<PAGE> 1
REGISTRATION NOS. 333-
811-5166
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO.
POST-EFFECTIVE AMENDMENT NO. [X]
AND/OR
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO.
(CHECK APPROPRIATE BOX OR BOXES.)
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MONY AMERICA VARIABLE ACCOUNT A
(EXACT NAME OF REGISTRANT)
MONY LIFE INSURANCE COMPANY
OF AMERICA
(NAME OF DEPOSITOR)
1740 BROADWAY
NEW YORK, NEW YORK 10019
(ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
DEPOSITOR'S TELEPHONE NUMBER, INCLUDING AREA CODE (212) 708-2000
EDWARD P. BANK
VICE PRESIDENT AND DEPUTY GENERAL COUNSEL
THE MUTUAL LIFE INSURANCE COMPANY OF NEW YORK
1740 BROADWAY
NEW YORK, NEW YORK 10019
(NAME AND ADDRESS OF AGENT FOR SERVICE)
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APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as possible after the
effective date of this Registration Statement. It is proposed that this filing
will become effective: (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b) of Rule
485
[ ] pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a)(1) of Rule
485
[ ] on pursuant to paragraph (a)(1) of Rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment
designates a new effective date for
a previously filed post-effective
amendment.
TITLE OF SECURITIES BEING REGISTERED: Flexible Payment Variable Annuity
Contracts
Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until Registrant shall file a
further amendment which specifically states that this Registration Statement
shall become effective in accordance with Section 8(a) of the Securities Act of
1933 or until this Registration Statement shall become effective on such date as
the Commission, acting pursuant to said Section 8(a), may determine.
STATEMENT PURSUANT TO RULE 24f-2
The Registrant registers an indefinite number or amount of its flexible
payment variable annuity contracts under the Securities Act of 1933 pursuant to
Rule 24f-2 under the Investment Company Act of 1940. The Rule 24f-2 notice for
the Registrant's fiscal year ending December 31, 1997 was filed on March 31,
1998.
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<PAGE> 2
CROSS REFERENCE SHEET
(REQUIRED BY RULE 495)
PART A
<TABLE>
<CAPTION>
ITEM NO. LOCATION
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<C> <S> <C>
1. Cover Page...................................... Cover Page
2. Definitions..................................... Definitions
3. Synopsis........................................ Synopsis
4. Condensed Financial Information................. Condensed Financial Information
5. General Description of Registrant, Depositor,
and Portfolio Companies......................... MONY Life Insurance Company of America;
MONY America Variable Account A; The
Funds; Charges and Deductions
6. Deductions and Expenses......................... Charges and Deductions
7. General Description of Variable Annuity
Contracts....................................... Payment and Allocation of Purchase
Payments; Other Provisions
8. Annuity Period.................................. Annuity Provisions
9. Death Benefit................................... Death Benefit; Annuity Provisions
10. Purchases and Contract Value.................... Payment and Allocation of Purchase
Payments
11. Redemptions..................................... Surrenders
12. Taxes........................................... Federal Tax Status
13. Legal Proceedings............................... Legal Proceedings
14. Table of Contents of Statement of Additional
Information..................................... Table of Contents of Statement of
Additional Information
PART B
Information Required in a Statement of Additional Information
15. Cover Page...................................... Cover Page
16. Table of Contents............................... Table of Contents
17. General Information and History................. MONY Life Insurance Company of America
18. Services........................................ Not Applicable
19. Purchase of Securities Being Offered............ Not Applicable
20. Underwriters.................................... Prospectus -- MONY Life Insurance Company
of America
21. Calculation of Performance Data................. Performance Data
22. Annuity Payments................................ Not Applicable
23. Financial Statements............................ Financial Statements
PART C
Information related to the following Items is set forth under the appropriate Item, so numbered,
in
Part C to this Registration Statement.
24. Financial Statements and Exhibits
25. Directors and Officers of the Depositor
26. Persons Controlled by or Under Common Control with the Depositor or Registrant
27. Number of Contractowners
28. Indemnification
29. Principal Underwriters
30. Location of Accounts and Records
31. Management Services
32. Undertakings
</TABLE>
<PAGE> 3
PROSPECTUS
DATED SEPTEMBER 1, 1998
INDIVIDUAL FLEXIBLE PAYMENT VARIABLE ANNUITY CONTRACTS
ISSUED BY
MONY AMERICA VARIABLE ACCOUNT A
MONY LIFE INSURANCE COMPANY OF AMERICA
The Individual Flexible Payment Variable Annuity Contracts (the
"Contracts") described in this Prospectus provide for accumulation on a variable
basis and payment of annuity benefits. The Contracts are designed for use by
individuals for retirement accumulations including for funding plans that may or
may not qualify for special federal income tax treatment. In addition, pension
and retirement plans may purchase the Contracts if they receive favorable tax
treatment under Sections 401, 403 (other than section 403 (b)), 408, 408A or 457
of the Internal Revenue Code. (See "Definitions -- Qualified Plans" at page 2.)
At the election of the Owner, purchase payments for the Contracts will be
allocated to either (i) a segregated investment account of MONY Life Insurance
Company of America (the "Company"), which account has been designated MONY
America Variable Account A (the "Variable Account"), or (ii) the Guaranteed
Interest Account, which is a part of the Company's General Account or to both as
the Owner may determine. The Variable Account purchases shares of MONY Series
Fund, Inc. and Enterprise Accumulation Trust at their net asset value. (See "The
Funds" at page 9.) Upon the issuance of the Contract, interest will be credited
until the end of the Right to Return Contract Period on payments received before
the end of the Right to Return Contract Period. Interest will be credited at a
rate declared by the Company, but not less than 3.5% per year. After expiration
of the Right to Return Contract Period, the Fund Value of the Contract will
automatically be transferred to one or more of the Subaccounts of the Variable
Account in accordance with the instructions of the Owner. (See "PAYMENT AND
ALLOCATION OF PREMIUMS" at page 12.) Owners bear the complete investment risk
for all amounts allocated to the Variable Account. This Prospectus generally
describes only the variable features of the Contract. (For a summary of the
Guaranteed Interest Account, see "Guaranteed Interest Account" at page 11.) A
separate prospectus describes the market value adjustment provision of the
Contract. This Prospectus sets forth the basic information that a prospective
purchaser should know before investing. Please keep this Prospectus for future
reference.
A Statement of Additional Information dated September 1, 1998, incorporated
herein by reference, and containing additional information about the Contracts,
has been filed with the Securities and Exchange Commission. The Statement of
Additional Information is available from the Company without charge upon written
request to the address shown on the request form on page 33 of this Prospectus
or by telephoning 1-800-487-6669. The Table of Contents of the Statement of
Additional Information can be found on page 33 of this Prospectus.
This Prospectus does not constitute an offer to sell or a solicitation of
an offer to buy the Contracts in any jurisdiction in which such may not be
lawfully made.
In pursuing its investment objective, the High-Yield Bond Subaccount
purchases shares of the High Yield Bond Portfolio which may invest significantly
in lower rated bonds, commonly referred to as "Junk Bonds." Bonds of this type
are considered to be speculative with regard to the payment of interest and
return of principal. Investment in these types of securities have special risks
and therefore, may not be suitable for all investors. Investors should carefully
assess the risks associated with allocating purchase payments to this
subaccount.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE COMMISSION,
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS
PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED (OR PRECEDED) BY A CURRENT PROSPECTUS
FOR MONY SERIES FUND, INC., ENTERPRISE ACCUMULATION TRUST, AND MONY LIFE
INSURANCE COMPANY OF AMERICA.
MONY LIFE INSURANCE COMPANY OF AMERICA
1740 BROADWAY
NEW YORK, NEW YORK 10019
1-800-487-6669
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Definitions................................................. 1
Synopsis.................................................... 3
Condensed Financial Information............................. 8
The Company and the Variable Account........................ 9
MONY Life Insurance Company of America.................... 9
Year 2000 Issue........................................... 9
MONY America Variable Account A........................... 9
The Funds................................................. 10
Guaranteed Interest Account................................. 12
Payment and Allocation of Purchase Payments................. 13
Issuance of the Contract.................................. 13
Right to Return Contract Provision........................ 14
Allocation of Purchase Payments and Fund Value............ 14
Termination of the Contract............................... 17
Surrenders.................................................. 17
Loans....................................................... 18
Death Benefit............................................... 18
Death Benefit Provided by the Contract.................... 18
Optional Enhancement Death Benefit........................ 19
Election and Effective Date of Election................... 19
Payment of Death Benefit.................................. 19
Charges and Deductions...................................... 19
Deductions from Payments.................................. 19
Charges Against Fund Value................................ 20
Mortality and Expense Risk Charge......................... 22
Taxes..................................................... 22
Investment Advisory Fee................................... 22
Annuity Provisions.......................................... 24
Annuity Starting Date..................................... 24
Election and Change of Settlement Option.................. 24
Settlement Options........................................ 24
Frequency of Annuity Payments............................. 25
Additional Provisions..................................... 25
Other Provisions............................................ 26
Ownership................................................. 26
Provision Required by Section 72(s) of the Code........... 26
Provision Required by Section 401(a)(9) of the Code....... 26
Secondary Annuitant....................................... 27
Assignment................................................ 27
Change of Beneficiary..................................... 28
Substitution of Securities................................ 28
Modification of the Contracts............................. 28
Change in Operation of Variable Accounts.................. 28
Voting Rights............................................... 28
Distribution of the Contracts............................... 29
</TABLE>
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<TABLE>
<CAPTION>
PAGE
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<S> <C>
Federal Tax Status.......................................... 30
Introduction.............................................. 30
Tax Treatment of the Company.............................. 30
Taxation of Annuities in General.......................... 30
Retirement Plans.......................................... 31
Performance Data............................................ 32
Additional Information...................................... 32
Legal Proceedings........................................... 33
Financial Statements........................................ 33
Table of Contents of Statement of Additional Information.... 34
</TABLE>
<PAGE> 6
DEFINITIONS
ADMINISTRATIVE OFFICE -- The Company's administrative office at 1740
Broadway, New York, N.Y. 10019. "Home Office" also includes the Company's
Operations Center at 1 MONY Plaza, Syracuse, N.Y. 13221.
AGE -- The person's age as of his or her last birthday on the Effective
Date, increased by the number of complete Contract Years elapsed.
ANNUITANT -- The person upon whose continuation of life any annuity payment
depends.
ANNUITY STARTING DATE -- The date on which annuity payments are to begin.
BENEFICIARY -- The party entitled to receive benefits payable at the death
of the Annuitant or (if applicable) the Secondary Annuitant.
BUSINESS DAY -- Each day that the New York Stock Exchange is open for
trading or any other day on which there is sufficient trading in the securities
of a Portfolio of the Fund on a national or international securities exchange to
affect materially the value of the Units of the corresponding Subaccount.
CASH VALUE -- The Fund Value of the Contract, less (1) any applicable
surrender charges, (2) any market value adjustments, and (3) outstanding loan
balance including accrued interest, if any.
COMPANY -- MONY Life Insurance Company of America.
CONTRACT -- The Flexible Payment Variable Annuity Contract offered by the
Company and described in this Prospectus.
CONTRACT ANNIVERSARY -- An anniversary of the Effective Date of the
Contract.
CONTRACT YEAR -- Any period of twelve (12) months commencing with the
Effective Date and each Contract Anniversary thereafter.
EFFECTIVE DATE -- The date the contract goes into effect as shown in the
Contract.
ENTERPRISE ACCUMULATION TRUST -- The Enterprise Accumulation Trust, a
Massachusetts business trust.
FUND VALUE -- The aggregate dollar value as of any Business Day of all
amounts accumulated under each of the Subaccounts, the Guaranteed Interest
Account, and the Loan Account of the Contract. If the term Fund Value is
preceded or followed by the terms Subaccount(s), the Guaranteed Interest
Account, and the Loan Account, or any one of more of those terms, Fund Value
means only the Fund Value of the Subaccount, the Guaranteed Interest Account, or
the Loan Account, as the context requires.
FUNDS -- MONY Series Fund, Inc. and Enterprise Accumulation Trust.
FREE PARTIAL SURRENDER AMOUNT:
For Non-qualified Contracts -- An amount, up to 10 percent of the Fund
Value of the Subaccount(s) and the Guaranteed Interest Account (not the Loan
Account) at the beginning of the Contract Year, that may be surrendered without
the imposition of a Surrender Charge. For the purposes of the Free Partial
Surrender Amount only, Non-Qualified Contracts include Contracts issued for IRAs
and SEP-IRAs.
For Qualified Contracts -- An amount, up to the greater of $10,000 (but not
more than the Fund Value of the Subaccount(s) and the Guaranteed Interest
Account or 10 percent of the Fund Value of the Subaccount(s) and the Guaranteed
Interest Account at the beginning of the Contract Year, that may be surrendered
without the imposition of a Surrender Charge. Fund Value for this purpose means
only the Fund Value of the Subaccounts and the Guaranteed Interest Account (not
the Loan Account). For the purposes of the Free Partial Surrender Amount only,
Qualified Contracts exclude Contracts issued for IRAs and SEP-IRAs.
1
<PAGE> 7
GUARANTEED INTEREST ACCOUNT -- A part of the Company's general account, the
Guaranteed Interest Account pays interest at a rate declared by the Company,
which the Company guarantees will not be less than 3.5%.
LOAN ACCOUNT -- A part of the Company's general account, the Loan Account
pays interest at a rate not less than 3.5% per year. For those contracts that
have a loan provision, an amount equal to the loan requested is transferred from
one or more of the Subaccounts and/or the Guaranteed Interest Account as
determined by the Owner, subject to the provisions of the Contract, to the Loan
Account as security for the loan.
MARKET VALUE ADJUSTMENT -- An amount added to or deducted from the amount
surrendered or transferred from the Guaranteed Interest Account.
MONY SERIES FUND -- MONY Series Fund, Inc., a Maryland Corporation.
NET PURCHASE PAYMENT -- An amount equal to a Purchase Payment, less any
deduction for premium or similar taxes.
NON-QUALIFIED CONTRACTS -- Contracts issued under Non-Qualified Plans.
NON-QUALIFIED PLANS -- Retirement Plans that do not receive favorable tax
treatment under Sections 401, 403, 408, or 457 of the Internal Revenue Code.
OPERATIONS CENTER -- The administrative office of the Company located at 1
MONY Plaza, Syracuse, New York 13221.
OUTSTANDING DEBT -- Total loan balance plus any accrued loan interest.
OWNER -- The person so designated in the application. If a Contract has
been absolutely assigned, the assignee becomes the Owner. A collateral assignee
is not the Owner.
PORTFOLIO -- A separate investment portfolio of the Funds.
PURCHASE PAYMENT (PAYMENT) -- An amount paid to the Company by the Owner or
on the Owner's behalf as consideration for the benefits provided by the
Contract.
QUALIFIED CONTRACTS -- Contracts issued under Qualified Plans.
QUALIFIED PLANS -- Retirement plans that receive favorable tax treatment
under Sections 401, 403, 408, 408A or 457 of the Internal Revenue Code.
RIGHT TO RETURN CONTRACT PERIOD -- A period which follows the application
for the Contract and its issuance to the Owner. The period runs to the date
which is 10 days (or longer in certain states) after the Owner receives the
Contract. During the Right to Return Contract Period, the Owner may cancel the
Contract and receive the amount provided for under the terms of the Contract.
SECONDARY ANNUITANT -- The party designated by the Owner to become the
Annuitant, subject to certain conditions, on the death of the Annuitant.
SUBACCOUNT -- A subdivision of the Variable Account. Each Subaccount
invests exclusively in the shares of a corresponding Portfolio of the Fund.
SUCCESSOR OWNER -- The living person who, at the death of the Owner,
becomes the new Owner.
SURRENDER CHARGE -- A contingent deferred sales charge that may be applied
against amounts surrendered. (See "Charges Against Fund Value -- Surrender
Charge" at page 19.)
UNIT -- The measure by which the Contract's interest in each Subaccount is
determined.
VARIABLE ACCOUNT -- A separate investment account of the Company,
designated as MONY America Variable Account A, to which Net Purchase Payments
will be allocated.
2
<PAGE> 8
SYNOPSIS
THE CONTRACTS
The Individual Flexible Payment Variable Annuity Contracts (the
"Contracts") described in this Prospectus provide for the accumulation of values
on a variable basis or a guaranteed interest basis or a combination of both and
the payment of annuity benefits. The Contracts are designed for use in
connection with personal retirement plans, some of which (the "Qualified Plans")
may qualify for federal income tax advantages available under Sections 401, 403
(other than Section 403(b)), 408, 408A and 457 of the Internal Revenue Code (the
"Code").
THE VARIABLE ACCOUNT
Net Purchase Payments for the Contracts will be allocated at the Owner's
option to Sub-accounts, made available therefor in accordance with the terms of
the Contracts, of a segregated investment account of MONY Life Insurance Company
of America (the "Company"), which account has been designated MONY America
Variable Account A (the "Variable Account") or to the Guaranteed Interest
Account, which is a part of the Company's general account and consists of all
the Company's assets other than assets allocated to segregated investment
accounts of the Company, including the Variable Account. The Subaccounts of the
Variable Account invest in shares of MONY Series Fund, Inc. (the "MONY Series
Fund") and The Enterprise Accumulation Trust (the "Accumulation Trust") (the
MONY Series Fund and the Accumulation Trust are collectively called the "Funds")
at their net asset value. (See "The Funds" at page 9.) Owners bear the entire
investment risk for all amounts allocated to the Variable Account. Net Purchase
Payments allocated to the Guaranteed Interest Account will be credited with
interest at rates guaranteed by the Company for specified periods. (See
"Guaranteed Interest Account" at page 11.)
PURCHASE PAYMENTS
For Non-Qualified Plans and individual retirement accounts and annuities
purchased by individuals under Section 408 of the Code (other than Simplified
Employee Pensions), the minimum initial Purchase Payment for the Contract is
$2,000, except that the minimum initial Purchase Payment for individuals is $600
if Purchase Payments are made through automatic checking account withdrawals.
For H.R. 10 plans, certain corporate or association retirement plans, Simplified
Employee Pensions under Section 408 of the Code, and annuity purchase plans
sponsored by certain tax-exempt organizations, governmental entities, or public
school systems, the minimum initial Purchase Payment is $600. Additional
Purchase Payments may be made at any time. Different limits apply where certain
automatic payment plans are used. (See "Issuance of the Contract" at page 12.)
The Company may change any of these requirements in the future.
DEDUCTIONS FROM PURCHASE PAYMENTS
Deductions may be made from Purchase Payments for premium or similar taxes.
Currently, the Company makes no such deduction, but may do so with respect to
future payments. The amount of the deduction will vary from state to state, but
will generally range from 0 percent to 3.5 percent of Payments. In the event
that the Company will begin to make deductions for such tax from future Purchase
Payments, it will give notice to each affected Owner.
RIGHT TO RETURN CONTRACT PROVISION
Within 10 days (or longer in certain states) of the day the Contract is
delivered to the Owner, it may be returned to the Company or to the agent
through whom it was purchased. When the Contract is received by the Company, it
will be voided as if it had never been in force. The amount to be refunded is
equal to all Purchase Payments received.
3
<PAGE> 9
SURRENDER CHARGE
A contingent deferred sales charge (called a "Surrender Charge") will be
imposed upon requests for surrenders or commencement of annuity benefits during
the first 8 contract years. In addition, the Contract details certain other
circumstances under which a surrender charge will not be imposed. The Surrender
Charge is intended to reimburse the Company for expenses incurred that are
related to sales of the Contract. In no event will the aggregate Surrender
Charge exceed 7 percent of the total Fund Value. (See "Charges Against Fund
Value -- Surrender Charge" at page 19.)
The Surrender Charge, which otherwise would have been deducted, will not be
deducted to the extent necessary to permit the Contractholder to obtain during a
contract year, for Qualified Contracts (other than Contracts issued for IRA and
SEP-IRA) an amount up to the greater of $10,000 (but not more than the
Contract's Fund Value of the subaccounts and the Guaranteed Interest Account) or
10 percent of the Contract's Fund Value of the subaccounts and the Guaranteed
Interest Account on the first day of the contract year; and for Non-qualified
Contracts (and Contracts issued for IRA and SEP-IRA), an amount up to 10% of the
Contract's Fund Value of the subaccounts and the Guaranteed Interest Account on
the first day of the contract year. Contract Fund Value for this purpose means
the Fund Value at the beginning of the contract year in the sub-accounts and the
Guaranteed Interest Account (the Loan Account, if any).
MORTALITY AND EXPENSE RISK CHARGE
A Mortality and Expense Risk Charge is deducted daily from the net assets
of the Variable Account for mortality and expense risks assumed by the Company
(See "Mortality and Expense Risk Charge" at page 21.)
TRANSFER CHARGE
Contract value may be transferred. A transfer charge is not currently
imposed, but the Company has reserved the right to impose a charge for each
transfer, which will not exceed $25 per transfer. If imposed, the transfer
charge will be deducted from the Contract's Fund Value. (See "Charges Against
Fund Value -- Transfer Charge" at page 21.)
MARKET VALUE ADJUSTMENT
A Market Value Adjustment will be imposed on transfers or surrenders
(partial or full) from the Guaranteed Interest Account. The adjustment can be
either a positive or negative assessment. The Market Value Adjustment reflects
the difference between the rate(s) then being credited to amounts allocated to
the Guaranteed Interest Account and the currently declared rate applicable to
new payments to the Guaranteed Interest Account. No adjustment is made for
amount withdrawn or transferred within 30 days before the end of the
accumulation period, nor to benefits paid as a result of the death of the
Annuitant. A Market Value Adjustment will be imposed on benefits paid as a
result of the death of the Owner. The Guaranteed Interest Account and its market
value adjustment feature are described in a separate prospectus which
accompanies this Prospectus.
ANNUAL CONTRACT CHARGE
On each Contract Anniversary prior to the Annuity Starting Date, the
Company deducts an Annual Contract Charge from the Fund Value, to reimburse the
Company for administrative expenses relating to the maintenance of the Contract.
The charge is currently $0, but the Company may in the future change the amount
of the charge. The charge will never, however, exceed $50. (See "Charges Against
Fund Value -- Annual Contract Charge" at page 20.)
DEATH BENEFIT
In the event of death of the Annuitant (and the Secondary Annuitant, if one
has been named) prior to the Annuity Starting Date, the Company will pay a death
benefit to the Beneficiary. If death of the Annuitant
4
<PAGE> 10
occurs after the Annuity Starting Date, no death benefit will be payable except
as may be payable under the settlement option selected. (See "Death Benefit" at
page 18.)
TAX UPON SURRENDER
Amounts withdrawn may be subject to income tax. In addition, a penalty tax
may be payable pursuant to the Internal Revenue Code on withdrawal of amounts
accumulated under any annuity contract. (See "FEDERAL TAX STATUS" at page 28.)
MONY LIFE INSURANCE COMPANY OF AMERICA
MONY AMERICA VARIABLE ACCOUNT A
TABLE OF FEES FOR THE YEAR ENDED DECEMBER 31, 1997
CONTRACTOWNER TRANSACTION EXPENSES:
<TABLE>
<S> <C>
Maximum Deferred Sales Load (Surrender Charge) (as a
percentage of fund value.)................................ 7%*
Annual Contract Charge:..................................... $0
Separate Account Annual Expenses:
Mortality and Expense Risk Fees........................... 1.25%**
</TABLE>
ANNUAL EXPENSES OF MONY SERIES FUND, INC. AND ENTERPRISE ACCUMULATION TRUST:
MONY SERIES FUND, INC.
PRO FORMA ANNUAL EXPENSES FOR THE YEAR ENDED DECEMBER 31, 1997
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
<TABLE>
<CAPTION>
LONG TERM GOVERNMENT
INTERMEDIATE TERM BOND SECURITIES MONEY MARKET
BOND PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------------- --------- ---------- ------------
<S> <C> <C> <C> <C>
Expenses (After reimbursement)***...... .16% .12% .25% .09%
Management Fees........................ .50%**** .50%**** .50%**** .40%
--- --- --- ---
Total MONY Series Fund, Inc.
Annual Expenses...................... .66% .62% .75% .49%
=== === === ===
</TABLE>
ENTERPRISE ACCUMULATION TRUST
ANNUAL EXPENSES FOR THE YEAR ENDED DECEMBER 31, 1997
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
<TABLE>
<CAPTION>
HIGH SMALL
SMALL INTERNATIONAL YIELD COMPANY EQUITY
EQUITY CAP MANAGED GROWTH BOND GROWTH INCOME GROWTH
PORTFOLIO PORTFOLIO+ PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO++ PORTFOLIO
--------- ---------- --------- ------------- --------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Expenses................. .04% .06% .03% .34% .17%
Management Fees.......... .80% .80% .73% .85% .60%
---- ---- ---- ----- ---- ---- ---- ----
Total Accumulation
Trust Annual Expenses
(After
Reimbursement)......... .84%+++ .86%+++ .76%+++ 1.19%+++ .77%+++
==== ==== ==== ===== ==== ==== ==== ====
<CAPTION>
GROWTH
CAPITAL AND
APPRECIATION INCOME
PORTFOLIO++ PORTFOLIO++
------------ -----------
<S> <C> <C>
Expenses.................
Management Fees..........
---- ----
Total Accumulation
Trust Annual Expenses
(After
Reimbursement).........
==== ====
</TABLE>
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* The Surrender Charge percentage, which reduces to zero as shown in the table
on page 6, is determined by the number of Contract Anniversaries since the
Effective date of the Contract.
