<PAGE>
Mutual of America
SEPARATE ACCOUNT NO. 2
ANNUAL REPORT
&
THE ANNUAL REPORTS OF
MUTUAL OF AMERICA INVESTMENT CORPORATION
SCUDDER VARIABLE LIFE INVESTMENT FUND
TCI GROWTH FUND
CALVERT RESPONSIBLY INVESTED BALANCED PORTFOLIO
FIDELITY INVESTMENTS VARIABLE INSURANCE PRODUCTS FUND:
EQUITY-INCOME PORTFOLIO
FIDELITY INVESTMENTS VARIABLE INSURANCE PRODUCTS
FUND II:
ASSET MANAGER AND CONTRAFUND PORTFOLIOS
DECEMBER 31, 1996
This report is not to be construed as an offering for sale of any Variable
Product. No offering is
made except in conjunction with a prospectus which must precede or accompany
this report.
<PAGE>
MUTUAL OF AMERICA
SEPARATE ACCOUNT NO. 2
ANNUAL REPORT
DECEMBER 31, 1996
Dear Participant:
We are pleased to send you the 1996 Annual Report of Mutual of America's
Separate Account No. 2. This Account is an investment vehicle for participants
in our Tax-Deferred Annuity, Voluntary Employee Contributions, and Individual
Retirement Annuity programs, Thrift and Section 457 Deferred Compensation
Plans, as well as for Flexible Premium Annuity policyholders. Separate Account
No. 2 consists of sixteen distinct Funds: the Mutual of America Money Market,
All America (formerly the Stock Fund), Equity Index, Bond, Short-Term Bond,
Mid-Term Bond, Composite and Aggressive Equity Funds, the Scudder Bond,
Capital Growth and International Funds, the TCI Growth Fund, the Calvert
Responsibly Invested Balanced Fund (formerly "Calvert Socially Responsible
Series"), and three portfolios of Fidelity Investments: Equity-Income,
Contrafund and Asset Manager Fund.
Each of the Funds of Separate Account No. 2 owns shares in a similarly named
Fund of Mutual of America Investment Corporation ("Investment Company"),
Portfolio of Scudder Variable Life Investment Fund ("Scudder"), Fund of TCI
Portfolios, Inc. ("TCI"), Calvert Responsibly Invested Balanced Portfolio of
Acacia Capital Corporation ("Calvert") and Fidelity Investments Variable
Insurance Products Fund and Variable Insurance Products Fund II ("Fidelity").
The investment results of each of the Funds of Separate Account No. 2 are
based on the performance of the corresponding Funds or Portfolios of the
Investment Company, Scudder, TCI, Calvert and Fidelity.
The Separate Account Funds invest in Funds and Portfolios which have the
following investment objectives:
THE MUTUAL OF AMERICA MONEY MARKET FUND: This Fund seeks to obtain high
current income to the extent consistent with the maintenance of liquidity,
investment quality and stability of capital through investments in money
market instruments and other short-term debt securities.
THE MUTUAL OF AMERICA ALL AMERICA FUND: The investment objective for
approximately 60% of the assets of this Fund (the "Indexed Assets") is to
provide investment results that to the extent practical corresponds to the
performance of the Standard & Poor's 500 Composite Index. The Indexed
Assets are invested in the same manner as the Equity Index Fund described
below. The investment objective for the remaining approximately 40% of the
assets (the "Active Assets") is to achieve a high level of total return,
through both appreciation of capital and, to a lesser extent, current
income, by means of a diversified portfolio of securities that may include
common stocks, securities convertible into common stocks, bonds and money
market instruments.
THE MUTUAL OF AMERICA EQUITY INDEX FUND: This Fund seeks to duplicate, as
closely as possible, the investment performance of the Standard & Poor's
500 Composite Index ("S&P 500") by investing in approximately 500 publicly
traded stocks that comprise the S&P 500 ("Standard & Poor's 500", "S&P" and
"S&P 500" are trademarks of Standard & Poor's Corporation.)
THE MUTUAL OF AMERICA BOND FUND: This Fund seeks a high level of current
income, together with preservation of capital, through investments in such
securities as U.S. Government, corporate and other notes and bonds.
THE MUTUAL OF AMERICA SHORT-TERM BOND FUND: This Fund seeks a high level
of current income, together with preservation of capital, through
investments in such securities as U.S. Government, corporate and other
notes and bonds with an average maturity of one to three years.
THE MUTUAL OF AMERICA MID-TERM BOND FUND: This Fund seeks a high level of
current income, together with preservation of capital, through investments
in such securities as U.S. Government, corporate and other notes and bonds
with an average maturity of three to seven years.
THE MUTUAL OF AMERICA COMPOSITE FUND: This Fund seeks a high total rate
of return on investments, through both appreciation of capital and current
income, through investments in a diversified portfolio of common stocks,
bonds and money market instruments.
THE MUTUAL OF AMERICA AGGRESSIVE EQUITY FUND: The investment objective
for approximately half of the assets of the Fund (the "Aggressive Growth
Portfolio") is to achieve capital appreciation by investing in companies
believed to possess above-average growth potential. Growth can be in the
areas of earnings or gross sales which can be measured in either dollars or
in unit volume. The investment objective for the other half of the assets
of the Fund (the "Aggressive Value Portfolio") is to achieve capital
appreciation by investing in companies believed to possess valuable assets
or
I
<PAGE>
whose securities are undervalued in the marketplace in relation to factors
such as a company's assets, earnings or growth potential.
THE SCUDDER BOND PORTFOLIO: This Portfolio seeks a high level of income
consistent with a high quality portfolio of debt securities.
THE SCUDDER CAPITAL GROWTH PORTFOLIO: This Portfolio seeks to maximize
long-term capital growth through a broad and flexible investment program.
The Portfolio invests in marketable securities, principally common stocks,
and, consistent with its objective, may invest in preferred stocks, debt
securities and foreign securities.
THE SCUDDER INTERNATIONAL PORTFOLIO: This Portfolio seeks long-term
capital growth through investing primarily in diversified holdings of
marketable foreign equity investments in companies, wherever organized,
that do business primarily outside the United States and which are listed
on foreign exchanges.
THE TCI GROWTH FUND: This Fund seeks capital growth over time by
investing primarily in common stocks (including securities convertible into
common stocks) that are considered by management to have better-than-
average prospects for appreciation.
THE CALVERT RESPONSIBLY INVESTED BALANCED PORTFOLIO: This Fund seeks
capital growth and a total return above the rate of inflation through an
actively managed portfolio of stocks, bonds and money market instruments
selected with a concern for the social impact of each investment.
