withdrawal charges will apply. Any partial withdrawal
must be least $300.
o Upon the death of the beneficiary, any remaining death benefit will be paid
in a lump sum to the person the beneficiary chooses.
For traditional IRA contracts only, if you die AFTER the "Required Beginning
Date" for required minimum distributions (see "Tax information"), the contract
will continue if:
(a) You were receiving minimum distribution withdrawals from this contract;
and
(b) The pattern of minimum distribution withdrawals you chose was based in
part on the life of the designated beneficiary.
<PAGE>
Payment of death benefit 39
- --------------------------------------------------------------------------------
The withdrawals will then continue to be paid to the beneficiary on the same
basis as you chose before your death. We will be able to tell your beneficiary
whether this option is available. You should contact our processing office for
further information.
For both kinds of IRA contracts, if you die BEFORE the Required Beginning Date
(and, for a Rollover IRA, therefore you were not taking minimum distribution
withdrawals under the contract), the beneficiary may choose one of the
following two beneficiary continuation options.
1. Payments over life expectancy period. The beneficiary can receive annual
minimum distributions based on the beneficiary's life expectancy. If there is
more than one beneficiary, the shortest life expectancy is used. These minimum
distributions must begin by December 31st of the calendar year following the
year of your death. In some situations, a spouse beneficiary who elects to
continue the contract in your name under the beneficiary continuation option
instead of electing successor owner/annuitant status may choose to delay
beginning the minimum distributions until December 31st of the calendar year
in which you would have turned age 70 1/2.
2. Five Year Rule. The beneficiary can take withdrawals as desired. If the
beneficiary does not withdraw the entire account value by the December 31st of
the fifth calendar year following your death, we will pay any amounts
remaining under the contract to the beneficiary by that date. If you have more
than one beneficiary, and one of them elects this option, then all of your
beneficiaries will receive this option.
<PAGE>
40 Tax information
7
Tax information
- --------------------------------------------------------------------------------
OVERVIEW
In this part of the prospectus, we discuss the current federal income tax
rules that generally apply to Equitable Accumulator Plus contracts owned by
United States taxpayers. The tax rules can differ, depending on the type of
contract, whether NQ, Rollover IRA, Roth Conversion IRA, QP or Rollover TSA.
Therefore, we discuss the tax aspects of each type of contract separately.
Federal income tax rules include the United States laws in the Internal
Revenue Code, and Treasury Department Regulations and Internal Revenue Service
("IRS") interpretations of the Internal Revenue Code. These tax rules may
change. We cannot predict whether, when, or how these rules could change. Any
change could affect contracts purchased before the change.
We cannot provide detailed information on all tax aspects of the contracts.
Moreover, the tax aspects that apply to a particular person's contract may
vary depending on the facts applicable to that person. We do not discuss state
income and other state taxes, federal income tax, and withholding rules for
non-U.S. taxpayers, or federal gift and estate taxes. Transfers of the
contract, rights under the contract, or payments under the contract may be
subject to gift or estate taxes. You should not rely only on this document,
but should consult your tax adviser before your purchase.
If you are buying a contract to fund a retirement plan that already provides
tax deferral under sections of the Internal Revenue Code (IRA, QP and Rollover
TSA), you should do so for the contract's features and benefits other than tax
deferral. In such situations, the tax deferral of the contract does not
provide additional benefits.
TRANSFERS AMONG VARIABLE INVESTMENT OPTIONS
You can make transfers among variable investment options inside the contract
without triggering taxable income.
TAXATION OF NONQUALIFIED ANNUITIES
CONTRIBUTIONS
You may not deduct the amount of your contributions to a nonqualified annuity
contract.
CONTRACT EARNINGS
Generally, you are not taxed on contract earnings until you receive a
distribution from your contract, whether as a withdrawal or as an annuity
payment. However, earnings are taxable, even without a distribution:
o if a contract fails investment diversification requirements as specified in
federal income tax rules (these rules are based on or are similar to those
specified for mutual funds under the securities laws);
o if you transfer a contract, for example, as a gift to someone other than
your spouse (or former spouse);
o if you use a contract as security for a loan (in this case, the amount
pledged will be treated as a distribution); and
o if the owner is other than an individual (such as a corporation,
partnership, trust, or other non-natural person).
All nonqualified deferred annuity contracts that Equitable Life and its
affiliates issue to you during the same calendar year are linked together and
treated as one contract for calculating the taxable amount of any distribution
from any of those contracts.
ANNUITY PAYMENTS
Once annuity payments begin, a portion of each payment is taxable as ordinary
income. You get back the remaining portion without paying taxes on it. This is
your "investment in the contract." Generally, your investment in the contract
equals the contributions you made, less any amounts you previously withdrew
that were not taxable.
For fixed annuity payments, the tax-free portion of each payment is determined
by (1) dividing your investment in the contract by the total amount you are
expected to receive out
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Tax information 41
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of the contract, and (2) multiplying the result by the amount of the payment.
For variable annuity payments, your tax-free portion of each payment is your
investment in the contract divided by the number of expected payments.
Once you have received the amount of your investment in the contract, all
payments after that are fully taxable. If payments under a life annuity stop
because the annuitant dies, there is an income tax deduction for any
unrecovered investment in the contract.
PAYMENTS MADE BEFORE ANNUITY PAYMENTS BEGIN
If you make withdrawals before annuity payments begin under your contract,
they are taxable to you as ordinary income if there are earnings in the
contract. Generally, earnings are your account value less your investment in
the contract. If you withdraw an amount which is more than the earnings in the
contract as of the date of the withdrawal, the balance of the distribution is
treated as a return of your investment in the contract and is not taxable.
CONTRACTS PURCHASED THROUGH EXCHANGES
You may purchase your NQ contract through an exchange of another contract.
Normally, exchanges of contracts are taxable events. The exchange will not be
taxable under Section 1035 of the Internal Revenue Code if:
o the contract that is the source of the funds you are using to purchase the
NQ contract is another nonqualified deferred annuity contract or life
insurance or endowment contract.
o the owner and the annuitant are the same under the source contract and the
Equitable Accumulator Plus NQ contract. If you are using a life insurance
or endowment contract the owner and the insured must be the same on both
sides of the exchange transaction.
The tax basis of the source contract carries over to the Equitable Accumulator
Plus NQ contract.
A recent case permitted an owner to direct the proceeds of a partial
withdrawal from one nonqualified deferred annuity contract to a different
insurer to purchase a new nonqualified deferred annuity contract on a
tax-deferred basis. Special forms, agreement between the carriers, and
provision of cost basis information may be required to process this type of
exchange.
SURRENDERS
If you surrender or cancel the contract, the distribution is taxable as
ordinary income (not capital gain) to the extent it exceeds your investment in
the contract.
DEATH BENEFIT PAYMENTS MADE TO A BENEFICIARY AFTER YOUR DEATH
For the rules applicable to death benefits, see "Payment of death benefit"
earlier in this prospectus. The tax treatment of a death benefit taken as a
single sum is generally the same as the tax treatment of a withdrawal from or
surrender of your contract. The tax treatment of a death benefit taken as
annuity payments is generally the same as the tax treatment of annuity
payments under your contract.
EARLY DISTRIBUTION PENALTY TAX
If you take distributions before you are age 59 1/2 a penalty tax of 10% of
the taxable portion of your distribution applies in addition to the income
tax. The extra penalty tax does not apply to pre-age 59 1/2 distributions
made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o in the form of substantially equal periodic annuity payments for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and a beneficiary.
OTHER INFORMATION
The Treasury Department has the authority to issue guidelines prescribing the
circumstances in which your ability to direct your investment to particular
portfolios within a separate account may cause you, rather than the insurance
company, to be treated as the owner of the portfolio shares attributable to
your nonqualified annuity contract. In that case, income and gains
attributable to such portfolio shares would be included in your gross income
for federal income
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42 Tax information
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tax purposes. Under current rules, however, we believe that Equitable Life,
and not the owner of a nonqualified annuity contract, would be considered the
owner of the portfolio shares.
SPECIAL RULES FOR NQ CONTRACTS ISSUED IN PUERTO RICO
Under current law we treat income from NQ contracts as U.S. source. A Puerto
Rico resident is subject to U.S. taxation on such U.S. source income. Only
Puerto Rico source income of Puerto Rico residents is excludable from U.S.
taxation. Income from NQ contracts is also subject to Puerto Rico tax. The
calculation of the taxable portion of amounts distributed from a contract may
differ in the two jurisdictions. Therefore, you might have to file both U.S.
and Puerto Rico tax returns, showing different amounts of income from the
contract for each tax return. Puerto Rico generally provides a credit against
Puerto Rico tax for U.S. tax paid. Depending on your personal situation and
the timing of the different tax liabilities, you may not be able to take full
advantage of this credit.
INDIVIDUAL RETIREMENT ARRANGEMENTS (IRAS)
GENERAL
"IRA" stands for individual retirement arrangement. There are two basic types
of such arrangements, individual retirement accounts and individual retirement
annuities. In an individual retirement account, a trustee or custodian holds
the assets for the benefit of the IRA owner. The assets can include mutual
funds and certificates of deposit. In an individual retirement annuity, an
insurance company issues an annuity contract that serves as the IRA.
There are two basic types of IRAs, as follows:
o Traditional IRAs, typically funded on a pre-tax basis including SEP-IRAs
and SIMPLE-IRAs, issued and funded in connection with employer-sponsored
retirement plans; and
o Roth IRAs, first available in 1998, funded on an after-tax basis.
Regardless of the type of IRA, your ownership interest in the IRA cannot be
forfeited. You or your beneficiaries who survive you are the only ones who can
receive the IRA's benefits or payments.
You can hold your IRA assets in as many different accounts and annuities as
you would like, as long as you meet the rules for setting up and making
contributions to IRAs. However, if you own multiple IRAs, you may be required
to combine IRA values or contributions for tax purposes. For further
information about individual retirement arrangements, you can read Internal
Revenue Service Publication 590 ("Individual Retirement Arrangements (IRAs)").
This publication is usually updated annually, and can be obtained from any IRS
district office or the IRS Web site (http://www.irs.gov).
Equitable Life designs its traditional IRA contracts to qualify as individual
retirement annuities under Section 408(b) of the Internal Revenue Code. You
may purchase the contract as a traditional IRA ("Rollover IRA") or Roth IRA
("Roth Conversion IRA"). This prospectus contains the information that the IRS
requires you to have before you purchase an IRA. This section of the
prospectus covers some of the special tax rules that apply to IRAs. The next
section covers Roth IRAs. Education IRAs are not discussed in this prospectus
because they are not available in individual retirement annuity form.
The Equitable Accumulator Plus IRA contract has been approved by the IRS as to
form for use as a traditional IRA. This IRS approval is a determination only
as to the form of the annuity. It does not represent a determination of the
merits of the annuity as an investment. The IRS approval does not address
every feature possibly available under the Equitable Accumulator Plus IRA
contract. Although we do not have IRS approval as to form, we believe that the
version of the Roth IRA currently offered complies with the requirements of
the Internal Revenue Code.
CANCELLATION
You can cancel an Equitable Accumulator Plus IRA contract by following the
directions under "Your right to cancel
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Tax information 43
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within a certain number of days" in "Contract features and benefits" earlier
in the prospectus. You can cancel an Equitable Accumulator Plus Roth
Conversion IRA contract issued as a result of a full conversion of an
Equitable Accumulator Plus Rollover IRA contract by following the instructions
in the request for full conversion form. The form is available from our
processing office or your registered representative. If you cancel an IRA
contract, we may have to withhold tax, and we must report the transaction to
the IRS. A contract cancellation could have an unfavorable tax impact.
TRADITIONAL INDIVIDUAL RETIREMENT ANNUITIES (TRADITIONAL IRAS)
CONTRIBUTIONS TO TRADITIONAL IRAS. Individuals may make three different types
of contributions to a traditional IRA:
o regular contributions out of earned income or compensation.
o tax-free "rollover" contributions; or
o direct custodian-to-custodian transfers from other traditional IRAs
("direct transfers").
REGULAR CONTRIBUTIONS TO TRADITIONAL IRAS
LIMITS ON CONTRIBUTIONS. Generally, $2,000 is the maximum amount that you may
contribute to all IRAs (including Roth IRAs) in any taxable year. When your
earnings are below $2,000, your earned income or compensation for the year is
the most you can contribute. This $2,000 limit does not apply to rollover
contributions or direct custodian-to-custodian transfers into a traditional
IRA. You cannot make regular traditional IRA contributions for the tax year in
which you reach age 70 1/2 or any tax year after that.
SPECIAL RULES FOR SPOUSES. If you are married and file a joint income tax
return, you and your spouse may combine your compensation to determine the
amount of regular contributions you are permitted to make to traditional IRAs
(and Roth IRAs discussed below). Even if one spouse has no compensation or
compensation under $2,000, married individuals filing jointly can contribute
up to $4,000 for any taxable year to any combination of traditional IRAs and
Roth IRAs. (Any contributions to Roth IRAs reduce the ability to contribute to
traditional IRAs and vice versa.) The maximum amount may be less if earned
income is less and the other spouse has made IRA contributions. No more than a
combined total of $2,000 can be contributed annually to either spouse's
traditional and Roth IRAs. Each spouse owns his or her traditional IRAs and
Roth IRAs even if the other spouse funded the contributions. A working spouse
age 70 1/2 or over can contribute up to the lesser of $2,000 or 100% of
"earned income" to a traditional IRA for a nonworking spouse until the year in
which the nonworking spouse reaches age 70 1/2.
DEDUCTIBILITY OF CONTRIBUTIONS. The amount of traditional IRA contributions
that you can deduct for a tax year depends on whether you are covered by an
employer-sponsored tax-favored retirement plan, as defined under special
federal income tax rules. Your Form W-2 will indicate whether or not you are
covered by such a retirement plan.
IF YOU ARE NOT COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, you
can make fully deductible contributions to your traditional IRAs for each tax
year up to $2,000 or, if less, your earned income.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
adjusted gross income (AGI) is BELOW THE LOWER DOLLAR FIGURE IN A PHASE-OUT
RANGE, you can make fully deductible contributions to your traditional IRAs.
For each tax year, your fully deductible contribution can be up to $2,000 or,
if less, your earned income.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
AGI falls within a PHASE-OUT range, you can make PARTIALLY DEDUCTIBLE
CONTRIBUTIONS to your traditional IRAs.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
AGI falls ABOVE THE HIGHER
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44 Tax information
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FIGURE IN THE PHASE-OUT RANGE, you may not deduct any of your regular
contributions to your traditional IRAs.
If you are single and covered by a retirement plan during any part of the
taxable year, the deduction for traditional IRA contributions phases out with
AGI between $31,000 and $42,000 in 2000. This range will increase every year
until 2005 when the range is $50,000-$60,000.
If you are married and file a joint return, and you are covered by a
retirement plan during any part of the taxable year, the deduction for
traditional IRA contributions phases out with AGI between $51,000 and $61,000
in 1999. This range will increase every year until 2007 when the range is
$80,000-$100,000.
Married individuals filing separately and living apart at all times are not
considered married for purposes of this deductible contribution calculation.
Generally, the active participation in an employer-sponsored retirement plan
of an individual is determined independently for each spouse. Where spouses
have "married filing jointly" status, however, the maximum deductible
traditional IRA contribution for an individual who is not an active
participant (but whose spouse is an active participant) is phased out for
taxpayers with AGI of between $150,000 and $160,000.
To determine the deductible amount of the contribution in 2000, you determine
AGI and subtract $32,000 if you are single, or $52,000 if you are married and
file a joint return with your spouse. The resulting amount is your excess AGI.
You then determine the limit on the deduction for traditional IRA
contributions using the following formula:
<TABLE>
<S> <C> <C> <C> <C>
($10,000-excess AGI) times $2,000 (or earned Equals the adjusted
- ------------------------------ x income, if less) = deductible
divided by $10,000 contribution
limit
</TABLE>
NONDEDUCTIBLE REGULAR CONTRIBUTIONS. If you are not eligible to deduct part or
all of the traditional IRA contribution, you may still make nondeductible
contributions on which earnings will accumulate on a tax-deferred basis. The
combined deductible and nondeductible contributions to your traditional IRA
(or the nonworking spouse's traditional IRA) may not, however, exceed the
maximum $2,000 per person limit. See "Excess contributions" below. You must
keep your own records of deductible and nondeductible contributions in order
to prevent double taxation on the distribution of previously taxed amounts.
See "Withdrawals, payments and transfers of funds out of traditional IRAs"
below.
If you are making nondeductible contributions in any taxable year, or you have
made nondeductible contributions to a traditional IRA in prior years and are
receiving distributions from any traditional IRA, you must file the required
information with the IRS. Moreover, if you are making nondeductible
traditional IRA contributions, you must retain all income tax returns and
records pertaining to such contributions until interests in all traditional
IRAs are fully distributed.
WHEN YOU CAN MAKE REGULAR CONTRIBUTIONS. If you file your tax returns on a
calendar year basis like most taxpayers, you have until the April 15 return
filing deadline (without extensions) of the following calendar year to make
your regular traditional IRA contributions for a tax year.
ROLLOVERS AND TRANSFERS
Rollover contributions may be made to a traditional IRA from these sources:
o qualified plans;
o TSAs (including Internal Revenue Code Section 403(b)(7) custodial
accounts); and
o other traditional IRAs.
Any amount contributed to a traditional IRA after you reach age 70 1/2 must
be net of your required minimum distribution for the year in which the
rollover or direct transfer contribution is made.
ROLLOVERS FROM QUALIFIED PLANS OR TSAS
There are two ways to do rollovers:
o Do it yourself
You actually receive a distribution that can be rolled over and you roll
it over to a traditional IRA within 60 days after
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Tax information 45
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the date you receive the funds. The distribution from your qualified plan
or TSA will be net of 20% mandatory federal income tax withholding. If you
want, you can replace the withheld funds yourself and roll over the full
amount.
o Direct rollover
You tell your qualified plan trustee or TSA issuer/custodian/fiduciary to
send the distribution directly to your traditional IRA issuer. Direct
rollovers are not subject to mandatory federal income tax withholding.
All distributions from a TSA or qualified plan are eligible
rollover distributions, unless the distribution is:
o only after-tax contributions you made to the plan; or
o "required minimum distributions" after age 70 1/2 or separation from
service; or
o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancies) of
you and your designated beneficiary; or
o a hardship withdrawal; or
o substantially equal periodic payments made for a specified period of 10
years or more; or
o corrective distributions that fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse;
or
o a qualified domestic relations order distribution to a beneficiary who is
not your current spouse or former spouse.
ROLLOVERS FROM TRADITIONAL IRAS TO TRADITIONAL IRAS
You may roll over amounts from one traditional IRA to one or more of your
other traditional IRAs if you complete the transaction within 60 days after
you receive the funds. You may make such a rollover only once in every
12-month period for the same funds. Trustee-to-trustee or
custodian-to-custodian direct transfers are not rollover transactions. You can
make these more frequently than once in every 12-month period.
The surviving spouse beneficiary of a deceased individual can roll over or
directly transfer an inherited traditional IRA to one or more other
traditional IRAs. Also, in some cases, traditional IRAs can be transferred on
a tax-free basis between spouses or former spouses as a result of a
court-ordered divorce or separation decree.
EXCESS CONTRIBUTIONS
Excess contributions to IRAs are subject to a 6% excise tax for the year in
which made and for each year after until withdrawn. The following are excess
contributions to IRAs:
o regular contributions of more than $2,000; or
o regular contributions of more than earned income for the year, if that
amount is under $2,000; or
o regular contributions to a traditional IRA made after you reach age
70 1/2; or
o rollover contributions of amounts which are not eligible to be rolled over.
For example, after-tax contributions to a qualified plan or minimum
distributions required to be made after age 70 1/2.
You can avoid the excise tax by withdrawing an excess contribution (rollover
or regular) before the due date (including extensions) for filing your federal
income tax return for the year. If it is an excess regular traditional IRA
contribution, you cannot take a tax deduction for the amount withdrawn. You do
not have to include the excess contribution withdrawn as part of your income.
It is also not subject to the 10% additional penalty tax on early
distributions, discussed below under "Early distribution penalty tax." You do
have to withdraw any earnings that are attributed to the excess contribution.
The withdrawn earnings would be included in your gross income and could be
subject to the 10% penalty tax.
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46 Tax information
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Even after the due date for filing your return, you may withdraw an excess
rollover contribution, without income inclusion or 10% penalty, if:
(1) the rollover was from a qualified retirement plan to a traditional IRA;
(2) the excess contribution was due to incorrect information that the plan
provided; and
(3) you took no tax deduction for the excess contribution.
RECHARACTERIZATIONS
Amounts that have been contributed as traditional IRA funds may subsequently
be treated as Roth IRA funds. Special federal income tax rules allow you to
change your mind again and have amounts that are subsequently treated as Roth
IRA funds, once again treated as traditional IRA funds. You do this by using
the forms we prescribe. This is referred to as having "recharacterized" your
contribution.
WITHDRAWALS, PAYMENTS AND TRANSFERS OF FUNDS OUT OF TRADITIONAL IRAS
NO FEDERAL INCOME TAX LAW RESTRICTIONS ON WITHDRAWALS. You can withdraw any or
all of your funds from a traditional IRA at any time. You do not need to wait
for a special event like retirement.
TAXATION OF PAYMENTS. Earnings in traditional IRAs are not subject to federal
income tax until you or your beneficiary receive them. Taxable payments or
distributions include withdrawals from your contract, surrender of your
contract, and annuity payments from your contract. Death benefits are also
taxable. Except as discussed below, the total amount of any distribution from
a traditional IRA must be included in your gross income as ordinary income.
If you have ever made nondeductible IRA contributions to any traditional IRA
(it does not have to be to this particular traditional IRA contract), those
contributions are recovered tax free when you get distributions from any
traditional IRA. You must keep permanent tax records of all of your
nondeductible contributions to traditional IRAs. At the end of any year in
which you have received a distribution from any traditional IRA, you calculate
the ratio of your total nondeductible traditional IRA contributions (less any
amounts previously withdrawn tax free) to the total account balances of all
traditional IRAs you own at the end of the year plus all traditional IRA
distributions made during the year. Multiply this by all distributions from
the traditional IRA during the year to determine the nontaxable portion of
each distribution.
In addition, a distribution is not taxable if:
o the amount received is a withdrawal of excess contributions, as described
under "Excess contributions" above; or
o the entire amount received is rolled over to another traditional IRA (see
"Rollovers and transfers" above); or
o in certain limited circumstances, where the traditional IRA acts as a
"conduit," you roll over the entire amount into a qualified plan or TSA
that accepts rollover contributions. To get this conduit traditional IRA
treatment:
o the source of funds you used to establish the traditional IRA must have
been a rollover contribution from a qualified plan; and
o the entire amount received from the traditional IRA (including any
earnings on the rollover contribution) must be rolled over into another
qualified plan within 60 days of the date received.
Similar rules apply in the case of a TSA.
However, you may lose conduit treatment if you make an eligible rollover
distribution contribution to a traditional IRA and you commingle this
contribution with other contributions. In that case, you may not be able to
roll over these eligible rollover distribution contributions and earnings to
another qualified plan or TSA at a future date. The Rollover IRA contract can
be used as a conduit IRA if amounts are not commingled.
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Tax information 47
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Distributions from a traditional IRA are not eligible for favorable ten-year
averaging or long-term capital gain treatment available to certain
distributions from qualified plans.
REQUIRED MINIMUM DISTRIBUTIONS
LIFETIME REQUIRED MINIMUM DISTRIBUTIONS. You must start taking annual
distributions from your traditional IRAs beginning at age 70 1/2.
WHEN YOU HAVE TO TAKE THE FIRST REQUIRED MINIMUM DISTRIBUTION. The first
required minimum distribution is for the calendar year in which you turn age
70 1/2. You have the choice to take this first required minimum
distribution during the calendar year you actually reach age 70 1/2, or to
delay taking it until the first three-month period in the next calendar year
(January 1 - April 1). Distributions must start no later than your "Required
Beginning Date," which is April 1st of the calendar year after the calendar
year in which you turn age 70 1/2. If you choose to delay taking the first
annual minimum distribution, then you will have to take two minimum
distributions in that year - the delayed one for the first year and the one
actually for that year. Once minimum distributions begin, they must be made at
some time each year.
HOW YOU CAN CALCULATE REQUIRED MINIMUM DISTRIBUTIONS. There are two approaches
to taking required minimum distributions - "account-based" or "annuity-based."
Account-based method. If you choose an account-based method, you divide the
value of your traditional IRA as of December 31st of the past calendar year by
a life expectancy factor from IRS tables. This gives you the required minimum
distribution amount for that particular IRA for that year. The required
minimum distribution amount will vary each year as the account value and your
life expectancy factors change.
You have a choice of life expectancy factors, depending on whether you choose
a method based only on your life expectancy, or the joint life expectancies of
you and another individual. You can decide to "recalculate" your life
expectancy every year by using your current life expectancy factor. You can
decide instead to use the "term certain" method, where you reduce your life
expectancy by one every year after the initial year. If your spouse is your
designated beneficiary for the purpose of calculating annual account-based
required minimum distributions, you can also annually recalculate your
spouse's life expectancy if you want. If you choose someone who is not your
spouse as your designated beneficiary for the purpose of calculating annual
account-based required minimum distributions, you have to use the term certain
method of calculating that person's life expectancy. If you pick a nonspouse
designated beneficiary, you may also have to do another special calculation.
You can later apply your traditional IRA funds to a life annuity-based payout.
You can only do this if you already chose to recalculate your life expectancy
annually (and your spouse's life expectancy if you select a spousal joint
annuity). For example, if you anticipate selecting any other form of life
annuity payout after you are age 70 1/2, you must have elected to
recalculate life expectancies.
Annuity-based method. If you choose an annuity-based method, you do not have
to do annual calculations. You apply the account value to an annuity payout
for your life or the joint lives of you and a designated beneficiary, or for a
period certain not extending beyond applicable life expectancies.
DO YOU HAVE TO PICK THE SAME METHOD TO CALCULATE YOUR REQUIRED MINIMUM
DISTRIBUTIONS FOR ALL OF YOUR TRADITIONAL IRAS AND OTHER RETIREMENT PLANS?
No. If you want, you can choose a different method and a different
beneficiary for each of your traditional IRAs and other retirement plans. For
example, you can choose an annuity payout from one IRA, a different annuity
payout from a qualified plan, and an account-based annual withdrawal from
another IRA.
WILL WE PAY YOU THE ANNUAL AMOUNT EVERY YEAR FROM YOUR TRADITIONAL IRA BASED
ON THE METHOD YOU CHOOSE? No, unless you affirmatively select an annuity
payout option or an account-based withdrawal option such as our minimum
distribution withdrawal option. Because the options we offer do not cover
every option permitted under
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48 Tax information
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federal income tax rules, you may prefer to do your own required minimum
distribution calculations for one or more of your traditional IRAs.
WHAT IF YOU TAKE MORE THAN YOU NEED TO FOR ANY YEAR? The required minimum
distribution amount for your traditional IRAs is calculated on a year-by-year
basis. There are no carry-back or carry-forward provisions. Also, you cannot
apply required minimum distribution amounts you take from your qualified plans
to the amounts you have to take from your traditional IRAs and vice versa.
However, the IRS will let you calculate the required minimum distribution for
each traditional IRA that you maintain, using the method that you picked for
that particular IRA. You can add these required minimum distribution amount
calculations together. As long as the total amount you take out every year
satisfies your overall traditional IRA required minimum distribution amount,
you may choose to take your annual required minimum distribution from any one
or more traditional IRAs that you own.
WHAT IF YOU TAKE LESS THAN YOU NEED TO FOR ANY YEAR? Your IRA could be
disqualified, and you could have to pay tax on the entire value. Even if your
IRA is not disqualified, you could have to pay a 50% penalty tax on the
shortfall (required amount for traditional IRAs less amount actually taken).
It is your responsibility to meet the required minimum distribution rules. We
will remind you when our records show that your age 70 1/2 is approaching.
If you do not select a method with us, we will assume you are taking your
required minimum distribution from another traditional IRA that you own.
WHAT ARE THE REQUIRED MINIMUM DISTRIBUTION PAYMENTS AFTER YOU DIE? If you die
after either (a) the start of annuity payments, or (b) your Required Beginning
Date, your beneficiary must receive payment of the remaining values in the
contract at least as rapidly as under the distribution method before your
death. In some circumstances, your surviving spouse may elect to become the
owner of the traditional IRA and halt distributions until he or she reaches
age 70 1/2.
If you die before your Required Beginning Date and before annuity payments
begin, federal income tax rules require complete distribution of your entire
value in the contract within five years after your death. Payments to a
designated beneficiary over the beneficiary's life or over a period certain
that does not extend beyond the beneficiary's life expectancy are also
permitted, if these payments start within one year of your death. A surviving
spouse beneficiary can also (a) delay starting any payments until you would
have reached age 70 1/2 or (b) roll over your traditional IRA into his or
her own traditional IRA.
SUCCESSOR ANNUITANT AND OWNER
If your spouse is the sole primary beneficiary and elects to become the
successor annuitant and owner, no death benefit is payable until your
surviving spouse's death.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
IRA death benefits are taxed the same as IRA distributions.
BORROWING AND LOANS ARE PROHIBITED TRANSACTIONS
You cannot get loans from a traditional IRA. You cannot use a traditional IRA
as collateral for a loan or other obligation. If you borrow against your IRA
or use it as collateral, its tax-favored status will be lost as of the first
day of the tax year in which this prohibited event occurs. If this happens,
you must include the value of the traditional IRA in your federal gross
income. Also, the early distribution penalty tax of 10% will apply if you have
not reached age 59 1/2 before the first day of that tax year.
EARLY DISTRIBUTION PENALTY TAX
A penalty tax of 10% of the taxable portion of a distribution applies to
distributions from a traditional IRA made before you reach age 59 1/2. The
extra penalty tax does not apply to pre-age 59 1/2 distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
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Tax information 49
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o used to pay certain extraordinary medical expenses (special federal income
tax definition); or
o used to pay medical insurance premiums for unemployed individuals (special
federal income tax definition); or
o used to pay certain first-time home buyer expenses (special federal income
tax definition); or
o used to pay certain higher education expenses (special federal income tax
definition); or
o in the form of substantially equal periodic payments made at least annually
over your life (or your life expectancy), or over the joint lives of you
and your beneficiary (or your joint life expectancy) using an IRS-approved
distribution method.
To meet this last exception, you could elect to apply your contract value to
an Income Manager (life annuity with a period certain) payout annuity contract
(level payments version). You could also elect the substantially equal
withdrawals option. We will calculate the substantially equal annual payments
under a method we select based on guidelines issued by the IRS (currently
contained in IRS Notice 89-25, Question and Answer 12). Although substantially
equal withdrawals and Income Manager payments are not subject to the 10%
penalty tax, they are taxable as discussed in "Withdrawals, payments and
transfers of funds out of traditional IRAs" above. Once substantially equal
withdrawals or Income Manager annuity payments begin, the distributions should
not be stopped or changed until after the later of your reaching age 59 1/2
or five years after the date of the first distribution, or the penalty tax,
including an interest charge for the prior penalty avoidance, may apply to all
prior distributions under either option. Also, it is possible that the IRS
could view any additional withdrawal or payment you take from your contract as
changing your pattern of substantially equal withdrawals or Income Manager
payments for purposes of determining whether the penalty applies.
ROTH INDIVIDUAL RETIREMENT ANNUITIES (ROTH IRAS)
This section of the prospectus covers some of the special tax rules that apply
to Roth IRAs. If the rules are the same as those that apply to the traditional
IRA, we will refer you to the same topic under "traditional IRAs."
The Equitable Accumulator Plus Roth Conversion IRA contract is designed to
qualify as a Roth individual retirement annuity under Sections 408A and 408(b)
of the Internal Revenue Code.
CONTRIBUTIONS TO ROTH IRAS
Individuals may make three different types of contributions to a Roth IRA:
o taxable rollover contributions from traditional IRAs ("conversion"
contributions); or
o tax-free rollover contributions from other Roth IRAs; or
o tax-free direct custodian-to-custodian transfers from other Roth IRAs
("direct transfers").
Since we only permit direct transfer and rollover contributions under the
Equitable Accumulator Plus Roth Conversion IRA contract, we do not discuss
regular after-tax contributions here. If you use the forms we require, we will
also accept traditional IRA funds which are subsequently recharacterized as
Roth IRA funds following special federal income tax rules.
ROLLOVERS AND DIRECT TRANSFERS
WHAT IS THE DIFFERENCE BETWEEN ROLLOVER AND DIRECT TRANSFER TRANSACTIONS? You
may make rollover contributions to a Roth IRA from only two sources:
o another Roth IRA ("tax-free rollover contribution"); or
o another traditional IRA, including a SEP-IRA or SIMPLE-IRA, in a taxable
conversion rollover ("conversion contribution").
You may not make contributions to a Roth IRA from a qualified plan under
Section 401(a) of the Internal Revenue Code, or a TSA under Section 403(b) of
the Internal Revenue
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Code. You may make direct transfer contributions to a Roth IRA only from
another Roth IRA.
The difference between a rollover transaction and a direct transfer
transaction is the following: in a rollover transaction you actually take
possession of the funds rolled over, or are considered to have received them
under tax law in the case of a change from one type of plan to another. In a
direct transfer transaction, you never take possession of the funds, but
direct the first Roth IRA custodian, trustee, or issuer to transfer the first
Roth IRA funds directly to Equitable Life, as the Roth IRA issuer. You can
make direct transfer transactions only between identical plan types (for
example, Roth IRA to Roth IRA). You can also make rollover transactions
between identical plan types. However, you can only use rollover transactions
between different plan types (for example, traditional IRA to Roth IRA).
You may make both Roth IRA to Roth IRA rollover transactions and Roth IRA to
Roth IRA direct transfer transactions. This can be accomplished on a
completely tax-free basis. However, you may make Roth IRA to Roth IRA rollover
transactions only once in any 12-month period for the same funds.
Trustee-to-trustee or custodian-to-custodian direct transfers can be made more
frequently than once a year. Also, if you send us the rollover contribution to
apply it to a Roth IRA, you must do so within 60 days after you receive the
proceeds from the original IRA to get rollover treatment.
The surviving spouse beneficiary of a deceased individual can roll over or
directly transfer an inherited Roth IRA to one or more other Roth IRAs. In
some cases, Roth IRAs can be transferred on a tax-free basis between spouses
or former spouses as a result of a court-ordered divorce or separation decree.
CONVERSION CONTRIBUTIONS TO ROTH IRAS
In a conversion rollover transaction, you withdraw (or are considered to have
withdrawn) all or a portion of funds from a traditional IRA you maintain and
convert it to a Roth IRA within 60 days after you receive (or are considered
to have received) the traditional IRA proceeds. Unlike a rollover from a
traditional IRA to another traditional IRA, the conversion rollover
transaction is not tax free. Instead, the distribution from the traditional
IRA is generally fully taxable. For this reason, we are required to withhold
10% federal income tax from the amount converted unless you elect out of such
withholding. If you have ever made nondeductible regular contributions to any
traditional IRA - whether or not it is the traditional IRA you are converting
- a pro rata portion of the distribution is tax free.
There is, however, no early distribution penalty tax on the traditional IRA
withdrawal that you are converting to a Roth IRA, even if you are under age
59 1/2.
You cannot make conversion contributions to a Roth IRA for any taxable year in
which your adjusted gross income exceeds $100,000. For this purpose, your
adjusted gross income is calculated without the gross income stemming from the
traditional IRA conversion. You also cannot make conversion contributions to a
Roth IRA for any taxable year in which your federal income tax filing status
is "married filing separately."
Finally, you cannot make conversion contributions to a Roth IRA to the extent
that the funds in your traditional IRA are subject to the annual required
minimum distribution rule applicable to traditional IRAs beginning at age
70 1/2.
WITHDRAWALS, PAYMENTS AND TRANSFERS OF FUNDS OUT OF ROTH IRAS
NO FEDERAL INCOME TAX LAW RESTRICTIONS ON WITHDRAWALS. You can withdraw any or
all of your funds from a Roth IRA at any time; you do not need to wait for a
special event like retirement.
DISTRIBUTIONS FROM ROTH IRAS
Distributions include withdrawals from your contract, surrender of your
contract, and annuity payments from your contract. Death benefits are also
distributions.
The following distributions from Roth IRAs are free of income tax:
o Rollover from a Roth IRA to another Roth IRA;
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o Direct transfer from a Roth IRA to another Roth IRA;
o Qualified distribution from a Roth IRA; and
o Return of excess contributions or amounts recharacterized to a traditional
IRA.
QUALIFIED DISTRIBUTIONS FROM ROTH IRAS. Qualified distributions from Roth IRAs
made because of one of the following four qualifying events or reasons are not
includable in income:
o you reach age 59 1/2; or
o you die; or
o you become disabled (special federal income tax definition); or
o your distribution is a "qualified first-time homebuyer distribution"
(special federal income tax definition; $10,000 lifetime total limit for
these distributions from all of your traditional and Roth IRAs).
You also have to meet a five-year aging period. A qualified distribution is
any distribution made after the five-taxable- year period beginning with the
first taxable year for which you made any contribution to any Roth IRA
(whether or not the one from which the distribution is being made). It is not
possible to have a tax-free qualified distribution before the year 2003
because of the five-year aging requirement.
NONQUALIFIED DISTRIBUTIONS FROM ROTH IRAS. Nonqualified distributions from
Roth IRAs are distributions that do not meet the qualifying event and
five-year aging period tests described above. Such distributions are
potentially taxable as ordinary income. Nonqualified distributions receive
return-of-investment-first treatment. Only the difference between the amount
of the distribution and the amount of contributions to all of your Roth IRAs
is taxable. You have to reduce the amount of contributions to all of your Roth
IRAs to reflect any previous tax-free recoveries.
You must keep your own records of regular and conversion contributions to all
Roth IRAs to assure appropriate taxation. You may have to file information on
your contributions to and distributions from any Roth IRA on your tax return.
You may have to retain all income tax returns and records pertaining to such
contributions and distributions until your interests in all Roth IRAs are
distributed.
Like traditional IRAs, taxable distributions from a Roth IRA are not entitled
to the special favorable five-year averaging method (or, in certain cases,
favorable ten-year averaging and long-term capital gain treatment) available
in certain cases to distributions from qualified plans.
REQUIRED MINIMUM DISTRIBUTIONS AT DEATH
Same as traditional IRA under "What are the required minimum distribution
payments after you die?" Lifetime required minimum distributions do not apply.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
Distributions to a beneficiary generally receive the same tax treatment as if
the distribution had been made to you.
BORROWING AND LOANS ARE PROHIBITED TRANSACTIONS
Same as traditional IRA.
EXCESS CONTRIBUTIONS
Generally the same as traditional IRA.
Excess rollover contributions to Roth IRAs are contributions not eligible to
be rolled over (for example, conversion contributions from a traditional IRA
if your adjusted gross income is in excess of $100,000 in the conversion
year).
You can withdraw or recharacterize any contribution to a Roth IRA before the
due date (including extensions) for filing your federal income tax return for
the tax year. If you do this, you must also withdraw or recharacterize any
earnings attributable to the contribution.
EARLY DISTRIBUTION PENALTY TAX
Same as traditional IRA.
For Roth IRAs, special penalty rules may apply to amounts withdrawn
attributable to 1998 conversion rollovers.
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SPECIAL RULES FOR NONQUALIFIED CONTRACTS IN QUALIFIED PLANS
Under QP contracts your plan administrator or trustee notifies you as to tax
consequences. See Appendix II.
TAX-SHELTERED ANNUITY CONTRACTS (TSAS)
GENERAL
This section covers some of the special tax rules that apply to TSA contracts
under Section 403(b) of the Internal Revenue Code (TSAs). If the rules are the
same as those that apply to another kind of contract, for example, traditional
IRAs, we will refer you to the same topic under "traditional IRAs."
CONTRIBUTIONS TO TSAS
There are two ways you can make contributions to your Rollover TSA contract:
o a rollover from another TSA contract or arrangement that meets the
requirements of Section 403(b) of the Internal Revenue Code, or
o a full or partial direct transfer of assets ("direct transfer") from
another contract or arrangement that meets the requirements of Section
403(b) of the Internal Revenue Code by means of IRS Revenue Ruling 90-24.
With appropriate written documentation satisfactory to us, we will accept
rollover contributions from "conduit IRAs" for TSA funds.
If you make a direct transfer, you must fill out our transfer form.
EMPLOYER-REMITTED CONTRIBUTIONS. The Rollover TSA contract does not accept
employer-remitted contributions. However, we provide the following discussion
as part of our description of restrictions on the distribution of funds
directly transferred, which include employer-remitted contributions to other
TSAs.
Employer-remitted contributions to TSAs made through the employer's payroll
are subject to annual limits. (Tax-free transfer or tax-deferred rollover
contributions from another 403(b) arrangement are not subject to these annual
contribution limits). Commonly, some or all of the contributions made to a TSA
are made under a salary reduction agreement between the employee and the
employer. These contributions are called "salary reduction" or "elective
deferral" contributions. However, a TSA can also be wholly or partially funded
through non-elective employer contributions or after-tax employee
contributions. Amounts attributable to salary reduction contributions to TSAs
are generally subject to withdrawal restrictions. Also, all amounts
attributable to investments in a 403(b)(7) custodial account are subject to
withdrawal restrictions discussed below.
ROLLOVER OR DIRECT TRANSFER CONTRIBUTIONS. You may make rollover contributions
to your Rollover TSA contract from TSAs under Section 403(b) of the Internal
Revenue Code. Generally, you may make a rollover contribution to a TSA when
you have a distributable event from an existing TSA as a result of your:
o termination of employment with the employer who provided the TSA funds; or
o reaching age 59 1/2 even if you are still employed; or
o disability (special federal income tax definition).
A transfer occurs when changing the funding vehicle, even if there is no
distributable event. Under a direct transfer, you do not receive a
distribution. We accept direct transfers of TSA funds under Revenue Ruling
90-24 only if:
o you give us acceptable written documentation as to the source of the funds,
and
o the Equitable Accumulator contract receiving the funds has provisions at
least as restrictive as the source contract.
Before you transfer funds to a Rollover TSA contract, you may have to obtain
your employer's authorization or demonstrate that you do not need employer
authorization. For example, the transferring TSA may be subject to Title I of
ERISA if the employer makes matching contributions to
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salary reduction contributions made by employees. In that case, the employer
must continue to approve distributions from the plan or contract.
Your contribution to the Rollover TSA must be net of the required minimum
distribution for the tax year in which we issue the contract if:
o you are or will be at least age 70 1/2 in the current calendar year, and
o you have separated from service with the employer who provided the funds to
purchase the TSA you are transferring or rolling over to the Rollover TSA.
This rule applies regardless of whether the source of funds is a:
o rollover by check of the proceeds from another TSA; or
o direct rollover from another TSA; or
o direct transfer under Revenue Ruling 90-24 from another TSA.
Further, you must use the same elections regarding recalculation of your life
expectancy (and if applicable, your spouse's life expectancy) if you have
already begun to receive required minimum distribution from or with respect to
the TSA from which you are making your contribution to the Rollover TSA. You
must also elect or have elected a minimum distribution calculation method
requiring recalculation of your life expectancy (and if applicable, your
spouse's life expectancy) if you elect an annuity payout for the funds in this
contract subsequent to this year.
DISTRIBUTIONS FROM TSAS
GENERAL. Depending on the terms of the employer plan and your employment
status, you may have to get your employer's consent to take a loan or
withdrawal. Your employer will tell us this when you establish the TSA through
a direct transfer.
WITHDRAWAL RESTRICTIONS. If this is a Revenue Ruling 90-24 direct transfer, we
will treat all amounts transferred to this contract and any future earnings on
the amount transferred as not eligible for withdrawal until one of the
following events happens:
o you are separated from service with the employer who provided the funds to
purchase the TSA you are transferring to the Rollover TSA; or
o you reach age 59 1/2; or
o you die; or
o you become disabled (special federal income tax definition); or
o you take a hardship withdrawal (special federal income tax definition).
If any portion of the funds directly transferred to your TSA contract is
attributable to the amounts that you invested in a 403(b)(7) custodial
account, such amounts, including earnings, are subject to withdrawal
restrictions. With respect to the portion of the funds that were never
invested in a 403(b)(7) custodial account, these restrictions apply to the
salary reduction (elective deferral) contributions to a TSA annuity contract
you made and any earnings on them. These restrictions do not apply to the
amount directly transferred to your TSA contract that represents your December
31, 1988 account balance attributable to salary reduction contributions to a
TSA annuity contract and earnings. To take advantage of this grandfathering,
you must properly notify us in writing at our processing office of your
December 31, 1988 account balance if you have qualifying amounts transferred
to your TSA contract.
THIS PARAGRAPH APPLIES ONLY TO PARTICIPANTS IN A TEXAS OPTIONAL RETIREMENT
PROGRAM. Texas Law permits withdrawals only after one of the following
distributable events occurs:
1. the requirements for minimum distribution (discussed under "Required
minimum distributions" below and in the prospectus) are met; or
2. death; or
3. retirement; or
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4. termination of employment in all Texas public institutions of higher
education.
For you to make a withdrawal, we must receive a properly completed written
acknowledgement from the employer. If a distributable event occurs before you
are vested, we will refund to the employer any amounts provided by an
employer's first-year matching contributions. We reserve the right to change
these provisions without your consent, but only to the extent necessary to
maintain compliance with applicable law. Loans are not permitted under Texas
Optional Retirement Programs.
TAX TREATMENT OF DISTRIBUTIONS. Amounts held under TSAs are generally not
subject to federal income tax until benefits are distributed. Distributions
include withdrawals from your TSA contract and annuity payments from your TSA
contract. Death benefits paid to a beneficiary are also taxable distributions.
Unless an exception applies, amounts distributed from TSAs are includable in
gross income as ordinary income. Distributions from TSAs may be subject to 20%
federal income tax withholding. See "Federal and state income tax withholding
and information reporting" below. In addition, TSA distributions may be
subject to additional tax penalties.
If you have made after-tax contributions, you will have a tax basis in your
TSA contract, which will be recovered tax-free. Since we do not track your
investment in the contract, if any, it is your responsibility to determine how
much of the distribution is taxable.
DISTRIBUTIONS BEFORE ANNUITY PAYMENTS BEGIN. On a total surrender, the amount
received in excess of the investment in the contract is taxable. We will
report the total amount of the distribution. The amount of any partial
distribution from a TSA prior to the annuity starting date is generally
taxable, except to the extent that the distribution is treated as a withdrawal
of after-tax contributions. Distributions are normally treated as pro rata
withdrawals of after-tax contributions and earnings on those contributions.
ANNUITY PAYMENTS. If you elect an annuity payout option, you will recover any
investment in the contract as each payment is received by dividing the
investment in the contract by an expected return determined under an IRS table
prescribed for qualified annuities. The amount of each payment not excluded
from income under this exclusion ratio is fully taxable. The full amount of
the payments received after your investment in the contract is recovered is
fully taxable. If you (and your beneficiary under a joint and survivor
annuity) die before recovering the full investment in the contract, a
deduction is allowed on your (or your beneficiary's) final tax return.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
Death benefit distributions from a TSA generally receive the same tax
treatment as distribution during your lifetime. In some instances,
distributions from a TSA made to your surviving spouse may be rolled over to a
traditional IRA.
LOANS FROM TSAS
You may take loans from a TSA unless restricted by the employer (for example,
under an employer plan subject to ERISA). If you cannot take a loan, or cannot
take a loan without approval from the employer who provided the funds, we will
have this information in our records based on what you and the employer who
provided the TSA funds told us when you purchased your contract.
Loans are generally not treated as a taxable distribution. If the amount of
the loan when made exceeds permissible limits under federal income tax rules,
the amount of the excess is treated (solely for tax purposes) as a taxable
distribution. Additionally, if the loan is not repaid at least quarterly,
amortizing (paying down) interest and principal, the amount not repaid when
due will be treated as a taxable distribution. Under Proposed Treasury
Regulations the entire unpaid balance of the loan is includable in income in
the year of the default.
TSA loans are subject to federal income tax limits and may also be subject to
limits of the plan from which the funds came. Federal income tax rule
requirements apply even if the plan is not subject to ERISA. For example,
loans offered by TSAs are subject to the following conditions:
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o The amount of a loan to a participant, when combined with all other loans
to the participant from all qualified plans of the employer, cannot exceed
the lesser of:
(1) the greater of $10,000 or 50% of the participant's nonforfeitable
accrued benefits; and
(2) $50,000 reduced by the excess (if any) of the highest outstanding
loan balance over the previous twelve months over the outstanding
loan balance of plan loans on the date the loan was made.
o In general, the term of the loan cannot exceed five years unless the loan
is used to acquire the participant's primary residence. Rollover TSA
contracts have a term limit of
10 years for loans used to acquire the participant's primary residence.
All principal and interest must be amortized in substantially level payments
over the term of the loan, with payments being made at least quarterly.
The amount borrowed and not repaid may be treated as a distribution if:
o the loan does not qualify under the conditions above;
o the participant fails to repay the interest or principal when due; or
o in some instances, the participant separates from service with the employer
who provided the funds or the plan is terminated.
In this case, the participant may have to include the unpaid amount due as
ordinary income. In addition, the 10% early distribution penalty tax may
apply. The amount of the unpaid loan balance is reported to the IRS on Form
1099-R as a distribution.
TAX-DEFERRED ROLLOVERS AND DIRECT TRANSFERS
You may roll over any "eligible rollover distribution" from a TSA into another
eligible retirement plan, either directly or within 60 days of your receiving
the distribution. To the extent rolled over, a distribution remains
tax-deferred.
You may roll over a distribution from a TSA to another TSA or to a traditional
IRA. A spousal beneficiary may roll over death benefits only to a traditional
IRA.
The taxable portion of most distributions will be eligible for rollover,
except as specifically excluded under federal income tax rules. Distributions
that you cannot roll over generally include periodic payments for life or for
a period of 10 years or more, hardship withdrawals, and required minimum
distributions under federal income tax rules.
Direct transfers of TSA funds from one TSA to another under Revenue Ruling
90-24 are not distributions.
REQUIRED MINIMUM DISTRIBUTIONS
Generally the same as traditional IRA with these differences:
WHEN YOU HAVE TO TAKE THE FIRST REQUIRED MINIMUM DISTRIBUTION. The minimum
distribution rules force TSA participants to start calculating and taking
annual distribution from their TSAs by a required date. Generally you must
take the first required minimum distribution for the calendar year in which
you turn age 70 1/2. You may be able to delay the start of required minimum
distributions for all or part of your account balance until after age 70 1/2,
as follows:
o For TSA participants who have not retired from service with the employer
who provided the funds for the TSA by the calendar year the participant
turns age 70 1/2, the required beginning date for minimum distribution is
extended to April 1 following the calendar year of retirement.
o TSA plan participants may also delay the start of required minimum
distribution to age 75 of the portion of their account value attributable
to their December 31, 1986 TSA account balance, even if retired at age
70 1/2. We will know whether or not you qualify for this exception because
it will only apply to people who establish their Rollover TSA by direct
Revenue Ruling 90-24 transfers. If you do not give us the amount of your
December 31, 1986 account balance that is being transferred to the
Rollover TSA on the form used to establish the TSA, you do not qualify.
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SPOUSAL CONSENT RULES
This will only apply to you if you establish your Rollover TSA by direct
Revenue Ruling 90-24 transfer. Your employer will tell us on the form used to
establish the TSA whether or not you need to get spousal consent for loans,
withdrawals, or other distributions. If you do, you will need such consent if
you are married when you request a withdrawal under the TSA contract. In
addition, unless you elect otherwise with the written consent of your spouse,
the retirement benefits payable under the plan must be paid in the form of a
qualified joint and survivor annuity. A qualified joint and survivor annuity
is payable for the life of the annuitant with a survivor annuity for the life
of the spouse in an amount not less than one-half of the amount payable to the
annuitant during his or her lifetime. In addition, if you are married, the
beneficiary must be your spouse, unless your spouse consents in writing to the
designation of another beneficiary.
If you are married and you die before annuity payments have begun, payments
will be made to your surviving spouse in the form of a life annuity unless at
the time of your death a contrary election was in effect. However, your
surviving spouse may elect, before payments begin, to receive payments in any
form permitted under the terms of the TSA contract and the plan of the
employer who provided the funds for the TSA.
EARLY DISTRIBUTION PENALTY TAX
A penalty tax of 10% of the taxable portion of a distribution applies to
distribution from a TSA before you reach age 59 1/2. This is in addition to
any income tax. There are exceptions to the extra penalty tax. No penalty tax
applies to pre-age 59 1/2 distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o to pay for certain extraordinary medical expenses (special federal income
tax definition); or
o if you are separated from service, any form of payout after you are age 55;
or
o only if you are separated from service, a payout in the form of
substantially equal periodic payments made at least annually over your
life (or your life expectancy), or over the joint lives of you and your
beneficiary (or your joint life expectancy) using an IRS-approved
distribution method.
FEDERAL AND STATE INCOME TAX WITHHOLDING
AND INFORMATION REPORTING
We must withhold federal income tax from distributions from annuity contracts.
You may be able to elect out of this income tax withholding in some cases.
Generally, we do not have to withhold if your distributions are not taxable.
The rate of withholding will depend on the type of distribution and, in
certain cases, the amount of your distribution. Any income tax withheld is a
credit against your income tax liability. If you do not have sufficient income
tax withheld or do not make sufficient estimated income tax payments, you may
incur penalties under the estimated income tax rules.
You must file your request not to withhold in writing before the payment or
distribution is made. Our processing office will provide forms for this
purpose. You cannot elect out of withholding unless you provide us with your
correct Taxpayer Identification Number and a United States residence address.
You cannot elect out of withholding if we are sending the payment out of the
United States.
You should note the following special situations:
o We might have to withhold and/or report on amounts we pay under a free look
or cancellation.
o We are generally required to withhold on conversion rollovers of
traditional IRAs to Roth IRAs, as it is considered a withdrawal from the
traditional IRA and is taxable.
o We are required to withhold on the gross amount of a distribution from a
Roth IRA unless you elect out of withholding. This may result in tax being
withheld even though the Roth IRA distribution is not taxable in whole or
in part.
Special withholding rules apply to foreign recipients and United States
citizens residing outside the United States. We
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do not discuss these rules here. Certain states have indicated that state
income tax withholding will also apply to payments from the contracts made to
residents. In some states, you may elect out of state withholding, even if
federal withholding applies. Generally, an election out of federal withholding
will also be considered an election out of state withholding. If you need more
information concerning a particular state or any required forms, call our
processing office at the toll-free number.
FEDERAL INCOME TAX WITHHOLDING ON PERIODIC ANNUITY PAYMENTS
We withhold differently on "periodic" and "non-periodic" payments. For a
periodic annuity payment, for example, unless you specify a different number
of withholding exemptions, we withhold assuming that you are married and
claiming three withholding exemptions. If you do not give us your correct
Taxpayer Identification Number, we withhold as if you are single with no
exemptions.
Based on the assumption that you are married and claiming three withholding
exemptions, if you receive less than $14,880 in periodic annuity payments in
2000, your payments will generally be exempt from federal income tax
withholding. You could specify a different choice of withholding exemption or
request that tax be withheld. Your withholding election remains effective
unless and until you revoke it. You may revoke or change your withholding
election at any time.
FEDERAL INCOME TAX WITHHOLDING ON NON-PERIODIC ANNUITY PAYMENTS (WITHDRAWALS)
For a non-periodic distribution (total surrender or partial withdrawal), we
generally withhold at a flat 10% rate. We apply that rate to the taxable
amount in the case of nonqualified contracts, and to the payment amount in the
case of IRAs and Roth IRAs.
You cannot elect out of withholding if the payment is an eligible rollover
distribution from a qualified plan or TSA. If a non-periodic distribution from
a qualified plan or TSA is not an eligible rollover distribution then the 10%
withholding rate applies.
MANDATORY WITHHOLDING FROM TSA AND QUALIFIED PLAN DISTRIBUTIONS
Unless you have the distribution go directly to the new plan, eligible
rollover distributions from qualified plans and TSAs are subject to mandatory
20% withholding. An eligible rollover distribution from a TSA can be rolled
over to another TSA or a traditional IRA. An eligible rollover distribution
from a qualified plan can be rolled over to another qualified plan or
traditional IRA. All distributions from a TSA or qualified plan are eligible
rollover distributions unless they are on the following list of exceptions:
o any after-tax contributions you made to the plan; or
o any distributions which are required minimum distributions after age
70 1/2 or separation from service; or
o hardship withdrawals; or
o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and your designated beneficiary; or
o substantially equal periodic payments made for a specified period of 10
years or more; or
o corrective distributions that fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse;
or
o a qualified domestic relations order distribution to a beneficiary who is
not your current spouse or former spouse.
A death benefit payment to your surviving spouse, or a qualified domestic
relations order distribution to your current or former spouse, may be a
distribution subject to mandatory 20% withholding.
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IMPACT OF TAXES TO EQUITABLE LIFE
The contracts provide that we may charge Separate Account No. 49 for taxes. We
do not now, but may in the future set up reserves for such taxes.
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ABOUT OUR SEPARATE ACCOUNT NO. 49
Each variable investment option is a subaccount of our Separate Account No.
49. We established Separate Account No. 49 in 1996 under special provisions of
the New York Insurance Law. These provisions prevent creditors from any other
business we conduct from reaching the assets we hold in our variable
investment options for owners of our variable annuity contracts. We are the
legal owner of all of the assets in Separate Account No. 49 and may withdraw
any amounts that exceed our reserves and other liabilities with respect to
variable investment options under our contracts. The results of Separate
Account No. 49's operations are accounted for without regard to Equitable
Life's other operations.
Separate Account No. 49 is registered under the Investment Company Act of 1940
and is classified by that act as a "unit investment trust." The SEC, however,
does not manage or supervise Equitable Life or Separate Account No. 49.
Each subaccount (variable investment option) within Separate Account No. 49
invests solely in class IB shares issued by the corresponding portfolio of EQ
Advisors Trust.
We reserve the right subject to compliance with laws that apply:
(1) to add variable investment options to, or to remove variable investment
options from, Separate Account No. 49, or to add other separate accounts;
(2) to combine any two or more variable investment options;
(3) to transfer the assets we determine to be the shares of the class of
contracts to which the contracts belong from any variable investment
option to another variable investment option;
(4) to operate Separate Account No. 49 or any variable investment option as a
management investment company under the Investment Company Act of 1940
(in which case, charges and expenses that otherwise would be assessed
against an underlying mutual fund would be assessed against Separate
Account No. 49 or a variable investment option directly);
(5) to deregister Separate Account No. 49 under the Investment Company Act of
1940;
(6) to restrict or eliminate any voting rights as to Separate Account No. 49;
and
(7) to cause one or more variable investment options to invest some or all of
their assets in one or more other trusts or investment companies.
ABOUT EQ ADVISORS TRUST
EQ Advisors Trust is registered under the Investment Company Act of 1940. It
is classified as an "open-end management investment company," more commonly
called a mutual fund. EQ Advisors Trust issues different shares relating to
each portfolio.
Equitable Life serves as the investment manager of EQ Advisors Trust. As such,
Equitable Life oversees the activities of the investment advisers with respect
to EQ Advisors Trust and is responsible for retaining or discontinuing the
services of those advisers. (Prior to September 1999 EQ Financial Consultants,
Inc., the predecessor to AXA Advisors, LLC and an affiliate of Equitable Life,
served as investment manager to EQ Advisors Trust.)
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999 the Alliance portfolios (other than EQ/Alliance Premier
Growth) were part of The Hudson River Trust. On October 18, 1999, these
portfolios became corresponding portfolios of EQ Advisors Trust.
EQ Advisors Trust does not impose sales charges or "loads" for buying and
selling its shares. All dividends and other distributions on Trust shares are
reinvested in full. The Board of Trustees of EQ Advisors Trust may establish
additional portfolios or eliminate existing portfolios at any time. More
detailed information about EQ Advisors Trust, the portfolio investment
objectives, policies, restrictions, risks, expenses, the Rule 12b-1 Plan
relating to its Class IB shares, and other aspects of its operations, appears
in the prospectus for EQ Advisors Trust attached at the end of this
prospectus, or in its SAI which is available upon request.
<PAGE>
60 More information
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ABOUT THE GENERAL ACCOUNT
Our general account supports all of our policy and contract guarantees, as
well as our general obligations. Credits allocated to your account value are
funded from our general account.
The general account is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations
of all jurisdictions where we are authorized to do business. Because of
exemptions and exclusionary provisions that apply, interests in the general
account have not been registered under the Securities Act of 1933, nor is the
general account an investment company under the Investment Company Act of
1940.
We have been advised that the staff of the SEC has not reviewed the portions
of this prospectus that relate to the general account. The disclosure with
regard to the general account, however, may be subject to certain provisions
of the federal securities laws relating to the accuracy and completeness of
statements made in prospectuses.
ABOUT OTHER METHODS OF PAYMENT
WIRE TRANSMITTALS
We accept initial contributions sent by wire to our processing office by
agreement with certain broker-dealers. The transmittals must be accompanied by
information we require to allocate your contribution. Wire orders not
accompanied by complete information may be retained as described under "How
you can make your contributions" under "Contract features and benefits."
Even if we accept the wire order and essential information, a contract
generally will not be issued until we receive and accept a properly completed
application. In certain cases we may issue a contract based on information
forwarded electronically. In these cases, you must sign our Acknowledgement of
Receipt form.
Where we require a signed application, no financial transactions will be
permitted until we receive the signed application and have issued the
contract. Where we require an Acknowledgement of Receipt form, financial
transactions are only permitted if you request them in writing, sign the
request and have it signature guaranteed, until we receive the signed
Acknowledgement of Receipt form.
After your contract has been issued, additional contributions may be
transmitted by wire.
AUTOMATIC INVESTMENT PROGRAM - FOR NQ CONTRACTS ONLY
You may use our automatic investment program, or "AIP," to have a specified
amount automatically deducted from a checking account, money market account,
or credit union checking account and contributed as an additional contribution
into an NQ contract on a monthly or quarterly basis. AIP is not available for
Rollover IRA, Roth Conversion IRA, QP contracts, or Rollover TSA contracts.
The minimum amounts we will deduct are $100 monthly and $300 quarterly. AIP
additional contributions may be allocated to any of the variable investment
options. You choose the day of the month you wish to have your account
debited. However, you may not choose a date later than the 28th day of the
month.
You may cancel AIP at any time by notifying our processing office. We are not
responsible for any debits made to your account before the time written notice
of cancellation is received at our processing office.
DATES AND PRICES AT WHICH CONTRACT EVENTS OCCUR
We describe below the general rules for when, and at what prices, events under
your contract will occur. Other portions of this prospectus describe
circumstances that may cause exceptions. We generally do not repeat those
exceptions below.
BUSINESS DAY
Our business day is any day the New York Stock Exchange is open for trading.
Our business day generally ends at 4:00 p.m., Eastern Time for purposes of
determining the
<PAGE>
More information 61
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date when contributions are applied and any other transaction requests are
processed. We may, however, close due to emergency conditions. Contributions
will be applied and any other transaction requests will be processed when they
are received along with all the required information.
o If your contribution, transfer, or any other transaction request,
containing all the required information, reaches us on a non-business day
or after 4:00 p.m. on a business day, we will use the next business day.
o A loan request under your Rollover TSA contract will be processed on the
first business day of the month following the date on which the properly
completed loan request form is received.
o If your transaction is set to occur on the same day of the month as the
contract date and that date is the 29th, 30th or 31st of the month, then
the transaction will occur on the 1st day of the next month.
o When a charge is to be deducted on a contract date anniversary that is a
non-business day, we will deduct the charge on the next business day.
CONTRIBUTIONS, CREDITS, AND TRANSFERS
o Contributions and credits allocated to the variable investment options are
invested at the value next determined after the close of the business day.
o Transfers to or from variable investment options will be made at the value
next determined after the close of the business day.
ABOUT YOUR VOTING RIGHTS
As the owner of the shares of EQ Advisors Trust we have the right to vote on
certain matters involving the portfolios, such as:
o the election of trustees;
o the formal approval of independent auditors selected for EQ Advisors Trust;
or
o any other matters described in the prospectus for EQ Advisors Trust or
requiring a shareholders' vote under the Investment Company Act of 1940.
We will give contract owners the opportunity to instruct us how to vote the
number of shares attributable to their contracts if a shareholder vote is
taken. If we do not receive instructions in time from all contract owners, we
will vote the shares of a portfolio for which no instructions have been
received in the same proportion as we vote shares of that portfolio for which
we have received instructions. We will also vote any shares that we are
entitled to vote directly because of amounts we have in a portfolio in the
same proportions that contract owners vote.
VOTING RIGHTS OF OTHERS
Currently, we control EQ Advisors Trust. EQ Advisors Trust shares are sold to
our separate accounts and an affiliated qualified plan trust. In addition, EQ
Advisors Trust shares are held by separate accounts of insurance companies
both affiliated and unaffiliated with us. Shares held by these separate
accounts will probably be voted according to the instructions of the owners of
insurance policies and contracts issued by those insurance companies. While
this will dilute the effect of the voting instructions of the contract owners,
we currently do not foresee any disadvantages because of this. The Board of
Trustees of EQ Advisors Trust intends to monitor events in order to identify
any material irreconcilable conflicts that may arise and to determine what
action, if any, should be taken in response. If we believe that a response to
any of those events insufficiently protects our contract owners, we will see
to it that appropriate action is taken.
SEPARATE ACCOUNT NO. 49 VOTING RIGHTS
If actions relating to Separate Account No. 49 require contract owner
approval, contract owners will be entitled to one vote for each unit they have
in the variable investment options. Each contract owner who has elected a
variable annuity payout option may cast the number of votes equal to the
dollar amount of reserves we are holding for that annuity in a variable
investment option divided by the annuity unit value for that option. We will
cast votes attributable to any
<PAGE>
62 More information
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amounts we have in the variable investment options in the same proportion as
votes cast by contract owners.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under applicable
federal securities laws. To the extent that those laws or the regulations
published under those laws eliminate the necessity to submit matters for
approval by persons having voting rights in separate accounts of insurance
companies, we reserve the right to proceed in accordance with those laws or
regulations.
ABOUT LEGAL PROCEEDINGS
Equitable Life and its affiliates are parties to various legal proceedings. In
our view, none of these proceedings is likely to have a material adverse effect
upon Separate Account No. 49, our ability to meet our obligations under the
contracts, or the distribution of the contracts.
ABOUT OUR INDEPENDENT ACCOUNTANTS
The consolidated financial statements of Equitable Life at December 31, 1999
and 1998, and for the three years ended December 31, 1999 incorporated in this
prospectus by reference to the 1999 Annual Report on Form 10-K are
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
FINANCIAL STATEMENTS
The financial statements of Separate Account No. 49, as well as consolidated
financial statements of Equitable Life, are in the SAI. The SAI is available
free of charge. You may request one by writing to our processing office or
calling 1-800-789-7771.
TRANSFERS OF OWNERSHIP, COLLATERAL ASSIGNMENTS, LOANS, AND BORROWING
You can transfer ownership of an NQ contract at any time before annuity
payments begin. We will continue to treat you as the owner until we receive
written notification of any change at our processing office. You cannot assign
your NQ contract as collateral or security for a loan. Loans are also not
available under your NQ contract. In some cases, an assignment or change of
ownership may have adverse tax consequences. See "Tax information" earlier in
this prospectus.
You cannot assign or transfer ownership of a Rollover IRA, Roth Conversion
IRA, QP or Rollover TSA contract except by surrender to us. Loans are not
available and you cannot assign Rollover IRA, Roth Conversion IRA, and QP
contracts as security for a loan or other obligation. If the employer that
provided the funds does not restrict them, loans are available under a
Rollover TSA contract.
For limited transfers of ownership after the owner's death see "Beneficiary
continuation option" in "Payment of death benefit" earlier in this prospectus.
You may direct the transfer of the values under your Rollover IRA, Roth
Conversion IRA, QP or Rollover TSA contract to another similar arrangement
under federal income tax rules. In the case of such a transfer, we will impose
a withdrawal charge, if one applies.
DISTRIBUTION OF THE CONTRACTS
Equitable Distributors, Inc. ("EDI"), an indirect, wholly owned subsidiary of
Equitable Life, is the distributor of the contracts and has responsibility for
sales and marketing functions for Separate Account No. 49. EDI serves as the
principal underwriter of Separate Account No. 49. EDI is registered with the
SEC as a broker-dealer and is a member of the National Association of
Securities Dealers, Inc. EDI's principal business address is 1290 Avenue of
the Americas, New York, New York 10104. Under a distribution agreement between
EDI, Equitable Life, and certain of Equitable Life's separate accounts,
including Separate Account No. 49, Equitable Life paid EDI distribution fees
of $46,957,345 for 1999, $35,452,793 for 1998 and $9,566,343 for 1997 as the
Distributor of certain contracts and as the principal underwriter of several
Equitable Life separate accounts, including Separate Account No. 49.
<PAGE>
More information 63
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The contracts will be sold by registered representatives of EDI, as well as by
affiliated and unaffiliated broker-dealers with which EDI has entered into
selling agreements. We pay broker-dealer sales compensation that will not
exceed an amount equal to 7% annually of the account value on a contract date
anniversary. EDI may also receive compensation and reimbursement for its
marketing services under the terms of its distribution agreement with
Equitable Life. Broker- dealers receiving sales compensation will generally
pay a portion of it to their registered representatives as commissions related
to sales of the contracts. The offering of the contracts is intended to be
continuous.
<PAGE>
64 Investment performance
9
Investment performance
- --------------------------------------------------------------------------------
We provide the following tables to show five different measurements of the
investment performance of the variable investment options and/or the
portfolios in which they invest. We include these tables because they may be
of general interest to you.
Table 1 shows the average annual total return of the variable investment
options. Average annual total return is the annual rate of growth that would
be necessary to achieve the ending value of a contribution plus the 4% credit
invested in the variable investment options for the periods shown.
Table 2 shows the growth of a hypothetical $1,000 investment plus a $40 credit
in the variable investment options over the periods shown. Both Tables 1 and 2
take into account all current fees and charges under the contract, but do not
reflect the charges designed to approximate certain taxes imposed on us, such
as premium taxes in your state or any applicable annuity administrative fee.
Tables 3, 4, and 5 show the rates of return of the variable investment options
on an annualized, cumulative, and year-by-year basis. These tables take into
account all current fees and charges under the contract, but do not reflect
the withdrawal charge or any charges designed to approximate certain taxes
imposed on us, such as premium taxes in your state, or any applicable annuity
administrative fee. If the charges were reflected they would effectively
reduce the rates of return shown. The credit is not included.