5
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Surrender Charge Percentage Table
<TABLE>
<CAPTION>
# OF CONTRACT SURRENDER
ANNIVERSARIES CHARGE
SINCE EFFECTIVE DATE PERCENTAGE
-------------------- ----------
<S> <C>
0...................................................... 7 %
1...................................................... 7
2...................................................... 6
3...................................................... 6
4...................................................... 5
5...................................................... 4
6...................................................... 3
7...................................................... 2
8 (or more)............................................ 0
</TABLE>
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The Surrender Charge may be reduced under certain circumstances which
include reduction in order to guarantee that certain amounts may be received
free of surrender charge. See "Charges against Fund Value -- Free Partial
Surrender Amount" at page 20.
** The Mortality and Expense Risk charge is deducted at a current daily rate
equivalent to an annual rate of 1.25 percent (and is guaranteed not to
exceed a daily rate equivalent to an annual rate of 1.35 percent) from the
value of the net assets of the Separate Account.
*** Expenses reflect the reallocation of the fees and expenses associated with
the computation of the net asset value of the Fund from MONY America to the
Fund which became effective on and after October 14, 1997. The table
reflects the impact of the reallocation of fees and expenses as if the
reallocation had become effective on and after January 1, 1997. Expenses
also includes custodial credit percentages as follows: Intermediate Term
Bond -- .0080%; Long Term Bond -- .0043%; Government Securities -- .0169%;
and Money Market -- .0048% .
**** Management Fees reflect investment advisory fees of .50% which became
effective on and after October 14, 1997. Prior thereto, the investment
advisory fees were .40%. The table reflects the impact of the increased
fees as if they increase had become effective on and after January 1, 1997.
(See "CHARGES AND DEDUCTIONS -- Investment Advisory Fee" at page .)
+ The name, but not the investment objectives or policies, of the Small Cap
Portfolio was changed effective May 1, 1998 to the Small Company Value
Portfolio.
++ The Sub-accounts corresponding to these Portfolios first became available
for allocation in
-------------, 1998.
+++ These expenses reflect expense reimbursements in effect on May 1, 1995.
Absent these expense reimbursements, expenses would have been as follows:
Equity -- .81%; Small Cap-- .84%; Managed -- .74%; International
Growth -- 1.38%; and High Yield Bond -- .94%. The Equity, Small Cap, and
Managed Portfolio reimbursements relate to mutual fund accounting expense.
The purpose of the Table of Fees beginning on page 5 is to assist the Owner
in understanding the various costs and expenses that the Owner will bear,
directly or indirectly. The table reflects the expenses of the separate account
as well as of the MONY Series Fund, Inc. and the Enterprise Accumulation Trust.
MONY Series Fund, Inc. and Enterprise Accumulation Trust have provided
information relating to their respective operations. The expenses borne by the
Separate Account are explained under the caption "Charges and Deductions" at
page 19 of this Prospectus. The expenses borne by the MONY Series Fund, Inc. are
explained under the caption "Investment Management Arrangements and Expenses" at
page 19 of the accompanying prospectus for MONY Series Fund, Inc. The expenses
borne by the Enterprise Accumulation Trust assume that the expense
reimbursements in effect on and after May 1, 1990 for the Equity, Small Cap, and
Managed Portfolios which limit the total annual expenses to 1.00% of average net
assets and expense reimbursements which, on and after November 16, 1994
(commencement of operations), limit the total annual expenses of the
International Growth Portfolio to 1.55% of average net assets and the High Yield
Bond Portfolio to .85% of
6
<PAGE> 12
average net assets, will continue throughout the period shown and are explained
under the caption "Management of the Fund" at page 14 of the accompanying
prospectus for the Accumulation Trust. The table does not reflect income taxes
or penalty taxes which may become payable under the Internal Revenue Code or
premium or other taxes which may be imposed under state or local laws.
EXAMPLE
If you surrender your Contract at the end of the time periods shown below,
you would pay the following expenses on a $1,000 investment, assuming 5% annual
return on assets:
<TABLE>
<CAPTION>
AFTER AFTER AFTER AFTER
SUBACCOUNT 1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------- ------ -------- -------- ---------
<S> <C> <C> <C> <C>
Equity....................................... $85 $122 $162 $252
Small Company Value.......................... $85 $123 $163 $254
Managed...................................... $84 $120 $158 $244
International Growth......................... $89 $133 $179 $288
Small Company Growth.........................
Equity Income................................
Growth.......................................
Growth and Income............................
Capital Appreciation.........................
High Yield Bond.............................. $84 $120 $159 $245
Intermediate Term Bond....................... $82 $112 $145 $218
Long Term Bond............................... $81 $111 $144 $216
Government Securities........................ $82 $113 $147 $223
Money Market................................. $81 $111 $142 $213
</TABLE>
If you annuitize at the end of the time periods shown below, you would pay
the following expenses on a $1,000 investment, assuming 5% annual return on
assets:
<TABLE>
<CAPTION>
AFTER AFTER AFTER AFTER
SUBACCOUNT 1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------- ------ -------- -------- ---------
<S> <C> <C> <C> <C>
Equity....................................... $85 $122 $117 $252
Small Company Value.......................... $85 $123 $118 $254
Managed...................................... $84 $120 $113 $244
International Growth......................... $89 $133 $135 $288
Small Company Growth.........................
Equity Income................................
Growth.......................................
Growth and Income............................
Capital Appreciation.........................
High Yield Bond.............................. $84 $120 $114 $255
Intermediate Term Bond....................... $82 $112 $101 $218
Long Term Bond............................... $81 $111 $100 $216
Government Securities........................ $82 $113 $103 $223
Money Market................................. $81 $111 $98 $213
</TABLE>
7
<PAGE> 13
If you do not surrender your Contract at the end of the time periods shown
below, you would pay the following expenses on a $1,000 investment, assuming 5%
annual return on assets:
<TABLE>
<CAPTION>
AFTER AFTER AFTER AFTER
SUBACCOUNT 1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------- ------ -------- -------- ---------
<S> <C> <C> <C> <C>
Equity....................................... $22 $69 $117 $252
Small Company Value.......................... $22 $69 $118 $254
Managed...................................... $21 $66 $113 $244
International Growth......................... $26 $79 $135 $288
Small Company Growth.........................
Equity Income................................
Growth.......................................
Growth and Income............................
Capital Appreciation.........................
High Yield Bond.............................. $22 $66 $114 $245
Intermediate Term Bond....................... $19 $58 $101 $218
Long Term Bond............................... $19 $58 $100 $216
Government Securities........................ $19 $60 $103 $223
Money Market................................. $18 $57 $98 $213
</TABLE>
The examples above should not be considered a representation of past or
future expenses, and actual expenses may be greater or lesser than those shown.
All Variable Account expenses as well as portfolio company (MONY Series Fund and
the Accumulation Trust) expenses, net of expense reimbursements, are reflected
in the examples. Not reflected in the examples which assume surrender at the end
of each time period are income taxes and penalty taxes which may become payable
under the Internal Revenue Code or premium or other taxes which may be imposed
under state or local laws.
8
<PAGE> 14
CONDENSED FINANCIAL INFORMATION
MONY LIFE INSURANCE COMPANY OF AMERICA
MONY AMERICA VARIABLE ACCOUNT A
ACCUMULATION UNIT VALUES
<TABLE>
<CAPTION>
UNIT VALUE
-----------------------------------------------------------------------------------------------
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
SUBACCOUNT INCEPTION* 1988 1989 1990 1991 1992 1993 1994
---------- ---------- --------- --------- --------- --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Equity............................ $10.00 $10.15 $12.29 $11.87 $15.40 $17.94 $19.11 $19.60
Small Cap......................... 10.00 10.19 11.91 10.61 15.53 18.64 22.01 21.73
Intermediate Term Bond............ 10.00 10.29 11.35 11.99 13.66 14.43 15.37 14.95
Long Term Bond.................... 10.00 10.15 11.74 12.32 14.32 15.39 17.36 16.09
Managed........................... 10.00 10.39 13.61 12.96 18.71 21.93 23.91 24.22
Money Market...................... 10.00 10.58 11.35 12.10 12.64 12.91 13.11 13.45
Government Securities............. 10.00 -- -- -- -- -- -- 10.04
International Growth.............. 10.00 -- -- -- -- -- -- 9.91
Small Company Growth..............
Equity Income.....................
Growth............................
Growth and Income.................
Capital Appreciation..............
High Yield Bond................... 10.00 -- -- -- -- -- -- 10.05
<CAPTION>
UNIT VALUE
------------------------------------
DEC. 31, DEC. 31, DEC . 31,
SUBACCOUNT 1995 1996 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C>
Equity............................ $26.82 $33.18
Small Cap......................... 24.11 $26.49
Intermediate Term Bond............ 16.95 $17.36
Long Term Bond.................... 20.68 $20.36
Managed........................... 35.17 $42.90
Money Market...................... 14.03 $14.57
Government Securities............. 11.00 $11.25
International Growth.............. 11.22 $12.48
Small Company Growth..............
Equity Income.....................
Growth............................
Growth and Income.................
Capital Appreciation..............
High Yield Bond................... 11.54 $12.88
</TABLE>
<TABLE>
<CAPTION>
UNITS OUTSTANDING
----------------------------------------------------------------------------------------------
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
SUBACCOUNT 1988 1989 1990 1991 1992 1993 1994 1995
---------- -------- --------- --------- --------- --------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Equity............................. -- 724,942 932,249 1,556,288 2,956,822 3,865,965 5,426,511
Small Cap.......................... -- 205,615 549,782 1,476,360 4,249,653 5,924,266 6,055,472
Intermediate Term Bond............. -- 224,861 335,862 673,719 1,673,790 1,753,781 1,806,518
Long Term Bond..................... -- 409,738 618,029 1,193,954 2,673,790 2,245,807 2,477,643
Managed............................ -- 2,732,585 4,291,015 9,199,182 18,964,250 24,924,610 31,540,233
Money Market....................... 1,324,393 1,570,127 2,718,704 3,698,103 5,304,884 6,504,679
Government Securities.............. -- -- -- -- -- 17,347 679,711
International Growth............... -- -- -- -- -- 208,202 1,456,982
Small Company Growth...............
Equity Income......................
Growth.............................
Growth and Income..................
Capital Appreciation...............
High Yield Bond.................... -- -- -- -- -- 6,870 1,194,315
<CAPTION>
UNITS OUTSTANDING
-----------------------
DEC. 31, DEC. 31,
SUBACCOUNT 1996 1997
---------- ---------- ----------
<S> <C> <C>
Equity............................. 8,212,227
Small Cap.......................... 6,346,453
Intermediate Term Bond............. 1,916,050
Long Term Bond..................... 2,506,531
Managed............................ 39,371,381
Money Market....................... 8,278,977
Government Securities.............. 1,269,214
International Growth............... 3,610,923
Small Company Growth...............
Equity Income......................
Growth.............................
Growth and Income..................
Capital Appreciation...............
High Yield Bond.................... 2,361,710
</TABLE>
- ---------------
* MONY America Variable Account A commenced operations on November 25, 1987. The
Intermediate Term Bond, Long Term Bond, and Money Market Subaccounts became
available for allocation on that date, however, only the Money Market
Subaccount had operations in 1987. The Equity, Small Cap Company, and Managed
Subaccounts became available for allocation on August 1, 1988. The Government
Securities, International Growth, and High Yield Bond Subaccounts first became
available for allocation on November 16, 1994. The Small Company Growth,
Growth Equity Income, Growth and Income, and Capital Appreciation Subaccounts
first became available for allocation on , 1998.
9
<PAGE> 15
THE COMPANY AND THE VARIABLE ACCOUNT
MONY LIFE INSURANCE COMPANY OF AMERICA
MONY Life Insurance Company of America (the "Company") is a stock life
insurance company organized in the state of Arizona. The Company is currently
licensed to sell life insurance and annuities in 49 states (not including New
York), the District of Columbia, the U.S. Virgin Islands and Puerto Rico. The
Company is the corporate successor of VICO Credit Life Insurance Company,
incorporated in Arizona on March 6, 1969. The Company's financial statements may
be found in the Statement of Additional Information.
The Company is a wholly owned subsidiary of The Mutual Life Insurance
Company of New York ("MONY"), organized under the laws of the State of New York
in 1842 as a mutual life insurance company. The principal offices of MONY and
the Company are at 1740 Broadway, New York, New York 10019. MONY Securities
Corp., an affiliate of the Company and MONY, is the principal underwriter for
the Contracts described in this Prospectus. The Company may purchase certain
administrative services from MONY under a services agreement, to enable the
Company to administer the Contracts.
In September 1998, MONY announced that it had begun the process of
demutualization. If completed, it is not expected that demutualization will have
any material effect on MONY America Variable Account A.
YEAR 2000 ISSUE
The Year 2000 issue is the result of widespread use of computer systems
which use two digits (rather than four) to define the applicable year. Such
programming was a common industry practice designed to avoid the significant
costs associated with the additional mainframe computer capacity which would
have been necessary to accommodate a four digit year field. As a result, any of
the Company's computer systems that have time-sensitive software may recognize a
date using "00" as the year 1900 rather than the year 2000. This could result in
a major system failure or in miscalculations.
The Company has conducted a comprehensive review of its computer systems to
identify the systems that could be affected by the "Year 2000" issue and has
developed and implemented a plan to resolve the issue. The Company currently
believes that with the modifications to existing software and converting to new
software, the Year 2000 problem will not pose significant operational problems
for the Company's computer systems. However, if such modifications and
conversions are not completed on a timely basis, the Year 2000 problem may have
a material impact on the operations of the Company. Further, even if the Company
completes such modifications and conversions, there can be no assurance that the
failure by vendors or other third parties to solve the Year 2000 problem will
not have a material impact on the operations of the company.
MONY Series Fund and the Accumulation Trust have reviewed with their
respective investment advisers and other suppliers of services the status of
their Year 2000 issue. MONY Series Fund and the Accumulation Trust prospectuses,
which are included in the Prospectus Portfolio, contain the results of those
status reviews. See MONY Series Fund prospectus at page 20; Accumulation Trust
prospectus at page .
MONY AMERICA VARIABLE ACCOUNT A
The Company established MONY America Variable Account A (the "Variable
Account") on March 27, 1987, under Arizona law as a separate investment account.
The Variable Account holds assets that are segregated from all of the Company's
other assets and at present is used only to support individual flexible payment
variable annuity contracts.
The Company is the legal holder of the assets in the Variable Account and
will at all times maintain assets in the Variable Account with a total market
value at least equal to the contract liabilities for the Variable Account. The
obligations under the Contracts are obligations of the Company. Income, gains,
and losses, whether or not realized, from assets allocated to the Variable
Account, are, in accordance with the Contracts, credited to or charged against
the Variable Account without regard to other income, gains, or losses of the
Company. The assets in the Variable Account may not be charged with liabilities
which arise from any
10
<PAGE> 16
other business the Company conducts. The Variable Account's assets may include
accumulations of the charges the Company makes against Contracts participating
in the Variable Account. From time to time, any such additional assets may be
transferred in cash to the Company's General Account.
The Variable Account is registered with the Securities and Exchange
Commission ("SEC") under the Investment Company Act of 1940 ("1940 Act") as a
unit investment trust, which is a type of investment company. This does not
involve any supervision by the SEC of the management or investment policies or
practices of the Variable Account. For state law purposes, the Variable Account
is treated as a part or division of the Company. There are currently 19
Subaccounts within the Variable Account, and each invests only in a
corresponding Portfolio of MONY Series Fund, Inc. or the Enterprise Accumulation
Trust. Not all Subaccounts are available to the Owner.
THE FUNDS
Each Subaccount of the Variable Account will invest only in the shares of a
corresponding Portfolio of MONY Series Fund, Inc. (the "MONY Series Fund") or
the Enterprise Accumulation Trust (the "Accumulation Trust") (the MONY Series
Fund and the Accumulation Trust are collectively called the "Funds"). The Funds
are registered with the SEC under the 1940 Act as open-end diversified
management investment companies. These registrations do not involve supervision
by the SEC of the management or investment practices or policies of the Funds.
Shares of the MONY Series Fund are currently sold to, separate accounts of, the
Company and MONY, to fund variable life insurance contracts issued by the
Company and MONY and to fund certain individual variable annuity contracts
issued by MONY and MONY America. In addition, the Company may make available
additional Subaccounts with differing or similar investment objectives. The
Funds, or either of them, may withdraw from sale any or all of the respective
Portfolios in accordance with applicable law.
The Board of Directors of the MONY Series Fund and the Board of Trustees of
the Accumulation Trust each have undertaken to monitor the respective Fund for
the existence of any material irreconcilable conflict between the interests of
variable annuity Owners and variable life insurance Owners and shall report any
such conflict to the boards of the Company and MONY. The Board of Directors of
the Company and the Board of Trustees of MONY have agreed to be responsible for
reporting any potential or existing conflicts to the Directors and Trustees,
respectively, of each of the Funds and, at their own cost, to remedy such
conflict up to and including establishing a new registered management investment
company and segregating the assets underlying the variable annuity contracts and
the variable life insurance contracts.
The Variable Account will purchase and redeem shares from the Funds at net
asset value. Shares will be redeemed to the extent necessary for the Company to
collect charges under the Contracts, to pay Cash Value upon full surrenders of
the Contracts, to fund partial surrenders and loans, to provide benefits under
the Contracts, and to transfer assets from one Subaccount to another or between
one or more Subaccounts of the Variable Account and the Guaranteed Interest
Account as requested by Owners. Any dividend or capital gain distribution
received from a Portfolio of a Fund will be reinvested immediately at net asset
value in shares of that Portfolio and retained as assets of the corresponding
Subaccount.
Investment Advisers. The MONY Series Fund at present receives investment
advice with respect to each of its Portfolios from the Company, which acts as
investment adviser to the MONY Series Fund.
The investment adviser with respect to the all of the Portfolios of the
Accumulation Trust is Enterprise Capital Management, Inc., an affiliate of the
Company ("Enterprise Capital"). Enterprise Capital has entered into a
sub-advisory agreement with Op Cap Advisors with respect to the Equity and
Managed Portfolios (OpCap Advisors is a subsidiary of Oppenheimer Capital, which
is a subsidiary of Oppenheimer Financial Corp.); with 1740 Advisers, Inc. with
respect to the Equity Income Portfolio; with Retirement System Investors, Inc.
with respect to the Growth and Income Portfolio; with Montag & Caldwell, Inc.
with respect to the Growth Portfolio; with Provident Investment Counsel, Inc.
with respect to the Capital Appreciation Portfolio, with Pilgrim Baxter &
Associates with respect to the Small Company Growth Portfolio; with Gabelli
Asset Management, Inc. with respect to the Small Company Growth Portfolio; with
Brinson Partners
11
<PAGE> 17
with respect to the International Growth Portfolio; and with Caywood Scholl
Capital Corporation. with respect to the High Yield Bond Portfolio.
Investment Objectives. The investment objectives of the Portfolios
currently available to Owners through corresponding Subaccounts of the Variable
Account are set forth in the accompanying prospectus for each of the Funds and
are described briefly below. There is no assurance that these objectives will be
met.
The investment objectives of each Portfolio are fundamental and may not be
changed without the approval of the holders of a majority of the outstanding
shares of the Portfolio affected (which, for each of the Funds, means the lesser
of (1) 67 percent of the Portfolio shares represented at a meeting at which more
than 50 percent of the outstanding Portfolio shares are represented or (2) more
than 50 percent of the outstanding Portfolio shares).
Each Owner should periodically consider the allocation among the
Subaccounts and the Guaranteed Interest Account in light of current market
conditions and the investment risks attendant to investing in each of the Funds'
various Portfolios. A full description of each of the Funds, their investment
objectives, policies and restrictions, their expenses, the risks attendant to
investing in each of the Funds' Portfolios, and other aspects of their operation
is contained in the accompanying prospectus for each of the Funds, which should
be read together with this Prospectus.
The investment objectives of each of the Portfolios of the Funds and
identification of which of the Funds offers the Portfolio is as follows:
Money Market Portfolio: The maximum current income consistent with
preservation of capital and maintenance of liquidity, through investment in
money market instruments. The MONY Series Fund offers this Portfolio.
Government Securities Portfolio: The maximum current income over the
intermediate term consistent with preservation of capital, through
investment in highly-rated debt securities of the United States government
and its agencies and money market instruments with a dollar-weighted
average life of up to ten years at the time of purchase. MONY Series Fund
offers this Portfolio.
Long Term Bond Portfolio: The maximum income over the longer term
consistent with preservation of capital, through investment in highly rated
debt securities, U.S. Government obligations, and money market instruments,
together having a dollar-weighted average life of more than 8 years. The
MONY Series Fund offers this Portfolio.
Intermediate Term Bond Portfolio: The maximum income over the
intermediate term consistent with preservation of capital, through
investment in highly rated debt securities, U.S. Government obligations,
and money market instruments, together having a dollar-weighted average
life of between 4 and 8 years. MONY Series Fund offers this Portfolio.
Equity Income Portfolio: A combination of growth and income to
achieve an above average and consistent total return, primarily from
investments in dividend-paying common stocks. The Accumulation Trust offers
this Portfolio.
Growth and Income Portfolio: Total return in excess of the total
return of the Lipper Growth and Income Mutual Funds Average measured over a
new period of three to five years, by investing in a broadly diversified
group of large capitalization stocks. The Accumulation Trust offers this
Portfolio.
Growth Portfolio: Capital appreciation, primarily from investments in
common stocks. The Accumulation Trust offers this Portfolio.
Equity Portfolio: Long term capital appreciation through investment
in a diversified portfolio of primarily equity securities selected on the
basis of a value oriented approach to investing. The Accumulation Trust
offers this Portfolio.
12
<PAGE> 18
Capital Appreciation Portfolio: Maximum capital appreciation,
primarily through investment in common stock of companies that demonstrate
accelerating earnings momentum and consistently strong financial
characteristics. The Accumulation Trust offers this Portfolio.
Managed Portfolio: Growth of capital over time through investment in
a portfolio consisting of common stocks, bonds, and cash equivalents, the
percentages of which will vary over time based on the investment manager's
assessments of relative investment values. The Accumulation Trust offers
this Portfolio.
Small Company Growth Portfolio: Capital appreciation by investing
primarily in common stocks of small capitalization companies believed by
the Portfolio Manager to have an outlook for strong earnings growth and
potential for significant capital appreciation. The Accumulation Trust
offers this Portfolio.
Small Company Value Portfolio: Capital appreciation through
investment in a diversified portfolio of primarily equity securities of
companies with market capitalizations of under $1 billion. The Accumulation
Trust offers this Portfolio.
International Growth Portfolio: Capital appreciation, primarily
through a diversified portfolio of non-United States equity securities. The
Accumulation Trust offers this Portfolio.
High Yield Bond Portfolio: Maximum current income, primarily from
debt securities that are rated Ba or lower by Moody's Investors Service,
Inc. or BB or lower by Standard & Poor's Corporation. The Accumulation
Trust offers this Portfolio.
GUARANTEED INTEREST ACCOUNT
The Guaranteed Interest Account is a part of the Company's General Account
and consists of all the Company's assets other than assets allocated to
segregated investment accounts of the Company, including the Variable Account.
Crediting of Interest. The entire initial purchase payment always earns
interest at a rate not less than 3.5% per year until the end of the Right to
Return Contract period, at which time it is transferred to the selected
subaccounts and/or accumulation periods. When the Right to Return Contract
Period expires, the portion of the Initial Net Purchase Payment to be allocated
to the Guaranteed Interest Account will be transferred to the Guaranteed
Interest Account.
Net Purchase Payments allocated by an Owner to the Guaranteed Interest
Account will be credited with interest at the rate declared by the Company which
the Company guarantees will not be less than 3.5% (0.0094%, compounded daily).
Contract Owners who make purchase payments allocated to or transfer funds into
the Guaranteed Interest Account choose between a 3, 5, 7, or 10 year
accumulation period. Prior to the beginning of each calendar month, interest
rates will be declared for each period, if more favorable then the guaranteed
rate. Each interest rate declared by the Company will be applicable for all Net
Purchase Payments received or transfers from the Variable Account completed
within the period during which it is effective. The purchase payment is locked
in to this interest rate for the entire duration of the period selected by the
Contract Owner. Within 45 days, but not less than 15 days before the
Accumulation Period expires, we will send notice of the new rates then being
declared by the Company. When the period expires the Contract Owner can elect an
accumulation period of 3, 5, 7, or 10 years, or may elect to transfer the entire
amount allocated to the expiring accumulation period to the separate account. If
no election is made, the entire amount allocated to the expiring accumulation
period will automatically be held for an accumulation period of the same
duration. If that period will extend beyond the maturity date or if that period
is no longer offered, the money will be transferred into the Money Market
subaccount.
Surrenders. The Contract Owner must specify the source by interest rate
accumulation period of amounts withdrawn from the Guaranteed Interest Account as
a result of a transfer, partial surrender, loan or any charge imposed in
accordance with the Contract. Partial and full surrenders or transfers from the
Guaranteed Interest Account are subject to the Market Value Adjustment. This
Adjustment is determined by
13
<PAGE> 19
multiplying the amount of the surrender or transfer from each accumulation
period and interest rate by the following factor:
[(1 + a)/(1+b)](n-t)/12) - 1
where
<TABLE>
<S> <C> <C>
a = rate declared at the beginning of accumulation period
b = rate then currently declared for an accumulation period
equal to the time remaining in the guaranteed period, plus
0.25%
n = guaranteed period in months
t = number of elapsed months (or portion thereof) in the
guaranteed period
</TABLE>
If an Accumulation Period equal to the time remaining is not issued by the
Company, the rate will be an interpolation between two available Accumulation
Periods. If two such Periods are not available, we will use the rate for the
next available Accumulation Period.