THE FIDELITY EQUITY-INCOME PORTFOLIO: Seeks reasonable income by
investing primarily in income-producing equity securities while also
considering the potential for capital appreciation. Secondarily, the
Portfolio's goal is to achieve a yield that exceeds the composite yield on
the securities comprising the S&P 500 Composite Index.
THE FIDELITY CONTRAFUND PORTFOLIO: Seeks long-term capital appreciation
by investing primarily in a broad variety of common stocks using both
growth-oriented and contrarian disciplines.
THE FIDELITY ASSET MANAGER PORTFOLIO: Seeks high long-term return with
reduced risk by allocating assets among a broadly diversified mix of
stocks, bonds and short-term fixed-income instruments.
For the year ended December 31, 1996, the following total returns were
experienced in these sixteen Separate Account Funds:
<TABLE>
<S> <C>
Mutual of America Money Market Fund(1)............................. + 3.7%
Mutual of America All America Fund................................. +18.9%
Mutual of America Equity Index Fund................................ +20.8%
Mutual of America Bond Fund........................................ + 1.9%
Mutual of America Short-Term Bond Fund............................. + 3.3%
Mutual of America Mid-Term Bond Fund............................... + 2.2%
Mutual of America Composite Fund................................... +10.2%
Mutual of America Aggressive Equity Fund........................... +25.1%
Scudder Bond Fund.................................................. + 1.2%
Scudder Capital Growth Fund........................................ +18.3%
Scudder International Fund......................................... +13.0%
TCI Growth Fund.................................................... - 5.6%
Calvert Responsibly Invested Balanced Fund......................... +10.9%
Fidelity Equity-Income Fund........................................ +12.5%
Fidelity Contrafund................................................ +19.4%
Fidelity Asset Manager Fund........................................ +12.8%
</TABLE>
- -------
(1) The current seven-day net annualized yield as of 2/18/97 was 3.72% and is
not necessarily indicative of future actual yields.
Total return is equal to the changes in the value of a unit of participation
in a Fund from the beginning to the end of the specified period. It reflects
investment income earned and reinvested plus the changes in the market value
(whether realized or unrealized) of the securities in the respective Fund or
Portfolio of the Investment Company, Scudder, TCI, Calvert or Fidelity during
the indicated period. Results are net of all charges, including a monthly
service charge (assessed against an average account balance for all
individually allocated contracts) based upon a hypothetical $1,000 invested at
the beginning of the period. These returns are not guaranteed and are not
necessarily indicative of the future investment performance of
II
<PAGE>
the particular Fund. Withdrawals and contributions made within a period would
experience different rates of return based on the respective unit values on
the dates of such transactions.
This report includes financial statements for each Fund of Separate Account
No. 2. Following this report are the financial statements for each similarly
named Fund of the Investment Company, Portfolios of Scudder, Fund of TCI,
Portfolio of Calvert and Portfolios of Fidelity Investments.
I hope you will find this report helpful and informative.
Sincerely,
/s/ Manfred Altstadt
Manfred Altstadt
Senior Executive Vice President
and Chief Financial Officer,
Mutual of America Life Insurance Company
III
<PAGE>
CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ANNUAL REPORT OF MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 2................. I
Statement of Assets and Liabilities...................................... VI
Statement of Operations.................................................. VIII
Statements of Changes in Net Assets...................................... X
Notes to Financial Statements............................................ XIII
Report of Independent Public Accountants................................. XVII
ANNUAL REPORT OF MUTUAL OF AMERICA INVESTMENT CORPORATION................. 1
President's Message...................................................... 1
Portfolio Management Discussions......................................... 2
Portfolio of Investments in Securities:
Money Market Fund...................................................... 9
All America Fund....................................................... 10
Equity Index Fund...................................................... 18
Bond Fund.............................................................. 24
Short-Term Bond Fund................................................... 27
Mid-Term Bond Fund..................................................... 29
Composite Fund......................................................... 31
Aggressive Equity Fund................................................. 36
Statement of Assets and Liabilities...................................... 40
Statement of Operations.................................................. 41
Statements of Changes in Net Assets...................................... 42
Financial Highlights..................................................... 44
Notes to Financial Statements............................................ 50
Report of Independent Public Accountants................................. 55
ANNUAL REPORT OF SCUDDER VARIABLE LIFE INVESTMENT FUND.................... 57
Letter from the Fund's President......................................... 58
Portfolio Management Discussions......................................... 59
Portfolio of Investments, Statement of Assets and Liabilities, Statement
of Operations, Statements of Changes in Net Assets and Financial
Highlights:
Bond Portfolio......................................................... 65
Capital Growth Portfolio............................................... 72
International Portfolio................................................ 80
Notes to Financial Statements............................................ 90
Report of Independent Accountants........................................ 94
Tax Information.......................................................... 95
</TABLE>
<TABLE>
<S> <C>
ANNUAL REPORT OF TCI GROWTH FUND OF TCI PORTFOLIOS, INC................... 97
Executive Message, Performance & Portfolio Information................... 98
Management Q & A......................................................... 100
Schedule of Investments.................................................. 102
Statement of Assets and Liabilities...................................... 104
Statement of Operations.................................................. 105
Statements of Changes in Net Assets...................................... 106
Notes to Financial Statements............................................ 107
Financial Highlights..................................................... 110