In all cases the results shown are based on the actual historical investment
experience of the portfolios in which the variable investment options invest.
In some cases, the results shown relate to periods when the variable
investment options and/or contracts were not available. In those cases, we
adjusted the results of the portfolios to reflect the charges under the
contracts that would have applied had the variable investment options and/or
contracts been available. The contracts are being offered for the first time
in 1999.
For the "Alliance" portfolios (other than EQ/Alliance Premier Growth), we have
adjusted the results prior to October 1996, when Class IB shares for these
portfolios were not available, to reflect the 12b-1 fees currently imposed.
Finally, the results shown for the Alliance Money Market and Alliance Common
Stock options for periods before March 22, 1985 reflect the results of the
variable investment options that preceded them. The "Since portfolio
inception" figures for these options are based on the date of inception of the
preceding variable investment options. We have adjusted these results to
reflect the maximum investment advisory fee payable for the portfolios, as
well as an assumed charge of 0.06% for direct operating expenses.
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999 the Alliance portfolios (other than EQ/Alliance Premier
Growth) were part of The Hudson River Trust. On October 18, 1999, these
portfolios became corresponding portfolios of EQ Advisors Trust. In each case,
the performance shown is for the indicated EQ Advisors Trust portfolio and any
predecessor that it may have had.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends.
From time to time, we may advertise different measurements of the investment
performance of the variable investment options and/or the portfolios,
including the measurements reflected in the tables below. We will indicate
that the 4% credit is reflected when we show performance numbers that give
effect to the credit.
THE PERFORMANCE INFORMATION SHOWN BELOW AND THE PERFORMANCE INFORMATION THAT
WE ADVERTISE REFLECT PAST PERFORMANCE AND DOES NOT INDICATE HOW THE VARIABLE
INVESTMENT OPTIONS MAY PERFORM IN THE FUTURE. SUCH INFORMATION ALSO DOES NOT
REPRESENT THE RESULTS EARNED BY ANY PARTICULAR INVESTOR. YOUR RESULTS WILL
DIFFER.
BENCHMARKS
Tables 3 and 4 compare the performance of variable investment options to
market indices that serve as benchmarks. Market indices are not subject to any
charges
<PAGE>
Investment performance 65
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for investment advisory fees, brokerage commission or other operating expenses
typically associated with a managed portfolio. Also, they do not reflect other
contract charges such as the mortality and expense risks charge,
administrative charge, distribution charge, or any withdrawal charge.
Comparisons with these benchmarks, therefore, may be of limited use. We
include them because they are widely known and may help you to understand the
universe of securities from which each portfolio is likely to select its
holdings. Benchmark data reflect the reinvestment of dividend income. The
benchmarks include:
<TABLE>
<S> <C>
EQ/AGGRESSIVE STOCK: 50% Russell 2000 Index and 50% Standard
& Poor's Mid-Cap Total Return Index.
ALLIANCE COMMON STOCK: Standard & Poor's 500 Index.
ALLIANCE HIGH YIELD: Benchmark #1 - Merrill Lynch High Yield
Master Index and Benchmark #2 - Credit Suisse First Boston
Global High Index.
ALLIANCE MONEY MARKET: Salomon Brothers Three-Month T-Bill
Index.
EQ/ALLIANCE PREMIER GROWTH: Standard & Poor's 500 Index.
ALLIANCE SMALL CAP GROWTH: Russell 2000 Growth Index.
EQ/ALLIANCE TECHNOLOGY: Lipper Specialty Funds Average.
BT EQUITY 500 INDEX: Standard & Poor's 500 Index.
BT INTERNATIONAL EQUITY INDEX: Morgan Stanley Capital
International Europe, Australia, Far East Index.
BT SMALL COMPANY INDEX: Russell 2000 Index.
CAPITAL GUARDIAN INTERNATIONAL: Morgan Stanley Capital
International Europe, Australia, Far East Index.
CAPITAL GUARDIAN RESEARCH: Standard & Poor's 500 Index.
CAPITAL GUARDIAN U.S. EQUITY: Standard & Poor's 500 Index.
EQ/EVERGREEN: Benchmark #1 - Russell 2000 Index and
Benchmark #2 - Standard & Poor's 500 Index.
EQ/EVERGREEN FOUNDATION: 60% Standard & Poor's 500
Index/40% Lehman Brothers Aggregate Bond Index.
J.P. MORGAN CORE BOND: Salomon Brothers Broad Investment
Grade Bond.
LAZARD LARGE CAP VALUE: Standard & Poor's 500 Index.
LAZARD SMALL CAP VALUE: Russell 2000 Index.
MFS EMERGING GROWTH COMPANIES: Russell 2000 Index.
MFS GROWTH WITH INCOME: Standard & Poor's 500 Index.
MFS RESEARCH: Standard & Poor's 500 Index.
MERCURY BASIC VALUE EQUITY: Standard & Poor's 500 Index.
MERCURY WORLD STRATEGY: 36% Standard & Poor's 500 Index/24%
Morgan Stanley Capital International Europe, Australia, Far East
Index/21% Salomon Brothers U.S. Treasury Bond 1 Year+ 14%
Salomon Brothers World Government Bond (excluding U.S.)/and
5% Three-Month U.S. Treasury Bill.
MORGAN STANLEY EMERGING MARKETS EQUITY: Morgan Stanley
Capital International Emerging Markets Free Price Return Index.
EQ/PUTNAM GROWTH & INCOME VALUE: Standard & Poor's 500
Index.
EQ/PUTNAM INTERNATIONAL EQUITY: Morgan Stanley Capital
International Europe, Australia and Far East Index.
EQ/PUTNAM INVESTORS GROWTH: Standard & Poor's 500 Index.
</TABLE>
LIPPER SURVEY. The Lipper Variable Insurance Products Performance Analysis
Survey (Lipper Survey) records the performance of a large group of variable
annuity products, including managed separate accounts of insurance companies.
According to Lipper Analytical Services, Inc. (Lipper), the data are presented
net of investment management fees, direct operating expenses and asset-based
charges applicable under annuity contracts. Lipper data provide a more
accurate picture than market benchmarks of the Equitable Accumulator Plus
performance relative to other variable annuity products.
<PAGE>
66 Investment performance
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TABLE 1
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 1999:+
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
LENGTH OF INVESTMENT PERIOD
--------------------------------------------------------------------------
SINCE SINCE
1 3 5 10 OPTION PORTFOLIO
VARIABLE INVESTMENT OPTIONS YEAR YEARS YEARS YEARS INCEPTION* INCEPTION**
- ---------------------------- --------- --------- -------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
EQ/Aggressive Stock 13.32% 7.12% 14.44% 14.96% 7.08% 15.99%
Alliance Common Stock 19.81% 25.76% 26.31% 16.86% 26.10% 14.78%
Alliance High Yield (9.34)% (0.06)% 7.96% 8.62% 1.03% 7.67%
Alliance Money Market (0.83)% 2.49% 3.37% 3.63% 2.88% 5.22%
Alliance Small Cap Growth 22.60% - - - 15.44% 15.44%
BT Equity 500 Index 15.12% - - - 19.83% 19.83%
BT International Equity Index 22.45% - - - 20.89% 20.89%
BT Small Company Index 15.55% - - - 5.25% 5.25%
EQ/Evergreen 4.29% - - - 4.29% 4.29%
EQ/Evergreen Foundation 1.87% - - - 1.87% 1.87%
J.P. Morgan Core Bond (7.30)% - - - 0.02% 0.02%
Lazard Large Cap Value (2.05)% - - - 8.25% 8.25%
Lazard Small Cap Value (3.89)% - - - (6.62)% (6.62)%
MFS Emerging Growth Companies 69.74% - - - 46.68% 46.68%
MFS Growth with Income 3.26% - - - 3.26% 3.26%
MFS Research 18.00% - - - 21.90% 21.90%
Mercury Basic Value Equity 13.72% - - - 15.75% 15.75%
Mercury World Strategy 16.18% - - - 9.75% 9.75%
Morgan Stanley Emerging Markets Equity 92.32% - - - 16.56% 2.96%
EQ/Putnam Growth & Income Value (7.06)% - - - 7.68% 7.68%
EQ/Putnam International Equity 56.00% - - - 30.14% 30.14%
EQ/Putnam Investors Growth 25.31% - - - 32.87% 32.87%
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
+ If you start receiving annuity payments within three years of making an
additional contribution we will recover the amount of any credit that
applied to that contribution.
* The variable investment option inception dates are: Alliance Money
Market, Alliance High Yield, Alliance Common Stock and EQ/Aggressive
Stock (October 16, 1996); Alliance Small Cap Growth, MFS Research, MFS
Emerging Growth Companies, Mercury Basic Value Equity, and Mercury World
Strategy, EQ/Putnam Growth & Income Value, EQ/Putnam International
Equity, and EQ/Putnam Investors Growth (May 1, 1997); BT Equity 500
Index, BT Small Company Index, BT International Equity Index, JP Morgan
Core Bond, Lazard Large Cap Value, Lazard Small Cap Value, Morgan Stanley
Emerging Markets Equity (December 31, 1997) and EQ/Evergreen,
EQ/Evergreen Foundation, and MFS Growth with Income (December 31, 1998).
The inception dates for the variable investment options that became
available less than one year ago, and are therefore not shown in this
table are: EQ/Alliance Premier Growth, Capital Guardian U.S. Equity,
Capital Guardian Research, and Capital Guardian International (April 30,
1999) and EQ/Alliance Technology (May 1, 2000).
<PAGE>
Investment performance 67
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** The inception dates for the portfolios underlying the Alliance variable
investment options shown in the tables are for portfolios of The Hudson
River Trust, the assets of which became assets of corresponding
portfolios of EQ Advisors Trust on October 18, 1999. The portfolio
inception dates are: Alliance Money Market (July 13, 1981); Alliance High
Yield (January 2, 1987); Alliance Common Stock (January 13, 1976);
EQ/Aggressive Stock (January 27, 1986); Alliance Small Cap Growth, MFS
Research, MFS Emerging Growth Companies, Mercury Basic Value Equity, and
Mercury World Strategy, EQ/Putnam Growth & Income Value, EQ/Putnam
International Equity, EQ/Putnam Investors Growth (May 1, 1997); Morgan
Stanley Emerging Markets Equity (August 20, 1997); BT Equity 500 Index,
BT Small Company Index, BT International Equity Index, JPM Core Bond,
Lazard Large Cap Value, and Lazard Small Cap Value (January 1, 1998); and
EQ/Evergreen, EQ/Evergreen Foundation, and MFS Growth with Income
(December 31, 1998). The inception dates for the portfolios that became
available after December 31, 1998 and are therefore not shown in the
tables are: EQ/Alliance Premier Growth, Capital Guardian U.S. Equity,
Capital Guardian Research, and Capital Guardian International (April 30,
1999); EQ/Alliance Technology (May 1, 2000).
<PAGE>
68 Investment performance
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TABLE 2
GROWTH OF $1,040 UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 1999:+
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
LENGTH OF INVESTMENT PERIOD
----------------------------------------------------------------------
SINCE
1 3 5 10 PORTFOLIO
VARIABLE INVESTMENT OPTIONS YEAR YEARS YEARS YEARS INCEPTION*
- ---------------------------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
EQ/Aggressive Stock $ 1,133.16 $ 1,229.11 $ 1,963.11 $ 4,031.00 $ 7,893.17
Alliance Common Stock $ 1,198.06 $ 1,988.79 $ 3,214.66 $ 4,750.89 $ 27,177.91
Alliance High Yield $ 906.65 $ 998.11 $ 1,466.27 $ 2,285.78 $ 2,611.16
Alliance Money Market $ 991.72 $ 1,076.72 $ 1,180.41 $ 1,428.90 $ 2,558.95
Alliance Small Cap Growth $ 1,226.03 - - - $ 1,467.04
BT Equity 500 Index $ 1,151.15 - - - $ 1,435.92
BT International Equity Index $ 1,224.47 - - - $ 1,461.50
BT Small Company Index $ 1,155.52 - - - $ 1,107.70
EQ/Evergreen $ 1,042.89 - - - $ 1,042.89
EQ/Evergreen Foundation $ 1,018.66 - - - $ 1,018.66
J.P. Morgan Core Bond $ 927.03 - - - $ 1,000.34
Lazard Large Cap Value $ 979.55 - - - $ 1,171.76
Lazard Small Cap Value $ 961.14 - - - $ 872.03
MFS Emerging Growth Companies $ 1,697.36 - - - $ 2,779.33
MFS Growth with Income $ 1,032.59 - - - $ 1,032.59
MFS Research $ 1,179.96 - - - $ 1,696.39
Mercury Basic Value Equity $ 1,137.22 - - - $ 1,477.27
Mercury World Strategy $ 1,161.76 - - - $ 1,281.94
Morgan Stanley Emerging Markets Equity $ 1,923.25 - - - $ 1,071.33
EQ/Putnam Growth & Income Value $ 929.42 - - - $ 1,218.31
EQ/Putnam International Equity $ 1,559.98 - - - $ 2,019.90
EQ/Putnam Investors Growth $ 1,253.07 - - - $ 2,134.70
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
+ If you start receiving annuity payments within three years of making an
additional contribution we will recover the amount of any credit that
applied to that contribution.
* Portfolio inception dates are shown in Table 1.
<PAGE>
Investment performance 69
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TABLE 3
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
------ ------- ------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
EQ/AGGRESSIVE STOCK 16.65% 7.69% 14.12% 14.51% - 15.67%
Lipper Mid-Cap Growth 51.65% 24.68% 19.97% 14.78% - 15.86%
Benchmark 18.09% 17.48% 19.92% 15.41% - 14.58%
ALLIANCE COMMON STOCK 22.89% 25.56% 25.70% 16.41% 16.21% 14.59%
Lipper Growth 29.78% 26.87% 25.55% 16.90% 15.83% 15.16%
Benchmark 21.03% 27.56% 28.56% 18.21% 17.88% 16.19%
ALLIANCE HIGH YIELD (5.13)% 0.90% 7.83% 8.19% - 7.34%
Lipper High Current Yield 3.65% 4.82% 8.59% 9.61% - 7.79%
Benchmark #1 1.57% 5.91% 9.61% 10.79% - 9.99%
Benchmark #2 3.28% 5.37% 9.07% 11.06% - 10.04%
ALLIANCE MONEY MARKET 3.05% 3.31% 3.42% 3.23% - 5.00%
Lipper Money Market 3.78% 4.05% 4.16% 3.96% - 5.70%
Benchmark 4.74% 5.01% 5.20% 5.06% - 6.65%
ALLIANCE SMALL CAP GROWTH 25.58% - - - - 15.77%
Lipper Small Company Growth 34.26% - - - - 19.49%
Benchmark 43.09% - - - - 25.88%
BT EQUITY 500 INDEX 18.38% - - - - 20.73%
Lipper S&P 500 Index 19.36% - - - - 23.16%
Benchmark 21.03% - - - - 24.76%
BT INTERNATIONAL EQUITY INDEX 25.43% - - - - 21.75%
Lipper International 43.24% - - - - 26.76%
Benchmark 26.96% - - - - 23.43%
BT SMALL COMPANY INDEX 18.80% - - - - 6.86%
Lipper Small Cap 34.26% - - - - 16.02%
Benchmark 21.26% - - - - 8.70%
EQ/EVERGREEN 7.97% 7.97%
Lipper Balanced 29.78% - - - - 29.78%
Benchmark #1 21.26% - - - - 21.26%
Benchmark #2 21.03% - - - - 21.03%
EQ/EVERGREEN FOUNDATION 5.64% - - - - 5.64%
Lipper Balanced 8.69% - - - - 8.69%
Benchmark 11.15% - - - - 11.15%
J.P. MORGAN CORE BOND (3.17)% - - - - 1.92%
Lipper Intermediate Investment Grade Debt (0.83)% - - - - 3.84%
Benchmark (1.77)% - - - - 2.64%
LAZARD LARGE CAP VALUE 1.88% - - - - 9.71%
Lipper Capital Appreciation 43.66% - - - - 32.61%
Benchmark 21.03% - - - - 24.76%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
70 Investment performance
- --------------------------------------------------------------------------------
TABLE 3 (CONTINUED)
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
------ ------- ------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
LAZARD SMALL CAP VALUE ......... 0.11% - - - - (4.32)%
Lipper Small Cap ............... 34.26% - - - - 16.02%
Benchmark ...................... 21.26% - - - - 8.70%
MFS EMERGING GROWTH COMPANIES .. 70.90% - - - - 45.89%
Lipper Mid-Cap ................. 51.65% - - - - 32.50%
Benchmark ...................... 21.26% - - - - 16.99%
MFS GROWTH WITH INCOME ......... 6.98% - - - - 6.98%
Lipper Growth & Income ........ 12.90% - - - - 12.90%
Benchmark ..................... 21.03% - - - - 21.03%
MFS RESEARCH ................... 21.15% - - - - 21.96%
Lipper Growth .................. 29.78% - - - - 29.33%
Benchmark ...................... 21.03% - - - - 27.36%
MERCURY BASIC VALUE EQUITY ..... 17.04% - - - - 16.05%
Lipper Growth & Income ......... 12.90% - - - - 18.00%
Benchmark ...................... 21.03% - - - - 27.36%
MERCURY WORLD STRATEGY ......... 19.40% - - - - 10.33%
Lipper Global Flexible Portfolio 12.93% - - - - 11.91%
Benchmark ...................... 13.07% - - - - 16.18%
MORGAN STANLEY EMERGING MARKETS
EQUITY ........................ 92.62% - - - - 4.01%
Lipper Emerging Markets ........ 82.53% - - - - 2.90%
Benchmark ...................... 66.41% - - - (0.88)%
EQ/PUTNAM GROWTH & INCOME VALUE (2.94)% - - - - 8.35%
Lipper Growth & Income ........ 12.90% - - - - 18.00%
Benchmark ..................... 21.03% - - - - 27.36%
EQ/PUTNAM INTERNATIONAL EQUITY . 57.69% - - - - 29.89%
Lipper International .......... 43.24% - - - - 20.38%
Benchmark ..................... 26.96% - - - - 18.32%
EQ/PUTNAM INVESTORS GROWTH ..... 28.18% - - - - 32.52%
Lipper Growth ................. 29.78% - - - - 29.33%
Benchmark ..................... 21.03% - - - - 27.36%
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
- ------------
* Portfolio inception dates are shown in Table 1. Lipper survey and
benchmark "Since portfolio inception" information is as of the month-end
closest to actual date of portfolio inception.
<PAGE>
- -----
Investment performance 71
- --------------------------------------------------------------------------------
TABLE 4
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS
------ ------- -------
<S> <C> <C> <C>
EQ/AGGRESSIVE STOCK 16.65% 24.90% 93.56%
Lipper Mid-Cap Growth 51.65% 102.87% 158.98%
Benchmark 18.09% 62.12% 147.96%
ALLIANCE COMMON STOCK 22.89% 97.94% 213.88%
Lipper Growth 29.78% 106.30% 216.51%
Benchmark 21.04% 107.56% 251.12%
ALLIANCE HIGH YIELD (5.13)% 2.71% 45.81%
Lipper High Current Yield 3.65% 15.25% 51.19%
Benchmark #1 1.57% 18.80% 58.22%
Benchmark #2 3.28% 17.00% 54.39%
ALLIANCE MONEY MARKET 3.05% 10.26% 18.30%
Lipper Money Market 3.78% 12.64% 22.65%
Benchmark 4.74% 15.79% 28.88%
ALLIANCE SMALL CAP GROWTH 25.58% - -
Lipper Small Company Growth 34.26% - -
Benchmark 43.09% - -
BT EQUITY 500 INDEX 18.38% - -
Lipper S&P 500 Index 19.36% - -
Benchmark 21.03% - -
BT INTERNATIONAL EQUITY INDEX 25.43% - -
Lipper International 43.24% - -
Benchmark 26.96% - -
BT SMALL COMPANY INDEX 18.80% - -
Lipper Small Cap 34.26% - -
Benchmark 21.26% - -
EQ/EVERGREEN 7.97% - -
Lipper Balanced 29.78% - -
Benchmark #1 21.26% - -
Benchmark #2 21.03% - -
EQ/EVERGREEN FOUNDATION 5.64% - -
Lipper Balanced 8.69% - -
Benchmark 11.15% - -
J.P. MORGAN CORE BOND (3.17)% - -
Lipper Intermediate Investment Grade Debt (0.83)% - -
Benchmark (1.77)% - -
LAZARD LARGE CAP VALUE 1.88% - -
Lipper Capital Appreciation 43.66% - -
Benchmark 21.03% - -
- -------------------------------------------------------------------------------------
<CAPTION>
- ----------------------------------------------------------------------------------------
SINCE
PORTFOLIO
10 YEARS 20 YEARS INCEPTION*
-------- -------- ----------
<S> <C> <C> <C>
EQ/AGGRESSIVE STOCK 287.60% - 658.94%
Lipper Mid-Cap Growth 311.69% - 683.45%
Benchmark 319.19% - 595.55%
ALLIANCE COMMON STOCK 356.81% 1,916.29% 2,513.58%
Lipper Growth 386.68% 1,816.52% 2,838.39%
Benchmark 432.78% 2,584.39% 3,555.48%
ALLIANCE HIGH YIELD 119.82% - 151.11%
Lipper High Current Yield 151.82% - 166.74%
Benchmark #1 178.72% - 245.03%
Benchmark #2 185.43% - 246.92%
ALLIANCE MONEY MARKET 37.39% - 146.07%
Lipper Money Market 47.52% - 178.18%
Benchmark 63.79% - 229.35%
ALLIANCE SMALL CAP GROWTH - - 47.80%
Lipper Small Company Growth - - 62.98%
Benchmark - - 84.91%
BT EQUITY 500 INDEX - - 45.76%
Lipper S&P 500 Index - - 51.69%
Benchmark - - 55.65%
BT INTERNATIONAL EQUITY INDEX - - 48.22%
Lipper International - - 61.58%
Benchmark - - 52.35%
BT SMALL COMPANY INDEX - - 14.20%
Lipper Small Cap - - 37.82%
Benchmark - - 18.17%
EQ/EVERGREEN - - 7.97%
Lipper Balanced - - 29.78%
Benchmark #1 - - 21.26%
Benchmark #2 - - 21.03%
EQ/EVERGREEN FOUNDATION - - 5.64%
Lipper Balanced - - 8.69%
Benchmark - - 11.15%
J.P. MORGAN CORE BOND - - 3.88%
Lipper Intermediate Investment Grade Debt - - 7.83%
Benchmark - - 5.96%
LAZARD LARGE CAP VALUE - - 20.36%
Lipper Capital Appreciation - - 79.44%
Benchmark - - 55.65%
- ----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
72 Investment performance
- --------------------------------------------------------------------------------
TABLE 4 (CONTINUED)
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
------ ------- ------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
LAZARD SMALL CAP VALUE ......... 0.11% - - - - (8.45)%
Lipper Small Cap ............... 34.26% - - - - 37.82%
Benchmark ...................... 21.26% - - - - 18.17%
MFS EMERGING GROWTH COMPANIES .. 70.90% - - - - 173.96%
Lipper Mid-Cap ................. 51.65% - - - - 120.85%
Benchmark ...................... 21.26% - - - - 52.05%
MFS GROWTH WITH INCOME ......... 6.98% - - - - 6.98%
Lipper ......................... 12.90% - - - - 12.90%
Benchmark ...................... 21.03% - - - - 21.03%
MFS RESEARCH ................... 21.15% - - - - 69.84%
Lipper Growth .................. 29.78% - - - - 101.13%
Benchmark ...................... 21.03% - - - - 90.75%
MERCURY BASIC VALUE EQUITY ..... 17.04% - - - - 48.77%
Lipper Growth & Income ......... 12.90% - - - - 56.85%
Benchmark ...................... 21.03% - - - - 90.75%
MERCURY WORLD STRATEGY ......... 19.40% - - - - 30.00%
Lipper Global Flexible Portfolio 12.93% - - - - 35.69%
Benchmark ...................... 13.07% - - - - 49.16%
MORGAN STANLEY EMERGING MARKETS
EQUITY ........................ 92.62% - - - - 9.74%
Lipper Emerging Markets ........ 82.53% - - - - 7.48%
Benchmark ...................... 66.41% - - - - 5.32%
EQ/PUTNAM GROWTH & INCOME VALUE (2.94)% - - - - 23.87%
Lipper ......................... 12.90% - - - - 56.85%
Benchmark ...................... 21.03% - - - - 90.75%
EQ/PUTNAM INTERNATIONAL EQUITY . 57.69% - - - - 100.96%
Lipper ......................... 43.24% - - - - 65.44%
Benchmark ...................... 26.96% - - - - 56.70%
EQ/PUTNAM INVESTORS GROWTH ..... 28.18% - - - - 111.99%
Lipper ......................... 29.78% - - - - 101.13%
Benchmark ...................... 21.03% - - - - 90.75%
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
* Portfolio inception dates are shown in Table 1. Lipper survey and
benchmark information are as of the month-end closest to the actual date
of portfolio inception.
<PAGE>
- -----
Investment performance 73
- --------------------------------------------------------------------------------
TABLE 5
YEAR-BY-YEAR RATES OF RETURN:
<TABLE>
- --------------------------------------------------------------------------------------------------------
1990 1991 1992 1993 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
EQ/Aggressive Stock 6.16% 83.43% (4.95)% 14.59% (5.59)%
Alliance Common Stock (9.82)% 35.34% 1.31% 22.52% (3.94)%
Alliance High Yield (2.95)% 22.17% 10.23% 20.88% (4.58)%
Alliance Money Market 6.23% 4.23% 1.65% 1.06% 2.10%
Alliance Small Cap Growth - - - - -
BT Equity 500 Index - - - - -
BT International Equity Index - - - - -
BT Small Company Index - - - - -
EQ/Evergreen
EQ/Evergreen Foundation
JP Morgan Core Bond - - - - -
Lazard Large Cap Value - - - - -
Lazard Small Cap Value - - - - -
MFS Emerging Growth Companies - - - - -
MFS Growth with Income
MFS Research - - - - -
Mercury Basic Value Equity - - - - -
Mercury World Strategy - - - - -
Morgan Stanley Emerging Markets Equity - - - - -
EQ/Putnam Growth & Income Value
EQ/Putnam International Equity
EQ/Putnam Investors Growth
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
1995 1996 1997 1998 1999
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
EQ/Aggressive Stock 29.21% 19.93% 8.77% (1.55)% 16.65%
Alliance Common Stock 30.01% 21.97% 26.84% 27.00% 22.89%
Alliance High Yield 17.71% 20.60% 16.28% (6.90)% (5.13)%
Alliance Money Market 3.80% 3.37% 3.48% 3.40% 3.05%
Alliance Small Cap Growth - - 25.16%+ (5.97)% 25.58%
BT Equity 500 Index - - - 23.13% 18.38%
BT International Equity Index - - - 18.17% 25.43%
BT Small Company Index - - - (3.87)% 18.80%
EQ/Evergreen 7.97%
EQ/Evergreen Foundation 5.64%
JP Morgan Core Bond - - - 7.28% (3.17)%
Lazard Large Cap Value - - - 18.14% 1.88%
Lazard Small Cap Value - - - (8.56)% 0.11%
MFS Emerging Growth Companies - - 21.11%+ 32.37% 70.90%
MFS Growth with Income 6.98%
MFS Research - - 14.80%+ 22.12% 21.15%
Mercury Basic Value Equity - - 15.77%+ 9.80% 17.04%
Mercury World Strategy - - 3.58%+ 5.11% 19.40%
Morgan Stanley Emerging Markets Equity - - (20.66)%+ (28.19)% 92.62%
EQ/Putnam Growth & Income Value 14.96%+ 11.02% (2.94)%
EQ/Putnam International Equity 8.40%+ 17.56% 57.69%
EQ/Putnam Investors Growth 23.32%+ 34.11% 28.18%
- --------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
+ Returns for these portfolios represent less than 12 months of
performance. The returns are as of each portfolio inception date as shown
in Table 1.
<PAGE>
- ----------
74 Investment performance
- --------------------------------------------------------------------------------
COMMUNICATING PERFORMANCE DATA
In reports or other communications to contract owners or in advertising
material, we may describe general economic and market conditions affecting our
variable investment options and the portfolios and may compare the performance
or ranking of those options and the portfolios with:
o those of other insurance company separate accounts or mutual funds included
in the rankings prepared by Lipper Analytical Services, Inc., Morningstar,
Inc., VARDS, or similar investment services that monitor the performance
of insurance company separate accounts or mutual funds;
o other appropriate indices of investment securities and averages for peer
universes of mutual funds; or
o data developed by us derived from such indices or averages.
We also may furnish to present or prospective contract owners advertisements
or other communications that include evaluations of a variable investment
option or portfolio by nationally recognized financial publications. Examples
of such publications are:
- --------------------------------------------------------------------------------
Barron's Investment Management Weekly
Morningstar's Variable Annuity Money Management Letter
Sourcebook Investment Dealers Digest
Business Week National Underwriter
Forbes Pension & Investments
Fortune USA Today
Institutional Investor Investor's Business Daily
Money The New York Times
Kiplinger's Personal Finance The Wall Street Journal
Financial Planning The Los Angeles Times
Investment Adviser The Chicago Tribune
- --------------------------------------------------------------------------------
Lipper compiles performance data for peer universes of funds with similar
investment objectives in its Lipper Survey. Morningstar, Inc. compiles similar
data in the Morningstar Variable Annuity/Life Report (Morningstar Report).
The Lipper Survey records performance data as reported to it by over 800
mutual funds underlying variable annuity and life insurance products. It
divides these actively managed portfolios into 25 categories by portfolio
objectives. The Lipper Survey contains two different universes, which reflect
different types of fees in performance data:
o The "separate account" universe reports performance data net of investment
management fees, direct operating expenses and asset-based charges
applicable under variable life and annuity contracts, and
o The "mutual fund" universe reports performance net only of investment
management fees and direct operating expenses, and therefore reflects only
charges that relate to the underlying mutual fund.
The Morningstar Variable Annuity/Life Report consists of nearly 700 variable
life and annuity funds, all of which report their data net of investment
management fees, direct operating expenses and separate account level charges.
VARDS is a monthly reporting service that monitors approximately 2,500
variable life and variable annuity funds on performance and account
information.
YIELD INFORMATION
Current yield for the Alliance Money Market option will be based on net
changes in a hypothetical investment over a given seven-day period, exclusive
of capital changes, and then "annualized" (assuming that the same seven-day
result would occur each week for 52 weeks). Current yield for the Alliance
High Yield option will be based on net changes in a hypothetical investment
over a given 30-day period, exclusive of capital changes, and then
"annualized" (assuming that the same 30-day result would occur each month for
12 months).
<PAGE>
- ----------
Investment performance 75
- --------------------------------------------------------------------------------
"Effective yield" is calculated in a similar manner, but when annualized, any
income earned by the investment is assumed to be reinvested. The "effective
yield" will be slightly higher than the "current yield" because any earnings
are compounded weekly for the Alliance Money Market option. The current yields
and effective yields assume the deduction of all current contract charges and
expenses other than the withdrawal charge, and any charge designed to
approximate certain taxes that may be imposed on us, such as premium taxes in
your state. For more information, see "Yield Information for the Alliance
Money Market Option and Alliance High Yield Option" in the SAI.
<PAGE>
Appendix I: Condensed financial information
- --------
A-1 Appendix I: Condensed financial information
- --------------------------------------------------------------------------------
The unit values and number of units outstanding shown below are for contracts
offered under Separate Account No. 49 with the same daily asset based charges of
1.60%.
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION, EXCEPT EQ/ALLIANCE TECHNOLOGY WHICH IS BEING OFFERED FOR THE
FIRST TIME ON MAY 1, 2000.
- ---------------------------------------------------------------
FOR THE YEAR ENDING
EQ/Aggressive Stock DEC. 31, 1999
------------------- -------------------
Unit value $ 78.30
Number of units outstanding (000s) 141
ALLIANCE COMMON STOCK
Unit value $ 275.01
Number of units outstanding (000s) 255
ALLIANCE HIGH YIELD
Unit value $ 25.73
Number of units outstanding (000s) 574
ALLIANCE MONEY MARKET
Unit value $ 25.55
Number of units outstanding (000s) 5,805
EQ/ALLIANCE PREMIER GROWTH
Unit value $ 11.77
Number of units outstanding (000s) 5,630
ALLIANCE SMALL CAP GROWTH
Unit value $ 14.78
Number of units outstanding (000s) 818
BT EQUITY 500 INDEX
Unit value $ 14.58
Number of units outstanding (000s) 6,216
BT INTERNATIONAL EQUITY INDEX
Unit value $ 14.82
Number of units outstanding (000s) 992
BT SMALL COMPANY INDEX
Unit value $ 11.42
Number of units outstanding (000s) 522
- ---------------------------------------------------------------
<PAGE>
- -----
A-2 Appendix I: Condensed financial information
- --------------------------------------------------------------------------------
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION (CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------
FOR THE YEAR ENDING
DEC. 31, 1999
-------------------
<S> <C>
CAPITAL GUARDIAN INTERNATIONAL
Unit value $ 13.93
Number of units outstanding (000s) 1,286
CAPITAL GUARDIAN RESEARCH
Unit value $ 10.60
Number of units outstanding (000s) 987
CAPITAL GUARDIAN U.S. EQUITY
Unit value $ 10.26
Number of units outstanding (000s) 2,436
EQ/EVERGREEN
Unit value $ 10.80
Number of units outstanding (000s) 6
EQ/EVERGREEN FOUNDATION
Unit value $ 10.56
Number of units outstanding (000s) 6
J.P. MORGAN CORE BOND
Unit value $ 10.39
Number of units outstanding (000s) 2,026
LAZARD LARGE CAP VALUE
Unit value $ 12.04
Number of units outstanding (000s) 1,532
LAZARD SMALL CAP VALUE
Unit value $ 9.15
Number of units outstanding (000s) 988
MFS EMERGING GROWTH COMPANIES
Unit value $ 27.40
Number of units outstanding (000s) 1,680
- ---------------------------------------------------------------
</TABLE>
<PAGE>
- -----
A-3 Appendix I: Condensed financial information
- --------------------------------------------------------------------------------
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION (CONTINUED)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
FOR THE YEAR ENDING
DEC. 31, 1999
-------------------
<S> <C>
MFS GROWTH WITH INCOME
Unit value $ 10.70
Number of units outstanding (000s) 2,906
MFS RESEARCH
Unit value $ 16.99
Number of units outstanding (000s) 1,725
MERCURY BASIC VALUE EQUITY
Unit value $ 14.88
Number of units outstanding (000s) 173
MERCURY WORLD STRATEGY
Unit value $ 13.00
Number of units outstanding (000s) 19
MORGAN STANLEY EMERGING MARKETS EQUITY
Unit value $ 10.97
Number of units outstanding (000s) 962
EQ PUTNAM GROWTH AND INCOME VALUE
Unit value $ 12.39
Number of units outstanding (000s) 978
EQ PUTNAM INTERNATIONAL EQUITY FUND
Unit value $ 20.10
Number of units outstanding (000s) 771
EQ PUTNAM INVESTORS GROWTH
Unit value $ 21.20
Number of units outstanding (000s) 576
- -------------------------------------------------------------------
</TABLE>
<PAGE>
Appendix II: Purchase considerations for QP contracts
- --------
B-1 Appendix II: Purchase considerations for QP contracts
- --------------------------------------------------------------------------------
Trustees who are considering the purchase of an Equitable Accumulator Plus QP
contract should discuss with their tax advisers whether this is an appropriate
investment vehicle for the employer's plan. Trustees should consider whether
the plan provisions permit the investment of plan assets in the QP contract,
the distribution of such an annuity and the payment of death benefits in
accordance with the requirements of the federal income tax rules. The QP
contract and this prospectus should be reviewed in full, and the following
factors, among others, should be noted. Assuming continued plan qualification
and operation, earnings on qualified plan assets will accumulate value on a
tax-deferred basis even if the plan is not funded by the Equitable Accumulator
Plus QP contract or another annuity. Therefore, you should purchase an
Equitable Accumulator Plus QP contract to fund a plan for the contract's
features and benefits other than tax deferral. This QP contract accepts
transfer contributions only and not regular, ongoing payroll contributions. For
401(k) plans under defined contribution plans, no employee after-tax
contributions are accepted.
Under defined benefit plans, we will not accept rollovers from a defined
contribution plan to a defined benefit plan. We will only accept transfers from
a defined benefit plan or a change of investment vehicles in the plan. Only one
additional contribution may be made per contract year. For defined benefit
plans, the maximum percentage of actuarial value of the plan
participant/employee's normal retirement benefit that can be funded by a QP
contract is 80%. The account value under a QP contract may at any time be more
or less than the lump sum actuarial equivalent of the accrued benefit for a
defined benefit plan participant/employee. Equitable Life does not guarantee
that the account value under a QP contract will at any time equal the actuarial
value of 80% of a participant/employee's accrued benefit. If overfunding of a
plan occurs, withdrawals from the QP contract may be required. A withdrawal
charge may apply.
Further, Equitable Life will not perform or provide any plan recordkeeping
services with respect to the QP contracts. The plan's administrator will be
solely responsible for performing or providing for all such services. There is
no loan feature offered under the QP contracts, so if the plan provides for
loans and a participant/employee takes a loan from the plan, other plan assets
must be used as the source of the loan and any loan repayments must be credited
to other investment vehicles and/or accounts available under the plan.
Given that required minimum distributions must generally commence from the plan
for annuitants after age 70 1/2, trustees should consider that the QP contract
may not be appropriate purchase for annuitants approaching or over age 70 1/2.
Finally, because the method of purchasing the QP contract, including the large
initial contribution and the features of the QP contract may appeal more to
plan participants/employees who are older and tend to be highly paid, and
because certain features of the QP contract are available only to plan
participants/employees who meet certain minimum and/or maximum age
requirements, plan trustees should discuss with their advisers whether the
purchase of the QP contract would cause the plan to engage in prohibited
discrimination in contributions, benefits or otherwise.
<PAGE>
Appendix III: Guaranteed minimum death benefit example
- --------
C-1 Appendix III: Guaranteed minimum death benefit example
- --------------------------------------------------------------------------------
The death benefit under the contracts is equal to the account value or, if
greater, the guaranteed minimum death benefit.
The following illustrates the guaranteed minimum death benefit calculation.
Assuming $100,000 is allocated to the variable investment options (with no
allocation to the Alliance Money Market option), no additional contributions,
no transfers, no withdrawals, and no loans under a Rollover TSA contract the
guaranteed minimum death benefit for an annuitant age 45 would be calculated as
follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
END OF 5% ROLL UP TO AGE 80 ANNUAL RATCHET TO AGE 80
CONTRACT GUARANTEED MINIMUM GUARANTEED MINIMUM
YEAR ACCOUNT VALUE DEATH BENEFIT(1) DEATH BENEFIT
- ---------- ------------- -------------------- ------------------------
<S> <C> <C> <C>
1 $105,000 $ 105,000(1) $ 105,000(3)
2 $115,500 $ 110,250(2) $ 115,500(3)
3 $129,360 $ 115,763(2) $ 129,360(3)
4 $103,488 $ 121,551(1) $ 129,360(4)
5 $113,837 $ 127,628(1) $ 129,360(4)
6 $127,497 $ 134,010(1) $ 129,360(4)
7 $127,497 $ 140,710(1) $ 129,360(4)
- -------------------------------------------------------------------------------------
</TABLE>
The account values for contract years 1 through 7 are based on hypothetical
rates of return of 5.00%, 10.00%, 12.00%, (20.00)%, 10.00%, 12.00% and 0.00%.
We are using these rates solely to illustrate how the benefit is determined.
The return rates bear no relationship to past or future investment results.
5% ROLL UP TO AGE 80
(1) At the end of contract year 1, and again at the end of contract years 4
through 7, the death benefit will be equal to the guaranteed minimum
death benefit.
(2) At the end of contract years 2 and 3, the death benefit will be equal to
the current account value since it is higher than the current guaranteed
minimum death benefit.
ANNUAL RATCHET TO AGE 80
(3) At the end of contract years 1 through 3, the guaranteed minimum death
benefit is equal to the current account value.
(4) At the end of contract years 4 through 7, the guaranteed minimum death
benefit is equal to the guaranteed minimum death benefit at the end of
the prior year since it is equal to or higher than the current account
value.
<PAGE>
Statement of additional
information
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Unit Values 2
Custodian and Independent Accountants 3
Yield Information for the Alliance Money Market Option and Alliance High Yield
Option 3
Financial Statements 5
</TABLE>
HOW TO OBTAIN AN EQUITABLE ACCUMULATOR PLUS STATEMENT OF ADDITIONAL INFORMATION
FOR SEPARATE ACCOUNT NO. 49
Send this request form to:
Equitable Accumulator Plus
P.O. Box 1547
Secaucus, NJ 07096-1547
Please send me an Equitable Accumulator Plus SAI for Separate Account No. 49
dated May 1, 2000:
- ------------------------------------------------------------------------------
Name
- ------------------------------------------------------------------------------
Address
- ------------------------------------------------------------------------------
City State Zip
(SAI 10AMLF(05/00))
<PAGE>
Equitable Accumulator
Plus(SM)
A variable deferred annuity contract
Please read and keep this prospectus for future reference. It contains
important information that you should know before purchasing or taking any
other action under your contract. Also, at the end of this prospectus you will
find attached the prospectus for EQ Advisors Trust, which contains important
information about its portfolios.
PROSPECTUS DATED MAY 1, 2000
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WHAT IS THE EQUITABLE ACCUMULATOR PLUS?
Equitable Accumulator Plus is a deferred annuity contract issued by THE
EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES. It provides for the
accumulation of retirement savings and for income. The contract offers death
benefit protection and a number of payout options. You invest to accumulate
value on a tax-deferred basis in one or more of our variable investment
options. This contract may not currently be available in all states.
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VARIABLE INVESTMENT OPTIONS
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FIXED INCOME
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o Alliance High Yield o Alliance Money Market
o Alliance Intermediate
Government Securities
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DOMESTIC STOCKS
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o EQ/Aggressive Stock(1) o EQ/Evergreen
o Alliance Common Stock o MFS Emerging Growth
Companies
o Alliance Growth and Income
o MFS Growth with Income
o EQ/Alliance Premier Growth
o MFS Research
o Alliance Small Cap Growth
o Mercury Basic Value Equity(3)
o EQ/Alliance Technology(2)
o EQ/Putnam Growth & Income
o BT Equity 500 Index Value
o BT Small Company Index o T. Rowe Price Equity Income
o Capital Guardian Research o Warburg Pincus Small Company
Value
o Capital Guardian U.S. Equity
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INTERNATIONAL STOCKS
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o Alliance Global o Morgan Stanley Emerging
Markets Equity
o Alliance International
o T. Rowe Price International
o BT International Equity Index Stock
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BALANCED/HYBRID
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o Alliance Conservative Investors o EQ/Evergreen Foundation
o Alliance Growth Investors o Mercury World Strategy(4)
o EQ/Putnam Balanced
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(1) Formerly named "Alliance Aggressive Stock."
(2) May not be available in California.
(3) Formerly named "Merrill Lynch Basic Value Equity."
(4) Formerly named "Merrill Lynch World Strategy."
You may allocate amounts to any of the variable investment options. Each
variable investment option is a subaccount of our Separate Account No. 45.
Each variable investment option, in turn, invests in a corresponding
securities portfolio of EQ Advisors Trust. Your investment results in a
variable investment option will depend on the investment performance of the
related portfolio.
TYPES OF CONTRACTS. We offer the contracts for use as:
o A nonqualified annuity ("NQ") for after-tax contributions only.
o An individual retirement annuity ("IRA"), either traditional IRA ("Rollover
IRA") or Roth IRA ("Roth Conversion IRA").
o An annuity that is an investment vehicle for a qualified defined
contribution or defined benefit plan ("QP").
o An Internal Revenue Code Section 403(b) Tax-Sheltered Annuity ("TSA") -
("Rollover TSA")
A contribution of at least $25,000 is required to purchase a contract. We add
an amount ("credit") to your contract with each contribution you make. Over
time, the amount of the credit may be more than offset by fees and charges
associated with the credit.
A registration statement relating to this offering has been filed with the
Securities and Exchange Commission ("SEC"). The statement of additional
information ("SAI") dated May 1, 2000 is a part of the registration statement.
The SAI is available free of charge. You may request one by writing to our
processing office or calling 1-800-789-7771. The SAI has been incorporated by
reference into this prospectus. This prospectus and the SAI can also be
obtained from the SEC's Web site at http://www.sec.gov. The table of contents
for the SAI appears at the back of this prospectus.
THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. THE CONTRACTS ARE NOT INSURED BY THE FDIC OR ANY OTHER
AGENCY. THEY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE NOT
BANK GUARANTEED. THEY ARE SUBJECT TO INVESTMENT RISKS AND POSSIBLE LOSS OF
PRINCIPAL.
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Contents of this prospectus
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EQUITABLE ACCUMULATOR PLUS(SM)
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Index of key words and phrases 4
Who is Equitable Life? 5
How to reach us 6
Equitable Accumulator Plus at a glance - key features 8
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FEE TABLE 10
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Examples 13
Condensed financial information 14
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1 CONTRACT FEATURES AND BENEFITS 15
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How you can purchase and contribute to your contract 15
Owner and annuitant requirements 18
How you can make your contributions 18
What are your variable investment options under the
contract? 18
Allocating your contributions 21
Credits 21
Guaranteed minimum death benefit 21
Your right to cancel within a certain number of days 22
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2 DETERMINING YOUR CONTRACT'S VALUE 23
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Your account value and cash value 23
Your contract's value in the variable investment options 23
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"We," "our," and "us" refer to Equitable Life.
When we use the word "contract" it also includes certificates that are issued
under group contracts in some states.
When we address the reader of this prospectus with words such as "you" and
"your," we mean the person who has the right or responsibility that the
prospectus is discussing at that point. This is usually the contract owner.
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3 TRANSFERRING YOUR MONEY AMONG THE
VARIABLE INVESTMENT OPTIONS 24
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Transferring your account value 24
Market timing 24
Dollar cost averaging your account value 24
Rebalancing your account value 24
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4 ACCESSING YOUR MONEY 26
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Withdrawing your account value 26
How withdrawals are taken from your account value 27
How withdrawals affect your guaranteed minimum
death benefit 27
Loans under rollover TSA contracts 28
Surrendering your contract to receive its cash value 29
When to expect payments 29
Your annuity payout options 29
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5 CHARGES AND EXPENSES 32
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Charges that Equitable Life deducts 32
Charges that EQ Advisors Trust deducts 34
Group or sponsored arrangements 34
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6 PAYMENT OF DEATH BENEFIT 36
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Your beneficiary and payment of benefit 36
How death benefit payment is made 37
Beneficiary continuation option 37
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7 TAX INFORMATION 39
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Overview 39
Transfers among variable investment options 39
Taxation of nonqualified annuities 39
Individual retirement arrangements (IRAs) 41
Special rules for nonqualified contracts in qualified plans 51
Tax-Sheltered Annuity contracts (TSAs) 51
Federal and state income tax withholding and
information reporting 55
Impact of taxes to Equitable Life 57
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8 MORE INFORMATION 58
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About our Separate Account No. 45 58
About EQ Advisors Trust 58
About the general account 59
About other methods of payment 59
Dates and prices at which contract events occur 59
About your voting rights 60
About legal proceedings 60
About our independent accountants 60
Financial statements 61
Transfers of ownership, collateral assignments, loans,
and borrowing 61
Distribution of the contracts 61
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9 INVESTMENT PERFORMANCE 62
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Benchmarks 62
Communicating performance data 72
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APPENDICES
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I - Condensed financial information A-1
II - Purchase considerations for QP contracts B-1
III - Guaranteed minimum death benefit example C-1
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STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
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Index of key words and phrases
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This index should help you locate more information on the terms used in this
prospectus.
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PAGE IN
TERM PROSPECTUS
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account value 23
annuitant 15
annuity payout options 29
beneficiary 36
business day 59
cash value 23
conduit IRA 45
contract date 9
contract date anniversary 9
contract year 9
contributions to Roth IRAs 48
rollovers and direct transfers 48
conversion contributions 49
contributions to traditional IRAs 42
rollovers and transfers 43
credit 21
EQAccess 6
guaranteed minimum death benefit 21
IRA cover
IRS 39
NQ cover
participant 18
portfolio cover
processing office 6
QP cover
recharacterizations 45
Required Beginning Date 46
Rollover IRA cover
Rollover TSA cover
Roth IRA 48
Roth Conversion IRA cover
SAI cover
SEC cover
TOPS 6
TSA cover
traditional IRA 42
unit 24
variable investment options 18
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To make this prospectus easier to read, we sometimes use different words than
in the contract or supplemental materials. This is illustrated below. Although
we use different words, they have the same meaning in this prospectus as in the
contract or supplemental materials. Your financial professional can provide
further explanation about your contract or supplemental materials.
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PROSPECTUS CONTRACT OR SUPPLEMENTAL MATERIALS
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variable investment options Investment Funds
account value Annuity Account Value
unit Accumulation Unit
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Who is Equitable Life?
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We are The Equitable Life Assurance Society of the United States ("Equitable
Life"), a New York stock life insurance corporation. We have been doing
business since 1859. Equitable Life is a subsidiary of AXA Financial, Inc.
(previously, The Equitable Companies Incorporated). The majority shareholder
of AXA Financial, Inc. is AXA, a French holding company for an international
group of insurance and related financial services companies. As a majority
shareholder, and under its other arrangements with Equitable Life and
Equitable Life's parent, AXA exercises significant influence over the
operations and capital structure of Equitable Life and its parent. No company
other than Equitable Life, however, has any legal responsibility to pay
amounts that Equitable Life owes under the contract.
AXA Financial, Inc. and its consolidated subsidiaries managed approximately
$462.7 billion in assets as of December 31, 1999. For over 100 years Equitable
Life has been among the largest insurance companies in the United States. We
are licensed to sell life insurance and annuities in all fifty states, the
District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our home
office is located at 1290 Avenue of the Americas, New York, N.Y. 10104.
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HOW TO REACH US
You may communicate with our processing office as listed below for any of the
following purposes:
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FOR CONTRIBUTIONS SENT BY REGULAR MAIL:
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Equitable Accumulator Plus
P.O. Box 13014
Newark, NJ 07188-0014
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FOR CONTRIBUTIONS SENT BY EXPRESS DELIVERY:
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Equitable Accumulator Plus
c/o Bank One, N.A.
300 Harmon Meadow Boulevard, 3rd Floor
Attn: Box 13014
Secaucus, NJ 07094
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FOR ALL OTHER COMMUNICATIONS (E.G.,
REQUESTS FOR TRANSFERS, WITHDRAWALS, OR
REQUIRED NOTICES) SENT BY REGULAR MAIL:
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Equitable Accumulator Plus
P.O. Box 1547
Secaucus, NJ 07096-1547
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FOR ALL OTHER COMMUNICATIONS (E.G.,
REQUESTS FOR TRANSFERS, WITHDRAWALS, OR
REQUIRED NOTICES) SENT BY EXPRESS DELIVERY:
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Equitable Accumulator Plus
200 Plaza Drive, 4th Floor
Secaucus, NJ 07094
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REPORTS WE PROVIDE:
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o written confirmation of financial transactions;
o statement of your contract values at the close of each calendar quarter
(four per year); and
o annual statement of your contract values as of the close of the contract
year.
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TELEPHONE OPERATED PROGRAM SUPPORT
("TOPS") AND EQACCESS SYSTEMS:
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TOPS is designed to provide you with up-to-date information via touch-tone
telephone. EQAccess is designed to provide this information through the
Internet. You can obtain information on:
o your current account value;
o your current allocation percentages (anticipated to be available through
EQAccess by the end of 2000);
o the number of units you have in the variable investment options;
o the daily unit values for the variable investment options; and
o performance information regarding the variable investment options (not
available through TOPS).
You can also:
o change your allocation percentages and/or transfer among the variable
investment options (anticipated to be available through EQAccess by the
end of 2000);
o change your TOPS personal identification number (PIN) (not available
through EQAccess); and
o change your EQAccess password (not available through TOPS).
TOPS and EQAccess are normally available seven days a week, 24 hours a day.
You may use TOPS by calling toll free 1-888-909-7770. You may use EQAccess by
visiting our Web site at http://www.equitable.com and clicking on EQAccess. Of
course, for reasons beyond our control, these services may sometimes be
unavailable.
We have established procedures to reasonably confirm that the instructions
communicated by telephone or Internet are genuine. For example, we will
require certain personal identification information before we will act on
telephone or Internet instructions and we will provide written confirmation of
your transfers. If we do not employ reasonable procedures to confirm the
genuineness of
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telephone or Internet instructions, we may be liable for any losses arising
out of any act or omission that constitutes negligence, lack of good faith, or
willful misconduct. In light of our procedures, we will not be liable for
following telephone or Internet instructions we reasonably believe to be
genuine.
We reserve the right to limit access to these services if we determine that
you are engaged in a market timing strategy (see "Market timing" in
"Transferring your money among investment options").
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CUSTOMER SERVICE REPRESENTATIVE:
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You may also use our toll-free number (1-800-789-7771) to speak with one of
our customer service representatives. Our customer service representatives are
available on any business day from 8:30 a.m. until 5:30 p.m., Eastern Time.
WE REQUIRE THAT THE FOLLOWING TYPES OF COMMUNICATIONS BE ON SPECIFIC FORMS WE
PROVIDE FOR THAT PURPOSE:
(1) conversion of a traditional IRA to a Roth Conversion IRA contract;
(2) election of the automatic investment program;
(3) election of the rebalancing program;
(4) requests for loans under Rollover TSA contracts;
(5) spousal consent for loans under Rollover TSA contracts;
(6) tax withholding election; and
(7) election of the beneficiary continuation option.
WE ALSO HAVE SPECIFIC FORMS THAT WE RECOMMEND YOU USE FOR THE FOLLOWING TYPES
OF REQUESTS:
(1) address changes;
(2) beneficiary changes;
(3) transfers between variable investment options; and
(4) contract surrender and withdrawal requests.
TO CANCEL OR CHANGE ANY OF THE FOLLOWING WE REQUIRE WRITTEN NOTIFICATION
GENERALLY AT LEAST SEVEN CALENDAR DAYS BEFORE THE NEXT SCHEDULED TRANSACTION:
(1) automatic investment program;
(2) dollar cost averaging;
(3) rebalancing;
(4) substantially equal withdrawals;
(5) systematic withdrawals; and
(6) the date annuity payments are to begin.
You must sign and date all these requests. Any written request that is not on
one of our forms must include your name and your contract number along with
adequate details about the notice you wish to give or the action you wish us
to take.
SIGNATURES:
The proper person to sign forms, notices and requests would normally be the
owner. If there are joint owners both must sign.
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Equitable Accumulator Plus at a glance - key features
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PROFESSIONAL Equitable Accumulator Plus' variable investment options invest in different portfolios managed
INVESTMENT by professional investment advisers.
MANAGEMENT
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TAX ADVANTAGES o On earnings inside the No tax on any dividends, interest, or capital gains until you
contract make withdrawals from your contract or receive annuity
payments.
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o On transfers inside the No tax on transfers among variable investment options.
contract
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If you are buying a contract to fund a retirement plan that already provides tax deferral under
sections of the Internal Revenue Code, you should do so for the contract's features and benefits
other than tax deferral. In such situations, the tax deferral of the contract does not provide
necessary or additional benefits.
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CONTRIBUTION AMOUNTS o Initial minimum: $25,000
o Additional minimum: $ 1,000
$100 monthly and $300 quarterly under our automatic
investment program (NQ contracts)
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Maximum contribution limitations may apply.
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CREDIT We allocate your contributions to your account value. We allocate a credit to your account
value at the same time that we allocate your contributions. The amount of the credit is
equal to 4% of each contribution. The credit is subject to recovery by us in certain limited
circumstances.
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ACCESS TO YOUR MONEY o Lump sum withdrawals
o Several withdrawal options on a periodic basis
o Loans under Rollover TSA contracts
o Contract surrender
You may incur a withdrawal charge for certain withdrawals or if you surrender your contract.
You may also incur income tax and a tax penalty.
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PAYOUT OPTIONS o Fixed annuity payout options
o Variable Immediate Annuity payout options
o Income Manager(R) payout options
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ADDITIONAL FEATURES o Guaranteed minimum death benefit
o Dollar cost averaging
o Automatic investment program
o Account value rebalancing (quarterly, semiannually, and annually)
o Free transfers
o Waiver of withdrawal charge for disability, terminal illness, or confinement to a nursing
home
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FEES AND CHARGES o Daily charges on amounts invested in the variable investment options for mortality and expense
risks, administrative, and distribution charges at a current annual rate of 1.60% (1.70%
maximum).
o No sales charge deducted at the time you make contributions and no annual contract fee.
o During the first nine contract years following a contribution, a charge will be deducted from
amounts that you withdraw that exceed 15% of your account value. We use the account value on
the most recent contract date anniversary to calculate the 15% amount available. The charge is
8% in each of the first two contract years following a contribution. It declines by 1% each
year beginning in the third contract year to 1% in the ninth contract year. There is no
withdrawal charge in the tenth and later contract years following a contribution.
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The "contract date" is the effective date of a contract. This usually is the business day we
reveive the properly completed and signed application, along with any other required documents,
and your initial contribution. Your contract date will be shown in your contract. The 12-month
period beginning on your contract date and each 12-month period after that date is a "contract
year." The end of each 12-month period is your "contract date anniversary."
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o We deduct a charge designed to approximate certain taxes that may be imposed on us, such as
premium taxes in your state. This charge is generally deducted from the amount applied to an
annuity payout option.
o We deduct a $350 annuity administrative fee from amounts applied to the Variable Immediate
Annuity payout options.
o Annual expenses of EQ Advisors Trust portfolios are calculated as a percentage of the average
daily net assets invested in each portfolio. These expenses include management fees ranging
from 0.25% to 1.15% annually, 12b-1 fees of 0.25% annually, and other expenses.
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ANNUITANT ISSUE AGES NQ: 0-80
Rollover IRA, Roth Conversion IRA,
Rollover TSA: 20-78
QP: 20-70
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THE ABOVE IS NOT A COMPLETE DESCRIPTION OF ALL MATERIAL PROVISIONS OF THE
CONTRACT. IN SOME CASES RESTRICTIONS OR EXCEPTIONS APPLY. ALSO, ALL FEATURES OF
THE CONTRACT ARE NOT NECESSARILY AVAILABLE IN YOUR STATE OR AT CERTAIN AGES.
For more detailed information we urge you to read the contents of this
prospectus, as well as your contract. Please feel free to speak with your
financial professional, or call us, if you have any questions.
OTHER CONTRACTS
We offer a variety of fixed and variable annuity contracts. They may offer
features, including investment options, fees and/or charges that are different
from those in the contracts offered by this prospectus. Not every contract is
offered through the same distributor. Upon request, your financial professional
can show you information regarding other Equitable Life that he or she
distributes. You can also contact us to find out more about any of the
Equitable Life annuity contracts.
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Fee table
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The fee table below will help you understand the various charges and expenses
that apply to your contract. The table reflects charges you will directly incur
under the contract, as well as charges and expenses of the portfolios that you
will bear indirectly. Charges designed to approximate certain taxes that may be
imposed on us, such as premium taxes in your state, may also apply. Also, an
annuity administrative fee may apply when your annuity payments are to begin.
Each of the charges and expenses is more fully described in "Charges and
expenses" later in this prospectus.
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CHARGES WE DEDUCT FROM YOUR VARIABLE INVESTMENT OPTIONS EXPRESSED AS AN ANNUAL PERCENTAGE OF DAILY
NET ASSETS
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Mortality and expense risks(1) 1.10%*
Administrative 0.25% current (0.35% maximum)
Distribution 0.25%
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Total annual expenses 1.60% current (1.70% maximum)
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CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE AT THE TIME YOU REQUEST CERTAIN TRANSACTIONS
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Withdrawal charge as a percentage of contributions* (deducted if you Contract year
surrender your contract or make certain withdrawals. The withdrawal charge 1 ............. 8.00%
percentage we use is determined by the contract year in which you make the 2 ............. 8.00%
withdrawal or surrender your contract. For each contribution, we consider the 3 ............. 7.00%
contract year in which we receive that contribution to be "contract year 1")(2) 4 ............. 6.00%
5 ............. 5.00%
6 ............. 4.00%
7 ............. 3.00%
8 ............. 2.00%
9 ............. 1.00%
10+ ............ 0.00%
Charge if you elect a Variable Immediate Annuity payout option $350
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* These charges compensate us for certain risks we assume and expenses we
incur under the contract. They also compensate us for the expenses
associated with the credit. We expect to make a profit from these
charges.
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EQ ADVISOR TRUST ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
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TOTAL
OTHER ANNUAL
EXPENSES EXPENSES
MANAGEMENT (AFTER EXPENSE (AFTER EXPENSE
FEES(3) 12b-1 FEES(4) LIMITATION)(5) LIMITATION)(6)
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EQ/Aggressive Stock 0.60% 0.25% 0.04% 0.89%
Alliance Common Stock 0.46% 0.25% 0.04% 0.75%
Alliance Conservative Investors 0.60% 0.25% 0.07% 0.92%
Alliance Global 0.73% 0.25% 0.09% 1.07%
Alliance Growth and Income 0.59% 0.25% 0.05% 0.89%
Alliance Growth Investors 0.57% 0.25% 0.05% 0.87%
Alliance High Yield 0.60% 0.25% 0.05% 0.90%
Alliance Intermediate Government Securities 0.50% 0.25% 0.07% 0.82%
Alliance International 0.85% 0.25% 0.20% 1.30%
Alliance Money Market 0.34% 0.25% 0.05% 0.64%
EQ/Alliance Premier Growth 0.90% 0.25% 0.00% 1.15%
Alliance Small Cap Growth 0.75% 0.25% 0.07% 1.07%
EQ/Alliance Technology* 0.90% 0.25% 0.00% 1.15%
BT Equity 500 Index 0.25% 0.25% 0.10% 0.60%
BT International Equity Index 0.35% 0.25% 0.40% 1.00%
BT Small Company Index 0.25% 0.25% 0.25% 0.75%
Capital Guardian Research 0.65% 0.25% 0.05% 0.95%
Capital Guardian U.S. Equity 0.65% 0.25% 0.05% 0.95%
EQ/Evergreen 0.65% 0.25% 0.05% 0.95%
EQ/Evergreen Foundation 0.60% 0.25% 0.10% 0.95%
MFS Emerging Growth Companies 0.65% 0.25% 0.10% 1.00%
MFS Growth with Income 0.60% 0.25% 0.10% 0.95%
MFS Research 0.65% 0.25% 0.05% 0.95%
Mercury Basic Value Equity 0.60% 0.25% 0.10% 0.95%
Mercury World Strategy 0.70% 0.25% 0.25% 1.20%
Morgan Stanley Emerging Markets Equity 1.15% 0.25% 0.35% 1.75%
EQ/Putnam Balanced 0.60% 0.25% 0.05% 0.90%
EQ/Putnam Growth & Income Value 0.60% 0.25% 0.10% 0.95%
T. Rowe Price Equity Income 0.60% 0.25% 0.10% 0.95%
T. Rowe Price International Stock 0.85% 0.25% 0.15% 1.25%
Warburg Pincus Small Company Value 0.75% 0.25% 0.10% 1.10%
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Notes:
(1) A portion of this charge is for providing the guaranteed minimum death
benefit.
(2) Deducted upon a withdrawal of amounts in excess of the 15% free
withdrawal amount and upon surrender of a contract.
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(3) The management fees shown reflect revised management fees, effective on
or about May 1, 2000 which were approved by shareholders. The management
fees shown for EQ/Putnam Balanced, EQ/Putnam Growth & Income Value,
Warburg Pincus Small Company Value and T. Rowe Price International Stock
do not reflect the waiver of a portion of each portfolio's investment
management fees that are currently in effect. The management fee for each
portfolio cannot be increased without a vote of each portfolio's
shareholders.
(4) Portfolio shares are all subject to fees imposed under the distribution
plan (the "Rule 12b-1 Plan") adopted by EQ Advisors Trust pursuant to
Rule 12b-1 under the Investment Company Act of 1940. The 12b-1 fee will
not be increased for the life of the contracts. Prior to October 18,
1999, the total annual expenses for the Alliance Small Cap Growth
portfolio were limited to 1.20% under an expense limitation arrangement
related to that portfolio's Rule 12b-1 Plan. The arrangement is no longer
in effect. The amounts shown have been restated to reflect the expenses
that would have been incurred in 1999, absent the expense limitation
arrangement.
(5) The amounts shown as "Other Expenses" will fluctuate from year to year
depending on actual expenses. See footnote (6) for any expense limitation
agreements.
On October 18, 1999, the Alliance portfolios (other than EQ/Alliance
Premier Growth and EQ/Alliance Technology) became part of the portfolios
of EQ Advisors Trust. The "Other Expenses" for these portfolios have been
restated to reflect the estimated expenses that would have been incurred
had these portfolios been portfolios of EQ Advisors Trust for the year
ended December 31, 1999. The restated expenses reflect an increase of
0.01% for each of these portfolios.
(6) Equitable Life, EQ Advisors Trust's manager, has entered into an expense
limitation agreement with respect to certain portfolios. Under this
agreement Equitable Life has agreed to waive or limit its fees and assume
other expenses. Under the expense limitation agreement, total annual
operating expenses of certain portfolios (other than interest, taxes,
brokerage commissions, capitalized expenditures, extraordinary expenses
and 12b-1 fees) are limited as a percentage of the average daily net
assets of each of the following portfolios: 1.75% for Morgan Stanley
Emerging Markets Equity; 1.25% for T. Rowe Price International Stock;
1.20% for Mercury World Strategy; 1.15% for EQ/Alliance Premier Growth
and EQ/Alliance Technology; 1.10% for Warburg Pincus Small Company Value;
1.00% for BT International Equity Index and MFS Emerging Growth
Companies; 0.95% for Capital Guardian U.S. Equity, Capital Guardian
Research, EQ/Evergreen, EQ/Evergreen Foundation, MFS Growth with Income,
MFS Research, Mercury Basic Value Equity, EQ/Putnam Growth & Income
Value, and T. Rowe Price Equity Income; 0.90% for EQ/Putnam Balanced;
0.75% for BT Small Company Index; and 0.60% for BT Equity 500 Index. The
expense limitations for the BT Equity 500 Index, EQ/Putnam Growth &
Income Value, Mercury Basic Value Equity, MFS Growth with Income, MFS
Research, MFS Emerging Growth Companies, T. Rowe Price Equity Income, T.
Rowe Price International Stock and Warburg Pincus Small Company Value,
portfolios reflect an increase effective on May 1, 2000. The expense
limitation for the EQ/Evergreen portfolio reflects a decrease effective
on May 1, 2000.
Absent the expense limitation, the "Other Expenses" for 1999 on an
annualized basis for each of the portfolios would have been as follows:
1.00% for Morgan Stanley Emerging Markets Equity; 0.30% for T. Rowe Price
International Stock; 0.46% for Mercury World Strategy; 0.23% for
EQ/Alliance Premier Growth; 0.10% for EQ/Alliance Technology; 0.24% for
Warburg Pincus Small Company Value; 0.49% for BT International Equity
Index; 0.17% for MFS Emerging Growth Companies; 0.34% for Capital Guardian
U.S. Equity; 0.47% for Capital Guardian Research; 1.87% for EQ/Evergreen;
1.07% for EQ/Evergreen Foundation; 0.37% for MFS Growth with Income; 0.17%
for MFS Research and Mercury Basic Value Equity; 0.16% for EQ/Putnam
Growth & Income Value; 0.21% for T. Rowe Price Equity Income; 0.28% for
EQ/Putnam Balanced; 0.71% for BT Small Company Index; and 0.18% for BT
Equity 500 Index. Initial seed capital was invested on April 30, 1999 for
the EQ/Alliance Premier Growth, Capital Guardian U.S. Equity and Capital
Guardian Research portfolios and will be invested on or about May 1, 2000
for the EQ/Alliance Technology portfolio and therefore expenses have been
estimated.
Each portfolio may at a later date make a reimbursement to Equitable Life
for any of the management fees waived or limited and other expenses
assumed and paid by Equitable Life pursuant to the expense limitation
agreement provided that, among other things, such portfolio has reached
sufficient size to permit such reimbursement to be made and provided that
the portfolio's current annual operating expenses do not exceed the
operating expense limit determined for such portfolio. For more
information see the prospectus for EQ Advisors Trust.
<PAGE>
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13
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EXAMPLES
The examples below show the expenses that a hypothetical contract owner would
pay in the situations illustrated. We assume that a $1,000 contribution plus a
$40 credit is invested in one of the variable investment options listed and a
5% annual return is earned on the assets in that option.(1) The charges used in
the examples are the maximum charges rather than the lower current charges.
The examples should not be considered a representation of past or future
expenses for each option. Actual expenses may be greater or less than those
shown. Similarly, the annual rate of return assumed in the examples is not an
estimate or guarantee of future investment performance.