Market Value Adjustments do not apply for partial or full surrenders or
transfers requested within 30 days before the end of the accumulation period,
nor to any benefits paid upon the death of the Annuitant. The Market Value
Adjustment does apply to benefits paid upon death of the Owner.
The Guaranteed Interest Account and its market value adjustment feature are
described in a separate prospectus which accompanies this Prospectus.
PAYMENT AND ALLOCATION OF PURCHASE PAYMENTS
ISSUANCE OF THE CONTRACT
Individuals wishing to purchase a Contract must complete an application and
personally deliver it to a licensed agent of the Company who is also a
registered representative of MONY Securities Corp. ("MSC"), a wholly-owned
subsidiary of the Company, which is the principal underwriter for the Contracts,
or a registered broker dealer which has been authorized by MSC to sell the
Contract. Except where certain automatic payment plans (i.e., government
allotment, payroll deduction, or automatic checking account withdrawal plans)
are used, the minimum initial Purchase Payment for the Contract is currently
$2,000 for Non-Qualified Plans, $2,000 for individual retirement accounts and
annuities purchased by individuals under Section 408 of the Code (other than
Simplified Employee Pensions), and $600 for H.R. 10 plans (self-employed
individuals' retirement plans under Section 401 or 403(c) of the Code),
Simplified Employee Pensions under Sections 408 and 408A of the Code, annuity
purchase plans sponsored by certain tax-exempt organizations, governmental
entities, and deferred compensation plans under Section 457 of the Code. These
minimum initial Payments must be paid with the application for the Contract.
Additional Payments may be made at any time.
Different rules apply for government allotment, payroll deduction and
automatic checking account withdrawal plans. For payroll deduction and automatic
checking account withdrawal plans, Purchase Payments must be made at an
annualized rate of $600 (i.e., $600 per year, $300 semiannually, $150 for each
quarter year, or $50 per month). For government allotment plans, the minimum
Purchase Payment is $50 per month.
The Company reserves the right to revise its rules from time to time to
specify different minimum Purchase Payments.
In addition, the prior approval of the Company is required before it will
accept a Purchase Payment where, with that Payment, cumulative Purchase Payments
made under any one or more Contracts held by the Owner, less the amount of any
prior partial surrenders and their Surrender Charges, exceed $1,500,000.
The Company reserves the right to reject an application for any reason
permitted by law.
14
<PAGE> 20
Net Purchase Payments received before the Effective Date will be held in
the Company's General Account and will be credited with interest at not less
than 3.5 percent per annum if the Contract is issued by the Company and accepted
by the Owner. No interest will be paid if the Contract is not issued or if it is
declined by the Owner. If the application is approved and the Contract is
subsequently issued and accepted by the Owner, then on the Effective Date,
amounts allocable to the Contract held in the Company's General Account will
earn interest at the annual rate of not less than 3.5%. Upon expiration of the
Right to Return Contract Period (See "Right to Return Contract Provision"
below), money is transferred to the selected options. For purposes of crediting
interest on amounts held in the General Account, Purchase Payments will be
treated as received on the day of actual receipt at the Company's Operations
Center. If an application is not complete when received by the Company at its
Operations Center, and if it is not made complete within 5 days, the prospective
purchaser will be informed of the reasons for the delay and the initial Purchase
Payment will be returned in full (and the application will be declined), unless
the prospective purchaser consents to the Company's retaining the Purchase
Payment until the application is made complete.
RIGHT TO RETURN CONTRACT PROVISION
Within 10 days (or longer in certain states) of the day the Contract is
delivered to the Owner (the "Right to Return Contract Period"), it may be
returned to the Company or to any agent of the Company. When the Contract is
received by the Company, it will be voided as if it had never been in force. The
amount to be refunded is equal to all Purchase Payments.
ALLOCATION OF PURCHASE PAYMENTS AND FUND VALUE
Allocation of Purchase Payments. The Owner may allocate on the application
Net Purchase Payments to the Subaccount(s) of the Variable Account or to the
Guaranteed Interest Account. Any Net Purchase Payments received before the end
of the Right to Return Contract Period (and any interest thereon) will initially
earn interest at a rate not less than 3.5% per year beginning on the later of
(i) the Effective Date and (ii) the date the Payment is received at the
Company's Operations Center. Net Purchase Payments will continue to earn
interest at a rate not less than 3.5% per year until the Right to Return
Contract Period expires. (See "Right to Return Contract Provision" above.) After
the Right to Return Contract Period has expired, the Contract's Fund Value will
automatically be transferred to the Subaccount(s) of the Variable Account or to
the Guaranteed Interest Account in accordance with the Owner's percentage
allocation.
After the Right to Return Contract Period, Net Purchase Payments under a
nonautomatic payment plan will be allocated in accordance with the Owner's most
recent instructions on record with the Company, unless the Owner at the time a
Purchase Payment is made specifies the amount or the percentage (not less than
10 percent of the Payment) of the Net Purchase Payment to be allocated among the
Subaccount(s). If the specific allocation is incorrect or incomplete, then that
Net Purchase Payment will be made in accordance with the most recent correct
payment allocation on record. For automatic payment plans, Net Purchase Payments
will be allocated in accordance with the Owner's most recent instructions on
record.
The Owner may change the allocation formula specified in the initial
allocation notification, or as changed in any subsequent notification, for
future Net Purchase Payments at any time without charge by sending written
notification to the Company at the Operations Center. Prior allocation
instructions may also be changed by telephone subject to the rules of the
Company and its right to terminate telephone allocation. The Company reserves
the right to deny any telephone allocation request. If all telephone lines are
busy (which might occur, for example, during periods of substantial market
fluctuations), Owners might not be able to request changes in allocation of
purchase payments by telephone and would have to submit written requests. Any
such change, whether made in writing or by telephone, will be effective when
recorded on the records of the Company, in accordance with the applicable
requirements of state insurance departments and the Investment Company Act of
1940. The Company has adopted rules relating to changes of allocations by
telephone, which, among other things, outlines procedures to be followed which
are designed, and which the Company believes are reasonable, to prevent
unauthorized instructions. If these procedures are followed, the Company shall
not be liable for, and the Owner will therefore bear the entire risk of, any
loss as a result of the Company's following telephone instructions in the event
that such instructions prove to be fraudulent. A copy
15
<PAGE> 21
of the rules and the Company's form for electing telephone allocation privileges
is available from licensed agents of the Company who are also registered
representatives of MSC or by calling 1-800-487-6669. The Company's form must be
signed and received at the Company's Operations Center before telephone
allocation instructions will be accepted.
The minimum percentage of each Net Purchase Payment that may be allocated
to any Subaccount of the Variable Account or to the Guaranteed Interest Account
is 10 percent; all percentages must be expressed in whole numbers and must total
100 percent.
Upon receipt of a Purchase Payment, the Net Purchase Payments allocated to
Subaccounts of the Variable Account will be credited to the designated
Subaccount(s) in the form of Units. The number of Units to be credited to a
Subaccount is determined by dividing the dollar amount allocated to the
particular Subaccount by the Unit value for the particular Subaccount for the
Business Day on which the Purchase Payment is received.
The Unit value for each Subaccount was established at $10 for the first
Business Day. The Unit value for a Subaccount for any subsequent Business Day is
determined by subtracting (b) from (a) and dividing the result by (c), where:
(a) is the per share net asset value on the Business Day of the Fund
Portfolio in which the Subaccount invests times the number of such shares
held in the Subaccount before the purchase or redemption of any shares on
that Date.
(b) is the mortality and expense risk charge accrued as of that
Business Day. The daily mortality and expense risk charge is a percentage
of the Subaccount's net asset value on the previous Business Day. (If the
previous day was not a Business Day, then the daily mortality and expense
risk charge is the applicable percentage times the number of days since the
last Business Day times the Subaccount's net asset value on the last
Business Day.)
(c) is the total number of Units held in the Subaccount on the
Business Day before the purchase or redemption of any Units on that Date.
The Unit value for these Subaccounts may increase, decrease, or remain
constant from Business Day to Business Day, depending upon the investment
performance of the Portfolio of the Fund in which the Subaccount is invested and
any expenses and charges deducted from the Variable Account. The Owner bears the
entire investment risk. Owners should periodically review their allocations of
payments and values in light of market conditions and overall financial planning
requirements.
Net Purchase Payments to be allocated to the Guaranteed Interest Account
will be credited to that account on the date of receipt at the Operations
Center, if that date is a Business Day, and, if not, on the next Business Day.
Interest will be credited daily.
Fund Value. The Contract's Fund Value will reflect the investment
performance of the selected Subaccount(s) of the Variable Account, amounts
credited to the Guaranteed Interest Account, amounts credited to the Loan
Account, if any, any Net Purchase Payments, any partial surrenders, and all
charges imposed in connection with the Contract. There is no guaranteed minimum
Fund Value, except to the extent Net Purchase Payments have been allocated to
the Guaranteed Interest Account, and because a Contract's Fund Value at any
future date will be dependent on a number of variables, it cannot be
predetermined.
Determination of Fund Value. The Fund Value of the Contract is determined
on each Business Day. The Fund Value will be calculated first on the Effective
Date and thereafter on each Business Day. On the Effective Date, the Contract's
Fund Value will be the Net Purchase Payments received plus any interest credited
on those Payments. During the period when Net Purchase Payments are held in the
General Account, interest will be credited to the Contract. (See "Issuance of
the Contract" at page 12.) After allocation of the
16
<PAGE> 22
amounts in the General Account to the Variable Account or to the Guaranteed
Interest Account, on each Business Day, the Contract's Fund Value will be:
(1) The aggregate of the Fund Values attributable to the Contract in
each of the Subaccounts on the Business Day, determined for each Subaccount
by multiplying the Subaccount's Unit value on that date by the number of
Subaccount Units allocated to the Contract; plus
(2) any amount credited to the Guaranteed Interest Account (which
shall be the aggregate of all Net Purchase Payments, plus interest
credited, if any, plus or minus amounts transferred, if any, less partial
surrenders, if any, less any charges, market value adjustments, and
deductions imposed in accordance with the Contract terms detailed in the
Prospectus); plus
(3) any amount credited to the Loan Account, if available (which shall
be the aggregate of all amounts transferred plus interest credited, if any,
less loan repayments, if any, less any charges and deductions imposed in
accordance with the Contract terms detailed in the Prospectus); plus
(4) any Net Purchase Payment received on that Business Day; less
(5) any transfer charge made on that Business Day; less
(6) any partial surrender amount and its Surrender Charge made on that
Business Day; less
(7) any Annual Contract Charge deductible on that Business Day.
In computing the Contract's Fund Value, the number of Subaccount Units
allocated to the Contract is determined after any transfers among Subaccounts
(and deduction of transfer charges) or between one or more of the Subaccounts
and the Guaranteed Interest Account, but before any other Contract transactions,
such as receipt of Net Purchase Payments and partial surrenders, on the Business
Day. If the Contract's Fund Value is to be calculated for a day that is not a
Business Day, the next following Business Day will be used.
Transfers. After the Right to Return Contract Period has expired, the
value attributable to the Contract may be transferred among the Subaccounts of
the Variable Account. There is no minimum amount that need be transferred. The
Company will effectuate transfers and determine all values in connection with
transfers among the Subaccounts on the date on which the transfer request is
received at the Operations Center, if that date is a Business Day and, if not,
on the next Business Day. Different provisions apply to transfers involving the
Guaranteed Interest Account. (See "Allocation of Premiums and Fund
Value -- Transfers Involving the Guaranteed Interest Account" at page 16.)
Transfers may be made by sending a written request to the Operations Center or
by telephone, subject to the rules of the Company and its right to terminate
telephone transfers. The Company reserves the right to deny any telephone
transfer request. If all telephone lines are busy (which might occur, for
example, during periods of substantial market fluctuations), Owners might not be
able to request transfers by telephone and would have to submit written
requests. If a written transfer request is incomplete or incorrect, no transfer
will be made and the request will be returned to the Owner. Telephone transfer
instructions will only be accepted if complete and correct. The Company has
adopted guidelines relating to telephone transfers which, among other things,
outlines procedures to be followed which are designed, and which the Company
believes are reasonable, to prevent unauthorized transfers. If these procedures
are followed, the Company shall not be liable for, and the Owner will therefore
bear the entire risk of, any loss as a result of the Company's following
telephone instructions in the event that such instructions prove to be
fraudulent. A copy of the guidelines and the Company's form for electing
telephone transfer privileges is available from licensed agents of the Company
who are also registered representatives of MSC or by calling 1-800-487-6669. The
Company's form must be signed and received at the Company's Syracuse Operations
Center before telephone transfers will be accepted.
A transfer charge is not currently imposed (See "Charges Against Fund
Value -- Transfer Charge" at page 21.), but the Company has reserved the right
to impose a charge which will not exceed $25 per transfer. If imposed, the
transfer charge will be deducted from the first of the Subaccount(s) or the
Guaranteed Interest Account from which the amounts are transferred. This charge
is in addition to the amount transferred. All transfers included in a single
request are treated as one transfer transaction. A transfer resulting from the
first reallocation of Fund Value at the expiration of the Right to Return
Contract Period will not be subject to a transfer charge. Under present law,
transfers are not taxable transactions.
17
<PAGE> 23
Transfers Involving the Guaranteed Interest Account. Transfers may be made
from the Guaranteed Interest Account at any time, but if they are made before
the end of the 3, 5, 7, or 10 year accumulation period there will be a Market
Value Adjustment. If the transfer request is received within 30 days before the
end of the Accumulation Period, no market value adjustment will apply.
TERMINATION OF THE CONTRACT
The Contract will remain in force until the earlier of (1) the date the
Contract is surrendered in full, (2) the Annuity Starting Date, (3) the Contract
Anniversary on which, after deduction for any Annual Contract Charge then due,
no Fund Value in the Subaccounts and the Guaranteed Interest Account remains in
the Contract, and (4) the date the Death Benefit is payable under the Contract.
SURRENDERS
At any time on or before the Annuity Starting Date and during the lifetime
of the Annuitant, the Owner may elect to make a surrender of all or part of the
Contract's value. Any such election shall specify the amount of the surrender
and will be effective on the date a proper request is received by the Company at
its Operations Center.
The amount of the surrender may be equal to the Contract's Cash Value,
which is its Fund Value less (1) any applicable Surrender Charge, (2) any Market
Value Adjustment, and (3) any Outstanding Debt. The Surrender may also be for a
lesser amount (a "partial surrender"). If a partial surrender is requested, and
that surrender would leave a Fund Value of less than $1,000, then that partial
surrender will be treated and processed as a full surrender, and the entire Cash
Value will be paid to the Owner. For a partial surrender, any Surrender Charge
or Market Value Adjustment will be in addition to the amount requested by the
Owner.
A surrender will result in the cancellation of Units and the withdrawal of
amounts credited to the Guaranteed Interest Account, in accordance with the
directions of the Owner, with an aggregate value equal to the dollar amount of
the surrender plus, if applicable, any Surrender Charge and any Market Value
Adjustment. The Guaranteed Interest Account and its market value adjustment
feature are described in a separate prospectus which accompanies this
Prospectus. Partial or full surrenders allocated to the Guaranteed Interest
Account will be subject to a market value adjustment. For a partial surrender,
the Company will cancel Units of the particular Subaccounts and withdraw amounts
from the Guaranteed Interest Account in accordance with the allocation specified
by the Owner in written notice to the Company at its Operations Center at the
time the request for the partial surrender is received. Allocations may be by
either amount or percentage. Allocations by percentage must be in whole
percentages (totaling 100 percent), and at least 10 percent of the partial
surrender must be allocated to any Subaccount or to the Guaranteed Interest
Account designated by the Owner. If there is insufficient Fund Value in the
Owner's Guaranteed Interest Account or a Subaccount to provide for the requested
allocation against it, or the request is incorrect, the request will not be
accepted.
Any Surrender Charge will be allocated against the Guaranteed Interest
Account and each Subaccount in the same proportion that the amount of a partial
surrender allocated against the Guaranteed Interest Account and each Subaccount
bears to the total amount of the partial surrender.
Any cash surrender amount will be paid in accordance with the requirements
of state insurance departments and the Investment Company Act of 1940.
Postponement is currently permissible under the Investment Company Act of 1940
only (1) for any period (a) during which the New York Stock Exchange is closed
other than customary weekend and holiday closings, or (b) during which trading
on the New York Stock Exchange is restricted as determined by the Securities and
Exchange Commission, (2) for any period during which an emergency exists as a
result of which (a) disposal of securities held by the Funds is not reasonably
practicable, or (b) it is not reasonably practicable to determine the value of
the net assets of the Funds, or (3) for such other periods as the Securities and
Exchange Commission may by order permit for the protection of Owners. Any cash
surrender involving payment from amounts credited to the Guaranteed Interest
Account may, to the extent amounts are paid from the Guaranteed Interest
Account, be postponed, at
18
<PAGE> 24
the option of the Company, for up to 6 months from the date the request for a
surrender or proof of death is received by the Company. Surrenders involving
payment from the Guaranteed Interest Account may also be subject to a Market
Value Adjustment, in addition to a surrender charge. The Owner may elect to have
the amount of a surrender settled under one of the Settlement Options of the
Contract. (See "ANNUITY PROVISIONS" at page 22.)
Since the Contracts offered by this Prospectus may be issued in connection
with retirement plans that meet the requirements of certain sections of the
Internal Revenue Code, reference should be made to the terms of the particular
retirement plan for any limitations or restrictions on cash surrenders.
Surrenders of certain Qualified Contracts may also be restricted by the
terms of the particular plan pursuant to which such Qualified Contract is
issued. Without such restriction on surrender, the Contracts would be subject to
treatment under the Internal Revenue Code as annuity contracts rather than
contracts governed by Section 403(b). (See "FEDERAL TAX STATUS" at page 28.)
The tax consequences of a cash surrender should be carefully considered.
(See "FEDERAL TAX STATUS" at page 28.)
LOANS
Qualified Contracts issued under an Internal Revenue Code Section 401(k)
plan will have a loan provision. All of the following conditions apply in order
for the amount to be considered a loan, rather than a (taxable) partial
surrender:
- The term of the loan must be 5 years or less.
- Repayments are required at least quarterly and must be substantially
level.
- The loan amount is limited to certain dollar amounts, as specified by the
IRS.
The Owner (Plan Trustee) must certify that these conditions are satisfied.
In any event, the maximum outstanding loan on a contract is 50% of the Fund
Value of the subaccounts and/or the Guaranteed Interest Account. Loans are not
permitted before the end of the Right to Return Contract period. In requesting a
Loan, the Contract Owner must specify the Subaccounts from which Fund Value
equal to the amount of the Loan requested will be taken. Loans from the
Guaranteed Interest Account are not taken until Fund Value in the subaccounts is
exhausted. If in order to provide the Contract Owner with the amount of the Loan
requested, Fund Values must be taken from the Guaranteed Interest Account, then
the Contract Owner must specify the Accumulation Periods from which Fund Values
equal to such amount will be taken. If the Contract Owner fails to specify
Subaccounts and Accumulation Periods, the request for a Loan will be returned to
a Contract Owner.
Values are transferred to a Loan Account that earns interest at an annual
rate of 3.5%. The annual loan interest rate charged will be 6%.
Loan repayments must be specifically earmarked as a loan repayment and will
be allocated to the sub-accounts and/or the Guaranteed Interest Account using
the most recent payment allocation on record.
DEATH BENEFIT
DEATH BENEFIT PROVIDED BY THE CONTRACT
In the event of the death of the Annuitant prior to the Annuity Starting
Date, the Company will pay a Death Benefit to the Beneficiary. The amount of the
Death Benefit will be the greater of (a) the Fund Value less any Outstanding
Debt on the date of the Annuitant's death, and (b) the Purchase Payments paid,
less any partial surrenders and their Surrender Charges less any Outstanding
Debt. If there are funds allocated to the Guaranteed Interest Account at the
time of death, any applicable market value adjustment will be waived. If the
death of the Annuitant occurs on or after the Annuity Starting Date, no Death
Benefit will be payable except as may be provided under the Settlement Option
elected.
19
<PAGE> 25
OPTIONAL ENHANCED DEATH BENEFIT
An enhanced death benefit may apply. On the 5th Contract anniversary and
each subsequent 5th Contract anniversary prior to the Annuitant's 71st birthday
(prior to the first 5th anniversary for issue ages greater than 65), the
Guaranteed Minimum Death Benefit ("GMDB") is increased to the then current Fund
Value, if it is greater than the current GMDB, proportionally reduced by any
partial surrenders including Surrender Charges and Market Value Adjustments
assessed, since the last Reset Anniversary. In no event will the GMDB exceed
200% of the total Purchase Payments made, reduced proportionately for any
partial surrenders including Surrender Charges and Market Value Adjustments,
less any Outstanding Debt. The proportionate reduction for each partial
surrender will be equal to (i) the amount of that partial surrender (including
any Surrender Charges and Market Value Adjustments assessed), divided by (ii)
the Fund Value immediately before that partial surrender, multiplied by (iii)
the Enhanced Death Benefit immediately before the surrender. All Subaccounts are
eligible for GMDB coverage. The cost of this enhancement is reflected in the
Mortality and Expense Risk Charge. Once the last value is set (prior to the
Annuitant's 71st birthday or on the first 5th anniversary for issue ages greater
than 65), it will not be reset.
All other basic death benefits as outlined in this prospectus continue to
apply. The largest death benefit under any of these provisions will be paid.
ELECTION AND EFFECTIVE DATE OF ELECTION
During the lifetime of the Annuitant and prior to the Annuity Starting
Date, the Owner may elect to have the Death Benefit of the Contract applied
under one or more Settlement Options to effect an annuity for the Beneficiary as
payee after the death of the Annuitant. (See "Settlement Options" at page 23.)
If no election of a Settlement Option for the Death Benefit is in effect on the
date when proceeds become payable, the Beneficiary may elect (a) to receive the
Death Benefit in the form of a cash payment; or (b) to have Death Benefit
applied under one of the Settlement Options. (See "Settlement Options" at page
23.) If an election by the payee is not received by the Company within one month
following the date proceeds become payable, the payee will be deemed to have
elected a cash payment. Either election described above may be made by filing
with the Company a written election in such form as the Company may require. Any
proper election of a method of settlement of the Death Benefit by the Owner will
become effective on the date it is signed, but any election will be subject to
any payment made or action taken by the Company before receipt of the notice at
the Company's Operations Center.
Reference should be made to the terms of any applicable retirement plan and
any applicable legislation for any limitations or restrictions on the election
of a method of settlement and payment of the Death Benefit.
PAYMENT OF DEATH BENEFIT
If the Death Benefit is to be paid in cash to the Beneficiary, payment will
be made within seven (7) days of the date the election becomes effective or is
deemed to become effective and due proof of death is received, except as the
Company may be permitted to postpone such payment in accordance with the
Investment Company Act of 1940. If the Death Benefit is to be paid in one sum to
the Successor Beneficiary, or to the estate of the deceased Annuitant, payment
will be made within seven (7) days of the date due proof of the death of the
Annuitant and the Beneficiary is received by the Company.
CHARGES AND DEDUCTIONS
Charges may be assessed under the Contracts as follows:
DEDUCTIONS FROM PAYMENTS
A deduction may be made from each Purchase Payment for premium or similar
taxes prior to allocation of any Net Purchase Payment among the Subaccounts of
the Variable Account. Currently, the Company does not make such a deduction, but
may do so in the future. The Company will provide the Owner with written notice
of its intention to make deductions for premium or other taxes. Any such
deduction will apply only to
20
<PAGE> 26
Purchase Payments made after notice has been sent by the Company. The amount of
the deduction will vary from locality to locality, but will generally range from
0 percent to 3.5 percent of Purchase Payments.
CHARGES AGAINST FUND VALUE
Surrender Charge. The Contract imposes a contingent deferred sales charge,
called a "Surrender Charge," on full and partial surrenders and on the Annuity
Starting Date. The Surrender Charge, which will never exceed 7 percent of total
Fund Value, is intended to reimburse the Company for expenses incurred in
distributing the Contract. To the extent such charge is insufficient to cover
all distribution costs, the Company will make up the difference using funds from
its General Account, which may contain funds deducted from the Variable Account
to cover mortality and expense risks borne by the Company. (See "Mortality and
Expense Risk Charge" at page 21.)
If all or a portion of the Contract's Cash Value (see "SURRENDERS" at page
16) is surrendered or if the Cash Value is received at maturity on the Annuity
Starting Date, a Surrender Charge will be calculated at the time of surrender
and will be deducted from the Fund Value. A Surrender Charge will not be imposed
against Fund Value surrendered after the eighth Contract Year. In addition, the
Surrender Charge, which otherwise would have been deducted, will not be deducted
to the extent necessary to permit the Owner to obtain, an amount equal to the
Free Partial Surrender Amount. (See "Free Partial Surrender Amount" at page
20.). Except in certain states, no Surrender Charge will be imposed if the
Contract is surrendered after the third Contract Year and the surrender proceeds
are paid under either Settlement Option 3 or Settlement Option 3A. (See
"Settlement Options" at page 23.) In no event will the aggregate Surrender
Charge exceed 7 percent of the total Fund Value.
For a partial surrender, the Surrender Charge will be deducted from any
remaining Fund Value, if sufficient; otherwise, it will be deducted from the
amount surrendered. Any Surrender Charge will be allocated against the
Guaranteed Interest Account and each Subaccount of the Variable Account in the
same proportion that the amount of the partial surrender allocated against the
Guaranteed Interest Account and each Subaccount bears to the total amount of the
partial surrender.