Independent Accountants' Report.......................................... 111
ANNUAL REPORT OF CALVERT RESPONSIBLY INVESTED BALANCED PORTFOLIO OF ACACIA
CAPITAL CORPORATION...................................................... 113
President's Letter....................................................... 114
Report of Independent Accountants........................................ 116
Portfolio of Investments................................................. 117
Statement of Assets and Liabilities...................................... 122
Statement of Operations.................................................. 123
Statements of Changes in Net Assets...................................... 124
Notes to Financial Statements............................................ 125
Financial Highlights..................................................... 127
</TABLE>
IV
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ANNUAL REPORT OF FIDELITY INVESTMENTS VARIABLE INSURANCE PRODUCTS FUND.. 129
Market Environment..................................................... 130
Equity-Income Portfolio................................................ 131
Performance and Investment Summary; Portfolio Manager's Overview..... 131
Investments.......................................................... 133
Financial Statements................................................. 137
Notes to Financial Statements........................................ 139
Report of Independent Accountants.................................... 141
Distributions........................................................ 142
ANNUAL REPORT OF FIDELITY INVESTMENTS VARIABLE INSURANCE PRODUCTS FUND
II..................................................................... 143
Market Environment..................................................... 144
Asset Manager Portfolio................................................ 145
Performance and Investment Summary; Portfolio Manager's Overview..... 145
Investments.......................................................... 149
Financial Statements................................................. 160
Notes to Financial Statements........................................ 162
Report of Independent Accountants.................................... 165
Distributions........................................................ 166
ANNUAL REPORT OF FIDELITY INVESTMENTS VARIABLE INSURANCE PRODUCTS FUND
II..................................................................... 167
Market Environment..................................................... 168
Contrafund Portfolio................................................... 169
Performance and Investment Summary; Portfolio Manager's Overview..... 169
Investments.......................................................... 171
Financial Statements................................................. 180
Notes to Financial Statements........................................ 182
Report of Independent Accountants.................................... 184
Distributions........................................................ 185
</TABLE>
V
<PAGE>
MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 2
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1996
<TABLE>
<CAPTION>
MUTUAL OF AMERICA
-------------------------------------------------
MONEY MARKET ALL AMERICA EQUITY BOND
FUND FUND INDEX FUND FUND
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
Assets:
Investments in Mutual of
America Investment
Corporation at market value
(Cost:
Money Market Fund --
$32,642,625
All America Fund --
$215,500,697
Equity Index Fund --
$50,748,917
Bond Fund -- $35,179,723)
(Notes 1 and 2)............ $32,511,499 $266,873,270 $59,254,485 $34,411,219
Due From (To) Mutual of
America General Account.... 301,285 1,764,684 1,962,036 67,735
----------- ------------ ----------- -----------
Net Assets.................. $32,812,784 $268,637,954 $61,216,521 $34,478,954
=========== ============ =========== ===========
Unit Value at December 31,
1996 (Note 5).............. $ 1.87 $ 5.39 $ 1.72 $ 2.75
====== ====== ====== ======
Number of Units Outstanding
at December 31, 1996 (Note
5)......................... 17,511,321 49,797,567 35,659,625 12,548,214
=========== ============ =========== ===========
</TABLE>
<TABLE>
<CAPTION>
MUTUAL OF AMERICA
-----------------------------------------------
AGGRESSIVE
SHORT-TERM MID-TERM COMPOSITE EQUITY
BOND FUND BOND FUND FUND FUND
---------- ---------- ------------ -----------
<S> <C> <C> <C> <C>
Assets:
Investments in Mutual of America
Investment Corporation at
market value
(Cost:
Short-Term Bond Fund --
$2,425,654
Mid-Term Bond Fund --
$5,002,565
Composite Fund -- $240,213,132
Aggressive Equity Fund --
$86,627,575)
(Notes 1 and 2)................ $2,399,136 $4,529,043 $250,437,858 $89,972,197
Due From (To) Mutual of America
General Account................ 25,538 19,536 (193,544) (429,848)
---------- ---------- ------------ -----------
Net Assets...................... $2,424,674 $4,548,579 $250,244,314 $89,542,349
========== ========== ============ ===========
Unit Value at December 31, 1996
(Note 5).......................... $ 1.14 $ 1.19 $ 3.75 $ 1.80
====== ====== ====== ======
Number of Units Outstanding at
December 31, 1996 (Note 5)..... 2,129,412 3,828,100 66,714,952 49,800,336
========== ========== ============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
VI
<PAGE>
MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 2
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1996
<TABLE>
<CAPTION>
SCUDDER TCI CALVERT
-------------------------------------- ----------- -----------
CAPITAL RESPONSIBLY
BOND GROWTH INTERNATIONAL GROWTH INVESTED
FUND FUND FUND FUND FUND
----------- ------------ ------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Assets:
Investments in Scudder
Portfolios, TCI Growth
Fund and Calvert
Responsibly Invested
Portfolio at market
value
(Cost:
Scudder Bond Fund --
$16,106,363
Scudder Capital Growth
Fund -- $161,273,633
Scudder International
Fund -- $85,733,463
TCI Growth Fund --
$79,665,157
Calvert Responsibly
Invested Portfolio --
$21,926,864)
(Notes 1 and 2)........ $15,618,347 $204,282,725 $104,627,698 $83,510,038 $23,755,739
Due From (To) Mutual of
America General
Account................ 18,929 571,262 (1,391,371) 242,492 166,018
----------- ------------ ------------ ----------- -----------
Net Assets.............. $15,637,276 $204,853,987 $103,236,327 $83,752,530 $23,921,757
=========== ============ ============ =========== ===========
Unit Value at December
31, 1996 (Note 5)...... $ 11.48 $ 22.11 $ 13.43 $ 11.53 $ 2.23
======= ======= ======= ======= ======
Number of Units
Outstanding at December
31, 1996 (Note 5)...... 1,362,287 9,265,744 7,687,579 7,264,496 10,713,395
=========== ============ ============ =========== ===========
</TABLE>
<TABLE>
<CAPTION>
FIDELITY
----------------------------------------
VIP VIP II VIP II
EQUITY-INCOME CONTRA ASSET MANAGER
FUND FUND FUND
------------- ----------- -------------
<S> <C> <C> <C>
Assets:
Investments in Fidelity Portfolios at
market value