<TABLE>
<CAPTION>
IF YOU SURRENDER YOUR CONTRACT
AT THE END OF EACH PERIOD SHOWN,
THE EXPENSES WOULD BE:
--------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock $ 108.17 $ 156.47 $ 197.47 $ 312.63
Alliance Common Stock $ 106.64 $ 151.90 $ 189.88 $ 297.66
Alliance Conservative Investors $ 108.61 $ 157.78 $ 199.63 $ 316.87
Alliance Global $ 110.25 $ 162.66 $ 207.70 $ 332.60
Alliance Growth and Income $ 108.28 $ 156.80 $ 198.01 $ 313.69
Alliance Growth Investors $ 108.06 $ 156.15 $ 196.93 $ 311.57
Alliance High Yield $ 108.28 $ 156.80 $ 198.01 $ 313.69
Alliance Intermediate Government Securities $ 107.52 $ 154.51 $ 194.22 $ 306.24
Alliance International $ 112.76 $ 170.11 $ 219.97 $ 356.26
Alliance Money Market $ 105.44 $ 148.30 $ 183.88 $ 285.76
EQ/Alliance Premier Growth $ 112.21 $ 168.49 $ 217.32 $ 351.17
Alliance Small Cap Growth $ 110.14 $ 162.33 $ 207.17 $ 331.56
EQ/Alliance Technology $ 111.12 $ 165.25 $ 211.98 $ 340.89
BT Equity 500 Index $ 105.12 $ 147.31 $ 182.24 $ 282.48
BT International Equity Index $ 109.48 $ 160.38 $ 203.94 $ 325.29
BT Small Company Index $ 106.75 $ 152.23 $ 190.42 $ 298.74
Capital Guardian Research $ 108.94 $ 158.75 $ 201.25 $ 320.03
Capital Guardian U.S. Equity $ 108.94 $ 158.75 $ 201.25 $ 320.03
EQ/Evergreen $ 108.94 $ 158.75 $ 201.25 $ 320.03
EQ/Evergreen Foundation $ 108.94 $ 158.75 $ 201.25 $ 320.03
MFS Emerging Growth Companies $ 109.48 $ 160.38 $ 203.94 $ 325.29
MFS Growth with Income $ 108.94 $ 158.75 $ 201.25 $ 320.03
MFS Research $ 108.94 $ 158.75 $ 201.25 $ 320.03
Mercury Basic Value Equity $ 108.94 $ 158.75 $ 201.25 $ 320.03
Mercury World Strategy $ 111.67 $ 166.87 $ 214.65 $ 346.04
Morgan Stanley Emerging Markets Equity $ 117.67 $ 184.59 $ 243.63 $ 400.97
EQ/Putnam Balanced $ 108.39 $ 157.12 $ 198.55 $ 314.75
EQ/Putnam Growth & Income Value $ 108.94 $ 158.75 $ 201.25 $ 320.03
T. Rowe Price Equity Income $ 108.94 $ 158.75 $ 201.25 $ 320.03
T. Rowe Price International Stock $ 112.21 $ 168.49 $ 217.32 $ 351.17
Warburg Pincus Small Company Value $ 110.58 $ 163.63 $ 209.31 $ 335.72
<CAPTION>
IF YOU DO NOT SURRENDER YOUR CONTRACT
AT THE END OF EACH PERIOD SHOWN,
THE EXPENSES WOULD BE:
------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock $ 28.17 $ 86.47 $ 147.47 $ 312.63
Alliance Common Stock $ 26.64 $ 81.90 $ 139.88 $ 297.66
Alliance Conservative Investors $ 28.61 $ 87.78 $ 149.63 $ 316.87
Alliance Global $ 30.25 $ 92.66 $ 157.70 $ 332.60
Alliance Growth and Income $ 28.28 $ 86.80 $ 148.01 $ 313.69
Alliance Growth Investors $ 28.06 $ 86.15 $ 146.93 $ 311.57
Alliance High Yield $ 28.28 $ 86.80 $ 148.01 $ 313.69
Alliance Intermediate Government Securities $ 27.52 $ 84.51 $ 144.22 $ 306.24
Alliance International $ 32.76 $ 100.11 $ 169.97 $ 356.26
Alliance Money Market $ 25.44 $ 78.30 $ 133.88 $ 285.76
EQ/Alliance Premier Growth $ 32.21 $ 98.49 $ 167.32 $ 351.17
Alliance Small Cap Growth $ 30.14 $ 92.33 $ 157.17 $ 331.56
EQ/Alliance Technology $ 31.12 $ 95.25 $ 161.98 $ 340.89
BT Equity 500 Index $ 25.12 $ 77.31 $ 132.24 $ 282.48
BT International Equity Index $ 29.48 $ 90.38 $ 153.94 $ 325.29
BT Small Company Index $ 26.75 $ 82.23 $ 140.42 $ 298.74
Capital Guardian Research $ 28.94 $ 88.75 $ 151.25 $ 320.03
Capital Guardian U.S. Equity $ 28.94 $ 88.75 $ 151.25 $ 320.03
EQ/Evergreen $ 28.94 $ 88.75 $ 151.25 $ 320.03
EQ/Evergreen Foundation $ 28.94 $ 88.75 $ 151.25 $ 320.03
MFS Emerging Growth Companies $ 29.48 $ 90.38 $ 153.94 $ 325.29
MFS Growth with Income $ 28.94 $ 88.75 $ 151.25 $ 320.03
MFS Research $ 28.94 $ 88.75 $ 151.25 $ 320.03
Mercury Basic Value Equity $ 28.94 $ 88.75 $ 151.25 $ 320.03
Mercury World Strategy $ 31.67 $ 96.87 $ 164.65 $ 346.04
Morgan Stanley Emerging Markets Equity $ 37.67 $ 114.59 $ 193.63 $ 400.97
EQ/Putnam Balanced $ 28.39 $ 87.12 $ 148.55 $ 314.75
EQ/Putnam Growth & Income Value $ 28.94 $ 88.75 $ 151.25 $ 320.03
T. Rowe Price Equity Income $ 28.94 $ 88.75 $ 151.25 $ 320.03
T. Rowe Price International Stock $ 32.21 $ 98.49 $ 167.32 $ 351.17
Warburg Pincus Small Company Value $ 30.58 $ 93.63 $ 159.31 $ 335.72
</TABLE>
(1) The amount accumulated from the $1,000 contribution plus the $40 credit
could not be paid in the form of an annuity payout option at the end of
any of the periods shown in the examples. This is because if the amount
applied to purchase an annuity payout option is less than $2,000, or the
initial payment is less than $20, we may pay the amount to you in a
single sum instead of as payments under an annuity payout option. See
"Accessing your money."
<PAGE>
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14
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IF YOU ELECT A VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION:
Assuming an annuity payout option could be issued (see note (1) above), and you
elect a Variable Immediate Annuity payout option, the expenses shown in the
examples for "if you do not surrender you contract" would, in each case, be
increased by $4.34 based on the average amount applied to annuity payout
options in 1999. See "Annuity administrative fee" in "Charges and expenses."
CONDENSED FINANCIAL INFORMATION
Please see Appendix 1 at the end of this prospectus for the unit values and the
number of units outstanding as of the end of the periods shown for each of the
variable investment options available as of December 31, 1999.
<PAGE>
1
Contract features and benefits
- --------
15
- --------------------------------------------------------------------------------
HOW YOU CAN PURCHASE AND CONTRIBUTE TO YOUR CONTRACT
You may purchase a contract by making payments to us that we call
"contributions." We require a minimum initial contribution of $25,000 for you
to purchase a contract. You may make additional contributions of at least
$1,000 each, subject to limitations noted below. The following table summarizes
our rules regarding contributions to your contract. All ages in the table refer
to the age of the annuitant named in the contract.
- ------------------------------------------------------------------------------
The "annuitant" is the person who is the measuring life for determining
contract benefits. The annuitant is not necessarily the contract owner.
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
AVAILABLE
CONTRACT FOR ANNUITANT LIMITATIONS ON
TYPE ISSUE AGES SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NQ 0 through 80 o After-tax money. o No additional contributions after
age 81.
o Paid to us by check or transfer
of contract value in a
tax-deferred exchange under
Section 1035 of the Internal
Revenue Code.
- ---------------------------------------------------------------------------------------------------------------
Rollover IRA 20 through 78 o Rollovers from a qualified plan. o No contributions after age 79.
o Rollovers from a Tax-Sheltered o Contributions after age 70 1/2
Annuity ("TSA"). must be net of required
minimum distributions.
o Rollovers from another
traditional individual retirement o Only rollover and direct transfer
arrangement. contributions are permitted
under the Rollover IRA contract.
o Direct custodian-to-custodian
transfers from another o Regular IRA contributions
traditional individual retirement limited to $2,000 per year.
arrangement.
o Although we accept regular IRA
o Regular IRA contributions. contributions under Rollover IRA
contracts, we intend that this
contract be used for rollover and
direct transfer contributions.
Please refer to "Withdrawals,
payments and transfers of funds
out of traditional IRAs" in "Tax
Information" for a discussion of
conduit IRAs.
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
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16
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
AVAILABLE
CONTRACT FOR ANNUITANT LIMITATIONS ON
TYPE ISSUE AGES SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Roth 20 through 78 o Rollovers from another Roth o No contributions after age 79.
Conversion IRA.
IRA o Conversion rollovers from a o Conversion rollovers after
traditional IRA. age 70 1/2 must be net of
required minimum distributions
o Direct transfers from another for the traditional IRA you are
Roth IRA. rolling over.
o You cannot roll over funds from
a traditional IRA if your adjusted
gross income is $100,000 or more.
o Regular contributions are not
permitted.
o Only rollover and direct transfer
contributions are permitted.
- ---------------------------------------------------------------------------------------------------------------
Rollover TSA 20 through 78 o Rollovers from another TSA o Additional rollover or direct
contract or arrangement. transfer contributions may be
made up to age 79.
o Rollovers from a traditional IRA
which was a "conduit" for TSA o Contributions after age 70 1/2
funds previously rolled over. must be net of required
minimum distributions.
o Direct transfer from another
contract or arrangement under o Employer-remitted contributions
Section 403(b) of the Internal are not permitted.
Revenue Code, complying with
IRS Revenue Ruling 90-24.
This contract may not be available in your state.
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
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17
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
AVAILABLE
CONTRACT FOR ANNUITANT LIMITATIONS ON
TYPE ISSUE AGES SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
QP 20 through 70 o Only transfer contributions from o Regular ongoing payroll
an existing qualified plan trust contributions are not permitted.
as a change of investment o Only one additional contribution
vehicle under the plan. may be made during a contract
o The plan must be qualified year.
under Section 401(a) of the o No additional transfer
Internal Revenue Code. contributions after age 71.
o For 401(k) plans, transferred o For defined benefit plans,
contributions may only include employee contributions are not
employee pre-tax contributions. permitted.
Please refer to Appendix II for a discussion of purchase considerations of QP contracts.
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
See "Tax information" for a more detailed discussion of sources of
contributions and certain contribution limitations. We may refuse to accept any
contribution if the sum of all contributions under all Equitable Accumulator
contracts with the same annuitant would then total more than $1,500,000. We may
also refuse to accept any contribution if the sum of all contributions under
all Equitable Life annuity accumulation contracts that you own would then total
more than $2,500,000.
For information on when contributions are credited under your contract see
"Dates and prices at which contract events occur" in "More information" later
in this prospectus.
<PAGE>
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18
- --------------------------------------------------------------------------------
OWNER AND ANNUITANT REQUIREMENTS
Under NQ contracts, the annuitant can be different than the owner. A joint
owner may also be named. Only natural persons can be joint owners. This means
that an entity such as a corporation cannot be a joint owner.
Under all IRA and Rollover TSA contracts, the owner and annuitant must be the
same person.
Under QP contracts, the owner must be the trustee of the qualified plan and
the annuitant must be the plan participant/employee. See Appendix I for more
information on QP contracts.
- --------------------------------------------------------------------------------
A participant is an individual who is currently, or was formerly,
participating in an eligible employer's QP or TSA plan.
- --------------------------------------------------------------------------------
HOW YOU CAN MAKE YOUR CONTRIBUTIONS
Except as noted below, contributions must be by check drawn on a U.S. bank, in
U.S. dollars, and made payable to Equitable Life. We do not accept third-party
checks endorsed to us except for rollover contributions, tax-free exchanges or
trustee checks that involve no refund. All checks are subject to our ability
to collect the funds. We reserve the right to reject a payment if it is
received in an unacceptable form.
Additional contributions may also be made under our automatic investment
program. This method of payment is discussed in detail in "More information"
later in this prospectus.
Your initial contribution must generally be accompanied by an application and
any other form we need to process the payments. If any information is missing
or unclear, we will try to obtain that information. If we are unable to obtain
all of the information we require within five business days after we receive
an incomplete application or form, we will inform the financial professional
submitting the application on your behalf. We will then return the
contribution to you unless you specifically direct us to keep your
contribution until we receive the required information.
- --------------------------------------------------------------------------------
Our "business day" is any day the New York Stock Exchange is open for trading
and generally ends at 4:00 p.m. Eastern Time. We may, however, close due to
emergency conditions.
- --------------------------------------------------------------------------------
SECTION 1035 EXCHANGES
You may apply the value of an existing nonqualified deferred annuity contract
(or life insurance or endowment contract) to purchase an Equitable Accumulator
Plus NQ contract in a tax-free exchange if you follow certain procedures as
shown in the form that we require you to use. Also see "Tax information" later
in this prospectus.
WHAT ARE YOUR VARIABLE INVESTMENT OPTIONS UNDER THE CONTRACT?
Your investment results in any one of the variable investment options will
depend on the investment performance of the underlying portfolios. Listed
below are the currently available portfolios, their investment objectives, and
their advisers.
- --------------------------------------------------------------------------------
You can choose from among the variable investment options.
- --------------------------------------------------------------------------------
<PAGE>
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19
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PORTFOLIOS OF EQ ADVISORS TRUST
- ---------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- ---------------------------------- ---------------------------------------------------- -----------------------------------------
<S> <C> <C>
EQ/Aggressive Stock Long-term growth of capital Alliance Capital Management L.P.,
Massachusetts Financial Services Company
Alliance Common Stock Long-term growth of capital and increasing Alliance Capital Management L.P.
income
Alliance Conservative Investors High total return without, in the adviser's Alliance Capital Management L.P.
opinion, undue risk to principal
Alliance Global Long-term growth of capital Alliance Capital Management L.P.
Alliance Growth and Income High total return through a combination of Alliance Capital Management L.P.
current income and capital appreciation
Alliance Growth Investors High total return consistent with the adviser's Alliance Capital Management L.P.
determination of reasonable risk
Alliance High Yield High return by maximizing current income and, Alliance Capital Management L.P.
to the extent consistent with that objective,
capital appreciation
Alliance Intermediate High current income consistent with relative Alliance Capital Management L.P.
Government Securities stability of principal
Alliance International Long-term growth of capital Alliance Capital Management L.P.
Alliance Money Market High level of current income while preserving Alliance Capital Management L.P.
assets and maintaining liquidity
EQ/Alliance Premier Growth Long-term growth of capital Alliance Capital Management L.P.
Alliance Small Cap Growth Long-term growth of capital Alliance Capital Management L.P.
EQ/Alliance Technology Long-term growth of capital Alliance Capital Management L.P.
BT Equity 500 Index Replicate as closely as possible (before deduction Bankers Trust Company
of portfolio expenses) the total return of the
Standard & Poor's 500 Composite Stock Price
Index
</TABLE>
<PAGE>
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20
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PORTFOLIOS OF EQ ADVISORS TRUST (CONTINUED)
- -------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- -------------------------------- ---------------------------------------------------- -----------------------------------------
<S> <C> <C>
BT International Equity Index Replicate as closely as possible (before deduction Bankers Trust Company
of portfolio expenses) the total return of the
Morgan Stanley Capital International Europe,
Australia, Far East Index
BT Small Company Index Replicate as closely as possible (before reduction Bankers Trust Company
of portfolio expenses) the total return of the
Russell 2000 Index
Capital Guardian Research Long-term growth of capital Capital Guardian Trust Company
Capital Guardian U.S. Equity Long-term growth of capital Capital Guardian Trust Company
EQ/Evergreen Long-term growth of capital Evergreen Asset Management Corp.
EQ/Evergreen Foundation In order of priority, reasonable income, Evergreen Asset Management Corp.
conservation of capital, and capital appreciation
MFS Emerging Growth Long-term capital growth Massachusetts Financial Services Company
Companies
MFS Growth with Income Reasonable current income and long-term Massachusetts Financial Services Company
growth of capital and income
MFS Research Long-term growth of capital and future income Massachusetts Financial Services Company
Mercury Basic Value Equity Capital appreciation and secondarily, income Mercury Asset Management US
Mercury World Strategy High total investment return Mercury Asset Management US
Morgan Stanley Emerging Long-term capital appreciation Morgan Stanley Asset Management
Markets Equity
EQ/Putnam Balanced Balanced Investment Putnam Investment Management, Inc.
EQ/Putnam Growth & Income Capital growth, current income a secondary Putnam Investment Management, Inc.
Value objective
T. Rowe Price Equity Income Substantial dividend income and also capital T. Rowe Price Associates, Inc.
appreciation
T. Rowe Price International Long-term growth of capital Rowe Price-Fleming International, Inc.
Stock
Warburg Pincus Small Company Long-term capital appreciation Warburg Pincus Asset Management, Inc.
Value
</TABLE>
Other important information about the portfolios is included in the prospectus
for EQ Advisors Trust attached at the end of this prospectus.
<PAGE>
- ----------
21
- --------------------------------------------------------------------------------
ALLOCATING YOUR CONTRIBUTIONS
You may allocate your contributions to one or more, or all, of the variable
investment options. Allocations must be in whole percentages and you may
change your allocations at any time. However, the total of your allocations
must equal 100%. Once contributions are allocated to the variable investment
options they become part of your account value. We discuss account value in
"Determining your contract's value."
CREDITS
A credit will also be allocated to your account value at the same time that we
allocate your contribution. The amount of the credit is equal to 4% of the
amount of each contribution. Credits are allocated to the same variable
investment options based on the same percentages used to allocate your
contributions.
We will recover the amount of the credit if you exercise your right to cancel
the contract. See "Your right to cancel within a certain number of days"
below. Also, if you start receiving annuity payments within three years of
making any additional contribution, we will recover the amount of the credit
that applies to that contribution.
We do not consider credits to be contributions for purposes of any discussion
in this prospectus. Credits are also not considered to be your investment in
the contract for tax purposes.
We use a portion of the mortality and expense risks charge and withdrawal
charge to help recover the cost of providing the credit. See "charges and
expenses" below. Under certain circumstances (such as a period of poor market
performance), the cost associated with the credit may exceed the sum of the
credit and any related earnings. You should consider this possibility before
purchasing the contract.
GUARANTEED MINIMUM DEATH BENEFIT
GUARANTEED MINIMUM DEATH BENEFIT APPLICABLE FOR ANNUITANT AGES 0 THROUGH 79 AT
ISSUE OF NQ CONTRACTS; 20 THROUGH 78 AT ISSUE OF ROLLOVER IRA, ROTH CONVERSION
IRA AND ROLLOVER TSA CONTRACTS; AND 20 THROUGH 70 AT ISSUE OF QP CONTRACTS.
You may elect either the "5% roll up to age 80" or the "annual ratchet to age
80" guaranteed minimum death benefit when you apply for a contract. Once you
have made your election, you may not change it.
5% ROLL UP TO AGE 80. On the contract date, the guaranteed minimum death
benefit is equal to your initial contribution plus the credit. Thereafter, the
guaranteed minimum death benefit will be credited with interest each day
through the annuitant's age 80. The effective annual interest rate is 5%
except for amounts invested in the Alliance Money Market option and Alliance
Intermediate Government Securities option and amounts in the loan reserve
account (applicable to Rollover TSA contracts only). Amounts in the Alliance
Money Market option, Alliance Intermediate Government Securities option and
the loan reserve account will be credited with interest at a 3% effective
annual rate. No interest is credited after the annuitant is age 80.
If you make additional contributions, we will increase your current guaranteed
minimum death benefit by the dollar amount of the additional contribution plus
the amount of the credit on the date the contribution is allocated to your
variable investment options. If you take a withdrawal from your contract, we
will adjust your guaranteed minimum death benefit for the withdrawal on the
date you take the withdrawal.
The 5% roll up to age 80 guaranteed minimum death benefit is not available in
New York.
ANNUAL RATCHET TO AGE 80. On the contract date, your guaranteed minimum death
benefit equals your initial contribution plus the credit. Then, on each
contract date anniversary, we will determine your guaranteed minimum death
benefit by comparing your current guaranteed minimum death benefit to your
account value on that contract date anniversary. If your account value is
higher than your guaranteed minimum death benefit, we will increase your
guaranteed minimum death benefit to equal
<PAGE>
- -------
22
- --------------------------------------------------------------------------------
your account value. On the other hand, if your account value on the contract
date anniversary is less than your guaranteed minimum death benefit, we will
not adjust your guaranteed minimum death benefit either up or down. If you
make additional contributions, we will increase your current guaranteed
minimum death benefit by the dollar amount of the contribution plus the amount
of the credit on the date the contribution is allocated to your variable
investment options. If you take a withdrawal from your contract, we will
reduce your guaranteed minimum death benefit on the date you take the
withdrawal.
GUARANTEED MINIMUM DEATH BENEFIT APPLICABLE FOR AN ANNUITANT THAT IS
AGE 80 AT ISSUE.
On the contract date, your guaranteed minimum death benefit equals your
initial contribution plus the credit. Thereafter, it will be increased by the
dollar amount of any additional contributions. We will adjust your guaranteed
minimum death benefit if you take any withdrawals.
----------------------------------------
Please see "How withdrawals affect your guaranteed minimum death benefit" in
"Accessing your money" for information on how withdrawals affect your
guaranteed minimum death benefit.
See Appendix II for an example of how we calculate the guaranteed minimum
death benefit.
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your contract, you may return it
to us for a refund. To exercise this cancellation right you must mail the
contract directly to our processing office within 10 days after you receive
it. If state law requires, this "free look" period may be longer.
Generally, your refund will equal your account value under the contract on the
day we receive notification of your decision to cancel the contract and will
reflect any investment gain or loss in the variable investment options that
also reflect the daily charges we deduct through the date we receive your
contract. Please note that you will forfeit the credit by exercising this
right of cancellation. Some states require that we refund the full amount of
your contribution (not reflecting any investment gain or loss). For any IRA
contract returned to us within seven days after you receive it, we are
required to refund the full amount of your contribution.
We may require that you wait six months before you may apply for a contract
with us again if:
o you cancel your contract during the free look period; or
o you change your mind before you receive your contract whether we have
received your contribution or not.
Please see "Tax information" for possible consequences of
cancelling your contract.
In addition to the cancellation right described above, if you fully convert an
existing traditional IRA contract to a Roth Conversion IRA contract, you may
cancel your Roth Conversion IRA contract and return to a Rollover IRA
contract. Our processing office or your financial professional can provide you
with the cancellation instructions.
<PAGE>
2
Determining your contract's value
- ------
23
- --------------------------------------------------------------------------------
YOUR ACCOUNT VALUE AND CASH VALUE
Your "account value" is the total value you have in the variable investment
options and in the loan reserve account (applies for Rollover TSA contracts
only). These amounts are subject to certain fees and charges discussed in
"Charges and expenses."
Your contract also has a "cash value." At any time before annuity payments
begin, your contract's cash value is equal to the account value less: (i) any
applicable withdrawal charges; and (ii) the amount of any outstanding loan
plus accrued interest (applicable to Rollover TSA contracts only). Please see
"Surrendering your contract to receive its cash value" in "Accessing your
money."
YOUR CONTRACT'S VALUE IN THE VARIABLE INVESTMENT OPTIONS
Each variable investment option invests in shares of a corresponding
portfolio. Your value in each variable investment option is measured by
"units." The value of your units will increase or decrease as though you had
invested it in the corresponding portfolio's shares directly. Your value,
however will be reduced by the amount of the fees and charges that we deduct
under the contract.
The unit value for each variable investment option depends on the investment
performance of that option, less daily charges for:
(i) mortality and expense risks;
(ii) administrative expenses; and
(iii) distribution charges.
On any day, your value in any variable investment option equals the number of
units credited to that option, adjusted for any units purchased for or
deducted from your contract under that option, multiplied by that day's value
for one unit. The number of your contract units in any variable investment
option does not change unless they are:
(i) increased to reflect additional contributions;
(ii) decreased to reflect a withdrawal (plus applicable withdrawal
charges);
(iii) increased to reflect transfer into, or decreased to reflect a
transfer out of a variable investment option; or
(iv) decreased to reflect your loan amount to the loan reserve account
under a Rollover TSA contract.
A description of how unit values are calculated is found in the SAI.
<PAGE>
3
Transferring your money among the variable investment options
- -------
24
- --------------------------------------------------------------------------------
TRANSFERRING YOUR ACCOUNT VALUE
At any time before the date annuity payments are to begin, you can transfer
some or all of your account value among the variable investment options.
You may request a transfer in writing or by telephone using TOPS. (We
anticipate that transfers will be available online by using EQAccess by the
end of 2000.) You must send in all written transfer requests directly to our
processing office. Transfer requests should specify:
(1) the contract number,
(2) the dollar amounts or percentages of your current account value to be
transferred, and
(3) the investment options to and from which you are transferring.
We will confirm all transfers in writing.
MARKET TIMING
You should note that the product is not designed for professional "market
timing" organizations, or other organizations or individuals engaging in a
market timing strategy, making programmed transfers, frequent transfers or
transfers that are large in relation to the total assets of the underlying
mutual fund portfolio. Market timing strategies are disruptive to the
underlying mutual fund portfolios in which the variable investment options
invest. If we determine that your transfer patterns among the variable
investment options reflect a market timing strategy, we reserve the right to
take action including, but not limited to: restricting the availability of
transfers through telephone requests, facsimile transmissions, automated
telephone services, Internet services or any electronic transfer services. We
may also refuse to act on transfer instructions of an agent acting under a
power of attorney who is acting on behalf of more than one owner.
DOLLAR COST AVERAGING YOUR ACCOUNT VALUE
Dollar cost averaging allows you to gradually transfer amounts from the
Alliance Money Market option to the other variable investment options by
periodically transferring approximately the same dollar amount to the variable
investment options you select. This will cause you to purchase more units if
the unit's value is low and fewer units if the unit's value is high.
Therefore, you may get a lower average cost per unit over the long term. This
plan of investing, however, does not guarantee that you will earn a profit or
be protected against losses.
- --------------------------------------------------------------------------------
Units measure your value in each variable investment option.
- --------------------------------------------------------------------------------
If your value in the Alliance Money Market option is at least $5,000, you may
choose, at any time, to have a specified dollar amount or percentage of your
value transferred from that option to the other variable investment options.
You can select to have transfers made on a monthly, quarterly, or annual
basis. The transfer date will be the same calendar day of the month as the
contract date, but not later than the 28th day of the month. You can also
specify the number of transfers or instruct us to continue making the
transfers until all amounts in the Alliance Money Market option have been
transferred out.
The minimum amount that we will transfer each time is $250. The maximum amount
we will transfer is equal to your value in the Alliance Money Market option at
the time the program is elected, divided by the number of transfers scheduled
to be made.
If, on any transfer date, your value in the Alliance Money Market option is
equal to or less than the amount you have elected to have transferred, the
entire amount will be transferred. The dollar cost averaging program will then
end. You may change the transfer amount once each contract year or cancel this
program at any time.
You may not elect dollar cost averaging if you are participating in the
rebalancing program.
REBALANCING YOUR ACCOUNT VALUE
We currently offer a rebalancing program that you can use to automatically
reallocate your account value among the variable investment options. You must
tell us:
<PAGE>
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(a) the percentage you want invested in each variable investment option (whole
percentages only), and
(b) how often you want the rebalancing to occur (quarterly, semiannually, or
annually on a contract year basis. Rebalancing will occur on the same
day of the month as the contract date).
While your rebalancing program is in effect, we will transfer amounts among
each variable investment option so that the percentage of your account value
that you specify is invested in each option at the end of each rebalancing
date. Your entire account value must be included in the rebalancing program.
- --------------------------------------------------------------------------------
Rebalancing does not assure a profit or protect against loss. You should
periodically review your allocation percentages as your needs change. You may
want to discuss the rebalancing program with your financial professional or
other financial adviser before electing the program.
- --------------------------------------------------------------------------------
You may elect the rebalancing program at any time. You may also change your
allocation instructions or cancel the program at any time. If you request a
transfer while the rebalancing program is in effect, we will process the
transfer as requested; the rebalancing program will remain in effect unless
you request that it be canceled in writing.
You may not elect the rebalancing program if you are participating in the
dollar cost averaging or special dollar cost averaging program.
<PAGE>
4
Accessing your money
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WITHDRAWING YOUR ACCOUNT VALUE
You have several ways to withdraw your account value before annuity payments
begin. The table below shows the methods available under each type of
contract. More information follows the table. For the tax consequences of
withdrawals, see "Tax information."
<TABLE>
<CAPTION>
METHOD OF WITHDRAWAL
- --------------------------------------------------------------------------------
SUBSTANTIALLY MINIMUM
CONTRACT LUMP SUM SYSTEMATIC EQUAL DISTRIBUTION
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NQ Yes Yes No No
Rollover IRA Yes Yes Yes Yes
Roth
Conversion
IRA Yes Yes Yes No
Rollover
TSA* Yes No No Yes
- --------------- ----------- ------------- ---------------- -------------
QP Yes No No Yes
- --------------- ----------- ------------- ---------------- -------------
</TABLE>
* For some Rollover TSA contracts, your ability to take withdrawals, loans or
surrender your contract may be limited. You must provide withdrawal
restriction information when you apply for a contract. See "Tax Sheltered
Annuity contracts (TSAs)" in "Tax information."
LUMP SUM WITHDRAWALS
(All contracts)
You may take lump sum withdrawals from your account value at any time.
(Rollover TSA contracts may have restrictions.) The minimum amount you may
withdraw is $300. If you request to withdraw more than 90% of a contract's
current cash value we will treat it as a request to surrender the contract for
its cash value. See "Surrendering your contract to receive its cash value"
below.
Lump sum withdrawals in excess of the 15% free withdrawal amount (see "15%
free withdrawal amount" in "Charges and expenses") may be subject to a
withdrawal charge. Under Rollover TSA contracts, if a loan is outstanding, you
may only take lump sum withdrawals as long as the cash value remaining after
any withdrawal equals at least 10% of the outstanding loan plus accrued
interest.
SYSTEMATIC WITHDRAWALS
(NQ, Rollover IRA, and Roth Conversion IRA contracts only)
You may take systematic withdrawals of a particular dollar amount or a
particular percentage of your account value.
You may take systematic withdrawals on a monthly, quarterly, or annual basis
as long as the withdrawals do not exceed the following percentages of your
account value: 1.2% monthly, 3.6% quarterly, and 15.0% annually. The minimum
amount you may take in each systematic withdrawal is $250. If the amount
withdrawn would be less than $250 on the date a withdrawal is to be taken, we
will not make a payment and we will terminate your systematic withdrawal
election.
We will make the withdrawals on any day of the month that you select as long
as it is not later than the 28th day of the month. If you do not select a
date, we will make the withdrawals on the same calendar day of the month as
the contract date. You must wait at least 28 days after your contract is
issued before your systematic withdrawals can begin.
You may elect to take systematic withdrawals at any time. If you own an IRA
contract, you may elect this withdrawal method only if you are between ages
59 1/2 and 70 1/2.
You may change the payment frequency, or the amount or percentage of your
systematic withdrawals, once each contract year. However, you may not change
the amount or percentage in any contract year in which you have already taken
a lump sum withdrawal. You can cancel the systematic withdrawal option at any
time.
Systematic withdrawals are not subject to a withdrawal charge, except to the
extent that, when added to a lump sum withdrawal previously taken in the same
contract year, the systematic withdrawal exceeds the 15% free withdrawal
amount.
SUBSTANTIALLY EQUAL WITHDRAWALS
(Rollover IRA and Roth Conversion IRA contracts only)
The substantially equal withdrawals option allows you to receive distributions
from your account value without
<PAGE>
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triggering the 10% additional federal tax penalty, which normally applies to
distributions made before age 59 1/2. See "Tax information." Once you begin to
take substantially equal withdrawals, you should not stop them or change the
pattern of your withdrawals until after the later of age 59 1/2 or five full
years after the first withdrawal. If you stop or change the withdrawals or
take a lump sum withdrawal, you may be liable for the 10% federal tax penalty
that would have otherwise been due on prior withdrawals made under this option
and for any interest on those withdrawals.
You may elect to take substantially equal withdrawals at any time before age
59 1/2. We will make the withdrawal on any day of the month that you select as
long as it is not later than the 28th day of the month. You may not elect to
receive the first payment in the same contract year in which you took a lump
sum withdrawal. We will calculate the amount of your substantially equal
withdrawals based on the method you choose from the choices we offer. The
payments will be made monthly, quarterly, or annually as you select. These
payments will continue until we receive written notice from you to cancel this
option or you take a lump sum withdrawal. You may elect to start receiving
substantially equal withdrawals again, but the payments may not restart in the
same contract year in which you took a lump sum withdrawal. We will calculate
the new withdrawal amount.
Substantially equal withdrawals are not subject to a withdrawal charge.
MINIMUM DISTRIBUTION WITHDRAWALS
(Rollover IRA, Rollover TSA and QP contracts only - See "Tax information")
We offer the minimum distribution withdrawal option to help you meet lifetime
required minimum distributions under federal income tax rules. You may elect
this option in the year in which you reach age 70 1/2. The minimum amount we
will pay out is $250. You may elect the method you want us to use to calculate
your minimum distribution withdrawals from the choices we offer. Currently,
minimum distribution withdrawal payments will be made annually.
We do not impose a withdrawal charge on minimum distribution withdrawals
except if when added to a lump sum withdrawal previously taken in the same
contract year, the minimum distribution withdrawal exceeds the 15% free
withdrawal amount.
We will calculate your annual payment based on your account value at the end
of the prior calendar year based on the method you choose.
Under Rollover TSA contracts, you may not elect minimum distribution
withdrawals if a loan is outstanding.
- --------------------------------------------------------------------------------
For Rollover IRA, Rollover TSA and QP contracts, we will send a form outlining
the distribution options available in the year you reach age 70 1/2 (if you
have not begun your annuity payments before that time).
- --------------------------------------------------------------------------------
HOW WITHDRAWALS ARE TAKEN FROM YOUR ACCOUNT VALUE
Unless you specify otherwise, we will subtract your withdrawals on a pro rata
basis from your value in the variable investment options.
HOW WITHDRAWALS AFFECT YOUR GUARANTEED MINIMUM DEATH BENEFIT
Withdrawals will reduce your guaranteed minimum death benefit on either a
dollar-for-dollar basis or on a pro rata basis as explained below:
5% roll up to age 80 - If you elect the 5% roll up to age 80 guaranteed
minimum death benefit, your current guaranteed minimum death benefit will be
reduced on a dollar-for-dollar basis as long as the sum of your withdrawals in
a contract year is 5% or less of the guaranteed minimum death benefit on the
most recent contract date anniversary. Once you take a withdrawal that causes
the sum of your withdrawals in a contract year to exceed 5% of the guaranteed
minimum death benefit on the most recent contract date anniversary, that
withdrawal
<PAGE>
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- --------------------------------------------------------------------------------
and any subsequent withdrawals in that same contract year will reduce your
current guaranteed minimum death benefit on a pro rata basis.
The timing of your withdrawals and whether they exceed the 5% threshold
described above can have a significant impact on your guaranteed minimum death
benefit.
Annual ratchet to age 80 - If you elect the annual ratchet to age 80
guaranteed minimum death benefit, each withdrawal will always reduce your
current guaranteed minimum death benefit on a pro rata basis.
Annuitant issue age 80 - If your contract was issued when the annuitant was
age 80, each withdrawal will always reduce your current guaranteed minimum
death benefit on a pro rata basis.
----------------------------------------
Reduction on a dollar-for-dollar basis means that your current benefit will be
reduced by the dollar amount of the withdrawal. Reduction on a pro rata basis
means that we calculate the percentage of your current account value that is
being withdrawn and we reduce your current benefit by that same percentage.
For example, if your account value is $30,000 and you withdraw $12,000, you
have withdrawn 40% of your account value. If your guaranteed minimum death
benefit was $40,000 before the withdrawal, it would be reduced by $16,000
($40,000 x .40) and your new guaranteed minimum death benefit after the
withdrawal would be $24,000 ($40,000 - $16,000).
LOANS UNDER ROLLOVER TSA CONTRACTS
You may take loans from a Rollover TSA unless restricted by the employer who
provided the Rollover TSA funds. If you cannot take a loan, or cannot take a
loan without approval from the employer who provided the funds, we will have
this information in our records based on what you and the employer who
provided the funds told us when you purchased your contract. The employer must
also tell us whether special employer plan rules of the Employee Retirement
Income Security Act of 1974 ("ERISA") apply. We will not permit you to take a
loan while you are taking minimum distribution withdrawals.
You should read the terms and conditions on our loan request form carefully
before taking out a loan. Under Rollover TSA contracts subject to ERISA, you
may only take a loan with the written consent of your spouse. Your contract
contains further details of the loan provision. Also, see "Tax information"
below, for general rules applicable to loans.
We will permit you to have only one loan outstanding at a time. The minimum
loan amount is $1,000. The maximum amount if $50,000 or, if less, 50% of your
account value, subject to any limits under the federal income tax rules. The
term of the loan is five years. However, if you use the loan to acquire your
primary residence, the term is 10 years. The term may not extend beyond the
earliest of:
(1) the date annuity payments begin;
(2) the date the contract terminates; and
(3) the date a death benefit is paid (the outstanding loan will be deducted
from the death benefit amounts).
Interest will accrue daily on your outstanding loan at a rate we set. The loan
interest rate will be equal to the Moody's Corporate Bond Yield Averages for
Baa bonds for the calendar month ending two months before the first day of the
calendar quarter in which the rate is determined.
LOAN RESERVE ACCOUNT
On the date your loan is processed, we will transfer the amount of your loan
to the loan reserve account. Unless you specify otherwise, we will subtract
your loan on a pro rata basis from your value in the variable investment
options.
We will credit interest to the amount in the loan reserve account at a rate of
2% lower than the loan interest rate that applies for the time your loan is
outstanding. On each contract date anniversary after the date the loan is
processed, we will transfer the amount of interest earned in the loan reserve
account to the variable investment options on a pro rata basis. When you make
a loan repayment, unless you specify otherwise, we will transfer the dollar
<PAGE>
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amount of the loan repaid from the loan reserve account to the investment
options according the allocation percentages we have on our records. Loan
repayments are not considered contributions and therefore are not eligible for
additional credits.
SURRENDERING YOUR CONTRACT TO RECEIVE ITS CASH VALUE
You may surrender your contract to receive its cash value at any time while
the annuitant is living and before you begin to receive annuity payments.
(Rollover TSA contracts may have restrictions). For a surrender to be
effective, we must receive your written request and your contract at our
processing office. We will determine your cash value on the date we receive
the required information. All benefits under the contract will terminate as of
that date.
You may receive your cash value in a single sum payment or apply it to one or
more of the annuity payout options. See "Your annuity payout options" below.
For the tax consequences of surrenders, see "Tax information."
WHEN TO EXPECT PAYMENTS
Generally, we will fulfill requests for payments out of the variable
investment options within seven calendar days after the date of the
transaction to which the request relates. These transactions may include
applying proceeds to a variable annuity, payment of a death benefit, payment
of any amount you withdraw (less any withdrawal charge) and, upon surrender,
payment of the cash value. We may postpone such payments or applying proceeds
for any period during which:
(1) the New York Stock Exchange is closed or restricts trading,
(2) sales of securities or determination of the fair value of a variable
investment option's assets is not reasonably practicable because of an
emergency, or
(3) the SEC, by order, permits us to defer payment to protect people remaining
in the variable investment options.
We also may defer payments for a reasonable amount of time (not to exceed 10
days) while we are waiting for a contribution check to clear.
All payments are made by check and are mailed to you (or the payee named in a
tax-free exchange) by U.S. mail, unless you request that we use an express
delivery service at your expense.
YOUR ANNUITY PAYOUT OPTIONS
Equitable Accumulator Plus offers you several choices of annuity payout
options. Some enable you to receive fixed annuity payments, which can be
either level or increasing, and others enable you to receive variable annuity
payments.
You can choose from among the annuity payout options listed below.
Restrictions may apply, depending on the type of contract you own or the
annuitant's age at contract issue.
<TABLE>
<S> <C>
Fixed annuity payout options Life annuity
Life annuity with period certain
Life annuity with refund certain
Period certain annuity
- ------------------------------------------------------------------
Variable Immediate Annuity Life annuity (not available
payout options in New York)
Life annuity with period
certain
- ------------------------------------------------------------------
Income Manager payout Life annuity with period
options certain
Period certain annuity
- ------------------------------------------------------------------
</TABLE>
o Life annuity: An annuity that guarantees payments for the rest of the
annuitant's life. Payments end with the last monthly payment before the
annuitant's death. Because there is no continuation of benefits following
the annuitant's death with this payout option, it provides the highest
monthly payment of any of the life annuity options, so long as the
annuitant is living.
o Life annuity with period certain: An annuity that guarantees payments for
the rest of the annuitant's life. If the annuitant dies before the end of
a selected period of time ("period certain"), payments continue to the
<PAGE>
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beneficiary for the balance of the period certain. The period certain
cannot extend beyond the annuitant's life expectancy. A life annuity with
a period certain is the form of annuity under the contracts that you will
receive if you do not elect a different payout option. In this case, the
period certain will be based on the annuitant's age and will not exceed 10
years.
o Life annuity with refund certain: An annuity that guarantees payments for
the rest of the annuitant's life. If the annuitant dies before the amount
applied to purchase the annuity option has been recovered, payments to the
beneficiary will continue until that amount has been recovered. This
payout option is available only as a fixed annuity.
o Period certain annuity: An annuity that guarantees payments for a specific
period of time, usually 5, 10, 15, or 20 years. This guaranteed period may
not exceed the annuitant's life expectancy. This option does not guarantee
payments for the rest of the annuitant's life. It does not permit any
repayment of the unpaid principal, so you cannot elect to receive part of
the payments as a single sum payment with the rest paid in monthly annuity
payments. This payout option is available only as a fixed annuity.
The life annuity, life annuity with period certain, and life annuity with
refund certain payout options are available on a single life or joint and
survivor life basis. The joint and survivor life annuity guarantees payments
for the rest of the annuitant's life and, after the annuitant's death,
payments continue to the survivor. We may offer other payout options not
outlined here. Your financial professional can provide details.
FIXED ANNUITY PAYOUT OPTION
With fixed annuities, we guarantee fixed annuity payments that will be based
either on the tables of guaranteed annuity purchase factors in your contract
or on our then current annuity purchase factors, whichever is more favorable
for you.
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTIONS
Variable Immediate Annuities are described in a separate prospectus that is
available from your financial professional. Before you select a Variable
Immediate Annuity payout option, you should read the prospectus which contains
important information that you should know.
Variable annuities may be funded through your choice of variable investment
options investing in portfolios of EQ Advisors Trust. The contract also offers
a fixed annuity payout option that can be elected in combination with the
variable annuity payout options. The amount of each variable annuity payment
will fluctuate, depending upon the performance of the variable investment
options, and whether the actual rate of investment return is higher or lower
than an assumed base rate.
INCOME MANAGER PAYOUT OPTIONS
The Income Manager payout annuity contracts differ from the other payout
annuity contracts. The other payout annuity contracts may provide higher or
lower income levels, but do not have all the features of the Income Manager
payout annuity contract. You may request an illustration of the Income Manager
payout annuity contract from your financial professional. Income Manager
payout options are described in a separate prospectus that is available from
your financial professional. Before you select an Income Manager payout
option, you should read the prospectus which contains important information
that you should know.
Both Income Manager payout options provide guaranteed level payments (NQ and
IRA contracts). The Income Manager (life annuity with period certain) also
provides guaranteed increasing payments (NQ contracts only). You may not elect
a period certain Income Manager payout option unless withdrawal charges are no
longer in effect under your Equitable Accumulator.
For QP and Rollover TSA contracts, if you want to elect an Income Manager
payout option, we will first roll over amounts in such contract to a Rollover
IRA contract. You will be the owner of the Rollover IRA contract.
<PAGE>
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You may choose to apply only part of the account value of your Equitable
Accumulator Plus contract to an Income Manager payout annuity. In this case,
we will consider any amounts applied as a withdrawal from your Equitable
Accumulator Plus and we will deduct any applicable withdrawal charge. For the
tax consequences of withdrawals, see "Tax information."
Depending upon your circumstances, the purchase of an Income Manager contract
may be done on a tax-free basis. Please consult your tax adviser.
THE AMOUNT APPLIED TO PURCHASE AN ANNUITY PAYOUT OPTION
The amount applied to purchase an annuity payout option varies, depending on
the payout option that you choose, and the timing of your purchase as it
relates to any withdrawal charges.
For the fixed annuity payout options and Variable Immediate Annuity payout
options, no withdrawal charge is imposed if you select a life annuity, life
annuity with period certain or life annuity with refund certain.
For the fixed annuity payout option, the withdrawal charge applicable under
your Equitable Accumulator Plus is imposed if you select a period certain. If
the period certain is more than 5 years, then the withdrawal charge deducted
will not exceed 5% of the account value.
For the Income Manager payout options, no withdrawal charge is imposed under
the Equitable Accumulator Plus. If the withdrawal charge that otherwise would
have been applied to your account value under your Equitable Accumulator Plus
is greater that 2% of the contributions that remain in your contract at the
time you purchase your payout option, the withdrawal charges under the Income
Manager will apply. For this purpose, the year in which your account value is
applied to the payout option will be "contract year 1."
SELECTING AN ANNUITY PAYOUT OPTION
When you select a payout option, we will issue you a separate written
agreement confirming your right to receive annuity payments. We require you to
return your contract before annuity payments begin unless you are applying
only some of your account value to an income manager contract. The contract
owner and annuitant must meet the issue age and payment requirements.
You can choose the date annuity payments begin but it may not be earlier than
five years from the contract date. Except with respect to the Income Manager
annuity payout options, where payments are made on the 15th day of each month,
you can change the date your annuity payments are to begin anytime before that
date as long as you do not choose a date later than the 28th day of any month.
Also, that date may not be later than the contract date anniversary that
follows the annuitant's 90th birthday. This may be different in some states.
If you elect to start receiving annuity payments within three years of making
an additional contribution, we will recover the amount of any credit that
applies to that contribution.
Before the last day by which your annuity payments must begin, we will notify
you by letter. Once you have selected an annuity payout option and payments
have begun, no change can be made other than: (i) transfers (if permitted in
the future) among the variable investment options if a Variable Immediate
Annuity payout option is selected; and (ii) withdrawals or contract surrender
if an Income Manager annuity payout option is chosen.
The amount of the annuity payments will depend on the amount applied to
purchase the annuity and the applicable annuity purchase factors, discussed
earlier.
In no event will you ever receive payments under a fixed option or an initial
payment under a variable option of less than the minimum amounts guaranteed by
the contract.
If, at the time you elect a payout option, the amount to be applied is less
than $2,000 or the initial payment under the form elected is less than $20
monthly, we reserve the right to pay the account value in a single sum rather
than as payments under the payout option chosen.
<PAGE>
5
Charges and expenses
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CHARGES THAT EQUITABLE LIFE DEDUCTS
We deduct the following charges each day from the net assets of each variable
investment option. These charges are reflected in the unit values of each
variable investment option:
o A mortality and expense risks charge
o An administrative charge
o A distribution charge
We deduct the following charges from your account value. When we deduct these
charges from your variable investment options, we reduce the number of units
credited to your contract:
o At the time you make certain withdrawals or surrender your contract - a
withdrawal charge.
o At the time annuity payments are to begin - charges designed to approximate
certain taxes that may be imposed on us, such as premium taxes in your
state. An annuity administrative fee may also apply.
More information about these charges appears below. We will not increase these
charges for the life of your contract, except as noted. We may reduce certain
charges under group or sponsored arrangements. See "Group or sponsored
arrangements" below.
To help with your retirement planning, we may offer other annuities with
different charges, benefits, and features. Please contact your financial
professional for more information.
MORTALITY AND EXPENSE RISKS CHARGE
We deduct a daily charge from the net assets in each variable investment
option to compensate us for mortality and expense risks, including the
guaranteed minimum death benefit. The daily charge is equivalent to an annual
rate of 1.10% of the net assets in each variable investment option.
The mortality risk we assume is the risk that annuitants as a group will live
for a longer time than our actuarial tables predict. If that happens, we would
be paying more in annuity income than we planned. We also assume a risk that
the mortality assumptions reflected in our guaranteed annuity payment tables,
shown in each contract, will differ from actual mortality experience. Lastly,
we assume a mortality risk to the extent that at the time of death, the
guaranteed minimum death benefit exceeds the cash value of the contract. The
expense risk we assume is the risk that it will cost us more to issue and
administer the contracts than we expect. A portion of this charge also
compensates us for the contract credit. For a discussion of the credit, see
"Credits" in "Contract features and benefits." We expect to make a profit from
this charge.
ADMINISTRATIVE CHARGE
We deduct a daily charge from the net assets in each variable investment
option to compensate us for administrative expenses under the contracts. The
daily charge is equivalent to an annual rate of 0.25% of the net assets in
each variable investment option. We reserve the right under the contracts to
increase this charge to an annual rate of 0.35%.
DISTRIBUTION CHARGE
We deduct a daily charge from the net assets in each variable investment
option to compensate us for a portion of our sales expenses under the
contracts. The daily charge is equivalent to an annual rate of 0.25% of the
net assets in each variable investment option.
WITHDRAWAL CHARGE
A withdrawal charge applies in two circumstances: (1) if you make one or more
withdrawals during a contract year that, in total, exceed the 15% free
withdrawal amount, described below, or (2) if you surrender your contract to
receive its cash value. A portion of this charge also compensates us for the
contract credit. For a discussion of the credit, see "Credits" in "Contract
features and benefits." We expect to make a profit from this charge.
<PAGE>
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33
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The withdrawal charge equals a percentage of the contributions withdrawn. We
do not consider credits to be contributions. Therefore, there is no withdrawal
charge associated with a credit.
The percentage of the withdrawal charge that applies to each contribution
depends on how long each contribution has been invested in the contract. We
determine the withdrawal charge separately for each contribution according to
the following table:
<TABLE>
<CAPTION>
CONTRACT YEAR
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 2 3 4 5 6 7 8 9 10+
Percentage of
contribution 8% 8% 7% 6% 5% 4% 3% 2% 1% 0%
</TABLE>
For purposes of calculating the withdrawal charge, we treat the contract year
in which we receive a contribution as "contract year 1." Amounts withdrawn up
to the free withdrawal amount are not considered withdrawal of any
contribution. We also treat contributions that have been invested the longest
as being withdrawn first. We treat contributions as withdrawn before earnings
for purposes of calculating the withdrawal charge. However, federal income tax
rules treat earnings under your contract as withdrawn first. See "Tax
information."
In order to give you the exact dollar amount of the withdrawal you request, we
deduct the amount of the withdrawal and the withdrawal charge from your
account value. Any amount deducted to pay withdrawal charges is also subject
to the same withdrawal charge percentage. We deduct the charge in proportion
to the amount of the withdrawal subtracted from each variable investment
option. The withdrawal charge helps cover our sales expenses.
The withdrawal charge does not apply in the circumstances described below.
15% FREE WITHDRAWAL AMOUNT. Each contract year you can withdraw up to 15% of
your account value without paying a withdrawal charge. The 15% free withdrawal
amount is determined using your account value on the most recent contract date
anniversary, minus any other withdrawals made during the contract year. The
15% free withdrawal amount does not apply if you surrender your contract.
Note the following special rule for NQ contracts issued to a charitable
remainder trust, the free withdrawal amount will equal the greater of: (1) the
current account value, less contributions that have not been withdrawn
(earnings in the contract), and (2) the 15% free withdrawal amount defined
above.
DISABILITY, TERMINAL ILLNESS, OR CONFINEMENT TO NURSING HOME. The withdrawal
charge does not apply if:
o The annuitant has qualified to receive Social Security disability benefits
as certified by the Social Security Administration; or
o We receive proof satisfactory to us (including certification by a licensed
physician) that the annuitant's life expectancy is six months or less; or
o The annuitant has been confined to a nursing home for more than 90 days (or
such other period, as required in your state) as verified by a licensed
physician. A nursing home for this purpose means one that is (a) approved
by Medicare as a provider of skilled nursing care service, or (b) licensed
as a skilled nursing home by the state or territory in which it is located
(it must be within the United States, Puerto Rico, or U.S. Virgin Islands)
and meets all of the following:
- its main function is to provide skilled, intermediate, or custodial
nursing care;
- it provides continuous room and board to three or more persons;
- it is supervised by a registered nurse or licensed practical nurse;
- it keeps daily medical records of each patient;
- it controls and records all medications dispensed; and - its primary
service is other than to provide housing for residents.
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We reserve the right to impose a withdrawal charge, in accordance with your
contract and applicable state law, if the disability is caused by a
preexisting condition or a condition that began within 12 months of the
contract date. Some states may not permit us to waive the withdrawal charge in
the above circumstances, or may limit the circumstances for which the
withdrawal charge may be waived. Your financial professional can provide more
information or you may contact our processing office.
CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES
We deduct a charge designed to approximate certain taxes that may be imposed
on us, such as premium taxes in your state. Generally, we deduct the charge
from the amount applied to provide an annuity payout option. The current tax
charge that might be imposed by us varies by state and ranges from 0% to 3.5%
(1% in Puerto Rico and 5% in the U.S. Virgin Islands).
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION ADMINISTRATIVE FEE
We deduct a fee of $350 from the amount to the Variable Immediate Annuity
payout option.
CHARGES THAT EQ ADVISORS TRUST DEDUCTS
EQ Advisors Trust deducts charges for the following types of fees and
expenses:
o Management fees ranging from 0.25% to 1.15%.
o 12b-1 fees of 0.25%.
o Operating expenses, such as trustees' fees, independent auditors' fees,
legal counsel fees, administrative service fees, custodian fees, and
liability insurance.
o Investment-related expenses, such as brokerage commissions.
These charges are reflected in the daily share price of each portfolio. Since
shares of EQ Advisors Trust are purchased at their net asset value, these fees
and expenses are, in effect, passed on to the variable investment options and
are reflected in their unit values. For more information about these charges,
please refer to the prospectus for EQ Advisors Trust following this
prospectus.
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce the withdrawal
charge or the mortality and expense risks charge or change the minimum initial
contribution requirements. We also may change the guaranteed minimum death
benefit or offer variable investment options that invest in shares of EQ
Advisors Trust that are not subject to the 12b-1 fee. Group arrangements
include those in which a trustee or an employer, for example, purchases
contracts covering a group of individuals on a group basis. Group arrangements
are not available for Rollover IRA and Roth Conversion IRA contracts.
Sponsored arrangements include those in which an employer allows us to sell
contracts to its employees or retirees on an individual basis.
Our costs for sales, administration, and mortality generally vary with the
size and stability of the group or sponsoring organization, among other
factors. We take all these factors into account when reducing charges. To
qualify for reduced charges, a group or sponsored arrangement must meet
certain requirements, such as requirements for size and number of years in
existence. Group or sponsored arrangements that have been set up solely to buy
contracts or that have been in existence less than six months will not qualify
for reduced charges.
We will make these and any similar reductions according to our rules in effect
when we approve a contract for issue. We may change these rules from time to
time. Any variation will reflect differences in costs or services and will not
be unfairly discriminatory.
Group or sponsored arrangements may be governed by federal income tax rules,
the Employee Retirement Income Security Act of 1974 or both. We make no
representations with regard to the impact of these and other applicable laws
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on such programs. We recommend that employers, trustees, and others purchasing
or making contracts available for purchase under such programs seek the advice
of their own legal and benefits advisers.
<PAGE>
6
Payment of death benefit
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YOUR BENEFICIARY AND PAYMENT OF BENEFIT
You designate your beneficiary when you apply for your contract. You may
change your beneficiary at any time. The change will be effective on the date
the written request for the change is received in our processing office. We
are not responsible for any beneficiary change request that we do not receive.
We will send you written confirmation when we receive your request. Under
jointly owned contracts, the surviving owner is considered the beneficiary,
and will take the place of any other beneficiary. You may be limited as to the
beneficiary you can designate in a Rollover TSA contract. In a QP contract,
the beneficiary must be the trustee.
The death benefit is equal to your account value, or, if greater, the
guaranteed minimum death benefit. We determine the amount of the death benefit
(other than the guaranteed minimum death benefit) as of the date we receive
satisfactory proof of the annuitant's death and any required instructions for
the method of payment. We determine the amount of the guaranteed death benefit
(other than the guaranteed minimum death benefit) as of the date of the
annuitant's death. Under Rollover TSA contracts, we will deduct the amount of
any outstanding loan plus accrued interest from the amount of the death
benefit.
EFFECT OF THE ANNUITANT'S DEATH
If the annuitant dies before the annuity payments begin, we will pay the death
benefit to your beneficiary.
Generally, the death of the annuitant terminates the contract. However, a
beneficiary spouse of the owner/annuitant can choose to be treated as the
successor owner/annuitant and continue the contract. Only a spouse can be a
successor owner/annuitant. A successor owner/annuitant can only be named under
NQ and IRA contracts.
For IRA contracts, a beneficiary may be able to have limited ownership as
discussed under "Beneficiary continuation option" below.
WHEN AN NQ CONTRACT OWNER DIES BEFORE THE ANNUITANT
Under certain conditions the owner changes after the original owner's death.
When you are not the annuitant under an NQ contract and you die before annuity
payments begin, the beneficiary named to receive the death benefit upon the
annuitant's death will automatically become the successor owner. If you do not
want this beneficiary to be the successor owner, you should name a specific
successor owner. You may name a successor owner at any time by sending
satisfactory notice to our processing office. If the contract is jointly owned
and the first owner to die is not the annuitant, the surviving owner becomes
the sole contract owner. This person will be considered the successor owner
for purposes of the distribution rules described in this section. The
surviving owner automatically takes the place of any other beneficiary
designation.
Unless the surviving spouse of the owner who has died (or in the case of a
joint ownership situation, the surviving spouse of the first owner to die) is
the successor owner for this purpose, the entire interest in the contract must
be distributed under the following rules:
o The cash value of the contract must be fully paid to the successor owner
(new owner) by December 31st of the fifth calendar year after your death
(or in a joint ownership situation, the death of the first owner to die).
o The successor owner may instead elect to receive the cash value as a life
annuity (or payments for a period certain of not longer than the new
owner's life expectancy). Payments must begin no later than December 31st
following the calendar year of the non-annuitant owner's death. Unless
this alternative is elected, we will pay any cash value on December 31st
of the fifth calendar year following the year of your death (or the death
of the first owner to die).
If the surviving spouse is the successor owner or joint owner, the spouse may
elect to continue the contract. No distributions are required as long as the
surviving spouse and annuitant are living.
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HOW DEATH BENEFIT PAYMENT IS MADE
We will pay the death benefit to the beneficiary in the form of the annuity
payout option you have chosen. If you have not chosen an annuity payout option
as of the time of the annuitant's death, the beneficiary will receive the
death benefit in a single sum. However, subject to any exceptions in the
contract, our rules and any applicable requirements under federal income tax
rules, the beneficiary may elect to apply the death benefit to one or more
annuity payout options we offer at the time. See "Your annuity payout options"
in "Accessing your money" earlier in this prospectus. Please note that any
annuity payout option chosen may not extend beyond the life expectancy of the
beneficiary.
SUCCESSOR OWNER AND ANNUITANT
If you are both the contract owner and the annuitant, and your spouse is the
sole beneficiary or the joint owner, then your spouse may elect to receive the
death benefit or continue the contract as successor owner/annuitant.
If your surviving spouse decides to continue the contract, then on the
contract date anniversary following your death, we will increase the account
value to equal your current guaranteed minimum death benefit, if it is higher
than the account value. The increase in the account value will be allocated to
the investment options according to the allocation percentages we have on file
for your contract. Therefore, withdrawal charges will no longer apply to this
amount. Withdrawal charges will apply if you make additional contributions.
These additional contributions will be withdrawn only after all other amounts
have been withdrawn. In determining whether the guaranteed minimum death
benefit will continue to grow, we will use your surviving spouse's age (as of
the contract date anniversary).
BENEFICIARY CONTINUATION OPTION
Upon your death, under an IRA contract, a beneficiary may generally elect to
keep the contract in your name and receive distributions under the contract
instead of receiving the death benefit in a single sum. In order to elect this
option, the beneficiary must be an individual. Certain trusts with only
individual beneficiaries will be treated as individuals. This election must be
made within 60 days following the date we receive proof of your death. We will
increase the account value to equal the death benefit if the death benefit is
greater than the account value. Except as noted in the next sentence, the
beneficiary continuation option will be available on or after May 1, 2000
depending on when we receive regulatory clearance in your state. For Rollover
IRA contracts, a similar beneficiary continuation option will be available
until the beneficiary continuation option described in this prospectus is
available. Please contact our processing office for further information.
Under the beneficiary continuation option:
o The contract continues in your name for the benefit of your beneficiary.
o The beneficiary may make transfers among the investment options but no
additional contributions will be permitted.
o The death benefit (including the guaranteed minimum death benefit)
provision will no longer be in effect.
o The beneficiary may choose at any time to withdraw all or a portion of the
account value and no withdrawal charges will apply. Any partial withdrawal
must be at least $300.
o Upon the death of the beneficiary, any remaining death benefit will be paid
in a lump sum to the person the beneficiary chooses.
For traditional IRA contracts only, if you die AFTER the "Required Beginning
Date" for required minimum distributions (see "Tax information"), the contract
will continue if:
(a) You were receiving minimum distribution withdrawals from this
contract; and
(b) The pattern of minimum distribution withdrawals you chose was based
in part on the life of the designated beneficiary.
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The withdrawals will then continue to be paid to the beneficiary on the same
basis as you chose before you death. We will be able to tell your beneficiary
whether this option is available. You should contact our processing office for
further information.
For both kinds of IRA contracts, if you die BEFORE the Required Beginning Date
(and, for a Rollover IRA, therefore you were not taking minimum distribution
withdrawals under the contract) the beneficiary may choose one of the
following two beneficiary continuation options.
1. Payments over life expectancy period. The beneficiary can receive annual
minimum distributions based on the beneficiary's life expectancy. If there is
more than one beneficiary, the shortest life expectancy is used. These minimum
distributions must begin by December 31st of the calendar year following the
year of your death. In some situations, a spouse beneficiary who elects to
continue the contract in your name under the beneficiary continuation option
instead of electing successor owner/annuitant status may choose to delay
beginning the minimum distributions until the December 31st of the calendar
year in which you would have turned age 70 1/2.
2. Five Year Rule. The beneficiary can take withdrawals as desired. If the
beneficiary does not withdraw the entire account value by the December 31st of
the fifth calendar year following your death, we will pay any amounts
remaining under the contract to the beneficiary by that date. If you have more
than one beneficiary, and one of them elects this option, then all of your
beneficiaries will receive this option.
<PAGE>
7
Tax information
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OVERVIEW
In this part of the prospectus, we discuss the current federal income tax
rules that generally apply to Equitable Accumulator Plus contracts owned by
United States taxpayers. The tax rules can differ, depending on the type of
contract, whether NQ, Rollover IRA, Roth Conversion IRA, QP or Rollover TSA.
Therefore, we discuss the tax aspects of each type of contract separately.
Federal income tax rules include the United States laws in the Internal
Revenue Code, and Treasury Department Regulations and Internal Revenue Service
("IRS") interpretations of the Internal Revenue Code. These tax rules may
change. We cannot predict whether, when, or how these rules could change. Any
change could affect contracts purchased before the change.
We cannot provide detailed information on all tax aspects of the contracts.
Moreover, the tax aspects that apply to a particular person's contract may
vary depending on the facts applicable to that person. We do not discuss state
income and other state taxes, federal income tax, and withholding rules for
non-U.S. taxpayers, or federal gift and estate taxes. Transfers of the
contract, rights under the contract, or payments under the contract may be
subject to gift or estate taxes. You should not rely only on this document,
but should consult your tax adviser before your purchase.
If you are buying a contract to fund a retirement plan that already provides
tax deferral under sections of the Internal Revenue Code (IRA, QP and Rollover
TSA), you should do so for the contract's features and benefits other than tax
deferral. In such situations, the tax deferral of the contract does not
provide additional benefits.
TRANSFERS AMONG VARIABLE INVESTMENT OPTIONS
You can make transfers among variable investment options inside the contract
without triggering taxable income.
TAXATION OF NONQUALIFIED ANNUITIES
CONTRIBUTIONS
You may not deduct the amount of your contributions to a nonqualified annuity
contract.
CONTRACT EARNINGS
Generally, you are not taxed on contract earnings until you receive a
distribution from your contract, whether as a withdrawal or as an annuity
payment. However, earnings are taxable, even without a distribution:
o if a contract fails investment diversification requirements as specified in
federal income tax rules (these rules are based on or are similar to those
specified for mutual funds under the securities laws);
o if you transfer a contract, for example, as a gift to someone other than
your spouse (or former spouse);
o if you use a contract as security for a loan (in this case, the amount
pledged will be treated as a distribution); and
o if the owner is other than an individual (such as a corporation,
partnership, trust, or other non-natural person).
All nonqualified deferred annuity contracts that Equitable Life and its
affiliates issue to you during the same calendar year are linked together and
treated as one contract for calculating the taxable amount of any distribution
from any of those contracts.
ANNUITY PAYMENTS
Once annuity payments begin, a portion of each payment is taxable as ordinary
income. You get back the remaining portion without paying taxes on it. This is
your "investment in the contract." Generally, your investment in the contract
equals the contributions you made, less any amounts you previously withdrew
that were not taxable.
For fixed annuity payments, the tax-free portion of each payment is determined
by (1) dividing your investment in the contract by the total amount you are
expected to receive out
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of the contract, and (2) multiplying the result by the amount of the payment.
For variable annuity payments, your tax-free portion of each payment is your
investment in the contract divided by the number of expected payments.
Once you have received the amount of your investment in the contract, all
payments after that are fully taxable. If payments under a life annuity stop
because the annuitant dies, there is an income tax deduction for any
unrecovered investment in the contract.
PAYMENTS MADE BEFORE ANNUITY PAYMENTS BEGIN
If you make withdrawals before annuity payments begin under your contract,
they are taxable to you as ordinary income if there are earnings in the
contract. Generally, earnings are your account value less your investment in
the contract. If you withdraw an amount which is more than the earnings in the
contract as of the date of the withdrawal, the balance of the distribution is
treated as a return of your investment in the contract and is not taxable.
CONTRACTS PURCHASED THROUGH EXCHANGES
You may purchase your NQ contract through an exchange of another contract.
Normally, exchanges of contracts are taxable events. The exchange will not be
taxable under Section 1035 of the Internal Revenue Code if:
o the contract that is the source of the funds you are using to purchase the
NQ contract is another nonqualified deferred annuity contract or life
insurance or endowment contract.
o the owner and the annuitant are the same under the source contract and the
Equitable Accumulator Plus NQ contract. If you are using a life insurance
or endowment contract the owner and the insured must be the same on both
sides of the exchange transaction.
The tax basis of the source contract carries over to the Equitable Accumulator
Plus NQ contract.
A recent case permitted an owner to direct the proceeds of a partial
withdrawal from one nonqualified deferred annuity contract to a different
insurer to purchase a new nonqualified deferred annuity contract on a
tax-deferred basis. Special forms, agreement between the carriers, and
provision of cost basis information may be required to process this type of
exchange.
SURRENDERS
If you surrender or cancel the contract, the distribution is taxable as
ordinary income (not capital gain) to the extent it exceeds your investment in
the contract.
DEATH BENEFIT PAYMENTS MADE TO A BENEFICIARY AFTER YOUR DEATH
For the rules applicable to death benefits, see "Payment of death benefit"
earlier in this prospectus. The tax treatment of a death benefit taken as a
single sum is generally the same as the tax treatment of a withdrawal from or
surrender of your contract. The tax treatment of a death benefit taken as
annuity payments is generally the same as the tax treatment of annuity
payments under your contract.
EARLY DISTRIBUTION PENALTY TAX
If you take distributions before you are age 59 1/2 a penalty tax of 10% of
the taxable portion of your distribution applies in addition to the income
tax. The extra penalty tax does not apply to pre-age 59 1/2 distributions
made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o in the form of substantially equal periodic annuity payments for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and a beneficiary.
OTHER INFORMATION
The Treasury Department has the authority to issue guidelines prescribing the
circumstances in which your ability to direct your investment to particular
portfolios within a separate account may cause you, rather than the insurance
company, to be treated as the owner of the portfolio shares attributable to
your nonqualified annuity contract. In that case, income and gains
attributable to such portfolio shares would be included in your gross income
for federal income
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tax purposes. Under current rules, however, we believe that Equitable Life,
and not the owner of a nonqualified annuity contract, would be considered the
owner of the portfolio shares.
SPECIAL RULES FOR NQ CONTRACTS ISSUED IN PUERTO RICO
Under current law we treat income from NQ contracts as U.S. source. A Puerto
Rico resident is subject to U.S. taxation on such U.S. source income. Only
Puerto Rico source income of Puerto Rico residents is excludable from U.S.
taxation. Income from NQ contracts is also subject to Puerto Rico tax. The
calculation of the taxable portion of amounts distributed from a contract may
differ in the two jurisdictions. Therefore, you might have to file both U.S.
and Puerto Rico tax returns, showing different amounts of income from the
contract for each tax return. Puerto Rico generally provides a credit against
Puerto Rico tax for U.S. tax paid. Depending on your personal situation and
the timing of the different tax liabilities, you may not be able to take full
advantage of this credit.
INDIVIDUAL RETIREMENT ARRANGEMENTS (IRAS)
GENERAL
"IRA" stands for individual retirement arrangement. There are two basic types
of such arrangements, individual retirement accounts and individual retirement
annuities. In an individual retirement account, a trustee or custodian holds
the assets for the benefit of the IRA owner. The assets can include mutual
funds and certificates of deposit. In an individual retirement annuity, an
insurance company issues an annuity contract that serves as the IRA.
There are two basic types of IRAs, as follows:
o Traditional IRAs, typically funded on a pre-tax basis including SEP-IRAs
and SIMPLE-IRAs, issued and funded in connection with employer-sponsored
retirement plans; and
o Roth IRAs, first available in 1998, funded on an after-tax basis.
Regardless of the type of IRA, your ownership interest in the IRA cannot be
forfeited. You or your beneficiaries who survive you are the only ones who can
receive the IRA's benefits or payments.
You can hold your IRA assets in as many different accounts and annuities as
you would like, as long as you meet the rules for setting up and making
contributions to IRAs. However, if you own multiple IRAs, you may be required
to combine IRA values or contributions for tax purposes. For further
information about individual retirement arrangements, you can read Internal
Revenue Service Publication 590 ("Individual Retirement Arrangements (IRAs)").
This publication is usually updated annually, and can be obtained from any IRS
district office or the IRS Web site (http://www.irs.gov).
Equitable Life designs its traditional IRA contracts to qualify as individual
retirement annuities under Section 408(b) of the Internal Revenue Code. You
may purchase the contract as a traditional IRA ("Rollover IRA") or Roth IRA
("Roth Conversion IRA"). This prospectus contains the information that the IRS
requires you to have before you purchase an IRA. This section of the
prospectus covers some of the special tax rules that apply to IRAs. The next
section covers Roth IRAs. Education IRAs are not discussed in this prospectus
because they are not available in individual retirement annuity form.