No Surrender Charge will be deducted from Death Benefits except as
described in "DEATH BENEFIT" at page 18.
Amount of Surrender Charge. The amount of the Surrender Charge is equal to
a varying percentage of Fund Value during the first 8 Contract Years. The
percentage is determined as follows:
SURRENDER CHARGE PERCENTAGE TABLE
<TABLE>
<CAPTION>
# OF CONTRACT SURRENDER
ANNIVERSARIES CHARGE
SINCE EFFECTIVE DATE PERCENTAGE
-------------------- ----------
<S> <C>
0...................................................... 7 %
1...................................................... 7
2...................................................... 6
3...................................................... 6
4...................................................... 5
5...................................................... 4
6...................................................... 3
7...................................................... 2
8 (or more)............................................ 0
</TABLE>
Free Partial Surrender Amount. The Surrender Charge may be reduced by
using the Free Partial Surrender Amount provided for in the Contract. For
Non-qualified Contracts (and Contracts issued for IRA and SEP-IRA) , the Free
Partial Surrender Amount provides that an amount up to 10% of the Contract's
Fund Value may be surrendered without application of a surrender charge. For
Qualified Contracts (other
21
<PAGE> 27
than Contracts issued for IRA and SEP-IRA), the Free Partial Surrender Amount
provides that the greater of $10,000, (but not more than the Contract's Fund
Value) or 10% of the Contract's Fund Value (at the beginning of a Contract Year)
may be surrendered without application of surrender charge. Contract Fund Value
here means the Fund Value at the beginning of the contract year in the
sub-accounts (and the Guaranteed Interest Account not the Loan Account).
Annual Contract Charge. The Company has primary responsibility for the
administration of the Contract and the Variable Account. Ordinary administrative
expenses expected to be incurred include collection of purchase payments,
recordkeeping, processing death benefit claims and surrenders, preparing and
mailing reports, and overhead costs. In addition, the Company expects to incur
certain additional administrative expenses in connection with the issuance of
the Contract, including the review of applications and the establishment of
Contract records.
The Company intends to administer the Contract itself through an
arrangement whereby the Company may purchase some administrative services from
MONY and such other sources as may be available.
An Annual Contract Charge will be deducted from the Contract's Fund Value
to help cover administrative expenses. Currently, the amount of the charge is
$0, but it may be increased to as much as $50 on 30 days' written notice to the
Owner. The charge will be deducted on each Contract Anniversary prior to the
Annuity Starting Date. The amount of the charge will be allocated against the
Guaranteed Interest Account and each Subaccount of the Variable Account in the
same proportion that the Fund Value in the Guaranteed Interest Account and each
Subaccount bears to the Fund Value of the Contract. The Company does not expect
to make any profit from the administrative cost deductions.
Transfer Charge. The Company has reserved the right to impose a transfer
charge, which will not exceed $25, for each transfer instructed by the Owner
among the Subaccounts or to or from the Guaranteed Interest Account and one or
more of the Subaccounts (including transfers made by telephone, if permitted by
the Company) in a Contract Year, to compensate the Company for the costs of
effectuating the transfer. Currently, the Company does not do so. The Company
does not expect to make a profit from the transfer charge. This charge will be
deducted from the Contract's Fund Value held in the Subaccount(s) or from the
Guaranteed Interest Account from which the first transfer is made.
Market Value Adjustment. Full and partial surrenders or transfers from the
Guaranteed Interest Account are subject to a Market Value Adjustment. The
adjustment is determined by multiplying the amount of the surrender or transfer
from each accumulation period and interest rate by the following factor:
[(1 + a)/(1+b)](n-t)/12) - 1
where
<TABLE>
<S> <C> <C>
a = rate declared at beginning of the accumulation period
b = rate then currently declared for an accumulation period
equal to the time remaining in the guaranteed period, plus
0.25%
n = guaranteed period in months
t = number of elapsed months (or portion thereof) in the
guaranteed period
</TABLE>
If an Accumulation Period equal to the time remaining is not issued by the
Company, the rate will be an interpolation between two available Accumulation
Periods. If two such Periods are not available, we will use the rate for the
next available Accumulation Period.
Market Value Adjustments do not apply for full and partial surrenders or
transfers requested within 30 days before the end of the accumulation period,
nor in the calculation of any benefits paid upon the death of the Annuitant.
Market Value Adjustments apply to benefits paid upon death of the Owner.
Descriptions of the Guaranteed Interest Account are included in this
Prospectus for the convenience of the purchaser. The Guaranteed Interest Account
and its market value adjustment feature are described in a separate prospectus
which accompanies this Prospectus. The general account of the Company is not
registered under the Securities Act of 1933 or the Investment Company Act of
1940. Accordingly, the general account of
22
<PAGE> 28
the Company is not generally subject to the provisions of these Acts; however,
disclosures regarding the general account of the Company may be subject to
certain generally applicable provisions of the federal securities laws relating
to the accuracy and completeness of statements made in prospectuses. The staff
of the Securities and Exchange Commission has not reviewed the disclosures in
this Prospectus which relate to the Guaranteed Interest Account and the general
account of the Company.
MORTALITY AND EXPENSE RISK CHARGE
A daily charge will be deducted from the value of the net assets of the
Variable Account to compensate the Company for mortality and expense risks
assumed in connection with the Contract. The Mortality and Expense Risk charge
is deducted at a current daily rate equivalent to an annual rate of 1.25 percent
(and is guaranteed not to exceed a daily rate equivalent to an annual rate of
1.35 percent) from the value of the net assets of the Separate Account. Of the
1.25 percent current charge, .80 percent is for assuming mortality risks (which
is guaranteed not to exceed .90 percent), and .45 percent is for assuming
expense risks. The daily charge will be deducted from the net asset value of the
Variable Account, and therefore the Subaccounts, on each Business Day. These
charges will not be deducted from the Guaranteed Interest Account. Where the
previous day (or days) was not a Business Day, the deduction currently on the
next Business Day will be 0.003425 percent (guaranteed not to exceed 0.003699
percent) multiplied by the number of days since the last Business Day.
The Company believes that this level of charge is within the range of
industry practice for comparable individual flexible payment variable annuity
contracts.
The mortality risk assumed by the Company is that Annuitants may live for a
longer time than projected, and that an aggregate amount of annuity benefits
greater than that projected will accordingly be payable. In making this
projection, the Company has used the mortality rates from the 1983 Table "a"
(discrete functions without projections for future mortality), with 3 1/2
percent interest. The expense risk assumed is that expenses incurred in issuing
and administering the Contracts will exceed the administrative charges provided
in the Contracts.
The Company does not expect to make a profit from the mortality and expense
risk charge. Should, however, the amount of the charge exceed the amount needed,
the excess will be retained by the Company in its general account. Should the
amount of the charge be inadequate, the Company will pay the difference out of
its general account.
TAXES
Currently, no charge will be made against the Variable Account for federal
income taxes. The Company may, however, make such a charge in the future if
income or gains within the Variable Account will incur any federal income tax
liability. Charges for other taxes, if any, attributable to the Variable Account
may also be made. (See "FEDERAL TAX STATUS" at page 28.)
INVESTMENT ADVISORY FEE
Because the Variable Account purchases shares of the Funds, the net assets
of the Variable Account will reflect the investment advisory fee and other
expenses incurred by the Funds. The Company, as investment adviser to the MONY
Series Fund, will receive a daily investment advisory fee at an annual rate of
0.50 percent of the first $400 million, 0.35 percent of the next $400 million,
and 0.30 percent of the aggregate average daily net assets in excess of $800
million of the Intermediate Term Bond, Long Term Bond, and Government Securities
Portfolios of the MONY Series Fund, and as investment adviser to the MONY Series
Fund, the Company will receive a daily investment advisory fee at an annual rate
of 0.40 percent of the first $400 million, 0.35 percent of the next $400
million, and 0.30 percent of the aggregate average daily net assets in excess of
$800 million of the Money Market Portfolio of the MONY Series Fund.
Enterprise Capital, as investment adviser to the Accumulation Trust, will
receive from the Accumulation Trust a daily investment advisory fee at an annual
rate of 0.80 percent of the first $400 million, 0.75 percent of
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the next $400 million, and 0.70 percent of the aggregate average daily net
assets in excess of $800 million of the Equity and Managed Portfolios of the
Accumulation Trust. OpCap Advisors, a subsidiary of Oppenheimer Capital, as
sub-investment adviser to the Equity and Managed Portfolios of the Accumulation
Trust, will receive from Enterprise Capital and not the Accumulation Trust .40
percent (0.30 percent of assets in excess of $1 billion) of the aggregate
average daily net assets of the Equity Portfolio and .40 percent of the first $1
billion, .30 percent of the next $1 billion of assets, and .25 percent of assets
in excess of $2 billion of the average daily net assets of the Managed
Portfolio. Enterprise Capital, as investment adviser to the Accumulation Trust,
will receive from the Accumulation Trust a daily investment advisory fee at an
annual rate of 0.75 percent of the aggregate average daily net assets of the
Small Company Value Portfolio of the Accumulation Trust. Gabelli Asset
Management, Inc., as sub-investment adviser to the Small Company Value Portfolio
of the Accumulation Trust, will receive from Enterprise Capital and not the
Accumulation Trust, 0.40 percent of the first $1 billion and 0.30 percent of the
aggregate average daily net assets in excess of $1 billion of the Small Company
Value Portfolio. Enterprise Capital, as investment adviser to the Accumulation
Trust, will receive from the Accumulation Trust a daily investment advisory fee
at an annual rate of 0.60 percent of the aggregate average daily net assets of
the High Yield Bond Portfolio and Caywood Scholl Capital Corporation, as
sub-investment adviser to the High Yield Bond Portfolio, will receive from
Enterprise Capital and not the Accumulation Trust, .30 percent of the first $100
million and 0.25 percent of the aggregate average daily net assets .in excess of
$100 million of the High Yield Bond Portfolio. Enterprise Capital, as investment
adviser to the Accumulation Trust will receive from the Accumulation Trust a
daily investment advisory fee at an annual rate of .85 percent of the aggregate
average daily net assets of the International Growth Portfolio, and Brinson
Partners, as sub-investment adviser to the International Growth Portfolio, will
receive from Enterprise Capital and not the Accumulation Trust, .45 percent (53%
of the fee received by Enterprise Capital; the fee paid to Brinson Partners
declines as assets exceed $100 million) of the aggregate average daily net
assets of the International Growth Portfolio. Enterprise Capital, as investment
adviser to the Accumulation Trust, will receive from the Accumulation Trust a
daily investment advisory fee at an annual rate of 1.00 percent of the aggregate
average daily net assets of the Small Company Growth Portfolio and Pilgrim
Baxter & Associates, as sub-investment adviser to the Small Company Growth
Portfolio, will receive from Enterprise Capital and not the Accumulation Trust,
0.65 percent of the first $50 million, 0.55 percent of the next $50 million, and
0.45 percent of the aggregate average daily net assets in excess of $100 million
of the Small Company Growth Portfolio . Enterprise Capital, as investment
adviser to the Accumulation Trust, will receive from the Accumulation Trust a
daily investment advisory fee at an annual rate of 0.75 percent of the aggregate
average daily net assets of the Equity Income Portfolio and 1740 Advisers, Inc.,
as sub-investment adviser to the Equity Income Portfolio, will receive from
Enterprise Capital and not the Accumulation Trust, 0.30 percent of the first
$100 million, 0.25 percent of the next $100 million, and 0.20 percent of the
aggregate average daily net assets in excess of $200 million of the Equity
Income Portfolio. Enterprise Capital, as invest ment adviser to the Accumulation
Trust, will receive from the Accumulation Trust a daily investment advisory fee
at an annual rate of 0.75 percent of the aggregate average daily net assets of
the Growth and Income Portfolio and Retirement System Investors, Inc., as
sub-investment adviser to the Growth and Income Portfolio, will receive from
Enterprise Capital and not the Accumulation Trust, .0.30 percent of the first
$100 million, 0.25 percent of the next $100 million, and 0.20 percent of the
aggregate average daily net assets in excess of $200 million of the Growth and
Income Portfolio. Enterprise Capital, as investment adviser to the Accumulation
Trust, will receive from the Accumulation Trust a daily investment advisory fee
at an annual rate of 0.75 percent of the aggregate average daily net assets of
the Capital Appreciation Portfolio and Montag & Caldwell, Inc., as
sub-investment adviser to the Capital Appreciation Portfolio, will receive from
Enterprise Capital and not the Accumulation Trust, 0.30 percent of the first $1
billion and 0.20 percent of aggregate average daily net assets in excess of $1
billion of the Capital Appreciation Portfolio.
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ANNUITY PROVISIONS
ANNUITY STARTING DATE
Annuity payments under a Contract will begin on the Annuity Starting Date
that is selected by the Owner at the time the Contract is applied for. The
Annuity Starting Date chosen may be no earlier than the Contract Anniversary
after the Annuitant's 10th birthday, and no later than the Contract Anniversary
after the Annuitant's 95th birthday. The minimum number of years from the
Contract Date to the Annuity Starting Date is 10. The Annuity Starting Date may
be advanced to a date not earlier than the 10th Contract Anniversary or deferred
from time to time by the Owner by written notice to the Company, provided that
(1) notice of such deferral or advance is received by the Company prior to the
then current Annuity Starting Date, and (2) the new Annuity Starting Date is a
date which is not later than the Contract Anniversary after the Annuitant's 95th
birthday. A particular retirement plan may contain other restrictions.
On the Annuity Starting Date, unless Settlement Option 3 or 3A is elected,
the Contract's Cash Value less any taxes which may be imposed by an applicable
state upon annuitization, will be applied to provide an annuity or any other
option previously chosen by the Owner and permitted by the Company. If
Settlement Option 3 or 3A is elected, the Contract's Fund Value (less any taxes
which may be imposed by an applicable state upon annuitization) will be applied
to provide an annuity. A supplementary contract will be issued, and that
contract will set forth the terms of the settlement. No payments may be
requested under the Contract's surrender provisions after the Annuity Starting
Date, and no surrender will be permitted except as may be available under the
Settlement Option elected.
For Contracts issued in connection with retirement plans, reference should
be made to the terms of the particular retirement plan for any limitations or
restrictions on the Annuity Starting Date.
ELECTION AND CHANGE OF SETTLEMENT OPTION
During the lifetime of the Annuitant and prior to the Annuity Starting
Date, the Owner may elect one or more of the Settlement Options described below,
or such other settlement option as may be agreed to by the Company. The Owner
may also change any election, but written notice of an election or change of
election must be received by the Company at its Operations Center prior to the
Annuity Starting Date. If no election is in effect on the Annuity Starting Date,
a lump sum payment will be deemed to have been elected.
Settlement Options may also be elected by the Owner or the Beneficiary as
provided in the Death Benefit and Surrender sections of this Prospectus. (See
"Death Benefit" at page 18 and "Surrenders" at page 16.)
Where applicable, reference should be made to the terms of a particular
retirement plan and any applicable legislation for any limitations or
restrictions on the options that may be elected.
SETTLEMENT OPTIONS
Proceeds settled under the Settlement Options listed below or otherwise
currently available will not participate in the investment experience of the
Variable Account.
Settlement Option 1 -- Interest Income: Interest on the proceeds at a rate
(not less than 2 3/4 percent per year) set by the Company each year.
Settlement Option 2 -- Income for Specified Period: Fixed monthly payments
for a specified period of time, as elected. The payments may, at the Company's
option, be increased by additional interest each year.
Settlement Option 3 -- Single Life Income: Payments for the life of the
payee and for a period certain. The period certain may be (a) 0 years, 10 years,
or 20 years, or (b) the period required for the total income payments to equal
the proceeds (refund period certain). The amount of the income will be
determined by the Company on the date the proceeds become payable.
Settlement Option 3A -- Joint Life Income: Payments during the joint
lifetime of the payee and one other person, and during the lifetime of the
survivor. The survivor's monthly income may be equal to either
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(a) the income payable during the joint lifetime or (b) two-thirds of that
income. If a person for whom this option is chosen dies before the first monthly
payment is made, the survivor will receive proceeds instead under Settlement
Option 3, with 10 years certain.
Settlement Option 4 -- Income of Specified Amount: Income, of an amount
chosen, for as long as the proceeds and interest last. The amount chosen to be
received as income in each year may not be less than 10 percent of the proceeds
settled. Interest will be credited annually on the amount remaining unpaid at a
rate determined annually by the Company. This rate will not be less than 2 3/4
percent per year.
The Contract contains annuity payment rates for Settlement Options 3 and 3A
described in this Prospectus. The rates show, for each $1,000 applied, the
dollar amount of the monthly fixed annuity payment, when this payment is based
on minimum guaranteed interest as described in the Contract.
The annuity payment rates may vary according to the Settlement Option
elected and the age of the payee. The mortality table used in determining the
annuity payment rates for Options 3 and 3A is the 1983 Table "a" (discrete
functions, without projections for future mortality), with 3 percent interest.
Under Settlement Option 3, if income based on the period certain elected is
the same as the income provided by another available period or periods certain,
the Company will deem the election to have been made of the longest period
certain.
In Qualified Plans, settlement options available to Owners may be
restricted by the terms of the plans.
FREQUENCY OF ANNUITY PAYMENTS
Annuity payments will be paid as monthly installments unless the payee
requests quarterly, semiannual, or annual installments at the time the option is
chosen. However, if the net amount available to apply under any Settlement
Option under any circumstances is less than $1,000, the Company shall have the
right to pay such amount in one lump sum. In addition, if the payments provided
for would be less than $25, the Company shall have the right to change the
frequency of payments to such intervals as will result in payments of at least
$25.
ADDITIONAL PROVISIONS
The Company may require proof of age of the Annuitant before making any
life annuity payment provided for by the Contract. If the age of the Annuitant
has been misstated, the amount payable will be the amount that the amount
settled would have provided at the correct age. Once life income payments have
begun, any underpayments will be made up in one sum with the next annuity
payment; overpayments will be deducted from the future annuity payments until
the total is repaid.
The Contract must be returned to the Company upon any settlement. Prior to
any settlement of a death claim, due proof of the Annuitant's death must be
submitted to the Company.
Where any benefits under the Contract are contingent upon the recipient's
being alive on a given date, the Company may require proof satisfactory to it
that such condition has been met.
The Contracts described in this Prospectus contain annuity payment rates
that distinguish between men and women. On July 6, 1983, the Supreme Court held
in Arizona Governing Committee v. Norris that optional annuity benefits provided
under an employer's deferred compensation plan could not, under Title VII of the
Civil Rights Act of 1964, vary between men and women on the basis of sex.
Because of this decision, the annuity payment rates applicable to Contracts
purchased under an employment-related insurance or benefit program may in some
cases not vary on the basis of the Annuitant's sex. Unisex rates to be provided
by the Company will apply for Qualified Plans.
Employers and employee organizations should consider, in consultation with
legal counsel, the impact of Norris, and Title VII generally, and any comparable
state laws that may be applicable, on any employment-related plan for which a
Contract may be purchased.
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OTHER PROVISIONS
OWNERSHIP
The Owner has all rights and may receive all benefits under the Contract.
During the lifetime of the Annuitant (and the Secondary Annuitant if one has
been named), the Owner shall be the person so designated in the application,
unless changed, or unless a Successor Owner becomes the Owner. On and after the
death of the Annuitant (and the Secondary Annuitant, if applicable), if the
Beneficiary (or Successor Beneficiary, if one be named) is not then living, the
Death Benefit shall be paid to the Annuitant's (or if the Annuitant is not then
living and a Secondary Annuitant has been named and is not then living, the
Secondary Annuitant's) executors or administrators, unless the Owner directed
otherwise.
The Owner may name a Successor Owner or a new Owner at any time. If the
Owner dies, the Successor Owner, if living, becomes the Owner. Any request for
change must be: (1) made in writing; and (2) received at the Company. The change
will become effective as of the date the written request is signed. A new choice
of Owner or Successor Owner will not apply to any payment made or action taken
by the Company prior to the time a request for change is received. Owners should
consult a competent tax advisor prior to changing Owners.
PROVISION REQUIRED BY SECTION 72(S) OF THE CODE
If the Owner of a Non-Qualified Plan dies before the Annuity Starting Date
and while the Annuitant is living, and if that Owner's surviving spouse is not
the Successor Owner as of the date of that Owner's death (as evidenced by proof
satisfactory to the Company), then the Contract will be surrendered as of the
date of that death. If the Successor Owner is the Beneficiary, the surrender
proceeds may, at the option of the Successor Owner, be paid over the life of the
Successor Owner. Such payments must begin no later than one year after such date
of death. If the Successor Owner is a surviving spouse, then the surviving
spouse will be treated as the new Owner of the Contract. Under such
circumstances, it shall not be necessary to surrender the Contract. If the
spouse is not the Successor Owner and there is no designated beneficiary, the
proceeds must be distributed within 5 years after the date of death. However,
under the terms of the Contract, if the spouse is not the Successor Owner, the
Contract will be surrendered as of the date of death and the proceeds will be
paid to the Beneficiary. This provision shall not extend the term of the
Contract beyond the date when death proceeds become payable.
Further, if the Owner dies on or after the Annuity Starting Date, then any
remaining portion of the proceeds will be distributed at least as rapidly as
under the method of distribution being used as of the date of the Owner's death.
PROVISION REQUIRED BY SECTION 401(A)(9) OF THE CODE
The entire interest of a Qualified Plan participant under the Contract will
be distributed to the Owner or his/her Designated Beneficiary either by or
beginning not later than April 1 of the calendar year following the calendar
year in which the Qualified Plan Participant attains age 70 1/2. The period over
which such distribution will be made is the life of such Participant or the
lives of such Participant and Designated Beneficiary.
Where distributions have begun in accordance with the previous paragraph
and the Participant dies before the Owner's entire interest has been distributed
to him/her, the remaining portion of such interest will be distributed at least
as rapidly as under the method of distribution being used as of the date of the
Participant's death. If the Participant dies before the commencement of such
distributions and there is no Designated Beneficiary, the Contract will be
surrendered as of the date of death. The surrender proceeds must be distributed
within 5 years after the date of death. But if there is a Designated
Beneficiary, the surrender proceeds may, at the option of the Designated
Beneficiary, be paid over the life of the Designated Beneficiary. In such case,
distributions will begin not later than one year after the Participant's death.
If the Designated Beneficiary is the surviving spouse of the Participant, the
date on which the distributions will begin shall not be earlier than the date on
which the Participant would have attained age 70 1/2. If the surviving spouse
dies before distributions to him/her begin, the provisions of this paragraph
shall be applied as if the surviving spouse were
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the Participant. If the Plan is an IRA under Section 408 of the Code, the
surviving spouse may elect to forego distribution and treat the IRA as his/her
own plan.
It is the Owner's responsibility to assure that distribution rules imposed
by the Code will be met. Qualified Plan Contracts include those qualifying for
special treatment under Sections 401, 403, 408, and 408A of the Code.
SECONDARY ANNUITANT
Except where the Contract is issued in connection with a Qualified Plan, a
Secondary Annuitant may be designated by the Owner. Such designation may be made
once before annuitization, either (1) in the application for the Contract, or
(2) after the Contract is issued, by written notice to the Company at its
Operations Center. The Secondary Annuitant may be deleted by written notice to
the Company at its Operations Center. A designation or deletion of a Secondary
Annuitant will take effect as of the date the written election was signed. The
Company, however, must first accept and record the change at its Operations
Center. The change will be subject to any payment made by the Company or action
taken by the Company before receipt of the notice at the Company's Operations
Center. The Secondary Annuitant will be deleted from the Contract automatically
by the Company as of the Contract Anniversary after the Secondary Annuitant's
95th birthday.
On the death of the Annuitant, the Secondary Annuitant will become the
Annuitant, under the following conditions:
(1) the death of the Annuitant must have occurred before the Annuity
Starting Date;
(2) the Secondary Annuitant is living on the date of the Annuitant's
death;
(3) if the Annuitant was the Owner on the date of death, the Successor
Owner must have been the Annuitant's spouse; and
(4) if the Annuity Starting Date is later than the Contract
Anniversary after the Secondary Annuitant's 95th birthday, the Annuity
Starting Date will be automatically advanced to that Contract Anniversary.
Effect of Secondary Annuitant's Becoming the Annuitant. If the Secondary
Annuitant becomes the Annuitant at the death of the Annuitant, in accordance
with the conditions specified above, the Death Benefit proceeds of the Contract
will be paid to the Beneficiary only on the death of the Secondary Annuitant.
However, if the Secondary Annuitant was also the beneficiary, then at the death
of the Annuitant, the Secondary Annuitant will be given the option of receiving
the death proceeds as beneficiary instead. If the Secondary Annuitant was the
Beneficiary on the Annuitant's death, and the contract is to be continued, the
Beneficiary will be changed automatically to the person who was the Successor
Beneficiary on the date of death. If there was no Successor Beneficiary, then
the Secondary Annuitant's executors or administrators, unless the Owner directed
otherwise, will become the Beneficiary. All other rights and benefits under the
Contract will continue in effect during the lifetime of the Secondary Annuitant
as if the Secondary Annuitant were the Annuitant.
ASSIGNMENT
The Company will not be bound by any assignment until the assignment (or a
copy) is received by the Company at its Home Office. The Company is not
responsible for assessing the validity or effect of any assignment. The Company
shall not be liable as to any payment or other settlement made by the Company
before receipt of the assignment.
If the Contract is issued pursuant to certain retirement plans, then it may
not be assigned, pledged or otherwise transferred except under such conditions
as may be allowed under applicable law.
Because an assignment may be a taxable event, a Owner should consult a
competent tax advisor before assigning the Contract.