(Cost:
VIP Equity-Income Fund --
$47,282,361
VIP II Contra Fund -- $56,333,671
VIP II Asset Manager Fund --
$9,713,829)
(Notes 1 and 2)..................... $52,157,836 $65,584,941 $10,579,297
Due From (To) Mutual of America
General Account..................... (799,158) (1,229,692) 282,682
----------- ----------- -----------
Net Assets........................... $51,358,678 $64,355,249 $10,861,979
=========== =========== ===========
Unit Value at December 31, 1996 (Note
5).................................. $ 21.93 $ 16.59 $ 17.72
======= ======= =======
Number of Units Outstanding at
December 31, 1996 (Note 5).......... 2,341,936 3,879,776 612,867
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
VII
<PAGE>
MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 2
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
MUTUAL OF AMERICA
---------------------------------------------------------
MONEY MARKET ALL AMERICA EQUITY INDEX BOND
FUND FUND FUND FUND
------------ ----------- ------------ -----------------
<S> <C> <C> <C> <C>
Investment Income and
Expenses:
Income (Notes 1 and 4):
Dividends.............. $1,324,066 $13,468,089 $ 2,017,643 $ 2,262,234
---------- ----------- ----------- -----------
Total income............ 1,324,066 13,468,089 2,017,643 2,262,234
---------- ----------- ----------- -----------
Expenses (Note 3):
Fees................... 395,269 2,902,848 528,457 409,658
Administrative
expenses.............. 79,017 147,007 32,877 61,887
---------- ----------- ----------- -----------
Total Expenses.......... 474,286 3,049,855 561,334 471,545
---------- ----------- ----------- -----------
Net Investment Income
(Loss)................. 849,780 10,418,234 1,456,309 1,790,689
---------- ----------- ----------- -----------
Net Realized and
Unrealized Gain (Loss)
on
Investments (Note 1):
Net realized gain
(loss) on
investments........... 73,658 2,431,185 476,262 68,629
Net unrealized
appreciation
(depreciation) of
investments........... 278,840 28,344,476 6,045,598 (1,221,188)
---------- ----------- ----------- -----------
Net Realized and
Unrealized Gain (Loss)
on Investments......... 352,498 30,775,661 6,521,860 (1,152,559)
---------- ----------- ----------- -----------
Net Increase (Decrease)
in Net Assets Resulting
from Operations........ $1,202,278 $41,193,895 $ 7,978,169 $ 638,130
========== =========== =========== ===========
<CAPTION>
MUTUAL OF AMERICA
---------------------------------------------------------
SHORT-TERM MID-TERM COMPOSITE AGGRESSIVE EQUITY
BOND FUND BOND FUND FUND FUND
------------ ----------- ------------ -----------------
<S> <C> <C> <C> <C>
Investment Income and
Expenses:
Income (Notes 1 and 4):
Dividends.............. $ 93,631 $ 617,704 $31,535,711 $12,716,658
---------- ----------- ----------- -----------
Total income............ 93,631 617,704 31,535,711 12,716,658
---------- ----------- ----------- -----------
Expenses (Note 3):
Fees................... 24,809 50,783 3,060,681 726,246
Administrative
expenses.............. 5,283 7,924 252,940 38,003
---------- ----------- ----------- -----------
Total Expenses.......... 30,092 58,707 3,313,621 764,249
---------- ----------- ----------- -----------
Net Investment Income
(Loss)................. 63,539 558,997 28,222,090 11,952,409
---------- ----------- ----------- -----------
Net Realized and
Unrealized Gain (Loss)
on
Investments (Note 1):
Net realized gain
(loss) on
investments........... 7,065 (2,132) 2,739,162 201,936
Net unrealized
appreciation
(depreciation) of
investments........... (1,966) (455,047) (6,525,946) 547,221
---------- ----------- ----------- -----------
Net Realized and
Unrealized Gain (Loss)
on Investments......... 5,099 (457,179) (3,786,784) 749,157
---------- ----------- ----------- -----------
Net Increase (Decrease)
in Net Assets Resulting
from Operations........ $ 68,638 $ 101,818 $24,435,306 $12,701,566
========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
VIII
<PAGE>
MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 2
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
SCUDDER TCI CALVERT
------------------------------------- ------------ -----------
CAPITAL RESPONSIBLY
BOND GROWTH INTERNATIONAL GROWTH INVESTED
FUND FUND FUND FUND FUND
---------- ----------- ------------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Investment Income and
Expenses:
Income (Notes 1 and 4):
Dividends.............. $1,316,556 $15,621,108 $ 2,077,284 $ 10,819,616 $1,778,522
---------- ----------- ----------- ------------ ----------
Total income............ 1,316,556 15,621,108 2,077,284 10,819,616 1,778,522
---------- ----------- ----------- ------------ ----------
Expenses (Note 3):
Fees................... 182,202 2,243,282 1,201,020 965,938 237,816
Administrative
expenses.............. 37,353 104,160 25,882 26,190 35,000
---------- ----------- ----------- ------------ ----------
Total Expenses.......... 219,555 2,347,442 1,226,902 992,128 272,816
---------- ----------- ----------- ------------ ----------
Net Investment Income
(Loss)................. 1,097,001 13,273,666 850,382 9,827,488 1,505,706
---------- ----------- ----------- ------------ ----------
Net Realized and
Unrealized Gain (Loss)
on Investments (Note
1):
Net realized gain
(loss) on
investments........... (110,077) 1,971,672 3,882,634 3,898,097 72,424
Net unrealized
appreciation
(depreciation) of
investments........... (788,323) 15,612,266 7,289,627 (18,669,322) 439,874
---------- ----------- ----------- ------------ ----------
Net Realized and
Unrealized Gain (Loss)
on Investments......... (898,400) 17,583,938 11,172,261 (14,771,225) 512,298
---------- ----------- ----------- ------------ ----------
Net Increase (Decrease)
in Net Assets Resulting
from Operations........ $ 198,601 $30,857,604 $12,022,643 $ (4,943,737) $2,018,004
========== =========== =========== ============ ==========
</TABLE>
<TABLE>
<CAPTION>
FIDELITY
---------------------------------------
VIP VIP II VIP II
EQUITY-INCOME CONTRA ASSET MANAGER
FUND FUND FUND
------------- ---------- -------------
<S> <C> <C> <C>
Investment Income and Expenses:
Income (Notes 1 and 4):
Dividends............................ $ 965,667 $ 261,805 $245,695
---------- ---------- --------
Total income.......................... 965,667 261,805 245,695
---------- ---------- --------
Expenses (Note 3):
Fees................................. 447,520 544,562 85,671
Administrative expenses.............. 52,766 34,222 12,957
---------- ---------- --------
Total Expenses........................ 500,286 578,784 98,628
---------- ---------- --------
Net Investment Income (Loss).......... 465,381 (316,979) 147,067
---------- ---------- --------
Net Realized and Unrealized Gain
(Loss) on Investments (Note 1):
Net realized gain (loss) on
investments......................... 36,749 106,747 17,488
Net unrealized appreciation
(depreciation) of investments....... 4,033,446 8,757,016 726,606
---------- ---------- --------
Net Realized and Unrealized Gain
(Loss) on Investments................ 4,070,195 8,863,763 744,094
---------- ---------- --------