The Equitable Accumulator Plus IRA contract has been approved by the IRS as to
form for use as a traditional IRA. This IRS approval is a determination only
as to the form of the annuity. It does not represent a determination of the
merits of the annuity as an investment. The IRS approval does not address
every feature possibly available under the Equitable Accumulator Plus IRA
contract. Although we do not have IRS approval as to form, we believe that the
version of the Roth IRA currently offered complies with the requirements of
the Internal Revenue Code.
CANCELLATION
You can cancel an Equitable Accumulator Plus IRA contract by following the
directions under "Your right to cancel
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within a certain number of days" in "Contract features and benefits" earlier
in the prospectus. You can cancel an Equitable Accumulator Plus Roth
Conversion IRA contract issued as a result of a full conversion of an
Equitable Accumulator Plus Rollover IRA contract by following the instructions
in the request for full conversion form. The form is available from our
processing office or your financial professional. If you cancel an IRA
contract, we may have to withhold tax, and we must report the transaction to
the IRS. A contract cancellation could have an unfavorable tax impact.
TRADITIONAL INDIVIDUAL RETIREMENT ANNUITIES (TRADITIONAL IRAS)
CONTRIBUTIONS TO TRADITIONAL IRAS. Individuals may make three different types
of contributions to a traditional IRA:
o regular contributions out of earned income or compensation.
o tax-free "rollover" contributions; or
o direct custodian-to-custodian transfers from other traditional IRAs
("direct transfers").
REGULAR CONTRIBUTIONS TO TRADITIONAL IRAS
LIMITS ON CONTRIBUTIONS. Generally, $2,000 is the maximum amount that you may
contribute to all IRAs (including Roth IRAs) in any taxable year. When your
earnings are below $2,000, your earned income or compensation for the year is
the most you can contribute. This $2,000 limit does not apply to rollover
contributions or direct custodian-to-custodian transfers into a traditional
IRA. You cannot make regular traditional IRA contributions for the tax year in
which you reach age 70 1/2 or any tax year after that.
SPECIAL RULES FOR SPOUSES. If you are married and file a joint income tax
return, you and your spouse may combine your compensation to determine the
amount of regular contributions you are permitted to make to traditional IRAs
(and Roth IRAs discussed below). Even if one spouse has no compensation or
compensation under $2,000, married individuals filing jointly can contribute
up to $4,000 for any taxable year to any combination of traditional IRAs and
Roth IRAs. (Any contributions to Roth IRAs reduce the ability to contribute to
traditional IRAs and vice versa.) The maximum amount may be less if earned
income is less and the other spouse has made IRA contributions. No more than a
combined total of $2,000 can be contributed annually to either spouse's
traditional and Roth IRAs. Each spouse owns his or her traditional IRAs and
Roth IRAs even if the other spouse funded the contributions. A working spouse
age 70 1/2 or over can contribute up to the lesser of $2,000 or 100% of
"earned income" to a traditional IRA for a nonworking spouse until the year in
which the nonworking spouse reaches age 70 1/2.
DEDUCTIBILITY OF CONTRIBUTIONS. The amount of traditional IRA contributions
that you can deduct for a tax year depends on whether you are covered by an
employer-sponsored tax-favored retirement plan, as defined under special
federal income tax rules. Your Form W-2 will indicate whether or not you are
covered by such a retirement plan.
IF YOU ARE NOT COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, you
can make fully deductible contributions to your traditional IRAs for each tax
year up to $2,000 or, if less, your earned income.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
adjusted gross income (AGI) is BELOW THE LOWER DOLLAR FIGURE IN A PHASE-OUT
RANGE, you can make fully deductible contributions to your traditional IRAs.
For each tax year, your fully deductible contribution can be up to $2,000 or,
if less, your earned income.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
AGI falls within a PHASE-OUT range, you can make PARTIALLY DEDUCTIBLE
CONTRIBUTIONS to your traditional IRAs.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
AGI falls ABOVE THE HIGHER
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FIGURE IN THE PHASE-OUT RANGE, you may not deduct any of your regular
contributions to your traditional IRAs.
If you are single and covered by a retirement plan during any part of the
taxable year, the deduction for traditional IRA contributions phases out with
AGI between $31,000 and $42,000 in 2000. This range will increase every year
until 2005 when the range is $50,000-$60,000.
If you are married and file a joint return, and you are covered by a
retirement plan during any part of the taxable year, the deduction for
traditional IRA contributions phases out with AGI between $51,000 and $61,000
in 1999. This range will increase every year until 2007 when the range is
$80,000-$100,000.
Married individuals filing separately and living apart at all times are not
considered married for purposes of this deductible contribution calculation.
Generally, the active participation in an employer-sponsored retirement plan
of an individual is determined independently for each spouse. Where spouses
have "married filing jointly" status, however, the maximum deductible
traditional IRA contribution for an individual who is not an active
participant (but whose spouse is an active participant) is phased out for
taxpayers with AGI of between $150,000 and $160,000.
To determine the deductible amount of the contribution in 2000, you determine
AGI and subtract $32,000 if you are single, or $52,000 if you are married and
file a joint return with your spouse. The resulting amount is your excess AGI.
You then determine the limit on the deduction for traditional IRA
contributions using the following formula:
<TABLE>
<S> <C> <C> <C> <C>
($10,000-excess AGI) times $2,000 (or earned Equals the adjusted
-------------------- x income, if less) = deductible
divided by $10,000 contribution
limit
</TABLE>
NONDEDUCTIBLE REGULAR CONTRIBUTIONS. If you are not eligible to deduct part or
all of the traditional IRA contribution, you may still make nondeductible
contributions on which earnings will accumulate on a tax-deferred basis. The
combined deductible and nondeductible contributions to your traditional IRA
(or the nonworking spouse's traditional IRA) may not, however, exceed the
maximum $2,000 per person limit. See "Excess contributions" below. You must
keep your own records of deductible and nondeductible contributions in order
to prevent double taxation on the distribution of previously taxed amounts.
See "Withdrawals, payments and transfers of funds out of traditional IRAs"
below.
If you are making nondeductible contributions in any taxable year, or you have
made nondeductible contributions to a traditional IRA in prior years and are
receiving distributions from any traditional IRA, you must file the required
information with the IRS. Moreover, if you are making nondeductible
traditional IRA contributions, you must retain all income tax returns and
records pertaining to such contributions until interests in all traditional
IRAs are fully distributed.
WHEN YOU CAN MAKE REGULAR CONTRIBUTIONS. If you file your tax returns on a
calendar year basis like most taxpayers, you have until the April 15 return
filing deadline (without extensions) of the following calendar year to make
your regular traditional IRA contributions for a tax year.
ROLLOVERS AND TRANSFERS
Rollover contributions may be made to a traditional IRA from these sources:
o qualified plans;
o TSAs (including Internal Revenue Code Section 403(b)(7) custodial
accounts); and
o other traditional IRAs.
Any amount contributed to a traditional IRA after you reach age 70 1/2 must
be net of your required minimum distribution for the year in which the
rollover or direct transfer contribution is made.
ROLLOVERS FROM QUALIFIED PLANS OR TSAS
There are two ways to do rollovers:
o Do it yourself
You actually receive a distribution that can be rolled over and you roll
it over to a traditional IRA within 60 days after
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the date you receive the funds. The distribution from your qualified plan
or TSA will be net of 20% mandatory federal income tax withholding. If you
want, you can replace the withheld funds yourself and roll over the full
amount.
o Direct rollover
You tell your qualified plan trustee or TSA issuer/custodian/fiduciary to
send the distribution directly to your traditional IRA issuer. Direct
rollovers are not subject to mandatory federal income tax withholding.
All distributions from a TSA or qualified plan are eligible
rollover distributions, unless the distribution is:
o only after-tax contributions you made to the plan; or
o "required minimum distributions" after age 70 1/2 or separation from
service; or
o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancies) of
you and your designated beneficiary; or
o a hardship withdrawal; or
o substantially equal periodic payments made for a specified period of 10
years or more; or
o corrective distributions that fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse;
or
o a qualified domestic relations order distribution to a beneficiary who is
not your current spouse or former spouse.
ROLLOVERS FROM TRADITIONAL IRAS TO TRADITIONAL IRAS
You may roll over amounts from one traditional IRA to one or more of your
other traditional IRAs if you complete the transaction within 60 days after
you receive the funds. You may make such a rollover only once in every
12-month period for the same funds. Trustee-to-trustee or
custodian-to-custodian direct transfers are not rollover transactions. You can
make these more frequently than once in every 12-month period.
The surviving spouse beneficiary of a deceased individual can roll over or
directly transfer an inherited traditional IRA to one or more other
traditional IRAs. Also, in some cases, traditional IRAs can be transferred on
a tax-free basis between spouses or former spouses as a result of a court-
ordered divorce or separation decree.
EXCESS CONTRIBUTIONS
Excess contributions to IRAs are subject to a 6% excise tax for the year in
which made and for each year after until withdrawn. The following are excess
contributions to IRAs:
o regular contributions of more than $2,000; or
o regular contributions of more than earned income for the year, if that
amount is under $2,000; or
o regular contributions to a traditional IRA made after you reach age
70 1/2; or
o rollover contributions of amounts which are not eligible to be rolled over.
For example, after-tax contributions to a qualified plan or minimum
distributions required to be made after age 70 1/2.
You can avoid the excise tax by withdrawing an excess contribution (rollover
or regular) before the due date (including extensions) for filing your federal
income tax return for the year. If it is an excess regular traditional IRA
contribution, you cannot take a tax deduction for the amount withdrawn. You do
not have to include the excess contribution withdrawn as part of your income.
It is also not subject to the 10% additional penalty tax on early
distributions, discussed below under "Early distribution penalty tax." You do
have to withdraw any earnings that are attributed to the excess contribution.
The withdrawn earnings would be included in your gross income and could be
subject to the 10% penalty tax.
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Even after the due date for filing your return, you may withdraw an excess
rollover contribution, without income inclusion or 10% penalty, if:
(1) the rollover was from a qualified retirement plan to a traditional IRA;
(2) the excess contribution was due to incorrect information that the plan
provided; and
(3) you took no tax deduction for the excess contribution.
RECHARACTERIZATIONS
Amounts that have been contributed as traditional IRA funds may subsequently
be treated as Roth IRA funds. Special federal income tax rules allow you to
change your mind again and have amounts that are subsequently treated as Roth
IRA funds, once again treated as traditional IRA funds. You do this by using
the forms we prescribe. This is referred to as having "recharacterized" your
contribution.
WITHDRAWALS, PAYMENTS AND TRANSFERS OF FUNDS OUT OF TRADITIONAL IRAS
NO FEDERAL INCOME TAX LAW RESTRICTIONS ON WITHDRAWALS. You can withdraw any or
all of your funds from a traditional IRA at any time. You do not need to wait
for a special event like retirement.
TAXATION OF PAYMENTS. Earnings in traditional IRAs are not subject to federal
income tax until you or your beneficiary receive them. Taxable payments or
distributions include withdrawals from your contract, surrender of your
contract, and annuity payments from your contract. Death benefits are also
taxable. Except as discussed below, the total amount of any distribution from
a traditional IRA must be included in your gross income as ordinary income.
If you have ever made nondeductible IRA contributions to any traditional IRA
(it does not have to be to this particular traditional IRA contract), those
contributions are recovered tax free when you get distributions from any
traditional IRA. You must keep permanent tax records of all of your
nondeductible contributions to traditional IRAs. At the end of any year in
which you have received a distribution from any traditional IRA, you calculate
the ratio of your total nondeductible traditional IRA contributions (less any
amounts previously withdrawn tax free) to the total account balances of all
traditional IRAs you own at the end of the year plus all traditional IRA
distributions made during the year. Multiply this by all distributions from
the traditional IRA during the year to determine the nontaxable portion of
each distribution.
In addition, a distribution is not taxable if:
o the amount received is a withdrawal of excess contributions, as described
under "Excess contributions" above; or
o the entire amount received is rolled over to another traditional IRA (see
"Rollovers and transfers" above); or
o in certain limited circumstances, where the traditional IRA acts as a
"conduit," you roll over the entire amount into a qualified plan or TSA
that accepts rollover contributions. To get this conduit traditional IRA
treatment:
o the source of funds you used to establish the traditional IRA must have
been a rollover contribution from a qualified plan; and
o the entire amount received from the traditional IRA (including any
earnings on the rollover contribution) must be rolled over into another
qualified plan within 60 days of the date received.
Similar rules apply in the case of a TSA.
However, you may lose conduit treatment if you make an eligible rollover
distribution contribution to a traditional IRA and you commingle this
contribution with other contributions. In that case, you may not be able to
roll over these eligible rollover distribution contributions and earnings to
another qualified plan or TSA at a future date. The Rollover IRA contract can
be used as a conduit IRA if amounts are not commingled.
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Distributions from a traditional IRA are not eligible for favorable ten-year
averaging and long-term capital gain treatment available to certain
distributions from qualified plans.
REQUIRED MINIMUM DISTRIBUTIONS
LIFETIME REQUIRED MINIMUM DISTRIBUTIONS. You must start taking annual
distributions from your traditional IRAs beginning at age 70 1/2.
WHEN YOU HAVE TO TAKE THE FIRST REQUIRED MINIMUM DISTRIBUTION. The first
required minimum distribution is for the calendar year in which you turn age
70 1/2. You have the choice to take this first required minimum
distribution during the calendar year you actually reach age 70 1/2, or to
delay taking it until the first three-month period in the next calendar year
(January 1 - April 1). Distributions must start no later than your "Required
Beginning Date," which is April 1st of the calendar year after the calendar
year in which you turn age 70 1/2. If you choose to delay taking the first
annual minimum distribution, then you will have to take two minimum
distributions in that year - the delayed one for the first year and the one
actually for that year. Once minimum distributions begin, they must be made at
some time each year.
HOW YOU CAN CALCULATE REQUIRED MINIMUM DISTRIBUTIONS. There are two approaches
to taking required minimum distributions - "account-based" or "annuity-based."
Account-based method. If you choose an account-based method, you divide the
value of your traditional IRA as of December 31st of the past calendar year by
a life expectancy factor from IRS tables. This gives you the required minimum
distribution amount for that particular IRA for that year. The required
minimum distribution amount will vary each year as the account value and your
life expectancy factors change.
You have a choice of life expectancy factors, depending on whether you choose
a method based only on your life expectancy, or the joint life expectancies of
you and another individual. You can decide to "recalculate" your life
expectancy every year by using your current life expectancy factor. You can
decide instead to use the "term certain" method, where you reduce your life
expectancy by one every year after the initial year. If your spouse is your
designated beneficiary for the purpose of calculating annual account-based
required minimum distributions, you can also annually recalculate your
spouse's life expectancy if you want. If you choose someone who is not your
spouse as your designated beneficiary for the purpose of calculating annual
account-based required minimum distributions, you have to use the term certain
method of calculating that person's life expectancy. If you pick a nonspouse
designated beneficiary, you may also have to do another special calculation.
You can later apply your traditional IRA funds to a life annuity-based payout.
You can only do this if you already chose to recalculate your life expectancy
annually (and your spouse's life expectancy if you select a spousal joint
annuity). For example, if you anticipate selecting any other form of life
annuity payout after you are age 70 1/2, you must have elected to
recalculate life expectancies.
Annuity-based method. If you choose an annuity-based method, you do not have
to do annual calculations. You apply the account value to an annuity payout
for your life or the joint lives of you and a designated beneficiary, or for a
period certain not extending beyond applicable life expectancies.
DO YOU HAVE TO PICK THE SAME METHOD TO CALCULATE YOUR REQUIRED MINIMUM
DISTRIBUTIONS FOR ALL OF YOUR TRADITIONAL IRAS AND OTHER RETIREMENT PLANS? No.
If you want, you can choose a different method and a different beneficiary for
each of your traditional IRAs and other retirement plans. For example, you can
choose an annuity payout from one IRA, a different annuity payout from a
qualified plan, and an account-based annual withdrawal from another IRA.
WILL WE PAY YOU THE ANNUAL AMOUNT EVERY YEAR FROM YOUR TRADITIONAL IRA BASED
ON THE METHOD YOU CHOOSE? No, unless you affirmatively select an annuity
payout option or an account-based withdrawal option such as our minimum
distribution withdrawal option. Because the options we offer do not cover
every option permitted under
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federal income tax rules, you may prefer to do your own required minimum
distribution calculations for one or more of your traditional IRAs.
WHAT IF YOU TAKE MORE THAN YOU NEED TO FOR ANY YEAR? The required minimum
distribution amount for your traditional IRAs is calculated on a year-by-year
basis. There are no carry-back or carry-forward provisions. Also, you cannot
apply required minimum distribution amounts you take from your qualified plans
to the amounts you have to take from your traditional IRAs and vice versa.
However, the IRS will let you calculate the required minimum distribution for
each traditional IRA that you maintain, using the method that you picked for
that particular IRA. You can add these required minimum distribution amount
calculations together. As long as the total amount you take out every year
satisfies your overall traditional IRA required minimum distribution amount,
you may choose to take your annual required minimum distribution from any one
or more traditional IRAs that you own.
WHAT IF YOU TAKE LESS THAN YOU NEED TO FOR ANY YEAR? Your IRA could be
disqualified, and you could have to pay tax on the entire value. Even if your
IRA is not disqualified, you could have to pay a 50% penalty tax on the
shortfall (required amount for traditional IRAs less amount actually taken).
It is your responsibility to meet the required minimum distribution rules. We
will remind you when our records show that your age 70 1/2 is approaching.
If you do not select a method with us, we will assume you are taking your
required minimum distribution from another traditional IRA that you own.
WHAT ARE THE REQUIRED MINIMUM DISTRIBUTION PAYMENTS AFTER YOU DIE? If you die
after either (a) the start of annuity payments, or (b) your Required Beginning
Date, your beneficiary must receive payment of the remaining values in the
contract at least as rapidly as under the distribution method before your
death. In some circumstances, your surviving spouse may elect to become the
owner of the traditional IRA and halt distributions until he or she reaches
age 70 1/2.
If you die before your Required Beginning Date and before annuity payments
begin, federal income tax rules require complete distribution of your entire
value in the contract within five years after your death. Payments to a
designated beneficiary over the beneficiary's life or over a period certain
that does not extend beyond the beneficiary's life expectancy are also
permitted, if these payments start within one year of your death. A surviving
spouse beneficiary can also (a) delay starting any payments until you would
have reached age 70 1/2 or (b) roll over your traditional IRA into his or
her own traditional IRA.
SUCCESSOR ANNUITANT AND OWNER
If your spouse is the sole primary beneficiary and elects to become the
successor annuitant and owner, no death benefit is payable until your
surviving spouse's death.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
IRA death benefits are taxed the same as IRA distributions.
BORROWING AND LOANS ARE PROHIBITED TRANSACTIONS
You cannot get loans from a traditional IRA. You cannot use a traditional IRA
as collateral for a loan or other obligation. If you borrow against your IRA
or use it as collateral, its tax-favored status will be lost as of the first
day of the tax year in which this prohibited event occurs. If this happens,
you must include the value of the traditional IRA in your federal gross
income. Also, the early distribution penalty tax of 10% will apply if you have
not reached age 59 1/2 before the first day of that tax year.
EARLY DISTRIBUTION PENALTY TAX
A penalty tax of 10% of the taxable portion of a distribution applies to
distributions from a traditional IRA made before you reach age 59 1/2. The
extra penalty tax does not apply to pre-age 59 1/2 distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
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o used to pay certain extraordinary medical expenses (special federal income
tax definition); or
o used to pay medical insurance premiums for unemployed individuals (special
federal income tax definition); or
o used to pay certain first-time home buyer expenses (special federal income
tax definition); or
o used to pay certain higher education expenses (special federal income tax
definition); or
o in the form of substantially equal periodic payments made at least annually
over your life (or your life expectancy), or over the joint lives of you
and your beneficiary (or your joint life expectancy) using an IRS-approved
distribution method.
To meet this last exception, you could elect to apply your contract value to
an Income Manager (life annuity with a period certain) payout annuity contract
(level payments version). You could also elect the substantially equal
withdrawals option. We will calculate the substantially equal annual payments
under a method we select based on guidelines issued by the IRS (currently
contained in IRS Notice 89-25, Question and Answer 12). Although substantially
equal withdrawals and Income Manager payments are not subject to the 10%
penalty tax, they are taxable as discussed in "Withdrawals, payments and
transfers of funds out of traditional IRAs" above. Once substantially equal
withdrawals or Income Manager annuity payments begin, the distributions should
not be stopped or changed until after the later of your reaching age 59 1/2
or five years after the date of the first distribution, or the penalty tax,
including an interest charge for the prior penalty avoidance, may apply to all
prior distributions under either option. Also, it is possible that the IRS
could view any additional withdrawal or payment you take from your contract as
changing your pattern of substantially equal withdrawals or Income Manager
payments for purposes of determining whether the penalty applies.
ROTH INDIVIDUAL RETIREMENT ANNUITIES (ROTH IRAS)
This section of the prospectus covers some of the special tax rules that apply
to Roth IRAs. If the rules are the same as those that apply to the traditional
IRA, we will refer you to the same topic under "traditional IRAs."
The Equitable Accumulator Plus Roth Conversion IRA contract is designed to
qualify as a Roth individual retirement annuity under Sections 408A and 408(b)
of the Internal Revenue Code.
CONTRIBUTIONS TO ROTH IRAS
Individuals may make three different types of contributions to a Roth IRA:
o taxable rollover contributions from traditional IRAs ("conversion"
contributions); or
o tax-free rollover contributions from other Roth IRAs; or
o tax-free direct custodian-to-custodian transfers from other Roth IRAs
("direct transfers").
Since we only permit direct transfer and rollover contributions under the
Equitable Accumulator Plus Roth Conversion IRA contract, we do not discuss
regular after-tax contributions here. If you use the forms we require, we will
also accept traditional IRA funds which are subsequently recharacterized as
Roth IRA funds following special federal income tax rules.
ROLLOVERS AND DIRECT TRANSFERS
WHAT IS THE DIFFERENCE BETWEEN ROLLOVER AND DIRECT TRANSFER TRANSACTIONS? You
may make rollover contributions to a Roth IRA from only two sources:
o another Roth IRA ("tax-free rollover contribution"); or
o another traditional IRA, including a SEP-IRA or SIMPLE-IRA, in a taxable
conversion rollover ("conversion contribution").
You may not make contributions to a Roth IRA from a qualified plan under
Section 401(a) of the Internal Revenue Code, or a TSA under Section 403(b) of
the Internal Revenue
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Code. You may make direct transfer contributions to a Roth IRA only from
another Roth IRA.
The difference between a rollover transaction and a direct transfer
transaction is the following: in a rollover transaction you actually take
possession of the funds rolled over, or are considered to have received them
under tax law in the case of a change from one type of plan to another. In a
direct transfer transaction, you never take possession of the funds, but
direct the first Roth IRA custodian, trustee, or issuer to transfer the first
Roth IRA funds directly to Equitable Life, as the Roth IRA issuer. You can
make direct transfer transactions only between identical plan types (for
example, Roth IRA to Roth IRA). You can also make rollover transactions
between identical plan types. However, you can only use rollover transactions
between different plan types (for example, traditional IRA to Roth IRA).
You may make both Roth IRA to Roth IRA rollover transactions and Roth IRA to
Roth IRA direct transfer transactions. This can be accomplished on a
completely tax-free basis. However, you may make Roth IRA to Roth IRA rollover
transactions only once in any 12-month period for the same funds.
Trustee-to-trustee or custodian-to-custodian direct transfers can be made more
frequently than once a year. Also, if you send us the rollover contribution to
apply it to a Roth IRA, you must do so within 60 days after you receive the
proceeds from the original IRA to get rollover treatment.
The surviving spouse beneficiary of a deceased individual can roll over or
directly transfer an inherited Roth IRA to one or more other Roth IRAs. In
some cases, Roth IRAs can be transferred on a tax-free basis between spouses
or former spouses as a result of a court-ordered divorce or separation decree.
CONVERSION CONTRIBUTIONS TO ROTH IRAS
In a conversion rollover transaction, you withdraw (or are considered to have
withdrawn) all or a portion of funds from a traditional IRA you maintain and
convert it to a Roth IRA within 60 days after you receive (or are considered
to have received) the traditional IRA proceeds. Unlike a rollover from a
traditional IRA to another traditional IRA, the conversion rollover
transaction is not tax free. Instead, the distribution from the traditional
IRA is generally fully taxable. For this reason, we are required to withhold
10% federal income tax from the amount converted unless you elect out of such
withholding. If you have ever made nondeductible regular contributions to any
traditional IRA - whether or not it is the traditional IRA you are converting
- a pro rata portion of the distribution is tax free.
There is, however, no early distribution penalty tax on the traditional IRA
withdrawal that you are converting to a Roth IRA, even if you are under age
59 1/2.
You cannot make conversion contributions to a Roth IRA for any taxable year in
which your adjusted gross income exceeds $100,000. For this purpose, your
adjusted gross income is calculated without the gross income stemming from the
traditional IRA conversion. You also cannot make conversion contributions to a
Roth IRA for any taxable year in which your federal income tax filing status
is "married filing separately."
Finally, you cannot make conversion contributions to a Roth IRA to the extent
that the funds in your traditional IRA are subject to the annual required
minimum distribution rule applicable to traditional IRAs beginning at age
70 1/2.
WITHDRAWALS, PAYMENTS AND TRANSFERS OF FUNDS OUT OF ROTH IRAS
NO FEDERAL INCOME TAX LAW RESTRICTIONS ON WITHDRAWALS. You can withdraw any or
all of your funds from a Roth IRA at any time; you do not need to wait for a
special event like retirement.
DISTRIBUTIONS FROM ROTH IRAS
Distributions include withdrawals from your contract, surrender of your
contract, and annuity payments from your contract. Death benefits are also
distributions.
The following distributions from Roth IRAs are free of income tax:
o Rollover from a Roth IRA to another Roth IRA;
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o Direct transfer from a Roth IRA to another Roth IRA;
o Qualified distribution from a Roth IRA; and
o Return of excess contributions or amounts recharacterized to a traditional
IRA.
QUALIFIED DISTRIBUTIONS FROM ROTH IRAS. Qualified distributions from Roth IRAs
made because of one of the following four qualifying events or reasons are not
includable in income:
o you reach age 59 1/2; or
o you die; or
o you become disabled (special federal income tax definition); or
o your distribution is a "qualified first-time homebuyer distribution"
(special federal income tax definition; $10,000 lifetime total limit for
these distributions from all of your traditional and Roth IRAs).
You also have to meet a five-year aging period. A qualified distribution is
any distribution made after the five-taxable- year period beginning with the
first taxable year for which you made any contribution to any Roth IRA
(whether or not the one from which the distribution is being made). It is not
possible to have a tax-free qualified distribution before the year 2003
because of the five-year aging requirement.
NONQUALIFIED DISTRIBUTIONS FROM ROTH IRAS. Nonqualified distributions from
Roth IRAs are distributions that do not meet the qualifying event and five-year
aging period tests described above. Such distributions are potentially taxable
as ordinary income. Nonqualified distributions receive
return-of-investment-first treatment. Only the difference between the amount of
the distribution and the amount of contributions to all of your Roth IRAs is
taxable. You have to reduce the amount of contributions to all of your Roth
IRAs to reflect any previous tax-free recoveries.
You must keep your own records of regular and conversion contributions to all
Roth IRAs to assure appropriate taxation. You may have to file information on
your contributions to and distributions from any Roth IRA on your tax return.
You may have to retain all income tax returns and records pertaining to such
contributions and distributions until your interests in all Roth IRAs are
distributed.
Like traditional IRAs, taxable distributions from a Roth IRA are not entitled
to the special favorable five-year averaging method (or, in certain cases,
favorable ten-year averaging and long-term capital gain treatment) available
in certain cases to distributions from qualified plans.
REQUIRED MINIMUM DISTRIBUTIONS AT DEATH
Same as traditional IRA under "What are the required minimum distribution
payments after you die?" Lifetime required minimum distributions do not apply.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
Distributions to a beneficiary generally receive the same tax treatment as if
the distribution had been made to you.
BORROWING AND LOANS ARE PROHIBITED TRANSACTIONS
Same as traditional IRA.
EXCESS CONTRIBUTIONS
Generally the same as traditional IRA.
Excess rollover contributions to Roth IRAs are contributions not eligible to
be rolled over (for example, conversion contributions from a traditional IRA
if your adjusted gross income is in excess of $100,000 in the conversion
year).
You can withdraw or recharacterize any contribution to a Roth IRA before the
due date (including extensions) for filing your federal income tax return for
the tax year. If you do this, you must also withdraw or recharacterize any
earnings attributable to the contribution.
EARLY DISTRIBUTION PENALTY TAX
Same as traditional IRA.
For Roth IRAs, special penalty rules may apply to amounts withdrawn
attributable to 1998 conversion rollovers.
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SPECIAL RULES FOR NONQUALIFIED CONTRACTS IN QUALIFIED PLANS
Under QP contracts your plan administrator or trustee notifies you as to tax
consequences. See Appendix II.
TAX-SHELTERED ANNUITY CONTRACTS (TSAS)
GENERAL
This section covers some of the special tax rules that apply to TSA contracts
under Section 403(b) of the Internal Revenue Code (TSAs). If the rules are the
same as those that apply to another kind of contract, for example, traditional
IRAs, we will refer you to the same topic under "traditional IRAs."
CONTRIBUTIONS TO TSAS
There are two ways you can make contributions to your Rollover TSA contract:
o a rollover from another TSA contract or arrangement that meets the
requirements of Section 403(b) of the Internal Revenue Code, or
o a full or partial direct transfer of assets ("direct transfer") from
another contract or arrangement that meets the requirements of Section
403(b) of the Internal Revenue Code by means of IRS Revenue Ruling 90-24.
With appropriate written documentation satisfactory to us, we will accept
rollover contributions from "conduit IRAs" for TSA funds.
If you make a direct transfer, you must fill out our transfer form.
EMPLOYER-REMITTED CONTRIBUTIONS. The Rollover TSA contract does not accept
employer-remitted contributions. However, we provide the following discussion
as part of our description of restrictions on the distribution of funds
directly transferred, which include employer-remitted contributions to other
TSAs.
Employer-remitted contributions to TSAs made through the employer's payroll
are subject to annual limits. (Tax-free transfer or tax-deferred rollover
contributions from another 403(b) arrangement are not subject to these annual
contribution limits). Commonly, some or all of the contributions made to a TSA
are made under a salary reduction agreement between the employee and the
employer. These contributions are called "salary reduction" or "elective
deferral" contributions. However, a TSA can also be wholly or partially funded
through non-elective employer contributions or after-tax employee
contributions. Amounts attributable to salary reduction contributions to TSAs
are generally subject to withdrawal restrictions. Also, all amounts
attributable to investments in a 403(b)(7) custodial account are subject to
withdrawal restrictions discussed below.
ROLLOVER OR DIRECT TRANSFER CONTRIBUTIONS. You may make rollover contributions
to your Rollover TSA contract from TSAs under Section 403(b) of the Internal
Revenue Code. Generally, you may make a rollover contribution to a TSA when
you have a distributable event from an existing TSA as a result of your:
o termination of employment with the employer who provided the TSA funds; or
o reaching age 59 1/2 even if you are still employed; or
o disability (special federal income tax definition).
A transfer occurs when changing the funding vehicle, even if there is no
distributable event. Under a direct transfer, you do not receive a
distribution. We accept direct transfers of TSA funds under Revenue Ruling
90-24 only if:
o you give us acceptable written documentation as to the source of the funds,
and
o the Equitable Accumulator contract receiving the funds has provisions at
least as restrictive as the source contract.
Before you transfer funds to a Rollover TSA contract, you may have to obtain
your employer's authorization or demonstrate that you do not need employer
authorization. For example, the transferring TSA may be subject to Title I of
ERISA if the employer makes matching contributions to
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salary reduction contributions made by employees. In that case, the employer
must continue to approve distributions from the plan or contract.
Your contribution to the Rollover TSA must be net of the required minimum
distribution for the tax year in which we issue the contract if:
o you are or will be at least age 70 1/2 in the current calendar year, and
o you have separated from service with the employer who provided the funds to
purchase the TSA you are transferring or rolling over to the Rollover TSA.
This rule applies regardless of whether the source of funds is a:
o rollover by check of the proceeds from another TSA; or
o direct rollover from another TSA; or
o direct transfer under Revenue Ruling 90-24 from another TSA.
Further, you must use the same elections regarding recalculation of your life
expectancy (and if applicable, your spouse's life expectancy) if you have
already begun to receive required minimum distribution from or with respect to
the TSA from which you are making your contribution to the Rollover TSA. You
must also elect or have elected a minimum distribution calculation method
requiring recalculation of your life expectancy (and if applicable, your
spouse's life expectancy) if you elect an annuity payout for the funds in this
contract subsequent to this year.
DISTRIBUTIONS FROM TSAS
GENERAL. Depending on the terms of the employer plan and your employment
status, you may have to get your employer's consent to take a loan or
withdrawal. Your employer will tell us this when you establish the TSA through
a direct transfer.
WITHDRAWAL RESTRICTIONS. If this is a Revenue Ruling 90-24 direct transfer, we
will treat all amounts transferred to this contract and any future earnings on
the amount transferred as not eligible for withdrawal until one of the
following events happens:
o you are separated from service with the employer who provided the funds to
purchase the TSA you are transferring to the Rollover TSA; or
o you reach age 59 1/2; or
o you die; or
o you become disabled (special federal income tax definition); or
o you take a hardship withdrawal (special federal income tax definition).
If any portion of the funds directly transferred to your TSA contract is
attributable to the amounts that you invested in a 403(b)(7) custodial
account, such amounts, including earnings, are subject to withdrawal
restrictions. With respect to the portion of the funds that were never
invested in a 403(b)(7) custodial account, these restrictions apply to the
salary reduction (elective deferral) contributions to a TSA annuity contract
you made and any earnings on them. These restrictions do not apply to the
amount directly transferred to your TSA contract that represents your December
31, 1988 account balance attributable to salary reduction contributions to a
TSA annuity contract and earnings. To take advantage of this grandfathering,
you must properly notify us in writing at our processing office of your
December 31, 1988 account balance if you have qualifying amounts transferred
to your TSA contract.
THIS PARAGRAPH APPLIES ONLY TO PARTICIPANTS IN A TEXAS OPTIONAL RETIREMENT
PROGRAM. Texas Law permits withdrawals only after one of the following
distributable events occurs:
1. the requirements for minimum distribution (discussed under "Required
minimum distributions" below and in the prospectus) are met; or
2. death; or
3. retirement; or
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4. termination of employment in all Texas public institutions of higher
education.
For you to make a withdrawal, we must receive a properly completed written
acknowledgment from the employer. If a distributable event occurs before you
are vested, we will refund to the employer any amounts provided by an
employer's first-year matching contributions. We reserve the right to change
these provisions without your consent, but only to the extent necessary to
maintain compliance with applicable law. Loans are not permitted under Texas
Optional Retirement Programs.
TAX TREATMENT OF DISTRIBUTIONS. Amounts held under TSAs are generally not
subject to federal income tax until benefits are distributed. Distributions
include withdrawals from your TSA contract and annuity payments from your TSA
contract. Death benefits paid to a beneficiary are also taxable distributions.
Unless an exception applies, amounts distributed from TSAs are includable in
gross income as ordinary income. Distributions from TSAs may be subject to 20%
federal income tax withholding. See "Federal and state income tax withholding
and information reporting" below. In addition, TSA distributions may be
subject to additional tax penalties.
If you have made after-tax contributions, you will have a tax basis in your
TSA contract, which will be recovered tax-free. Since we do not track your
investment in the contract, if any, it is your responsibility to determine how
much of the distribution is taxable.
DISTRIBUTIONS BEFORE ANNUITY PAYMENTS BEGIN. On a total surrender, the amount
received in excess of the investment in the contract is taxable. We will
report the total amount of the distribution. The amount of any partial
distribution from a TSA prior to the annuity starting date is generally
taxable, except to the extent that the distribution is treated as a withdrawal
of after-tax contributions. Distributions are normally treated as pro rata
withdrawals of after-tax contributions and earnings on those contributions.
ANNUITY PAYMENTS. If you elect an annuity payout option, you will recover any
investment in the contract as each payment is received by dividing the
investment in the contract by an expected return determined under an IRS table
prescribed for qualified annuities. The amount of each payment not excluded
from income under this exclusion ratio is fully taxable. The full amount of
the payments received after your investment in the contract is recovered is
fully taxable. If you (and your beneficiary under a joint and survivor
annuity) die before recovering the full investment in the contract, a
deduction is allowed on your (or your beneficiary's) final tax return.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
Death benefit distributions from a TSA generally receive the same tax
treatment as distribution during your lifetime. In some instances,
distributions from a TSA made to your surviving spouse may be rolled over to a
traditional IRA.
LOANS FROM TSAS
You may take loans from a TSA unless restricted by the employer (for example,
under an employer plan subject to ERISA). If you cannot take a loan, or cannot
take a loan without approval from the employer who provided the funds, we will
have this information in our records based on what you and the employer who
provided the TSA funds told us when you purchased your contract.
Loans are generally not treated as a taxable distribution. If the amount of
the loan when made exceeds permissible limits under federal income tax rules,
the amount of the excess is treated (solely for tax purposes) as a taxable
distribution. Additionally, if the loan is not repaid at least quarterly,
amortizing (paying down) interest and principal, the amount not repaid when
due will be treated as a taxable distribution. Under Proposed Treasury
Regulations the entire unpaid balance of the loan is includable in income in
the year of the default.
TSA loans are subject to federal income tax limits and may also be subject to
limits of the plan from which the funds came. Federal income tax rule
requirements apply even if the plan is not subject to ERISA. For example,
loans offered by TSAs are subject to the following conditions:
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o The amount of a loan to a participant, when combined with all other loans
to the participant from all qualified plans of the employer, cannot exceed
the lesser of:
(1) the greater of $10,000 or 50% of the participant's nonforfeitable
accrued benefits; and
(2) $50,000 reduced by the excess (if any) of the highest outstanding loan
balance over the previous twelve months over the outstanding loan
balance of plan loans on the date the loan was made.
o In general, the term of the loan cannot exceed five years unless the loan
is used to acquire the participant's primary residence. Rollover TSA
contracts have a term limit of 10 years for loans used to acquire the
participant's primary residence.
All principal and interest must be amortized in substantially level payments
over the term of the loan, with payments being made at least quarterly.
The amount borrowed and not repaid may be treated as a distribution if:
o the loan does not qualify under the conditions above;
o the participant fails to repay the interest or principal when due; or
o in some instances, the participant separates from service with the employer
who provided the funds or the plan is terminated.
In this case, the participant may have to include the unpaid amount due as
ordinary income. In addition, the 10% early distribution penalty tax may
apply. The amount of the unpaid loan balance is reported to the IRS on Form
1099-R as a distribution.
TAX-DEFERRED ROLLOVERS AND DIRECT TRANSFERS
You may roll over any "eligible rollover distribution" from a TSA into another
eligible retirement plan, either directly or within 60 days of your receiving
the distribution. To the extent rolled over, a distribution remains
tax-deferred.
You may roll over a distribution from a TSA to another TSA or to a traditional
IRA. A spousal beneficiary may roll over death benefits only to a traditional
IRA.
The taxable portion of most distributions will be eligible for rollover,
except as specifically excluded under federal income tax rules. Distributions
that you cannot roll over generally include periodic payments for life or for
a period of 10 years or more, hardship withdrawals, and required minimum
distributions under federal income tax rules.
Direct transfers of TSA funds from one TSA to another under Revenue Ruling
90-24 are not distributions.
REQUIRED MINIMUM DISTRIBUTIONS
Generally the same as traditional IRA with these differences:
WHEN YOU HAVE TO TAKE THE FIRST REQUIRED MINIMUM DISTRIBUTION. The minimum
distribution rules force TSA participants to start calculating and taking
annual distribution from their TSAs by a required date. Generally you must
take the first required minimum distribution for the calendar year in which
you turn age 70 1/2. You may be able to delay the start of required minimum
distributions for all or part of your account balance until after age 70 1/2,
as follows:
o For TSA participants who have not retired from service with the employer
who provided the funds for the TSA by the calendar year the participant
turns age 70 1/2, the required beginning date for minimum distribution is
extended to April 1 following the calendar year of retirement.
o TSA plan participants may also delay the start of required minimum
distribution to age 75 of the portion of their account value attributable
to their December 31, 1986 TSA account balance, even if retired at age
70 1/2. We will know whether or not you qualify for this exception because
it will only apply to people who establish their Rollover TSA by direct
Revenue Ruling 90-24 transfers. If you do not give us the amount of your
December 31, 1986 account balance that is being transferred to the
Rollover TSA on the form used to establish the TSA, you do not qualify.
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SPOUSAL CONSENT RULES
This will only apply to you if you establish your Rollover TSA by direct
Revenue Ruling 90-24 transfer. Your employer will tell us on the form used to
establish the TSA whether or not you need to get spousal consent for loans,
withdrawals, or other distributions. If you do, you will need such consent if
you are married when you request a withdrawal under the TSA contract. In
addition, unless you elect otherwise with the written consent of your spouse,
the retirement benefits payable under the plan must be paid in the form of a
qualified joint and survivor annuity. A qualified joint and survivor annuity
is payable for the life of the annuitant with a survivor annuity for the life
of the spouse in an amount not less than one-half of the amount payable to the
annuitant during his or her lifetime. In addition, if you are married, the
beneficiary must be your spouse, unless your spouse consents in writing to the
designation of another beneficiary.
If you are married and you die before annuity payments have begun, payments
will be made to your surviving spouse in the form of a life annuity unless at
the time of your death a contrary election was in effect. However, your
surviving spouse may elect, before payments begin, to receive payments in any
form permitted under the terms of the TSA contract and the plan of the
employer who provided the funds for the TSA.
EARLY DISTRIBUTION PENALTY TAX
A penalty tax of 10% of the taxable portion of a distribution applies to
distribution from a TSA before you reach age 59 1/2. This is in addition to
any income tax. There are exceptions to the extra penalty tax. No penalty tax
applies to pre-age 59 1/2 distributions made:
o on or after your death; or
o because you are disabled (special federal income tax definition); or
o to pay for certain extraordinary medical expenses (special federal income
tax definition); or
o if you are separated from service, any form of payout after you are age 55;
or
o only if you are separated from service, a payout in the form of
substantially equal periodic payments made at least annually over your
life (or your life expectancy), or over the joint lives of you and your
beneficiary (or your joint life expectancy) using an IRS-approved
distribution method.
FEDERAL AND STATE INCOME TAX WITHHOLDING AND INFORMATION REPORTING
We must withhold federal income tax from distributions from annuity contracts.
You may be able to elect out of this income tax withholding in some cases.
Generally, we do not have to withhold if your distributions are not taxable.
The rate of withholding will depend on the type of distribution and, in
certain cases, the amount of your distribution. Any income tax withheld is a
credit against your income tax liability. If you do not have sufficient income
tax withheld or do not make sufficient estimated income tax payments, you may
incur penalties under the estimated income tax rules.
You must file your request not to withhold in writing before the payment or
distribution is made. Our processing office will provide forms for this
purpose. You cannot elect out of withholding unless you provide us with your
correct Taxpayer Identification Number and a United States residence address.
You cannot elect out of withholding if we are sending the payment out of the
United States.
You should note the following special situations:
o We might have to withhold and/or report on amounts we pay under a free look
or cancellation.
o We are generally required to withhold on conversion rollovers of
traditional IRAs to Roth IRAs, as it is considered a withdrawal from the
traditional IRA and is taxable.
o We are required to withhold on the gross amount of a distribution from a
Roth IRA unless you elect out of withholding. This may result in tax being
withheld even though the Roth IRA distribution is not taxable in whole or
in part.
Special withholding rules apply to foreign recipients and United States
citizens residing outside the United States. We
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do not discuss these rules here. Certain states have indicated that state
income tax withholding will also apply to payments from the contracts made to
residents. In some states, you may elect out of state withholding, even if
federal withholding applies. Generally, an election out of federal withholding
will also be considered an election out of state withholding. If you need more
information concerning a particular state or any required forms, call our
processing office at the toll-free number.
FEDERAL INCOME TAX WITHHOLDING ON PERIODIC ANNUITY PAYMENTS
We withhold differently on "periodic" and "non-periodic" payments. For a
periodic annuity payment, for example, unless you specify a different number
of withholding exemptions, we withhold assuming that you are married and
claiming three withholding exemptions. If you do not give us your correct
Taxpayer Identification Number, we withhold as if you are single with no
exemptions.
Based on the assumption that you are married and claiming three withholding
exemptions, if you receive less than $14,880 in periodic annuity payments in
2000, your payments will generally be exempt from federal income tax
withholding. You could specify a different choice of withholding exemption or
request that tax be withheld. Your withholding election remains effective
unless and until you revoke it. You may revoke or change your withholding
election at any time.
FEDERAL INCOME TAX WITHHOLDING ON NON-PERIODIC ANNUITY PAYMENTS (WITHDRAWALS)
For a non-periodic distribution (total surrender or partial withdrawal), we
generally withhold at a flat 10% rate. We apply that rate to the taxable
amount in the case of nonqualified contracts, and to the payment amount in the
case of IRAs and Roth IRAs.
You cannot elect out of withholding if the payment is an eligible rollover
distribution from a qualified plan or TSA. If a non-periodic distribution from
a qualified plan or TSA is not an eligible rollover distribution then the 10%
withholding rate applies.
MANDATORY WITHHOLDING FROM TSA AND QUALIFIED PLAN DISTRIBUTIONS
Unless you have the distribution go directly to the new plan, eligible
rollover distributions from qualified plans and TSAs are subject to mandatory
20% withholding. An eligible rollover distribution from a TSA can be rolled
over to another TSA or a traditional IRA. An eligible rollover distribution
from a qualified plan can be rolled over to another qualified plan or
traditional IRA. All distributions from a TSA or qualified plan are eligible
rollover distributions unless they are on the following list of exceptions:
o any after-tax contributions you made to the plan; or
o any distributions which are required minimum distributions after age
70 1/2 or separation from service; or
o hardship withdrawals; or
o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancy) of you
and your designated beneficiary; or
o substantially equal periodic payments made for a specified period of 10
years or more; or
o corrective distributions that fit specified technical tax rules; or
o loans that are treated as distributions; or
o a death benefit payment to a beneficiary who is not your surviving spouse;
or
o a qualified domestic relations order distribution to a beneficiary who is
not your current spouse or former spouse.
A death benefit payment to your surviving spouse, or a qualified domestic
relations order distribution to your current or former spouse, may be a
distribution subject to mandatory 20% withholding.
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IMPACT OF TAXES TO EQUITABLE LIFE
The contracts provide that we may charge Separate Account No. 45 for taxes. We
do not now, but may in the future set up reserves for such taxes.
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More information
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ABOUT OUR SEPARATE ACCOUNT NO. 45
Each variable investment option is a subaccount of our Separate Account No.
45. We established Separate Account No. 45 in 1994 under special provisions of
the New York Insurance Law. These provisions prevent creditors from any other
business we conduct from reaching the assets we hold in our variable
investment options for owners of our variable annuity contracts. We are the
legal owner of all of the assets in Separate Account No. 45 and may withdraw
any amounts that exceed our reserves and other liabilities with respect to
variable investment options under our contracts. The results of Separate
Account No. 45's operations are accounted for without regard to Equitable
Life's other operations.
Separate Account No. 45 is registered under the Investment Company Act of 1940
and is classified by that act as a "unit investment trust." The SEC, however,
does not manage or supervise Equitable Life or Separate Account No. 45.
Each subaccount (variable investment option) within Separate Account No. 45
invests solely in class IB shares issued by the corresponding portfolio of EQ
Advisors Trust.
We reserve the right subject to compliance with laws that apply:
(1) to add variable investment options to, or to remove variable investment
options from, Separate Account No. 45, or to add other separate accounts;
(2) to combine any two or more variable investment options;
(3) to transfer the assets we determine to be the shares of the class of
contracts to which the contracts belong from any variable investment
option to another variable investment option;
(4) to operate Separate Account No. 45 or any variable investment option as a
management investment company under the Investment Company Act of 1940
(in which case, charges and expenses that otherwise would be assessed
against an underlying mutual fund would be assessed against Separate
Account No. 45 or a variable investment option directly);
(5) to deregister Separate Account No. 45 under the Investment Company Act of
1940;
(6) to restrict or eliminate any voting rights as to Separate Account No. 45;
and
(7) to cause one or more variable investment options to invest some or all of
their assets in one or more other trusts or investment companies.
ABOUT EQ ADVISORS TRUST
EQ Advisors Trust is registered under the Investment Company Act of 1940. It
is classified as an "open-end management investment company," more commonly
called a mutual fund. EQ Advisors Trust issues different shares relating to
each portfolio.
Equitable Life serves as the investment manager of EQ Advisors Trust. As such,
Equitable Life oversees the activities of the investment advisers with respect
to EQ Advisors Trust and is responsible for retaining or discontinuing the
services of those advisers. (Prior to September 1999 EQ Financial Consultants,
Inc., the predecessor to AXA Advisors, LLC and an affiliate of Equitable Life,
served as investment manager to EQ Advisors Trust.)
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999 the Alliance portfolios (other than EQ/Alliance Premier
Growth) were part of The Hudson River Trust. On October 18, 1999, these
portfolios became corresponding portfolios of EQ Advisors Trust.
EQ Advisors Trust does not impose sales charges or "loads" for buying and
selling its shares. All dividends and other distributions on Trust shares are
reinvested in full. The Board of Trustees of EQ Advisors Trust may establish
additional portfolios or eliminate existing portfolios at any time. More
detailed information about EQ Advisors Trust, the portfolio investment
objectives, policies, restrictions, risks, expenses, the Rule 12b-1 Plan
relating to its Class IB shares, and other aspects of its operations, appears
in the prospectus for EQ Advisors Trust attached at the end of this
prospectus, or in its SAI which is available upon request.
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ABOUT THE GENERAL ACCOUNT
Our general account supports all of our policy and contract guarantees, as
well as our general obligations. Credits allocated to your account value are
funded from our general account.
The general account is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations
of all jurisdictions where we are authorized to do business. Because of
exemptions and exclusionary provisions that apply, interests in the general
account have not been registered under the Securities Act of 1933, nor is the
general account an investment company under the Investment Company Act of
1940.
We have been advised that the staff of the SEC has not reviewed the portions
of this prospectus that relate to the general account. The disclosure with
regard to the general account, however, may be subject to certain provisions
of the federal securities laws relating to the accuracy and completeness of
statements made in prospectuses.
ABOUT OTHER METHODS OF PAYMENT
AUTOMATIC INVESTMENT PROGRAM - FOR NQ CONTRACTS ONLY
You may use our automatic investment program, or "AIP," to have a specified
amount automatically deducted from a checking account, money market account,
or credit union checking account and contributed as an additional contribution
into an NQ contract on a monthly or quarterly basis. AIP is not available for
Rollover IRA, Roth Conversion IRA, QP or Rollover TSA contracts.
The minimum amounts we will deduct are $100 monthly and $300 quarterly. AIP
additional contributions may be allocated to any of the variable investment
options. You choose the day of the month you wish to have your account
debited. However you may not choose a date later than the 28th day of the
month.
You may cancel AIP at any time by notifying our processing office. We are not
responsible for any debits made to your account before the time written notice
of cancellation is received at our processing office.
DATES AND PRICES AT WHICH CONTRACT EVENTS OCCUR
We describe below the general rules for when, and at what prices, events under
your contract will occur. Other portions of this prospectus describe
circumstances that may cause exceptions. We generally do not repeat those
exceptions below.
BUSINESS DAY
Our business day is any day the New York Stock Exchange is open for trading.
Our business day generally ends at 4:00 p.m., Eastern Time for purposes of
determining the date when contributions are applied and any other transaction
requests are processed. We may, however, close due to emergency conditions.
Contributions will be applied and any other transaction requests will be
processed when they are received along with all the required information.
o If your contribution, transfer, or any other transaction request,
containing all the required information, reaches us on a non-business day
or after 4:00 p.m. on a business day, we will use the next business day.
o A loan request under your Rollover TSA contract will be processed on the
first business day of the month following the date on which the properly
completed loan request form is received.
o If your transaction is set to occur on the same day of the month as the
contract date and that date is the 29th, 30th or 31st of the month, then
the transaction will occur on the 1st day of the next month.
o When a charge is to be deducted on a contract date anniversary that is a
non-business day, we will deduct the charge on the next business day.
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CONTRIBUTIONS, CREDITS, AND TRANSFERS
o Contributions and credits allocated to the variable investment options are
invested at the value next determined after the close of the business day.
o Transfers to or from variable investment options will be made at the value
next determined after the close of the business day.
ABOUT YOUR VOTING RIGHTS
As the owner of the shares of EQ Advisors Trust we have the right to vote on
certain matters involving the portfolios, such as:
o the election of trustees;
o the formal approval of independent auditors selected for EQ Advisors Trust;
or
o any other matters described in the prospectus for EQ Advisors Trust or
requiring a shareholders' vote under the Investment Company Act of 1940.
We will give contract owners the opportunity to instruct us how to vote the
number of shares attributable to their contracts if a shareholder vote is
taken. If we do not receive instructions in time from all contract owners, we
will vote the shares of a portfolio for which no instructions have been
received in the same proportion as we vote shares of that portfolio for which
we have received instructions. We will also vote any shares that we are
entitled to vote directly because of amounts we have in a portfolio in the
same proportions that contract owners vote.
VOTING RIGHTS OF OTHERS
Currently, we control EQ Advisors Trust. EQ Advisors Trust shares are sold to
our separate accounts and an affiliated qualified plan trust. In addition, EQ
Advisors Trust shares are held by separate accounts of insurance companies
affiliated and unaffiliated with us. Shares held by these separate accounts
will probably be voted according to the instructions of the owners of
insurance policies and contracts issued by those insurance companies. While
this will dilute the effect of the voting instructions of the contract owners,
we currently do not foresee any disadvantages because of this. The Board of
Trustees of EQ Advisors Trust intends to monitor events in order to identify
any material irreconcilable conflicts that may arise and to determine what
action, if any, should be taken in response. If we believe that a response to
any of those events insufficiently protects our contract owners, we will see
to it that appropriate action is taken.
SEPARATE ACCOUNT NO. 45 VOTING RIGHTS
If actions relating to Separate Account No. 45 require contract owner
approval, contract owners will be entitled to one vote for each unit they have
in the variable investment options. Each contract owner who has elected a
variable annuity payout option may cast the number of votes equal to the
dollar amount of reserves we are holding for that annuity in a variable
investment option divided by the annuity unit value for that option. We will
cast votes attributable to any amounts we have in the variable investment
options in the same proportion as votes cast by contract owners.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under applicable
federal securities laws. To the extent that those laws or the regulations
published under those laws eliminate the necessity to submit matters for
approval by persons having voting rights in separate accounts of insurance
companies, we reserve the right to proceed in accordance with those laws or
regulations.
ABOUT LEGAL PROCEEDINGS
Equitable Life and its affiliates are parties to various legal proceedings. In
our view, none of these proceedings is likely to have a material adverse
effect upon Separate Account No. 45, our ability to meet our obligations under
the contracts, or the distribution of the contracts.
ABOUT OUR INDEPENDENT ACCOUNTANTS
The consolidated financial statements of Equitable Life at December 31, 1999
and 1998, and for the three years ended December 31, 1999 incorporated in this
prospectus by
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reference to the 1999 Annual Report on Form 10-K are incorporated in reliance
on the report of PricewaterhouseCoopers LLP, independent accountants, given on
the authority of said firm as experts in auditing and accounting.
FINANCIAL STATEMENTS
The financial statements of Separate Account No. 45, as well as the
consolidated financial statements of Equitable Life, are in the SAI. The SAI
is available free of charge. You may request one by writing to our processing
office or calling 1-800-789-7771.
TRANSFERS OF OWNERSHIP, COLLATERAL ASSIGNMENTS, LOANS, AND BORROWING
You can transfer ownership of an NQ contract at any time before annuity
payments begin. We will continue to treat you as the owner until we receive
written notification of any change at our processing office. You cannot assign
your NQ contract as collateral or security for a loan. Loans are also not
available under your NQ contract. In some cases, an assignment or change of
ownership may have adverse tax consequences. See "Tax information" earlier in
this prospectus.
You cannot assign or transfer ownership of a Rollover IRA, Roth Conversion
IRA, QP or Rollover TSA contract except by surrender to us. Loans are not
available and you cannot assign Rollover IRA, Roth Conversion IRA, and QP
contracts as security for a loan or other obligation. If the employer that
provided the funds does not restrict them, loans are available under a
Rollover TSA contract.
For limited transfers of ownership after the owner's death see "Beneficiary
continuation option" in "Payment of death benefit" earlier in this prospectus.
You may direct the transfer of the values under your Rollover IRA, Roth
Conversion IRA, QP or Rollover TSA contract to another similar arrangement
under federal income tax rules. In the case of such a transfer, we will impose
a withdrawal charge, if one applies.
DISTRIBUTION OF THE CONTRACTS
AXA Advisors, LLC ("AXA Advisors"), the successor to EQ Financial Consultants,
Inc. and an affiliate of Equitable Life, is the distributor of the contracts
and has responsibility for sales and marketing functions for Separate Account
No. 45. AXA Advisors serves as the principal underwriter of Separate Account
No. 45. AXA Advisors is registered with the SEC as a broker-dealer and is a
member of the National Association of Securities Dealers, Inc. AXA Advisors'
principal business address is 1290 Avenue of the Americas, New York, New York
10104. Pursuant to a Distribution and Servicing Agreement between AXA
Advisors, Equitable Life, and certain of Equitable Life's separate accounts,
including Separate Account No. 45, Equitable Life paid AXA Advisors
distribution fees of 325,380 for 1999 and $325,380 for 1998, as the
distributor of certain contracts and as the principal underwriter of certain
separate accounts including Separate Account No. 45. Before May 1, 1998,
Equitable Distributors, Inc. ("EDI"), also an indirect, wholly owned
subsidiary of Equitable Life, served as the distributor of the contracts and
the principal underwriter of Separate Account No. 45. Pursuant to a
Distribution Agreement between Equitable Life, certain of Equitable Life's
separate accounts, including Separate Account No. 45, and EDI, Equitable Life
paid EDI distribution fees of $9,444,621 for 1997 as the distributor of
certain contracts and as the principal underwriter of certain separate
accounts including Separate Account No. 45.
The contracts will be sold by financial professionals who are financial
professionals of AXA Advisors and its affiliates, who are also our licensed
agents. AXA Advisors may also receive compensation and reimbursement for its
marketing services under the terms of its distribution agreement with
Equitable Life. The offering of the contracts is intended to be continuous.
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Investment performance
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We provide the following tables to show five different measurements of the
investment performance of the variable investment options and/or the
portfolios in which they invest. We include these tables because they may be
of general interest to you.
Table 1 shows the average annual total return of the variable investment
options. Average annual total return is the annual rate of growth that would
be necessary to achieve the ending value of a contribution plus the 4% credit
invested in the variable investment options for the periods shown.
Table 2 shows the growth of a hypothetical $1,000 investment plus a $40 credit
in the variable investment options over the periods shown. Both Tables 1 and 2
take into account all current fees and charges under the contract, but do not
reflect the charges designed to approximate certain taxes imposed on us, such
as premium taxes in your state or any applicable annuity administrative fee.
Tables 3, 4, and 5 show the rates of return of the variable investment options
on an annualized, cumulative, and year-by-year basis. These tables take into
account all current fees and charges under the contract, but do not reflect
the withdrawal charge or the charges designed to approximate certain taxes
imposed on us, such as premium taxes in your state or any applicable annuity
administrative fee. If the charges were reflected they would effectively
reduce the rates of return shown. The credit is not included.
In all cases the results shown are based on the actual historical investment
experience of the portfolios in which the variable investment options invest.
In some cases, the results shown relate to periods when the variable
investment options and/or contracts were not available. In those cases, we
adjusted the results of the portfolios to reflect the charges under the
contracts that would have applied had the variable investment options and/or
contracts been available. The contracts are being offered for the first time
in 1999.
For the "Alliance" portfolios (other than EQ/Alliance Premier Growth) we have
adjusted the results prior to October 1996, when Class IB shares for these
portfolios were not available, to reflect the 12b-1 fees currently imposed.
Finally, the results shown for the Alliance Money Market and Alliance Common
Stock options for periods before March 22, 1985 reflect the results of the
variable investment options that preceded them. The "Since portfolio
inception" figures for these options are based on the date of inception of the
preceding variable investment options. We have adjusted these results to
reflect the maximum investment advisory fee payable for the portfolios, as
well as an assumed charge of 0.06% for direct operating expenses.
EQ Advisors Trust commenced operations on May 1, 1997. For periods prior to
October 18, 1999 the Alliance portfolios (other than EQ/Alliance Premier
Growth) were part of The Hudson River Trust. On October 18, 1999, these
portfolios became corresponding portfolios of EQ Advisors Trust. In each case
the performance shown is for the indicated EQ Advisors Trust portfolio and any
predecessor that it may have had.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends.
From time to time, we may advertise different measurements of the investment
performance of the variable investment options and/or the portfolios,
including the measurements reflected in the tables below. We will indicate
that the 4% credit is reflected when we show performance numbers that give
effect to the credit.
THE PERFORMANCE INFORMATION SHOWN BELOW AND THE PERFORMANCES INFORMATION THAT
WE ADVERTISE REFLECT PAST PERFORMANCE AND DO NOT INDICATE HOW THE VARIABLE
INVESTMENT OPTIONS MAY PERFORM IN THE FUTURE. SUCH INFORMATION ALSO DOES NOT
REPRESENT THE RESULTS EARNED BY ANY PARTICULAR INVESTOR. YOUR RESULTS WILL
DIFFER.
BENCHMARKS
Tables 3 and 4 compare the performance of variable investment options to
market indices that serve as benchmarks. Market indices are not subject to any
charges
<PAGE>
- ------
63
- --------------------------------------------------------------------------------
for investment advisory fees, brokerage commission or other operating expenses
typically associated with a managed portfolio. Also, they do not reflect other
contract charges such as the mortality and expense risks charge,
administrative charge, distribution charge, or any withdrawal charge.
Comparisons with these benchmarks, therefore, may be of limited use. We
include them because they are widely known and may help you to understand the
universe of securities from which each portfolio is likely to select its
holdings. Benchmark data reflect the reinvestment of dividend income. The
benchmarks include:
<TABLE>
<S> <C>
EQ/AGGRESSIVE STOCK: 50% Russell 2000 Index and 50%
Standard & Poor's Mid-Cap Total Return Index.
ALLIANCE COMMON STOCK: Standard & Poor's 500 Index.
ALLIANCE CONSERVATIVE INVESTORS: 70% Lehman Treasury Bond
Composite Index and 30% Standard & Poor's 500 Index.
ALLIANCE GLOBAL: Morgan Stanley Capital International World Index.
ALLIANCE GROWTH AND INCOME: 75% Standard & Poor's 500 Index
and 25% Value Line Convertibles Index.
ALLIANCE GROWTH INVESTORS: 70% Standard & Poor's 500 Index
and 30% Lehman Government/Corporate Bond Index.
ALLIANCE HIGH YIELD: Benchmark #1 - Merrill Lynch High Yield
Master Index and Benchmark #2 - Credit Suisse First Boston
Global High Yield Index.
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES: Lehman
Intermediate Government Bond Index.
ALLIANCE INTERNATIONAL: Morgan Stanley Capital International
Europe, Australia, Far East Index.
ALLIANCE MONEY MARKET: Salomon Brothers Three-Month T-Bill
Index.
EQ/ALLIANCE PREMIER GROWTH: Standard & Poor's 500 Index.
ALLIANCE SMALL CAP GROWTH: Russell 2000 Growth Index.
EQ/ALLIANCE TECHNOLOGY: Lipper Specialty Funds Average.
BT EQUITY 500 INDEX: Standard & Poor's 500 Index.
BT INTERNATIONAL EQUITY INDEX: Morgan Stanley Capital
International Europe, Australia, Far East Index.
BT SMALL COMPANY INDEX: Russell 2000 Index.
CAPITAL GUARDIAN RESEARCH: Standard & Poor's 500 Index.
CAPITAL GUARDIAN U.S. EQUITY: Standard & Poor's 500 Index.
EQ/EVERGREEN: Benchmark #1 - Russell 2000 Index and
Benchmark #2 - Standard & Poor's 500 Index.
EQ/EVERGREEN FOUNDATION: 60% Standard & Poor's 500
Index/40% Lehman Brothers Aggregate Bond Index.
MFS EMERGING GROWTH COMPANIES: Russell 2000 Index.
MFS GROWTH WITH INCOME: Standard & Poor's 500 Index.
MFS RESEARCH: Standard & Poor's 500 Index.
MERCURY BASIC VALUE EQUITY: Standard & Poor's 500 Index.
MERCURY WORLD STRATEGY: 36% Standard & Poor's 500 Index/24%
Morgan Stanley Capital International Europe, Australia, Far East
Index/21% Salomon Brothers U.S. Treasury Bond 1 Year+/14%
Salomon Brothers World Government Bond (excluding U.S.)/and
5% Three-Month U.S. Treasury Bill.
MORGAN STANLEY EMERGING MARKETS EQUITY: Morgan Stanley
Capital International Emerging Markets Free Price Return Index.
EQ/PUTNAM BALANCED: 60% Standard & Poor's 500 Index and
40% Lehman Government/Corporate Bond Index.
EQ/PUTNAM GROWTH & INCOME VALUE: Standard & Poor's 500
Index.
T. ROWE PRICE EQUITY INCOME: Standard & Poor's 500 Index.
T. ROWE PRICE INTERNATIONAL STOCK: Morgan Stanley Capital
International Europe, Australia, Far East Index.
WARBURG PINCUS SMALL COMPANY VALUE: Benchmark #1 -
Russell 2000 Index and Benchmark #2 - Russell 2000 Value
Index.
</TABLE>
LIPPER SURVEY. The Lipper Variable Insurance Products Performance Analysis
Survey (Lipper Survey) records the performance of a large group of variable
annuity products, including managed separate accounts of insurance companies.
According to Lipper Analytical Services, Inc. (Lipper), the data are presented
net of investment management fees, direct operating expenses and asset-based
charges applicable under annuity contracts. Lipper data provide a more
accurate picture than market benchmarks of the Equitable Accumulator Plus
performance relative to other variable annuity products.
<PAGE>
- -----
64
- --------------------------------------------------------------------------------
TABLE 1
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 1999:+
<TABLE>
<CAPTION>
LENGTH OF INVESTMENT PERIOD
------------------------------------------------------------------------
1 3 5 10 OPTION PORTFOLIO
VARIABLE INVESTMENT OPTIONS YEAR YEARS YEARS YEARS INCEPTION* INCEPTION**
- --------------------------- ----- ------ ----- ----- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
EQ/Aggressive Stock 13.32%% 7.12% 14.44% 14.96% 14.39% 15.99%
Alliance Common Stock 19.81% 25.76% 26.31% 16.86% 26.45% 14.78%
Alliance Conservative Investors 4.43% 9.89% 10.60% 8.33% 10.18% 8.39%
Alliance Global 33.40% 21.21% 18.92% 14.14% 19.77% 12.71%
Alliance Growth and Income 13.14% 19.77% 20.27% - 20.34% 15.47%
Alliance Growth Investors 21.22% 18.45% 18.38% 15.36% 18.27% 15.33%
Alliance High Yield (9.34)% (0.06)% 7.96% 8.62% 6.89% 7.67%
Alliance Intermediate Government Securities (5.78)% 2.23% 4.39% - 3.79% 4.72%
Alliance International 32.66% 11.41% - - 11.29% 11.39%
Alliance Money Market (0.83)% 2.49% 3.37% 3.63% 3.32% 5.22%
Alliance Small Cap Growth 22.60% - - - 15.44% 15.44%
BT Equity 500 Index 15.12% - - - 19.83% 19.83%
BT International Equity Index 22.45% - - - 20.89% 20.89%
BT Small Company Index 15.55% - - - 5.25% 5.25%
EQ/Evergreen 4.29% - - - 4.29% 4.29%
EQ/Evergreen Foundation 1.87% - - - 1.87% 1.87%
MFS Emerging Growth Companies 69.74% - - - 46.68% 46.68%
MFS Growth with Income 3.26% - - - 3.26% 3.26%
MFS Research 18.00% - - - 21.90% 21.90%
Mercury Basic Value Equity 13.72% - - - 15.75% 15.75%
Mercury World Strategy 16.18% - - - 9.75% 9.75%
Morgan Stanley Emerging Markets Equity 92.32% - - - 6.60% 2.96%
EQ/Putnam Balanced (5.62)% - - - 7.25% 7.25%
EQ/Putnam Growth & Income Value (7.06)% - - - 7.68% 7.68%
T. Rowe Price Equity Income (2.02)% - - - 10.46% 10.46%
T. Rowe Price International Stock 26.95% - - - 13.47% 13.47%
Warburg Pincus Small Company Value (3.82)% - - - 0.64% 0.64%
</TABLE>
+ If you start receiving annuity payments within three years of making an
additional contribution we will recover the amount of any credit that
applied to that contribution.
* The variable investment option inception dates are: EQ/Aggressive Stock,
Alliance Common Stock, Alliance Conservative Investors, Alliance Global,
Alliance Growth and Income, Alliance Growth Investors, Alliance High
Yield, Alliance Intermediate Government Securities, Alliance
International, and Alliance Money Market (May 1, 1995); Alliance Small
Cap Growth, Mercury Basic Value Equity, Mercury World Strategy, MFS
Emerging Growth Companies, MFS Research, EQ/Putnam Balanced, EQ/Putnam
Growth & Income Value, T. Rowe Price
<PAGE>
- -----
65
- --------------------------------------------------------------------------------
Equity Income, T. Rowe Price International Stock, and Warburg Pincus Small
Company Value (May 1, 1997); Morgan Stanley Emerging Markets Equity
(September 2, 1997); BT Equity 500 Index, BT International Equity Index, BT
Small Company Index (December 31, 1997); EQ/Evergreen, EQ/Evergreen
Foundation, and MFS Growth with Income (December 31, 1998). The inception
dates for the variable investment options that became available after
December 31, 1998 and are therefore not shown in this table are:
EQ/Alliance Premier Growth, Capital Guardian U.S. Equity, and Capital
Guardian Research (April 30, 1999) and EQ/Alliance Technology (May 1,
2000).