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CHANGE OF BENEFICIARY
So long as the Contract is in force, the Beneficiary or Successor
Beneficiary may be changed by written request to the Company at its Operations
Center in a form acceptable to the Company. The Contract need not be returned
unless requested by the Company. The change will take effect as of the date the
request is signed, whether or not the Annuitant is living when the request is
received by the Company. The Company will not, however, be liable for any
payment made or action taken before receipt and acknowledgement of the request
at its Operations Center.
SUBSTITUTION OF SECURITIES
If the shares of any Portfolio of the Funds should no longer be available
for investment by the Variable Account or, if in the judgment of the Company's
Board of Directors, further investment in shares of one or more of the
Portfolios of the Funds should become inappropriate in view of the purposes of
the Contract, the Company may substitute shares of another mutual fund for
shares of the Funds already purchased or to be purchased in the future by
Purchase Payments under the Contract. A substitution of securities in any
Subaccount will take place only with prior approval of the Securities and
Exchange Commission and under such requirements as it may impose.
MODIFICATION OF THE CONTRACTS
Upon notice to the Owner, the Contract may be modified by the Company, but
only if such modification (1) is necessary to make the Contract or the Variable
Account comply with any law or regulation issued by a governmental agency to
which the Company is subject or (2) is necessary to assure continued
qualification of the Contract under the Internal Revenue Code or other federal
or state laws relating to retirement annuities or annuity contracts or (3) is
necessary to reflect a change in the operation of the Variable Account or the
Subaccounts or the Guaranteed Interest Account or (4) provides additional
Settlement Options or fixed accumulation options. In the event of any
modification, the Company may make appropriate endorsement in the Contract to
reflect such modification.
CHANGE IN OPERATION OF VARIABLE ACCOUNTS
At the Company's election and subject to any necessary vote by persons
having the right to give instructions with respect to the voting of shares of
the Funds held by the Subaccounts, the Variable Account may be operated as a
management company under the Investment Company Act of 1940 or it may be
deregistered under the Investment Company Act of 1940 in the event registration
is no longer required. Deregistration of the Variable Account requires an order
by the Securities and Exchange Commission. In the event of any change in the
operation of the Variable Account pursuant to this provision, the Company may
make appropriate endorsement to the Contract to reflect the change and take such
other action as may be necessary and appropriate to effect the change.
VOTING RIGHTS
All of the assets held in the Subaccounts of the Variable Account will be
invested in shares of the corresponding Portfolios of the Funds. The Company is
the legal holder of those shares and as such has the right to vote to elect the
Board of Directors of the MONY Series Fund or the Board of Trustees of the
Accumulation Trust, to vote upon certain matters that are required by the 1940
Act to be approved or ratified by the shareholders of a mutual fund, and to vote
upon any other matter that may be voted upon at a shareholder's meeting. To the
extent required by law, the Company will vote the shares of each of the Funds
held in the Variable Account (whether or not attributable to Owners) at
shareholder meetings of each of the Funds in accordance with the instructions
received from Owners. The number of votes will be determined as of the record
date selected by the Board of Directors or the Board of Trustees of the
respective Fund. The Company will furnish Owners with the proper forms to enable
them to give it these instructions. Currently, the Company may disregard voting
instructions under the circumstances described in the following paragraph.
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<PAGE> 35
The Company may, if required by state insurance officials, disregard voting
instructions if those instructions would require shares to be voted to cause a
change in the subclassification or investment objectives or policies of one or
more of the Portfolios of either or both of the Funds, or to approve or
disapprove an investment adviser or principal underwriter for either or both of
the Funds. In addition, the Company itself may disregard voting instructions
that would require changes in the investment objectives or policies of any
Portfolio or in an investment adviser or principal underwriter for either or
both of the Funds, if the Company reasonably disapproves those changes in
accordance with applicable federal regulations. If the Company does disregard
voting instructions, it will advise Owners of that action and its reasons for
the action in the next semiannual report to Owners.
Each Owner will have the equivalent of one vote per $100 of value
attributable to the Contract held in each Subaccount of the Variable Account,
with fractional votes for amounts less than $100. For voting purposes, this
value attributable to the Contract is equal to the Fund Value. These votes,
represented as votes per $100 of value in each Subaccount of the Variable
Account, are converted into a proportionate number of votes in shares of the
corresponding Portfolio of each of the Funds. Shares of each of the Funds held
in each Subaccount for which no timely instructions from Owners are received
will be voted by the Company in the same proportion as those shares in that
Subaccount for which instructions are received. Should applicable federal
securities laws or regulations permit, the Company may elect to vote shares of
each of the Funds in its own right.
The number of shares of the corresponding Portfolio of one of the Funds in
a Subaccount for which instructions may be given by an Owner is determined by
dividing the portion of the value attributable to the Contract held in that
Subaccount by the net asset value of one share in the corresponding Portfolio of
the respective Fund. In other words, if the value attributable to the Contract
held in the Subaccount were $540 and the net asset value of the respective
Fund's shares of the Portfolio held in that Subaccount were $20 per share on the
record date, then the Owner could issue instructions on 5.4 votes (representing
votes per $100 of value attributable to the Contract held in the Subaccount),
which would be converted into instructions on 27 shares of the respective Fund.
Matters on which Owners may give voting instructions include the following:
(1) approval of any change in the Investment Advisory Agreement and Services
Agreement, if any, for the Portfolio(s) of the Fund(s) corresponding to the
Owner's selected Subaccount(s); (2) any change in the fundamental investment
policies of the Portfolio(s) corresponding to the Owner's selected
Subaccount(s); and (3) any other matter requiring a vote of the shareholders of
either of the Funds. With respect to approval of the Investment Advisory
Agreement or any change in a Portfolio's fundamental investment policies, Owners
participating in that Portfolio will vote separately on the matter pursuant to
the requirements of Rule 18f-2 under the 1940 Act.
DISTRIBUTION OF THE CONTRACTS
MONY Securities Corp. ("MSC"), a New York corporation which is a
wholly-owned subsidiary of MONY, will act as the principal underwriter of the
Contracts, pursuant to an underwriting agreement with the Company. MSC is
registered as a broker-dealer under the Securities Exchange Act of 1934 and is a
member of the National Association of Securities Dealers. The Contracts are sold
by individuals who are registered representatives of MSC and who are also
licensed as life insurance agents for the Company. The Contracts may also be
sold through other broker-dealers authorized by MSC and applicable law to do so.
Commissions and other expenses directly related to the sale of the Contract will
not exceed 6.0 percent of Purchase Payments. Additional compensation may be paid
for persistency, sales quality, and contract size and for other services not
directly related to the sale of the Contract. Such services include the training
of personnel and the production of promotional literature.
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FEDERAL TAX STATUS
INTRODUCTION
The Contracts described in this Prospectus are designed for use by
retirement plans that may or may not qualify for favorable tax treatment under
the provisions of Section 401, 403, 408(b), and 457 of the Code. The ultimate
effect of federal income taxes on the value of the Contract's Fund Value, on
annuity payments, and on the economic benefit to the Owner, the Annuitant, and
the Beneficiary may depend upon the type of retirement plan for which the
Contract is purchased and upon the tax and employment status of the individual
concerned.
The following discussion of the treatment of the Contracts and of the
Company under the federal income tax laws is general in nature, is based upon
the Company's understanding of current federal income tax laws, and is not
intended as tax advice. Any person contemplating the purchase of a Contract
should consult a qualified tax adviser. A more detailed description of the
treatment of the Contract under federal income tax laws is contained in the
Statement of Additional Information. THE COMPANY DOES NOT MAKE ANY GUARANTEE
REGARDING ANY TAX STATUS, FEDERAL, STATE, OR LOCAL, OF ANY CONTRACT OR ANY
TRANSACTION INVOLVING THE CONTRACTS.
TAX TREATMENT OF THE COMPANY
Under existing federal income tax laws, the income of the Variable
Accounts, to the extent that it is applied to increase reserves under the
Contracts, is substantially nontaxable to the Company.
TAXATION OF ANNUITIES IN GENERAL
The Contracts offered by this Prospectus are designed for use in connection
with Qualified Plans and Non-Qualified Plans. All or a portion of the
contributions to such plans will be used to make Purchase Payments under the
Contracts. In general, contributions to Qualified Plans and income earned on
contributions to all plans are tax-deferred until distributed to plan
participants or their beneficiaries. Such tax deferral is not, however,
available for Non-Qualified Plans if the Owner is other than a natural person
unless the contract is held as an agent for a natural person. Annuity payments
made as retirement distributions under a Contract, except to the extent of
participant (in the case of Qualified Plans) or Owner (in the case of Non-
Qualified Plans) contributions, are generally taxable to the annuitant as
ordinary income. Owners, Annuitants, and Beneficiaries should seek qualified
advice about the tax consequences of distributions, withdrawals, and payments
under the retirement plans in connection with which the Contracts are purchased.
The Company will withhold and remit to the United States Government and,
where applicable, to state governments part of the taxable portion of each
distribution made under a Contract unless the Owner or Annuitant provides his or
her taxpayer identification number to the Company and notifies the Company that
he or she chooses not to have amounts withheld.
Under the Technical and Miscellaneous Revenue Act of 1988 ("TAMRA"), for
purposes of determining the amount includable in gross income with respect to
distributions not received as an annuity, including deemed distributions
resulting from gratuitous transfers, all annuity contracts issued by the same
company to the same Owner during any 12 month period, other than those issued to
qualified retirement plans, will be treated as one annuity contract. The IRS is
given power to prescribe additional rules to prevent avoidance of this rule
through serial purchases of contracts or otherwise. None of these rules is
expected to affect tax-benefitted plans.
Effective January 1, 1993, distributions of plan benefits from qualified
retirement plans, other than individual retirement arrangements ("IRAs"),
generally will be subject to mandatory federal income tax withholding unless
they either are:
1. Part of a series of substantially equal periodic payments (at least
annually) for the participant's life or life expectancy, the joint lives or
life expectancies of the participant and his/her beneficiary, or a period
certain of not less than 10 years, or
31
<PAGE> 37
2. Required by the Code upon the participant's attainment of age
70 1/2 or death.
Such withholding will apply even if the distribution is rolled over into
another qualified plan, including an IRA. The withholding can be avoided if the
participant's interest is directly transferred by the old plan to another
eligible qualified plan, including an IRA. A direct transfer to the new plan can
be made only in accordance with the terms of the old plan. If withholding is not
avoided, the amount withheld may be subject to income tax and excise tax
penalties.
Under the generation skipping transfer tax, the Company may be liable for
payment of this tax under certain circumstances. In the event that the Company
determines that such liability exists, an amount necessary to pay the generation
skipping transfer tax may be subtracted from the death benefit proceeds.
RETIREMENT PLANS
The Contracts described in this Prospectus currently are designed for use
with the following types of retirement plans:
(1) Pension and Profit-Sharing Plans established by business employers
and certain associations, as permitted by Sections 401(a) and 401(k) of the
Code, including those purchasers who would have been covered under the
rules governing H.R. 10 (Keogh) Plans;
(2) Individual Retirement Annuities permitted by Section 408(b) of the
Code, including Simplified Employee Pensions established by employers
pursuant to Section 408(k);
(3) Deferred compensation plans provided by certain governmental
entities under Section 457; and
(4) Non-Qualified Plans.
The tax rules applicable to participants in such retirement plans vary
according to the type of plan and its terms and conditions. Therefore, no
attempt is made herein to provide more than general information about the use of
Contracts with the various types of retirement plans. Participants in such plans
as well as Owners, Annuitants, and Beneficiaries are cautioned that the rights
of any person to any benefits under these plans are subject to the terms and
conditions of the plans themselves, regardless of the terms and conditions of
the Contracts. The Company will provide purchasers of Contracts used in
connection with Individual Retirement Annuities with such supplementary
information as may be required by the Internal Revenue Service or other
appropriate agency. Any person contemplating the purchase of a Contract should
consult a qualified tax adviser.
PERFORMANCE DATA
From time to time the performance of one or more of the Subaccounts may be
advertised. The performance data contained in these advertisements is based upon
historical earnings and is not indicative of future performance. The data for
each Subaccount reflects the results of the corresponding Portfolio of the Fund
and recurring charges and deductions borne by or imposed on the Portfolio and
the Subaccount. Set forth below for each Subaccount is the manner in which the
data contained in such advertisements will be calculated.
Money Market Subaccount. The performance data for this Subaccount will
reflect the "yield" and "effective yield". The "yield" of the Subaccount refers
to the income generated by an investment in the Subaccount over the seven day
period stated in the advertisement. This income is "annualized", that is, the
amount of income generated by the investment during that week is assumed to be
generated each week over a 52-week period and is shown as a percentage of the
investment. The "effective yield" is calculated similarly, but, when annualized,
the income earned by an investment in the Subaccount is assumed to be
reinvested. The "effective yield" will be slightly higher than the "yield"
because of the compounding effect of this assumed reinvestment.
Subaccounts other than the Money Market Subaccount. The performance data
for these Subaccounts will reflect the "yield" and "total return". The "yield"
of each of these Subaccounts refers to the income
32
<PAGE> 38
generated by an investment in that Subaccount over the 30 day period stated in
the advertisement and is the result of dividing that income by the value of the
Subaccount. The value of each Subaccount is the average daily number of Units
outstanding multiplied by the Unit Value on the last day of the period. The
"yield" reflects deductions for all charges, expenses, and fees of both the
Funds and the Variable Account other than the Surrender Charge. "Total return"
for each of these Subaccounts refers to the return an Owner would receive during
the period indicated if a $1,000 Purchase Payment was made the indicated number
of years ago. It reflects historical investment results less charges and
deductions of both the Funds and the Variable Account, including any Surrender
Charge imposed as a result of the full Surrender, with the distribution being
made in cash rather than in the form of one of the settlement options, at the
close of the period for which the "total return" data is given. Total return
data may also be shown assuming that the Contract continues in force (i.e., was
not surrendered) beyond the close of the periods indicated, in which case that
data would reflect all charges and deductions of both the Funds and the Variable
Account other than the Surrender Charge. Returns for periods exceeding one year
reflect the average annual total return for such period. In addition to the
total return data described above based upon a $1,000 investment, comparable
data may also be shown for an investment equal to the amount of the average
purchase payment made by a purchaser of a Contract during the prior year.
Non-Standardized Performance Data. From time to time, average annual total
return or other performance data may also be advertised in non-standardized
formats. Non-standard performance data will be accompanied by standard
performance data, and the period covered or other non-standard features will be
disclosed.
In addition, reference in advertisements may be made to various indices,
including, without limitation, the Standard & Poor's 500 Indices and the Lehman
Brothers, Shearson, CDA/Wiesenberger, Russell, Merrill Lynch, and Wilshire
indices, and to various ranking services, including, without limitation, the
Lipper Annuity and Closed End Survey compiled by Lipper Analytical Services and
the VARDS report compiled by Variable Annuity Research and Data Service in order
to provide the reader a basis for comparison of performance.
ADDITIONAL INFORMATION
This Prospectus does not contain all the information set forth in the
registration statement, certain portions of which have been omitted pursuant to
the rules and regulations of the Securities and Exchange Commission. The omitted
information may be obtained from the Commission's principal office in
Washington, D.C., upon payment of the fees prescribed by the Commission.
For further information with respect to the Company and the Contracts
offered by this Prospectus, including the Statement of Additional Information
(which includes financial statements relating to the Company), Owners and
prospective investors may also contact the Company at its address or phone
number set forth on the cover of this Prospectus for requesting such statement.
The Statement of Additional Information is available from the Company without
charge.
LEGAL PROCEEDINGS
There are no legal proceedings to which the Variable Account is a party.
The Company and the principal underwriter are engaged in various kinds of
routine litigation which, in the opinions of the Company and the principal
underwriter, are not of material importance in relation to the total capital and
surplus of the Company or the principal underwriter.
FINANCIAL STATEMENTS
The financial statements for the Company should be distinguished from the
financial statements of the Variable Account and should be considered only as
bearing on the ability of the Company to meet its obligations under the
Contracts. The financial statements of the Company should not be considered as
bearing on the investment performance of the assets held in the Variable
Account. The financial statements of the Company and The Variable Account are
included in the Statement of Additional Information.
33
<PAGE> 39
TABLE OF CONTENTS
OF
STATEMENT OF ADDITIONAL INFORMATION
MAY 1, 1998
<TABLE>
<CAPTION>
ITEM PAGE
---- ----
<S> <C>
MONY Life Insurance Company of America...................... 1
Legal Opinion............................................... 1
Independent Accountants..................................... 1
Federal Tax Status.......................................... 1
Performance Data............................................ 5
Financial Statements........................................ F-1
</TABLE>
If you would like to receive a copy of the MONY America Variable Account A
Statement of Additional Information, please return this request to:
MONY Life Insurance Company of America
1740 Broadway
New York, New York 10019
Your name
Address
City State ____________ Zip ______________
Please send me a copy of the MONY America Variable Account A Statement of
Additional Information.
Policy Bx-98
Form No. 1 SL (9/98) 333-
34
<PAGE> 40
THE MONYMASTER
STATEMENT OF ADDITIONAL INFORMATION
DATED SEPTEMBER 1, 1998
INDIVIDUAL FLEXIBLE PAYMENT
VARIABLE ANNUITY CONTRACT
ISSUED BY
MONY AMERICA VARIABLE ACCOUNT A
AND
MONY LIFE INSURANCE COMPANY OF AMERICA
This Statement of Additional Information is not a prospectus, but it
relates to, and should be read in conjunction with, the prospectus dated
September 1, 1998 for the Individual Flexible Payment Variable Annuity Contract
("Contract") issued by MONY Life Insurance Company of America ("Company"). The
prospectus is available, at no charge, by writing the Company at 1740 Broadway,
New York, New York 10019, Mail Drop 8-27 or by calling 1-800-487-6669.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ITEM PAGE
---- ----
<S> <C>
MONY Life Insurance Company of.............................. 1
America Legal Opinion....................................... 1
Independent Accountants..................................... 1
Federal Tax Status.......................................... 1
Performance Data............................................ 5
Financial Statements........................................ F-1
</TABLE>
Form No. 1 SL (9/98) 333-
<PAGE> 41
MONY LIFE INSURANCE COMPANY OF AMERICA
MONY Life Insurance Company of America ("Company"), is a stock life
insurance company organized in the state of Arizona. The Company is the
corporate successor of Vico Credit Life Insurance Company, incorporated in
Arizona on March 6, 1969, re-named Vico Life Insurance Company on July 7, 1972,
and re-named Consumers National Life Insurance Company on December 22, 1977. The
Mutual Life Insurance Company of New York ("MONY") purchased Consumers National
Life Insurance Company on December 10, 1981 and changed the corporate name to
MONY Life Insurance Company of America. The Company is currently licensed to
sell life insurance in 49 states (not including New York), the District of
Columbia, the U.S. Virgin Island, and Puerto Rico.
MONY is a mutual life insurance company organized under the laws of the
state of New York in 1842. The principal offices of both MONY and the Company
are at 1740 Broadway, New York, New York 10019. MONY had consolidated assets at
the end of 1997 of approximately $ 22.0 billion. As of December 31, 1997, MONY
had approximately $133.2 million invested in the Company to support its
insurance operations. MONY intends from time to time to make additional capital
contributions to the Company as needed to enable it to meet its reserve
requirements and expenses in connection with its business. Generally, MONY is
under no obligation to make such contributions, and its assets do not back the
benefits payable under the Contracts.
In September 1997, MONY announced that it had begun the process of
demutualization. If completed, it is not expected that demutualization will have
any material effect on MONY America Variable Account A or the Contract.
At May 1, 1998, the rating assigned to the Company by A.M. Best Company,
Inc., an independent insurance company rating organization, was A- (Excellent)
based upon an analysis of financial condition and operating performance through
the end of 1996. At the same date, the Company was rated A- on the same basis.
The A.M. Best rating of the Company should be considered only as bearing on the
ability of the Company to meet its obligations under the Contracts.
The Company has a service agreement with MONY whereby MONY provides the
Company with such personnel, facilities, etc., as are reasonably necessary for
the conduct of the Company's business. These services are provided on a cost
reimbursement basis. The Company intends to administer the Contract itself
utilizing the services provided by MONY as a part of the Service Agreement.
During 1997, the Company paid MONY $57,527,856 for all services provided
under the Service Agreement.
LEGAL OPINION
Legal matters relating to federal securities laws applicable to the issue
and sale of the Contract and all matters of Arizona law pertaining to the
Contract, including the validity of the Contract and the Company's right to
issue the Contract, have been passed upon by Edward P. Bank, Esq., Vice
President and Deputy General Counsel, MONY.
INDEPENDENT ACCOUNTANTS
The audited financial statements of the Company and the Variable Account
appearing on the following pages have been audited by Coopers & Lybrand L.L.P.,
independent accountants, and are included herein in reliance on the reports of
said firm given on the authority of that firm as experts in accounting and
auditing. Coopers & Lybrand L.L.P.'s office is located at 1301 Avenue of the
Americas, New York, New York 10019.
(1)
<PAGE> 42
FEDERAL TAX STATUS
INTRODUCTION
The Contract is designed for use to fund retirement plans which may or may
not be Qualified Plans under the provisions of the Internal Revenue Code (the
"Code"). The ultimate effect of federal income taxes on the Contract value, on
annuity payments, and on the economic benefit to the Owner, Annuitant, or
Beneficiary depends on the type of retirement plan for which the Contract is
purchased and upon the tax and employment status of the individual concerned.
The discussion contained herein is general in nature and is not intended as tax
advice.
Each person concerned should consult a competent tax adviser. No attempt is
made to consider any applicable state or other tax laws. Moreover, the
discussion herein is based upon the Company's understanding of current federal
income tax laws as they are currently interpreted. No representation is made
regarding the likelihood of continuation of those current federal income tax
laws or of the current interpretations by the Internal Revenue Service.
TAXATION OF ANNUITIES IN GENERAL
Section 72 of the Code governs taxation of annuities in general. Except in
the case of certain corporate and other non-individual Owners, there are no
income taxes on increases in the value of a Contract until a distribution
occurs, in the form of a full surrender, a partial surrender, a death benefit,
an assignment or gift of the Contract, or as annuity payments.
SURRENDERS, DEATH BENEFITS, ASSIGNMENTS AND GIFTS
An Owner who fully surrenders his or her Contract is taxed on the portion
of the payment that exceeds his or her cost basis in the Contract. For
Non-Qualified Contracts, the cost basis is generally the amount of the Purchase
Payments made for the Contract, and the taxable portion of the surrender payment
is taxed as ordinary income. For Qualified Contracts, the cost basis is
generally zero, except to the extent of non-deductible employee contributions,
and the taxable portion of the surrender payment is generally taxed as ordinary
income subject to special elective 5-year (and, for certain eligible persons,
10-year) income averaging in the case of certain Qualified Contracts. A
Beneficiary entitled to receive a lump sum death benefit upon the death of the
Annuitant is taxed on the portion of the amount that exceeds the Owner's cost
basis in the Contract. If the Beneficiary elects to receive annuity payments
within 60 days of the Annuitant's death, different tax rules apply. (See
"Annuity Payments" below.)
Partial surrenders received under Non-Qualified Contracts prior to
annuitization are first included in gross income to the extent Surrender Value
exceeds Purchase Payments less prior non-taxable distributions, and the balance
is treated as a non-taxable return of principal to the Owner. For partial
surrenders under a Qualified Contract, payments are generally prorated between
taxable income and non-taxable return of investment.
There are special rules for Qualified Plans or contracts involving 85
percent or more employee contributions. Since the cost basis of Qualified
Contracts is generally zero, however, partial surrender amounts will generally
be fully taxed as ordinary income.
An Owner who assigns or pledges a Non-Qualified Contract is treated as if
he or she had received the amount assigned or pledged and thus is subject to
taxation under the rules applicable to surrenders. An Owner who gives away the
Contract (i.e., transfers it without full and adequate consideration) to anyone
other than his or her spouse is treated for income tax purposes as if he or she
had fully surrendered the Contract.
ANNUITY PAYMENTS
The non-taxable portion of each annuity payment is determined by an
"exclusion ratio" formula which establishes the ratio that the cost basis of the
Contract bears to the total expected value of annuity payments for the term of
the annuity. The remaining portion of each payment is taxable. Such taxable
portion is taxed at
(2)
<PAGE> 43
ordinary income rates. For Qualified Contracts, the cost basis is generally
zero. With annuity payments based on life contingencies, the payments will
become fully taxable once the Annuitant lives longer than the life expectancy
used to calculate the non-taxable portion of the prior payments. Conversely, a
tax deduction in the Annuitant's last taxable year, equal to the unrecovered
cost basis, is available if the Annuitant does not live to life expectancy.
PENALTY TAX
Payments received by Owners, Annuitants, and Beneficiaries under both
Qualified and Non-Qualified Contracts may be subject to both ordinary income
taxes and a penalty tax equal to 10 percent of the amount received that is
includable in income. The penalty is not imposed on amounts received: (a) after
the taxpayer attains age 59 1/2; (b) in a series of substantially equal payments
made for life or life expectancy following separation from service; (c) after
the death of the Owner (or, where the Owner is not a human being, the death of
the Annuitant); (d) if the taxpayer is totally disabled; (e) upon early
retirement under the plan after the taxpayer's attainment of age 55; or (f)
which are used for certain medical care expenses. Exceptions (e) and (f) do not
apply to Individual Retirement Accounts and Annuities and Non-Qualified
Contracts. An additional exception for Non-Qualified Contracts is amounts
received as an immediate annuity.