Net Increase (Decrease) in Net Assets
Resulting from Operations............ $4,535,576 $8,546,784 $891,161
========== ========== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
IX
<PAGE>
MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 2
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
MUTUAL OF AMERICA
------------------------------------------------------------------------------
MONEY MARKET FUND ALL AMERICA FUND EQUITY INDEX FUND
------------------------ -------------------------- ------------------------
1996 1995 1996 1995 1996 1995
----------- ----------- ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in
Net Assets:
From Operations:
Net investment income
(loss)................ $ 849,780 $ 1,625,250 $ 10,418,234 $ 4,164,433 $ 1,456,309 $ 575,015
Net realized gain
(loss) on
investments........... 73,658 174,996 2,431,185 676,857 476,262 162,564
Net unrealized
appreciation
(depreciation) of
investments........... 278,840 (485,901) 28,344,476 41,443,244 6,045,598 2,678,826
----------- ----------- ------------ ------------ ----------- -----------
Net Increase (Decrease)
in net assets resulting
from operations........ 1,202,278 1,314,345 41,193,895 46,284,534 7,978,169 3,416,405
----------- ----------- ------------ ------------ ----------- -----------
From Unit Transactions:
Contributions.......... 6,015,021 6,674,056 30,608,222 20,883,923 11,517,471 4,017,188
Withdrawals............ (4,077,160) (3,900,806) (15,824,928) (10,074,230) (6,193,918) (2,116,885)
Net transfers.......... (1,853,101) (2,980,451) 15,311,478 10,560,332 23,679,496 14,042,110
----------- ----------- ------------ ------------ ----------- -----------
Net Increase (Decrease)
from unit
transactions........... 84,760 (207,201) 30,094,772 21,370,025 29,003,049 15,942,413
----------- ----------- ------------ ------------ ----------- -----------
Net Increase (Decrease)
in Net Assets.......... 1,287,038 1,107,144 71,288,667 67,654,559 36,981,218 19,358,818
Net Assets:
Beginning of Year....... 31,525,746 30,418,602 197,349,287 129,694,728 24,235,303 4,876,485
----------- ----------- ------------ ------------ ----------- -----------
End of Year............. $32,812,784 $31,525,746 $268,637,954 $197,349,287 $61,216,521 $24,235,303
=========== =========== ============ ============ =========== ===========
<CAPTION>
MUTUAL OF AMERICA
------------------------------------------------------------------------------
BOND FUND SHORT-TERM BOND FUND MID-TERM BOND FUND
------------------------ -------------------------- ------------------------
1996 1995 1996 1995 1996 1995
----------- ----------- ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in
Net Assets:
From Operations:
Net investment income
(loss)................ $ 1,790,689 $ 1,576,433 $ 63,539 $ 63,700 $ 558,997 $ 157,817
Net realized gain
(loss) on
investments........... 68,629 (28,928) 7,065 14,369 (2,132) (8,004)
Net unrealized
appreciation
(depreciation) of
investments........... (1,221,188) 3,085,787 (1,966) 7,196 (455,047) 129,249
----------- ----------- ------------ ------------ ----------- -----------
Net Increase (Decrease)
in net assets resulting
from operations........ 638,130 4,633,292 68,638 85,265 101,818 279,062
----------- ----------- ------------ ------------ ----------- -----------
From Unit Transactions:
Contributions.......... 5,112,307 4,347,174 650,490 481,850 953,690 525,221
Withdrawals............ (3,323,187) (2,307,210) (229,391) (87,191) (231,712) (262,353)
Net transfers.......... (435,017) 1,651,332 344,727 (58,307) 424,626 1,301,289
----------- ----------- ------------ ------------ ----------- -----------
Net Increase (Decrease)
from unit
transactions........... 1,354,103 3,691,296 765,826 336,352 1,146,604 1,564,157
----------- ----------- ------------ ------------ ----------- -----------
Net Increase (Decrease)
in Net Assets.......... 1,992,233 8,324,588 834,464 421,617 1,248,422 1,843,219
Net Assets:
Beginning of Year....... 32,486,721 24,162,133 1,590,210 1,168,593 3,300,157 1,456,938
----------- ----------- ------------ ------------ ----------- -----------
End of Year............. $34,478,954 $32,486,721 $ 2,424,674 $ 1,590,210 $ 4,548,579 $ 3,300,157
=========== =========== ============ ============ =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
X
<PAGE>
MUTUAL OF AMERICA SEPARATE ACCOUNT NO.2
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
MUTUAL OF AMERICA
---------------------------------------------------
COMPOSITE FUND AGGRESSIVE EQUITY FUND
-------------------------- -----------------------
1996 1995 1996 1995
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net
Assets:
From Operations:
Net investment
income(loss)............ $ 28,222,090 $ 10,222,848 $11,952,409 $ 1,684,376
Net realized gain (loss)
on investments.......... 2,739,162 799,067 201,936 339,162
Net unrealized
appreciation
(depreciation) of
investments............. (6,525,946) 29,855,578 547,221 2,317,578
------------ ------------ ----------- -----------
Net Increase (Decrease) in
net assets resulting from
operations............... 24,435,306 40,877,493 12,701,566 4,341,116
------------ ------------ ----------- -----------
From Unit Transactions:
Contributions............ 28,326,960 29,572,877 16,800,622 5,686,601
Withdrawals.............. (22,088,981) (19,258,841) 506,734 28,794
Net transfers............ (19,948,521) (18,173,511) 29,646,189 10,226,297
------------ ------------ ----------- -----------
Net Increase (Decrease)
from unit transactions... (13,710,542) (7,859,475) 46,953,545 15,941,692
------------ ------------ ----------- -----------
Net Increase (Decrease) in
Net Assets............... 10,724,764 33,018,018 59,655,111 20,282,808
Net Assets:
Beginning of Year......... 239,519,550 206,501,532 29,887,238 9,604,430
------------ ------------ ----------- -----------
End of Year............... $250,244,314 $239,519,550 $89,542,349 $29,887,238
============ ============ =========== ===========
</TABLE>
<TABLE>
<CAPTION>
SCUDDER
--------------------------------------------------------------------------------
BOND FUND CAPITAL GROWTH FUND INTERNATIONAL FUND
------------------------ -------------------------- --------------------------
1996 1995 1996 1995 1996 1995
----------- ----------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in
Net Assets:
From Operations:
Net investment
income(loss).......... $ 1,097,001 $ 705,726 $ 13,273,666 $ 3,335,742 $ 850,382 $ (681,033)
Net realized gain
(loss) on
investments........... (110,077) (43,337) 1,971,672 601,944 3,882,634 2,996,091
Net unrealized
appreciation
(depreciation) of
investments........... (788,323) 1,156,840 15,612,266 28,289,318 7,289,627 5,526,646
----------- ----------- ------------ ------------ ------------ ------------
Net Increase (Decrease)
in net assets resulting
from operations........ 198,601 1,819,229 30,857,604 32,227,004 12,022,643 7,841,704
----------- ----------- ------------ ------------ ------------ ------------
From Unit Transactions:
Contributions.......... 2,640,943 2,443,120 27,988,093 24,829,211 14,517,884 15,269,408