** The inception dates for the portfolios underlying the Alliance variable
investment options shown in the tables are for portfolios of The Hudson
River Trust, the assets of which became assets of corresponding
portfolios of EQ Advisors Trust on October 18, 1999. The portfolio
inception dates are: EQ/Aggressive Stock (January 27, 1986); Alliance
Common Stock (January 13, 1976); Alliance Conservative Investors and
Alliance Growth Investors (October 2, 1989); Alliance Global (August 27,
1987); Alliance Growth and Income (October 1, 1993); Alliance High Yield
(January 2, 1987); Alliance Intermediate Government Securities (April 1,
1991); Alliance International (April 3, 1995); Alliance Money Market
(July 13, 1981); Alliance Small Cap Growth, Mercury Basic Value Equity,
Mercury World Strategy, MFS Emerging Growth Companies, MFS Research, T.
Rowe Price Equity Income, T. Rowe Price International Stock, and Warburg
Pincus Small Company Value (May 1, 1997); Morgan Stanley Emerging Markets
Equity (August 20, 1997); BT Equity 500 Index, BT International Equity
Index, and BT Small Company Index (January 1, 1998); and EQ/Evergreen,
EQ/Evergreen Foundation, and MFS Growth with Income (December 31, 1998).
The inception dates for the portfolios that became available after
December 31, 1998 and are therefore not shown in the tables are:
EQ/Alliance Premier Growth, Capital Guardian U.S. Equity, and Capital
Guardian Research (April 30, 1999) and EQ/Alliance Technology (May 1, 2000).
<PAGE>
- ------
66
- --------------------------------------------------------------------------------
TABLE 2
GROWTH OF $1,040 UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 1999:+
<TABLE>
<CAPTION>
LENGTH OF INVESTMENT PERIOD
---------------------------------------------------------------------
SINCE
1 3 5 10 PORTFOLIO
VARIABLE INVESTMENT OPTIONS YEAR YEARS YEARS YEARS INCEPTION*
- --------------------------- ----- ------ ------- ------- ----------
<S> <C> <C> <C> <C> <C>
EQ/Aggressive Stock $ 1,133.16 $ 1,229.10 $ 1,963.11 $ 4,031.00 $ 7,893.17
Alliance Common Stock $ 1,198.06 $ 1,988.79 $ 3,214.66 $ 4,750.89 $ 27,177.91
Alliance Conservative Investors $ 1,044.34 $ 1,327.05 $ 1,654.84 $ 2,225.15 $ 2,283.23
Alliance Global $ 1,333.98 $ 1,781.00 $ 2,378.00 $ 3,751.98 $ 4,377.83
Alliance Growth and Income $ 1,131.39 $ 1,718.01 $ 2,516.54 - $ 2,456.65
Alliance Growth Investors $ 1,212.20 $ 1,662.02 $ 2,324.39 $ 4,174.20 $ 4,314.00
Alliance High Yield $ 906.65 $ 998.11 $ 1,466.27 $ 2,285.78 $ 2,611.16
Alliance Intermediate Government Securities $ 942.22 $ 1,068.49 $ 1,239.90 - $ 1,497.40
Alliance International $ 1,326.60 $ 1,382.69 - - $ 1,668.36
Alliance Money Market $ 991.72 $ 1,076.72 $ 1,180.41 $ 1,428.90 $ 2,558.95
Alliance Small Cap Growth $ 1,226.03 - - - $ 1,467.04
BT Equity 500 Index $ 1,151.15 - - - $ 1,435.92
BT International Equity Index $ 1,224.47 - - - $ 1,461.50
BT Small Company Index $ 1,155.52 - - - $ 1,107.70
EQ/Evergreen $ 1,042.89 - - - $ 1,042.89
EQ/Evergreen Foundation $ 1,018.66 - - - $ 1,018.66
MFS Emerging Growth Companies $ 1,697.36 - - - $ 2,779.33
MFS Growth with Income $ 1,032.59 - - - $ 1,032.59
MFS Research $ 1,179.96 - - - $ 1,696.39
Mercury Basic Value Equity $ 1,137.22 - - - $ 1,477.27
Mercury World Strategy $ 1,161.76 - - - $ 1,281.94
Morgan Stanley Emerging Markets Equity $ 1,923.25 - - - $ 1,071.33
EQ/Putnam Balanced $ 943.78 - - - $ 1,205.50
EQ/Putnam Growth & Income Value $ 929.42 - - - $ 1,218.31
T. Rowe Price Equity Income $ 979.76 - - - $ 1,304.14
T. Rowe Price International Stock $ 1,269.50 - - - $ 1,401.02
Warburg Pincus Small Company Value $ 961.77 - - - $ 1,017.06
</TABLE>
- ----------
+ If you start receiving annuity payments within three years of making an
additional contribution we will recover the amount of any credit that
applied to that contribution.
* Portfolio inception dates are shown in Table 1.
<PAGE>
- -----
67
- --------------------------------------------------------------------------------
TABLE 3
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
------ -------- -------- -------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
EQ/AGGRESSIVE STOCK 16.65% 7.69% 14.12% 14.51% - 15.67%
Lipper Mid-Cap 51.65% 24.68% 19.97% 14.78% - 15.86%
Benchmark 18.09% 17.48% 19.92% 15.41% - 14.58%
ALLIANCE COMMON STOCK 22.89% 25.56% 25.70% 16.41% 16.21% 14.59%
Lipper Growth 29.78% 26.87% 25.55% 16.90% 15.83% 15.16%
Benchmark 21.03% 27.56% 28.56% 18.21% 17.88% 16.19%
ALLIANCE CONSERVATIVE INVESTORS 8.11% 10.34% 10.39% 7.90% - 7.98%
Lipper Flexible Portfolio 4.42% 11.65% 13.70% 10.10% - 10.15%
Benchmark 4.19% 12.07% 13.60% 10.75% - 10.68%
ALLIANCE GLOBAL 35.96% 21.19% 18.48% 13.69% - 12.35%
Lipper Global 44.62% 23.92% 20.57% 11.65% - 11.06%
Benchmark 24.93% 21.61% 19.76% 11.42% - 10.74%
ALLIANCE GROWTH AND INCOME 16.48% 19.80% 19.80% - - 14.97%
Lipper Growth & Income 12.90% 17.23% 20.50% - - 16.45%
Benchmark 20.71% 23.10% 25.01% - - 18.77%
ALLIANCE GROWTH INVESTORS 24.25% 18.53% 17.95% 14.91% - 14.89%
Lipper Flexible Portfolio 10.45% 14.19% 15.15% 11.65% - 11.68%
Benchmark 13.77% 20.90% 22.15% 15.13% - 15.15%
ALLIANCE HIGH YIELD (5.13)% 0.90% 7.83% 8.19% - 7.34%
Lipper High Current Yield 3.65% 4.82% 8.59% 9.61% - 7.79%
Benchmark #1 1.57% 5.91% 9.61% 10.79% - 9.99%
Benchmark #2 3.28% 5.37% 9.07% 11.06% - 10.04%
ALLIANCE INTERMEDIATE GOVERNMENT
SECURITIES (1.71)% 3.06% 4.40% - - 4.33%
Lipper Government (2.60)% 4.04% 5.81% - - 5.89%
Benchmark 0.49% 5.50% 6.93% - - 6.76%
ALLIANCE INTERNATIONAL 35.25% 11.78% - - - 11.16%
Lipper International 43.24% 18.74% - - - 16.13%
Benchmark 26.96% 15.74% - - - 13.11%
ALLIANCE MONEY MARKET 3.05% 3.31% 3.42% 3.23% - 5.00%
Lipper Money Market 3.78% 4.05% 4.16% 3.96% - 5.70%
Benchmark 4.74% 5.01% 5.20% 5.06% - 6.65%
ALLIANCE SMALL CAP GROWTH 25.58% - - - - 15.77%
Lipper Small Cap 34.26% - - - - 19.49%
Benchmark 43.09% - - - - 25.88%
BT EQUITY 500 INDEX 18.38% - - - - 20.73%
Lipper Standard & Poor's 500 Index 19.36% - - - - 23.16%
Benchmark 21.03% - - - - 24.76%
BT INTERNATIONAL EQUITY INDEX 25.43% - - - - 21.75%
Lipper International 43.24% - - - - 26.76%
Benchmark 26.96% - - - - 23.43%
- ------------------------------------- ------- ------- ------- ------- ------- -------
</TABLE>
<PAGE>
- -----
68
- --------------------------------------------------------------------------------
TABLE 3 (CONTINUED)
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
-------- -------- -------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
BT SMALL COMPANY INDEX 18.80% - - - - 6.86%
Lipper Small Cap 34.26% - - - - 16.02%
Benchmark 21.26% - - - - 8.70%
EQ/EVERGREEN 7.97% - - - - 7.97%
Lipper Growth 29.78% - - - - 29.78%
Benchmark #1 21.26% - - - - 21.26%
Benchmark #2 21.03% - - - - 21.03%
EQ/EVERGREEN FOUNDATION 5.64% - - - - 5.64%
Lipper Balanced 8.69% - - - - 8.69%
Benchmark 11.15% - - - - 11.15%
MFS EMERGING GROWTH COMPANIES 70.90% - - - - 45.89%
Lipper Mid-Cap 51.65% - - - - 32.50%
Benchmark 21.26% - - - - 16.99%
MFS GROWTH WITH INCOME 6.98% - - - - 6.98%
Lipper Growth and Income 12.90% - - - - 12.90%
Benchmark 21.03% - - - - 21.03%
MFS RESEARCH 21.15% - - - - 21.96%
Lipper Growth 29.78% - - - - 29.33%
Benchmark 21.03% - - - - 27.36%
MERCURY BASIC VALUE EQUITY 17.04% - - - - 16.05%
Lipper Growth & Income 12.90% - - - - 18.00%
Benchmark 21.03% - - - 27.36%
MERCURY WORLD STRATEGY 19.40% - - - - 10.33%
Lipper Global Flexible Portfolio 12.93% - - - - 11.91%
Benchmark 13.07% - - - - 16.18%
MORGAN STANLEY EMERGING MARKETS
EQUITY 92.62% - - - - 4.01%
Lipper Emerging Markets 82.53% - - - - 2.90%
Benchmark 66.41% - - - - (0.88)%
EQ/PUTNAM BALANCED (1.56)% - - - - 7.95%
Lipper Balanced 8.69% - - - - 13.91%
Benchmark 11.39% - - - - 18.81%
EQ/PUTNAM GROWTH & INCOME VALUE (2.94)% - - - - 8.35%
Lipper Growth & Income 12.90% - - - - 18.00%
Benchmark 21.03% - - - - 27.36%
T. ROWE PRICE EQUITY INCOME 1.90% - - - - 11.00%
Lipper Equity Income 6.90% - - - - 14.28%
Benchmark 21.03% - - - - 27.36%
T. ROWE PRICE INTERNATIONAL STOCK 29.76% - - - - 13.87%
Lipper International 43.24% - - - - 20.38%
Benchmark #1 26.96% - - - - 18.32%
WARBURG PINCUS SMALL COMPANY VALUE 0.17% - - - - 1.67%
Lipper Small Cap 34.26% - - - - 24.22%
Benchmark #1 21.26% - - - - 16.99%
Benchmark #2 (1.49)% 7.06%
</TABLE>
- ----------
* Portfolio inception dates are shown in Table 1. Lipper survey and
benchmark "Since portfolio inception" information is as of the month-end
closest to the actual date of portfolio inception.
<PAGE>
- -----
69
- --------------------------------------------------------------------------------
TABLE 4
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
-------- -------- -------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
EQ/AGGRESSIVE STOCK 16.65% 24.90% 93.56% 287.60% - 658.94%
Lipper Mid-Cap 51.65% 102.87% 158.98% 311.69% - 683.45%
Benchmark 18.09% 62.12% 147.96% 319.19% - 595.55%
ALLIANCE COMMON STOCK 22.89% 97.94% 213.88% 356.81% 1,916.29% 2,513.58%
Lipper Growth 29.78% 106.30% 216.51% 386.68% 1,816.52% 2,838.39%
Benchmark 21.03% 107.56% 251.12% 432.78% 2,584.39% 3,555.48%
ALLIANCE CONSERVATIVE INVESTORS 8.11% 34.33% 63.92% 113.94% - 119.53%
Lipper Flexible Portfolio 4.42% 39.31% 91.71% 163.35% - 169.02%
Benchmark 4.19% 40.74% 89.21% 177.71% - 186.90%
ALLIANCE GLOBAL 35.96% 77.98% 133.46% 260.79% - 320.97%
Lipper Global 44.62% 93.38% 162.57% 205.54% - 273.03%
Benchmark 24.93% 79.83% 146.35% 194.99% - 252.80%
ALLIANCE GROWTH AND INCOME 16.48% 71.92% 146.77% - - 139.09%
Lipper Growth & Income 12.90% 62.52% 157.04% - - 158.01%
Benchmark 20.71% 86.55% 205.26% - - 204.09%
ALLIANCE GROWTH INVESTORS 24.25% 66.54% 128.31% 301.37% - 314.82%
Lipper Flexible Portfolio 10.45% 49.38% 103.90% 204.29% - 211.11%
Benchmark 13.77% 76.71% 171.92% 309.28% - 352.50%
ALLIANCE HIGH YIELD (5.13)% 2.71% 45.81% 119.82% - 151.11%
Lipper High Current Yield 3.65% 15.25% 51.19% 151.82% - 166.74%
Benchmark #1 1.57% 18.80% 58.22% 178.72% - 245.03%
Benchmark #2 3.28% 17.00% 54.39% 185.43% - 246.92%
ALLIANCE INTERMEDIATE GOVERNMENT
SECURITIES (1.71)% 9.47% 24.03% - - 44.94%
Lipper U.S. General Government (2.60)% 12.55% 32.56% - - 64.40%
Benchmark 0.49% 17.43% 39.81% - - 77.41%
ALLIANCE INTERNATIONAL 35.25% 39.68% - - - 65.23%
Lipper International 43.24% 69.17% - - - 103.07%
Benchmark 26.96% 55.06% - - - 79.52%
ALLIANCE MONEY MARKET 3.05% 10.26% 18.30% 37.39% - 146.07%
Lipper Money Market 3.78% 12.64% 22.65% 47.52% - 178.18%
Benchmark 4.74% 15.79% 28.88% 63.79% - 229.35%
ALLIANCE SMALL CAP GROWTH 25.58% - - - - 47.80%
Lipper Small Cap 34.26% - - - - 62.98%
Benchmark 43.09% - - - - 84.91%
BT EQUITY 500 INDEX 18.38% - - - - 45.76%
Lipper Standard & Poor's 500 Index 19.36% - - - - 51.69%
Benchmark 21.03% - - - - 55.65%
BT INTERNATIONAL EQUITY INDEX 25.43% - - - - 48.22%
Lipper International 43.24% - - - - 61.58%
Benchmark 26.96% - - - - 52.35%
- ------------------------------------- ------- ------- -------- -------- --------- ---------
</TABLE>
<PAGE>
- -----
70
- --------------------------------------------------------------------------------
TABLE 4 (CONTINUED)
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1999:
<TABLE>
<CAPTION>
SINCE
PORTFOLIO
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION*
-------- -------- -------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
BT SMALL COMPANY INDEX 18.80% - - - - 14.20%
Lipper Small Cap 34.26% - - - - 37.82%
Benchmark 21.26% - - - - 18.17%
EQ/EVERGREEN 7.97% - - - - 7.97%
Lipper Growth 29.78% - - - - 29.78%
Benchmark #1 21.26% - - - - 21.26%
Benchmark #2 21.03% - - - - 21.03%
EQ/EVERGREEN FOUNDATION 5.64% - - - - 5.64%
Lipper Balanced 8.69% - - - - 8.69%
Benchmark 11.15% - - - - 11.15%
MFS EMERGING GROWTH COMPANIES 70.90% - - - - 173.96%
Lipper Mid-Cap 51.65% - - - - 120.85%
Benchmark 21.26% - - - - 52.05%
MFS GROWTH WITH INCOME 6.98% - - - - 6.98%
Lipper Growth and Income 12.90% - - - - 12.90%
Benchmark 21.03% - - - - 21.03%
MFS RESEARCH 21.15% - - - - 69.84%
Lipper Growth 29.78% - - - - 101.13%
Benchmark 21.03% - - - - 90.75%
MERCURY BASIC VALUE EQUITY 17.04% - - - - 48.77%
Lipper Growth & Income 12.90% - - - - 56.85%
Benchmark 21.03% - - - - 90.75%
MERCURY WORLD STRATEGY 19.40% - - - - 30.00%
Lipper Global Flexible portfolio 12.93% - - - - 35.69%
Benchmark 13.07% - - - - 49.16%
MORGAN STANLEY EMERGING MARKETS
EQUITY 92.62% - - - - 9.74%
Lipper Emerging Markets 82.53% - - - - 7.48%
Benchmark 66.41% - - - - 5.32%
EQ/PUTNAM BALANCED 1.56% - - - - 22.65%
Lipper Balanced 8.69% - - - - 42.44%
Benchmark 11.39% - - - - 61.21%
EQ/PUTNAM GROWTH & INCOME VALUE (2.94)% - - - - 23.87%
Lipper Growth & Income 12.90% - - - - 56.85%
Benchmark 21.03% - - - - 90.75%
T. ROWE PRICE EQUITY INCOME 1.90% - - - - 32.12%
Lipper Equity Income 6.90% - - - - 43.31%
Benchmark 21.03% - - - - 90.75%
T. ROWE PRICE INTERNATIONAL STOCK 29.76% - - - - 41.44%
Lipper International 43.24% - - - - 65.44%
Benchmark 26.96% - - - - 56.70%
WARBURG PINCUS SMALL COMPANY VALUE 0.17% - - - - 4.53%
Lipper Small Cap 34.26% - - - - 83.94%
Benchmark #1 21.26% - - - - 52.05%
Benchmark #2 (1.49)% 19.99%
</TABLE>
- ----------
* Portfolio inception dates are shown in Table 1. Lipper survey and
benchmark "Since portfolio inception" information is as of the month-end
closest to the actual date of portfolio inception.
<PAGE>
- -----
71
- --------------------------------------------------------------------------------
TABLE 5
YEAR-BY-YEAR RATES OF RETURN
<TABLE>
<S> <C> <C> <C> <C>
1990 1991 1992 1993
------ ------ ------ ------
EQ/Aggressive Stock 6.16% 83.43% (4.95)% 14.59%
Alliance Common Stock (9.82)% 35.34% 1.31% 22.52%
Alliance Conservative Investors 4.40% 17.67% 3.76% 8.77%
Alliance Global (7.81)% 28.15% (2.35)% 29.68%
Alliance Growth and Income - - - (0.72)%+
Alliance Growth Investors 8.61% 46.16% 2.96% 13.15%
Alliance High Yield (2.95)% 22.17% 10.23% 20.88%
Alliance Intermediate Government
Securities - 10.71%+ 3.64% 8.50%
Alliance International - - - -
Alliance Money Market 6.23% 4.23% 1.65% 1.06%
Alliance Small Cap Growth - - - -
BT Equity 500 Index - - - -
BT International Equity Index - - - -
BT Small Company Index - - - -
EQ/Evergreen - - - -
EQ/Evergreen Foundation - - - -
MFS Emerging Growth Companies - - - -
MFS Growth with Income - - - -
MFS Research - - - -
Mercury Basic Value Equity - - - -
Mercury World Strategy - - - -
Morgan Stanley Emerging Markets Equity - - - -
EQ/Putnam Balanced - - - -
EQ/Putnam Growth with Income - - - -
T. Rowe Price Equity Income - - - -
T. Rowe Price International Stock - - - -
Warburg Pincus Small Company Value - - - -
<S> <C> <C> <C> <C> <C> <C>
1994 1995 1996 1997 1998 1999
------- ------ ------ ------ ------ ------
EQ/Aggressive Stock (5.59)% 29.21% 19.93% 8.77% (1.55)% 16.65%
Alliance Common Stock (3.94)% 30.01% 21.97% 26.84% 27.00% 22.89%
Alliance Conservative Investors (5.86)% 18.19% 3.25% 11.15% 11.79% 8.11%
Alliance Global 3.29% 16.63% 12.47% 9.49% 19.56% 35.96%
Alliance Growth and Income (2.41)% 21.79% 17.86% 24.42% 18.63% 16.48%
Alliance Growth Investors (4.94)% 24.05% 10.51% 14.63% 16.93% 24.25%
Alliance High Yield (4.58)% 17.71% 20.60% 16.28% (6.90)% (5.13)%
Alliance Intermediate Government
Securities (6.13)% 11.24% 1.85% 5.31% 5.76% (1.71)%
Alliance International - 9.76%+ 7.77% (4.84)% 8.53% 35.25%
Alliance Money Market 2.10% 3.80% 3.37% 3.48% 3.40% 3.05%
Alliance Small Cap Growth - - - 25.16%+ (5.97)% 25.58%
BT Equity 500 Index - - - - 23.13% 18.38%
BT International Equity Index - - - - 18.17% 25.43%
BT Small Company Index - - - - (3.87)% 18.80%
EQ/Evergreen - - - - - 7.97%
EQ/Evergreen Foundation - - - - - 5.64%
MFS Emerging Growth Companies - - - 21.11%+ 32.37% 70.90%
MFS Growth with Income - - - - - 6.98%
MFS Research - - - 14.80%+ 22.12% 21.15%
Mercury Basic Value Equity - - - 15.77%+ 9.80% 17.04%
Mercury World Strategy - - - 3.58%+ 5.11% 19.40%
Morgan Stanley Emerging Markets Equity - - - (20.66)%+ (28.19)% 92.62%
EQ/Putnam Balanced - - - 13.24%+ 10.02% (1.56)%
EQ/Putnam Growth with Income - - - 14.96%+ 11.02% (2.94%)
T. Rowe Price Equity Income - - - 20.81%+ 7.33% 1.90%
T. Rowe Price International Stock - - - (2.57)%+ 11.88% 29.76%
Warburg Pincus Small Company Value - - - 17.84%+ (11.45)% 0.17%
</TABLE>
- ----------
+ Returns for these portfolios represent less than 12 months of performance.
The returns are as of each portfolio inception date as shown in Table 1.
<PAGE>
- ----------
72
- --------------------------------------------------------------------------------
COMMUNICATING PERFORMANCE DATA
In reports or other communications to contract owners or in advertising
material, we may describe general economic and market conditions affecting our
variable investment options and the portfolios and may compare the performance
or ranking of those options and the portfolios with:
o those of other insurance company separate accounts or mutual funds included
in the rankings prepared by Lipper Analytical Services, Inc., Morningstar,
Inc., VARDS, or similar investment services that monitor the performance
of insurance company separate accounts or mutual funds;
o other appropriate indices of investment securities and averages for peer
universes of mutual funds; or
o data developed by us derived from such indices or averages.
We also may furnish to present or prospective contract owners advertisements
or other communications that include evaluations of a variable investment
option or portfolio by nationally recognized financial publications. Examples
of such publications are:
<TABLE>
<S> <C>
Barron's Money Management Letter
Morningstar's Variable Annuity Investment Dealers
Sourcebook Digest
Business Week National Underwriter
Forbes Pension & Investments
Fortune USA Today
Institutional Investor Investor's Business Daily
Money The New York Times
Kiplinger's Personal Finance The Wall Street Journal
Financial Planning The Los Angeles Times
Investment Adviser The Chicago Tribune
Investment Management Weekly
</TABLE>
Lipper compiles performance data for peer universes of funds with similar
investment objectives in its Lipper Survey. Morningstar, Inc. compiles similar
data in the Morningstar Variable Annuity/Life Report (Morningstar Report).
The Lipper Survey records performance data as reported to it by over 800
mutual funds underlying variable annuity and life insurance products. It
divides these actively managed portfolios into 25 categories by portfolio
objectives. The Lipper Survey contains two different universes, which reflect
different types of fees in performance data:
o The "separate account" universe reports performance data net of investment
management fees, direct operating expenses and asset-based charges
applicable under variable life and annuity contracts, and
o The "mutual fund" universe reports performance net only of investment
management fees and direct operating expenses, and therefore reflects only
charges that relate to the underlying mutual fund.
The Morningstar Variable Annuity/Life Report consists of nearly 700 variable
life and annuity funds, all of which report their data net of investment
management fees, direct operating expenses and separate account level charges.
VARDS is a monthly reporting service that monitors approximately 2,500
variable life and variable annuity funds on performance and account
information.
YIELD INFORMATION
Current yield for the Alliance Money Market option will be based on net
changes in a hypothetical investment over a given seven-day period, exclusive
of capital changes, and then "annualized" (assuming that the same seven-day
result would occur each week for 52 weeks). Current yields for the Alliance
High Yield option and Alliance Intermediate Government Securities option will
be based on net changes in a hypothetical investment over a given 30-day
period, exclusive of capital changes, and then "annualized" (assuming that the
same 30-day result would occur each month for 12 months).
"Effective yield" is calculated in a similar manner, but when annualized, any
income earned by the investment is assumed to be reinvested. The "effective
yield" will be slightly higher than the "current yield" because any earnings
are compounded weekly for the Alliance Money Market option. The current yields
and effective yields assume the deduction of all current contract charges and
expenses other than the
<PAGE>
- --------
73
- --------------------------------------------------------------------------------
withdrawal charge, and any charge designed to approximate certain taxes
imposed on us, such as premium taxes in your state. For more information, see
"Yield Information for the Alliance Money Market Option, Alliance High Yield
Option, and Alliance Intermediate Government Securities Option" in the SAI.
<PAGE>
Appendix I: Condensed financial information
- --------
A-1
- --------------------------------------------------------------------------------
The unit values and number of units outstanding shown below are for contracts
offered under Separate Account No. 45 with the same daily asset based charges
of 1.60%.
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION, EXCEPT EQ/ALLIANCE TECHNOLOGY WHICH IS BEING OFFERED FOR THE
FIRST TIME ON MAY 1, 2000.
<TABLE>
<CAPTION>
YEAR ENDED
DEC. 31, 1999
----------------
<S> <C>
EQ/AGGRESSIVE STOCK
Unit value $ 78.30
Number of units outstanding (000s) 16
ALLIANCE COMMON STOCK
Unit value $ 275.01
Number of units outstanding (000s) 66
ALLIANCE CONSERVATIVE INVESTORS
Unit value $ 22.38
Number of units outstanding (000s) 216
ALLIANCE GLOBAL
Unit value $ 43.04
Number of units outstanding (000s) 97
ALLIANCE GROWTH AND INCOME
Unit value $ 24.13
Number of units outstanding (000s) 342
ALLIANCE GROWTH INVESTORS
Unit value $ 42.29
Number of units outstanding (000s) 149
ALLIANCE HIGH YIELD
Unit value $ 25.73
Number of units outstanding (000s) 35
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES
Unit value $ 14.70
Number of units outstanding (000s) 59
ALLIANCE INTERNATIONAL
Unit value $ 16.61
Number of units outstanding (000s) 38
ALLIANCE MONEY MARKET
Unit value $ 25.55
Number of units outstanding (000s) 549
</TABLE>
<PAGE>
- -------
A-2
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
DEC. 31, 1999
----------------
<S> <C>
EQ/ALLIANCE PREMIER GROWTH
Unit Value $ 11.77
Number of units outstanding (000s) 1,112
ALLIANCE SMALL CAP GROWTH
Unit value $ 14.78
Number of units outstanding (000s) 30
BT EQUITY 500 INDEX
Unit value $ 14.58
Number of units outstanding (000s) 385
BT INTERNATIONAL EQUITY INDEX
Unit value $ 14.82
Number of units outstanding (000s) 33
BT SMALL COMPANY INDEX
Unit value $ 11.42
Number of units outstanding (000s) 23
CAPITAL GUARDIAN RESEARCH
Unit value $ 10.60
Number of units outstanding (000s) 13
CAPITAL GUARDIAN U.S. EQUITY
Unit value $ 10.26
Number of units outstanding (000s) 31
EQ/EVERGREEN
Unit value $ 10.80
Number of units outstanding (000s) 8
EQ/EVERGREEN FOUNDATION
Unit value $ 10.56
Number of units outstanding (000s) 44
MFS EMERGING GROWTH COMPANIES
Unit value $ 27.40
Number of units outstanding (000s) 383
MFS GROWTH WITH INCOME
Unit value $ 10.70
Number of units outstanding (000s) 103
</TABLE>
<PAGE>
- -------
A-3
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
DEC. 31, 1999
----------------
<S> <C>
MFS RESEARCH
Unit value $ 16.99
Number of units outstanding (000s) 71
MERCURY BASIC VALUE EQUITY
Unit value $ 14.88
Number of units outstanding (000s) 163
MERCURY WORLD STRATEGY
Unit value $ 13.00
Number of units outstanding (000s) 13
MORGAN STANLEY EMERGING MARKETS EQUITY
Unit value $ 10.97
Number of units outstanding (000s) 126
EQ/PUTNAM BALANCED
Unit value $ 12.27
Number of units outstanding (000s) 19
EQ/PUTNAM GROWTH & INCOME VALUE
Unit value $ 12.39
Number of units outstanding (000s) 12
T. ROWE PRICE EQUITY INCOME
Unit value $ 13.21
Number of units outstanding (000s) 117
T. ROWE PRICE INTERNATIONAL STOCK
Unit value $ 14.15
Number of units outstanding (000s) 37
WARBURG PINCUS SMALL COMPANY VALUE
Unit value $ 10.45
Number of units outstanding (000s) 18
</TABLE>
<PAGE>
Appendix II: Purchase considerations for QP contracts
- --------
B-1
- --------------------------------------------------------------------------------
Trustees who are considering the purchase of an Equitable Accumulator Plus QP
contract should discuss with their tax advisers whether this is an appropriate
investment vehicle for the employer's plan. Trustees should consider whether
the plan provisions permit the investment of plan assets in the QP contract,
the distribution of such an annuity and the payment of death benefits in
accordance with the requirements of the federal income tax rules. The QP
contract and this prospectus should be reviewed in full, and the following
factors, among others, should be noted. Assuming continued plan qualification
and operation, earnings on qualified plan assets will accumulate value on a
tax-deferred basis even if the plan is not funded by the Equitable Accumulator
Plus QP contract or another annuity. Therefore, you should purchase an
Equitable Accumulator Plus QP contract to fund a plan for the contract's
features and benefits other than tax deferral. This QP contract accepts
transfer contributions only and not regular, ongoing payroll contributions. For
401(k) plans under defined contribution plans, no employee after-tax
contributions are accepted.
Under defined benefit plans, we will not accept rollovers from a defined
contribution plan to a defined benefit plan. We will only accept transfers from
a defined benefit plan or a change of investment vehicles in the plan. Only one
additional contribution may be made per contract year. For defined benefit
plans, the maximum percentage of actuarial value of the plan
participant/employee's normal retirement benefit that can be funded by a QP
contract is 80%. The account value under a QP contract may at any time be more
or less than the lump sum actuarial equivalent of the accrued benefit for a
defined benefit plan participant/employee. Equitable Life does not guarantee
that the account value under a QP contract will at any time equal the actuarial
value of 80% of a participant/employee's accrued benefit. If overfunding of a
plan occurs, withdrawals from the QP contract may be required. A withdrawal
charge may apply.
Further, Equitable Life will not perform or provide any plan recordkeeping
services with respect to the QP contracts. The plan's administrator will be
solely responsible for performing or providing for all such services. There is
no loan feature offered under the QP contracts, so if the plan provides for
loans and a participant/employee takes a loan from the plan, other plan assets
must be used as the source of the loan and any loan repayments must be credited
to other investment vehicles and/or accounts available under the plan.
Given that required minimum distributions must generally commence from the plan
for annuitants after age 70 1/2, trustees should consider that the QP contract
may not be an appropriate purchase for annuitants approaching or over age 70
1/2.
Finally, because the method of purchasing the QP contract, including the large
initial contribution and the features of the QP contract may appeal more to
plan participants/employees who are older and tend to be highly paid, and
because certain features of the QP contract are available only to plan
participants/employees who meet certain minimum and/or maximum age
requirements, plan trustees should discuss with their advisers whether the
purchase of the QP contract would cause the plan to engage in prohibited
discrimination in contributions, benefits or otherwise.
<PAGE>
Appendix III: Guaranteed minimum death benefit example
The death benefit under the contracts is equal to the account value or, if
greater, the guaranteed minimum death benefit.
The following illustrates the guaranteed minimum death benefit
calculation. Assuming $100,000 is allocated to the variable investment
options (with no allocation to the Alliance Money Market option or Alliance
Intermediate Government Securities option), no additional contributions, no
transfers, no withdrawals and no loans under a Rollover TSA contract, the
guaranteed minimum death benefit for an annuitant age 45 would be calculated
as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
END OF 5% ROLL UP TO AGE 80 ANNUAL RATCHET TO AGE 80
CONTRACT GUARANTEED MINIMUM GUARANTEED MINIMUM
YEAR ACCOUNT VALUE DEATH BENEFIT(1) DEATH BENEFIT
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
1 $105,000 $105,000(1) $105,000(3)
- --------------------------------------------------------------------------------
2 $115,500 $110,250(2) $115,500(3)
- --------------------------------------------------------------------------------
3 $129,360 $115,763(2) $129,360(3)
- --------------------------------------------------------------------------------
4 $103,488 $121,551(1) $129,360(4)
- --------------------------------------------------------------------------------
5 $113,837 $127,628(1) $129,360(4)
- --------------------------------------------------------------------------------
6 $127,497 $134,010(1) $129,360(4)
- --------------------------------------------------------------------------------
7 $127,497 $140,710(1) $129,360(4)
- --------------------------------------------------------------------------------
</TABLE>
The account values for contract years 1 through 7 are based on
hypothetical rates of return of 5.00%, 10.00%, 12.00%, (20.00)%, 10.00%,
12.00% and 0.00%. We are using these rates solely to illustrate how the
benefit is determined. The return rates bear no relationship to past or
future investment results.
5% ROLL UP TO AGE 80
(1) At the end of contract year 1, and again at the end of contract years 4
through 7, the death benefit will be equal to the guaranteed minimum death
benefit.
(2) At the end of contract years 2 and 3, the death benefit will be equal to
the current account value since it is higher than the current guaranteed
minimum death benefit.
ANNUAL RATCHET TO AGE 80
(3) At the end of contract years 1 through 3, the guaranteed minimum death
benefit is equal to the current account value.
(4) At the end of contract years 4 through 7, the guaranteed minimum death
benefit is equal to the guaranteed minimum death benefit at the end of the
prior year since it is equal to or higher than the current account value.
C-1
<PAGE>
Statement of additional
information
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Unit Values 2
Custodian and Independent Accountants 3
Yield Information for the Alliance Money Market Option, Alliance High Yield
Option, and Alliance Intermediate Government Securities Option 3
Financial Statements 5
</TABLE>
HOW TO OBTAIN AN EQUITABLE ACCUMULATOR PLUS STATEMENT OF ADDITIONAL INFORMATION
FOR SEPARATE ACCOUNT NO. 45
Send this request form to:
Equitable Accumulator Plus
P.O. Box 1547 Secaucus, NJ 07096-1547
- ------------------------------------------------------------------------------
Please send me an Equitable Accumulator Plus SAI for Separate Account No. 45
dated May 1, 2000:
- ------------------------------------------------------------------------------
Name
- ------------------------------------------------------------------------------
Address
- ------------------------------------------------------------------------------
City State Zip
IM-99-12 SAI (5/00)
<PAGE>
PLEASE READ AND KEEP THIS PROSPECTUS FOR FUTURE REFERENCE. IT CONTAINS IMPORTANT
INFORMATION THAT YOU SHOULD KNOW BEFORE PURCHASING OR TAKING ANY OTHER ACTION
UNDER YOUR CONTRACT.
INCOME MANAGER(R)
PAYOUT ANNUITY CONTRACTS
PROSPECTUS DATED MAY 1, 2000
- --------------------------------------------------------------------------------
WHAT IS INCOME MANAGER?
Income Manager contracts are payout annuity contracts issued by THE EQUITABLE
LIFE ASSURANCE SOCIETY OF THE UNITED STATES. They are designed to provide
retirement income. We offer two versions of the Income Manager payout annuity
contract from which you may choose to receive your retirement income. You may
choose to receive income payable for a specified period ("period certain"). Or,
you may choose to receive lifetime income payable for at least a specified
period ("life annuity with a period certain"). Under the life annuity with a
period certain contract you may choose whether payments are made on a single
life or a joint and survivor life basis.
TYPES OF CONTRACTS. We offer the contracts for use as:
o A nonqualified annuity ("NQ") for after-tax contributions only.
o An individual retirement annuity ("IRA"). There are two types of IRAs,
Traditional IRAs or Roth IRAs. Because Roth IRAs were newly introduced in
1998 and have a five year aging period before distributions should begin, we
do not expect to offer payout annuity Roth IRA contracts before the year
2003.
A contribution of at least $10,000 is required to purchase a contract.
FIXED MATURITY OPTIONS. We allocate your contributions to a series of fixed
maturity options to provide your income payments during the period certain.
Amounts allocated to these fixed maturity options will receive a fixed rate of
interest during the period certain. Interest is earned at a guaranteed rate we
set ("rate to maturity"). We make a market value adjustment (up or down) if you
make a withdrawal from a fixed maturity option before its maturity date.
A registration statement relating to this offering has been filed with the
Securities and Exchange Commission ("SEC"). This prospectus can be obtained from
the SEC's website at http://www.sec.gov.
THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. THE CONTRACTS ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY.
THEY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE NOT BANK
GUARANTEED. THEY ARE SUBJECT TO INVESTMENT RISKS AND POSSIBLE LOSS OF PRINCIPAL.
<PAGE>
Contents of this prospectus
- ---------
2
- --------------------------------------------------------------------------------
INCOME MANAGER(R)
- --------------------------------------------------------------------
Index of key words and phrases 4
Who is Equitable Life? 5
How to reach us 6
Income Manager at a glance - key features 7
- --------------------------------------------------------------------
1 CONTRACT FEATURES AND BENEFITS 10
- --------------------------------------------------------------------
How you can purchase and contribute to your contract 10
Source of contributions 10
Owner and annuitant requirements 10
What are your investments under the contract? 10
What are your contract choices? 12
Life annuity with a period certain contract 12
Period certain contract 18
- -------------------------------------------------------------------
2 OTHER BENEFITS AND FEATURES OF THE CONTRACTS 20
- -------------------------------------------------------------------
How you can make your contributions 20
Your right to cancel within a certain number of days 20
Surrendering your contract to receive its cash value 20
When to expect payments 20
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
"We," "our" and "us" refer to Equitable Life."Financial professional" means
the registered representative who is offering you this contract.
When we address the reader of this prospectus with words such as "you" and
"your," we mean the person who has the right or responsibility that the
prospectus is discussing at that point. This is usually the contract owner.
When we use the word "contract" it also includes certificates that are issued
under group contracts in some states.
<PAGE>
- ------
3
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
<S> <C>
3 CHARGES 21
- -------------------------------------------------------------------
Withdrawal charges 21
Amounts applied from other contracts issued by Equitable
Life 21
Charges for state premium and other applicable taxes 22
Group or sponsored arrangements 22
Other distribution arrangements 22
- -------------------------------------------------------------------
4 PAYMENT OF DEATH BENEFIT 23
- -------------------------------------------------------------------
Your beneficiary 23
Your annuity payout options 23
- -------------------------------------------------------------------
5 TAX INFORMATION 24
- -------------------------------------------------------------------
Overview 24
Taxation of nonqualified annuities 24
Special rules for NQ contracts issued in Puerto Rico 25
Individual retirement arrangements (IRAs) 26
Traditional individual retirement annuities (Traditional
IRAs) 26
Federal and state income tax withholding and
information reporting 33
- -------------------------------------------------------------------
6 MORE INFORMATION 35
- -------------------------------------------------------------------
About our fixed maturity options 35
About the separate account for the fixed maturity options 35
About our general account 36
Other methods of payment 36
About payments under period certain contracts 36
Dates and prices at which contract events occur 37
About legal proceedings 37
About our independent accountants 37
Transfers of ownership, collateral assignments, loans,
and borrowing 37
Distribution of contracts 37
- -------------------------------------------------------------------
7 INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE 39
- -------------------------------------------------------------------
- -------------------------------------------------------------------
APPENDIX: MARKET VALUE ADJUSTMENT
EXAMPLE A-1
- -------------------------------------------------------------------
</TABLE>
<PAGE>
Index of key words and phrases
- --------
4
- --------------------------------------------------------------------------------
This index should help you locate more information on the terms used in this
prospectus.
<TABLE>
<CAPTION>
PAGE PAGE
<S> <C> <C> <C>
account value 15 life annuity with a period certain 12
annuitant 10 life contingent annuity 13
beneficiary 23 market adjusted amount 11
business day 37 market value adjustment 11
cash value 15 maturity value 11
contract date 8 off maturity date 11
contract year 8 NQ 25
contribution 10 payout option 23
deferral period 13 period certain 7
fixed maturity amount 10 Processing Office 6
fixed maturity options 10 rate to maturity 10
IRA cover SEC cover
IRS 23 separate account 35
joint and survivor 12 single life 12
joint owners 10 traditional IRA 26
</TABLE>
To make this prospectus easier to read, we sometimes use different words than in
the contract or supplemental materials. This is illustrated below. Although we
use different words, they have the same meaning in the prospectus as in the
contract or supplemental materials. Your financial professional can provide
further explanation about your contract.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
PROSPECTUS CONTRACT ON SUPPLEMENTAL MATERIALS
- --------------------------------------------------------------------------------
<S> <C>
fixed maturity amount Guaranteed Period Amount
- --------------------------------------------------------------------------------
fixed maturity options Guarantee Periods
(Guaranteed Interest Rate Options ("GIRO's") in
supplemental materials)
- --------------------------------------------------------------------------------
off maturity date payments Modal Payment Portion
- --------------------------------------------------------------------------------
market adjusted amount annuity account value
- --------------------------------------------------------------------------------
maturity date Expiration Date
- --------------------------------------------------------------------------------
rate to maturity Guaranteed Rate
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
Who is Equitable Life?
- -------
5
- --------------------------------------------------------------------------------
We are The Equitable Life Assurance Society of the United States ("Equitable
Life"), a New York stock life insurance corporation. We have been doing business
since 1859. Equitable Life is a wholly owned subsidiary of AXA Financial, Inc.
(previously, The Equitable Companies, Incorporated). The majority shareholder of
AXA Financial, Inc. is AXA, a French holding company for an international group
of insurance and related financial services companies. As a majority
shareholder, and under its other arrangements with Equitable Life and Equitable
Life's parent, AXA exercises significant influence over the operations and
capital structure of Equitable Life and its parent. No company other than
Equitable Life, however, has any legal responsibility to pay amounts that
Equitable Life owes under the contract.
AXA Financial, Inc. and its consolidated subsidiaries managed approximately
$462.7 billion in assets as of December 31, 1999. For more than 100 years
Equitable Life has been among the largest insurance companies in the United
States. We are licensed to sell life insurance and annuities in all fifty
states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our
home office is located at 1290 Avenue of the Americas, New York, NY 10104.
<PAGE>
- ------
6
- --------------------------------------------------------------------------------
HOW TO REACH US
You may communicate with our Processing Office listed below for any of the
following purposes:
- -------------------------------------------------------------
FOR CONTRIBUTIONS SENT BY REGULAR MAIL:
- -------------------------------------------------------------
Equitable Life
Income Manager
P.O. Box 13014
Newark, NJ 07188-0014
- -------------------------------------------------------------
FOR CONTRIBUTIONS SENT BY EXPRESS DELIVERY:
- -------------------------------------------------------------
Equitable Life
Income Manager
c/o Bank One, N.A.
300 Harmon Meadow Boulevard, 3rd Floor
Attn: Box 13014
Secaucus, NJ 07094
- -------------------------------------------------------------
FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR
WITHDRAWALS, OR REQUIRED NOTICES) SENT BY REGULAR MAIL:
- -------------------------------------------------------------
Equitable Life
Income Manager
P.O. Box 1547
Secaucus, NJ 07096-1547
- -------------------------------------------------------------
FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR
WITHDRAWALS, OR REQUIRED NOTICES) SENT BY EXPRESS DELIVERY:
- -------------------------------------------------------------
Equitable Life
Income Manager
200 Plaza Drive, 4th Floor
Secaucus, NJ 07094
- -------------------------------------------------------------
CUSTOMER SERVICE REPRESENTATIVES:
- -------------------------------------------------------------
You may also use our toll-free number (1-800-789-7771) to
speak with one of our customer service representatives. Our
customer service representatives are available on each
business day from 8:30 a.m. until 5:30 p.m., Eastern Time.
- -------------------------------------------------------------
REPORTS WE PROVIDE:
o Statement of your contract values as of the last day of the calendar year;
o Three written reports of your contract values each year; and
o Written confirmation of financial transactions.
You should send all contributions, required notices, and requests to exercise
any of your rights or privileges to our Processing Office at the address above.
WE HAVE SPECIFIC FORMS THAT WE RECOMMEND YOU USE FOR THE FOLLOWING TYPES OF
REQUESTS:
1) address changes;
2) beneficiary changes;
3) withdrawal requests; and
4) contract surrender.
You must sign and date all these requests. Any written request that is not on
one of our forms must include your name and your contract number along with
adequate details about the notice you wish to give or the action you wish us to
take.
SIGNATURES:
The proper person to sign forms, notices and requests would normally be the
owner. If there are joint owners all must sign.
<PAGE>
Income Manager at a glance - key features
- -------
7
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
INCOME MANAGER
(LIFE ANNUITY INCOME MANAGER
WITH A PERIOD CERTAIN) (PERIOD CERTAIN)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCOME PAYMENTS NQ - Level or increasing payments. NQ and IRA - Level payments only.
IRA - Level payments only.
- --------------------------------------------------------------------------------------------------------
PERIOD CERTAIN You will receive payments for periods ranging from 7 to 15 years depending on
the age of the annuitant.
- --------------------------------------------------------------------------------------------------------
FORM OF PAYMENT Single life or joint and survivor. Single life only.
AVAILABLE
- --------------------------------------------------------------------------------------------------------
PAYMENTS AFTER THE END Payments continue while the annuitant None
OF THE PERIOD CERTAIN or joint annuitant is living.
- --------------------------------------------------------------------------------------------------------
CONTRIBUTION AMOUNTS:
INITIAL MINIMUM: o $10,000 o $10,000
ADDITIONAL MINIMUM: o $1,000 (subject to restrictions) o Not permitted
Maximum investment limitations may Maximum investment limitations may
apply. apply.
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FIXED MATURITY OPTIONS o 15 fixed maturity options with maturities ranging from approximately 1 to
15 years.
o Each fixed maturity option offers a guarantee of principal and interest
rate if you hold it to maturity.
o Principal guarantees.
- If you make withdrawals from a fixed maturity option before
maturity, there will be a market value adjustment due to differences
in interest rates. This may increase or decrease any value you have
left in that fixed maturity option. If you surrender
your contract, a market value adjustment may also
apply.
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TAXES Generally, earnings will be taxed at your ordinary income tax rate when
distributions are made from your contract.
o NQ - A portion of each payment is generally not considered taxable
income until you have received a tax-free recovery of your investment in the
contract.
o IRA - All amounts distributed are generally taxable.
-----------------------------------------------------------------------------
This contract is intended to be a payout annuity. However, there may be some
instances where you can delay beginning payments, so rules governing deferred
annuity payments could apply. If you are buying an annuity to fund a retirement
plan that already provides tax deferral under sections of the Internal Revenue
Code, such as IRA, you should do so for the contract's features and benefits
other than tax deferral. In such situations, the tax deferral of the contract
does not provide additional benefits.
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</TABLE>
<PAGE>
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8
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<TABLE>
<CAPTION>
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INCOME MANAGER
(LIFE ANNUITY INCOME MANAGER
WITH A PERIOD CERTAIN) (PERIOD CERTAIN)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
DEATH BENEFIT A death benefit is provided if the A death benefit is provided if the
annuitant dies before the end of the annuitant dies before the end of the
period certain. There is no death period certain.
benefit after the period certain.
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ACCESS TO YOUR o Withdrawals. o Withdrawals.
MONEY DURING THE o Contract surrender. o Contract surrender.
PERIOD CERTAIN
A market value adjustment may apply. A market value adjustment may apply.
You may also incur income tax and a You may also incur income tax and a
penalty tax. penalty tax.
You cannot take a withdrawal from, or
surrender, your life
contingent annuity.
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CHARGES o We deduct a charge designed to o We deduct a charge designed to
approximate certain taxes that may approximate certain taxes that may
be imposed upon us, such as be imposed upon us, such as
premium taxes in your state. We premium taxes in your state. We
deduct this charge from your deduct this charge from your
contributions. contributions.
o During the first seven contract years o During the first seven contract years
following a contribution, a charge a charge will be deducted from
will be deducted from amounts that amounts that you withdraw. The
you withdraw that exceed 10% of charge begins at 7% in the first
your account value. We use the contract year. It declines each year
account value on the most recent to 1% in the seventh contract year.
contract date anniversary to There is no withdrawal charge in
calculate the 10% amount the eighth and later contract years.
available. The charge begins at 7% o There is no free withdrawal amount
in the first contract year following a
contribution. It declines each year
to 1% in the seventh contract year.
There is no withdrawal charge in
the eighth and later contract years
following a contribution.
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</TABLE>
<PAGE>
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9
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<TABLE>
<CAPTION>
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INCOME MANAGER
(LIFE ANNUITY INCOME MANAGER
WITH A PERIOD CERTAIN) (PERIOD CERTAIN)
- --------------------------------------------------------------------------------------------------------
<S> <C>
The "contract date" is the effective date of a contract. This usually is the
business day we receive the properly completed and signed application, along
with any other required documents and your initial contribution. Your contract
date will be shown in your contract. The 12-month period beginning on your
contract date and each 12-month period after that date is a "contract year." The
end of each 12-month period is your"contract date anniversary."
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ANNUITANT NQ and IRA level payments: 45 - 83
ISSUE AGES NQ increasing payments: 53 1/2 - 83
Different ages may apply depending
on when annuity payments start.
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</TABLE>
THE ABOVE IS NOT A COMPLETE DESCRIPTION OF ALL MATERIAL PROVISIONS OF THE
CONTRACT. IN SOME CASES RESTRICTIONS OR EXCEPTIONS APPLY. ALSO, ALL FEATURES OF
THE CONTRACT ARE NOT NECESSARILY AVAILABLE IN YOUR STATE OR AT CERTAIN AGES.
For more detailed information we urge you to read the contents of this
prospectus, as well as your contract. Please feel free to speak with your
financial professional, or call us, if you have any questions.
<PAGE>
1
Contract features and benefits
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10
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HOW YOU CAN PURCHASE AND CONTRIBUTE TO YOUR CONTRACT
You may purchase your contract by making payments to us we call "contributions."
We require a contribution of at least $10,000 for you to purchase a contract.
Under life annuity with a period certain contracts, you may make additional
contributions subject to the limitations as described under "Additional
contributions" later in this prospectus.
SOURCE OF CONTRIBUTIONS
NQ CONTRACTS. We will accept only contributions made with after-tax money. You
may make your contributions by check or by transfer of your entire contract
value in a tax-deferred exchange under Section 1035 of the Internal Revenue
Code.
IRA CONTRACTS. Contributions may be made from:
o Rollovers from a qualified plan.
o Rollovers from a Tax Sheltered Annuity (TSA).
o Rollovers from another traditional individual retirement arrangement.
o Direct custodian-to-custodian transfers from another traditional individual
retirement arrangement.
See "Tax information" for a more detailed discussion of sources of contributions
and contribution limitations. We may refuse to accept any contribution if the
sum of all contributions under all Income Manager contracts with the same
annuitant would then total more than $1,500,000. We may also refuse to accept
any contributions if the sum of all contributions under all Equitable Life
annuity payout contracts that you own would then total more than $2,500,000.
For information on when contributions are credited see "Dates and prices at
which contract events occur" later in this prospectus.
OWNER AND ANNUITANT REQUIREMENTS
NQ CONTRACTS. The annuitant can be different from the contract owner. A joint
owner may also be named provided each owner is of legal age. Only natural
persons can be joint owners. This means that an entity such as a corporation or
a trust cannot be a joint owner.
- --------------------------------------------------------------------------------
The "annuitant" is the person who is the measuring life for determining contract
benefits. The annuitant is not necessarily the contract owner.
- --------------------------------------------------------------------------------
IRA CONTRACTS. The owner and the annuitant must be the same person. Joint owners
are not permitted. A joint annuitant may be named.
WHAT ARE YOUR INVESTMENTS UNDER THE CONTRACT?
FIXED MATURITY OPTIONS
To provide your income payments during the period certain, we allocate your
contributions to fixed maturity options that mature in consecutive date order.
When we allocate your contributions to the fixed maturity options they become
part of our general account assets. They accumulate interest at a rate to
maturity for each fixed maturity option. The total amount allocated to and
accumulated in each fixed maturity option is called the "fixed maturity amount."
The rate to maturity you will receive for each fixed maturity amount is the
interest rate in effect for new contributions allocated to that fixed maturity
option on the date we apply your contribution. If you make any withdrawals from
a fixed maturity option before the maturity date, we will make a market value
adjustment that may increase or decrease any fixed maturity amount you have left
in that fixed maturity option. We will discuss market value adjustment below and
in greater detail later in this prospectus under "More information."
For applications we receive under certain types of transactions, we may offer
you the opportunity to lock in rates to maturity on contributions.
<PAGE>
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11
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On the maturity date of each of your fixed maturity options, your fixed maturity
amount (assuming you have not made any withdrawals) will equal your contribution
to each fixed maturity option plus interest, at the rate to maturity for that
contribution, to the date of calculation. This is the fixed maturity option's
"maturity value." Before maturity, the current value we will report for your
fixed maturity amount will reflect a market value adjustment. It will reflect
the market value adjustment that we would make if you were to withdraw all of
your fixed maturity amount on the date of the report. We call this your "market
adjusted amount."
RATES TO MATURITY AND PRICE PER $100 OF MATURITY VALUE. We can determine the
amount required to be allocated to each fixed maturity option in order to
produce specified maturity values. For example, we can tell you how much you
need to allocate per $100 of maturity value.
Guaranteed rates to maturity for new allocations as of April 3, 2000 and the
related price per $100 of maturity value were as follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
FIXED MATURITY
OPTIONS WITH
FEBRUARY 15TH RATE TO PRICE
MATURITY DATE OF MATURITY AS PER $100 OF
MATURITY YEAR OF APRIL 3, 2000 MATURITY VALUE
- ---------------------------------------------------------------------
<S> <C> <C>
2001 4.24% $ 96.45
2002 4.83% $ 91.55
2003 5.27% $ 86.29
2004 5.34% $ 81.76
2005 5.46% $ 77.17
2006 5.54% $ 72.85
2007 5.61% $ 68.72
2008 5.70% $ 64.63
2009 5.80% $ 60.62
2010 5.87% $ 56.93
2011 5.29% $ 57.08
2012 5.29% $ 54.21
2013 5.29% $ 51.48
2014 5.29% $ 48.90
2015 5.29% $ 46.44
- ---------------------------------------------------------------------
</TABLE>
MARKET VALUE ADJUSTMENT. If you make any withdrawals (including surrender of
your contract or when we make deductions for withdrawal charges) from a fixed
maturity option before it matures we will make a market value adjustment which
will increase or decrease any fixed maturity amount you have in that fixed
maturity option. The amount of the adjustment will depend on two factors:
(a) the difference between the rate to maturity that applies to the amount
being withdrawn and the rate to maturity in effect at that time for new
allocations to that same fixed maturity option, and
(b) the length of time remaining until the maturity date.
In general, if interest rates rise from the time that we originally allocate an
amount to a fixed maturity option to the time that you take a withdrawal, the
market value adjustment will be negative. Likewise, if interest rates drop at
the end of that time, the market value adjustment will be positive. Also, the
amount of the market value adjustment, either up or down, will be greater the
longer the time remaining until the fixed maturity option's maturity date.
Therefore, it is possible that the market value adjustment could greatly reduce
your value in the fixed maturity options, particularly in the fixed maturity
options with later maturity dates.
We provide an explanation of how we calculate the market value adjustment, and
information concerning our general account under "More information" later in
this prospectus. We provide an example of how we calculate the market value
adjustment in the Appendix to this prospectus.
SEPARATE ACCOUNT FOR THE FIXED MATURITY OPTIONS
Amounts allocated to the fixed maturity options are held in a "nonunitized"
separate account we have established under the New York Insurance Law. This
separate account provides an additional measure of assurance that we will make
full payment of amounts due under the fixed maturity options. We provide
additional information about this separate account later in this prospectus
under "More information."
OFF MATURITY DATE PAYMENTS. Under Income Manager contracts you may choose to
receive payments monthly, quarterly or annually. If you choose annual payments,
generally your payments will be made on February 15th as each fixed maturity
option matures. You may instead
<PAGE>
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12
- --------------------------------------------------------------------------------
choose to have your annual payments made in a month other than February. We
refer to payments we make on an annual basis in any month other than February
and monthly or quarterly payments, as payments made "off maturity dates." If you
choose to have your payments made off maturity dates, we will be required to
begin making your payments before the maturity date of a fixed maturity option.
In planning for these payments we will allocate a portion of your initial
contribution to the separate account, but not to the fixed maturity options
contained in the separate account. We will credit these amounts with interest at
rates that will not be less than 3%.
After that, as each fixed maturity option expires we will transfer your maturity
value from the expired fixed maturity option and hold the maturity value in the
separate account. We will credit interest to these amounts at the same rate as
the rate to maturity that was credited in the expired fixed maturity option.
These amounts will then be used to provide for payments off maturity dates
during the period certain.
- --------------------------------------------------------------------------------
Whether you choose monthly, quarterly, or annual payments, your payments will be
made on the 15th day of the month.
- --------------------------------------------------------------------------------
We will not make a market value adjustment to the amounts held in the separate
account to provide for payments off maturity dates.
WHAT ARE YOUR CONTRACT CHOICES?
We offer two versions of the Income Manager payout annuity contracts from which
you may choose to receive your retirement income, a "life annuity with a period
certain" and a "period certain" annuity. We discuss both versions below.
LIFE ANNUITY WITH A PERIOD CERTAIN CONTRACT
This payout annuity contract provides you with guaranteed payments during the
period certain. When the period certain ends you will continue to receive
payments for as long as an annuitant is living. Payments based solely on the
life of one annuitant are called "single life" payments. You may also elect to
receive "joint and survivor" payments that are based on the lives of an
annuitant and a joint annuitant. These payments will continue as long as one of
the annuitants is living. Payments during the period certain are designed to pay
out your entire account value by the end of the period certain.
- --------------------------------------------------------------------------------
"Single life" payments are made to you as long as the annuitant is living.
"Joint and survivor" payments continue as long as either annuitant is living.
For IRA contracts, if you are married, the joint annuitant must be your spouse.
- --------------------------------------------------------------------------------
For annuitant ages at which the contracts are available see the chart under
"Your period certain" below.
ADDITIONAL CONTRIBUTIONS
If your annuity payments are set to begin on February 15, 2001 or later, and you
are age 78 or younger, you may make additional contributions of at least $1,000
at any time up until 15 days before your payments actually begin. If the
annuitant is over age 78 you can only make additional contributions during the
first contract year.
Under IRA contracts we will accept additional contributions that are "regular"
contributions, rollover contributions or direct transfers. Additional "regular"
contributions may no longer be made after you are age 70 1/2. If you make a
direct transfer or rollover contribution after you turn age 70 1/2 you must have
taken the required minimum distribution for the year before the contribution is
applied to this contract. See "Tax information" later in this prospectus.
If you are using the proceeds from another type of contract issued by us to
purchase this contract, you will not be permitted to make additional
contributions.
HOW WE ALLOCATE YOUR CONTRIBUTIONS
We determine the allocation of your contributions based on a number of factors.
They are:
o the amount of your contribution;
o the form of payments;
<PAGE>
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13
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o the age and sex of the annuitant (and the age and sex of the joint
annuitant, if joint and survivor annuity payments are elected);
o the frequency of payments; and
o the period certain.
We then allocate your initial contribution among the fixed maturity options, the
separate account if we need to make payments to you off maturity dates, and the
"life contingent annuity." We will allocate your additional contributions in the
same manner. Additional contributions will increase the level of all future
payments. You may not change this allocation.
- --------------------------------------------------------------------------------
The life contingent annuity continues the payments after the period certain
ends.
- --------------------------------------------------------------------------------
PAYMENTS
NQ CONTRACTS. If you are age 45 or older, you may elect to receive level
payments. You will receive level payments during the period certain and under
the life contingent annuity. However, if you are younger than age 59 1/2, there
are tax issues that you should consider before you purchase a contract. If you
are age 53 1/2 or older you may instead elect to receive payments that increase.
However, your payments may not start before you are age 59 1/2. Such payments
will increase by 10% every three years during the period certain on each third
anniversary of the date annuity payments begin. After the end of the period
certain, your first payment under the life contingent annuity will be 10%
greater than the final payment made under the period certain. See "Payments
after the period certain" below.
IRA CONTRACTS. Only level payments are available under IRA contracts.
Whether you choose monthly, quarterly or annual payments, you will usually begin
receiving payments one payment period from the contract date, unless you elect
otherwise as described under "Off maturity date payments" earlier in this
prospectus. Your payments will always be made on the 15th day of the month.
However, if you are age 53 1/2 or older, you must defer the date your payments
will start until you are age 59 1/2. If you are at least age 59 1/2 you may
elect to defer the date your payments will start. Generally, you may defer
payments for a period of up to 72 months. This is called the deferral period.
Deferral of the payment start date permits you to lock in rates at a time when
you may consider current rates to be high, while permitting you to delay
receiving payments if you have no immediate need to receive income under your
contract.
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The deferral period together with the period certain may be referred to as a
"liquidity period." Unlike traditional life annuities that provide periodic
payments, you will be able to make withdrawals before the end of the period
certain. You may also choose to surrender your contract for its cash value while
keeping the life contingent annuity in effect.
- --------------------------------------------------------------------------------
Before you decide to defer payments, you should consider the fact that the
amount of income you purchase is based on the rates to maturity in effect on the
date we allocate your contribution. Therefore, if rates rise during the deferral
period, your payments may be less than they would have been if you had purchased
a contract at a later date. Deferral of the payment start date is not available
if the annuitant is older than age 80. Under IRA contracts, if your deferred
payment start date is after you are age 70 1/2, you should consider the effect
that deferral may have on your required minimum distributions.
YOUR PERIOD CERTAIN
LEVEL PAYMENTS. Under level payments, you may select a period certain of not
less than 7 years nor more than 15 years. The maximum period certain available
based on the age of the annuitant when your contract is issued is as follows:
<PAGE>
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14
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<TABLE>
<CAPTION>
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NQ CONTRACTS
- --------------------------------------------------------------------------------
ANNUITANT'S AGE AT ISSUE MAXIMUM PERIOD CERTAIN
- --------------------------------------------------------------------------------
<S> <C>
45 through 70 15 years
71 through 75 85 less age at issue
76 through 80 10 years
81 though 83 90 less age at issue
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</TABLE>
<TABLE>
<CAPTION>
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IRA CONTRACTS
- --------------------------------------------------------------------------------
ANNUITANT'S AGE AT ISSUE MAXIMUM PERIOD CERTAIN
- --------------------------------------------------------------------------------
<S> <C>
45 through 70 15 years
71 through 78 85 less age at issue
79 through 83 7 years
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</TABLE>
* For joint and survivor payments, the period certain is based on the age of
the younger annuitant.
The minimum and maximum period certain will be reduced by each year you defer
the date your payments will start.
INCREASING PAYMENTS. Under NQ contracts if you elect increasing payments, you do
not have a choice as to the period certain. Based on the age of the annuitant
when your contract is issued, your period certain will be as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
ANNUITANT'S AGE AT ISSUE* PERIOD CERTAIN
- --------------------------------------------------------------------------------
<S> <C>
53 1/2 through 70 15 years
71 through 75 12 years
76 through 80 9 years
81 through 83 6 years
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</TABLE>
* For joint and survivor payments, the period certain is based on the age of
the younger annuitant.
If you elect increasing payments and defer the date payments will start, your
period certain will be as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
PERIOD CERTAIN BASED
ON DEFERRAL PERIOD
- --------------------------------------------------------------------------------
ANNUITANT'S AGE 1 - 36 37 - 60 61 - 72
AT ISSUE* MONTHS MONTHS MONTHS
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
59 1/2 through 70 12 years 9 years 9 years
71 through 75 9 years 9 years n/a
76 through 80 6 years 6 years n/a
81 through 83 n/a n/a n/a
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</TABLE>
* For joint and survivor payments, the period certain is based on the age of the
younger annuitant.
The annuitant ages at issue in the above table are also the annuitant ages for
which the contracts are available. Different ages may apply if you purchase a
contract by exercising a benefit under another type of contract that we issue.
PURCHASE RESTRICTIONS FOR JOINT AND SURVIVOR ANNUITY PAYMENTS
If you elect payments on a joint and survivor basis;
o the joint annuitant must also be the beneficiary under the contract. Under
IRA contracts, the joint annuitant must be your spouse;
o neither the annuitant nor the joint annuitant can be over age 83; and
o under level payments the joint and 100% to survivor form is only available
for the longest period certain we permit.
PAYMENTS AFTER THE PERIOD CERTAIN
After the end of the period certain, we will continue your payments under the
life contingent annuity if the annuitant or joint annuitant is living. Payments
continue throughout the annuitant's lifetime (or the lifetime of the joint
annuitant, if joint and survivor payments are elected) on the same payment
schedule (either monthly, quarterly or annually) as the payments you received
during the period certain.
- --------------------------------------------------------------------------------
The portion of your contribution allocated to the life contingent annuity does
not have a cash value or an account value and, therefore, does not provide for
withdrawals.
- --------------------------------------------------------------------------------
THERE IS NO DEATH BENEFIT PROVIDED UNDER THE LIFE CONTINGENT ANNUITY (AFTER THE
PERIOD CERTAIN) AND PAYMENTS ARE MADE TO YOU ONLY IF THE ANNUITANT (OR JOINT
ANNUITANT) IS LIVING WHEN THE PAYMENTS ARE SCHEDULED TO BEGIN. THESE PAYMENTS
ARE ONLY MADE DURING THE ANNUITANT'S LIFETIME AND, IF APPLICABLE, THE LIFETIME
OF A JOINT ANNUITANT. THEREFORE, YOU SHOULD CONSIDER THE POSSIBILITY THAT NO
PAYMENTS WILL BE MADE TO YOU UNDER THE LIFE CONTINGENT ANNUITY IF THE ANNUITANT
(OR JOINT ANNUITANT) DOES NOT SURVIVE TO THE DATE PAYMENTS ARE TO BEGIN.
<PAGE>
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15
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Under the life contingent annuity you may elect single life or joint and
survivor payments. Joint and survivor payments are available on a 100%, one-half
or two-thirds to survivor basis. If you elect increasing payments under NQ
contracts, your first payment under the life contingent annuity will be 10%
greater than the final payment under the period certain. After the period
certain we will increase your payments annually on each anniversary of the
payment start date under the life contingent annuity. We will base this increase
on the annual increase in the Consumer Price Index, but it will never be greater
than 3% per year.
EXAMPLE OF PAYMENTS
We provide the chart below to illustrate level payments under the contract using
the following assumptions:
(1) a male age 70 (who is both the contract owner and the annuitant);
(2) single life annuity payments;
(3) a contribution of $100,000;
(4) no additional contributions; and
(5) a period certain of 15 years.
If you had a contract date of April 3, 2000, based on rates to maturity on that
date, an election of either monthly, quarterly, or annual payments with payments
starting one payment period from the contract date, the following level payments
would be provided:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
PAYMENT
PERIOD MONTHLY QUARTERLY ANNUAL
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Start date 5/15/00 7/15/00 4/15/01
Payment $ 692 $2,089 $8,575
- --------------------------------------------------------------------------------
</TABLE>
WITHDRAWALS
After the first contract year and before the end of the period certain, you may
take withdrawals from your account value. You may take one withdrawal per
contract year at any time during the contract year. The minimum amount you may
withdraw at any time is $1,000. If you request to withdraw more than 90% of your
current "cash value" we will treat it as a request to surrender your contract
for its cash value. See "Surrendering your contract to receive its cash value"
later in this prospectus.
- --------------------------------------------------------------------------------
Your account value is the sum of your market adjusted amounts in each fixed
maturity option plus your amounts held in the separate account to provide for
payments off maturity dates. Your cash value is equal to your account value
minus any withdrawal charge.
- --------------------------------------------------------------------------------
Withdrawals in excess of a 10% free withdrawal amount may be subject to a
withdrawal charge. There is no free withdrawal amount if your contract is
surrendered for its cash value. Amounts withdrawn from a fixed maturity option
before its maturity date will result in a market value adjustment.
ALLOCATION OF WITHDRAWALS
We will subtract your withdrawal from all remaining fixed maturity options to
which your account value is allocated as well as from amounts held in the
separate account to provide for payments off maturity dates. As a result we will
reduce the amount of your payments and the length of your period certain. We
will also begin making payments to you under the life contingent annuity at an
earlier date. In order to achieve this result we will withdraw additional
amounts over the amount of the withdrawal you requested. We will withdraw these
amounts from the fixed maturity options and from amounts held in the separate
account to provide for payments off maturity dates and allocate them to the life
contingent annuity. The exact additional amount we withdraw will depend on how
much is necessary to assure that the same pattern of payments will continue in
reduced amounts for the annuitant's life, and if it applies, the life of the
joint annuitant. If you have elected increasing payments, the first increase in
your payments will take place no later than the date of the next planned
increase.
<PAGE>
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16
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EXAMPLE
The example below illustrates the effect of a withdrawal based on:
(1) a single contribution of $100,000 made on April 3, 2000;
(2) level annual payments of $8,003 to be made on February 15th of each year;
(3) joint and two-thirds to survivor payments for a male and female, both age
70;
(4) a period certain of 15 years;
(5) a withdrawal made at the beginning of the fourth contract year of 25% of an
account value of $69,598.84 when the annuitants are age 73.
The requested withdrawal amount would be $17,399.71 ($69,598.84 x .25). In this
case, $6,959.88 ($69,598.84 x .10) would be the free withdrawal amount and could
be withdrawn free of a withdrawal charge. The balance of $10,439.83 ($17,399.71
- - $6,959.88) would be considered a withdrawal of a part of the contribution of
$100,000. This contribution would be subject to a 4.0% withdrawal charge of
$417.59 ($10,439.83 x .04). The account value after the withdrawal is $51,781.54
($69,598.84 - $17,399.71 - $417.59). The payments would be reduced to $6,578.49
and the remaining period certain would be reduced to 10 years from 12.