INCOME TAX WITHHOLDING
The Company is required to withhold federal, and, where applicable, state,
income taxes on taxable amounts paid under the Contract unless the recipient
elects not to have withholding apply. The Company will notify recipients of
their right to elect not to have withholding apply.
Effective January 1, 1993, distributions of plan benefits from qualified
retirement plans, other than individual retirement arrangements ("IRAs"),
generally will be subject to mandatory federal income tax withholding unless
they either are:
1. Part of a series of substantially equal periodic payments (at least
annually) for the participant's life or life expectancy, the joint lives or
life expectancies of the participant and his/ her beneficiary, or a period
certain of not less than 10 years, or
2. Required by the Code upon the participant's attainment of age
70 1/2 or death.
Such withholding will apply even if the distribution is rolled over into
another qualified plan, including an IRA. The withholding can be avoided if the
participant's interest is directly transferred by the old plan to another
eligible qualified plan, including an IRA. A direct transfer to the new plan can
be made only in accordance with the terms of the old plan. If withholding is not
avoided, the amount withheld may be subject to income tax and excise tax
penalties.
DIVERSIFICATION STANDARDS
The United States Secretary of the Treasury has the authority to set
standards for diversification of the investments underlying variable annuity
contracts (other than pension plan contracts). The Secretary of the Treasury has
issued certain regulations. Further regulations may be issued. The Fund is
designed to be managed to meet the diversification requirements for the Contract
as those requirements may change from time to time. The Company intends to
satisfy those requirements so that the Contract will be treated as an annuity
contract.
The Secretary of the Treasury has announced that he expects to issue
regulations or Revenue Rulings that will prescribe the circumstances in which an
Owner's control of the investments of a segregated asset account may cause the
Owner, rather than the insurance company, to be treated as the owner of the
assets of the account. The regulations or Revenue Rulings could impose
requirements that are not reflected in the Contract. The Company, however, has
reserved certain rights to alter the Contract and investment alternatives so as
to comply with such regulations or Revenue Rulings. Since the regulations or
Revenue Rulings have not been issued, there can be no assurance as to the
content of such regulations or Revenue Rulings or even
(3)
<PAGE> 44
whether application of the regulations or Revenue Rulings will be prospective.
For these reasons, Owners are urged to consult with their own tax advisers.
QUALIFIED PLANS
The Contract is designed for use with several types of Qualified Plans. The
tax rules applicable to participants in such Qualified Plans vary according to
the type of plan and the terms and conditions of the plan itself. Moreover, many
of these tax rules were changed by the Tax Reform Act of 1986. Therefore, no
attempt is made herein to provide more than general information about the use of
the Contract with the various types of Qualified Plans. Participants under such
Qualified Plans as well as Owners, Annuitants, and Beneficiaries are cautioned
that the rights of any person to any benefits under such Qualified Plans may be
subject to the terms and conditions of the plans themselves, regardless of the
terms and conditions of the Contract issued in connection therewith. Following
are brief descriptions of the various types of Qualified Plans and of the use of
the Contract in connection therewith. Purchasers of the Contract should seek
competent advice concerning the terms and conditions of the particular Qualified
Plan and use of the Contract with that plan.
H.R. 10 PLANS
The Self-Employed Individuals Tax Retirement Act of 1962, as amended, which
is commonly referred to as "H.R. 10," permits self-employed individuals to
establish Qualified Plans for themselves and their employees. The tax
consequences to participants under such plans depend upon the plan itself. In
addition, such plans are limited by law to maximum permissible contributions,
distribution dates, and tax rates applicable to distributions. In order to
establish such a plan, a plan document, usually in prototype form pre-approved
by the Internal Revenue Service, is adopted and implemented by the employer.
INDIVIDUAL RETIREMENT ACCOUNTS AND ANNUITIES
Section 408 of the Code permits eligible individuals to contribute to
individual retirement programs known as "Individual Retirement Accounts" and
"Individual Retirement Annuities." These Individual Retirement Accounts and
Annuities are subject to limitations on the amounts which may be contributed,
the persons who may be eligible, and on the time when distributions may
commence. In addition, distributions from certain types of Qualified Plans may
be placed on a tax-deferred basis into an Individual Retirement Account or
Annuity.
CORPORATE PENSION AND PROFIT-SHARING PLANS
Sections 401(a) and 403(a) of the Code permit corporate employers to
establish various types of retirement plans for employees. Such retirement plans
may permit the purchase of the Contract to provide benefits under the plans.
CERTAIN GOVERNMENTAL ENTITIES
Section 457 of the Code permits certain governmental entities to establish
deferred contribution plans. Such deferred contribution plans may permit the
purchase of the Contract to provide benefits under the plans.
(4)
<PAGE> 45
PERFORMANCE DATA
MONEY MARKET SUBACCOUNT
For the seven-day period ended December 31, 1997, the yield was 4.03% and
the effective yield was 4.11%.
The yield is calculated by dividing the result of subtracting the value of
one Unit at the end of the seven day period ("Seventh Day Value") from the value
of one Unit at the beginning of the seven day period ("First Day Value") by the
First Day Value (the resulting quotient being the "Base Period Return") and
multiplying the Base Period Return by 365 divided by 7 to obtain the annualized
yield.
The effective yield was calculated by compounding the Base Period Return
calculated in accordance with the preceding paragraph, adding 1 to the Base
Period Return, raising that sum to a power equal to 365 divided by 7 and
subtracting 1 from the result.
As the Money Market Subaccount invests only in shares of the Money Market
Portfolio of the Fund, the First Day Value reflects the per share net asset
value of the Money Market Portfolio (which will normally be $1.00) and the
number of shares of the Money Market Portfolio of the Fund held in the Money
Market Subaccount. The Seventh Day Value reflects increases or decreases in the
number of shares of the Money Market Portfolio of the Fund held in the Money
Market Subaccount due to the declaration of dividends (in the form of shares and
including dividends (in the form of shares) on shares received as dividends) of
the net investment income and the daily charges and deductions from the
Subaccount for mortality and expense risks and a deduction for the Annual
Contract Charge imposed on each Contract Anniversary which has been pro-rated to
reflect the shortened 7-day period and allocated to the Money Market Subaccount
in the proportion that the total value of the Money Market Subaccount bore to
the total value of the Variable Account at the end of the period indicated. Net
investment income reflects earnings on investments less expenses of the Fund
including the Investment Advisory Fee (which for calculating the yield and
effective yield quoted above is assumed to be .40 percent, the fee which would
be charged based upon the amount of assets under management on the last day of
the period for which the quoted yield is stated). Not reflected in either the
yield or effective yield are surrender charges, which will not exceed 7% of
total Purchase Payments made in the Contract Year of surrender and the preceding
7 Contract Years.
(5)
<PAGE> 46
SUBACCOUNTS OTHER THAN MONEY MARKET SUBACCOUNT
TOTAL RETURN:
The average annual total return for the Subaccounts other than the Money
Market Subaccount, assuming full surrender of the Contract for cash at the end
of the period, for the periods indicated is shown in the table below. This table
does not reflect the impact of the tax laws, if any, on total return as a result
of the surrender.
MONY AMERICA VARIABLE ACCOUNT A
TOTAL RETURN
(ASSUMING $1,000 PAYMENT AT BEGINNING OF
PERIOD AND SURRENDER AT END OF PERIOD)
<TABLE>
<CAPTION>
FOR THE
FOR THE FOR THE PERIOD SINCE
1 YEAR ENDED 5 YEARS ENDED INCEPTION THROUGH
SUBACCOUNT DECEMBER 31, 1997 DECEMBER 31, 1997 DECEMBER 31, 1997
---------- ----------------- ----------------- -----------------
<S> <C> <C> <C>
Equity........................................ 17.38% 17.10% 15.89%
Managed....................................... 35.97% 14.16% 14.96%
Small Cap..................................... 15.00% 17.29% 18.43%
International Growth.......................... -2.68% N/A 6.85%
High Yield Bond............................... 5.39% N/A 10.72%
Intermediate Term Bond........................ -0.31% 3.92% 6.04%
Long Term Bond................................ 5.39% 7.17% 8.37%
Government Securities......................... -0.88% N/A 3.67%
</TABLE>
- ---------------
MONY America Variable Account A commenced operations on November 25, 1987. Total
return for the period since inception reflects the average annual total return
since the inception (commencement of operations) of each of the respective
Subaccounts, which is August 1988 for the Equity and Managed Subaccounts,
September 1988 for the Small Cap Subaccount, January 1988 for the Intermediate
Term Bond Subaccount, February 1988 for the Long Term Bond Subaccount, November
1994 for the Government Securities Subaccount, and November 1994 for the
International Growth and for the High Yield Bond Subaccounts. Total return is
not indicative of future performance.
The table above assumes that a $1,000 payment was made to each Subaccount
at the beginning of the period shown, that no further payments were made, that
any distributions from the corresponding Portfolio of the Funds were reinvested,
and that the Owner surrendered the Contract for cash, rather than electing
commencement of annuity benefits in the form of one of the Settlement Options
available, at the end of the period shown. The average annual total return
percentages shown in the table reflect the historical rates of return,
deductions for all charges, expenses, and fees of both the Funds (including the
Investment Advisory Fees described in the Prospectus (see "Investment Advisory
Fee" at page 23) and the Variable Account which would be imposed on the payment
assumed, including a contingent deferred sales (Surrender) charge imposed as a
result of the full surrender and a deduction for the Annual Contract Charge
imposed on each Contract Anniversary and upon full surrender and allocated to
each Subaccount in the proportion that the total value of that Subaccount bore
to the total value of the Variable Account at the end of the period indicated.
(6)
<PAGE> 47
The average annual total return for the Subaccounts other than the Money
Market Subaccount, assuming that the Contracts remain in force throughout the
periods indicated, is shown in the table below.
MONY AMERICA VARIABLE ACCOUNT A
TOTAL RETURN
(ASSUMING $1,000 PAYMENT AT BEGINNING OF
PERIOD AND CONTRACT CONTINUES IN FORCE)
<TABLE>
<CAPTION>
FOR THE
FOR THE FOR THE PERIOD SINCE
1 YEAR ENDED 5 YEARS ENDED INCEPTION THROUGH
SUBACCOUNT DECEMBER 31, 1997 DECEMBER 31, 1997 DECEMBER 31, 1997
---------- ----------------- ----------------- -----------------
<S> <C> <C> <C>
Equity........................................ 23.52% 17.51% 15.89%
Managed....................................... 41.98% 14.63% 14.96%
Small Cap..................................... 21.16% 17.69% 18.43%
International Growth.......................... 3.60% N/A 8.39%
High Yield Bond............................... 11.61% N/A 12.12%
Intermediate Term Bond........................ 5.94% 4.66% 6.04%
Long Term Bond................................ 11.61% 7.81% 8.37%
Government Securities......................... 5.38% N/A 5.36%
</TABLE>
- ---------------
MONY America Variable Account A commenced operations on November 25, 1987. Total
return for the period since inception reflects the average annual total return
since the inception (commencement of operations) of each of the Subaccounts,
which is August 1988 for the Equity and Managed Subaccounts, September 1988 for
the Small Cap Subaccount, January 1988 for the Intermediate Term Bond
Subaccount, February 1988 for the Long Term Bond Subaccount, November 1994 for
the Government Securities Subaccount, and November 1994 for the International
Growth and for the High Yield Bond Subaccounts. Total return is not indicative
of future performance.
The table above reflects the same assumptions and results as the table
appearing on page 6, except that no contingent deferred sales (surrender) charge
has been deducted. The data reflected in the table above reflects the average
annual total return an Owner would have received during that period if he did
not surrender his Contract.
In addition to the average annual total returns shown above, average annual
total returns may also be shown for the average purchase payment made by a
purchaser of the Contract. For 1997, this amount was $25,000. The following
tables show average annual total returns calculated on the same basis as the two
tables above, except that the purchase payment is $25,000.
(7)
<PAGE> 48
MONY AMERICA VARIABLE ACCOUNT A
TOTAL RETURN
(ASSUMING $25,000 PAYMENT AT BEGINNING OF
PERIOD AND SURRENDER AT END OF PERIOD)
<TABLE>
<CAPTION>
FOR THE
FOR THE FOR THE PERIOD SINCE
1 YEAR ENDED 5 YEARS ENDED INCEPTION THROUGH
SUBACCOUNT DECEMBER 31, 1997 DECEMBER 31, 1997 DECEMBER 31, 1997
---------- ----------------- ----------------- -----------------
<S> <C> <C> <C>
Equity........................................ 18.07% 17.68% 16.33%
Managed....................................... 36.58% 14.69% 15.34%
Small Cap..................................... 16.77% 18.76% N/A
International Growth.......................... -2.31% N/A 7.28%
High Yield Bond............................... 5.76% N/A 11.14%
Intermediate Term Bond........................ 0.11% 4.32% 6.34%
Long Term Bond................................ 5.82% 7.55% 8.66%
Government Securities......................... -0.42% N/A 4.23%
</TABLE>
- ---------------
MONY America Variable Account A commenced operations on November 25, 1987. Total
return for the period since inception reflects the average annual total return
since the inception (commencement of operations) of each of the Subaccounts,
which is August 1988 for the Equity and Managed Subaccounts, September 1988 for
the Small Cap Subaccount, January 1988 for the Intermediate Term Bond
Subaccount, February 1988 for the Long Term Bond Subaccount, November 1994 for
the Government Securities Subaccount, and November 1994 for the International
Growth and for the High Yield Bond Subaccounts. Total return is not indicative
of future performance.
MONY AMERICA VARIABLE ACCOUNT A
TOTAL RETURN
(ASSUMING $25,000 PAYMENT AT BEGINNING OF
PERIOD AND CONTRACT CONTINUES IN FORCE)
<TABLE>
<CAPTION>
FOR THE
FOR THE FOR THE PERIOD SINCE
1 YEAR ENDED 5 YEARS ENDED INCEPTION THROUGH
SUBACCOUNT DECEMBER 31, 1997 DECEMBER 31, 1997 DECEMBER 31, 1997
---------- ----------------- ----------------- -----------------
<S> <C> <C> <C>
Equity........................................ 24.20% 18.08% 16.33%
Managed....................................... 42.59% 15.15% 15.34%
Small Cap..................................... 22.91% 19.14% 19.41%
International Growth.......................... 3.96% N/A 8.71%
High Yield Bond............................... 11.98% N/A 12.44%
Intermediate Term Bond........................ 6.36% 5.05% 6.34%
Long Term Bond................................ 12.03% 8.18% 8.66%
Government Securities......................... 5.84% N/A 5.77%
</TABLE>
- ---------------
MONY America Variable Account A commenced operations on November 25, 1987. Total
return for the period since inception reflects the average annual total return
since the inception (commencement of operations) of each of the Subaccounts,
which is August 1988 for the Equity and Managed Subaccounts, September 1988 for
the Small Cap Subaccount, January 1988 for the Intermediate Term Bond
Subaccount, February 1988 for the Long Term Bond Subaccount, November 1994 for
the Government Securities Subaccount, and November 1994 for the International
Growth and for the High Yield Bond Subaccounts. Total return is not indicative
of future performance.
(8)
<PAGE> 49
30-DAY YIELD:
The yield for the Intermediate Term Bond, Long Term Bond, Government
Securities and High Yield Bond Subaccounts is shown in the table below.
MONY AMERICA VARIABLE ACCOUNT A
YIELD FOR 30-DAY PERIOD
<TABLE>
<CAPTION>
INTERMEDIATE LONG TERM GOVERNMENT HIGH YIELD
YIELD FOR 30 DAYS ENDED TERM BOND BOND SECURITIES BOND
----------------------- ------------ --------- ---------- ----------
<S> <C> <C> <C> <C>
December 31, 1997.................................. 4.78% 5.09% 4.43% 6.55%
</TABLE>
- ---------------
The 30-day yield is not indicative of future results.
For the Intermediate Term Bond, and Long Term Bond, Government Securities,
and High Yield Bond Portfolios, net investment income is the net of interest
earned on the obligation held by the Portfolio and expenses accrued for the
period. Interest earned on the obligation is determined by (i) computing the
yield to maturity based on the market value of each obligation held in the
corresponding Portfolio at the close of business on the thirtieth day of the
period (or as to obligations purchased during that 30-day period, based on the
purchase price plus accrued interest); (ii) dividing the yield to maturity for
each obligation by 360; (iii) multiplying that quotient by the market value of
each obligation (including actual accrued interest) for each day of the
subsequent 30-day month that the obligation is in the Portfolio; and (iv)
totaling the interest on each obligation. Discount or premium amortization is
recomputed at the beginning of each 30-day period and with respect to discount
and premium on mortgage or other receivables-backed obligations subject to
monthly payment of principal and interest, discount and premium is amortized on
the remaining security, based on the cost of the security, to the weighted
average maturity date, if available, or to the remaining term of the security,
if the weighted average maturity date is not available. Gain or loss
attributable to actual monthly paydowns is reflected as an increase or decrease
in interest income during that period.
The yield shown reflects deductions for all charges, expenses, and fees of
both the Funds and the Variable Account other than the contingent deferred sales
(surrender) charge. The surrender charge will not exceed 7% of total Purchase
Payments made in the Contract Year of surrender and the preceding 7 Contract
Years.
Net investment income of the corresponding Portfolio less all charges and
expenses imposed by the Variable Account is divided by the product of the
average daily number of Units outstanding and the value of one Unit on the last
day of the period. The sum of the quotient and 1 is raised to the 6th power, 1
is subtracted from the result, and then multiplied by 2.
YEAR TO DATE TOTAL RETURN:
The tables below show total returns for the year to date (January 1, 1998
to February 13, 1998) which have not been annualized and which assume,
respectively, a $1,000 and a $25,000 payment made at the beginning of the period
and reflecting the same assumptions and results as the table appearing on page
5,
(9)
<PAGE> 50
except, in the case of the column headed "Contract Continues In Force", no
contingent deferred sales (surrender) charge or annual contract charge has been
deducted:
MONY AMERICA VARIABLE ACCOUNT A
YEAR TO DATE TOTAL RETURN
JANUARY 1 TO FEBRUARY 14, 1998
(ASSUMING $1,000 PAYMENT AT BEGINNING OF PERIOD)
<TABLE>
<CAPTION>
SURRENDER AT CONTRACT CONTINUES
SUBACCOUNT END OF PERIOD IN FORCE
---------- ------------- ------------------
<S> <C> <C>
Equity................................................... -3.22% 3.78%
Managed.................................................. -4.09% 4.02%
Small Cap................................................ -2.91% 4.01%
International Growth..................................... -1.29% 5.35%
High Yield Bond.......................................... -3.77% 2.90%
Intermediate Term Bond................................... -5.52% 1.20%
Long Term Bond........................................... -5.41% 1.31%
Government Securities.................................... -5.92% 0.86%
</TABLE>
MONY AMERICA VARIABLE ACCOUNT A
YEAR TO DATE TOTAL RETURN
JANUARY 1 TO FEBRUARY 14, 1998
(ASSUMING $25,000 PAYMENT AT BEGINNING OF PERIOD)
<TABLE>
<CAPTION>
SURRENDER AT CONTRACT CONTINUES
SUBACCOUNT END OF PERIOD IN FORCE
---------- ------------- ------------------
<S> <C> <C>
Equity................................................... -2.52% 3.78%
Managed.................................................. -2.33% 4.02%
Small Cap................................................ -2.29% 4.01%
International Growth..................................... -0.93% 5.35%
High Yield Bond.......................................... -3.40% 2.90%
Intermediate Term Bond................................... -5.11% 1.20%
Long Term Bond........................................... -4.99% 1.31%
Government Securities.................................... -5.45% 0.86%
</TABLE>
OTHER NON-STANDARDIZED PERFORMANCE DATA:
From time to time, average annual total return or other performance data
may also be advertised in non-standardized formats. Non-standard performance
data will be accompanied by standard performance data, and the period covered or
other non-standard features will be disclosed.
FINANCIAL STATEMENTS
The financial statements of the Company should be distinguished from the
financial statements of the Variable Account. The financial statements of the
Company should be considered only as bearing upon the ability of the Company to
meet its obligations under the Contracts and should not be considered as bearing
on the investment performance of the assets held in the Variable Account.
(10)
<PAGE> 51
FINANCIAL STATEMENTS AND NOTES TO FINANCIAL STATEMENTS
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
With respect to MONY America Variable Account A
Report of Independent Accountants......................... F-
Statements of assets and liabilities as of December 31,
1997................................................... F-
Statements of operations for the year ended December 31,
1997................................................... F-
Statements of changes in net assets for the years ended
December 31, 1997 and 1996............................. F-
Notes to financial statements............................. F-
With respect to MONY Life Insurance Company of America:
Report of Independent Accountants......................... F-
Balance Sheets as of December 31, 1997 and 1996........... F-
Statements of operations for the years ended December 31,
1997 and 1996.......................................... F-
Statements of capital and surplus for the years ended
December 31, 1997 and 1996............................. F-
Statements of cash flows for the years ended December 31,
1997 and 1996.......................................... F-
Notes to financial statements............................. F-
</TABLE>
F-1
<PAGE> 52
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) The following Financial Statements are included in this Registration
Statement:
(1) With respect to MONY America Variable Account A:
(a) Report of Independent Accountants;
(b) Statements of assets and liabilities as of December 31, 1997;
(c) Statements of operations for the year ended December 31, 1997;
(d) Statements of changes in net assets for the years ended
December 31, 1997 and 1996.
(2) With respect to MONY Life Insurance Company of America:
(a) Report of Independent Accountants.
(b) Balance sheets as of December 31, 1997 and 1996.
(c) Statements of operations for the years ended December 31, 1997
and 1996.
(d) Statements of capital and surplus for the years ended December
31, 1997 and 1996.
(e) Statements of cash flows for the years ended December 31, 1997
and 1996.
(b) EXHIBITS
(1) Resolutions of Board of Directors of MONY Life Insurance Company
of America ("Company") authorizing the establishment of MONY America
Variable Account A ("Variable Account"), adopted March 27, 1987, filed as
Exhibit 1 of Registration Statement Nos. 33-14362 and 811-5166, dated May
18, 1987, is incorporated herein by reference.
(2) Not applicable.
(3)(a) Distribution Agreement among MONY Life Insurance Company of
America, MONY Securities Corp., and MONY Series Fund, Inc., filed as
Exhibit 3(a) of Post-Effective Amendment No. 3, dated February 28, 1991, to
Registration Statement No. 33-20453, is incorporated herein by reference.
(b) Specimen Agreement with Registered Representatives, filed as
Exhibit 3(b) of Pre-Effective Amendment No. 1, dated December 17, 1990, to
Registration Statement Nos. 33-37722 and 811-6216, is incorporated herein
by reference.
(c) Specimen Agreement (Career Contract) between the Company and
selling agents (with Commission Schedule), filed as Exhibit 3(c) of
Pre-Effective Amendment No. 1, dated October 26, 1987, to Registration
Statement Nos. 33-14362 and 811-5166, is incorporated herein by reference.
(4) Proposed forms of Flexible Payment Variable Annuity Contracts,
filed herewith
(5) Proposed form of Application for Flexible Payment Variable Annuity
Contract, to be filed by amendment.
(6) Articles of Incorporation and By-Laws of the Company, filed as
Exhibits 6(a) and 6(b), respectively, of Registration Statement No.
33-13183, dated April 6, 1987, is incorporated herein by reference.
(7) Not applicable.
(8) Not applicable.
II-1
<PAGE> 53
(9) Opinion and Consent to be filed by amendment.
(10) Consent of Coopers & Lybrand L.L.P., Independent Accountants for
MONY America Variable Account A, to be filed by amendment.
Consent of Coopers & Lybrand L.L.P., Independent Accountants for MONY
Life Insurance Company of America, to be filed by amendment
(11) Not applicable.
(12) Not applicable.
(13) Calculation of Performance Data, filed as Exhibit 13 of Post
Effective Amendment No. 20, dated March 2, 1998 to Registration Statement
No. 33-20453, is incorporated herein by reference.
ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
<TABLE>
<CAPTION>
NAME POSITION AND OFFICES WITH DEPOSITOR
---- -----------------------------------
<S> <C>
Michael I. Roth.............................. Director, Chairman and Chief Executive
Officer
Samuel J. Foti............................... Director, President and Chief Operating
Officer
Kenneth M. Levine............................ Director and Executive Vice President
Richard E. Connors........................... Director
Richard Daddario............................. Director, Vice President, and Controller
Philip A. Eisenberg.......................... Director, Vice President, and Actuary
Margaret G. Gale............................. Director and Vice President
Stephen J. Hall.............................. Director
Charles P. Leone............................. Director, Vice President and Chief Corporate
Compliance Officer
Sam Chiodo................................... Vice President
William D. Goodwin........................... Vice President
Edward E. Hill............................... Vice President-Compliance Officer
Evelyn L. Peos............................... Vice President
Michael Slipowitz............................ Vice President
David S. Waldman............................. Secretary
David V. Weigel.............................. Treasurer
</TABLE>
The business address for all officers and directors of MONY America is 1740
Broadway, New York, New York 10019.
ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR
REGISTRANT
No person is directly or indirectly controlled by the Registrant. The
Registrant is a separate account of MONY Life Insurance Company of America, a
wholly-owned subsidiary of The Mutual Life Insurance Company of New York
("MONY").
The following is a diagram showing all corporations directly or indirectly
controlled by or under common control with MONY Life Insurance Company of
America, showing the state or other sovereign power under the laws of which each
is organized and the percentage ownership of voting securities giving rise to
the control relationship. (See diagram on following page.) Omitted from the
diagram are subsidiaries of MONY that, considered in the aggregate, would not
constitute a "significant subsidiary" (as that term is defined in Rule 8b-2
under Section 8 of the Investment Company Act of 1940) of MONY.