Withdrawals............ (1,287,365) (1,238,764) (13,712,456) (11,652,523) (8,408,505) (7,516,904)
Net transfers.......... (259,197) 1,342 262,723 (5,052,941) (1,008,537) (22,431,215)
----------- ----------- ------------ ------------ ------------ ------------
Net Increase (Decrease)
from unit
transactions........... 1,094,381 1,205,698 14,538,360 8,123,747 5,100,842 (14,678,711)
----------- ----------- ------------ ------------ ------------ ------------
Net Increase (Decrease)
in Net Assets.......... 1,292,982 3,024,927 45,395,964 40,350,751 17,123,485 (6,837,007)
Net Assets:
Beginning of Year....... 14,344,294 11,319,367 159,458,023 119,107,272 86,112,842 92,949,849
----------- ----------- ------------ ------------ ------------ ------------
End of Year............. $15,637,276 $14,344,294 $204,853,987 $159,458,023 $103,236,327 $ 86,112,842
=========== =========== ============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
XI
<PAGE>
MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 2
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS* ENDED DECEMBER 31,
<TABLE>
<CAPTION>
TCI CALVERT
------------------------- --------------------------
GROWTH FUND RESPONSIBLY INVESTED FUND
------------------------- --------------------------
1996 1995 1996 1995
------------ ----------- ------------ ------------
<S> <C> <C> <C> <C>
Increase (Decrease) in
Net Assets:
From Operations:
Net investment
income(loss).......... $ 9,827,488 $ (768,225) $ 1,505,706 $ 1,173,547
Net realized gain
(loss) on
investments........... 3,898,097 2,629,546 72,424 55,268
Net unrealized
appreciation
(depreciation) of
investments........... (18,669,322) 16,390,488 439,874 1,651,549
------------ ----------- ------------ ------------
Net Increase (Decrease)
in net assets resulting
from operations........ (4,943,737) 18,251,809 2,018,004 2,880,364
------------ ----------- ------------ ------------
From Unit Transactions:
Contributions.......... 16,360,753 13,560,719 4,807,906 3,096,573
Withdrawals............ (7,283,773) (6,457,226) (1,198,222) (829,244)
Net transfers.......... (18,548,118) 13,097,419 2,535,811 1,233,524
------------ ----------- ------------ ------------
Net Increase (Decrease)
from unit
transactions........... (9,471,138) 20,200,912 6,145,495 3,500,853
------------ ----------- ------------ ------------
Net Increase (Decrease)
in Net Assets.......... (14,414,875) 38,452,721 8,163,499 6,381,217
Net Assets:
Beginning of Year....... 98,167,405 59,714,684 15,758,258 9,377,041
------------ ----------- ------------ ------------
End of Year............. $ 83,752,530 $98,167,405 $ 23,921,757 $ 15,758,258
============ =========== ============ ============
</TABLE>
<TABLE>
<CAPTION>
FIDELITY
--------------------------------------------------------------------------
VIP VIP II VIP II
EQUITY-INCOME CONTRA ASSET MANAGER
FUND FUND FUND
------------------------ ------------------------ -----------------------
1996 1995(A) 1996 1995(A) 1996 1995(A)
----------- ----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in
Net Assets:
From Operations:
Net investment
income(loss).......... $ 465,381 $ 52,183 $ (316,979) $ 211,743 $ 147,067 $ (11,648)
Net realized gain
(loss) on
investments........... 36,749 167 106,747 21,227 17,488 9,118
Net unrealized
appreciation
(depreciation) of
investments........... 4,033,446 842,029 8,757,016 494,253 726,606 138,862
----------- ----------- ----------- ----------- ----------- ----------
Net Increase (Decrease)
in net assets resulting
from operations........ 4,535,576 894,379 8,546,784 727,223 891,161 136,332
----------- ----------- ----------- ----------- ----------- ----------
From Unit Transactions:
Contributions.......... 11,293,855 1,349,849 13,486,367 2,617,118 2,540,371 541,615
Withdrawals............ (154,620) (11,412) 89,022 107,831 (659,754) (74)
Net transfers.......... 21,543,664 11,907,387 17,419,557 21,361,347 5,212,637 2,199,691
----------- ----------- ----------- ----------- ----------- ----------
Net Increase (Decrease)
from unit
transactions........... 32,682,899 13,245,824 30,994,946 24,086,296 7,093,254 2,741,232
----------- ----------- ----------- ----------- ----------- ----------
Net Increase (Decrease)
in Net Assets.......... 37,218,475 14,140,203 39,541,730 24,813,519 7,984,415 2,877,564
Net Assets:
Beginning of
Year/Period............ 14,140,203 -- 24,813,519 -- 2,877,564 --
----------- ----------- ----------- ----------- ----------- ----------
End of Year/Period...... $51,358,678 $14,140,203 $64,355,249 $24,813,519 $10,861,979 $2,877,564
=========== =========== =========== =========== =========== ==========
</TABLE>
- -------
* Except for the periods noted.
(a) For the period May 1, 1995, (Commencement of Operations) to December 31,
1995.
The accompanying notes are an integral part of these financial statements.
XII
<PAGE>
MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 2
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
Separate Account No. 2 of Mutual of America Life Insurance Company ("the
Company") was established in conformity with New York Insurance Law and
commenced operations on June 4, 1984. On October 31, 1986, Separate Account
No. 2 was reorganized into a unit investment trust consisting of four Funds:
the Money Market Fund, the All America Fund, the Bond Fund and the Composite
Fund. These Funds invest in corresponding Funds of Mutual of America
Investment Corporation ("Investment Company"). Prior to May 2, 1994, the All
America Fund was known as the Stock Fund and had different investment
objectives and no sub-advisors.
On January 3, 1989, the following Funds became available to Separate Account
No. 2 as investment options: Scudder Bond, Scudder Capital Growth, Scudder
International and TCI Growth. The Scudder Funds invest in corresponding
Portfolios of Scudder Variable Life Investment Fund ("Scudder"). The TCI Fund
invests in a corresponding Fund of TCI Portfolios Inc. ("TCI"). Effective May
13, 1991, the Calvert Responsibly Invested Balanced Portfolio became available
as an investment option. The Calvert Responsibly Invested Balanced Portfolio
(formerly "Calvert Socially Responsible Series") invests in a corresponding
Fund of the Calvert Responsibly Invested Balanced Portfolio of Acacia Capital
Corporation ("Calvert").
On February 5, 1993 the Mutual of America Equity Index, Short-Term Bond and
Mid-Term Bond Funds became available to Separate Account No. 2 as investment
options. On May 2, 1994 the Mutual of America Aggressive Equity Fund became
available as an investment option. These Funds invest in corresponding Funds
of the Investment Company.
On May 1, 1995, Fidelity Investments Equity-Income, Contrafund and Asset
Manager Portfolios became available to Separate Account No. 2 as investment
options. The Fidelity Equity-Income Portfolio invests in a corresponding
Portfolio of the Fidelity Variable Insurance Products Fund and the Contrafund
and Asset Manager Portfolios invest in corresponding Portfolios of the
Fidelity Variable Insurance Products Fund II (collectively "Fidelity").