DEATH BENEFIT
When the annuitant dies before payments begin
Generally, when we receive satisfactory proof of the annuitant's death before
annuity payments begin we will pay the death benefit to the "beneficiary" named
in your contract. See "Your beneficiary" later in this prospectus. If the joint
owner who is also the annuitant dies, we will consider the surviving owner to be
the beneficiary, taking the place of any other beneficiary designations.
We determine the amount of the death benefit payable to your beneficiary as of
the date we receive satisfactory proof of the annuitant's death and any required
instructions for the method of payment. The death benefit is the greater of:
(1) your account value; and
(2) the sum of the fixed maturity amounts in each fixed maturity option plus
any amounts held in the separate account to provide for payments off
maturity dates.
However, if you are the annuitant and your spouse is the joint owner or the
designated beneficiary under the contract, your spouse may elect to receive the
payments instead of taking the death benefit if payments have not been deferred,
or payments are scheduled to begin within one year. The payments will then begin
on the scheduled date. We will not make any payments under the life contingent
annuity after the annuitant's death unless you have elected the joint and
survivor form of payments. If you elect joint and one-half or joint and
two-thirds to survivor payments, at the death of either annuitant, we will
reduce the payments by one-half or one-third, whichever applies.
- --------------------------------------------------------------------------------
A death benefit is never payable under the life contingent annuity. The death
benefit applies only during the period certain.
- --------------------------------------------------------------------------------
When the annuitant dies after the annuity payments begin
If the annuitant dies after the payments begin, we will continue to make
payments during the period certain to either the joint owner or the designated
beneficiary, whichever applies. The payments will be made on the same schedule
that was in effect before the annuitant's death. If you elected joint and
survivor payments under the life contingent annuity, the payments will be made
as long as one of the annuitants is living.
At the beneficiary's option, payments during the period certain may be
discontinued and paid in a single sum. If the single sum is elected within one
year after the annuitant's death, the single sum will be equal to the greater
of:
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(1) the account value; and
(2) the sum of the fixed maturity amounts in each fixed maturity option, plus
any amounts held in the separate account to provide for payments off
maturity dates.
If a single sum is elected and there is a joint annuitant, we will begin making
payments to you under the life contingent annuity at an earlier date. These
payments will be made in reduced amounts to compensate for the earlier start
date.
When the NQ contract owner who is not the annuitant dies before the annuitant
and before the annuity payments begin
When you are not the annuitant under an NQ contract and you die before annuity
payments begin, the beneficiary named to receive the death benefit upon the
annuitant's death will automatically become the new contract owner. You may name
a different person that will become the owner at any time by sending an
acceptable written form to our Processing Office. If the contract is jointly
owned and the first owner to die is not the annuitant, the surviving owner
becomes the sole contract owner. This person will be considered the beneficiary
for purposes of the distribution rules described below. The surviving owner
automatically takes the place of any other beneficiary designation.
Unless the surviving spouse of the deceased owner (or in the case of a joint
ownership situation, the surviving spouse of the first owner to die) is the
designated beneficiary for this purpose, the entire interest in the contract
must be distributed under the following rules:
o The cash value in the contract must be fully paid to the designated
beneficiary (new owner) by December 31st of the fifth calendar year after
your death (or in a joint ownership situation, the death of the first owner
to die).
o The new owner may instead elect to receive payments as a life annuity (or
payments for a period certain of not longer than the new owner's life
expectancy), with payments beginning no later than December 31st following
the calendar year of the non-annuitant owner's death. Unless the
alternative is elected, we will pay any cash value in the contract as a
single sum on December 31st of the fifth calendar year following the year
of your death (or the death of the first owner to die).
o If the surviving spouse is the designated beneficiary or joint owner, the
surviving spouse may elect to continue the contract. No distributions are
required as long as the surviving spouse and the annuitant are living.
When the NQ contract owner who is not the annuitant dies after the annuity
payments begin
If your death occurs after annuity payments begin, payments will continue to be
made during the period certain to the designated beneficiary, or in the case of
joint owners, to the surviving owner. In either case this person becomes the new
contract owner. The payments will be made on the same payment schedule that was
in effect before your death. After the period certain, lifetime payments will be
made under the life contingent annuity for as long the annuitant (or joint
annuitant) is living.
SURRENDERING YOUR LIFE ANNUITY WITH PERIOD CERTAIN CONTRACT
You may surrender your contract for its cash value at any time during the period
certain and receive lifetime payments after that under the life contingent
annuity. Once your contract is surrendered, the date your payments are to start
under the life contingent annuity will be moved forward to the date when you
were supposed to receive the next payment under the period certain. However,
your payments will be made in reduced amounts. Once your contract is
surrendered, we will return it to you with a notation that the life contingent
annuity is still in effect. You may not surrender the life contingent annuity.
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PERIOD CERTAIN CONTRACT
You may purchase the period certain contract if you are age 59 1/2 or older. The
annuitant must be at least age 59 1/2, but not older than age 78. This contract
provides you with level guaranteed payments for a period certain that you
select. The minimum period certain you may select is 7 years and the maximum
period certain is 15 years. If the annuitant is over age 70 when the contract is
issued, the maximum period certain you may select is 85 less the annuitant's age
when the contract is issued.
ADDITIONAL CONTRIBUTIONS
Additional contributions are not permitted under the contract.
HOW WE ALLOCATE YOUR CONTRIBUTIONS
Based on the amount of your single contribution and the period certain you
select, we allocate your contribution among the fixed maturity options and, if
necessary, to the separate account to provide for payments off maturity dates.
You may not change this allocation. See "More information" for an example of
payments.
PAYMENTS
Whether you choose monthly, quarterly, or annual payments, your payments
normally will start one payment period from the contract date unless you elect
otherwise as described under "Off maturity date payments" earlier in this
prospectus. Your payments will always be made on the 15th day of the month.
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The period certain may also be referred to as the "liquidity period" because
you have access to your money through withdrawals or surrender of your
contract.
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WITHDRAWALS
After the first contract year you may take withdrawals from your account value.
You may take one withdrawal per contract year at any time during the contract
year. The minimum amount you may withdraw at any time is $2,000 or 25% of your
current cash value if it produces a larger amount. If you request to withdraw
more than 90% of your current cash value we will treat it as a request for
surrender of the contract for its cash value. See "Surrendering your contract to
receive its cash value" later in this prospectus. Any amounts withdrawn from a
fixed maturity option, before its maturity date, will result in a market value
adjustment. See "Market value adjustment" earlier in this prospectus.
Withdrawals made during the first seven contract years may be subject to a
withdrawal charge. There is no free withdrawal amount under the period certain
contracts.
ALLOCATION OF WITHDRAWALS
We will subtract your withdrawals pro rata from all remaining fixed maturity
options to which your account value is allocated as well as from amounts held in
the separate account to provide for payments off maturity dates. As a result,
your payments will continue in reduced level amounts over the remaining term of
the period certain.
DEATH BENEFIT
When the annuitant dies before payments begin
Generally, when we receive satisfactory proof of the annuitant's death before
annuity payments begin we will pay the death benefit to the beneficiary named in
your contract. See "Your beneficiary" later in this prospectus. If the joint
owner who is also the annuitant dies, we will consider the surviving owner to be
the beneficiary, taking the place of any other beneficiary designations.
We determine the amount of the death benefit payable to your beneficiary as of
the date we receive satisfactory proof of the annuitant's death and any required
instructions for the method of payment. The death benefit is the greater of:
(1) your account value; and
(2) the sum of the fixed maturity amounts in each fixed maturity option plus
any amounts held in the separate account to provide for payments off
maturity dates.
However, if you are the annuitant and your spouse is the joint owner or the
designated beneficiary under the contract,
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your spouse may elect to receive the payments instead of taking the death
benefit. The payments will then begin on the scheduled date.
When the annuitant dies after the annuity payments begin
If the annuitant dies after the payments begin, payments will continue to be
made during the period certain to either the joint owner or the designated
beneficiary, whichever applies. The payments will be made on the same schedule
that was in effect before the annuitant's death.
At the beneficiary's option, payments may be discontinued and paid in a single
sum. If the single sum is elected within one year after the annuitant's death,
the single sum will be equal to the greater of:
(1) the account value; and
(2) the sum of the fixed maturity amounts in each fixed maturity option plus
any amounts held in the separate account to provide for payments off
maturity dates.
When the NQ contract owner who is not the annuitant dies before the annuitant
and before the annuity payments begin
When you are not the annuitant under an NQ contract and you die before annuity
payments begin, the beneficiary named to receive the death benefit upon the
annuitant's death will automatically become the new contract owner. You may
instead name a different person to become the new contract owner at any time by
sending an acceptable written form to our Processing Office. If the contract is
jointly owned and the first owner to die is not the annuitant, the surviving
owner becomes the sole contract owner. This person will be considered the
beneficiary for purposes of the distribution rules described below. The
surviving owner automatically takes the place of any other beneficiary
designation.
Unless the surviving spouse of the deceased owner (or in the case of a joint
ownership situation, the surviving spouse of the first owner to die) is the
designated beneficiary for this purpose, the entire interest in the contract
must be distributed under the following rules:
o The cash value in the contract must be fully paid to the designated
beneficiary (new owner) by December 31st of the fifth calendar year after
your death (or in a joint ownership situation, the death of the first owner
to die).
o The new owner may elect instead to receive payments as a life annuity (or
payments for a period certain of not longer than the new owner's life
expectancy), with payments beginning no later than December 31st following
the calendar year of the non-annuitant owner's death. Unless this
alternative is elected, we will pay any cash value in the contract as a
single sum on December 31st of the fifth calendar year following the year
of your death (or the death of the first owner to die).
o If the surviving spouse is the designated beneficiary or joint owner, the
surviving spouse may elect to continue the contract. No distributions are
required as long as the surviving spouse and the annuitant are living.
When the NQ contract owner who is not the annuitant dies after the annuity
payments begin
If your death occurs after annuity payments begin, payments will continue to be
made during the period certain to the designated beneficiary or in the case of
joint owners to the surviving owner. In either case, this person becomes the new
contract owner and receives the payments.
<PAGE>
2
Other benefits and features of the contracts
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HOW YOU CAN MAKE YOUR CONTRIBUTIONS
Except as noted below, contributions must be by 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. We do not accept third party checks endorsed to us
except for rollover contributions, tax-free exchanges or trustee checks that
involve no refund. All checks are subject to our ability to collect the funds.
We reserve the right to reject a payment if it is received in an unacceptable
form.
For your convenience, we will accept initial and additional contributions, if
applicable, by wire transmittal from certain broker-dealers who have agreements
with us for this purpose. These methods of payment are discussed in detail under
"More information" later in this prospectus.
Your initial contribution must generally be accompanied by an application and
any other form we need to process the payments. If any information is missing or
unclear, we will try to obtain that information. If we are unable to obtain all
of the information we require within five business days, we will inform the
financial professional submitting the application, on your behalf. We will then
return the contribution to you unless you specifically direct us to keep your
contribution until we receive the required information.
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Our "business day" is any day the New York Stock Exchange is open for trading.
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SECTION 1035 EXCHANGES
You may apply the entire value of an existing nonqualified deferred annuity
contract (or life insurance or endowment contract) to purchase an Income Manager
NQ contract in a tax-deferred exchange if you follow certain procedures as shown
in the form that we require you to use. Please note that the IRS may not apply
tax-free treatment to partial 1035 exchanges. Also see "Tax information" later
in this prospectus.
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your contract, you may return it to
us for a refund. To exercise this cancellation right you must mail the contract
directly to our Processing Office within 10 days after you receive it. In some
states, this "free look" period may be longer.
Generally, your refund will equal your account value under the contract. Your
account value reflects any positive or negative market value adjustments in the
fixed maturity options through the date we receive your contract. Under the life
annuity with a period certain your refund will also include any amount applied
to the life contingent annuity. However, some states require that we refund the
full amount of your contribution (not including any investment gain or loss).
For IRA contracts returned to us within seven days after you receive it, we are
required to refund the full amount of your contribution.
If you cancel your contract during the free look period, we may require that you
wait six months before you may apply for a contract with us again.
Please see "Tax information" for possible consequences of cancelling your
contract.
SURRENDERING YOUR CONTRACT TO RECEIVE ITS CASH VALUE
You may surrender your contract to receive its cash value at any time during the
period certain. Your cash value is equal to your account value minus any
withdrawal charge. There is no free withdrawal amount if you surrender your
contract.
For a surrender to be effective, we must receive your written request and your
contract at our Processing Office. We will determine your cash value on the date
we receive the required information. All benefits under your contract will
terminate as of that date unless you have elected the life contingent annuity.
See "Surrendering your life annuity with a period certain contract" earlier in
this prospectus.
WHEN TO EXPECT PAYMENTS
Generally, we will fulfill requests for payments within seven days of the
transaction to which the request relates. We can defer payment of any portion of
the account value (other than for death benefits) for up to six months while you
are living. We also may defer payments for any reasonable amount of time (not to
exceed 15 days) while we are waiting for a contribution check to clear.
<PAGE>
3
Charges
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WITHDRAWAL CHARGES
A withdrawal charge applies in two circumstances: (1) if you make a withdrawal
during a contract year and it exceeds any applicable free withdrawal amount,
described below, or (2) if you surrender your contract to receive its cash
value.
The withdrawal charge equals a percentage of each contribution (or single
contribution) withdrawn. The percentage that applies depends on how long each
contribution has been invested in the contract. We determine the withdrawal
charge separately for each contribution according to the following table:
<TABLE>
<CAPTION>
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Contract Year
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1 2 3 4 5 6 7 8+
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
Percentage of
Contribution 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0%
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</TABLE>
For purposes of calculating the withdrawal charge, we treat the contract year in
which we receive a contribution as "contract year 1." Amounts withdrawn up to
the free withdrawal amount are not considered withdrawal of any contribution. We
also treat contributions that have been invested the longest as being withdrawn
first. We treat contributions as withdrawn before earnings for purposes of
calculating the withdrawal charge. However, federal income tax rules treat
earnings under your contract as withdrawn first. See "Tax information."
We deduct the withdrawal charge from your account value in proportion to the
amount withdrawn from each fixed maturity option and any amounts held in the
separate account to provide for payments off maturity dates. In order to give
you the exact dollar amount of the withdrawal you request, we deduct the amount
of the withdrawal and the amount of the withdrawal charge from your account
value. Any amount deducted to pay a withdrawal charge is also subject to a
withdrawal charge.
The withdrawal charge does not apply to the 10% free withdrawal amount described
below.
THE 10% FREE WITHDRAWAL AMOUNT APPLIES ONLY TO LIFE ANNUITY WITH A PERIOD
CERTAIN CONTRACTS. IT DOES NOT APPLY TO YOUR PERIOD CERTAIN CONTRACT OR IF YOU
SURRENDER YOUR CONTRACT TO RECEIVE ITS CASH VALUE.
Under life annuity with a period certain contracts, each contract year you can
withdraw up to 10% of your account value without paying a withdrawal charge.
This 10% free withdrawal amount is determined using your account value on the
most recent contract date anniversary.
AMOUNTS APPLIED FROM OTHER CONTRACTS ISSUED BY EQUITABLE LIFE
LIFE ANNUITY WITH A PERIOD CERTAIN CONTRACT. If you own certain types of
contracts that we issue, you may apply the entire account value under those
contracts to purchase the life annuity with a period certain contract provided
the issue age and payment restrictions for the new contract are met. If you
apply your account value at a time when the dollar amount of the withdrawal
charge under such other contract is greater than 2% of remaining contributions
(after withdrawals), we reserve the right to waive the remaining withdrawal
charge. However, a new withdrawal charge schedule will apply under the new
contract. For purposes of the withdrawal charge schedule, the year in which your
account value is applied under the life annuity with a period certain contract
will be "contract year 1." If you apply your account value when the dollar
amount of the withdrawal charge is 2% or less, we reserve the right to waive the
withdrawal charges under the new contract. You should consider the timing of
your purchase as it relates to the potential for withdrawal charges under the
life annuity with a period certain contract.
PERIOD CERTAIN CONTRACT. If you own certain types of contracts that we issue,
you may apply your entire account value to purchase the period certain contract
once any withdrawal charges are no longer in effect under the other contracts.
No withdrawal charges will apply under the period certain contract.
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To purchase any Income Manager contract we require that you return your original
contract to us. A new Income Manager contract will be issued putting this
annuity into effect.
CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES
We deduct a charge designed to approximate certain taxes that may be imposed
upon us, such as premium taxes in your state. We deduct the charge from your
contributions. The current tax charge that might be imposed varies by state and
ranges from 0% to 3.5% (1% in Puerto Rico and 5% in the U.S. Virgin Islands).
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce the withdrawal charge
or change the minimum initial contribution requirements. We also may increase
the rates to maturity for the fixed maturity options and reduce purchase rates
for the life contingent annuity. Group arrangements include those in which a
trustee or an employer, for example, purchases contracts covering a group of
individuals on a group basis. Sponsored arrangements include those in which an
employer allows us to sell contracts to its employees or retirees on an
individual basis. IRA contracts are not available for group arrangements.
Our costs for sales, administration, and mortality generally vary with the size
and stability of the group or sponsoring organization, among other factors. We
take all these factors into account when reducing charges. To qualify for
reduced charges, a group or sponsored arrangement must meet certain
requirements, such as requirements for size and number of years in existence.
Group or sponsored arrangements that have been set up solely to buy contracts or
that have been in existence less than six months will not qualify for reduced
charges.
We will make these and any similar reductions according to our rules in effect
when we approve a contract for issue. We may change these rules from time to
time. Any variation in the withdrawal charge will reflect differences in costs
or services and will not be unfairly discriminatory.
Group or sponsored arrangements may be governed by federal income tax rules, the
Employee Retirement Income Security Act of 1974, or both. We make no
representations with regard to the impact of these and other applicable laws on
such programs. We recommend that employers, trustees, and others purchasing or
making contracts available for purchase under such programs seek the advice of
their own legal and benefits advisers.
OTHER DISTRIBUTION ARRANGEMENTS
We may reduce or eliminate withdrawal charges when sales are made in a manner
that results in savings of sales and administrative expenses. This may include
sales through persons who are compensated by clients for recommending
investments and who receive no commission or reduced commissions in connection
with the sale of the contracts. We will not permit a reduction or elimination of
the withdrawal charge where it will be unfairly discriminatory.
<PAGE>
4
Payment of death benefit
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YOUR BENEFICIARY
You designate your beneficiary when you apply for your contract. You may change
your beneficiary at any time. The change will be effective on the date the
written request for change is signed.
YOUR ANNUITY PAYOUT OPTIONS
If the annuitant dies before annuity payments begin, your beneficiary may elect
to apply the death benefit to an annuity payout option. We offer several annuity
payout options to choose from. Restrictions apply, depending on the type of
contract you own.
ANNUITY PAYOUT OPTIONS
Your beneficiary can choose from among the following annuity payout options:
o Life annuity: An annuity that guarantees payments for the rest of the
annuitant's life. Payments end with the last monthly payment before the
annuitant's death. Because there is no death benefit with this payout
option, it provides the highest monthly payment of any of the life annuity
options, so long as the annuitant is living.
o Life annuity - period certain: An annuity that guarantees payments for the
rest of the annuitant's life, and, if the annuitant dies before the end of
a selected period of time ("period certain"), payments to the beneficiary
will continue for the balance of the period certain.
o Life annuity - refund certain: An annuity that guarantees payments for the
rest of the annuitant's life. If the annuitant dies before the amount
applied to purchase the annuity option has been recovered, payments
continue to the beneficiary until that amount has been recovered.
o Period certain annuity: An annuity that guarantees payments for a specific
period of time, usually 5, 10, 15 or 20 years. This option does not
guarantee payments for the rest of the annuitant's life. It does not permit
any repayment of the unpaid principal, so you cannot elect to receive part
of the payments as a single sum payment with the rest paid in monthly
annuity payments.
The life annuity, life annuity - period certain and the life annuity - refund
certain are available on either single life or joint and survivor life basis.
The joint and survivor life annuity guarantees payments for the rest of the
annuitant's life and, after the annuitant's death, continuation of payments to
the survivor.
All of the above annuity payout options are available as fixed annuities. With
fixed annuities, we guarantee fixed annuity payments that will be based either
on the tables of guaranteed annuity payments in your contract or on our then
current annuity rates, whichever is more favorable for the annuitant.
When the beneficiary selects a payout option, we will issue a separate written
agreement confirming the beneficiary's right to receive annuity payments. We
require the return of the contract before annuity payments begin.
The amount of the annuity payments will depend on the amount applied to purchase
the annuity, the type of annuity chosen and, in the case of a life annuity, the
annuitant's age (or the annuitant's and joint annuitant's ages) and in certain
instances, the sex of the annuitant(s). Once a payout option has been chosen and
payments begin, no change can be made.
At the time that the beneficiary elects a payout option if the amount to be
applied is less than $2,000, or the initial payment under the form elected is
less than $20 monthly, we reserve the right to pay the account value in a single
sum rather than as payments under the payout option chosen.
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5
Tax information
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OVERVIEW
In this part of the prospectus, we discuss the current federal income tax rules
that generally apply to Income Manager contracts owned by United States
taxpayers. The tax rules can differ, depending on the type of contract, whether
NQ or Traditional IRA. Therefore, we discuss the tax aspects of each type of
contract separately.
Federal income tax rules include the United States laws in the Internal Revenue
Code, and Treasury Department Regulations and Internal Revenue Service ("IRS")
interpretations of the Internal Revenue Code. These tax rules may change. We
cannot predict whether, when, or how these rules could change. Any change could
affect contracts purchased before the change.
We cannot provide detailed information on all tax aspects of the contracts.
Moreover, the tax aspects that apply to a particular person's contract may vary
depending on the facts applicable to that person. We do not discuss state income
and other state taxes, federal income tax and withholding rules for non-U.S.
taxpayers, or federal gift and estate taxes. Transfers of the contract, rights
under the contract, or payments under the contract may be subject to gift or
estate taxes. You should not rely only on this document, but should consult your
tax adviser before your purchase.
This is intended to be a payout annuity. However, in certain circumstances you
may be able to delay beginning payments. If you are buying a contract to fund a
retirement plan that already provides tax deferral under sections of the
Internal Revenue Code, such as IRA, you should do so for the contract's features
and benefits other than tax deferral. In such situations, the tax deferral of
the contract does not provide additional benefits.
TAXATION OF NONQUALIFIED ANNUITIES
CONTRIBUTIONS
You may not deduct the amount of your contributions to a nonqualified annuity
contract.
CONTRACT EARNINGS
Generally, you are not taxed on contract earnings until you receive a
distribution from your contract, whether as a withdrawal, or as an annuity
payment. This contract is intended to be a payout annuity. However, because you
may be able to delay beginning payments, rules governing deferred annuity
contracts could apply. Earnings in a deferred annuity contract are taxable even
without a distribution if you transfer a contract, for example, as a gift to
someone other than your spouse (or former spouse).
All nonqualified deferred annuity contracts that Equitable Life and its
affiliates issue to you during the same calendar year are linked together and
treated as one contract when figuring out the taxable amount of any distribution
from any of those contracts.
Corporations, partnerships, trusts and other non-natural persons generally
cannot defer the taxation of current income credited to the contract unless an
exception under the federal income tax rules apply. There is an exception for
immediate annuities.
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Immediate annuities are generally annuities in which payments begin within one
year from purchase and provide for a series of substantially equal payments made
at least annually.
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ANNUITY PAYMENTS
Once annuity payments begin, a portion of each payment is taxable as ordinary
income. You get the remaining portion without paying taxes on it. This is your
"investment in the contract." Generally, your investment in the contract equals
the contributions you made, less any amounts you previously withdrew that were
not taxable.
The tax-free portion of each payment is determined by (1) dividing your
investment in the contract by the total amount you are expected to receive out
of the contract, and (2) multiplying the result by the amount of the payment.
Once you have received the amount of your investment in the contract, all
payments after that are fully taxable. If
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payments under a life annuity stop because the annuitant dies, there is an
income tax deduction for any unrecovered investment in the contract.
PAYMENTS MADE BEFORE ANNUITY PAYMENTS BEGIN
If you make withdrawals before annuity payments begin under your contract, they
are taxable to you as ordinary income if there are earnings in the contract.
Generally, earnings are your account value less your investment in the contract.
If you withdraw an amount which is more than the earnings in the contract as of
the date of the withdrawal, the balance of the distribution is treated as a
return of your investment in the contract and is not taxable.
CONTRACTS PURCHASED THROUGH EXCHANGES
You may purchase your NQ contract through an exchange of another contract.
Normally, exchanges of contracts are taxable events. The exchange will not be
taxable under Section 1035 of the Internal Revenue Code if:
o The contract which is the source of the funds you are using to purchase the
NQ contract is another nonqualified deferred annuity contract or life
insurance or endowment contract.
o The owner and the annuitant are the same under the source contract and the
Income Manager contract. If you are using a life insurance or endowment
contract the owner and the insured must be the same on both sides of the
exchange transaction.
The tax basis of the source contract carries over to the Income Manager NQ
contract.
A recent case permitted an owner to direct the proceeds of a partial withdrawal
from one nonqualified deferred annuity contract to a different insurer to
purchase a new nonqualified deferred annuity contract on a tax-deferred basis.
Special forms, agreement between the carriers, and provision of cost basis
information may be required to process this type of an exchange. You should also
note that the Internal Revenue Service has announced its intention to challenge
transactions where taxpayers enter into serial partial exchanges and
annuitizations in order to avoid income or penalties applicable to annuity
contracts. Although the IRS has not yet issued specific guidance on this point,
you should discuss with your tax adviser before you purchase an Income Manager
Contract intended to be a payout annuity under partial 1035 exchange proceeds.
SURRENDERS
If you surrender or cancel the NQ contract, the distribution is taxable as
ordinary income (not capital gain) to the extent it exceeds your investment in
the contract.
WITHDRAWALS MADE AFTER ANNUITY PAYMENTS BEGIN
If you make a withdrawal that terminates all periodic payments due, it will be
taxable as a complete surrender as discussed above. If you make a withdrawal
that does not terminate all periodic payments due, then a portion of the
remaining reduced payments will be eligible for tax-free recovery of investment.
Also, a portion of the withdrawal may not be taxable.
DEATH BENEFIT PAYMENT MADE TO A BENEFICIARY AFTER YOUR DEATH
For the rules applicable to death benefits, see "Payment of death benefit" and
"When the NQ contract owner who is not the annuitant dies before the annuitant
and before the annuity payments begin" earlier in this prospectus. The tax
treatment of a death benefit taken as a single sum is generally the same as the
tax treatment of a withdrawal from or surrender of your contract. The tax
treatment of a death benefit taken as annuity payments is generally the same as
the tax treatment of annuity payments under your contract.
EARLY DISTRIBUTION PENALTY TAX
If you take distributions before you are age 59 1/2 a penalty tax of 10% of the
taxable portion of your distribution applies in addition to the income tax. The
extra penalty tax does not apply to pre-age 59 1/2 distributions made:
o on or after your death; or
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o because you are disabled (special federal income tax definition); or
o in the form of substantially equal periodic annuity payments for your life
(or life expectancy) or the joint lives (or joint life expectancies) of you
and a beneficiary; or
o payments under an immediate annuity.
Periodic annuity payments we make to you from the life annuity with a period
certain while you are under age 59 1/2 should qualify for the "substantially
equal payments for life" exception noted above. However, this exception may not
apply if you take a withdrawal, surrender your contract or change the payment
pattern in any way.
OTHER INFORMATION
The Treasury Department has the authority to issue guidelines prescribing the
circumstances in which your ability to direct your investment to particular
investments within a separate account may cause you, rather than the insurance
company, to be treated as the owner of the investments attributable to your
nonqualified annuity contract. In that case, income and gains attributable to
such investments would be included in your gross income for federal income tax
purposes. Under current rules, however, we believe that Equitable Life, and not
the owner of a nonqualified annuity contract, would be considered the owner of
the separate account investments.
SPECIAL RULES FOR NQ CONTRACTS ISSUED IN PUERTO RICO
Under current law we treat income from NQ contracts as U.S.-source. A Puerto
Rico resident is subject to U.S. taxation on such U.S.-source income. Only
Puerto Rico-source income of Puerto Rico residents is excludable from U.S.
taxation. Income from NQ contracts is also subject to Puerto Rico tax. The
computation of the taxable portion of amounts distributed from a contract may
differ in the two jurisdictions. Therefore, you might have to file both U.S. and
Puerto Rico tax returns, showing different amounts of income from the contract
for each tax return. Puerto Rico generally provides a credit against Puerto Rico
tax for U.S. tax paid. Depending on your personal situation and the timing of
the different tax liabilities, you may not be able to take full advantage of
this credit.
INDIVIDUAL RETIREMENT ARRANGEMENTS ("IRAS")
GENERAL
"IRA" stands for individual retirement arrangement. There are two basic types of
such arrangements, individual retirement accounts and individual retirement
annuities. In an individual retirement account, a trustee or custodian holds the
assets for the benefit of the IRA owner. The assets can include mutual funds and
certificates of deposit. In an individual retirement annuity, an insurance
company issues an annuity contract that serves as the IRA.
There are two basic types of IRAs, as follows:
o Traditional IRAs, typically funded on a pre-tax basis;
o Roth IRAs, first available in 1998, funded on an after-tax basis.
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The Income Manager IRA contract is available in Traditional IRA form only.
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Regardless of the type of IRA, your ownership interest in the IRA cannot be
forfeited. You or your beneficiaries who survive you are the only ones who can
receive the IRA's benefits or payments.
You can hold your IRA assets in as many different accounts and annuities as you
would like, as long as you meet the rules for setting up and making
contributions to IRAs. However, if you own multiple IRAs, you may be required to
combine IRA values or contributions for tax purposes. For further information
about individual retirement arrangements, you can read Internal Revenue Service
Publication 590 ("Individual Retirement Arrangements (IRAs)"). This Publication
is usually updated annually, and can be obtained from any IRS district office or
the IRS website (www.irs.gov).
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Equitable Life designs its Traditional IRA contracts to qualify as individual
retirement annuities under Section 408(b) of the Internal Revenue Code. This
prospectus contains the information that the IRS requires you to have before you
purchase an IRA. This section of the prospectus covers some of the special tax
rules that apply to IRAs.
The Income Manager IRA contract has been approved by the IRS as to form for use
as a Traditional IRA. This IRS approval is a determination only as to the form
of the annuity. It does not represent a determination of the merits of the
annuity as an investment. The IRS approval does not address every feature
possibly available under the Income Manager IRA contract.
CANCELLATION
You can cancel an Income Manager IRA contract by following the directions under
"Your right to cancel within a certain number of days" earlier in the
prospectus. If you cancel an IRA contract, we may have to withhold tax, and we
must report the transaction to the IRS. A contract cancellation could have an
unfavorable tax impact.
TRADITIONAL INDIVIDUAL RETIREMENT ANNUITIES (TRADITIONAL IRAS)
CONTRIBUTIONS TO TRADITIONAL IRAS
Individuals may make three different types of contributions to a Traditional
IRA:
o "regular" contributions out of earned income or compensation; or
o tax-free "rollover" contributions; or
o direct custodian-to-custodian transfers from other Traditional IRAs
("direct transfers").
We require that your initial contribution to the Income Manager Traditional IRA
contract must be either a rollover or a direct custodian-to-custodian transfer.
See "Rollovers and transfers" below. Any additional contributions you make may
be rollovers, direct transfers, or regular Traditional IRA contributions.
REGULAR CONTRIBUTIONS TO TRADITIONAL IRAS
LIMITS ON CONTRIBUTIONS
Generally, $2,000 is the maximum amount that you may contribute to all IRAs
(including Roth IRAs) in any taxable year. When your earnings are below $2,000,
your earned income or compensation for the year is the most you can contribute.
This $2,000 limit does not apply to rollover contributions or direct
custodian-to-custodian transfers into a Traditional IRA. You cannot make regular
Traditional IRA contributions for the tax year in which you reach age 70 1/2 or
any tax year after that.
SPECIAL RULES FOR SPOUSES
If you are married and file a joint income tax return, you and your spouse may
combine your compensation to determine the amount of regular contributions you
are permitted to make to Traditional IRAs (and Roth IRAs). Even if one spouse
has no compensation or compensation under $2,000, married individuals filing
jointly can contribute up to $4,000 for any taxable year to any combination of
Traditional IRAs and Roth IRAs. (Any contributions to Roth IRAs reduce the
ability to contribute to Traditional IRAs and visa versa.) The maximum amount
may be less if earned income is less and the other spouse has made IRA
contributions. No more than a combined total of $2,000 can be contributed
annually to either spouse's Traditional and Roth IRAs. Each spouse owns his or
her IRAs even if the other spouse funded the contributions. A working spouse age
70 1/2 or over can contribute up to the lesser of $2,000 or 100% of "earned
income" to a Traditional IRA for a non-working spouse until the year in which
the non-working spouse reaches age 70 1/2.
DEDUCTIBILITY OF CONTRIBUTIONS
The amount of Traditional IRA contributions that you can deduct for a tax year
depends on whether you are covered by an employer-sponsored tax-favored
retirement plan, as defined under special federal income tax rules. Your Form
W-2 will indicate whether or not you are covered by such a retirement plan.
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IF YOU ARE NOT COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, you can
make fully deductible contributions to your Traditional IRAs for each tax year
up to $2,000 or, if less, your earned income.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
adjusted gross income (AGI) is BELOW THE LOWER DOLLAR FIGURE IN A PHASE-OUT
RANGE, you can make fully deductible contributions to your Traditional IRAs. For
each tax year, your fully deductible contribution can be up to $2,000 or, if
less, your earned income.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
AGI falls within a PHASE-OUT range, you can make PARTIALLY DEDUCTIBLE
CONTRIBUTIONS to your Traditional IRAs.
IF YOU ARE COVERED BY A RETIREMENT PLAN DURING ANY PART OF THE YEAR, and your
AGI falls ABOVE THE HIGHER FIGURE IN THE PHASE-OUT RANGE, you may not deduct any
of your regular contribution to your Traditional IRAs.
If you are single and covered by a retirement plan during any part of the
taxable year, the deduction for IRA contributions phases out with AGI between
$32,000 and $42,000 in 2000. This range will increase every year until 2005 when
the range is $50,000-$60,000.
If you are married and file a joint return, and you are covered by a retirement
plan during any part of the taxable year, the deduction for Traditional IRA
contributions phases out with AGI between $52,000 and $62,000 in 2000. This
range will increase every year until 2007 when the range is $80,000-$100,000.
Married individuals filing separately and living apart at all times are not
considered married for purposes of this deductible contribution calculation.
Generally, the active participation in an employer-sponsored retirement plan of
an individual is determined independently for each spouse. Where spouses have
"married filing jointly" status, however, the maximum deductible Traditional IRA
contribution for an individual who is not an active participant (but whose
spouse is an active participant) is phased out for taxpayers with AGI of between
$150,000 and $160,000.
To determine the deductible amount of the contribution in 2000, you determine
AGI and subtract $32,000 if you are single, or $52,000 if you are married and
file a joint return with your spouse. The resulting amount is your excess AGI.
You then determine the limit on the deduction for Traditional IRA contributions
using the following formula:
($10,000-excess AGI) times $2,000 (or earned equals the adjusted
- --------------------- x income, if less) = deductible
divided by $10,000 contribution
limit
NONDEDUCTIBLE CONTRIBUTIONS
If you are not eligible to deduct part or all of the Traditional IRA
contribution, you may still make nondeductible contributions on which earnings
will accumulate on a tax-deferred basis. The combined deductible and
nondeductible contributions to your Traditional IRA (or the non-working spouse's
Traditional IRA) may not, however, exceed the maximum $2,000 per person limit.
See "Excess contributions" below. You must keep your own records of deductible
and nondeductible contributions in order to prevent double taxation on the
distribution of previously taxed amounts. See "Withdrawals, payments and
transfer of funds out of Traditional IRAs" below.
If you are making nondeductible contributions in any taxable year, or you have
made nondeductible contributions to a Traditional IRA in prior years and are
receiving distributions from any Traditional IRA, you must file the required
information with the IRS. Moreover, if you are making nondeductible Traditional
IRA contributions, you must retain all income tax returns and records pertaining
to such contributions until interests in all Traditional IRAs are fully
distributed.
WHEN YOU CAN MAKE CONTRIBUTIONS
If you file your tax returns on a calendar year basis like most taxpayers, you
have until the April 15th return filing deadline (without extensions) of the
following calendar year to make your regular Traditional IRA contributions for a
tax year.
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EXCESS CONTRIBUTIONS
Excess contributions to IRAs are subject to a 6% excise tax for the year in
which made and for each year after until withdrawn. The following are excess
contributions to IRAs:
o regular contributions of more than $2,000;
o regular contributions of more than earned income for the year, if that
amount is under $2,000;
o regular contributions to a Traditional IRA made after you reach age 70 1/2;
and
o rollover contributions of amounts which are not eligible to be rolled over.
For example, after-tax contributions to a qualified plan or minimum
distributions required to be made after age 70 1/2.
You can avoid the excise tax by withdrawing an excess contribution (rollover or
regular) before the due date (including extensions) for filing your federal
income tax return for the year. If it is an excess regular Traditional IRA
contribution, you cannot take a tax deduction for the amount withdrawn. You do
not have to include the excess contribution withdrawn as part of your income. It
is also not subject to the 10% additional penalty tax on early distributions
discussed below under "Early distribution penalty tax." You do have to withdraw
any earnings that are attributed to the excess contribution. The withdrawn
earnings would be included in your gross income and could be subject to the 10%
penalty tax.
Even after the due date for filing your return, you may withdraw an excess
rollover contribution, without income inclusion or 10% penalty, if:
(1) the rollover was from a qualified retirement plan to a Traditional IRA;
(2) the excess contribution was due to incorrect information that the plan
provided; and
(3) you took no tax deduction for the excess contribution.
ROLLOVERS AND TRANSFERS
Rollover contributions may be made to a Traditional IRA from these sources:
o qualified plans;
o TSAs (including Internal Revenue Code Section 403(b)(7) custodial
accounts); and
o other Traditional IRAs.
Any amount contributed to a Traditional IRA after you reach age 70 1/2 must be
net of your required minimum distribution for the year in which the rollover or
direct transfer contribution is made.
ROLLOVERS FROM QUALIFIED PLANS OR TSAS
There are two ways to do rollovers:
o Do it yourself
You actually receive a distribution that can be rolled over and you roll it
over to a Traditional IRA within 60 days after the date you receive the
funds. The distribution from your qualified plan or TSA will be net of 20%
mandatory federal income tax withholding. If you want, you can replace the
withheld funds yourself and roll over the full amount.
o Direct rollover
You tell your qualified plan trustee or TSA issuer/custodian/fiduciary to
send the distribution directly to your Traditional IRA issuer. Direct
rollovers are not subject to mandatory federal income tax withholding.
All distributions from a TSA or qualified plan are eligible rollover
distributions and may be rolled over tax-free to an IRA unless the distribution
is any of the following:
o only after-tax contributions you made to the plan;
o required minimum distributions after age 70 1/2 or separation from service;
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o substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancies) of you
and your designated beneficiary;
o substantially equal periodic payments made for a specified period of 10
years or more;
o a hardship withdrawal;
o corrective distributions which fit specified technical tax rules;
o loans that are treated as distributions;
o a death benefit payment to a beneficiary who is not your surviving spouse;
or
o a qualified domestic relations order distribution to a beneficiary who is
not your current spouse or former spouse.
ROLLOVERS FROM TRADITIONAL IRAS TO TRADITIONAL IRAS
You may roll over amounts from one Traditional IRA to one or more of your other
Traditional IRAs if you complete the transaction within 60 days after you
receive the funds. You may make such a rollover only once in every 12-month
period for the same funds. Trustee-to-trustee or custodian-to-custodian direct
transfers are not rollover transactions. You can make these more frequently than
once in every 12-month period.
The surviving spouse beneficiary of a deceased individual can roll over or
directly transfer an inherited Traditional IRA to one or more other Traditional
IRAs. Also, in some cases, Traditional IRAs can be transferred on a tax-free
basis between spouses or former spouses as a result of a court ordered divorce
or separation decree.
WITHDRAWALS, PAYMENTS AND TRANSFERS OF FUNDS OUT OF TRADITIONAL IRAS
No federal income tax law restrictions on withdrawals
You can withdraw any or all of your funds from a Traditional IRA at any time.
You do not need to wait for a special event like retirement.
TAXATION OF PAYMENTS
Earnings in Traditional IRAs are not subject to federal income tax until you or
your beneficiary receive them. Taxable payments or distributions include
withdrawals from your contract, surrender of your contract and annuity payments
from your contract. Death benefits are also taxable. Except as discussed below,
the total amount of any distribution from a Traditional IRA must be included in
your gross income as ordinary income.
If you have ever made nondeductible IRA contributions to any Traditional IRA (it
does not have to be to this particular Traditional IRA contract), those
contributions are recovered tax free when you get distributions from any
Traditional IRA. You must keep permanent tax records of all of your
nondeductible contributions to Traditional IRAs. At the end of any year in which
you have received a distribution from any Traditional IRA, you calculate the
ratio of your total nondeductible Traditional IRA contributions (less any
amounts previously withdrawn tax free) to the total account balances of all
Traditional IRAs you own at the end of the year plus all Traditional IRA
distributions made during the year. Multiply this by all distributions from the
Traditional IRA during the year to determine the nontaxable portion of each
distribution.
In addition, a distribution is not taxable if:
o the amount received is a withdrawal of excess contributions, as described
under "Excess contributions" above;
o the entire amount received is rolled over to another Traditional IRA (see
"Rollovers and transfers" above); or
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o in certain limited circumstances, where the Traditional IRA acts as a
"conduit," you roll over the entire amount into a qualified plan or TSA
that accepts rollover contributions. To get this "conduit" Traditional IRA
treatment:
- the source of funds you used to establish the Traditional IRA must have
been a rollover contribution from a qualified plan, and
- the entire amount received from the Traditional IRA (including any
earnings on the rollover contribution) must be rolled over into another
qualified plan within 60 days of the date received.
Similar rules apply in the case of a TSA.
However, you may lose conduit treatment, if you make an eligible rollover
distribution contribution to a Traditional IRA and you commingle this
contribution with other contributions. In that case, you may not be able to roll
over these eligible rollover distribution contributions and earnings to another
qualified plan or TSA at a future date. Since the Income Manager annuity is
intended to be a payout contract, it may not be an appropriate contract if you
plan to use it as a conduit IRA.
Distributions from a Traditional IRA are not eligible for favorable ten-year
averaging and long-term capital gain treatment available to certain
distributions from qualified plans.
REQUIRED MINIMUM DISTRIBUTIONS
Lifetime required minimum distributions
You must start taking annual distributions from your Traditional IRAs beginning
at age 70 1/2.
When you have to take the first required minimum distribution
The first required minimum distribution is for the calendar year in which you
turn age 70 1/2. You have the choice to take this first required minimum
distribution during the calendar year you actually reach age 70 1/2, or to delay
taking it until the first three-month period in the next calendar year (January
1 - April 1). Distributions must start no later than your "required beginning
date," which is April 1st of the calendar year after the calendar year in which
you turn age 70 1/2. If you choose to delay taking the first annual minimum
distribution, then you will have to take two minimum distributions in that year
- - the delayed one for the first year and the one actually for that year. Once
minimum distributions begin, they must be made at some time each year.
HOW YOU CAN CALCULATE REQUIRED MINIMUM DISTRIBUTIONS
There are two approaches to taking required minimum distributions -
"account-based" or "annuity-based."
Account based method
If you choose an "account-based" method, you divide the value of your
Traditional IRA as of December 31st of the past calendar year by a life
expectancy factor from IRS tables. This gives you the required minimum
distribution amount for that particular IRA for that year. The required minimum
distribution amount will vary each year as the account value and your life
expectancy factors change.
You have a choice of life expectancy factors, depending on whether you choose a
method based only on your life expectancy, or the joint life expectancies of you
and another individual. You can decide to "recalculate" your life expectancy
every year by using your current life expectancy factor. You can decide instead
to use the "term certain" method, where you reduce your life expectancy by one
every year after the initial year. If your spouse is your designated beneficiary
for the purpose of figuring out annual account-based required minimum
distributions, you can also annually "recalculate" your spouse's life expectancy
if you want. If you choose someone who is not your spouse as your designated
beneficiary for the purpose of figuring out annual account-based required
minimum distributions, you have to use the "term certain" method of calculating
that person's life expectancy. If you pick a nonspouse designated beneficiary,
you may also have to do another special calculation.
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You can later apply your Traditional IRA funds to a life annuity-based payout.
You can only do this if you already chose to recalculate your life expectancy
annually (and your spouse's life expectancy if you select a spousal joint
annuity).
Annuity based method
If you choose an "annuity-based" method, you do not have to do annual
calculations. You apply the account value to an annuity payout for your life or
the joint lives of you and a designated beneficiary, or for a period certain not
extending beyond applicable life expectancies.
Do you have to pick the same method to calculate your required minimum
distributions for all of your Traditional IRAs and other retirement plans?
No. If you want, you can choose a different method and a different beneficiary
for each of your Traditional IRAs and other retirement plans. For example, you
can choose an annuity payout from one IRA, a different annuity payout from a
qualified plan, and an account-based annual withdrawal from another IRA.
Will we pay you the annual amount every year from your Traditional IRA based on
the method you choose?
No, we do not automatically make distributions from your contract before your
annuity payments begin.
What if you take more than you need to for any year?
The required minimum distribution amount for your Traditional IRAs is calculated
on a year-by-year basis. There are no carry-back or carry-forward provisions.
Also, you cannot apply required minimum distribution amounts you take from your
qualified plans to the amounts you have to take from your Traditional IRAs and
vice-versa. However, the IRS will let you figure out the required minimum
distribution for each Traditional IRA that you maintain, using the method that
you picked for that particular IRA. You can add these required minimum
distribution amount calculations together. As long as the total amount you take
out every year satisfies your overall Traditional IRA required minimum
distribution amount, you may choose to take your annual required minimum
distribution from any one or more Traditional IRAs that you own.
What if you take less than you need to for any year?
Your IRA could be disqualified, and you could have to pay tax on the entire
value. Even if your IRA is not disqualified, you could have to pay a 50% penalty
tax on the shortfall (required amount for Traditional IRAs less amount actually
taken). It is your responsibility to meet the required minimum distribution
rules. We will remind you when our records show that your age 70 1/2 is
approaching. If you do not select a method with us, we will assume you are
taking your required minimum distribution from another Traditional IRA that you
own.
What are the required minimum distribution payments after you die?
If you die after either (a) the start of annuity payments, or (b) your required
beginning date, your beneficiary must receive payment of the remaining values in
the contract at least as rapidly as under the distribution method before your
death. In some circumstances, your surviving spouse may elect to become the
owner of the Traditional IRA and halt distributions until he or she reaches age
70 1/2.
If you die before your required beginning date and before annuity payments
begin, federal tax rules require complete distribution of your entire value in
the contract within five years after your death. Payments to a designated
beneficiary over the beneficiary's life or over a period certain that does not
extend beyond the beneficiary's life expectancy are also permitted, if these
payments start within one year of your death. A surviving spouse beneficiary can
also (a) delay starting any payments until you would have reached age 70 1/2 or
(b) roll over your Traditional IRA into his or her own Traditional IRA.
Important information about minimum distributions under your contract
Although the life contingent annuity portion of the life annuity with a period
certain does not have a cash value, it
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will be assigned a value for tax purposes. This value will generally be changed
each year. When you determine the amount of account-based required minimum
distributions from your IRA this value must be included. This must be done
before annuity payments begin even though the life contingent annuity may not be
providing a source of funds to satisfy the required minimum distribution.
You will generally be required to determine your required minimum distribution
by annually recalculating your life expectancy. Recalculation is no longer
required once the only payments you or your spouse receive are under the life
contingent annuity.
If you surrender your contract, or withdraw any remaining account value before
your annuity payments begin, it may be necessary for you to satisfy your
required minimum distribution by moving forward the start date of payments under
your life contingent annuity. Or to the extent available, you have to take
distributions from other IRA funds you may have. Or, you may convert your IRA
life contingent annuity under the IRA contract to a nonqualified life contingent
annuity. This would be viewed as a distribution of the value of the life
contingent annuity from your IRA, and therefore, would be a taxable event.
However, since the life contingent annuity would no longer be part of the IRA,
you would not have to include its value when determining future required minimum
distributions.
If you have elected a joint and survivor form of the life contingent annuity,
the joint annuitant must be your spouse. You must determine your required
minimum distribution by annually recalculating both your life expectancy and
your spouse's life expectancy. Once the only payments you or your spouse are
receiving are under the life contingent annuity recalculation is no longer
required. In the event of your death or the death of your spouse the value of
such annuity will change. For this reason, it is important that someone tell us
if you or your spouse dies before the life contingent annuity has started
payments so that a lower valuation can be made. Otherwise, a higher tax value
may result in an overstatement of the amount that would be necessary to satisfy
your required minimum distribution amount.
Allocation of funds to the life contingent annuity may prevent the contract from
later receiving conduit IRA treatment.
SUCCESSOR ANNUITANT AND OWNER
If your spouse is the sole primary beneficiary and elects to become the
successor annuitant and owner, no death benefit is payable until your surviving
spouse's death.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
IRA death benefits are taxed the same as IRA distributions.
BORROWING AND LOANS ARE PROHIBITED TRANSACTIONS
You cannot get loans from a Traditional IRA. You cannot use a Traditional IRA as
collateral for a loan or other obligation. If you borrow against your IRA or use
it as collateral, its tax-favored status will be lost as of the first day of the
tax year in which this prohibited event occurs. If this happens, you must
include the value of the Traditional IRA in your federal gross income. Also, the
early distribution penalty tax of 10% will apply if you have not reached age
59 1/2 before the first day of that tax year.
EARLY DISTRIBUTION PENALTY TAX
A penalty tax of 10% of the taxable portion of a distribution applies to
distributions from a Traditional IRA made before you reach age 59 1/2. The extra
penalty tax does not apply to pre-age 59 1/2 distributions made:
o on or after your death;
o because you are disabled (special federal income tax definition);
o used to pay certain extraordinary medical expenses (special federal income
tax definition);
o used to pay medical insurance premiums for unemployed individuals (special
federal income tax definition);
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o used to pay certain first-time home buyer expenses (special federal income
tax definition; $10,000 lifetime total limit for these distributions from
all your Traditional and Roth IRAs);
o used to pay certain higher education expenses (special federal income tax
definition); or
o in the form of substantially equal periodic payments made at least annually
over your life (or your life expectancy), or over the joint lives of you
and your beneficiary (or your joint life expectancy) using an IRS-approved
distribution method.
WILL PAYMENTS WE MAKE TO YOU FROM THE LIFE ANNUITY WITH A PERIOD CERTAIN WHILE
YOU ARE UNDER AGE 59 1/2 QUALIFY AS SUBSTANTIALLY EQUAL PAYMENTS FOR LIFE?
Same as nonqualified annuities under "Early distribution penalty tax."
FEDERAL AND STATE INCOME TAX WITHHOLDING AND INFORMATION REPORTING
We must withhold federal income tax from distributions from annuity contracts.
You may be able to elect out of this income tax withholding in some cases.
Generally, we do not have to withhold if your distributions are not taxable. The
rate of withholding will depend on the type of distribution and, in certain
cases, the amount of your distribution. Any income tax withheld is a credit
against your income tax liability. If you do not have sufficient income tax
withheld or do not make sufficient estimated income tax payments, you may incur
penalties under the estimated income tax rules.
You must file your request not to withhold in writing before the payment or
distribution is made. Our Processing Office will provide forms for this purpose.
You cannot elect out of withholding unless you provide us with your correct
Taxpayer Identification Number and a United States residence address. You cannot
elect out of withholding if we are sending the payment out of the United States.
We might have to withhold and/or report on amounts we pay under a free look or
cancellation.
Special withholding rules apply to foreign recipients and United States citizens
residing outside the United States. We do not discuss these rules here. Certain
states have indicated that state income tax withholding will also apply to
payments from the contracts made to residents. In some states, you may elect out
of state withholding, even if federal withholding applies. Generally, an
election out of federal withholding will also be considered an election out of
state withholding. If you need more information concerning a particular state or
any required forms, call our Processing Office at their toll-free number.
If you are receiving periodic and/or non-periodic payments, you will be notified
of the withholding requirements and of your right to make withholding elections.
FEDERAL INCOME TAX WITHHOLDING ON PERIODIC ANNUITY PAYMENTS
We withhold differently on "periodic" and "non-periodic" payments. For a
periodic annuity payment, for example, unless you specify a different number of
withholding exemptions, we withhold assuming that you are married and claiming
three withholding exemptions. If you do not give us your correct Taxpayer
Identification Number, we withhold as if you are single with no exemptions.
Based on the assumption that you are married and claiming three withholding
exemptions, if you receive less than $14,880 in periodic annuity payments in
2000 your payments will generally be exempt from federal income tax withholding.
You could specify a different choice of withholding exemption or request that
tax be withheld. Your withholding election remains effective unless and until
you revoke it. You may revoke or change your withholding election at any time.
FEDERAL INCOME TAX WITHHOLDING ON NON-PERIODIC ANNUITY PAYMENTS
For a non-periodic distribution (total surrender or partial withdrawal) we
generally withhold at a flat 10% rate. We apply that rate to the taxable amount
in the case of nonqualified contracts, and to the payment amount in the case of
IRAs.
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More information
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ABOUT OUR FIXED MATURITY OPTIONS
HOW WE DETERMINE THE MARKET VALUE ADJUSTMENT. We use the following procedure to
calculate the market value adjustment (up or down) we make if you withdraw all
of your value from a fixed maturity option before its maturity date.
(1) We determine the market adjusted amount on the date of the withdrawal as
follows:
(a) We determine the fixed maturity amount that would be payable on the
maturity date, using the rate to maturity for the fixed maturity
option.
(b) We determine the period remaining in your fixed maturity option (based
on the withdrawal date) and convert it to fractional years based on a
365-day year. For example, three years and 12 days becomes 3.0329.
(c) We determine the current rate to maturity that applies on the
withdrawal date to new allocations to the same fixed maturity option.
(d) We determine the present value of the fixed maturity amount payable at
the maturity date, using the period determined in (b) and the rate
determined in (c).
(2) We determine the fixed maturity amount as of the current date. (3) We
subtract (2) from the result in (1)(d). The result is the market value
adjustment applicable to such fixed maturity option, which may be positive
or negative.
- --------------------------------------------------------------------------------
Your market adjusted amount is the present value of the maturity value
discounted at the rate to maturity in effect for new contributions to that same
fixed maturity option on the date of the calculation.
- --------------------------------------------------------------------------------
If you withdraw only a portion of the amount in a fixed maturity option, the
market value adjustment will be a percentage of the market value adjustment that
would have applied if you had withdrawn the entire value in that fixed maturity
option. This percentage is equal to the percentage of the value in the fixed
maturity option that you are withdrawing. See the Appendix to this prospectus
for an example of how we calculate the market value adjustment.
For purposes of calculating the rate to maturity for new allocations to a fixed
maturity option (see (1)(c) above), we use the rate we have in effect for new
allocations to that fixed maturity option. We use this rate even if new
allocations to that option would not be accepted at that time. This rate will
not be less than 3%. If we do not have a rate to maturity in effect for a fixed
maturity option to which the "current rate to maturity" in (1)(c) would apply,
we will use the rate at the next closest maturity date. If we are no longer
offering new fixed maturity options, the "current rate to maturity" will be
determined in accordance with our procedures then in effect. We reserve the
right to add up to 0.25% to the current rate in (1)(c) above for purposes of
calculating the market value adjustment only.
ABOUT THE SEPARATE ACCOUNT FOR THE FIXED MATURITY OPTIONS
INVESTMENTS. Under New York insurance law, the portion of the separate account
assets equal to the reserves and other contract liabilities relating to the
contracts are not chargeable with liabilities from any other business we may
conduct. We own the assets of the separate account, as well as any favorable
investment performance on those assets. You do not participate in the
performance of the assets held in this separate account. We may, subject to
state law which applies, transfer all assets allocated to the separate account
to our general account. We guarantee all benefits relating to your account value
in the fixed maturity options regardless of whether assets supporting fixed
maturity options are held in a separate account or our general account.
We have no specific formula for establishing the rates to maturity for the fixed
maturity options. We expect the rates to be influenced by, but not necessarily
correspond to, among other things, the yields that we can expect to realize on
the separate account's investments from time to time. Our current plans are to
invest in fixed-income obligations,
<PAGE>
- ----------
36
- --------------------------------------------------------------------------------
including corporate bonds, mortgage-backed and asset-backed securities and
government and agency issues having durations in the aggregate consistent with
those of the fixed maturity options.
Although the above generally describes our plans for investing the assets
supporting our obligations under the fixed maturity options, we are not
obligated to invest those assets according to any particular plan except as we
may be required to by state insurance laws. We will not determine the rates to
maturity we establish by the performance of the nonunitized separate account.
ABOUT OUR GENERAL ACCOUNT
Our general account supports all of our policy and contract guarantees,
including those that apply to the fixed maturity options, as well as our general
obligations. Amounts applied under the life contingent annuity become part of
our general account.
The general account is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations of
all jurisdictions where we are authorized to do business. Because of exemptions
and exclusionary provisions that apply, interests in the general account have
not been registered under the Securities Act of 1933, nor is the general account
an investment company under the Investment Company Act of 1940. However, the
market value adjustment interests under the contracts are registered under the
Securities Act of 1933.
We have been advised that the staff of the SEC has not made a review of the
disclosure that is included in the prospectus for your information that relates
to the general account (other than market value adjustment interests) and the
life contingent annuity. The disclosure, however, may be subject to certain
generally applicable provisions of the federal securities laws relating to the
accuracy and completeness of statements made in prospectuses.
OTHER METHODS OF PAYMENT
WIRE TRANSMITTALS
We accept initial contributions sent by wire to our Processing Office by
agreement with certain broker-dealers. The transmittals must be accompanied by
information we require to allocate your contribution. Wire orders not
accompanied by complete information may be retained as described under "How you
can make your contributions."
Even if we accept the wire order and essential information, a contract generally
will not be issued until we receive and accept a properly completed application.
In certain cases we may issue a contract based on information forwarded
electronically. Where we require a signed application, no financial transactions
will be permitted until we receive the signed application and have issued the
contract.
After your contract has been issued, additional contributions under the life
annuity with a period certain contract may be transmitted by wire.
ABOUT PAYMENTS UNDER PERIOD CERTAIN CONTRACTS
The following example illustrates a ten-year level stream of annual payments,
each in the amount of $10,000, purchased on April 3, 2000 with the first payment
on February 15, 2001. To achieve this result, a single contribution of
$75,697.19 is required, and is allocated among the fixed maturity options as
indicated below.
- --------------------------------------------------------------------------------
FEBRUARY 15TH OF PRICE PER $100 OF ALLOCATION OF
CALENDAR YEAR PAYMENT MATURITY VALUE CONTRIBUTION
- --------------------------------------------------------------------------------
2001 $10,000 $ 96.45 $ 9,644.68
- --------------------------------------------------------------------------------
2002 $10,000 $ 91.55 $ 9,155.18
- --------------------------------------------------------------------------------
2003 $10,000 $ 86.29 $ 8,628.96
- --------------------------------------------------------------------------------
2004 $10,000 $ 81.76 $ 8,175.91
- --------------------------------------------------------------------------------
2005 $10,000 $ 77.17 $ 7,717.40
- --------------------------------------------------------------------------------
2006 $10,000 $ 72.85 $ 7,285.32
- --------------------------------------------------------------------------------
2007 $10,000 $ 68.72 $ 6,871.51
- --------------------------------------------------------------------------------
2008 $10,000 $ 64.63 $ 6,463.00
- --------------------------------------------------------------------------------
2009 $10,000 $ 60.62 $ 6,062.44
- --------------------------------------------------------------------------------
2010 $10,000 $ 56.93 $ 5,692.79
- --------------------------------------------------------------------------------
Total $ 75,697.19
- --------------------------------------------------------------------------------
<PAGE>
- ----------
37
- --------------------------------------------------------------------------------
DATES AND PRICES AT WHICH CONTRACT EVENTS OCCUR
BUSINESS DAY
Our "business day" is any day the New York Stock Exchange is open for trading.
Each business day ends at the time regular trading on the exchange closes (or is
suspended) for the day. Our business day ends at 4:00 p.m., Eastern Time for
purposes of determining the date when contributions are applied and any other
transaction requests are processed. Contributions will be applied and any other
transaction requests will be processed when they are received along with all the
required information unless another date applies as indicated below.
If your contribution or any other transaction request containing all the
required information, reaches us on a non-business day or after 4:00 p.m. on a
business day, we will use the next business day.
CONTRIBUTIONS
o Contributions allocated to the fixed maturity options will receive the rate
to maturity in effect for that fixed maturity option on that business day.
o Contributions allocated to the separate account to provide for payments off
maturity dates will receive the interest rate in effect on that business
day or the same rate as the rate to maturity that applied to the expired
fixed maturity option.
o Contributions allocated to the life contingent annuity will be invested at
the purchase rates in effect on that business day. If you are purchasing
the Income Manager (life with a period certain) option in connection with
your guaranteed minimum income benefit under certain contracts, you should
note that the purchase rates used are more conservative (and therefore your
payments are smaller) than those we use for other Income Manager contracts.
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 our obligations under the contracts, or the distribution of the contracts.
ABOUT OUR INDEPENDENT ACCOUNTANTS
The financial statements of Equitable Life incorporated in this prospectus by
reference to the Annual Report on Form 10-K at December 31, 1999 and 1998, and
for the three years ended December 31, 1999, have been so incorporated in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of said firm as experts in auditing and accounting.
TRANSFERS OF OWNERSHIP, COLLATERAL ASSIGNMENTS, LOANS, AND BORROWING
The contracts may not be assigned except through surrender to us. They may not
be borrowed against or used as collateral for a loan or other obligation.
DISTRIBUTION OF CONTRACTS
Equitable Distributors, Inc. ("EDI") and AXA Advisors, LLC ("AXA Advisors"), the
successor to EQ Financial Consultants, Inc., are the distributors of the
contracts. EDI is a wholly owned subsidiary of Equitable Life, and AXA Advisors
is an affiliate of Equitable Life. EDI and AXA Advisors have responsibility for
sales and marketing functions. EDI and AXA Advisors are registered with the SEC
as broker-dealers and are members of the National Association of Securities
Dealers, Inc. The principal business address of EDI and AXA Advisors is 1290
Avenue of the Americas, New York, New York 10104. Under a distribution agreement
between EDI, Equitable Life, and certain of Equitable Life's separate accounts,
including the separate account that contains the fixed maturity options,
Equitable Life paid EDI distribution fees of $46,957,345 for 1999, $35,452,793
for 1998 and $9,566,343 for 1997, as the distributor of the contracts. Under a
distribution and services agreement between AXA Advisors, Equitable Life and
certain of Equitable Life's
<PAGE>
- ----------
38
- --------------------------------------------------------------------------------
separate accounts, including the separate account that contains the fixed
maturity options, Equitable Life paid EQF $325,380 annually for 1999, 1998 and
1997, as the distributor for certain contracts including these contracts.
The contracts will be sold by registered representatives of EDI and AXA Advisors
as well as by affiliated and unaffiliated broker-dealers with which EDI and/or
AXA Advisors has entered into selling agreements. Broker-dealer sales
compensation will generally not exceed 5% of total contributions made under the
contracts. EDI and AXA Advisors may also receive compensation and reimbursement
for its marketing services under the terms of their distribution agreements with
Equitable Life. Broker-dealers receiving sales compensation will generally pay a
portion of it to their registered representatives as commissions related to
sales of the contracts. The offering of the contracts is intended to be
continuous.
<PAGE>
7
Incorporation of certain documents by reference
- -------
39
- --------------------------------------------------------------------------------
Equitable Life's annual report on form 10-K for the year ended December 31, 1999
is considered to be part of this prospectus because it is incorporated by
reference.
After the date of the prospectus and before we terminate the offering of the
securities under this prospectus, all documents or reports we file with the SEC
under the Securities Exchange Act of 1934 ("Exchange Act") will be considered to
become part of this prospectus because they are incorporated by reference.
Any statement contained in a document that is or becomes part of this
prospectus, will be considered changed or replaced for purposes of this
prospectus if a statement contained in this prospectus changes or is replaced.
Any statement that is considered to be a part of this prospectus because of its
incorporation, will be considered changed or replaced for the purpose of this
prospectus if a statement contained in any other subsequently filed document
that is considered to be part of this prospectus changes or replaces that
statement. After that, only the statement that is changed or replaced will be
considered to be part of this prospectus.
We file our exchange act documents and reports, including our annual and
quarterly reports on form 10-K and form 10-Q, electronically according to EDGAR
under CIK No. 0000727920. The SEC maintains a website that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the SEC. The address of the site is
http://www.sec.gov.
Upon written or oral request, we will provide, free of charge, to each person to
whom this prospectus is delivered a copy of any or all of the documents
considered to be part of this prospectus because they are incorporated herein.
This does not include exhibits not specifically incorporated by reference into
the text of such documents. Requests for documents should be directed to The
Equitable Life Assurance Society of the United States, 1290 Avenue of the
Americas, New York, New York 10104. Attention: Corporate Secretary (telephone:
(212) 554-1234).
<PAGE>
Appendix: Market value adjustment example
- --------
A-1
- --------------------------------------------------------------------------------
The example below shows how the market value adjustment would be determined and
how it would be applied to a withdrawal, assuming that $100,000 was allocated on
February 15, 2001 to a fixed maturity option with a maturity date of February
15, 2010 at a rate to maturity of 7.00% resulting in a maturity value at the
maturity date of $183,846, and further assuming that a withdrawal of $50,000 was
made on February 15, 2005.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
ASSUMED RATE TO MATURITY
ON FEBRUARY 15, 2005
---------------------------
5.00% 9.00%
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
AS OF FEBRUARY 15, 2005 (BEFORE WITHDRAWAL)
- -------------------------------------------------------------------------------------------------
(1) Market adjusted amount $ 144,048 $ 119,487
- -------------------------------------------------------------------------------------------------
(2) Fixed maturity amount $ 131,080 $ 131,080
- -------------------------------------------------------------------------------------------------
(3) Market value adjustment:
(1) - (2) $ 12,968 $ (11,593)
- -------------------------------------------------------------------------------------------------
ON FEBRUARY 15, 2005 (AFTER WITHDRAWAL)
- -------------------------------------------------------------------------------------------------
(4) Portion of the market adjusted amount associated with withdrawal:
(3) x [$50,000/(1)] $ 4,501 $ (4,851)
- -------------------------------------------------------------------------------------------------
(5) Reduction in fixed maturity amount:
[$50,000 - (4)] $ 45,499 $ 54,851
- -------------------------------------------------------------------------------------------------
(6) Fixed maturity amount: (2) - (5) $ 85,581 $ 76,229
- -------------------------------------------------------------------------------------------------
(7) Maturity value $ 120,032 $ 106,915
- -------------------------------------------------------------------------------------------------
(8) Market adjusted amount of (7) $ 94,048 $ 69,487
- -------------------------------------------------------------------------------------------------
</TABLE>
You should note that if a withdrawal is made when rates have increased from
7.00% to 9.00% (right column), a portion of a negative market value adjustment
is realized. On the other hand, if a withdrawal is made when rates have
decreased from 7.00% to 5.00% (left column), a portion of a positive market
value adjustment is realized.
<PAGE>
SUPPLEMENT TO INCOME MANAGER ACCUMULATOR PROSPECTUS DATED MAY 1, 1996; INCOME
MANAGER ROLLOVER IRA PROSPECTUS DATED MAY 1, 1996; INCOME MANAGER ACCUMULATOR
PROSPECTUS DATED OCTOBER 17, 1996; INCOME MANAGER ROLLOVER IRA PROSPECTUS DATED
OCTOBER 17, 1996; INCOME MANAGER ACCUMULATOR PROSPECTUS DATED DECEMBER 31,
1997; INCOME MANAGER ROLLOVER IRA PROSPECTUS DATED DECEMBER 31, 1997; EQUITABLE
ACCUMULATOR (IRA, NQ AND QP) PROSPECTUS DATED MAY 1, 1998 AND TAX SHELTERED
ANNUITY SUPPLEMENT DATED JUNE 18, 1998; EQUITABLE ACCUMULATOR DATED OCTOBER 18,
1999; AND EQUITABLE ACCUMULATOR SELECT PROSPECTUS DATED OCTOBER 18, 1999.
COMBINATION VARIABLE AND FIXED DEFERRED ANNUITY CERTIFICATES
ISSUED BY THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
- --------------------------------------------------------------------------------
This supplement dated May 1, 2000, updates certain information in the following
prospectuses:
Income Manager Accumulator prospectus dated May 1, 1996, as previously
supplemented on May 1, 1997, December 31, 1997, May 1, 1998, January 4, 1999 and
May 1, 1999.
Income Manager Accumulator Rollover IRA prospectus, dated May 1, 1996 as
previously supplemented on May 1, 1997, December 31, 1997, May 1, 1998, January
4, 1999 and May 1, 1999.
Income Manager Accumulator prospectus dated October 17, 1996, as previously
supplemented on May 1, 1997, December 31, 1997, May 1, 1998, January 4, 1999 and
May 1, 1999.
Income Manager Accumulator Rollover IRA prospectus, dated October 17, 1996, as
previously supplemented on May 1, 1997, December 31, 1997, May 1, 1998, January
4, 1999 and May 1, 1999.
Income Manager Accumulator prospectus dated December 31, 1997, as previously
supplemented on May 1, 1998, January 4, 1999 and May 1, 1999.
Income Manager Accumulator Rollover IRA prospectus dated December 31, 1997, as
previously supplemented on May 1, 1998, January 4, 1999 and May 1, 1999.
Equitable Accumulator (IRA, NQ and QP) prospectus dated May 1, 1998, as
previously supplemented on June 18, 1998, January 4, 1999 and May 1, 1999.
Equitable Accumulator prospectus, dated October 18, 1999.
Equitable Accumulator Select prospectus dated October 18, 1999.
You should keep the supplements and the prospectus for future reference. We
have filed with the Securities and Exchange Commission (SEC) our statement of
additional information (SAI) dated May 1, 1999. If you do not presently have a
copy of the prospectus and prior supplements, you may obtain additional copies,
as well as a copy of the SAI, from us, free of charge, by writing to Equitable
Life, P.O. Box 1547, Secaucus, NJ 07096-1547, or calling (800) 789-7771. If you
only need a copy of the SAI, you may mail in the SAI request form located at the
end of this supplement. The SAI has been incorporated by reference into this
supplement.