II-2
<PAGE> 54
organizational chart
II-3
<PAGE> 55
ITEM 27. NUMBER OF CONTRACT OWNERS:
As of December 31, 1997 MONY America Variable Account A had 95,307 owners
of Contracts.
ITEM 28. INDEMNIFICATION
The By-Laws of MONY Life Insurance Company of America provide, in Article
VI as follows:
SECTION 1. The Corporation shall indemnify any existing or former
director, officer, employee or agent of the Corporation against all expenses
incurred by them and each of them which may arise or be incurred, rendered or
levied in any legal action brought or threatened against any of them for or on
account of any action or omission alleged to have been committed while acting
within the scope of employment as director, officer, employee or agent of the
Corporation, whether or not any action is or has been filed against them and
whether or not any settlement or compromise is approved by a court, all subject
and pursuant to the provisions of the Articles of Incorporation of this
Corporation.
SECTION 2. The indemnification provided in this By-Law shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under By-Law, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding office, and shall continue as to a
person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of such a
person.
Insofar as indemnification for liability 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 a claim for indemnification for such
liabilities (other than the payment by the Registrant of expense 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.
ITEM 29. PRINCIPAL UNDERWRITERS
(a) MONY Securities Corp. ("MSC") is the principal underwriter of the
Registrant and the Fund. The Mutual Life Insurance Company of New York ("MONY")
also acts as sub-investment adviser to the Fund through a services agreement.
(b) The names, titles, and principal business addresses of the officers of
MONY and MSC are listed on Schedules A and D of the respective Forms ADV for
MONY (Registration No. 801-13564), as filed with the Commission on December 20,
1977 and as amended, and on Schedule A of Form BD for MSC (Registration No.
8-15289) as filed with the Commission on November 23, 1969 and as amended and on
the individual officer's Form U-4, the texts of which are hereby incorporated by
reference.
(c) The following table sets forth commissions and other compensation
received by each principal underwriter, directly or indirectly, from MONY
America Variable Account A during fiscal year 1996 and 1995:
<TABLE>
<CAPTION>
NET
UNDERWRITING
DISCOUNTS AND COMPENSATION BROKERAGE OTHER
NAME OF COMMISSIONS ON REDEMPTION COMMISSIONS COMPENSATION
PRINCIPAL -------------- -------------- ------------ ------------
UNDERWRITER 1996 1997 1996 1997 1996 1997 1996 1997
----------- ----- ----- ----- ----- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MONY Securities Corp................ 0 0 0 0 0 0 0 0
</TABLE>
II-4
<PAGE> 56
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
Accounts, books, and other documents required to be maintained by Section
31(a) of the Investment Company Act of 1940 and the Rules promulgated thereunder
are maintained by MONY Life Insurance Company of America, in whole or in part,
at its principal offices at 1740 Broadway, New York, New York 10019, at its
Operations Center at 1 MONY Plaza, Syracuse, New York 13202 or at its Marketing
Center at 1740 Broadway, New York, New York 10019.
ITEM 31. MANAGEMENT SERVICES
Not applicable.
ITEM 32. UNDERTAKINGS
(a) Registrant hereby undertakes to file post-effective amendments to the
Registration Statement as frequently as is necessary to ensure that the audited
financial statements in the Registration Statement are never more than 16 months
old for so long as payments under the variable annuity contracts may be
accepted;
(b) Registrant hereby undertakes to include either (1) as part of any
application to purchase a contract offered by the prospectus, a space that an
applicant can check to request a Statement of Additional Information, or (2) a
post card or similar written communication affixed to or included in the
prospectus that the applicant can remove to send for a Statement of Additional
Information;
(c) Registrant hereby undertakes to deliver any Statement of Additional
Information and any financial statements required to be made available under
this Form promptly upon written or oral request.
REPRESENTATIONS RELATING TO SECTION 26 OF
THE INVESTMENT COMPANY ACT OF 1940
Registrant and MONY Life Insurance Company of America represent that the
fees and charges deducted under the Contract, the the aggregate, are reasonable
in relation to the services rendered, the expenses expected to be incurred and
the risks assumed by MONY Life Insurance Company of America.
II-5
<PAGE> 57
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, MONY America Variable Account A,
has duly caused this Registration Statement to be signed on its behalf by the
undersigned thereunto duly authorized, in the City of New York and the State of
New York, on this th day of , 1998.
MONY America Variable Account A
(Registrant)
MONY Life Insurance Company of America
(Depositor)
By: /s/ MICHAEL I. ROTH
------------------------------------
Michael I. Roth, Director
Chairman and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE DATE
--------- ----
<C> <S> <C>
/s/ MICHAEL I. ROTH , 1998
- --------------------------------------------------------
Michael I. Roth
Director, Chairman of the Board, and Chief
Executive Officer
/s/ SAMUEL J. FOTI , 1998
- --------------------------------------------------------
Samuel J. Foti
Director, President, and Chief
Operating Officer
/s/ RICHARD DADDARIO , 1998
- --------------------------------------------------------
Richard Daddario
Director, Vice President, and Controller
(Principal, Financial, and Accounting Officer)
/s/ KENNETH M. LEVINE , 1998
- --------------------------------------------------------
Kenneth M. Levine
Director and Executive Vice President
/s/ MARGARET G. GALE , 1998
- --------------------------------------------------------
Margaret G. Gale
Director and Vice President
</TABLE>
II-6
<PAGE> 58
<TABLE>
<CAPTION>
SIGNATURE DATE
--------- ----
<C> <S> <C>
/s/ RICHARD E. CONNORS , 1998
- --------------------------------------------------------
Richard E. Connors
Director
/s/ STEPHEN J. HALL , 1998
- --------------------------------------------------------
Stephen J. Hall
Director
/s/ CHARLES P. LEONE , 1998
- --------------------------------------------------------
Charles P. Leone
Director and Vice President
</TABLE>
II-7
<PAGE> 59
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <S>
(4) Form of Flexible Payment Variable Annuity Contract
</TABLE>
<PAGE> 1
EXHIBIT (4)
MONY LIFE
INSURANCE
COMPANY OF
AMERICA
Signed for MONY Life Insurance
Company of America , ,
on the Date of Issue.
Administrative Office - 1740 Broadway
New York, NY 10019
Operations Center - One MONY Plaza,
PO Box 4830, Syracuse, NY 13221
1(800) 487-6669
Home Office - 40 North Central Avenue,
Phoenix, AZ 85004
MICHAEL I. ROTH, Chairman
SAMUEL J. FOTI, President
DAVID S. WALDMAN, Secretary
IF YOU HAVE A COMPLAINT ABOUT THIS CONTRACT, SEE PAGE 2. SEE PAGE 3 FOR
INFORMATION REGARDING ANY TAXES APPLICABLE TO PURCHASE PAYMENTS
MONY (6/98)
MONY Life Insurance Company of America will pay the benefits provided in this
Contract, subject to all the contract provisions.
<TABLE>
<CAPTION>
<S> <C>
ANNUITANT: John Doe
AGE OF ANNUITANT AT ISSUE: 35
CONTRACT NUMBER: B 0000-00-00
EFFECTIVE DATE: 03-01-1998
DATE OF ISSUE: 03-01-1998
ANNUITY STARTING DATE: 03-01-2058
</TABLE>
Important Notice(s)
THIS CONTRACT IS A LEGAL CONTRACT BETWEEN THE CONTRACT OWNER AND THE COMPANY.
READ YOUR CONTRACT CAREFULLY.
ALL ANNUITY PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHERE BASED ON THE
INVESTMENT EXPERIENCE OF THE VARIABLE ACCOUNT, ARE VARIABLE AND ARE NOT
GUARANTEED AS TO DOLLAR AMOUNT. PAYMENTS AND VALUES MAY INCREASE OR DECREASE
ACCORDING TO THE EXPERIENCE OF THE VARIABLE ACCOUNT. SEE THE VARIABLE ACCOUNT
AND VALUE SECTIONS.
THIS IS A LONG TERM CONTRACT; A SURRENDER CHARGE MAY BE APPLIED TO ANY
SURRENDER MADE WITHIN THE FIRST 8 YEARS. A POSITIVE OR NEGATIVE MARKET VALUE
ADJUSTMENT MAY ALSO BE APPLIED TO SURRENDERS FROM THE GUARANTEED INTEREST
ACCOUNT.
RIGHT TO RETURN CONTRACT - THIS CONTRACT MAY BE RETURNED TO US WITHIN TEN DAYS
FROM THE DATE YOU RECEIVE IT BY DELIVERING OR MAILING IT TO OUR ADMINISTRATIVE
OFFICE, A LOCAL OFFICE OF OURS, OR TO ANY AGENT OF OURS. WE WILL THEN REFUND
ANY PURCHASE PAYMENTS PAID. THE CONTRACT WILL BE CONSIDERED NEVER TO HAVE BEEN
ISSUED. IF YOU RETURN BY MAIL, THE CANCELLATION WILL BE EFFECTIVE ON THE DATE
IT IS POSTMARKED (IF PROPERLY ADDRESSED WITH POSTAGE PREPAID).
Brief Description
This is a FLEXIBLE PAYMENT VARIABLE ANNUITY CONTRACT.
Payments to the Payee begin on the Annuity Starting Date. If the Annuitant dies
before that Date a Death Benefit is payable. No dividends are payable.
B5-98
Page 1
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
SECTION Page
<S> <C> <C>
1. SCHEDULE OF PAYMENTS - Contract description and specifications. 3
AND CHARGES
2. VARIABLE ACCOUNT, THE - Listing of Sub-accounts and funds. 4
FUNDS AND SUB-ACCOUNTS
3. ABOUT THIS CONTRACT - An overview of basic contract provisions. 5
4. WE WILL PAY - Annuity payments; changing the date Annuity Payments start; Death 6
Benefit; Interest on death proceeds.
5. PURCHASE PAYMENTS YOU MAKE - Initial purchase payment; Limits on payments; Automatic and 7
Non-Automatic Payments; Net Purchase Payment; Purchase Payment
Allocations.
6. FUND VALUE - How Fund Value is determined. 8
7. TRANSFERS - Types of transfers; allocation rules; 9
8. FULL OR PARTIAL SURRENDERS - Full and partial surrenders; Allocation rules; Surrender Charge; 9
Free partial surrender amount.
9. RIGHTS OF OWNER - Owner of the Contract; Owner s Rights;Successor Owner? 11
10. DEATH OF OWNER - Death of Owner before the Annuity Starting Date? 11
11. BENEFICIARY - Beneficiary of the Contract; Changing the Beneficiary; Successor 12
Beneficiary.
12. SECONDARY ANNUITANT - Secondary Annuitant;Naming or deleting a Secondary Annuitant. 12
13. THE VARIABLE ACCOUNT - Variable Account;Sub-accounts;. Changes to the Variable Account. 13
14. SUB-ACCOUNT UNIT VALUE - Unit value Determination 14
15. THE GUARANTEED INTEREST - Guaranteed Interest Account; interest rate applied to the Guaranteed 14
ACCOUNT Interest Account, Accumulation Period, Market Value Adjustment?
16. ANNUAL CONTRACT CHARGE - Annual Contract Charge 15
17. DATES AND CONTRACT PERIODS - How dates are determined; how periods are measured. 15
18. GENERAL PROVISIONS - The contract; Statements in application; Incontestability; 15
Misstatement of age or gender; Assignment; Postponement of
payments or transfers; Authority; Relationships; Reports.
19. SETTLEMENT OPTIONS - Election Of Settlement Options; Settlement (Payout) Options 17
Available; Minimum Monthly Income Tables.
ENDORSEMENTS, IF ANY
</TABLE>
Page 2
<PAGE> 3
APPLICATION
FOR INFORMATION OR TO MAKE A COMPLAINT CALL 1-800-487-MONY
(1-800-487-6669) OR WRITE TO US AT OUR OPERATIONS CENTER AT:
ONE MONY PLAZA
P.O. BOX 4830
SYRACUSE, NEW YORK 13221
Page 3
<PAGE> 4
1.. SCHEDULE OF PAYMENTS AND CHARGES
<TABLE>
<S> <C>
FLEXIBLE PAYMENT VARIABLE ANNUITY CONTRACT
INITIAL PURCHASE PAYMENT $10,000
ACCUMULATION PERIOD SELECTED FOR GUARANTEED INTEREST ACCOUNT 5YR
GUARANTEED INTEREST RATE FOR ACCUMULATION PERIOD 6.0%
CHARGE ON TRANSFERS (SUBJECT TO CHANGE; SEE SECTION 7).
CURRENT - $0
GUARANTEED MAXIMUM - $25
SURRENDER CHARGE (SEE SECTION 8).
DAILY MORTALITY/EXPENSE RISK CHARGE (SEE SECTION 14)
CURRENT .003425% (equal to 1.25% annually)
GUARANTEED MAXIMUM .003699% (equal to 1.35%annually)
ANNUAL CONTRACT CHARGE (SUBJECT TO CHANGE; SEE SECTION 16)
CURRENT $0
GUARANTEED MAXIMUM $50
TAX CHARGE - 0% OF EACH PAYMENT RECEIVED SUBJECT TO CHANGE BASED
UPON CHANGE IN APPLICABLE FEDERAL OR STATE TAX LAWS OR COST TO
THE COMPANY.
B0000-00-00
</TABLE>
Page 4
<PAGE> 5
2.. Variable Account, The Funds and Sub-accounts (see variable account section
for further information)
The Variable Account is MONY America Variable Account A and includes the
Sub-accounts listed below. The Sub-accounts available forinvestment purposes ,
and the corresponding portfolios of the applicable funds are:
<TABLE>
<S> <C>
Sub-account Applicable Fund
----------- ---------------
Money Market MONY Series Fund, Inc.
Government Securities MONY Series Fund, Inc.
Intermediate Term Bond MONY Series Fund, Inc.
Long Term Bond MONY Series Fund, Inc.
Equity Income Enterprise Accumulation Trust
Growth and Income Enterprise Accumulation Trust
Growth Enterprise Accumulation Trust
Equity Enterprise Accumulation Trust
Managed Enterprise Accumulation Trust
Capital Appreciation Enterprise Accumulation Trust
Small Company Value Enterprise Accumulation Trust
Small Company Growth Enterprise Accumulation Trust
International Growth Enterprise Accumulation Trust
High Yield Bond Enterprise Accumulation Trust
</TABLE>
The MONY Series Fund, Inc. is organized under the laws of Maryland. The
Enterprise Accumulation Trust is organized under the laws of Massachusetts.
Each fund is registered with the Securities and Exchange Commission (SEC) as an
open end, diversified management investment company under the Investment
Company Act of 1940.
Page 5
<PAGE> 6
3. . ABOUT THIS CONTRACT
The following is an overview of some basic contract provisions to aid your
understanding. The specific provisions of the Contract are found in the pages
following this overview. In the event of a discrepancy between this overview
and any specific provisions of this Contract, the specific Contract provisions
will control.
This is a Flexible Payment Variable Annuity Contract. This Contract goes
into effect on the Effective Date. This Contract is a "promise to pay"
Annuity Payments which start on a date chosen by you called the Annuity
Starting Date (or maturity date). Those payments are made to a person
chosen by you as the Payee. The Annuitant is the person on whose life the
Contract is based (the measuring life).
If the Annuitant (or Secondary Annuitant) is living on the Annuity
Starting Date, we begin to make Annuity Payments. If the Annuitant dies
before the Annuity Starting Date, the Secondary Annuitant (if you
designated one) takes over as Annuitant. If the Annuitant and the
Secondary Annuitant both die before the Annuity Starting Date, the
Contract ends and a death benefit is payable to the Beneficiary (person
who receives the death benefit) chosen by you. The death benefit is equal
to the Fund Value or, if greater, the Purchase Payments paid by you less
any partial surrenders, plus or minus any market value adjustment and less
any surrender charge. See the Guaranteed Minimum Death Benefit Rider for
explanation of the Guaranteed Minimum Death Benefit. The Beneficiary does
not have to be the Payee. If the Owner (and Successor Owner under certain
circumstances) dies before the Annuity Starting Date, while the Annuitant
is living, this Contract will be surrendered as of the date of that death.
The surrender proceeds will then be paid to the Beneficiary in a single
sum.
Purchase Payments are payments you make to us. The sum of Purchase
Payments made (less partial surrenders, charges, etc.) determine the value
of the Contract. There may be a positive or negative market value
adjustment and a surrender charge on partial surrenders you make or, if
you surrender (cash in) the Contract in full. The market value adjustment
depends on which Accumulation Period(s) you selected, how many years are
left in the applicable Period(s) and how interest rates have changed since
those Periods began. The surrender charge depends on how long ago you
purchased the Contract.
The value of this Contract is based on Purchase Payments which you
allocate to either the Variable Account and/or the Guaranteed Interest
Account. The Fund Value is the combined value of the Variable Account and
the Guaranteed Interest Account BEFORE any market value adjustment is
applied and any surrender charge is deducted. The Cash Value, if any, is
the value AFTER any market value adjustment is applied and any surrender
charge is deducted. The Guaranteed Interest Account is a "fixed" account
and is part of our General Account. We offer several choices of
Accumulation Periods and interest rates to apply during those Periods. The
Variable Account is an account that is separate from our General Account.
The value of the Variable Account can increase or decrease depending on
investment experience. The Variable Account is made up of several
Sub-accounts (subdivisions) with different investment objectives. Each
Sub-account invests only in the shares of its own portfolio of its fund.
The measure of value in a Sub-account is called a Unit.
The value of Units in a Sub-account can only change on a Business Day. A
Business Day is any day the New York Stock Exchange is open for trading or any
other day on which there is enough trading to change the Unit value of a
Sub-account. Trading refers to the purchase and sale of securities held by the
portfolio.
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When we refer to "I" or "my" in a question, or to "you" or "your" in an answer,
we mean the Owner. The Owner is the person who holds the Contract and who has
the rights of ownership. The Owner chooses any options the Contract offers.
When we refer to "we", "us" and "our" we mean MONY Life Insurance Company of
America. "Administrative Office" means our office at 1740 Broadway, New York,
N.Y. 10019 and also includes our Operations Center at One MONY Plaza,P.O. Box
4830 Syracuse, New York 13221.
You can read more about the terms used in the summary on the following pages.
"Annuity Payments" (see Section 4)
"Annuity Starting Date" shown on page 1.
"Beneficiary" (see Section 11)
"Business Day" (see Section 3)
"Cash Value" (see Section 8)
"Effective Date" shown on page 1.
"Fund Value" (see Section 6)
"Guaranteed Interest Account" (see Section 15)
"Owner" (see Section 9)
"Payee" (see Section 4)
"Purchase Payments" (see Section 5)
"Secondary Annuitant" (see Section 12)
"Sub-account" (see Section 2)
"Variable Account" (see Section 13)
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4. . WE WILL PAY
WHAT WILL THE COMPANY PAY AND WHEN WILL THEY PAY IT?
1. We will pay the Annuity Payments starting on the Annuity Starting Date to a
person named by you as Payee. You can name a Payee either in the application or
later (if later, we will send an endorsement to show the change).
2. We will pay the Death Benefit to the Beneficiary if the Annuitant dies
before the Annuity Starting Date. But we must first receive proof that the
Annuitant died before the Annuity Starting Date. Payment in any case will only
be made in accordance with all the provisions of this Contract. "Annuitant"
includes a "Secondary Annuitant" if you designated one.
3. We will pay the surrender proceeds to the Beneficiary if the Owner (or
Successor Owner if that Successor Owner is the Owner s Spouse) dies before the
Annuity Starting Date and while the Annuitant is living (see Section 10 for
details).
WHAT ARE ANNUITY PAYMENTS?
Annuity Payments are Income Payments made periodically (monthly, quarterly,
semi-annually or annually) over the lifetime of the Payee or for a selected
period. The income will be purchased by the Cash Value on the Annuity Starting
Date. The amount of the Cash Value and the Settlement (payout) Option chosen
will determine the amount of income payments.
But, if you elect Settlement Option 3 or 3A, the income will be purchased by
the Fund Value on the Annuity Starting Date. That benefit will be based on the
Payee's lifetime, as explained in the Settlement Options section (Section 19).
CAN I CHANGE THE DATE ANNUITY PAYMENTS START?
Yes, you may advance or defer the Annuity Starting Date, but only while the
Annuitant is living. We must receive your request before the Annuity Starting
Date. The Date may not be advanced to a date earlier than the 10th anniversary.
It may not be deferred to a date later than the anniversary following the
Annuitant's 95th birthday. The change will be effective as of the date we
receive your written request at our Administrative Office. You do not need to
return the Contract for us to make the change unless we ask for it.
IF THE ANNUITANT DIES, WHAT DOES THE COMPANY PAY?
If the Annuitant dies before the Annuity Starting Date, we will pay to the
Beneficiary, the greater of:
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(a) the Fund Value on the date of death; or
(b) the Purchase Payments paid by you, less any partial surrenders (reflecting
any Market Value Adjustments and any surrender charges).
But we must first receive proof that the Annuitant died before the Annuity
Starting Date.
Any death benefit payable under this Contract is not less than the minimum
benefit required by the law of the state in which the Contract is delivered.
If the proceeds are not paid by the end of 30 days from the date we receive due
proof of death of the Annuitant, we will pay interest on the proceeds if
required by the state in which the Contract is delivered at the rate specified
by that state. If interest is payable, it will be paid from date of the death
to date of payment of proceeds.
5. . PURCHASE PAYMENTS YOU MAKE
WHAT PAYMENTS CAN I MAKE TO THE COMPANY?
The INITIAL PURCHASE PAYMENT is shown on Page 3. You can send additional
Purchase Payments to our Administrative Office. On request, we will give a
receipt signed by our Treasurer. We will accept Purchase Payments any time
before the Annuity Starting Date as long as the Annuitant is living.
IS THERE A LIMIT ON PAYMENTS I CAN MAKE TO THE COMPANY?
Yes, we may limit the sum of Purchase Payments you make. That limit is
$1,500,000 (less any partial surrenders, any market value adjustment and any
surrender charge).
CAN I MAKE PAYMENTS TO THE COMPANY AUTOMATICALLY?
Yes, you can make automatic Purchase Payments to us through an automatic
payment plan. It could be payroll deductions by a central remitter with whom we
make an agreement or, authorized government allotments if we receive official
military verification. It could also be automatic bank drafts or any other
automatic plan we agree to.
CAN I MAKE PAYMENTS TO THE COMPANY OTHER THAN AUTOMATIC PAYMENTS?
Yes, whether you are on an automatic payment plan or not, you can make
non-automatic Purchase Payments.
WHAT IS A NET PURCHASE PAYMENT?
When we refer to net Purchase Payments, we mean the Purchase Payment amount
after deduction of any applicable taxes (see Page3 for the amount of tax, if
any). We may waive any deduction of taxes on Purchase Payments. But if we do,
we can stop waiving them on future Payments if we give you at least 30 days
written notice.
DOES THE COMPANY PAY INTEREST ON NET PURCHASE PAYMENTS I MAKE BEFORE THE
EFFECTIVE DATE?
Yes, net Purchase Payments will earn interest at a rate not less than 3.5%.
Interest will be credited annually from the later of the Effective Date and the
Business Day that falls on, or next follows, the date we receive it at our
Administrative Office until the date we transfer it to the Sub-accounts and/or
Guaranteed Interest Account as you have chosen. If you do not accept the
Contract at delivery, we will refund any Purchase Payment paid without
interest.
WILL MY NET PURCHASE PAYMENTS EARN INTEREST DURING THE "RIGHT TO RETURN
CONTRACT" PERIOD?
Any net Purchase Payment we receive after delivery of the Contract but before
the end of the "Right to Return Contract " period (see page 1) will also earn
interest at a rate not less than a 3.5% annual interest rate.
WHEN IS THIS VALUE TRANSFERRED INTO THE ACCOUNTS I'VE CHOSEN?
If you have not returned the Contract, at the end of the "Right to Return
Contract" period, we transfer the net Purchase Payments with interest to the
Sub-accounts and/or the Guaranteed Interest Account as you have chosen. When we
do this we use the most recent valid allocation choice and Accumulation Period
choice (if applicable), we have from you. If we have no valid allocation choice
from you, we will transfer the net Purchase Payments with interest to the Money
Market Sub-account.
AFTER THE "RIGHT TO RETURN CONTRACT" PERIOD, WHERE ARE NET PURCHASE PAYMENTS
ALLOCATED?
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After the "Right to Return Contract" period, any net Purchase Payments received
by us are allocated to the Sub-account(s) and/or the Guaranteed Interest
Account as chosen by you on the day we receive them if it is a Business Day. If
the day we receive the Purchase Payment is not a Business Day, we allocate it
on the next business Day. When we do this, we use the most recent valid
allocation choice and Accumulation Period choice (if applicable) we have from
you. If we have no valid allocation choice and Allocation Period choice (if
applicable) from you, we will allocate the net Purchase Payments to the Money
Market Sub-account.
ARE THERE ANY RULES FOR ALLOCATION CHOICES?
Yes, allocations must be made in whole percentages. If a Sub-account or the
Guaranteed Interest Account is to receive any allocation, the allocation must
be at least 10% and, the total must equal 100% of the net Purchase Payment. We
use the most recent valid allocation choice we have from you. You may change
your allocation choice by writing to us at our Administrative Office. A change
will take effect within 7 days after we receive that notice.
CAN I EARMARK A NON-AUTOMATIC NET PURCHASE PAYMENT FOR AN ALLOCATION DIFFERENT
FROM MY REGULAR ALLOCATION CHOICE?