Separate Account No. 2 was formed by the Company to support the operations
of the Company's group and individual variable accumulation annuity contracts
("Contracts"). The assets of Separate Account No. 2 are the property of the
Company. The portion of Separate Account No. 2's assets applicable to the
Contracts will not be charged with liabilities arising out of any other
business the Company may conduct.
The significant accounting policies of Separate Account No. 2 are as
follows:
Investment Valuation -- Investments are made in shares of the Investment
Company, Scudder, TCI, Calvert and Fidelity and are valued at the reported net
asset values of the respective Funds or Portfolios.
Investment Transactions -- Investment transactions are recorded on the trade
date. Realized gains and losses on sales of investments are determined based
on the average cost of the investment sold.
Federal Income Taxes -- Separate Account No. 2 and its operations are
treated as part of the Company which is exempt from federal income taxes under
Section 501(c)(4) of the Internal Revenue Code.
2. INVESTMENTS
The number of shares owned by Separate Account No. 2 and their respective
net asset values (rounded to the nearest cent) per share at December 31, 1996
are as follows:
<TABLE>
<CAPTION>
NUMBER OF NET ASSET
SHARES VALUE
----------- ---------
<S> <C> <C>
Investment Company Funds:
Money Market Fund................................. 27,320,060 $1.19
All America Fund.................................. 109,532,035 2.44
Equity Index Fund................................. 37,151,521 1.59
Bond Fund......................................... 24,913,606 1.38
Short-Term Bond Fund.............................. 2,334,982 1.03
Mid-Term Bond Fund................................ 5,050,510 0.90
Composite Fund.................................... 141,502,626 1.77
Aggressive Equity Fund............................ 61,114,362 1.47
</TABLE>
XIII
<PAGE>
MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 2
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
NUMBER OF NET ASSET
SHARES VALUE
---------- ---------
<S> <C> <C>
Scudder Portfolios:
Bond Portfolio....................................... 2,320,705 $ 6.73
Capital Growth Portfolio............................. 12,380,771 16.50
International Portfolio.............................. 7,896,430 13.25
TCI Growth Fund....................................... 8,155,277 10.24
Calvert Responsibly Invested Portfolio................ 13,391,059 1.77
Fidelity Portfolios:
Equity-Income........................................ 2,480,163 21.03
Contrafund........................................... 3,960,443 16.56
Asset Manager........................................ 624,885 16.93
</TABLE>
3. EXPENSES
Administrative Charges -- In connection with its administrative functions,
the Company deducts daily, at an annual rate of .40%, an amount from the value
of the net assets of all Funds except the TCI Growth Fund for which the annual
rate is .20%.
In addition, a deduction of up to $2.00 may be made at the end of each month
from a participant's account, except that such charge shall not exceed 1/12 of
1% of the balance in such account in any month.
Distribution Expense Charge -- As principal underwriter, the Company
performs all distribution and sales functions and bears all distribution and
sales expenses relative to the Contracts. For providing these services, the
Company deducts daily, at an annual rate of .35%, an amount from the value of
the net assets of each Fund to cover distribution expenses.
Mortality and Expense Risk Charge -- The Company assumes the risk to make
annuity payments in accordance with annuity tables provided in the Contracts
regardless of how long a participant lives and also assumes certain expense
risks associated with such annuity payments. For assuming this risk, the
Company deducts daily, at an annual rate of .50%, an amount from the value of
the net assets of each Fund.
4. DIVIDENDS
All dividend distributions are reinvested in additional shares of the
respective Funds or Portfolios at net asset value. On December 30, 1996 a
dividend distribution was declared by the Investment Company to shareholders
of record December 30, 1996. This dividend was paid on December 31, 1996. In
addition, the Investment Company declared and paid a dividend distribution on
September 15, 1996. The combined amount of these dividends was as follows:
<TABLE>
<S> <C>
Money Market Fund............................................ $ 1,324,066
All America Fund............................................. 13,468,089
Equity Index Fund............................................ 2,017,643
Bond Fund.................................................... 2,262,234
Short-Term Bond Fund......................................... 93,631
Mid-Term Bond Fund........................................... 617,704
Composite Fund............................................... 31,535,711
Aggressive Equity Fund....................................... 12,716,658
</TABLE>
On January 29, 1996, April 26, 1996, July 29, 1996 and October 29, 1996,
dividends were paid by the Scudder Bond Portfolio. The combined amount of the
dividends was $1,316,556.
On January 29, 1996, February 27, 1996, April 26, 1996, July 29, 1996, and
October 29, 1996 dividends were paid by the Scudder Capital Growth Portfolio.
The combined amount of the dividends was $15,621,108.
On February 27, 1996 and April 26, 1996, dividends were paid by the Scudder
International Portfolio. The combined amount of the dividends was $2,077,284.
XIV
<PAGE>
MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 2
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
On March 30, 1996 a dividend was paid by the TCI Growth Fund. The amount of
the dividend was $10,819,616.
On December 31, 1996, a dividend was paid by the Calvert Responsibly
Invested Portfolio. The amount of the dividend was $1,778,522.
On February 2, 1996 a dividend was paid by the Fidelity Equity-Income
Portfolio. The amount of the dividend was $965,667.
On February 2, 1996, a dividend was paid by the Fidelity Contrafund
Portfolio. The amount of the dividend was $261,805.
On February 2, 1996, a dividend was paid by the Fidelity Asset Manager
Portfolio. The amount of the dividend was $245,695.