In this Supplement, we provide information on (1) a new investment fund; (2)
changes in certain management fees and expense limitation agreements; (3)
certain portfolio/adviser name changes and new advisers; (4) telephone and
online access to certain contract transactions; (5) transaction requests that
are related to market timing strategies; (6) revised beneficiary continuation
options; (7) tax updates that may or may not affect your contract; (8) unit
values and number of outstanding units for the investment funds; and (9)
Equitable Life.
The Supplement also contains information that is intended to clarify the
Variable Immediate Annuity payout option that is available through your
contract.
72320/Agency
<PAGE>
- -----
1
- --------------------------------------------------------------------------------
(1) NEW INVESTMENT FUND
The following new Investment Fund is available under your Certificate effective
on or about May 1, 2000.
EQ/ALLIANCE TECHNOLOGY
The new Investment Fund invests in a corresponding new Portfolio of EQ Advisors
Trust. The objectives and Adviser for the Portfolio are shown below:
PORTFOLIO OF EQ ADVISERS TRUST
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- --------------------------------------------------------------------------------------------
<S> <C> <C>
EQ/Alliance Technology Long-term growth of capital Alliance Capital Management L.P.
- --------------------------------------------------------------------------------------------
</TABLE>
See "Update on Management Fees and Expense Limitation Agreements" below,
regarding the management fees for this new portfolio.
(2) UPDATE ON MANAGEMENT FEES AND EXPENSE LIMITATION AGREEMENTS
The following table sets forth the investment management fees payable to
Equitable from each portfolio under the new management agreement, effective on
or about May 1, 2000, which were approved by shareholders. New or revised
expense limitation agreements may also apply (see footnote #7 to the table).
All portfolios may not be available in all annuity products. Please note that
the names of certain portfolios have been changed (a correlating change in the
name of the corresponding investment fund also applies). For more information
on these name changes, see "Portfolio/Adviser name changes and new portfolio
advisers," later in this supplement.
<PAGE>
- -----
2
- --------------------------------------------------------------------------------
EQ ADVISORS TRUST ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
TOTAL
OTHER ANNUAL
EXPENSES EXPENSES
MANAGEMENT (AFTER EXPENSE (AFTER EXPENSE
FEES(5) 12B-1 FEES(6) LIMITATION)(7) LIMITATION)(8)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock(1) 0.60% 0.25% 0.04% 0.89%
Alliance Common Stock 0.46% 0.25% 0.04% 0.75%
Alliance Conservative Investors 0.60% 0.25% 0.07% 0.92%
Alliance Equity Index 0.25% 0.25% 0.05% 0.55%
Alliance Global 0.73% 0.25% 0.09% 1.07%
Alliance Growth & Income 0.59% 0.25% 0.05% 0.89%
Alliance Growth Investors 0.57% 0.25% 0.05% 0.87%
Alliance High Yield 0.60% 0.25% 0.05% 0.90%
Alliance Intermediate Government Securities 0.50% 0.25% 0.07% 0.82%
Alliance International 0.85% 0.25% 0.20% 1.30%
Alliance Money Market 0.34% 0.25% 0.05% 0.64%
EQ/Alliance Premier Growth 0.90% 0.25% 0.00% 1.15%
Alliance Small Cap Growth 0.75% 0.25% 0.07% 1.07%
EQ/Alliance Technology(2) 0.90% 0.25% 0.00% 1.15%
BT Equity 500 Index 0.25% 0.25% 0.10% 0.60%
BT International Equity Index 0.35% 0.25% 0.40% 1.00%
BT Small Company Index 0.25% 0.25% 0.25% 0.75%
Capital Guardian Research 0.65% 0.25% 0.05% 0.95%
Capital Guardian U.S. Equity 0.65% 0.25% 0.05% 0.95%
EQ/Evergreen 0.65% 0.25% 0.05% 0.95%
EQ/Evergreen Foundation 0.60% 0.25% 0.10% 0.95%
MFS Emerging Growth Companies 0.65% 0.25% 0.10% 1.00%
MFS Growth with Income 0.60% 0.25% 0.10% 0.95%
MFS Research 0.65% 0.25% 0.05% 0.95%
Mercury Basic Value Equity(3) 0.60% 0.25% 0.10% 0.95%
Mercury World Strategy(4) 0.70% 0.25% 0.25% 1.20%
Morgan Stanley Emerging Markets Equity 1.15% 0.25% 0.35% 1.75%
EQ/Putnam Balanced 0.60% 0.25% 0.05% 0.90%
EQ/Putnam Growth & Income Value 0.60% 0.25% 0.10% 0.95%
T. Rowe Price Equity Income 0.60% 0.25% 0.10% 0.95%
T. Rowe Price International Stock 0.85% 0.25% 0.15% 1.25%
Warburg Pincus Small Company Value 0.75% 0.25% 0.10% 1.10%
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
Notes:
(1) Formerly named Alliance Aggressive Stock.
(2) May not be available in California.
(3) Formerly named Merrill Lynch Basic Value Equity.
(4) Formerly named Merrill Lynch World Strategy.
(5) The management fees shown reflect revised management fees, effective on
or about May 1, 2000, which were approved by shareholders. The management
fees shown for EQ/Putnam Growth & Income Value do not reflect the waiver
of a portion of the portfolio investment management fees that is
currently in effect. The management fee for the portfolio cannot be
increased without a vote of the portfolio's shareholders.
<PAGE>
- -----
3
- --------------------------------------------------------------------------------
(6) Depending upon your contract, portfolio shares may be subject to fees
imposed under the distribution plan (the "Rule 12b-1 Plan") adopted by EQ
Advisors Trust pursuant to Rule 12b-1 under the Investment Company Act of
1940. The 12b-1 fee will not be increased for the life of the contracts.
If your contract's variable investment option choices invest in portfolio
shares that are not subject to the 12b-1 fees, the "Total annual
expenses" applicable to your contract would be lower than those shown.
Prior to October 18, 1999, the total annual expenses for the Alliance
Small Cap Growth portfolio were limited to 1.20% under an expense
limitation arrangement related to that portfolio's Rule 12b-1 Plan. The
arrangement is no longer in effect. The amounts shown have been restated
to reflect the expenses that would have been incurred in 1999, absent the
expense limitation arrangement.
(7) The amounts shown as "Other Expenses" will fluctuate from year to year
depending on actual expenses. See footnote (8) for any expense limitation
agreements.
On October 18, 1999 the Alliance portfolios (other than EQ/Alliance
Premier Growth and EQ/Alliance Technology) became part of the portfolios
of EQ Advisors Trust. The "Other Expenses" for these portfolios have been
restated to reflect the estimated expenses that would have been incurred
had these portfolios been portfolios of EQ Advisors Trust for the entire
year ended December 31, 1999. The restated expenses reflect an increase of
0.01% for each of these portfolios.
(8) Equitable Life, EQ Advisors Trust's manager, has entered into an expense
limitation agreement with respect to certain portfolios. Under this
agreement, Equitable Life has agreed to waive or limit its fees and assume
other expenses. Under the expense limitation agreement, total annual
operating expenses of certain portfolios (other than interest, taxes,
brokerage commissions, capitalized expenditures and extraordinary
expenses) are limited as a percentage of the average daily net assets of
each of the following portfolios: 1.75% for Morgan Stanley Emerging
Markets Equity; 1.25% for T. Rowe Price International Stock; 1.20% for
Mercury World Strategy; 1.15% for EQ/Alliance Premier Growth and
EQ/Alliance Technology; 1.10% for Warburg Pincus Small Company Value;
1.00% for BT International Equity Index and MFS Emerging Growth
Companies; 0.95% for Capital Guardian U.S. Equity, Capital Guardian
Research, EQ/Evergreen, EQ/Evergreen Foundation, MFS Growth with Income,
MFS Research, Mercury Basic Value Equity, EQ/Putnam Growth & Income Value
and T. Rowe Price Equity Income; 0.90% for EQ/Putnam Balanced; 0.75% for
BT Small Company Index; and 0.60% for BT Equity 500 Index. The expense
limitations for the BT Equity 500 Index, EQ/Putnam Growth & Income Value,
Mercury Basic Value Equity, MFS Growth with Income, MFS Research, MFS
Emerging Growth Companies, T. Rowe Price Equity Income, T. Rowe Price
International Stock and Warburg Pincus Small Company Value portfolios
reflect an increase effective on May 1, 2000. The expense limitation for
the EQ/Evergreen portfolio reflects a decrease effective on May 1, 2000.
Absent the expense limitation, the "Other Expenses" for 1999 on an
annualized basis for each of the portfolios would have been as follows:
1.00% for Morgan Stanley Emerging Markets Equity; 0.30% for T. Rowe Price
International Stock; 0.46% for Mercury World Strategy; 0.23% for
EQ/Alliance Premier Growth; 0.10% for EQ/Alliance Technology; 0.24% for
Warburg Pincus Small Company Value; 0.49% for BT International Equity
Index; 0.17% for MFS Emerging Growth Companies; 0.34% for Capital Guardian
U.S. Equity; 0.47% for Capital Guardian Research; 1.87% for EQ/Evergreen;
1.07% for EQ/Evergreen Foundation; 0.37% for MFS Growth with Income; 0.17%
for MFS Research and Mercury Basic Value Equity; 0.16% for EQ/Putnam
Growth & Income Value; 0.71% for BT Small Company Index; and 0.18% for BT
Equity 500 Index. Initial seed capital was invested on April 30, 1999 for
EQ/Alliance Premier Growth, Capital Guardian U.S. Equity and Capital
Guardian Research portfolios and will be invested on or about May 1, 2000
for the EQ/Alliance Technology portfolio and therefore expenses have been
estimated.
Each portfolio may at a later date make a reimbursement to Equitable Life
for any of the management fees waived or limited and other expenses
assumed and paid by Equitable Life pursuant to the expense limitation
agreement provided that, among other things, such portfolio has reached
sufficient size to permit such reimbursement to be made and provided that
the portfolio's current annual operating expenses do not exceed the
operating expense limit determined for such portfolio. For more
information see the prospectus for EQ Advisors Trust.
<PAGE>
- -----
4
- --------------------------------------------------------------------------------
EXAMPLES
The examples below show the expenses that a hypothetical contract owner would
pay in the situations illustrated. We assume that a $1,000 contribution is
invested in one of the variable investment options listed and a 5% annual
return is earned on the assets in that option.(1) Other than as indicated in
the next sentence, the charges used in the examples are the maximum charges
that might apply to any contract or investment fund to which this supplement
relates (including the maximum charges that would apply to the underlying
portfolio). The annual administrative charge used in the example is based on
the charges that apply to a mix of estimated contract sizes, resulting in an
estimated administrative charge for the purpose of these examples of $3.00 per
$1,000. If your contract does not have an annual administrative charge and/or
has lower charges than used in the examples, then the charges that apply to
your contract would be lower than those shown below.
These examples should not be considered a representation of past or future
expenses for each option. Actual expenses may be greater or less than those
shown. Similarly, the annual rate of return assumed in the examples is not an
estimate or guarantee of future investment performance.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
IF YOU SURRENDER YOUR CONTRACT AT THE END
OF EACH PERIOD SHOWN, THE EXPENSES
WOULD BE:
-------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock $ 100.16 $ 155.59 $ 213.89 $ 388.79
Alliance Common Stock $ 98.69 $ 151.27 $ 206.84 $ 375.43
Alliance Conservative Investors $ 100.58 $ 156.82 $ 215.90 $ 392.58
Alliance Equity Index $ 96.70 $ 145.39 $ 197.20 $ 356.98
Alliance Global $ 102.15 $ 161.43 $ 223.40 $ 406.62
Alliance Growth & Income $ 100.26 $ 155.90 $ 214.39 $ 389.74
Alliance Growth Investors $ 100.05 $ 155.28 $ 213.39 $ 387.85
Alliance High Yield $ 100.26 $ 155.90 $ 214.39 $ 389.74
Alliance Intermediate Government Securities $ 99.53 $ 153.74 $ 210.87 $ 383.09
Alliance International $ 104.56 $ 168.47 $ 234.80 $ 427.74
Alliance Money Market $ 97.54 $ 147.87 $ 201.26 $ 364.80
EQ/Alliance Premier Growth $ 104.03 $ 166.94 $ 232.33 $ 423.19
Alliance Small Cap Growth $ 102.04 $ 161.12 $ 222.90 $ 405.69
EQ/Alliance Technology $ 102.99 $ 163.88 $ 227.38 $ 414.03
BT Equity 500 Index $ 97.23 $ 146.94 $ 199.74 $ 361.87
BT International Equity Index $ 101.41 $ 159.28 $ 219.90 $ 400.10
BT Small Company Index $ 98.80 $ 151.58 $ 207.34 $ 376.39
Capital Guardian Research $ 100.89 $ 157.74 $ 217.40 $ 395.40
Capital Guardian U.S. Equity $ 100.89 $ 157.74 $ 217.40 $ 395.40
EQ/Evergreen $ 100.89 $ 157.74 $ 217.40 $ 395.40
EQ/Evergreen Foundation $ 100.89 $ 157.74 $ 217.40 $ 395.40
MFS Emerging Growth Companies $ 101.41 $ 159.28 $ 219.90 $ 400.10
MFS Growth with Income $ 100.89 $ 157.74 $ 217.40 $ 395.40
MFS Research $ 100.89 $ 157.74 $ 217.40 $ 395.40
Mercury Basic Value Equity $ 100.89 $ 157.74 $ 217.40 $ 395.40
Mercury World Strategy $ 103.51 $ 165.41 $ 229.86 $ 418.62
Morgan Stanley Emerging Markets Equity $ 109.27 $ 182.13 $ 256.78 $ 467.62
EQ/Putnam Balanced $ 100.37 $ 156.21 $ 214.90 $ 390.69
EQ/Putnam Growth & Income Value $ 100.89 $ 157.74 $ 217.40 $ 395.40
T. Rowe Price Equity Income $ 100.89 $ 157.74 $ 217.40 $ 395.40
T. Rowe Price International Stock $ 104.03 $ 166.94 $ 232.33 $ 423.19
Warburg Pincus Small Company Value $ 102.46 $ 162.35 $ 224.89 $ 409.41
- -----------------------------------------------------------------------------------------------
<CAPTION>
- ----------------------------------------------------------------------------------------------
IF YOU DO NOT SURRENDER YOUR CONTRACT AT
THE END OF EACH PERIOD SHOWN, THE
EXPENSES WOULD BE:
------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock $ 30.16 $ 105.59 $ 183.89 $ 388.79
Alliance Common Stock $ 28.69 $ 101.27 $ 176.84 $ 375.43
Alliance Conservative Investors $ 30.58 $ 106.82 $ 185.90 $ 392.58
Alliance Equity Index $ 26.70 $ 95.39 $ 167.20 $ 356.98
Alliance Global $ 32.15 $ 111.43 $ 193.40 $ 406.62
Alliance Growth & Income $ 30.26 $ 105.90 $ 184.39 $ 389.74
Alliance Growth Investors $ 30.05 $ 105.28 $ 183.39 $ 387.85
Alliance High Yield $ 30.26 $ 105.90 $ 184.39 $ 389.74
Alliance Intermediate Government Securities $ 29.53 $ 103.74 $ 180.87 $ 383.09
Alliance International $ 34.56 $ 118.47 $ 204.80 $ 427.74
Alliance Money Market $ 27.54 $ 97.87 $ 171.26 $ 364.80
EQ/Alliance Premier Growth $ 34.03 $ 116.94 $ 202.33 $ 423.19
Alliance Small Cap Growth $ 32.04 $ 111.12 $ 192.90 $ 405.69
EQ/Alliance Technology $ 32.99 $ 113.88 $ 197.38 $ 414.03
BT Equity 500 Index $ 27.23 $ 96.94 $ 169.74 $ 361.87
BT International Equity Index $ 31.41 $ 109.28 $ 189.90 $ 400.10
BT Small Company Index $ 28.80 $ 101.58 $ 177.34 $ 376.39
Capital Guardian Research $ 30.89 $ 107.74 $ 187.40 $ 395.40
Capital Guardian U.S. Equity $ 30.89 $ 107.74 $ 187.40 $ 395.40
EQ/Evergreen $ 30.89 $ 107.74 $ 187.40 $ 395.40
EQ/Evergreen Foundation $ 30.89 $ 107.74 $ 187.40 $ 395.40
MFS Emerging Growth Companies $ 31.41 $ 109.28 $ 189.90 $ 400.10
MFS Growth with Income $ 30.89 $ 107.74 $ 187.40 $ 395.40
MFS Research $ 30.89 $ 107.74 $ 187.40 $ 395.40
Mercury Basic Value Equity $ 30.89 $ 107.74 $ 187.40 $ 395.40
Mercury World Strategy $ 33.51 $ 115.41 $ 199.86 $ 418.62
Morgan Stanley Emerging Markets Equity $ 39.27 $ 132.13 $ 226.78 $ 467.62
EQ/Putnam Balanced $ 30.37 $ 106.21 $ 184.90 $ 390.69
EQ/Putnam Growth & Income Value $ 30.89 $ 107.74 $ 187.40 $ 395.40
T. Rowe Price Equity Income $ 30.89 $ 107.74 $ 187.40 $ 395.40
T. Rowe Price International Stock $ 34.03 $ 116.94 $ 202.33 $ 423.19
Warburg Pincus Small Company Value $ 32.46 $ 112.35 $ 194.89 $ 409.41
- ----------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
5
- --------------------------------------------------------------------------------
EXPENSES REFLECTING APO PLUS ELECTION (WHICH MAY NOT BE AVAILABLE IN YOUR
CONTRACT)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
IF YOU SURRENDER YOUR CONTRACT AT THE END
OF EACH PERIOD SHOWN, THE EXPENSES
WOULD BE:
-------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Common Stock $95.82 $128.75 $164.50 $286.22
Alliance Equity Index $93.63 $122.76 $154.52 $266.36
- -----------------------------------------------------------------------------------------------
<CAPTION>
- ----------------------------------------------------------------------------------------------
IF YOU DO NOT SURRENDER YOUR CONTRACT AT
THE END OF EACH PERIOD SHOWN, THE
EXPENSES WOULD BE:
------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Common Stock $25.82 $78.75 $134.50 $286.22
Alliance Equity Index $23.63 $72.76 $124.52 $266.36
- ----------------------------------------------------------------------------------------------
</TABLE>
- --------------
(1) The amount accumulated from the $1,000 contribution could not be paid in
the form of an annuity payout option at the end of any of the periods
shown in the examples. This is because if the amount applied to purchase
an annuity payout option is less than $2,000, or the initial payment is
less than $20, we may pay the amount to you in a single sum instead of
payments under an annuity payout option. See "Accessing your money."
(3) PORTFOLIO/ADVISER NAME CHANGES AND NEW PORTFOLIO ADVISERS
Effective on or about May 1, 2000, the structure of Alliance Aggressive Stock
is multi-advisor. We believe this will potentially leverage the investment
talents and expertise of recognized money managers within a single portfolio.
As a result, the name of this portfolio (and correlating investment fund) has
been changed. Please note the following new information:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
FORMER NAME NEW NAME SUB-ADVISORS
- --------------------------------------------------------------------------------------
<S> <C> <C>
Alliance Aggressive EQ/Aggressive Stock Alliance Capital
Stock Massachusetts Financial Service (MFS)
- --------------------------------------------------------------------------------------
</TABLE>
The investment objective and policy for these funds remain the same.
The following portfolio/correlating investment fund name changes are also
effective on or about May 1, 2000:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
FORMER NAME NEW NAME
- ----------------------------------------------------------------------------
<S> <C>
Merrill Lynch Basic Value Equity Mercury Basic Value Equity
- ----------------------------------------------------------------------------
Merrill Lynch World Strategy Mercury World Strategy
- ----------------------------------------------------------------------------
</TABLE>
Merrill Lynch Asset Management, the adviser to the Mercury portfolios, has
changed its name to Mercury Asset Management US.
(4) TELEPHONE AND ONLINE TRANSACTIONS
For your convenience, the following services are available through our
telephone operated program support ("TOPS") and/or EQAccess systems. All
services may not apply to your particular contract.
TOPS is designed to provide you with up-to-date information via touch-tone
telephone. EQAccess is designed to provide this information through the
Internet. You can obtain information on:
o your current account value;
o your current allocation percentages (anticipated to be available through
EQAccess by the end of 2000);
o the number of units you have in the variable investment options;
<PAGE>
- -----
6
- --------------------------------------------------------------------------------
o rates to maturity for the fixed maturity options;
o the daily unit values for the variable investment options; and
o performance information regarding the variable investment options (not
available through TOPS).
You can also:
o change your allocation percentages and/or transfer among the investment
options (anticipated to be available through EQAccess by the end of 2000);
o change your TOPS personal identification number (PIN) (not available
through EQAccess); and
o change your EQAccess password (not available through TOPS).
TOPS and EQAccess are normally available seven days a week, 24 hours a day. You
may use TOPS by calling toll free 1-888-909-7770. You may use EQAccess by
visiting our Web site at http://www.equitable.com and clicking on EQAccess. Of
course, for reasons beyond our control, these services may sometimes be
unavailable.
We have established procedures to reasonably confirm that the instructions
communicated by telephone or Internet are genuine. For example, we will require
certain personal identification information before we will act on telephone or
Internet instructions and we will provide written confirmation of your
transfers. If we do not employ reasonable procedures to confirm the genuineness
of telephone or Internet instructions, we may be liable for any losses arising
out of any act or omission that constitutes negligence, lack of good faith, or
willful misconduct. In light of our procedures, we will not be liable for
following telephone or Internet instructions we reasonably believe to be
genuine.
We reserve the right to limit access to these services if we determine that you
are engaged in a market timing strategy. For more information about market
timing restrictions, see "Market timing-related transaction requests" below.
(5) MARKET TIMING-RELATED TRANSACTION REQUESTS
You should note that the product is not designed for professional "market
timing" organizations, or other organizations or individuals engaging in a
market timing strategy, making programmed transfers, frequent transfers or
transfers that are large in relation to the total assets of the underlying
mutual fund portfolio. Market timing strategies are disruptive to the
underlying mutual fund portfolios in which the variable investment options
invest. If we determine that your transfer patterns among the variable
investment options reflect a market timing strategy, we reserve the right to
take action including, but not limited to: restricting the availability of
transfers through telephone requests, facsimile transmissions, automated
telephone services, Internet services or any electronic transfer services. We
may also refuse to act on transfer instructions of an agent acting under a
power of attorney who is acting on behalf of more than one owner.
(6) BENEFICIARY CONTINUATION OPTION
APPLICABLE TO IRA CONTRACTS
Upon your death under an IRA contract, a beneficiary may generally elect to
keep the contract in your name and receive distributions under the contract
instead of receiving the death benefit in a single sum. In order to elect this
option, the beneficiary must be an individual. Certain trusts with only
individual beneficiaries will be treated as individuals. This election must be
made within 60 days following the date we receive proof of your death. We will
increase the account value to equal
<PAGE>
- -----
7
- --------------------------------------------------------------------------------
the death benefit if the death benefit is greater than the account value. Except
as noted in the next sentence, the beneficiary continuation option will be
available on or after May 1, 2000 depending on when we receive regulatory
clearance in your state. For Rollover IRA and Flexible Premium IRA contracts, a
similar beneficiary continuation option will be available until the beneficiary
continuation option described in this prospectus is available. Please contact
our processing office for further information.
Under the beneficiary continuation option:
o The contract continues in your name for the benefit of your beneficiary.
o The beneficiary may make transfers among the investment options but no
additional contributions will be permitted.
o The guaranteed minimum income benefit, if applicable, and the death
benefit (including the guaranteed minimum death benefit, if applicable)
provisions will no longer be in effect.
o The beneficiary may choose at any time to withdraw all or a portion of the
account value and no withdrawal charges will apply. Any partial withdrawal
must be at least $300.
o Upon the death of the beneficiary, any remaining death benefit will be
paid in a lump sum to the person the beneficiary chooses.
For Traditional IRA contracts only, if you die AFTER the "Required Beginning
Date" for required minimum distributions (see "Tax information"), the contract
will continue if:
(a) You were receiving minimum distribution withdrawals from this contract;
and
(b) The pattern of minimum distribution withdrawals you chose was based in
part on the life of the designated beneficiary.
The withdrawals will then continue to be paid to the beneficiary on the same
basis as you chose before your death. We will be able to tell your beneficiary
whether this option is available. You should contact our processing office for
further information.
For all of the above contracts, if you die BEFORE the Required Beginning Date
(and, for a traditional IRA, therefore you were not taking minimum distribution
withdrawals under the contract) the beneficiary may choose one of the following
two beneficiary continuation options:
1. Payments over life expectancy period. The beneficiary can receive annual
minimum distributions based on the beneficiary's life expectancy. If there is
more than one beneficiary, the shortest life expectancy is used. These minimum
distributions must begin by December 31st of the calendar year following the
year of your death. In some situations, a spouse beneficiary who elects to
continue the contract in your name under the beneficiary continuation option
instead of electing successor owner/annuitant status may also choose to delay
beginning the minimum distributions until the December 31st of the calendar
year in which you would have turned age 70 1/2.
2. Five Year Rule. The beneficiary can take withdrawals as desired. If the
beneficiary does not withdraw the entire account value by the December 31st of
the fifth calendar year following your death, we will pay any amounts remaining
under the contract to the beneficiary by that date. If you have more than one
beneficiary, and one of them elects this option, then all of your beneficiaries
will receive this option.
<PAGE>
- -----
8
- --------------------------------------------------------------------------------
(7) TAX UPDATES APPLICABLE TO NONQUALIFIED CONTRACTS
A recent case permitted an owner to direct the proceeds of a partial withdrawal
from one nonqualified deferred annuity contract to a different insurer to
purchase a new nonqualified deferred annuity contract on a tax-deferred basis.
Special forms, agreement between the carriers, and provision of cost basis
information may be required to process this type of an exchange.
OTHER INFORMATION
Please note that the Treasury Department has the authority to issue guidelines
prescribing the circumstances in which your ability to direct your investment
to particular portfolios within a separate account may cause you, rather than
the insurance company, to be treated as the owner of the portfolio shares
attributable to your nonqualified annuity contract. In that case, income and
gains attributable to such portfolio shares would be included in your gross
income for federal income tax purposes. Under current rules, however, we
believe that Equitable Life, and not the owner of a nonqualified annuity
contract, would be considered the owner of the portfolio shares.
(8) UNIT VALUES AND THE NUMBER OF UNITS OUTSTANDING FOR EACH INVESTMENT FUND
The following table sets forth the unit values and number of units outstanding
at the year end for each variable investment option, except EQ/Alliance
Technology which is being offered for the first time on May 1, 2000. The table
shows unit values based on the highest charges that would apply to any contract
or investment fund to which this supplement relates including the highest
charges that would apply to the underlying portfolios. Therefore, if your
contract has lower charges than those assumed, your unit values will be higher
than those shown. The table also shows the total number of units outstanding
for all contracts to which this supplement relates. All variable investment
options may not be available in all products. Please refer to your annual
statement for the unit values applicable to your contract.
<PAGE>
- -----
9
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------
YEAR
ENDED
DEC. 31, 1999
- ---------------------------------------------------------------
<S> <C>
EQ/AGGRESSIVE STOCK
- ---------------------------------------------------------------
Unit value $ 78.30
- ---------------------------------------------------------------
Number of units outstanding (000s) 1,984
- ---------------------------------------------------------------
ALLIANCE COMMON STOCK
- ---------------------------------------------------------------
Unit value $275.01
- ---------------------------------------------------------------
Number of units outstanding (000s) 3,559
- ---------------------------------------------------------------
ALLIANCE CONSERVATIVE INVESTORS
- ---------------------------------------------------------------
Unit value $ 22.38
- ---------------------------------------------------------------
Number of units outstanding (000s) 4,272
- ---------------------------------------------------------------
ALLIANCE EQUITY INDEX
- ---------------------------------------------------------------
Unit value $ 31.67
- ---------------------------------------------------------------
Number of units outstanding (000s) 27
- ---------------------------------------------------------------
ALLIANCE GLOBAL
- ---------------------------------------------------------------
Unit value $ 43.04
- ---------------------------------------------------------------
Number of units outstanding (000s) 3,077
- ---------------------------------------------------------------
ALLIANCE GROWTH & INCOME
- ---------------------------------------------------------------
Unit value $ 24.13
- ---------------------------------------------------------------
Number of units outstanding (000s) 13,474
- ---------------------------------------------------------------
ALLIANCE GROWTH INVESTORS
- ---------------------------------------------------------------
Unit value $ 42.29
- ---------------------------------------------------------------
Number of units outstanding (000s) 5,355
- ---------------------------------------------------------------
ALLIANCE HIGH YIELD
- ---------------------------------------------------------------
Unit value $ 25.73
- ---------------------------------------------------------------
Number of units outstanding (000s) 2,736
- ---------------------------------------------------------------
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES
- ---------------------------------------------------------------
Unit value $ 14.70
- ---------------------------------------------------------------
Number of units outstanding (000s) 3,439
- ---------------------------------------------------------------
ALLIANCE INTERNATIONAL
- ---------------------------------------------------------------
Unit value $ 16.61
- ---------------------------------------------------------------
Number of units outstanding (000s) 1,898
- ---------------------------------------------------------------
ALLIANCE MONEY MARKET
- ---------------------------------------------------------------
Unit value $ 25.55
- ---------------------------------------------------------------
Number of units outstanding (000s) 6,544
- ---------------------------------------------------------------
EQ/ALLIANCE PREMIER GROWTH
- ---------------------------------------------------------------
Unit value $ 11.77
- ---------------------------------------------------------------
Number of units outstanding (000s) 9,209
- ---------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH
- ---------------------------------------------------------------
Unit value $ 14.78
- ---------------------------------------------------------------
Number of units outstanding (000s) 3,248
- ---------------------------------------------------------------
</TABLE>
<PAGE>
- -----
10
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------
YEAR
ENDED
DEC. 31, 1999
- --------------------------------------------------------
<S> <C>
BT EQUITY 500 INDEX
- --------------------------------------------------------
Unit value $ 14.58
- --------------------------------------------------------
Number of units outstanding (000s) 12,103
- --------------------------------------------------------
BT INTERNATIONAL EQUITY INDEX
- --------------------------------------------------------
Unit value $ 14.82
- --------------------------------------------------------
Number of units outstanding (000s) 1,060
- --------------------------------------------------------
BT SMALL COMPANY INDEX
- --------------------------------------------------------
Unit value $ 11.42
- --------------------------------------------------------
Number of units outstanding (000s) 1,113
- --------------------------------------------------------
CAPITAL GUARDIAN RESEARCH
- --------------------------------------------------------
Unit value $ 10.60
- --------------------------------------------------------
Number of units outstanding (000s) 104
- --------------------------------------------------------
CAPITAL GUARDIAN U.S. EQUITY
- --------------------------------------------------------
Unit value $ 10.26
- --------------------------------------------------------
Number of units outstanding (000s) 166
- --------------------------------------------------------
EQ/EVERGREEN
- --------------------------------------------------------
Unit value $ 10.80
- --------------------------------------------------------
Number of units outstanding (000s) 190
- --------------------------------------------------------
EQ/EVERGREEN FOUNDATION
- --------------------------------------------------------
Unit value $ 10.56
- --------------------------------------------------------
Number of units outstanding (000s) 209
- --------------------------------------------------------
MFS EMERGING GROWTH COMPANIES
- --------------------------------------------------------
Unit value $ 27.40
- --------------------------------------------------------
Number of units outstanding (000s) 9,926
- --------------------------------------------------------
MFS GROWTH WITH INCOME
- --------------------------------------------------------
Unit value $ 10.70
- --------------------------------------------------------
Number of units outstanding (000s) 726
- --------------------------------------------------------
MFS RESEARCH
- --------------------------------------------------------
Unit value $ 16.99
- --------------------------------------------------------
Number of units outstanding (000s) 5,474
- --------------------------------------------------------
MERCURY BASIC VALUE EQUITY
- --------------------------------------------------------
Unit value $ 14.88
- --------------------------------------------------------
Number of units outstanding (000s) 4,892
- --------------------------------------------------------
MERCURY WORLD STRATEGY
- --------------------------------------------------------
Unit value $ 13.00
- --------------------------------------------------------
Number of units outstanding (000s) 627
- --------------------------------------------------------
</TABLE>
<PAGE>
- -----
11
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------
YEAR
ENDED
DEC. 31, 1999
- ------------------------------------------------------------
<S> <C>
MORGAN STANLEY EMERGING MARKETS EQUITY
- ------------------------------------------------------------
Unit value $ 10.97
- ------------------------------------------------------------
Number of units outstanding (000s) 2,188
- ------------------------------------------------------------
EQ/PUTNAM BALANCED
- ------------------------------------------------------------
Unit value $ 12.27
- ------------------------------------------------------------
Number of units outstanding (000s) 4,222
- ------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME VALUE
- ------------------------------------------------------------
Unit value $ 12.39
- ------------------------------------------------------------
Number of units outstanding (000s) 4,268
- ------------------------------------------------------------
T. ROWE PRICE EQUITY INCOME
- ------------------------------------------------------------
Unit value $ 13.21
- ------------------------------------------------------------
Number of units outstanding (000s) 5,083
- ------------------------------------------------------------
T. ROWE PRICE INTERNATIONAL STOCK
- ------------------------------------------------------------
Unit value $ 14.15
- ------------------------------------------------------------
Number of units outstanding (000s) 3,348
- ------------------------------------------------------------
WARBURG PINCUS SMALL COMPANY VALUE
- ------------------------------------------------------------
Unit value $ 10.45
- ------------------------------------------------------------
Number of units outstanding (000s) 3,250
- ------------------------------------------------------------
</TABLE>
(9) UPDATED INFORMATION ON EQUITABLE LIFE
We are The Equitable Life Assurance Society of the United States ("Equitable
Life"), a New York stock life insurance corporation. We have been doing business
since 1859. Equitable Life is a subsidiary of AXA Financial, Inc. (previously,
The Equitable Companies Incorporated). The majority shareholder of AXA
Financial, Inc. is AXA, a French holding company for an international group of
insurance and related financial services companies. As a majority shareholder,
and under its other arrangements with Equitable Life and Equitable Life's
parent, AXA exercises significant influence over the operations and capital
structure of Equitable Life and its parent. No company other than Equitable
Life, however, has any legal responsibility to pay amounts that Equitable Life
owes under the contract.
AXA Financial, Inc. and its consolidated subsidiaries managed approximately
$462.7 billion in assets as of December 31, 1999. For over 100 years Equitable
Life has been among the largest insurance companies in the United States. We are
licensed to sell life insurance and annuities in all fifty states, the District
of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our home office is
located at 1290 Avenue of the Americas, New York, N.Y. 10104.
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION
The following information is intended to clarify the Variable Immediate Annuity
payout options that may be available through your contract.
<PAGE>
- -----
12
- --------------------------------------------------------------------------------
YOUR ANNUITY PAYOUT OPTIONS
You can choose from among the following Variable Immediate Annuity payout
options listed below. Restrictions may apply, depending on the type of contract
you own or the annuitant's age at contract issue.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
<S> <C>
Variable Immediate Annuity payout options Life annuity (not available in New York)
Life annuity with period certain
- -----------------------------------------------------------------------------------------
</TABLE>
Life annuity: An annuity that guarantees payments for the rest of the
annuitant's life. Payments end with the last monthly payment before the
annuitant's death. Because there is no continuation of benefits following the
annuitant's death with this payout option, it provides the highest monthly
payment of any of the life annuity options, so long as the annuitant is living.
Life annuity with period certain: An annuity that guarantees payments for the
rest of the annuitant's life. If the annuitant dies before the end of a selected
period of time ("period certain"), payments continue to the beneficiary for the
balance of the period certain. The period certain cannot extend beyond the
annuitant's life expectancy. A life annuity with a period certain is the form of
annuity under the contract that you will receive if you do not elect a different
payout option. In this case, the period certain will be based on the annuitant's
age and will not exceed 10 years.
The life annuity and life annuity with period certain, are available on a single
life or joint and survivor life basis. The joint and survivor life annuity
guarantees payments for the rest of the annuitant's life and, after the
annuitant's death, payments continue to the survivor. We may offer other payout
options not outlined here. Your financial professional can provide details.
Variable Immediate Annuities are described in a separate prospectus that is
available from your financial professional. Before you select a Variable
Immediate Annuity payout option, you should read the prospectus which contains
important information that you should know.
Variables annuities may be funded through your choice of available variable
investment options investing in portfolios of EQ Advisors Trust. The contract
also offers a fixed annuity option that can be elected in combination with the
variable annuity payout options. The amount of each variable annuity payment
will fluctuate, depending upon the performance of the variable investment
options, and whether the actual rate of investment return is higher or lower
than an assumed base rate.
The amount applied to purchase a Variable Immediate Annuity payout option
varies, depending on the payout option that you choose, and the timing of your
purchase as it relates to any applicable withdrawal charges or market value
adjustments. If applicable to your contract, amounts in a fixed maturity option
are used to purchase any annuity payout option, prior to the maturity date, a
market value adjustment will apply. No withdrawal charge is imposed if you
select a life annuity or life annuity with period certain.
<PAGE>
SUPPLEMENT TO EQUITABLE ACCUMULATOR (IRA, NQ, QP) PROSPECTUS DATED MAY 1, 1998
AND TAX SHELTERED ANNUITY SUPPLEMENT DATED JUNE 18, 1998 AND EQUITABLE
ACCUMULATOR PROSPECTUS DATED OCTOBER 18, 1999.
COMBINATION VARIABLE AND FIXED DEFERRED ANNUITY CERTIFICATES ISSUED BY THE
EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
- --------------------------------------------------------------------------------
This supplement dated May 1, 2000, updates certain information in the following
prospectuses:
Equitable Accumulator (IRA, NQ and QP) prospectus, dated May 1, 1998, as
previously supplemented on June 18, 1998, January 4, 1999 and May 1, 1999.
Equitable Accumulator prospectus, dated October 18, 1999.
You should keep the supplements and the prospectus for future reference. We have
filed with the Securities and Exchange Commission (SEC) our statement of
additional information (SAI) dated May 1, 1999. If you do not presently have a
copy of the prospectus and prior supplements, you may obtain additional copies,
as well as a copy of the SAI, from us, free of charge, by writing to Equitable
Life, P.O. Box 1547, Secaucus, NJ 07096-1547, or calling (800) 789-7771. If you
only need a copy of the SAI, you may mail in the SAI request form located at the
end of this supplement. The SAI has been incorporated by reference into this
supplement.
In this Supplement, we provide information on (1) a new investment fund; (2)
changes in certain management fees and expense limitation agreements; (3)
certain portfolio/adviser name changes and new advisers; (4) telephone and
online access to certain contract transactions; (5) transaction requests that
are related to market timing strategies; (6) revised beneficiary continuation
options; (7) tax updates that may or may not affect your contract; (8) unit
values and number of outstanding units for the investment funds; and (9)
Equitable Life.
The supplement also contains information that is intended to clarify the
Variable Immediate Annuity payout option that is available through your
contract.
72279/ML
<PAGE>
- --------
1
- --------------------------------------------------------------------------------
(1) NEW INVESTMENT FUND
The following new Investment Fund is available under your Certificate effective
on or about May 1, 2000.
EQ/ALLIANCE TECHNOLOGY
The new Investment Fund invests in a corresponding new Portfolio of EQ Advisors
Trust. The objectives and Adviser for the Portfolio are shown below:
PORTFOLIO OF EQ ADVISERS TRUST
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- --------------------------------------------------------------------------------------------
<S> <C> <C>
EQ/ALLIANCE TECHNOLOGY LONG-TERM GROWTH OF CAPITAL ALLIANCE CAPITAL MANAGEMENT L.P.
- --------------------------------------------------------------------------------------------
</TABLE>
See "Update on Management Fees and Expense Limitation Agreements" below,
regarding the management fees for this new portfolio.
(2) UPDATE ON MANAGEMENT FEES AND EXPENSE LIMITATION AGREEMENTS
The following table sets forth the investment management fees payable to
Equitable from each portfolio under the new management agreement, effective on
or about May 1, 2000, which were approved by shareholders. New or revised
expense limitation agreements may also apply (see footnote #7 to the table). All
portfolios may not be available in all annuity products. Please note that the
names of certain portfolios have been changed (a correlating change in the name
of the corresponding investment fund also applies). For more information on
these name changes, see "Portfolio/Adviser name changes and new portfolio
advisers," later in this supplement.
<PAGE>
- -----
2
- --------------------------------------------------------------------------------
EQ ADVISORS TRUST ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
TOTAL
OTHER ANNUAL
EXPENSES EXPENSES
MANAGEMENT (AFTER EXPENSE (AFTER EXPENSE
FEES(6) 12B-1 FEES(7) LIMITATION)(8) LIMITATION)(9)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock(1) 0.60% 0.25% 0.04% 0.89%
Alliance Common Stock 0.46% 0.25% 0.04% 0.75%
Alliance Global 0.73% 0.25% 0.09% 1.07%
Alliance Growth Investors 0.57% 0.25% 0.05% 0.87%
Alliance High Yield 0.60% 0.25% 0.05% 0.90%
Alliance Money Market 0.34% 0.25% 0.05% 0.64%
EQ/Alliance Premier Growth 0.90% 0.25% 0.00% 1.15%
Alliance Small Cap Growth 0.75% 0.25% 0.07% 1.07%
EQ/Alliance Technology(2) 0.90% 0.25% 0.00% 1.15%
BT Equity 500 Index 0.25% 0.25% 0.10% 0.60%
BT International Equity Index 0.35% 0.25% 0.40% 1.00%
BT Small Company Index 0.25% 0.25% 0.25% 0.75%
Capital Guardian International 0.85% 0.25% 0.10% 1.20%
Capital Guardian Research 0.65% 0.25% 0.05% 0.95%
Capital Guardian U.S. Equity 0.65% 0.25% 0.05% 0.95%
EQ/Evergreen 0.65% 0.25% 0.05% 0.95%
EQ/Evergreen Foundation 0.60% 0.25% 0.10% 0.95%
J.P. Morgan Core Bond(3) 0.45% 0.25% 0.10% 0.80%
Lazard Large Cap Value 0.65% 0.25% 0.05% 0.95%
Lazard Small Cap Value 0.75% 0.25% 0.10% 1.10%
MFS Emerging Growth Companies 0.65% 0.25% 0.10% 1.00%
MFS Growth with Income 0.60% 0.25% 0.10% 0.95%
MFS Research 0.65% 0.25% 0.05% 0.95%
Mercury Basic Value Equity(4) 0.60% 0.25% 0.10% 0.95%
Mercury World Strategy(5) 0.70% 0.25% 0.25% 1.20%
Morgan Stanley Emerging Markets Equity 1.15% 0.25% 0.35% 1.75%
EQ/Putnam Growth & Income Value 0.60% 0.25% 0.10% 0.95%
EQ/Putnam International Equity 0.85% 0.25% 0.15% 1.25%
EQ/Putnam Investors Growth 0.65% 0.25% 0.05% 0.95%
</TABLE>
- ----------
Notes:
(1) Formerly named Alliance Aggressive Stock.
(2) May not be available in California.
(3) Formerly named JPM Core Bond.
(4) Formerly named Merrill Lynch Basic Value Equity.
(5) Formerly named Merrill Lynch World Strategy.
(6) The management fees shown reflect revised management fees, effective on or
about May 1, 2000 which were approved by shareholders. The management fees
shown for EQ/Putnam Growth & Income Value and Lazard Large Cap Value do
not reflect the waiver of a portion of each portfolio's investment
management fees that is currently in effect. The management fee for each
portfolio cannot be increased without a vote of each portfolio's
shareholders.
(7) Depending upon your contract, portfolio shares may be subject to fees
imposed under the distribution plan (the "Rule 12b-1 Plan") adopted by EQ
Advisors Trust pursuant to Rule 12b-1 under the Investment Company Act of
1940. The
<PAGE>
- -----
3
- --------------------------------------------------------------------------------
12b-1 fee will not be increased for the life of the contracts. If your
contract's variable investment option choices invest in portfolio shares
that are not subject to the 12b-1 fees, the "Total annual expenses"
applicable to your contract would be lower than those shown. Prior to
October 18, 1999, the total annual expenses for the Alliance Small Cap
Growth portfolio were limited to 1.20% under an expense limitation
arrangement related to that portfolio's Rule 12b-1 Plan. The arrangement
is no longer in effect. The amounts shown have been restated to reflect
the expenses that would have been incurred in 1999, absent the expense
limitation arrangement.
(8) The amounts shown as "Other Expenses" will fluctuate from year to year
depending on actual expenses. See footnote (9) for any expense limitation
agreements.
On October 18, 1999 the Alliance portfolios (other than EQ/Alliance
Premier Growth and EQ/Alliance Technology) became part of the portfolios
of EQ Advisors Trust. The "Other Expenses" for these portfolios have been
restated to reflect the estimated expenses that would have been incurred
had these portfolios been portfolios of EQ Advisors Trust for the entire
year ended December 31, 1999. The restated expenses reflect an increase of
0.01% for each of these portfolios.
(9) Equitable Life, EQ Advisors Trust's manager, has entered into an expense
limitation agreement with respect to certain portfolios. Under this
agreement Equitable Life has agreed to waive or limit its fees and assume
other expenses. Under the expense limitation agreement, total annual
operating expenses of certain portfolios (other than interest, taxes,
brokerage commissions, capitalized expenditures and extraordinary
expenses) are limited as a percentage of the average daily net assets of
each of the following portfolios: 1.75% for Morgan Stanley Emerging
Markets Equity; 1.25% for EQ/Putnam International Equity; 1.20% for
Capital Guardian International and Mercury World Strategy; 1.15% for
EQ/Alliance Premier Growth and EQ/Alliance Technology; 1.10% for Lazard
Small Cap Value; 1.00% for BT International Equity Index and MFS Emerging
Growth Companies; 0.95% for Capital Guardian U.S. Equity, Capital
Guardian Research, EQ/Evergreen, EQ/Evergreen Foundation, Lazard Large
Cap Value, MFS Growth with Income, MFS Research, Mercury Basic Value
Equity, EQ/Putnam Growth & Income Value and EQ/Putnam Investors Growth;
0.80% for J.P. Morgan Core Bond; 0.75% for BT Small Company Index; and
0.60% for BT Equity 500 Index. The expense limitations for the BT Equity
500 Index, EQ/Putnam Growth & Income Value, EQ/Putnam International
Equity, Mercury Basic Value Equity, MFS Growth with Income, MFS Research
and MFS Emerging Growth Companies portfolios reflect an increase
effective on May 1, 2000. The expense limitation for the EQ/Evergreen
and Lazard Small Cap Value portfolios reflect a decrease effective on
May 1, 2000.
Absent the expense limitation, the "Other Expenses" for 1999 on an
annualized basis for each of the portfolios would have been as follows:
1.00% for Morgan Stanley Emerging Markets Equity; 0.32% for EQ/Putnam
International Equity; 0.66% for Capital Guardian International; 0.46% for
Mercury World Strategy; 0.23% for EQ/Alliance Premier Growth; 0.10% for
EQ/Alliance Technology; 0.26% for Lazard Small Cap Value; 0.49% for BT
International Equity Index; 0.17% for MFS Emerging Growth Companies; 0.34%
for Capital Guardian U.S. Equity; 0.47% for Capital Guardian Research;
1.87% for EQ/Evergreen; 1.07% for EQ/Evergreen Foundation; 0.21% for
Lazard Large Cap Value; 0.37% for MFS Growth with Income; 0.17% for MFS
Research and Mercury Basic Value Equity; 0.16% for EQ/Putnam Growth &
Income Value; 0.19% for EQ/Putnam Investors Growth; 0.20% for J.P. Morgan
Core Bond; 0.71% for BT Small Company Index; and 0.18% for BT Equity 500
Index. Initial seed capital was invested on April 30, 1999 for EQ/Alliance
Premier Growth, Capital Guardian U.S. Equity, Capital Guardian Research,
and Capital Guardian International portfolios and will be invested on or
about May 1, 2000 for the EQ/Alliance Technology portfolio and therefore
expenses have been estimated.
Each portfolio may at a later date make a reimbursement to Equitable Life
for any of the management fees waived or limited and other expenses
assumed and paid by Equitable Life pursuant to the expense limitation
agreement provided that, among other things, such portfolio has reached
sufficient size to permit such reimbursement to be made and provided that
the portfolio's current annual operating expenses do not exceed the
operating expense limit determined for such portfolio. For more
information see the prospectus for EQ Advisors Trust.
<PAGE>
- -----
4
- --------------------------------------------------------------------------------
EXAMPLES
The examples below show the expenses that a hypothetical contract owner would
pay in the situations illustrated. We assume that a $1,000 contribution is
invested in one of the variable investment options listed and a 5% annual return
is earned on the assets in that option.(1) Other than as indicated in the next
sentence, the charges used in the examples are the maximum, charges that might
apply to any contract or investment fund to which this supplement relates
(including the maximum charges that would apply to the underlying portfolio).
The annual administrative charge used in the example is based on the charges
that apply to a mix of estimated contract sizes, resulting in an estimated
administrative charge for the purpose of these examples of $0.00 per $1,000. If
your contract does not have an annual administrative charge and/or has lower
charges than used in the examples, then the charges that apply to your contract,
would be lower than those shown below.
These examples should not be considered a representation of past or future
expenses for each option. Actual expenses may be greater or less than those
shown. Similarly, the annual rate of return assumed in the examples is not an
estimate or guarantee of future investment performance.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
IF YOU SURRENDER YOUR CONTRACT AT THE END
OF EACH PERIOD SHOWN, THE EXPENSES
WOULD BE:
-------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock $ 97.09 $ 142.58 $ 191.27 $ 348.15
Alliance Common Stock $ 95.62 $ 138.20 $ 184.04 $ 334.13
Alliance Global $ 99.09 $ 148.50 $ 201.00 $ 366.86
Alliance Growth Investors $ 96.99 $ 142.27 $ 190.75 $ 347.16
Alliance High Yield $ 97.20 $ 142.89 $ 191.78 $ 349.15
Alliance Money Market $ 94.46 $ 134.75 $ 178.33 $ 322.97
EQ/Alliance Premier Growth $ 100.98 $ 154.08 $ 210.15 $ 384.25
Alliance Small Cap Growth $ 98.98 $ 148.18 $ 200.49 $ 365.89
EQ/Alliance Technology $ 99.93 $ 150.98 $ 205.08 $ 374.63
BT Equity 500 Index $ 94.15 $ 133.81 $ 176.77 $ 319.91
BT International Equity Index $ 98.35 $ 146.32 $ 197.43 $ 360.01
BT Small Company Index $ 95.72 $ 138.52 $ 184.56 $ 335.14
Capital Guardian International $ 100.45 $ 152.53 $ 207.62 $ 379.45
Capital Guardian Research $ 97.82 $ 144.76 $ 194.86 $ 355.09
Capital Guardian U.S. Equity $ 97.82 $ 144.76 $ 194.86 $ 355.09
EQ/Evergreen $ 97.82 $ 144.76 $ 194.86 $ 355.09
EQ/Evergreen Foundation $ 97.82 $ 144.76 $ 194.86 $ 355.09
J.P. Morgan Core Bond $ 96.25 $ 140.08 $ 187.14 $ 340.17
Lazard Large Cap Value $ 97.82 $ 144.76 $ 194.86 $ 355.09
Lazard Small Cap Value $ 99.40 $ 149.43 $ 202.53 $ 369.78
MFS Emerging Growth Companies $ 98.35 $ 146.32 $ 197.43 $ 360.01
MFS Growth with Income $ 97.82 $ 144.76 $ 194.86 $ 355.09
MFS Research $ 97.82 $ 144.76 $ 194.86 $ 355.09
Mercury Basic Value Equity $ 97.82 $ 144.76 $ 194.86 $ 355.09
Mercury World Strategy $ 100.45 $ 152.53 $ 207.62 $ 379.45
Morgan Stanley Emerging Markets Equity $ 106.23 $ 169.48 $ 235.19 $ 430.87
EQ/Putnam Growth & Income Value $ 97.82 $ 144.76 $ 194.86 $ 355.09
EQ/Putnam International Equity $ 100.98 $ 154.08 $ 210.15 $ 384.25
EQ/Putnam Investors Growth $ 98.88 $ 147.87 $ 199.98 $ 364.91
- ------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------
IF YOU DO NOT SURRENDER YOUR CONTRACT AT
THE END OF EACH PERIOD SHOWN, THE
EXPENSES WOULD BE:
------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock $ 27.09 $ 92.58 $ 161.27 $ 348.15
Alliance Common Stock $ 25.62 $ 88.20 $ 154.04 $ 334.13
Alliance Global $ 29.09 $ 98.50 $ 171.00 $ 366.86
Alliance Growth Investors $ 26.99 $ 92.27 $ 160.75 $ 347.16
Alliance High Yield $ 27.20 $ 92.89 $ 161.78 $ 349.15
Alliance Money Market $ 24.46 $ 84.75 $ 148.33 $ 322.97
EQ/Alliance Premier Growth $ 30.98 $ 104.08 $ 180.15 $ 384.25
Alliance Small Cap Growth $ 28.98 $ 98.18 $ 170.49 $ 365.89
EQ/Alliance Technology $ 29.93 $ 100.98 $ 175.08 $ 374.63
BT Equity 500 Index $ 24.15 $ 83.81 $ 146.77 $ 319.91
BT International Equity Index $ 28.35 $ 96.32 $ 167.43 $ 360.01
BT Small Company Index $ 25.72 $ 88.52 $ 154.56 $ 335.14
Capital Guardian International $ 30.45 $ 102.53 $ 177.62 $ 379.45
Capital Guardian Research $ 27.82 $ 94.76 $ 164.86 $ 355.09
Capital Guardian U.S. Equity $ 27.82 $ 94.76 $ 164.86 $ 355.09
EQ/Evergreen $ 27.82 $ 94.76 $ 164.86 $ 355.09
EQ/Evergreen Foundation $ 27.82 $ 94.76 $ 164.86 $ 355.09
J.P. Morgan Core Bond $ 26.25 $ 90.08 $ 157.14 $ 340.17
Lazard Large Cap Value $ 27.82 $ 94.76 $ 164.86 $ 355.09
Lazard Small Cap Value $ 29.40 $ 99.43 $ 172.53 $ 369.78
MFS Emerging Growth Companies $ 28.35 $ 96.32 $ 167.43 $ 360.01
MFS Growth with Income $ 27.82 $ 94.76 $ 164.86 $ 355.09
MFS Research $ 27.82 $ 94.76 $ 164.86 $ 355.09
Mercury Basic Value Equity $ 27.82 $ 94.76 $ 164.86 $ 355.09
Mercury World Strategy $ 30.45 $ 102.53 $ 177.62 $ 379.45
Morgan Stanley Emerging Markets Equity $ 36.23 $ 119.48 $ 205.19 $ 430.87
EQ/Putnam Growth & Income Value $ 27.82 $ 94.76 $ 164.86 $ 355.09
EQ/Putnam International Equity $ 30.98 $ 104.08 $ 180.15 $ 384.25
EQ/Putnam Investors Growth $ 28.88 $ 97.87 $ 169.98 $ 364.91
- ------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
5
- --------------------------------------------------------------------------------
- ----------
(1) The amount accumulated from the $1,000 contribution could not be paid in
the form of an annuity payout option at the end of any of the periods
shown in the examples. This is because if the amount applied to purchase
an annuity payout option is less than $2,000, or the initial payment is
less than $20, we may pay the amount to you in a single sum instead of
payments under an annuity payout option. See "Accessing your money."
(3) PORTFOLIO/ADVISER NAME CHANGES AND NEW PORTFOLIO ADVISERS
Effective on or about May 1, 2000, the structure of Alliance Aggressive Stock is
multi-advisor. We believe this will potentially leverage the investment talents
and expertise of recognized money managers within a single portfolio. As a
result, the name of this portfolio (and correlating investment fund) has been
changed. Please note the following new information:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
FORMER NAME NEW NAME SUB-ADVISORS
<S> <C> <C>
- -----------------------------------------------------------------------------------------
Alliance Aggressive EQ/Aggressive Stock Alliance Capital
Stock Massachusetts Financial Service (MFS)
- -----------------------------------------------------------------------------------------
</TABLE>
The investment objective and policy for these funds remain the same.
The following portfolio/correlating investment fund name changes are also
effective on or about May 1, 2000:
- --------------------------------------------------------------------------------
FORMER NAME NEW NAME
- --------------------------------------------------------------------------------
JPMCore Bond J.P. Morgan Core Bond
- --------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity Mercury Basic Value Equity
- --------------------------------------------------------------------------------
Merrill Lynch World Strategy Mercury World Strategy
- --------------------------------------------------------------------------------
Merrill Lynch Asset Management, the adviser to the Mercury portfolios, has
changed its name to Mercury Asset Management US.
(4) TELEPHONE AND ONLINE TRANSACTIONS
For your convenience, the following services are available through our telephone
operated program support ("TOPS") and/or EQAccess systems. All services may not
apply to your particular contract.
TOPS is designed to provide you with up-to-date information via touch-tone
telephone. EQAccess is designed to provide this information through the
Internet. You can obtain information on:
o your current account value;
o your current allocation percentages (anticipated to be available through
EQAccess by the end of 2000);
o the number of units you have in the variable investment options;
o rates to maturity for the fixed maturity options;
o the daily unit values for the variable investment options; and
o performance information regarding the variable investment options (not
available through TOPS).
<PAGE>
- -----
6
- --------------------------------------------------------------------------------
You can also:
o change your allocation percentages and/or transfer among the investment
options (anticipated to be available through EQAccess by the end of 2000);
o change your TOPS personal identification number (PIN) (not available
through EQAccess); and
o change your EQAccess password (not available through TOPS).
TOPS and EQAccess are normally available seven days a week, 24 hours a day. You
may use TOPS by calling toll free 1-888-909-7770. You may use EQAccess by
visiting our Web site at http://www.equitable.com and clicking on EQAccess. Of
course, for reasons beyond our control, these services may sometimes be
unavailable.
We have established procedures to reasonably confirm that the instructions
communicated by telephone or Internet are genuine. For example, we will require
certain personal identification information before we will act on telephone or
Internet instructions and we will provide written confirmation of your
transfers. If we do not employ reasonable procedures to confirm the genuineness
of telephone or Internet instructions, we may be liable for any losses arising
out of any act or omission that constitutes negligence, lack of good faith, or
willful misconduct. In light of our procedures, we will not be liable for
following telephone or Internet instructions we reasonably believe to be
genuine.
We reserve the right to limit access to these services if we determine that you
are engaged in a market timing strategy. For more information about market
timing restrictions, see "Market timing-related transaction requests" below.
(5) MARKET TIMING-RELATED TRANSACTION REQUESTS
You should note that the product is not designed for professional "market
timing" organizations, or other organizations or individuals engaging in a
market timing strategy, making programmed transfers, frequent transfers or
transfers that are large in relation to the total assets of the underlying
mutual fund portfolio. Market timing strategies are disruptive to the underlying
mutual fund portfolios in which the variable investment options invest. If we
determine that your transfer patterns among the variable investment options
reflect a market timing strategy, we reserve the right to take action including,
but not limited to: restricting the availability of transfers through telephone
requests, facsimile transmissions, automated telephone services, Internet
services or any electronic transfer services. We may also refuse to act on
transfer instructions of an agent acting under a power of attorney who is acting
on behalf of more than one owner.
(6) BENEFICIARY CONTINUATION OPTION
APPLICABLE TO IRA CONTRACTS
Upon your death under an IRA contract, a beneficiary may generally elect to keep
the contract in your name and receive distributions under the contract instead
of receiving the death benefit in a single sum. In order to elect this option,
the beneficiary must be an individual. Certain trusts with only individual
beneficiaries will be treated as individuals. This election must be made within
60 days following the date we receive proof of your death. We will increase the
account value to equal the death benefit if the death benefit is greater than
the account value. Except as noted in the next sentence, the beneficiary
continuation option will be available on or after May 1, 2000 depending on when
we receive regulatory clearance in your state.
<PAGE>
- -----
7
- --------------------------------------------------------------------------------
For Rollover IRA and Flexible Premium IRA contracts, a similar beneficiary
continuation option will be available until the beneficiary continuation option
described in this prospectus is available. Please contact our processing office
for further information.
Under the beneficiary continuation option:
o The contract continues in your name for the benefit of your beneficiary.
o The beneficiary may make transfers among the investment options but no
additional contributions will be permitted.
o The guaranteed minimum income benefit, if applicable, and the death benefit
(including the guaranteed minimum death benefit, if applicable) provisions
will no longer be in effect.
o The beneficiary may choose at any time to withdraw all or a portion of the
account value and no withdrawal charges will apply. Any partial withdrawal
must be at least $300.
o Upon the death of the beneficiary, any remaining death benefit will be paid
in a lump sum to the person the beneficiary chooses.
For Traditional IRA contracts only, if you die AFTER the "Required Beginning
Date" for required minimum distributions (see "Tax information"), the contract
will continue if:
(a) You were receiving minimum distribution withdrawals from this contract; and
(b) The pattern of minimum distribution withdrawals you chose was based in part
on the life of the designated beneficiary.
The withdrawals will then continue to be paid to the beneficiary on the same
basis as you chose before your death. We will be able to tell your beneficiary
whether this option is available. You should contact our processing office for
further information.
For all of the above contracts, if you die BEFORE the Required Beginning Date
(and, for a traditional IRA, therefore you were not taking minimum distribution
withdrawals under the contract) the beneficiary may choose one of the following
two beneficiary continuation options:
1. Payments over life expectancy period. The beneficiary can receive annual
minimum distributions based on the beneficiary's life expectancy. If there is
more than one beneficiary, the shortest life expectancy is used. These minimum
distributions must begin by December 31st of the calendar year following the
year of your death. In some situations, a spouse beneficiary who elects to
continue the contract in your name under the beneficiary continuation option
instead of electing successor owner/annuitant status may also choose to delay
beginning the minimum distributions until the December 31st of the calendar year
in which you would have turned age 70 1/2.
2. Five Year Rule. The beneficiary can take withdrawals as desired. If the
beneficiary does not withdraw the entire account value by the December 31st of
the fifth calendar year following your death, we will pay any amounts remaining
under the contract to the beneficiary by that date. If you have more than one
beneficiary, and one of them elects this option, then all of your beneficiaries
will receive this option.
<PAGE>
- -----
8
- --------------------------------------------------------------------------------
(7) TAX UPDATES APPLICABLE TO NONQUALIFIED CONTRACTS
A recent case permitted an owner to direct the proceeds of a partial withdrawal
from one nonqualified deferred annuity contract to a different insurer to
purchase a new nonqualified deferred annuity contract on a tax-deferred basis.
Special forms, agreement between the carriers, and provision of cost basis
information may be required to process this type of an exchange.
OTHER INFORMATION
Please note that the Treasury Department has the authority to issue guidelines
prescribing the circumstances in which your ability to direct your investment to
particular portfolios within a separate account may cause you, rather than the
insurance company, to be treated as the owner of the portfolio shares
attributable to your nonqualified annuity contract. In that case, income and
gains attributable to such portfolio shares would be included in your gross
income for federal income tax purposes. Under current rules, however, we believe
that Equitable Life, and not the owner of a nonqualified annuity contract, would
be considered the owner of the portfolio shares.
(8) UNIT VALUES AND THE NUMBER OF UNITS OUTSTANDING FOR EACH INVESTMENT FUND
The following table sets forth the unit values and number of units outstanding
at the year end for each variable investment option, except EQ/Alliance
Technology which is being offered for the first time on May 1, 2000. The table
shows unit values based on the highest charges that would apply to any contract
or investment fund to which this supplement relates including the highest
charges that would apply to the underlying portfolios. Therefore, if your
contract has lower charges than those assumed, your unit values will be higher
than those shown. The table also shows the total number of units outstanding for
all contracts to which this supplement relates. All variable investment options
may not be available in all products. Please refer to your annual statement for
the unit values applicable to your contract.
<PAGE>
- -----
9
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------
YEAR
ENDED
DEC. 31, 1999
- ------------------------------------------------------------
<S> <C>
EQ/AGGRESSIVE STOCK
- ------------------------------------------------------------
Unit value $ 78.30
- ------------------------------------------------------------
Number of units outstanding (000s) 1,517
- ------------------------------------------------------------
ALLIANCE COMMON STOCK
- ------------------------------------------------------------
Unit value $275.01
- ------------------------------------------------------------
Number of units outstanding (000s) 2,804
- ------------------------------------------------------------
ALLIANCE GLOBAL
- ------------------------------------------------------------
Unit value $ 45.25
- ------------------------------------------------------------
Number of units outstanding (000s) 355
- ------------------------------------------------------------
ALLIANCE GROWTH INVESTORS
- ------------------------------------------------------------
Unit value $ 44.08
- ------------------------------------------------------------
Number of units outstanding (000s) 496
- ------------------------------------------------------------
ALLIANCE HIGH YIELD
- ------------------------------------------------------------
Unit value $ 25.73
- ------------------------------------------------------------
Number of units outstanding (000s) 5,951
- ------------------------------------------------------------
ALLIANCE MONEY MARKET
- ------------------------------------------------------------
Unit value $ 25.55
- ------------------------------------------------------------
Number of units outstanding (000s) 13,930
- ------------------------------------------------------------
EQ/ALLIANCE PREMIER GROWTH
- ------------------------------------------------------------
Unit value $ 11.77
- ------------------------------------------------------------
Number of units outstanding (000s) 14,323
- ------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH
- ------------------------------------------------------------
Unit value $ 14.78
- ------------------------------------------------------------
Number of units outstanding (000s) 7,780
- ------------------------------------------------------------
BT EQUITY 500 INDEX
- ------------------------------------------------------------
Unit value $ 14.58
- ------------------------------------------------------------
Number of units outstanding (000s) 33,932
- ------------------------------------------------------------
BT INTERNATIONAL EQUITY INDEX
- ------------------------------------------------------------
Unit value $ 14.82
- ------------------------------------------------------------
Number of units outstanding (000s) 4,262
- ------------------------------------------------------------
BT SMALL COMPANY INDEX
- ------------------------------------------------------------
Unit value $ 11.42
- ------------------------------------------------------------
Number of units outstanding (000s) 3,463
- ------------------------------------------------------------
</TABLE>
<PAGE>
- -----
10
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
YEAR
ENDED
DEC. 31, 1999
- ------------------------------------------------------------------
<S> <C>
CAPITAL GUARDIAN INTERNATIONAL
- ------------------------------------------------------------------
Unit value $ 13.93
- ------------------------------------------------------------------
Number of units outstanding (000s) 2,778
- ------------------------------------------------------------------
CAPITAL GUARDIAN RESEARCH
- ------------------------------------------------------------------
Unit value $ 10.60
- ------------------------------------------------------------------
Number of units outstanding (000s) 1,972
- ------------------------------------------------------------------
CAPITAL GUARDIAN U.S. EQUITY
- ------------------------------------------------------------------
Unit value $ 10.26
- ------------------------------------------------------------------
Number of units outstanding (000s) 5,350
- ------------------------------------------------------------------
EQ/EVERGREEN
- ------------------------------------------------------------------
Unit value $ 10.80
- ------------------------------------------------------------------
Number of units outstanding (000s) 97
- ------------------------------------------------------------------
EQ/EVERGREEN FOUNDATION
- ------------------------------------------------------------------
Unit value $ 10.56
- ------------------------------------------------------------------
Number of units outstanding (000s) 516
- ------------------------------------------------------------------
J.P. MORGAN CORE BOND
- ------------------------------------------------------------------
Unit value $ 10.39
- ------------------------------------------------------------------
Number of units outstanding (000s) 15,004
- ------------------------------------------------------------------
LAZARD LARGE CAP VALUE
- ------------------------------------------------------------------
Unit value $ 12.04
- ------------------------------------------------------------------
Number of units outstanding (000s) 11,006
- ------------------------------------------------------------------
LAZARD SMALL CAP VALUE
- ------------------------------------------------------------------
Unit value $ 9.15
- ------------------------------------------------------------------
Number of units outstanding (000s) 7,782
- ------------------------------------------------------------------
MFS EMERGING GROWTH COMPANIES
- ------------------------------------------------------------------
Unit value $ 27.40
- ------------------------------------------------------------------
Number of units outstanding (000s) 15,579
- ------------------------------------------------------------------
MFS GROWTH WITH INCOME
- ------------------------------------------------------------------
Unit value $ 10.70
- ------------------------------------------------------------------
Number of units outstanding (000s) 8,971
- ------------------------------------------------------------------
MFS RESEARCH
- ------------------------------------------------------------------
Unit value $ 16.99
- ------------------------------------------------------------------
Number of units outstanding (000s) 21,308
- ------------------------------------------------------------------
MERCURY BASIC VALUE EQUITY
- ------------------------------------------------------------------
Unit value $ 14.88
- ------------------------------------------------------------------
Number of units outstanding (000s) 5,938
- ------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
11
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
YEAR
ENDED
DEC. 31, 1999
- ------------------------------------------------------------------
<S> <C>
MERCURY WORLD STRATEGY
- ------------------------------------------------------------------
Unit value $ 13.00
- ------------------------------------------------------------------
Number of units outstanding (000s) 634
- ------------------------------------------------------------------
MORGAN STANLEY EMERGING MARKETS EQUITY
- ------------------------------------------------------------------
Unit value $ 10.97
- ------------------------------------------------------------------
Number of units outstanding (000s) 4,873
- ------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME VALUE
- ------------------------------------------------------------------
Unit value $ 12.39
- ------------------------------------------------------------------
Number of units outstanding (000s) 30,923
- ------------------------------------------------------------------
EQ/PUTNAM INTERNATIONAL EQUITY
- ------------------------------------------------------------------
Unit value $ 20.10
- ------------------------------------------------------------------
Number of units outstanding (000s) 14,754
- ------------------------------------------------------------------
EQ/PUTNAM INVESTORS GROWTH
- ------------------------------------------------------------------
Unit value $ 16.54
- ------------------------------------------------------------------
Number of units outstanding (000s) 17,975
- ------------------------------------------------------------------
</TABLE>
(9) UPDATED INFORMATION ON EQUITABLE LIFE
We are The Equitable Life Assurance Society of the United States ("Equitable
Life"), a New York stock life insurance corporation. We have been doing business
since 1859. Equitable Life is a subsidiary of AXA Financial, Inc. (previously,
The Equitable Companies Incorporated). The majority shareholder of AXA
Financial, Inc. is AXA, a French holding company for an international group of
insurance and related financial services companies. As a majority shareholder,
and under its other arrangements with Equitable Life and Equitable Life's
parent, AXA exercises significant influence over the operations and capital
structure of Equitable Life and its parent. No company other than Equitable
Life, however, has any legal responsibility to pay amounts that Equitable Life
owes under the contract.
AXA Financial, Inc. and its consolidated subsidiaries managed approximately
$462.7 billion in assets as of December 31, 1999. For over 100 years Equitable
Life has been among the largest insurance companies in the United States. We
are licensed to sell life insurance and annuities in all fifty states, the
District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our home office
is located at 1290 Avenue of the Americas, New York, N.Y. 10104.
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION
The following information is intended to clarify the Variable Immediate Annuity
payout options that may be available through your contract.
<PAGE>
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12
- --------------------------------------------------------------------------------
YOUR ANNUITY PAYOUT OPTIONS
You can choose from among the following Variable Immediate Annuity payout
options listed below. Restrictions may apply, depending on the type of contract
you own or the annuitant's age at contract issue.
- --------------------------------------------------------------------------------
Variable Immediate Annuity Life annuity (not available in New York)
payout options Life annuity with period certain
- --------------------------------------------------------------------------------
Life annuity: An annuity that guarantees payments for the rest of the
annuitant's life. Payments end with the last monthly payment before the
annuitant's death. Because there is no continuation of benefits following the
annuitant's death with this payout option, it provides the highest monthly
payment of any of the life annuity options, so long as the annuitant is living.
Life annuity with period certain: An annuity that guarantees payments for the
rest of the annuitant's life. If the annuitant dies before the end of a selected
period of time ("period certain"), payments continue to the beneficiary for the
balance of the period certain. The period certain cannot extend beyond the
annuitant's life expectancy. A life annuity with a period certain is the form of
annuity under the contract that you will receive if you do not elect a different
payout option. In this case, the period certain will be based on the annuitant's
age and will not exceed 10 years.
The life annuity and life annuity with period certain, are available on a single
life or joint and survivor life basis. The joint and survivor life annuity
guarantees payments for the rest of the annuitant's life and, after the
annuitant's death, payments continue to the survivor. We may offer other payout
options not outlined here. Your financial professional can provide details.
Variable Immediate Annuities are described in a separate prospectus that is
available from your financial professional. Before you select a Variable
Immediate Annuity payout option, you should read the prospectus which contains
important information that you should know.
Variables annuities may be funded through your choice of available variable
investment options investing in portfolios of EQ Advisors Trust. The contract
also offers a fixed annuity option that can be elected in combination with the
variable annuity payout options. The amount of each variable annuity payment
will fluctuate, depending upon the performance of the variable investment
options, and whether the actual rate of investment return is higher or lower
than an assumed base rate.
The amount applied to purchase a Variable Immediate Annuity payout option
varies, depending on the payout option that you choose, and the timing of your
purchase as it relates to any applicable withdrawal charges or market value
adjustments. If applicable to your contract, amounts in a fixed maturity option
are used to purchase any annuity payout option, prior to the maturity date, a
market value adjustment will apply. No withdrawal charge is imposed if you
select a life annuity or life annuity with period certain.
<PAGE>
SUPPLEMENT TO INCOME MANAGER ACCUMULATOR PROSPECTUS DATED OCTOBER 16, 1996;
INCOME MANAGER ROLLOVER IRA PROSPECTUS DATED OCTOBER 16, 1996; EQUITABLE
ACCUMULATOR (IRA, NQ, QP) PROSPECTUS DATED MAY 1, 1998 AND TAX SHELTERED
ANNUITY SUPPLEMENT DATED JUNE 18, 1998; EQUITABLE ACCUMULATOR(SM) SELECT (IRA,
NQ, QP) PROSPECTUS DATED MAY 1, 1998 AND TAX SHELTERED ANNUITY SUPPLEMENT DATED
JUNE 18, 1998; EQUITABLE ACCUMULATOR SELECT PROSPECTUS DATED MAY 1, 1999;
EQUITABLE ACCUMULATOR SELECT PROSPECTUS DATED OCTOBER 18, 1999 AND EQUITABLE
ACCUMULATOR PROSPECTUS DATED OCTOBER 18, 1999.
COMBINATION VARIABLE AND FIXED DEFERRED ANNUITY CERTIFICATES
ISSUED BY THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
- --------------------------------------------------------------------------------
This supplement dated May 1, 2000, updates certain information in the following
prospectuses:
Income Manager Accumulator prospectus dated October 16, 1996, as previously
supplemented on May 1, 1997, December 31, 1997, May 1, 1998, January 4, 1999 and
May 1, 1999.
Income Manager Rollover IRA prospectus dated October 16, 1996, as previously
supplemented on May 1, 1997, December 31, 1997, May 1, 1998, January 4, 1999 and
May 1, 1999.
Equitable Accumulator (IRA, NQ and QP) prospectus dated May 1, 1998, as
previously supplemented on June 18, 1998, January 4, 1999 and May 1, 1999.
Equitable Accumulator Select (IRA, NQ, QP) prospectus dated May 1, 1998, as
previously supplemented on June 18, 1998, January 4, 1999 and May 1, 1999.
Equitable Accumulator Select prospectus dated May 1, 1999.
Equitable Accumulator Select prospectus dated October 18, 1999.
Equitable Accumulator prospectus dated October 18, 1999.
You should keep the supplements and the prospectus for future reference. We have
filed with the Securities and Exchange Commission (SEC) our statement of
additional information (SAI) dated May 1, 1999. If you do not presently have a
copy of the prospectus and prior supplements, you may obtain additional copies,
as well as a copy of the SAI, from us, free of charge, by writing to Equitable
Life, P.O. Box 1547, Secaucus, NJ 07096-1547, or calling (800) 789-7771. If you
only need a copy of the SAI, you may mail in the SAI request form located at the
end of this supplement. The SAI has been incorporated by reference into this
supplement.
In this Supplement, we provide information on (1) a new investment fund; (2)
changes in certain management fees and expense limitation agreements; (3)
certain portfolio/adviser name changes and new advisers; (4) telephone and
online access to certain contract transactions; (5) transaction requests that
are related to market timing strategies; (6) revised beneficiary continuation
options; (7) tax updates that may or may not affect your contract; (8) unit
values and number of outstanding units for the investment funds; and (9)
Equitable Life.
The supplement also contains information that is intended to clarify the
Variable Immediate Annuity payout option that is available through your
contract.
72319/EDI
<PAGE>
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1
- --------------------------------------------------------------------------------
(1) NEW INVESTMENT FUND
The following new Investment Fund is available under your Certificate effective
on or about May 1, 2000.
EQ/ALLIANCE TECHNOLOGY
The new Investment Fund invests in a corresponding new Portfolio of EQ Advisors
Trust. The objectives and Adviser for the Portfolio are shown below:
PORTFOLIO OF EQ ADVISERS TRUST
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- -------------------------------------------------------------------------------------------
<S> <C> <C>
EQ/Alliance Technology Long-term growth of capital Alliance Capital Management L.P.
- -------------------------------------------------------------------------------------------
</TABLE>
See "Update on Management Fees and Expense Limitation Agreements" below,
regarding the management fees for this new portfolio.
(2) UPDATE ON MANAGEMENT FEES AND EXPENSE LIMITATION AGREEMENTS
The following table sets forth the investment management fees payable to
Equitable from each portfolio under the new management agreement, effective on
or about May 1, 2000, which were approved by shareholders. New or revised
expense limitation agreements may also apply (see footnote #7 to the table).
All portfolios may not be available in all annuity products. Please note that
the names of certain portfolios have been changed (a correlating change in the
name of the corresponding investment fund also applies). For more information
on these name changes, see "Portfolio/Adviser name changes and new portfolio
advisers," later in this supplement.
<PAGE>
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2
- --------------------------------------------------------------------------------
EQ ADVISORS TRUST ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS IN EACH PORTFOLIO)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
TOTAL
OTHER ANNUAL
EXPENSES EXPENSES
MANAGEMENT (AFTER EXPENSE (AFTER EXPENSE
FEES(6) 12B-1 FEES(7) LIMITATION)(8) LIMITATION)(9)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock(1) 0.60% 0.25% 0.04% 0.89%
Alliance Common Stock 0.46% 0.25% 0.04% 0.75%
Alliance Global 0.73% 0.25% 0.09% 1.07%
Alliance Growth Investors 0.57% 0.25% 0.05% 0.87%
Alliance High Yield 0.60% 0.25% 0.05% 0.90%
Alliance Money Market 0.34% 0.25% 0.05% 0.64%
EQ/Alliance Premier Growth 0.90% 0.25% 0.00% 1.15%
Alliance Small Cap Growth 0.75% 0.25% 0.07% 1.07%
EQ/Alliance Technology(2) 0.90% 0.25% 0.00% 1.15%
BT Equity 500 Index 0.25% 0.25% 0.10% 0.60%
BT International Equity Index 0.35% 0.25% 0.40% 1.00%
BT Small Company Index 0.25% 0.25% 0.25% 0.75%
Capital Guardian International 0.85% 0.25% 0.10% 1.20%
Capital Guardian Research 0.65% 0.25% 0.05% 0.95%
Capital Guardian U.S. Equity 0.65% 0.25% 0.05% 0.95%
J.P. Morgan Core Bond(3) 0.45% 0.25% 0.10% 0.80%
Lazard Large Cap Value 0.65% 0.25% 0.05% 0.95%
Lazard Small Cap Value 0.75% 0.25% 0.10% 1.10%
MFS Emerging Growth Companies 0.65% 0.25% 0.10% 1.00%
MFS Growth with Income 0.60% 0.25% 0.10% 0.95%
MFS Research 0.65% 0.25% 0.05% 0.95%
Morgan Stanley Emerging Markets Equity 1.15% 0.25% 0.35% 1.75%
EQ/Putnam Growth & Income Value 0.60% 0.25% 0.10% 0.95%
EQ/Putnam International Equity 0.85% 0.25% 0.15% 1.25%
EQ/Putnam Investors Growth 0.65% 0.25% 0.05% 0.95%
</TABLE>
- ----------
Notes:
(1) Formerly named Alliance Aggressive Stock.
(2) May not be available in California.
(3) Formerly named JPM Core Bond.
(4) The management fees shown reflect revised management fees, effective on
or about May 1, 2000 which were approved by shareholders. The management
fees shown for EQ/Putnam Growth & Income Value and Lazard Large Cap Value
do not reflect the waiver of a portion of each portfolio's investment
management fees that is currently in effect. The management fee for each
portfolio cannot be increased without a vote of each portfolio's
shareholders.
(5) Depending upon your contract, portfolio shares may be subject to fees
imposed under the distribution plan (the "Rule 12b-1 Plan") adopted by EQ
Advisors Trust pursuant to Rule 12b-1 under the Investment Company Act of
1940. The 12b-1 fee will not be increased for the life of the contracts.
If your contract's variable investment option choices invest in portfolio
shares that are not subject to the 12b-1 fees, the "Total annual
expenses" applicable to your contract would be lower than those shown.
Prior to October 18, 1999, the total annual expenses for the Alliance
Small Cap Growth portfolio were limited to 1.20% under an expense
limitation arrangement related to that portfolio's Rule 12b-1 Plan. The
arrangement is no longer in effect. The amounts shown have been restated
to reflect the expenses that would have been incurred in 1999, absent the
expense limitation arrangement.
<PAGE>
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3
- --------------------------------------------------------------------------------
(6) The amounts shown as "Other Expenses" will fluctuate from year to year
depending on actual expenses. See footnote (9) for any expense limitation
agreements.
On October 18, 1999 the Alliance portfolios (other than EQ/Alliance
Premier Growth and EQ/Alliance Technology) became part of the portfolios
of EQ Advisors Trust. The "Other Expenses" for these portfolios have been
restated to reflect the estimated expenses that would have been incurred
had these portfolios been portfolios of EQ Advisors Trust for the entire
year ended December 31, 1999. The restated expenses reflect an increase of
0.01% for each of these portfolios.
(7) Equitable Life, EQ Advisors Trust's manager, has entered into an expense
limitation agreement with respect to certain portfolios. Under this
agreement Equitable Life has agreed to waive or limit its fees and assume
other expenses. Under the expense limitation agreement, total annual
operating expenses of certain portfolios (other than interest, taxes,
brokerage commissions, capitalized expenditures and extraordinary
expenses) are limited as a percentage of the average daily net assets of
each of the following portfolios: 1.75% for Morgan Stanley Emerging
Markets Equity; 1.25% for EQ/Putnam International Equity; 1.20% for
Capital Guardian International; 1.15% for EQ/Alliance Premier Growth and
EQ/Alliance Technology; 1.10% for Lazard Small Cap Value; 1.00% for BT
International Equity Index and MFS Emerging Growth Companies; 0.95% for
Capital Guardian U.S. Equity, Capital Guardian Research, Lazard Large Cap
Value, MFS Growth with Income, MFS Research, EQ/Putnam Growth & Income
Value and EQ/Putnam Investors Growth; 0.80% for J.P. Morgan Core Bond;
0.75% for BT Small Company Index; and 0.60% for BT Equity 500 Index. The
expense limitations for the BT Equity 500 Index, EQ/Putnam Growth & Income
Value, EQ/Putnam International Equity, MFS Growth with Income, MFS
Research and MFS Emerging Growth Companies portfolios reflect an increase
effective on May 1, 2000. The expense limitation for the Lazard Small Cap
Value portfolio reflects a decrease effective on May 1, 2000.
Absent the expense limitation, the "Other Expenses" for 1999 on an
annualized basis for each of the portfolios would have been as follows:
1.00% for Morgan Stanley Emerging Markets Equity; 0.32% for EQ/Putnam
International Equity; 0.66% for Capital Guardian International; 0.23% for
EQ/Alliance Premier Growth; 0.10% for EQ/Alliance Technology; 0.26% for
Lazard Small Cap Value; 0.49% for BT International Equity Index; 0.17% for
MFS Emerging Growth Companies; 0.34% for Capital Guardian U.S. Equity;
0.47% for Capital Guardian Research; 0.21% for Lazard Large Cap Value;
0.37% for MFS Growth with Income; 0.17% for MFS Research; 0.16% for
EQ/Putnam Growth & Income Value; 0.19% for EQ/Putnam Investors Growth;
0.20% for J.P. Morgan Core Bond; 0.71% for BT Small Company Index; and
0.18% for BT Equity 500 Index. Initial seed capital was invested on April
30, 1999 for EQ/Alliance Premier Growth, Capital Guardian U.S. Equity,
Capital Guardian Research, and Capital Guardian International portfolios
and will be invested on or about May 1, 2000 for the EQ/Alliance
Technology portfolio and therefore expenses have been estimated.
Each portfolio may at a later date make a reimbursement to Equitable Life
for any of the management fees waived or limited and other expenses
assumed and paid by Equitable Life pursuant to the expense limitation
agreement provided that, among other things, such portfolio has reached
sufficient size to permit such reimbursement to be made and provided that
the portfolio's current annual operating expenses do not exceed the
operating expense limit determined for such portfolio. For more
information see the prospectus for EQ Advisors Trust.
<PAGE>
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4
- --------------------------------------------------------------------------------
EXAMPLES
The examples below show the expenses that a hypothetical contract owner would
pay in the situations illustrated. We assume that a $1,000 contribution is
invested in one of the variable investment options listed and a 5% annual
return is earned on the assets in that option.(1) Other than as indicated in
the next sentence, the charges used in the examples are the maximum, charges
that might apply to any contract or investment fund to which this supplement
relates (including the maximum charges that would apply to the underlying
portfolio). The annual administrative charge used in the example is based on
the charges that apply to a mix of estimated contract sizes, resulting in an
estimated administrative charge for the purpose of these examples of $0.00 per
$1,000. If your contract does not have an annual administrative charge and/or
has lower charges than used in the examples, then the charges that apply to
your contract, would be lower than those shown below.
These examples should not be considered a representation of past or future
expenses for each option. Actual expenses may be greater or less than those
shown. Similarly, the annual rate of return assumed in the examples is not an
estimate or guarantee of future investment performance.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
IF YOU SURRENDER YOUR CONTRACT AT THE END
OF EACH PERIOD SHOWN, THE EXPENSES
WOULD BE:
-------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock $ 97.09 $ 142.58 $ 191.27 $ 348.15
Alliance Common Stock $ 95.62 $ 138.20 $ 184.04 $ 334.13
Alliance Global $ 99.09 $ 148.50 $ 201.00 $ 366.86
Alliance Growth Investors $ 96.99 $ 142.27 $ 190.75 $ 347.16
Alliance High Yield $ 97.20 $ 142.89 $ 191.78 $ 349.15
Alliance Money Market $ 94.46 $ 134.75 $ 178.33 $ 322.97
EQ/Alliance Premier Growth $ 100.98 $ 154.08 $ 210.15 $ 384.25
Alliance Small Cap Growth $ 98.98 $ 148.18 $ 200.49 $ 365.89
EQ/Alliance Technology $ 99.93 $ 150.98 $ 205.08 $ 374.63
BT Equity 500 Index $ 94.15 $ 133.81 $ 176.77 $ 319.91
BT International Equity Index $ 98.35 $ 146.32 $ 197.43 $ 360.01
BT Small Company Index $ 95.72 $ 138.52 $ 184.56 $ 335.14
Capital Guardian International $ 100.45 $ 152.53 $ 207.62 $ 379.45
Capital Guardian Research $ 97.82 $ 144.76 $ 194.86 $ 355.09
Capital Guardian U.S. Equity $ 97.82 $ 144.76 $ 194.86 $ 355.09
J.P. Morgan Core Bond $ 96.25 $ 140.08 $ 187.14 $ 340.17
Lazard Large Cap Value $ 97.82 $ 144.76 $ 194.86 $ 355.09
Lazard Small Cap Value $ 99.40 $ 149.43 $ 202.53 $ 369.78
MFS Emerging Growth Companies $ 98.35 $ 146.32 $ 197.43 $ 360.01
MFS Growth with Income $ 97.82 $ 144.76 $ 194.86 $ 355.09
MFS Research $ 97.82 $ 144.76 $ 194.86 $ 355.09
Morgan Stanley Emerging Markets Equity $ 106.23 $ 169.48 $ 235.19 $ 430.87
EQ/Putnam Growth & Income Value $ 97.82 $ 144.76 $ 194.86 $ 355.09
EQ/Putnam International Equity $ 100.98 $ 154.08 $ 210.15 $ 384.25
EQ/Putnam Investors Growth $ 98.88 $ 147.87 $ 199.98 $ 364.91
- ------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
IF YOU DO NOT SURRENDER YOUR CONTRACT AT
THE END OF EACH PERIOD SHOWN, THE
EXPENSES WOULD BE:
------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
EQ/Aggressive Stock $ 27.09 $ 92.58 $ 161.27 $ 348.15
Alliance Common Stock $ 25.62 $ 88.20 $ 154.04 $ 334.13
Alliance Global $ 29.09 $ 98.50 $ 171.00 $ 366.86
Alliance Growth Investors $ 26.99 $ 92.27 $ 160.75 $ 347.16
Alliance High Yield $ 27.20 $ 92.89 $ 161.78 $ 349.15
Alliance Money Market $ 24.46 $ 84.75 $ 148.33 $ 322.97
EQ/Alliance Premier Growth $ 30.98 $ 104.08 $ 180.15 $ 384.25
Alliance Small Cap Growth $ 28.98 $ 98.18 $ 170.49 $ 365.89
EQ/Alliance Technology $ 29.93 $ 100.98 $ 175.08 $ 374.63
BT Equity 500 Index $ 24.15 $ 83.81 $ 146.77 $ 319.91
BT International Equity Index $ 28.35 $ 96.32 $ 167.43 $ 360.01
BT Small Company Index $ 25.72 $ 88.52 $ 154.56 $ 335.14
Capital Guardian International $ 30.45 $ 102.53 $ 177.62 $ 379.45
Capital Guardian Research $ 27.82 $ 94.76 $ 164.86 $ 355.09
Capital Guardian U.S. Equity $ 27.82 $ 94.76 $ 164.86 $ 355.09
J.P. Morgan Core Bond $ 26.25 $ 90.08 $ 157.14 $ 340.17
Lazard Large Cap Value $ 27.82 $ 94.76 $ 164.86 $ 355.09
Lazard Small Cap Value $ 29.40 $ 99.43 $ 172.53 $ 369.78
MFS Emerging Growth Companies $ 28.35 $ 96.32 $ 167.43 $ 360.01
MFS Growth with Income $ 27.82 $ 94.76 $ 164.86 $ 355.09
MFS Research $ 27.82 $ 94.76 $ 164.86 $ 355.09
Morgan Stanley Emerging Markets Equity $ 36.23 $ 119.48 $ 205.19 $ 430.87
EQ/Putnam Growth & Income Value $ 27.82 $ 94.76 $ 164.86 $ 355.09
EQ/Putnam International Equity $ 30.98 $ 104.08 $ 180.15 $ 384.25
EQ/Putnam Investors Growth $ 28.88 $ 97.87 $ 169.98 $ 364.91
- -----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
5
- --------------------------------------------------------------------------------
- ----------
(1) The amount accumulated from the $1,000 contribution could not be paid in
the form of an annuity payout option at the end of any of the periods
shown in the examples. This is because if the amount applied to purchase
an annuity payout option is less than $2,000, or the initial payment is
less than $20, we may pay the amount to you in a single sum instead of
payments under an annuity payout option. See "Accessing your money."
(3) PORTFOLIO/ADVISER NAME CHANGES AND NEW PORTFOLIO ADVISERS
Effective on or about May 1, 2000, the structure of Alliance Aggressive Stock
is multi-advisor. We believe this will potentially leverage the investment
talents and expertise of recognized money managers within a single portfolio.
As a result, the name of this portfolio (and correlating investment fund) has
been changed. Please note the following new information:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
FORMER NAME NEW NAME SUB-ADVISORS
- --------------------------------------------------------------------------------------
<S> <C> <C>
Alliance Aggressive EQ/Aggressive Stock Alliance Capital
Stock Massachusetts Financial Service (MFS)
- --------------------------------------------------------------------------------------
</TABLE>
The investment objective and policy for these funds remain the same.
The following portfolio/correlating investment fund name change is also
effective on or about May 1, 2000:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------
FORMER NAME NEW NAME
- ---------------------------------------------------------------
<S> <C>
JPMCore Bond J.P. Morgan Core Bond
- ---------------------------------------------------------------
</TABLE>
(4) TELEPHONE AND ONLINE TRANSACTIONS
For your convenience, the following services are available through our
telephone operated program support ("TOPS") and/or EQAccess systems. All
services may not apply to your particular contract.
TOPS is designed to provide you with up-to-date information via touch-tone
telephone. EQAccess is designed to provide this information through the
Internet. You can obtain information on:
o your current account value;
o your current allocation percentages (anticipated to be available through
EQAccess by the end of 2000);
o the number of units you have in the variable investment options;
o rates to maturity for the fixed maturity options;
o the daily unit values for the variable investment options; and
o performance information regarding the variable investment options (not
available through TOPS).
You can also:
o change your allocation percentages and/or transfer among the investment
options (anticipated to be available through EQAccess by the end of 2000);
o change your TOPS personal identification number (PIN) (not available through
EQAccess); and
<PAGE>
- -----
6
- --------------------------------------------------------------------------------
o change your EQAccess password (not available through TOPS).
TOPS and EQAccess are normally available seven days a week, 24 hours a day. You
may use TOPS by calling toll free 1-888-909-7770. You may use EQAccess by
visiting our Web site at http://www.equitable.com and clicking on EQAccess. Of
course, for reasons beyond our control, these services may sometimes be
unavailable.
We have established procedures to reasonably confirm that the instructions
communicated by telephone or Internet are genuine. For example, we will require
certain personal identification information before we will act on telephone or
Internet instructions and we will provide written confirmation of your
transfers. If we do not employ reasonable procedures to confirm the genuineness
of telephone or Internet instructions, we may be liable for any losses arising
out of any act or omission that constitutes negligence, lack of good faith, or
willful misconduct. In light of our procedures, we will not be liable for
following telephone or Internet instructions we reasonably believe to be
genuine.
We reserve the right to limit access to these services if we determine that you
are engaged in a market timing strategy. For more information about market
timing restrictions, see "Market timing-related transaction requests" below.
(5) MARKET TIMING-RELATED TRANSACTION REQUESTS
You should note that the product is not designed for professional "market
timing" organizations, or other organizations or individuals engaging in a
market timing strategy, making programmed transfers, frequent transfers or
transfers that are large in relation to the total assets of the underlying
mutual fund portfolio. Market timing strategies are disruptive to the
underlying mutual fund portfolios in which the variable investment options
invest. If we determine that your transfer patterns among the variable
investment options reflect a market timing strategy, we reserve the right to
take action including, but not limited to: restricting the availability of
transfers through telephone requests, facsimile transmissions, automated
telephone services, Internet services or any electronic transfer services. We
may also refuse to act on transfer instructions of an agent acting under a
power of attorney who is acting on behalf of more than one owner.
(6) BENEFICIARY CONTINUATION OPTION
APPLICABLE TO IRA CONTRACTS
Upon your death under an IRA contract, a beneficiary may generally elect to
keep the contract in your name and receive distributions under the contract
instead of receiving the death benefit in a single sum. In order to elect this
option, the beneficiary must be an individual. Certain trusts with only
individual beneficiaries will be treated as individuals. This election must be
made within 60 days following the date we receive proof of your death. We will
increase the account value to equal the death benefit if the death benefit is
greater than the account value. Except as noted in the next sentence, the
beneficiary continuation option will be available on or after May 1, 2000
depending on when we receive regulatory clearance in your state. For Rollover
IRA and Flexible Premium IRA contracts, a similar beneficiary continuation
option will be available until the beneficiary continuation option described in
this prospectus is available. Please contact our processing office for further
information.
Under the beneficiary continuation option:
o The contract continues in your name for the benefit of your beneficiary.
o The beneficiary may make transfers among the investment options but no
additional contributions will be permitted.
<PAGE>
- -----
7
- --------------------------------------------------------------------------------
o The guaranteed minimum income benefit, if applicable, and the death benefit
(including the guaranteed minimum death benefit, if applicable) provisions
will no longer be in effect.
o The beneficiary may choose at any time to withdraw all or a portion of the
account value and no withdrawal charges will apply. Any partial withdrawal
must be at least $300.
o Upon the death of the beneficiary, any remaining death benefit will be paid
in a lump sum to the person the beneficiary chooses.
For Traditional IRA contracts only, if you die AFTER the "Required Beginning
Date" for required minimum distributions (see "Tax information"), the contract
will continue if:
(a) You were receiving minimum distribution withdrawals from this contract;
and
(b) The pattern of minimum distribution withdrawals you chose was based in
part on the life of the designated beneficiary.
The withdrawals will then continue to be paid to the beneficiary on the same
basis as you chose before your death. We will be able to tell your beneficiary
whether this option is available. You should contact our processing office for
further information.
For all of the above contracts, if you die BEFORE the Required Beginning Date
(and, for a traditional IRA, therefore you were not taking minimum distribution
withdrawals under the contract) the beneficiary may choose one of the following
two beneficiary continuation options:
1. Payments over life expectancy period. The beneficiary can receive annual
minimum distributions based on the beneficiary's life expectancy. If there is
more than one beneficiary, the shortest life expectancy is used. These minimum
distributions must begin by December 31st of the calendar year following the
year of your death. In some situations, a spouse beneficiary who elects to
continue the contract in your name under the beneficiary continuation option
instead of electing successor owner/annuitant status may also choose to delay
beginning the minimum distributions until the December 31st of the calendar
year in which you would have turned age 70 1/2.
2. Five Year Rule. The beneficiary can take withdrawals as desired. If the
beneficiary does not withdraw the entire account value by the December 31st of
the fifth calendar year following your death, we will pay any amounts remaining
under the contract to the beneficiary by that date. If you have more than one
beneficiary, and one of them elects this option, then all of your beneficiaries
will receive this option.
(7) TAX UPDATES APPLICABLE TO NONQUALIFIED CONTRACTS
A recent case permitted an owner to direct the proceeds of a partial withdrawal
from one nonqualified deferred annuity contract to a different insurer to
purchase a new nonqualified deferred annuity contract on a tax-deferred basis.
Special forms, agreement between the carriers, and provision of cost basis
information may be required to process this type of an exchange.
OTHER INFORMATION
Please note that the Treasury Department has the authority to issue guidelines
prescribing the circumstances in which your ability to direct your investment
to particular portfolios within a separate account may cause you, rather than
the insurance company, to be treated as the owner of the portfolio shares
attributable to your nonqualified annuity contract. In that case,
<PAGE>
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8
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income and gains attributable to such portfolio shares would be included in
your gross income for federal income tax purposes. Under current rules,
however, we believe that Equitable Life, and not the owner of a nonqualified
annuity contract, would be considered the owner of the portfolio shares.
(8) UNIT VALUES AND THE NUMBER OF UNITS OUTSTANDING FOR EACH INVESTMENT FUND
The following table sets forth the unit values and number of units outstanding
at the year end for each variable investment option, except EQ/Alliance
Technology which is being offered for the first time on May 1, 2000. The table
shows unit values based on the highest charges that would apply to any contract
or investment fund to which this supplement relates including the highest
charges that would apply to the underlying portfolios. Therefore, if your
contract has lower charges than those assumed, your unit values will be higher
than those shown. The table also shows the total number of units outstanding
for all contracts to which this supplement relates. All variable investment
options may not be available in all products. Please refer to your annual
statement for the unit values applicable to your contract.
<PAGE>
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9
- --------------------------------------------------------------------------------
- ---------------------------------------------------
YEAR
ENDED
DEC. 31, 1999
- ---------------------------------------------------
EQ/AGGRESSIVE STOCK
- ---------------------------------------------------
Unit value $ 78.30
- ---------------------------------------------------
Number of units outstanding (000s) 1,517
- ---------------------------------------------------
ALLIANCE COMMON STOCK
- ---------------------------------------------------
Unit value $275.01
- ---------------------------------------------------
Number of units outstanding (000s) 2,804
- ---------------------------------------------------
ALLIANCE GLOBAL
- ---------------------------------------------------
Unit value $ 45.25
- ---------------------------------------------------
Number of units outstanding (000s) 355
- ---------------------------------------------------
ALLIANCE GROWTH INVESTORS
- ---------------------------------------------------
Unit value $ 44.08
- ---------------------------------------------------
Number of units outstanding (000s) 496
- ---------------------------------------------------
ALLIANCE HIGH YIELD
- ---------------------------------------------------
Unit value $ 25.73
- ---------------------------------------------------
Number of units outstanding (000s) 5,951
- ---------------------------------------------------
ALLIANCE MONEY MARKET
- ---------------------------------------------------
Unit value $ 25.55
- ---------------------------------------------------
Number of units outstanding (000s) 13,930
- ---------------------------------------------------
EQ/ALLIANCE PREMIER GROWTH
- ---------------------------------------------------
Unit value $ 11.77
- ---------------------------------------------------
Number of units outstanding (000s) 14,323
- ---------------------------------------------------
ALLIANCE SMALL CAP GROWTH
- ---------------------------------------------------
Unit value $ 14.78
- ---------------------------------------------------
Number of units outstanding (000s) 7,780
- ---------------------------------------------------
BT EQUITY 500 INDEX
- ---------------------------------------------------
Unit value $ 14.58
- ---------------------------------------------------
Number of units outstanding (000s) 33,932
- ---------------------------------------------------
BT INTERNATIONAL EQUITY INDEX
- ---------------------------------------------------
Unit value $ 14.82
- ---------------------------------------------------
Number of units outstanding (000s) 4,262
- ---------------------------------------------------
BT SMALL COMPANY INDEX
- ---------------------------------------------------
Unit value $ 11.42
- ---------------------------------------------------
Number of units outstanding (000s) 3,463
- ---------------------------------------------------
<PAGE>
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10
- --------------------------------------------------------------------------------
- --------------------------------------------------------
YEAR
ENDED
DEC. 31, 1999
- --------------------------------------------------------
CAPITAL GUARDIAN INTERNATIONAL
- --------------------------------------------------------
Unit value $ 13.93
- --------------------------------------------------------
Number of units outstanding (000s) 2,778
- --------------------------------------------------------
CAPITAL GUARDIAN RESEARCH
- --------------------------------------------------------
Unit value $ 10.60
- --------------------------------------------------------
Number of units outstanding (000s) 1,972
- --------------------------------------------------------
CAPITAL GUARDIAN U.S. EQUITY
- --------------------------------------------------------
Unit value $ 10.26
- --------------------------------------------------------
Number of units outstanding (000s) 5,350
- --------------------------------------------------------
J.P. MORGAN CORE BOND
- --------------------------------------------------------
Unit value $ 10.39
- --------------------------------------------------------
Number of units outstanding (000s) 15,004
- --------------------------------------------------------
LAZARD LARGE CAP VALUE
- --------------------------------------------------------
Unit value $ 12.04
- --------------------------------------------------------
Number of units outstanding (000s) 11,006
- --------------------------------------------------------
LAZARD SMALL CAP VALUE
- --------------------------------------------------------
Unit value $ 9.15
- --------------------------------------------------------
Number of units outstanding (000s) 7,782
- --------------------------------------------------------
MFS EMERGING GROWTH COMPANIES
- --------------------------------------------------------
Unit value $ 27.40
- --------------------------------------------------------
Number of units outstanding (000s) 15,579
- --------------------------------------------------------
MFs GROWTH WITH INCOME
- --------------------------------------------------------
Unit value $ 10.70
- --------------------------------------------------------
Number of units outstanding (000s) 8,971
- --------------------------------------------------------
MFS RESEARCH
- --------------------------------------------------------
Unit value $ 16.99
- --------------------------------------------------------
Number of units outstanding (000s) 21,308
- --------------------------------------------------------
MORGAN STANLEY EMERGING MARKETS EQUITY
- --------------------------------------------------------
Unit value $ 10.97
- --------------------------------------------------------
Number of units outstanding (000s) 4,873
- --------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME VALUE
- --------------------------------------------------------
Unit value $ 12.39
- --------------------------------------------------------
Number of units outstanding (000s) 30,923
- --------------------------------------------------------
EQ/PUTNAM INTERNATIONAL EQUITY
- --------------------------------------------------------
Unit value $ 20.10
- --------------------------------------------------------
Number of units outstanding (000s) 14,754
- --------------------------------------------------------
<PAGE>
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11
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- ----------------------------------------------------
YEAR
ENDED
DEC. 31, 1999
- ----------------------------------------------------
EQ/PUTNAM INVESTORS GROWTH
- ----------------------------------------------------
Unit value $ 16.54
- ----------------------------------------------------
Number of units outstanding (000s) 17,975
- ----------------------------------------------------
(9) UPDATED INFORMATION ON EQUITABLE LIFE
We are The Equitable Life Assurance Society of the United States ("Equitable
Life"), a New York stock life insurance corporation. We have been doing
business since 1859. Equitable Life is a subsidiary of AXA Financial, Inc.
(previously, The Equitable Companies Incorporated). The majority shareholder of
AXA Financial, Inc. is AXA, a French holding company for an international group
of insurance and related financial services companies. As a majority
shareholder, and under its other arrangements with Equitable Life and Equitable
Life's parent, AXA exercises significant influence over the operations and
capital structure of Equitable Life and its parent. No company other than
Equitable Life, however, has any legal responsibility to pay amounts that
Equitable Life owes under the contract.
AXA Financial, Inc. and its consolidated subsidiaries managed approximately
$462.7 billion in assets as of December 31, 1999. For over 100 years Equitable
Life has been among the largest insurance companies in the United States. We
are licensed to sell life insurance and annuities in all fifty states, the
District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our home office
is located at 1290 Avenue of the Americas, New York, N.Y. 10104.
VARIABLE IMMEDIATE ANNUITY PAYOUT OPTION
The following information is intended to clarify the Variable Immediate Annuity
payout options that may be available through your contract.
<PAGE>
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12
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YOUR ANNUITY PAYOUT OPTIONS
You can choose from among the following Variable Immediate Annuity payout
options listed below. Restrictions may apply, depending on the type of contract
you own or the annuitant's age at contract issue.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
<S> <C>
Variable Immediate Annuity payout options Life annuity (not available in New York)
Life annuity with period certain
- --------------------------------------------------------------------------------------
</TABLE>
Life annuity: An annuity that guarantees payments for the rest of the
annuitant's life. Payments end with the last monthly payment before the
annuitant's death. Because there is no continuation of benefits following the
annuitant's death with this payout option, it provides the highest monthly
payment of any of the life annuity options, so long as the annuitant is living.
Life annuity with period certain: An annuity that guarantees payments for the
rest of the annuitant's life. If the annuitant dies before the end of a
selected period of time ("period certain"), payments continue to the
beneficiary for the balance of the period certain. The period certain cannot
extend beyond the annuitant's life expectancy. A life annuity with a period
certain is the form of annuity under the contract that you will receive if you
do not elect a different payout option. In this case, the period certain will
be based on the annuitant's age and will not exceed 10 years.
The life annuity and life annuity with period certain, are available on a
single life or joint and survivor life basis. The joint and survivor life
annuity guarantees payments for the rest of the annuitant's life and, after the
annuitant's death, payments continue to the survivor. We may offer other payout
options not outlined here. Your financial professional can provide details.
Variable Immediate Annuities are described in a separate prospectus that is
available from your financial professional. Before you select a Variable
Immediate Annuity payout option, you should read the prospectus which contains
important information that you should know.
Variables annuities may be funded through your choice of available variable
investment options investing in portfolios of EQ Advisors Trust. The contract
also offers a fixed annuity option that can be elected in combination with the
variable annuity payout options. The amount of each variable annuity payment
will fluctuate, depending upon the performance of the variable investment
options, and whether the actual rate of investment return is higher or lower
than an assumed base rate.
The amount applied to purchase a Variable Immediate Annuity payout option
varies, depending on the payout option that you choose, and the timing of your
purchase as it relates to any applicable withdrawal charges or market value
adjustments. If applicable to your contract, amounts in a fixed maturity option
are used to purchase any annuity payout option, prior to the maturity date, a
market value adjustment will apply. No withdrawal charge is imposed if you
select a life annuity or life annuity with period certain.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The by-laws of The Equitable Life Assurance Society of the
United States ("Equitable Life") provide, in Article VII, as follows:
7.4 Indemnification of Directors, Officers and Employees. (a) To
the extent permitted by the law of the State of New York and
subject to all applicable requirements thereof:
(i) any person made or threatened to be made a party to any
action or proceeding, whether civil or criminal, by
reason of the fact that he or she, or his or her
testator or intestate, is or was a director, officer or
employee of the Company shall be indemnified by the
Company;
(ii) any person made or threatened to be made a party to any
action or proceeding, whether civil or criminal, by
reason of the fact that he or she, or his or her
testator or intestate serves or served any other
organization in any capacity at the request of the
Company may be indemnified by the Company; and
(iii) the related expenses of any such person in any of said
categories may be advanced by the Company.
(b) To the extent permitted by the law of the State of New
York, the Company may provide for further indemnification or
advancement of expenses by resolution of shareholders of the
Company or the Board of Directors, by amendment of these
By-Laws, or by agreement. {Business Corporation Law ss.ss.
721-726; Insurance Law ss.1216}
The directors and officers of Equitable Life are insured under policies
issued by Lloyd's of London, X. L. Insurance Company and ACE Insurance Company.
The annual limit on such policies is $100 million, and the policies insure the
officers and directors against certain liabilities arising out of their conduct
in such capacities.
II-1
<PAGE>
ITEM 16. EXHIBITS
Exhibits No.
(1) (a) Form of Distribution Agreement by and among
Equitable Distributors, Inc., Separate
Account Nos. 45 and 49 of Equitable Life and
Equitable Life Assurance Society of the
United States, incorporated by reference to
Exhibit 1(a) to the Registration Statement
on Form S-3 (File No. 33-88456), filed June
7, 1996.
(b) Form of Distribution Agreement dated as of
January 1, 1998 among The Equitable Life
Assurance Society of the United States for
itself and as depositor on behalf of certain
separate accounts and Equitable
Distributors, Inc., incorporated herein by
reference to Exhibit 3(b) to the
Registration Statement on Form N-4 (File No.
333-05593) on May 1, 1998.
(c) Distribution and Servicing Agreement among
Equico Securities (now AXA Advisors, LLC),
The Equitable Life Assurance Society of the
United States, and Equitable Variable Life
Insurance Company, dated as of May 1, 1994,
incorporated herein by reference to Exhibit
3(c) to the Registration Statement on
Form N-4 File No. 2-30070, refiled
electronically July 10, 1998.
(d) Letter of Agreement for Distribution
Agreement among The Equitable Life Assurance
Society of the United States and EQ
Financial Consultants, Inc. (now AXA
Advisors, LLC), dated April 20, 1998,
incorporated herein by reference to
Exhibit No. 3(c) to Registration Statement
(File No. 33-83750), filed on May 1, 1998.
(e) Participation Agreement among EQ Advisors
Trust, The Equitable Life Assurance Society
of the United States, Equitable
Distributors, Inc. and EQ Financial
Consultants, Inc. (now AXA Advisors, LLC)
dated as of the 14th day of April 1997,
incorporated by reference to the
Registration Statement of EQ Advisors Trust,
(File No. 333-17217) on Form N-1A, August
28, 1997.
(4) (a) Form of group annuity contract no.
1050-94IC, previously filed with this
Registration Statement on Form S-3 (File No.
333-24009) on March 6, 1998.
(b) Form of group annuity certificate nos. 94ICA
and 94ICB, previously filed with this
Registration Statement on Form S-3 (File No.
333-24009) on March 6, 1998.
(b)(i) Form of Data pages for Equitable Accumulator
TSA, incorporated by reference to Exhibit
No. 4(s) to the Registration Statement on
Form N-4 (File No. 33-05593) filed on May
22, 1998.
(c) Forms of Endorsement Nos. 94ENIRAI, 94ENNQI
and 94ENMVAI to contract no. 1050-94IC and
data pages no. 94ICA/BIM(IRA), (NQ), (NQ
Plan A) and (NQ Plan B), previously filed
with this Registration Statement on Form S-3
(File No. 333-24009) on March 6, 1998.
(c)(i) Form of Data Pages for Equitable Accumulator
Select TSA, incorporated by reference to
Exhibit 4(k) to the Registration Statement
on Form N-4 (File No. 333-31131) filed on
May 22, 1998.
(d) Forms of Application used with the IRA, NQ
and Fixed Annuity Markets, previously filed
with this Registration Statement on Form S-3
(File No. 333-24009) on March 6, 1998.
(d)(i) Form of Data Pages for Equitable Accumulator
TSA, incorporated by reference to Exhibit
No. 4(v) to the Registration Statement on
Form N-4 (File No. 33-83750) filed on May
22, 1998.
(e) Form of Endorsement no. 95ENLCAI to contract
no. 1050-94IC and data pages no. 94ICA/BLCA,
previously filed with this Registration
Statement on Form S-3 (File No. 333-24009)
on March 6, 1998.
(e)(i) Form of Endorsement Applicable to TSA
Certificates, incorporated by reference to
Exhibit 4(t) to the Registration Statement
on Form N-4 (File No. 333-05593) filed on
May 22, 1998.
(f) Forms of Data Pages for Rollover IRA, IRA
Assured Payment Option, IRA Assured Payment
Option Plus, Accumulator, Assured Growth
Plan, Assured Growth Plan (Flexible Income
Program), Assured Payment Plan (Period
Certain) and Assured Payment Plan (Life with
a Period Certain), incorporated by reference
to Exhibit 4(f) to the Registration
Statement on Form S-3 (File No. 33-88456)
filed August 31, 1995.
(f)(i) Form of Enrollment Form/Application for
Equitable Accumulator (IRA, NQ, QF and TSA),
incorporated by reference to Exhibit No.
5(f) to the Registration Statement on Form
N-4 (File No. 333-05593) filed on May 22,
1998.
II-2
<PAGE>
Exhibits No.
(g) Forms of Data Pages for Rollover IRA, IRA
Assured Payment Option, IRA Assured Payment
Option Plus, Accumulator, Assured Growth
Plan and Assured Payment Plan (Life Annuity
with a Period Certain), incorporated by
reference to Exhibit 4(g) to the
Registration Statement on Form S-3 (File No.
33-88456), filed on April 23, 1996.
(h) Form of Separate Account Insulation
Endorsement for the Endorsement Applicable
to Market Value Adjustment Terms,
incorporated by reference to Exhibit 4(h) to
the Registration Statement on Form S-3 (File
No. 33-88456), filed on April 23, 1996.
(i) Forms of Guaranteed Minimum Income Benefit
Endorsements (and applicable data page for
Rollover IRA) for Endorsement Applicable to
Market Value Adjustment Terms and for the
Life Contingent Annuity Endorsement,
incorporated by reference to Exhibit 4(i) to
the Registration Statement on Form S-3 (File
No. 33-88456), filed on April 23, 1996.
(j) Forms of Enrollment Form/Application for
Rollover IRA, Choice Income Plan, Assured
Growth Plan, Accumulator and Assured Payment
Plan, incorporated by reference to Exhibit
4(j) to the Registration Statement on Form
S-3 (File No. 33-88456), filed on April 23,
1996.
(k) Forms of Data Pages for the Accumulator,
incorporated by reference to Exhibit 4(k) to
the Registration Statement on Form S-3 (File
No. 33-88456), filed June 7, 1996.
(l) Forms of Data Pages for the Rollover IRA,
incorporated by reference to Exhibit 4(l) to
the Registration Statement on Form S-3 (File
No. 33-88456), filed June 7, 1996.
(m) Forms of Data Pages for the Accumulator and
Rollover IRA, incorporated by reference to
Exhibit 4(m) to the Registration Statement
on Form S-3 (File No. 33-88456), filed
October 9, 1996.
(n) Forms of Data Pages for Accumulator and
Rollover IRA, incorporated by reference to
Exhibit 4(n) to the Registration Statement
on Form S-3 (File No. 33-88456), filed
October 16, 1996.
(o) Forms of Data Pages for the Accumulator,
Rollover IRA, Income Manager Accumulator,
Income Manager Rollover IRA, Equitable
Accumulator, Income Manager (IRA and NQ) and
MVA Annuity (IRA and NQ), previously filed
with this Registration Statement (File No.
333-24009) on April 30, 1997.
(p) Forms of Enrollment Form/Application for
Income Manager Accumulator, Income Manager
Rollover IRA, Equitable Accumulator, Income
Manager (IRA and NQ) and MVA Annuity (IRA
and NQ), previously filed with this
Registration Statement (File No. 333-24009)
on April 30, 1997.
(q) Forms of Data Pages for Equitable
Accumulator Select (IRA) and Equitable
Accumulator Select (NQ), previously filed
with this Registration Statement (File No.
333-24009) on September 18, 1997.
(r) Forms of Enrollment Form/Application for
Equitable Accumulator Select (IRA and NQ),
previously filed with this Registration
Statement (File No. 333-24009) on September
18, 1997.
(s) Form of Data Pages No. 94ICB and 94ICBMVA
for Equitable Accumulator (IRA)
Certificates, incorporated by reference to
Exhibit 4(m) to the Registration Statement
on Form N-4 (File No. 33-83750) on
February 27, 1998.
(t) Form of Data Pages No. 94ICB and 94ICBMVA
for Equitable Accumulator (NQ) Certificates,
incorporated by reference to Exhibit 4(n) to
the Registration Statement on Form N-4 (File
No. 33-83750) on February 27, 1998.
(u) Form of Data Pages No. 94ICB and 94ICBMVA
for Equitable Accumulator (QP) Certificates,
incorporated by reference to Exhibit 4(o) to
the Registration Statement on Form N-4 (File
No. 33-83750) on February 27, 1998.
(v) Form of Data Pages No. 94ICB, 94ICBMVA and
94ICBLCA for Assured Payment Option
Certificates, incorporated by reference to
Exhibit 4(p) to the Registration Statement
on Form N-4 (File No. 33-83750) on
February 27, 1998.
(w) Form of Data Pages No. 94ICB, 94ICBMVA and
94ICBLCA for APO Plus Certificates,
incorporated by reference to Exhibit 4(q) to
the Registration Statement on Form N-4 (File
No. 33-83750) on February 27, 1998.
(x) Form of Endorsement applicable to Defined
Benefit Qualified Plan Certificates No.
98ENDQPI incorporated by reference to
Exhibit 4(r) to the Registration Statement
on Form N-4 (File No. 33-83750) on
February 27, 1998.
(y) Form of Endorsement applicable to
Non-Qualified Certificates No. 98ENJONQI,
incorporated by reference to Exhibit 4(s) to
the Registration Statement on Form N-4 (File
No. 33-83750) on February 27, 1998.
(z) Form of Endorsement applicable to Charitable
Remainder Trusts No. 97ENCRTI, incorporated
by reference to Exhibit 4(t) to the
Registration Statement on Form N-4 (File No.
33-83750) on February 27, 1998.
(a)(a) Form of Enrollment Form/Application No.
126737 (5/98) for Equitable Accumulator
(IRA, NQ and QP), incorporated by reference
to Exhibit 5(e) to the Registration
Statement on Form N-4 (File No. 33-83750)
on February 27, 1998.
(b)(b) Form of Endorsement for Extra Credit Annuity
Form No. 98ECENDI and Data Pages 94ICA/B,
incorporated herein by reference to Exhibit
No. 4(j) to the Registration Statement
File No. 333-64749 on Form N-4, filed
September 30, 1998.
(c)(c) Form of Endorsement for Extra Credit Annuity
Form No. 98ECENDI and Data Pages 94ICA/B,
incorporated herein by reference to Exhibit
No. 4(k) to the Registration Statement
File No. 333-64751 on Form N-4, filed
September 30, 1998.
(d)(d) Form of Endorsement applicable to Defined
Contribution Qualified Plan Certificates No.
97ENQPI and Data Pages 94ICA/B, incorporated
herein by reference to Exhibit No. 4 (k) to
the Registration Statement File No.
333-64749 on Form N-4, filed September 30,
1998.
(e)(e) Form of Endorsement applicable to Defined
Contribution Qualified Plan Certificates No.
97ENQPI and Data Pages 94ICA/B, incorporated
herein by reference to Exhibit No. 4(l) to
the Registration Statement File No.
333-64751 on Form N-4, filed September 30,
1998.
(f)(f) Form of Data Pages for Equitable Accumulator
Express, incorporated herein by reference to
Exhibit No. 4(h) to Registration Statement
File No. 333-79379 on Form N-4, filed on May
26, 1999.
(g)(g) Form of Enrollment Form/Application for
Equitable Accumulator Express, incorporated
herein by reference to Exhibit No. 5 to
Registration Statement File No. 333-79379 on
Form N-4, filed on May 26, 1999.
(h)(h) Form of Data Pages for new version of
Equitable Accumulator, incorporated herein
by reference to Exhibit 4(z) to Registration
Statement File No. 333-05593 on Form N-4,
filed on November 23, 1999.
(i)(i) Form of Data Pages for new version of
Equitable Accumulator, incorporated herein
by reference to Exhibit 4(c)(c) to
Registration Statement File No. 33-83750 on
Form N-4, filed on December 3, 1999.
(j)(j) Form of Endorsement (Form No. 2000
ENRAI-IM) -- Beneficiary Continuation Option
for use with IRA contracts.
(k)(k) Form of data pages for Equitable Accumulator
Select baseBUILDER incorporated herein by
reference to Registration Statement File No.
333-73121, filed on April 25, 2000.
II-3
<PAGE>
Exhibits No.
(5) (a) Opinion and Consent of Jonathan E. Gaines,
Esq., Vice President and Associate General
Counsel of Equitable, as to the legality of
the securities being registered, previously
filed with this Registration Statement (File
No. 333-24009) on April 30, 1997.
(b) Copy of the Internal Revenue Service
determination letter regarding qualification
under Section 401 of the Internal Revenue
Code, incorporated by reference to Exhibit
5(b) to the Registration Statement on Form
S-3 (File No. 33-88456), filed August 31,
1995.
(8) (a) Not applicable.
(23) (a) Consent of PricewaterhouseCoopers LLP.
(b) Consent of Counsel (see Exhibit 5(a).
(c) Powers of Attorney.
II-4
<PAGE>
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment
to this registration statement:
(i) to include any prospectus required
by section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any
facts or events arising after the
effective date of the registration
statement (or the most recent
post-effective amendment thereof)
which, individually or in the
aggregate represent a fundamental
change in the information set forth
in the registration statement;
(iii) to include any material information
with respect to the plan of
distribution not previously
disclosed in the registration
statement or any material change to
such information in the registration
statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
with or furnished to the Commission by the registrant pursuant to
Section 13 or 15(d) of the Securities Act of 1934 that are incorporated
by reference in the registration statement.
(2) That, for the purpose of determining any
liability under the Securities Act of 1933,
each such post-effective amendment shall be
deemed to be a new registration statement
relating to the securities offered therein,
and the offering of such securities at that
time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the
securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or 15(d) of the Securities Exchange
Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-5
<PAGE>
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this amendment to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City and State of New York, on April 25,
2000.
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE
UNITED STATES
(Registrant)
By: /s/ Naomi J. Weinstein
------------------
Naomi J. Weinstein
Vice President
The Equitable Life Assurance Society
of the United States
Pursuant to the requirements of the Securities Act of 1933, this
amendment to the Registration Statement has been signed by or on behalf of
the following persons in the capacities and on the date indicated.
<TABLE>
<CAPTION>
PRINCIPAL EXECUTIVE OFFICERS:
<S> <C>
*Michael Hegarty President, Chief Operating Officer and Director
*Edward D. Miller Chairman of the Board, Chief Executive Officer and Director
PRINCIPAL FINANCIAL OFFICER:
*Stanley B. Tulin Vice Chairman of the Board, Chief Financial Officer and Director
PRINCIPAL ACCOUNTING OFFICER:
*Alvin H. Fenichel Senior Vice President and Controller
</TABLE>
*DIRECTORS:
Francoise Colloc'h Donald J. Greene George T. Lowy
Henri de Castries John T. Hartley Edward D. Miller
Joseph L. Dionne John H.F. Haskell, Jr. Didier Pineau-Valencienne
Denis Duverne Michael Hegarty George J. Sella, Jr.
Jean-Rene Fourtou Mary R. (Nina) Henderson Peter J. Tobin
Norman C. Francis W. Edwin Jarmain Stanley B. Tulin
Dave H. Williams
*By: /s/Naomi J. Weinstein
---------------------
Naomi J. Weinstein
Attorney-in-Fact
April 25, 2000
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. TAG VALUE
- ----------- ---------
<S> <C> <C>
4(j)(j) Form of Endorsement -- Beneficiary Continuation Option EX-99.4jj
23(a) Consent of Independent Accountants. EX-99.23a
23(c) Powers of Attorney EX-99.23c
</TABLE>
II-8
ENDORSEMENT
APPLICABLE TO IRA CERTIFICATES
As specified in the Data pages, this Certificate is an "IRA Certificate," which
is issued as an individual retirement annuity contract that meets the
requirements of Section 408(b) of the Code. It is established for the exclusive
benefit of you and your beneficiaries, and the terms below change, or are added
to, applicable sections of this Certificate. Also, your rights under this
Certificate are not forfeitable.
1. OWNER (SECTION 1.17):
You must be both the Owner and the Annuitant.
2. ANNUITY COMMENCEMENT DATE (SECTION 1.04):
You may not choose an Annuity Commencement Date later than the maximum
maturity age, currently the greater of age 90 or as stated in the Data
pages. If you choose a Date later than age 70 1/2, you must withdraw at
least the minimum payments required under Sections 408(b) and 401(a)(9)
of the Code and applicable Treasury regulations. See Section 5.01 of
the Certificate (Withdrawals) and Item 7 (Required Payments) below.
3. CONTRIBUTIONS (SECTION 3.01 AND 3.02):
No Contributions will be accepted unless they are in cash (or check or
other form if we require). Except in the case of a "rollover
Contribution," the total of such Contributions will not exceed $2,000
for any taxable year. A "rollover Contribution" is one permitted by
Sections 402(c), 403(a)(4), 403(b)(8), or 408(d)(3) of the Code.
Amounts transferred to the Certificate from an individual retirement
account or annuity contract, which meets the requirements of Section
408 of the Code, are not subject to the $2,000 limit.
If you make a Contribution which is an "eligible retirement plan
rollover" as defined in Section 402(c) or 403(b)(8) of the Code, and
you commingle such Contribution with other Contributions, you may not
be able to roll over the eligible retirement plan Contributions and
earnings to another qualified plan or Code Section 403(b) arrangement
at a future date, unless the Code permits.
4. DEATH BENEFIT (SECTION 6.01):
Under either of the following two circumstances, the death benefit
under Section 6.01 of the Certificate will not be paid at your death
before the Annuity Commencement Date and the coverage under the
Certificate will continue if (1) you are married at the time of your
death and the person named as beneficiary
No. 2000ENIRAI-IM - 1 -
<PAGE>
under Section 6.02 of your Certificate is your surviving spouse; and
(2) your surviving spouse elects to become "Successor Annuitant and
Owner" of your Certificate.
Also, a death benefit will not be paid under this Section 6.01 if the
"Beneficiary Continuation Option" under Item 6 of this Endorsement is
in effect.
5. BENEFICIARY (SECTION 6.02). THE THIRD PARAGRAPH OF THE CERTIFICATE IS
REPLACED WITH THE FOLLOWING:
Any part of a death benefit payable under Section 6.01, for which there
is no named beneficiary living at your death will be payable in a
single sum to your surviving spouse, if any; if there is no surviving
spouse, then to the children who survive you, in equal shares; if there
are no children, then to your estate.
6. BENEFICIARY CONTINUATION OPTION:
This Item 6 will apply only if you die before the Annuity Commencement
Date, and the beneficiary named under Section 6.02 of the Certificate
is an individual.
If there is more than one beneficiary, and any beneficiary is not an
individual, then this Item 6 does not apply, and the death benefit
described in Section 6.01 of the Certificate is payable.
If this Item 6 applies and there is more than one beneficiary, the
Annuity Account Value will be apportioned among your beneficiaries as
you designate pursuant to Section 6.02 of the Certificate.
If you die after your Required Beginning Date for required minimum
distribution payments, described below in Item 7, Subsection A of this
Endorsement (Minimum Distribution Rules--Required Payments During Your
Life) and such required minimum distribution payments have not
commenced under this Certificate, the death benefit under Section 6.01
will be paid in a lump sum and this Item 6 does not apply unless prior
to your death you have notified us in accordance with our procedures
then in effect that the beneficiary named pursuant to Section 6.02 of
the Certificate is also the designated beneficiary for purposes of
"Minimum Distribution Rules--Required Payments During Your Life"
described below in Item 7 of this Endorsement.
If the beneficiary qualifies to continue this Certificate, and we
receive the beneficiary's election within 60 days of receipt of proof
of your death, the beneficiary may continue your Certificate pursuant
to this Item 6 under the terms set forth in (a) through (h) below. Your
Certificate may be continued by one or more beneficiaries
(collectively, the "Continuation Beneficiary"). If there is more than
one beneficiary, the election must be provided to us within 60 days by
each
No. 2000ENIRAI-IM - 2 -
<PAGE>
beneficiary with respect to that beneficiary's portion of the Annuity
Account Value. For any beneficiary who does not so timely elect, we
will pay that beneficiary's share of the death benefit pursuant to
Section 6.01 of the Certificate in a lump sum.
a. the Continuation Beneficiary will automatically become the
Annuitant as defined in Section 1.01 of the Certificate with
respect to that Continuation Beneficiary's portion of the
Annuity Account Value.
b. the Continuation Beneficiary will have the same right to
transfer amounts among the Investment Options as the
Annuitant.
c. the Continuation Beneficiary cannot make any additional
Contributions.
d. distributions to the Continuation Beneficiary will be made in
accordance with requirements described in Item 7, Subsection B
of this Endorsement (Minimum Distribution Rules--Required
Payments After Death). If there is more than one beneficiary
and any Continuation Beneficiary requests payment pursuant to
Item 7, Subsection B(1) of this Endorsement, then all
Continuation Beneficiaries must agree to make this payment
election. If all Continuation Beneficiaries cannot so agree,
then we will instead make a complete distribution of your
entire interest no later than December 31st of the calendar
year that contains the fifth anniversary of your death.
Further, where payment pursuant to Item 7, Subsection B(1) of
this Endorsement is elected by all Continuation Beneficiaries,
the Annuity Account Value apportioned to each Continuation
Beneficiary is distributed based upon the life expectancy of
the oldest of the beneficiaries designated under Section 6.02
of the Certificate, even if that individual does not elect to
be a Continuation Beneficiary.
e. the Continuation Beneficiary may withdraw the Annuity Account
Value apportioned to such Continuation Beneficiary at any
time; withdrawals made after we have received a Continuation
Beneficiary's election to continue this Certificate are not
subject to a withdrawal charge.
f. upon the Continuation Beneficiary's death, we will make a lump
sum payment (other payment options are not available) to the
person designated by the deceased Continuation Beneficiary to
receive that deceased Continuation Beneficiary's portion of
the Annuity Account Value, if any remains.
g. the Certificate cannot be assigned and must continue in your
name for benefit of your Continuation Beneficiary.
No. 2000ENIRAI-IM - 3 -
<PAGE>
h. if a minimum income benefit pursuant to Section 7.08 of the
Certificate and/or a minimum death benefit pursuant to Section
6.01 of the Certificate are in effect upon our receipt of
proof of your death, the charges, if any, for such benefit(s)
will no longer apply and the minimum income benefit and the
minimum death benefit will no longer be in force.
7. REQUIRED PAYMENTS:
This Certificate is subject to these "Required Payment" or "Minimum
Distribution" rules of Sections 408(b) and 401(a)(9) of the Code and
the Treasury Regulations which apply.
A. MINIMUM DISTRIBUTION RULES -- REQUIRED PAYMENTS DURING YOUR
LIFE -- Your entire interest in this Certificate will be
distributed or begin to be distributed no later than the first
day of April following the calendar year in which you attain
age 70 1/2 ( "Required Beginning Date "). Your entire interest
may be distributed, as you elect, over (a) your life, or the
lives of you and your designated beneficiary, or (b) a period
certain not extending beyond your life expectancy, or the
joint and last survivor expectancy for you and your designated
beneficiary. Distributions must be made in periodic payments
at intervals of no longer than one year. In addition, payments
must be either non-increasing or they may increase only as
provided in Q & A F-3 of Section 1.401(a)(9)-1 of the Proposed
Treasury Regulations, or any successor Regulation thereto.
All distributions made under this Certificate must be made in
accordance with the requirements of Sections 408(b) and
401(a)(9) of the Code, including the incidental death benefit
requirements of Section 401(a)(9)(G) of the Code, and
applicable Treasury Regulations, including the minimum
distribution incidental benefit requirements of Section
1.401(a)(9)-2 of the Proposed Treasury Regulations, or any
successor Regulation thereto.
For purposes of determining the "period certain" referred to
in the first paragraph of this Section, life expectancy is
computed by use of the expected return multiples in Tables V
and VI of Treasury Regulation Section 1.72-9. Unless you
otherwise elect prior to the time distributions are required
to begin, life expectancies will be recalculated annually.
Such election will be irrevocable and will apply to all
subsequent years. The life expectancy of a non-spouse
beneficiary may not be recalculated. Instead, life expectancy
will be calculated using the attained age of such beneficiary
during the calendar year in which you attain age 70 1/2, and
payments of subsequent years will be calculated based on such
life expectancy reduced
No. 2000ENIRAI-IM - 4 -
<PAGE>
by one for each calendar year which has elapsed since the
calendar year in which life expectancy was first calculated.
B. MINIMUM DISTRIBUTION RULES -- REQUIRED PAYMENTS AFTER DEATH --
If you die after distribution of your interest in this
Certificate has begun, the remaining portion of such interest
will continue to be distributed at least as rapidly as under
the method of distribution being used prior to your death.
If you die before distribution of your interest in this
Certificate begins, distribution of your entire interest will
be completed no later than December 31 of the calendar year
containing the fifth anniversary of your death, except to the
extent that an election is made to receive distributions after
your death in accordance with the following alternate form of
distribution in (1) or (2) below:
(1) If your interest is payable to a designated
beneficiary, then your entire interest may be
distributed over the life of, or over a period certain
not greater than the life expectancy of, the designated
beneficiary. Such distributions must commence on or
before December 31 of the calendar year immediately
following the calendar year of your death.
(2) If the designated beneficiary is your surviving spouse,
the date that distributions are required to begin in
accordance with (1) above shall not be earlier than the
later of (a) December 31 of the calendar year
immediately following the calendar year of your death
or (b) December 31 of the calendar year in which you
would have attained age 70 1/2.
If the designated beneficiary is your surviving spouse, and a
Successor Annuitant and Owner option (described in Item 4
above of this Endorsement) is elected, the distribution of
your interest need not be made until after your surviving
spouse's death.
For purposes of determining the "period certain" referred to
above, life expectancy is computed by use of the expected
return multiples in Table V and VI of Treasury Regulation
Section 1.72-9. For purposes of distributions beginning after
your death, unless otherwise elected by the surviving spouse
by the time distributions are required to begin, life
expectancies will be recalculated annually. Such election will
be irrevocable by the surviving spouse and will apply to all
subsequent years. In the case of any other designated
beneficiary, life expectancies will be calculated using the
attained age of such beneficiary during the calendar year in
which distributions are required to begin, pursuant to this
Item 7, and payments for any subsequent calendar year will be
calculated based on
No. 2000ENIRAI-IM - 5 -
<PAGE>
such life expectancy reduced by one for each calendar year
which has elapsed since the calendar year in which life
expectancy was first calculated.
Distributions under this Item 7 are considered to have begun
if distributions are made because you have reached your
Required Beginning Date, or if prior to the Required Beginning
Date, distributions irrevocably commence to you over a period
permitted and in any annuity form acceptable under Section
1.401(a)(9)-1 of the Proposed Treasury Regulations or any
successor Regulation thereto.
8. REPORTS - NOTICES (SECTION 9.04):
We will send you a report as of the end of each calendar year showing
the status of the annuity and any other reports required by the Code or
Treasury Regulations.
9. ASSIGNMENTS (SECTION 9.05):
Your rights under this Certificate may not be assigned, pledged or
transferred except as permitted by law. You may not name a new Owner,
except as described in Item 4 or 6 of this Endorsement.
10. TERMINATION OF CERTIFICATE:
If an annuity under the Certificate fails to qualify as an annuity
under Section 408(b) of the Code, we will have the right to terminate
the Certificate. We may do so, upon receipt of notice of such fact,
before the Annuity Commencement Date. In that case, we will pay the
Annuity Account Value less a deduction for the part which applies to
any federal income tax payable by you which would not have been payable
with respect to an annuity which meets the terms of the Code. However,
we may also, at your request, transfer the Annuity Account Value to
another annuity certificate issued by an affiliate, subsidiary or us.
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
/s/Edward Miller /s/Pauline Sherman
- ---------------- ------------------
Edward Miller Pauline Sherman
Chairman and Chief Vice President, Secretary
Executive Officer and Associate General Counsel
No. 2000ENIRAI-IM - 6 -
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectuses
constituting part of this Post-Effective Amendment No. 14 to the Registration
Statement No. 333-24009 on Form S-3 of our report dated February 1, 2000
appearing on page F-1 of The Equitable Life Assurance Society of the United
States' Annual Report on Form 10-K for the year ended December 31, 1999. We
also consent to the incorporation by reference of our report on the Consolidated
Financial Statement Schedules dated February 1, 2000 which appears on page F-47
of such Annual Report on Form 10-K. We also consent to the reference to us
under the heading "About our independent accountants" in the Prospectuses.
/s/ PricewaterhouseCoopers LLP
- ------------------------------
PricewaterhouseCoopers LLP
New York, New York
April 25, 2000
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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
23rd day of March, 2000.
/s/ Francoise Colloc'h
----------------------------------
Francoise Colloc'h
Rev. 2/2000
122055
<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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
23rd day of March, 2000.
/s/ Norman C. Francis
----------------------------------
Norman C. Francis
Rev. 2/2000
122055
<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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
23rd day of March, 2000.
/s/ Michael Hegarty
----------------------------------
Michael Hegarty
Rev. 2/2000
122055
<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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
23rd day of March, 2000.
/s/ Edward Miller
----------------------------------
Edward Miller
Rev. 2/2000
122055
<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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
23rd day of March, 2000.
/s/ Denis Duverne
----------------------------------
Denis Duverne
Rev. 2/2000
122055
<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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
23rd day of March, 2000.
/s/ Donald J. Greene
----------------------------------
Donald J. Greene
Rev. 2/2000
122055
<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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
23rd day of March, 2000.
/s/ George T. Lowy
----------------------------------
George T. Lowy
Rev. 2/2000
122055
<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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
23rd day of March, 2000.
/s/ Peter J. Tobin
----------------------------------
Peter J. Tobin
Rev. 2/2000
122055
<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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
23rd day of March, 2000.
/s/ Joseph L. Dionne
----------------------------------
Joseph L. Dionne
Rev. 2/2000
122055
<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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
23rd day of March, 2000.
/s/ John T. Hartley
----------------------------------
John T. Hartley
Rev. 2/2000
122055
<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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
23rd day of March, 2000.
/s/ John H.F. Haskell, Jr.
----------------------------------
John H.F. Haskell, Jr.
Rev. 2/2000
122055
<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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
5th day of April, 2000.
/s/ Dave H. Williams
----------------------------------
Dave H. Williams
Rev. 2/2000
122055
<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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
23rd day of March, 2000.
/s/ Mary B. (Nina) Henderson
----------------------------------
Mary B. (Nina) Henderson
Rev. 2/2000
122055
<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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
4th day of April, 2000.
/s/ George J. Sella, Jr.
----------------------------------
George J. Sella, Jr.
Rev. 2/2000
122055
<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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
23rd day of March, 2000.
/s/ W. Edwin Jarmain
----------------------------------
W. Edwin Jarmain
Rev. 2/2000
122055
<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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
13th day of April, 2000.
/s/ Alvin H. Fenichel
----------------------------------
Alvin H. Fenichel
Rev. 2/2000
122055
<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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
13th day of April, 2000.
/s/ Jean-Rene Fourtou
----------------------------------
Jean-Rene Fourtou
Rev. 2/2000
122055
<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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
23rd day of March, 2000.
/s/ Stanley B. Tulin
----------------------------------
Stanley B. Tulin
Rev. 2/2000
122055
<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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
4th day of April, 2000.
/s/ Henri de Castries
----------------------------------
Henri de Castries
Rev. 2/2000
122055
<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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
10th day of April, 2000.
/s/ Didier Pineau Valencienne
----------------------------------
Didier Pineau Valencienne
Rev. 2/2000
122055