5. FINANCIAL HIGHLIGHTS
Shown below are financial highlights for a Unit outstanding for each of the
previous five years ended December 31,
<TABLE>
<CAPTION>
MUTUAL OF AMERICA MONEY MARKET FUND
---------------------------------------
1996 1995 1994 1993 1992
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year......... $1.80 $1.72 $1.68 $1.65 $1.62
======= ======= ======= ======= =======
Unit value, end of year............... $1.87 $1.80 $1.72 $1.68 $1.65
======= ======= ======= ======= =======
Thousands of units outstanding, end of
year................................. 17,511 17,502 17,653 15,815 16,545
======= ======= ======= ======= =======
<CAPTION>
MUTUAL OF AMERICA ALL AMERICA FUND
---------------------------------------
1996 1995 1994 1993 1992
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year......... $4.52 $3.35 $3.36 $3.03 $2.97
======= ======= ======= ======= =======
Unit value, end of year............... $5.39 $4.52 $3.35 $3.36 $3.03
======= ======= ======= ======= =======
Thousands of units outstanding, end of
year................................. 49,798 43,620 38,669 36,510 32,352
======= ======= ======= ======= =======
<CAPTION>
MUTUAL OF AMERICA BOND FUND
---------------------------------------
1996 1995 1994 1993 1992
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year......... $2.69 $2.28 $2.39 $2.13 $1.99
======= ======= ======= ======= =======
Unit value, end of year............... $2.75 $2.69 $2.28 $2.39 $2.13
======= ======= ======= ======= =======
Thousands of units outstanding, end of
year................................. 12,548 12,083 10,601 12,244 9,203
======= ======= ======= ======= =======
<CAPTION>
MUTUAL OF AMERICA COMPOSITE FUND
---------------------------------------
1996 1995 1994 1993 1992
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year......... $3.39 $2.82 $2.95 $2.55 $2.43
======= ======= ======= ======= =======
Unit value, end of year............... $3.75 $3.39 $2.82 $2.95 $2.55
======= ======= ======= ======= =======
Thousands of units outstanding, end of
year................................. 66,715 70,558 73,239 71,215 50,944
======= ======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
MUTUAL OF AMERICA MUTUAL OF AMERICA
EQUITY SHORT-TERM
INDEX FUND BOND FUND
--------------------------- -------------------------
1996 1995 1994 1993(A) 1996 1995 1994 1993(A)
------ ------ ----- ------- ----- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of
year/period............ $1.42 $1.05 $1.05 $1.00 $1.10 $1.03 $1.03 $1.00
====== ====== ===== ===== ===== ===== ===== =====
Unit value, end of
year/period............ $1.72 $1.42 $1.05 $1.05 $1.14 $1.10 $1.03 $1.03
====== ====== ===== ===== ===== ===== ===== =====
Thousands of units out-
standing, end of
year/period............ 35,660 17,109 4,644 2,135 2,129 1,447 1,132 747
====== ====== ===== ===== ===== ===== ===== =====
</TABLE>
XV
<PAGE>
MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 2
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
MUTUAL OF AMERICA MUTUAL OF AMERICA
MID-TERM AGGRESSIVE
BOND FUND EQUITY FUND
------------------------- ---------------------
1996 1995 1994 1993(A) 1996 1995 1994(B)
----- ----- ----- ------- ------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of
year/period.................. $1.16 $1.01 $1.06 $1.00 $1.43 $1.05 $1.00
===== ===== ===== ===== ====== ====== =====
Unit value, end of
year/period.................. $1.19 $1.16 $1.01 $1.06 $1.80 $1.43 $1.05
===== ===== ===== ===== ====== ====== =====
Thousands of units outstand-
ing, end of year/period...... 3,828 2,848 1,444 1,411 49,800 20,858 9,145
===== ===== ===== ===== ====== ====== =====
</TABLE>
<TABLE>
<CAPTION>
SCUDDER
--------------------------------------------------------------------
BOND FUND CAPITAL GROWTH FUND
--------------------------------- ----------------------------------
1996 1995 1994 1993 1992 1996 1995 1994 1993 1992
------ ------ ------ ------ ----- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of
year................... $11.30 $ 9.69 $10.32 $ 9.30 $8.78 $18.64 $14.67 $16.46 $13.80 $13.09
====== ====== ====== ====== ===== ====== ====== ====== ====== ======
Unit value, end of
year................... $11.48 $11.30 $ 9.69 $10.32 $9.30 $22.11 $18.64 $14.67 $16.46 $13.80
====== ====== ====== ====== ===== ====== ====== ====== ====== ======
Thousands of units
outstanding, end of
year................... 1,362 1,269 1,169 1,277 1,053 9,266 8,556 8,121 6,582 3,698
====== ====== ====== ====== ===== ====== ====== ====== ====== ======
<CAPTION>
SCUDDER TCI
--------------------------------- ----------------------------------
INTERNATIONAL FUND GROWTH FUND
--------------------------------- ----------------------------------
1996 1995 1994 1993 1992 1996 1995 1994 1993 1992
------ ------ ------ ------ ----- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of
year................... $11.85 $10.80 $11.06 $ 8.13 $8.48 $12.18 $ 9.39 $ 9.61 $ 8.81 $ 9.01
====== ====== ====== ====== ===== ====== ====== ====== ====== ======
Unit value, end of
year................... $13.43 $11.85 $10.80 $11.06 $8.13 $11.53 $12.18 $ 9.39 $ 9.61 $ 8.81
====== ====== ====== ====== ===== ====== ====== ====== ====== ======
Thousands of units
outstanding, end of
year................... 7,688 7,269 8,610 5,400 2,262 7,264 8,061 6,361 5,946 5,280
====== ====== ====== ====== ===== ====== ====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
CALVERT
----------------------------------
RESPONSIBLY INVESTED FUND
----------------------------------
1996 1995 1994 1993 1992
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year.............. $ 2.01 $ 1.57 $ 1.64 $ 1.54 $ 1.44
====== ====== ====== ====== ======
Unit value, end of year.................... $ 2.23 $ 2.01 $ 1.57 $ 1.64 $ 1.54
====== ====== ====== ====== ======
Thousands of units outstanding, end of
year...................................... 10,713 7,849 5,986 5,151 2,742
====== ====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
FIDELITY
--------------------------------------------
EQUITY- CONTRA ASSET MANAGER
INCOME FUND FUND FUND
-------------- -------------- --------------
1996 1995(C) 1996 1995(C) 1996 1995(C)
------ ------- ------ ------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of
year/period..................... $19.43 $16.30 $13.85 $11.43 $15.66 $14.04
====== ====== ====== ====== ====== ======
Unit value, end of year/period... $21.93 $19.43 $16.59 $13.85 $17.72 $15.66
====== ====== ====== ====== ====== ======
Thousands of units outstanding,
end of year/period.............. 2,342 728 3,880 1,792 613 184
====== ====== ====== ====== ====== ======
</TABLE>
- -------
(a) Commenced Operations February 5, 1993
(b) Commenced Operations, May 2, 1994
(c) Commenced Operations May 1, 1995
XVI
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Mutual of America Life Insurance Company:
We have audited the accompanying statement of assets and liabilities of
Mutual of America Separate Account No. 2 as of December 31, 1996, and the
related statement of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the five years in the period then ended.
These financial statements and financial highlights are the responsibility of
the Separate Account's management. Our responsibility is to express an opinion
on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Mutual of America Separate Account No. 2 as of December 31, 1996, the results
of its operations for the year then ended, the changes in its net assets for
each of the two years in the period then ended, and the financial highlights
for each of the five years in the period then ended, in conformity with
generally accepted accounting principles.
/s/ Arthur Andersen LLP
New York, New York
February 21, 1997
XVII
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MUTUAL OF AMERICA LIFE INSURANCE COMPANY
320 Park Avenue New York, New York 10022-6839 212-224-1600