Yes, you can choose a specific allocation for a non-automatic Purchase Payment
and it will not change your allocation choice and/or Accumulation Period choice
for future Purchase Payments. Allocations must be by amount or percentage in
whole numbers only. If a Sub-account or the Guaranteed Interest Account is to
receive any allocation, the allocation must be at least 10% and the total must
equal 100% of the net Purchase Payment.
If you do not give us a specific allocation for the non-automatic Purchase
Payment, or if your allocation choice is not valid, we will use the most recent
valid allocation choice and/or Accumulation Period choice we have from you.
6. . FUND VALUE
WHAT IS THE FUND VALUE ON THE EFFECTIVE DATE?
The Fund Value on the Effective Date is the net Purchase Payments received by
us on or before the Effective Date and any interest credited to those Payments.
WHEN ARE FUND VALUE CALCULATIONS MADE?
After the Effective Date, Fund Value calculations are made on Business Days. If
a Fund Value calculation has to be made for a day that is not a Business Day,
then we will use the next Business Day.
HOW IS THE FUND VALUE DETERMINED ON A BUSINESS DAY?
The Fund Value on a Business Day is determined as follows:
(a) Determine the Fund Value in each Sub-account on that Day (see below for
details).
(b) Total the Fund Value in each Sub-account on that Day.
(c) Add the Fund Value in the Guaranteed Interest Account on that Day (see
below for details).
(d) Add any net Purchase Payments received on that Day.
(e) Deduct any transfer charges on that Day.
(f) Deduct any partial surrender, (reflecting any market value adjustment and
any surrender charge) made on that Day.
(g) Deduct any Annual Contract Charge made on that Day.
REGARDING (a) ABOVE, HOW IS THE FUND VALUE FOR EACH SUB-ACCOUNT DETERMINED ON
THAT BUSINESS DAY?
For each Sub-account we multiply the number of Units credited to that
Sub-account by its Unit value on that Day. The multiplication is done BEFORE
the purchase or redemption of any Units on that Day.
REGARDING (c) ABOVE, WHAT MAKES UP THE FUND VALUE IN THE GUARANTEED INTEREST
ACCOUNT ON THAT BUSINESS DAY?
The Fund Value in the Guaranteed Interest Account on that Day is the
accumulated value at the applicable interest rate(s) of net Purchase Payments
allocated to the Guaranteed Interest Account BEFORE that Day, decreased by
allocations against the Guaranteed Interest Account BEFORE that Day for:
(i) any partial surrender, any market value adjustment and any surrender
charge;
(ii) any amount transferred from the Guaranteed Interest Account, its transfer
charge and any market value adjustment; and any transfer charge;
(iii) any Annual Contract Charge.
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7. . TRANSFERS
WHEN CAN I MAKE TRANSFERS?
Transfers may be made only after the "Right to Return Contract" period has
ended.
WHAT TRANSFERS CAN I MAKE?
There are 2 types of transfers you can make. Each type is explained (along with
any rules and limitations) below:
Type 1. Transfers FROM a Sub-account. There are no restrictions on this type of
transfer.
Type 2. Transfers FROM the Guaranteed Interest Account. This type of transfer
can be requested at any time. A Market Value Adjustment will apply unless your
request is received at our Administrative Office, WITHIN 30 DAYS BEFORE the end
of the applicable Accumulation Period. If multiple Accumulation Periods are in
effect, your transfer request must specify which Accumulation Period(s) funds
are to be transferred from.
There is no limit on transfers INTO a Sub-account or the Guaranteed Interest
Account.
WHEN WILL A TRANSFER REQUEST TAKE EFFECT?
Type 1 transfers will take effect on the Business Day that falls on, or next
follows, the date we receive the request at our Administrative Office. Type 2
transfers will take effect at the end of the Accumulation Period or, if later
(subject to above rules), on the Business Day that falls on, or next follows,
the date we receive the request at our Administrative Office.
WHAT IS THE CHARGE FOR A TRANSFER AND HOW DOES IT WORK?
Each request for a transfer is considered one transaction and is subject to a
transfer charge. The guaranteed maximum amount of that charge is shown on page
3. But, we may charge less than that maximum, or waive the charge entirely, in
accordance with our procedure in effect at the time of request.
If we change the amount of the charge we will send an endorsement to show the
change.
IF A TRANSFER CHARGE IS APPLICABLE, HOW IS IT ALLOCATED AMONG THE ACCOUNTS?
The charge is allocated against the first of the Sub-accounts and/or the
Guaranteed Interest Account from which Fund Value is being transferred.
8. . FULL AND PARTIAL SURRENDERS
CAN I WITHDRAW MONEY FROM THE CONTRACT?
Yes, money may be withdrawn by making a full or partial surrender.
WHEN CAN I MAKE A FULL OR PARTIAL SURRENDER?
At any time on or before the Annuity Starting Date and while the Annuitant is
living, you may make a full or partial surrender of the Contract for its Cash
Value (Fund Value plus or minus any market value adjustment and less any
surrender charge). A full surrender will end the Contract.
If a partial surrender reduces the Cash Value to less than $1,000, we will
process it as a full surrender.
IF I MAKE A FULL SURRENDER, WILL ANNUITY (INCOME) PAYMENTS BEGIN ON THE ANNUITY
STARTING DATE?
No. If a full surrender of the Contract is made on or before the Annuity
Starting Date, the income which was to begin on that Date will not be payable.
WHAT IS THE FULL VALUE OF THE CONTRACT ON SURRENDER?
The full value of the Contract on surrender is the Cash Value (Fund Value plus
or minus any market value adjustment and less any applicable surrender
charge).Any cash surrender available under this Contract is not less than the
minimum benefit required by the law of the state in which the Contract is
delivered.
WHEN WILL A FULL OR PARTIAL SURRENDER TAKE EFFECT?
A full or partial surrender will take effect on the Business Day that falls on,
or next follows, the date we receive your request at our Administrative Office.
HOW CAN I SPECIFY PARTIAL SURRENDER ALLOCATIONS AND ARE THERE MINIMUMS?
You can specify partial surrender allocations by amount or percentage.
Allocations by percentage must be in whole percentages and the minimum
percentage is 10% against any Sub-account or the
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Guaranteed Interest Account. Percentages must total 100%.
We will not accept an allocation which does not comply with the above rules or
if there is not enough Fund Value in a Sub-account or the Guaranteed Interest
Account to provide its share of the allocation.
WHAT IF I DON'T SPECIFY AN ALLOCATION?
If you do not specify an allocation, we will not accept your request for
partial surrender.
WHEN IS A SURRENDER CHARGE APPLICABLE?
Aside from the exceptions below, a surrender charge is applicable whenever we
pay any partial surrender or full surrender to you during the first 8 contract
years.
WHAT ARE THE EXCEPTIONS?
There are 2 exceptions when no surrender charge will apply:
1. Free Partial Surrender Amount. - During each contract year after the first,
you may make one or more partial surrenders without a surrender charge up to a
total surrender amount for that year of 10% of the Cash Value at the beginning
of the contract year.
Note that free partial surrenders may only be made to the extent Cash Value in
the Sub-accounts is available. For example, the Fund Value in the Variable
Account could decrease (due to unfavorable investment experience) after part of
the 10% was withdrawn. In that case it is possible that there may not be enough
Cash Value to provide the remaining part of the 10% free partial surrender
amount.
2. If the full surrender or partial surrender is after the 3rd contract year
and the proceeds are settled under Settlement Option 3 or 3A (life income
annuity options). See Section 19.
WHAT DOES THE AMOUNT OF SURRENDER CHARGE DEPEND ON?
The amount of any surrender charge depends on how much you surrender and how
long the Contract has been in effect.
HOW IS THE AMOUNT OF ANY SURRENDER CHARGE DETERMINED?
The amount of any surrender charge is determined as follows:
Step 1. Multiply the Fund Value in each Sub-account and/or the Guaranteed
Interest Account (after adjustment for any Market Value Adjustment) to be
surrendered by the appropriate surrender charge percentage shown in the table
below:
Surrender Charge Percentage Table
<TABLE>
<CAPTION>
# of Contract Surrender
Anniversaries since Charge
Effective Date Percentage
<S> <C>
0 7%
1 7
2 6
3 6
4 5
5 4
6 3
7 2
8 (or more) 0
</TABLE>
Step 2. Add the products of each multiplication in Step 1 above.
HOW WILL ANY SURRENDER CHARGE BE ALLOCATED?
Each Sub-account and/or the Guaranteed Interest Account will be charged its
pro-rata share of the surrender charge. That means the charge against each
account will be in the same proportion as the amount of the partial surrender
allocated against that account bears to the total partial surrender.
9. . RIGHTS OF OWNER
WHO IS THE OWNER OF THE CONTRACT AND WHAT RIGHTS DOES THE OWNER HAVE?
While the Annuitant is living, all rights, benefits, options and privileges
under the Contract or allowed by us belong to the Owner unless otherwise
provided by endorsement. These rights include the right to change the
Beneficiary, to assign the Contract, to transfer Contract values or make full
or partial surrenders, all in accordance with our rules and procedures. The
Owner is the person so named in the application for this Contract unless
otherwise provided by endorsement.
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WHO AND WHAT IS THE SUCCESSOR OWNER?
A Successor Owner, if one is named, is the person(s) who becomes the new Owner
if the first Owner dies.
10. . DEATH OF OWNER
The following is required by Section 72(s) of the Internal Revenue Code of 1986
(Death of Owner) and overrides anything in this Contract to the contrary: This
provision will not extend the term of this Contract beyond the date the
Annuitant dies.
WHAT HAPPENS IF AN OWNER DIES BEFORE THE ANNUITY STARTING DATE?
If an Owner dies before the Annuity Starting Date and while the Annuitant is
living, this Contract must be surrendered as of the date of that death. The
surrender proceeds will then be paid to the Beneficiary in a single sum. There
is one exception. If the Designated Beneficiary is a surviving spouse of the
Owner, then the surviving spouse will become the new Owner of this Contract and
it will not be necessary to surrender the Contract.
For purposes of compliance with Section 72(s) if an Owner is other than a
natural person, the Primary Annuitant will be the Owner and any change in
Primary Annuitant will be treated as the death of the Owner.
This provision will not extend the term of the Contract beyond the date when
death proceeds become payable due to the death of the Annuitant.
CAN THE PROCEEDS BE PAID IN OTHER THAN A SINGLE SUM?
Yes, but only if the Beneficiary was also the Successor Owner. In that case,
the Successor Owner may choose that the proceeds may be paid over his or her
lifetime.
WHAT HAPPENS IF THE OWNER DIES ON OR AFTER THE ANNUITY STARTING DATE?
If the Owner dies on or after the Annuity Starting Date, then any remaining
portion of the proceeds will be distributed at least as rapidly as under the
method of distribution being used as of the date of that Owner's death.
For purposes of this Section, "Successor Owner" means "Designated Beneficiary"
11 . BENEFICIARY
WHO IS THE BENEFICIARY ?
The Beneficiary is the person to whom the Death Benefit of the Contract is
payable upon the death of the Annuitant. The Beneficiary is the person so named
in the application for this Contract unless otherwise provided by endorsement.
If the beneficiary designation requires the Beneficiary to be living or
surviving, then, unless otherwise provided, that Beneficiary must be living on
the 14th day after the Annuitant s death or, if earlier, the date we receive
due proof of the Annuitant s death. The share of the Death Proceeds of any
Beneficiary who is not living on that earlier day will be payable to the
remaining Beneficiaries. Payment will be made in the manner provided for in
that designation.
WHAT IF THERE IS NO BENEFICIARY NAMED OR THEN LIVING?
Unless otherwise provided in the beneficiary designation, the Death Benefit
will be payable to the Annuitant s executors or administrators.
CAN I CHANGE THE BENEFICIARY?
Yes, you can change the Beneficiary, unless you have given up this right, as
long as the Annuitant is living by writing to us at our Administrative Office.
You do not need to return the Contract to make the change unless we ask for it.
WHEN WILL A CHANGE OF BENEFICIARY TAKE EFFECT?
A change will take effect when we record it retroactively as of the date the
request was signed. We shall not be charged with notice of a change of
beneficiary until the change is received at our Administrative Office. The
change will be subject to any payment made or action taken by us before we
received your request.
WHO IS THE SUCCESSOR BENEFICIARY?
The Successor Beneficiary is the person so named in the application or in an
endorsement. If the Beneficiary dies before the Annuitant, a Successor
Beneficiary becomes the new Beneficiary.
12. . SECONDARY ANNUITANT
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WHAT IS A SECONDARY ANNUITANT?
The Secondary Annuitant (sometimes called contingent annuitant), if you choose
one, is the person who becomes the Annuitant at the death of the Primary
Annuitant. If the Secondary Annuitant is living at the death of the Primary
Annuitant, the Contract continues (and no death benefit is payable). The
Secondary Annuitant can only become the Annuitant before the Annuity Starting
Date.
WHEN CAN I CHOOSE A SECONDARY ANNUITANT?
You may choose a Secondary Annuitant only once either at time of application or
after the Contract is issued. To choose a Secondary Annuitant after issue, you
must write to us at our Administrative Office before the Annuity Starting Date.
CAN I CHANGE THE SECONDARY ANNUITANT?
No, you cannot change the Secondary Annuitant but, you can delete the Secondary
Annuitant by writing to us at our Administrative Office.
IF I CHOOSE OR DELETE A SECONDARY ANNUITANT AFTER THE CONTRACT IS ISSUED, WHEN
WILL THAT REQUEST TAKE EFFECT?
Your request to choose or delete a Secondary Annuitant will take effect on the
date you signed the request. But we must first accept and record the change.
And, the change will have no effect on any payment made by us or action taken
by us before we received your request. You do not need to return the Contract
for us to make the change unless we ask for it. We will send an endorsement to
show the change.
WHAT ELSE SHOULD I KNOW ABOUT THE SECONDARY ANNUITANT?
We will delete any Secondary Annuitant automatically as of their 95th birthday.
The change will be effective on the anniversary following that birthday.
If the Primary Annuitant is also the Owner and the Primary Annuitant dies, his
or her spouse must be Successor Owner in order for the Secondary Annuitant to
become the Annuitant.
It may happen that when a Secondary Annuitant becomes the Annuitant, the
Annuity Starting Date in effect is after their 95th birthday. In that case we
will automatically advance the Annuity Starting Date to the anniversary
following that 95th birthday.
It may happen that the Secondary Annuitant is also the Beneficiary when the
Primary Annuitant dies. In that case we will automatically change the
Beneficiary to the person chosen as Successor Beneficiary.
If no Successor Beneficiary was chosen, the Beneficiary will be the Secondary
Annuitant's executors or administrators.
13. . THE VARIABLE ACCOUNT
WHAT IS THE VARIABLE ACCOUNT AND WHAT IS ITS PURPOSE?
The Variable Account is an investment account established and maintained by us,
separate from our general account or other separate accounts. The variable
benefits under this Contract are provided through investments we make in the
Variable Account. It is used for our flexible payment variable annuity
contracts and, if permitted by law, may be used for other contracts.
WHAT ELSE SHOULD I KNOW ABOUT THE VARIABLE ACCOUNT?
We own the assets in the Variable Account. Assets equal to the reserves and
other liabilities of the Variable Account will not be charged with liabilities
that arise from any other business we conduct. We may from time to time
transfer to our general account, assets which exceed the reserves and other
liabilities of the Variable Account.
The Variable Account is registered with the Securities and Exchange Commission
(SEC) as a unit investment trust under the Investment Company Act of 1940. It
is also governed by the laws of the state of Arizona.
WHAT CHANGES CAN THE COMPANY MAKE TO THE VARIABLE ACCOUNT?
We may, to the extent permitted by applicable laws and regulations, make these
changes:
(a) the Variable Account may be operated as a management company under the
Investment Company Act of 1940; or (b) the Variable Account may be
de-registered under that Act if registration is no longer required; or (c) the
Variable Account may be combined with any of our other separate accounts.
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WHAT SHOULD I KNOW ABOUT SUB-ACCOUNTS?
We use the assets of each separate Sub-account to buy shares in a corresponding
portfolio of the applicable fund. (See Section 2).
WHAT RIGHTS DOES THE COMPANY HAVE TO CHANGE SUB-ACCOUNTS?
We reserve the right to establish new Sub-accounts or eliminate one or more
Sub-accounts if marketing needs, tax considerations or investment conditions
warrant.
Any new Sub-accounts may be made available to existing contracts on a basis to
be determined by us. If any of these changes are made, we may by appropriate
endorsement change the Contract to reflect the change.
Income and realized and unrealized gains or losses from assets of each
Sub-account are credited to or charged against that Sub-account without regard
to income, gains or losses in the other Sub-accounts, our general account or
any other separate accounts. We reserve the right to credit or charge a
Sub-account in a different manner if required, or appropriate, by reason of a
change in the law.
WHEN WILL THE COMPANY VALUE THE ASSETS IN THE SUB-ACCOUNTS?
We will value the assets of each Sub-account on each Business Day after the
assets in its corresponding fund portfolio have been valued on that Day.
WHAT CHANGES CAN THE COMPANY MAKE TO THE PORTFOLIO?
If, in our judgment, a portfolio no longer suits the purposes of the Contract
due to a change in its investment objectives or restrictions, we may substitute
shares of another portfolio of that fund or shares of another investment fund.
But, we will notify You before doing so and, to the extent required by law, we
will get prior approval from the SEC and the Arizona Insurance Department. Such
approval process is on file with the Arizona Insurance Department. We also will
get any other required approvals.
14. . SUB-ACCOUNT UNIT VALUE
WHAT IS THE UNIT VALUE OF EACH SUB-ACCOUNT?
The Unit value of each Sub-account on its first Business Day was set at $10.
The Unit value of each Sub-account on any subsequent Business Day is obtained
by subtracting (b) from (a) and dividing the result by (c), where:
(a) is The per share net asset value on the Business Day of the applicable
fund portfolio in which the Sub-account invests times the number of
such shares held in the Sub-account before the purchase or redemption
of any shares on that Day.
(b) is The mortality/expense risk charge accrued as of that Business Day.
The Daily Mortality/Expense Risk Charge is a percentage of the
Sub-account's net asset value on the previous Business Day. (If the
previous day was not a Business Day, then the daily mortality/expense
risk charge is a percentage times the number of days since the last
Business Day times the Sub-account's net asset value on that last
Business Day.) The current amount of that charge is shown on page 3.
We may increase the charge but it will never be more than the
guaranteed maximum shown on page 3.
If we change the amount of the charge we will send an endorsement to
show the change.
(c) is The total number of Units held in the Sub-account on the Business Day
before the purchase or redemption of any Units on that Day.
Amounts allocated to a Sub-account are used to purchase Units in that
Sub-account. An example of a transaction where amounts are allocated to a
Sub-account is a purchase payment. Amounts allocated against a Sub-account
result in the redemption of Units in that Sub-account. An example of a
transaction where amounts are allocated against a Sub-account is a partial
surrender. The number of Units purchased or redeemed is equal to the dollar
amount of the allocation divided by the Sub-account s Unit value on the
applicable Business Day. The number of Units in a Sub-account on a Business Day
is equal to the number of Units purchased for the Sub-account before any
transactions are
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<PAGE> 15
processed on that Day minus the number of Units redeemed in that Sub-account
before any transactions are processed on that Day.
15. . GUARANTEED INTEREST ACCOUNT
WHAT IS THE GUARANTEED INTEREST ACCOUNT?
The Guaranteed Interest Account is an account which is part of our general
account. The general account consists of all of our assets except those held by
the Variable Account and other separate accounts maintained by us.
WHAT INTEREST RATE APPLIES TO THE GUARANTEED INTEREST ACCOUNT?
The guaranteed annual interest rate that applies in the calculation of the Fund
Value will be declared by us at the beginning of each Accumulation Period you
select. Those rates will never be less than 3 1/2% (0.0094%, compounded daily).
Interest in excess of the guaranteed rate may be applied in the calculation of
that Fund Value in a manner determined by us.
WHAT IS AN ACCUMULATION PERIOD?
The Accumulation Periods currently offered by us are 3, 5, 7, and 10 years. We
reserve the right to change the Periods offered. The Accumulation Period starts
on the Business Day that falls on, or next follows, the date we transfer the
purchase payment into the Guaranteed Interest Account and ends on the monthly
contract anniversary immediately prior to the last day of that Period.
WHAT HAPPENS AT THE END OF AN ACCUMULATION PERIOD?
We will send a notice to you at least 15 but not more than 45 days before the
end of an Accumulation Period. The notice will show the rates then being
declared by us. Within 30 days after the end of the Accumulation Period, you
may elect a new Period. If you do not elect a new Period, we will automatically
renew the Accumulation Period for the same length of time at the interest rate
then being declared. The start of the new Accumulation Period is the ending
date of the previous Accumulation Period.
If an Accumulation Period for the same length of time is no longer being
offered by us or if such renewal would extend the new Accumulation Period
beyond the Annuity Starting Date, values will be transferred into the Money
Market Sub-account described in Section2..
WHAT IS THE MARKET VALUE ADJUSTMENT?
The Market Value Adjustment is an amount that is added to or deducted from any
transfer or full/partial surrender from the Guaranteed Interest Account. It
will not apply to requests for transfer or full/partial surrenders received at
our Administrative Office within 30 days before the end of the applicable
Accumulation Period
The Market Value Adjustment is determined by multiplying the amount of transfer
or full/partial surrender by (a) divided by (b), accumulated for the time
remaining in the applicable Accumulation Period, minus 1, where:
(a) .. is 1 plus the interest rate then being credited for the
Accumulation Period from which the transfer or full/partial surrender
is taken.
(b) .. is 1 plus the interest rate then being declared for an
Accumulation Period equal to the time remaining in the applicable
Accumulation Period, plus 0.25%.
Regarding (b) above: if an Accumulation Period equal to the time remaining is
not available, the rate will be an interpolation between two available
Accumulation Periods. If two such Accumulation Periods are not available, we
will use the rate for the next available Accumulation Period.
If the Company is no longer declaring rates on new payments, we will use
Treasury yields adjusted for investment risk as the basis for the Market Value
Adjustment.
- -----------------------------------------------------
16. . ANNUAL CONTRACT CHARGE
WHAT IS THE ANNUAL CONTRACT CHARGE AND WHEN WILL IT BE DEDUCTED?
An Annual Contract Charge is a charge for administrative expenses. The
guaranteed maximum amount of the charge is shown in Section1.. But, we may
charge less than that maximum, or waive the charge entirely, in accordance with
our procedure in effect at the time of the deduction.. We will give at least 30
days written notice of our intention to change the charge.
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<PAGE> 16
The Annual Contract Charge will be deducted on each contract anniversary
HOW WILL THE CHARGE BE ALLOCATED AGAINST THE ACCOUNTS?
The amount of the charge will be allocated against all Sub-accounts and the
Guaranteed Interest Account in the same proportion that the Fund Value held in
each bears to the total Fund Value in the Contract.
WHAT IF THE CONTRACT'S FUND VALUE IS INSUFFICIENT TO COVER THE ANNUAL CONTRACT
CHARGE ON THE DAY IT IS TO BE DEDUCTED?
If the Contract s Fund Value is insufficient to cover the Annual Contract
Charge, then the Contract will end without value on that day.
17.. DATES AND CONTRACT PERIODS
HOW ARE PERIODS MEASURED IN THE CONTRACT?
Months, years and anniversaries are measured from the Effective Date unless we
state otherwise. Contract months start on the same date in each calendar month
as the Effective Date. That means if the Effective Date is on the 1st of the
month, then each contract month will start on the 1st of the month.
WHAT IF THE EFFECTIVE DATE IS A DATE THAT DOESN'T OCCUR IN ALL MONTHS, SUCH AS
THE 31ST?
If the Effective Date is the 29th, 30th or 31st of a month, there will be some
calendar months when there is no such date. For those months the contract month
will start on the last day of the calendar month.
Where dates are shown, the numbers stand for month, day and year, in that
order. The Effective Date is shown on Page 1.
18. . GENERAL PROVISIONS
WHAT MAKES UP THIS CONTRACT?
This Contract has been issued in consideration of the application and payment
of the initial Purchase Payment shown in Section 1.. The application, a copy
of which is attached, is a part of the Contract. The Contract, any attached
riders and/or endorsements and the application make up the entire contract.
The questions in this Contract, including the questions in any rider or
endorsement attached hereto, are for purposes of convenience and reference
only. They do not form a part of and shall not in any way limit or affect the
meaning or interpretation of any of the terms and conditions of this Contract.
HOW DOES THE COMPANY USE THE STATEMENTS I MAKE IN THE APPLICATION?
All statements made in the application will be considered to be representations
and not warranties. No statement may be used to make this Contract invalid or
to deny a claim under it, unless the statement is contained in the written
application, a copy of which must have been attached to the Contract at issue
or delivery.
WHEN WILL THIS CONTRACT BE INCONTESTABLE?
This Contract will be incontestable from its Date of Issue.
WHAT IF THE ANNUITANT'S AGE, DATE OF BIRTH OR GENDER HAS BEEN MISSTATED?
If the Annuitant's age, date of birth or gender has been misstated, any amount
payable by us at any time will be that which the Purchase Payments paid would
have bought at the correct age and gender. Any overpayment by us will be
deducted from the payment or payments made after the correction of the
misstatement. Any underpayment by us will be added to the payment or payments
made after the correction of the misstatement.
HOW DOES THE COMPANY HANDLE AN ASSIGNMENT OF THIS CONTRACT?
We shall not be charged with notice of assignment of any interest in this
Contract until the assignment (or a copy) is received and recorded at our
Administrative Office. We are not responsible as to the validity or effect of
any assignment. We may rely solely on the statement of the assignee as to the
amount of his or her interest. The interest of any Beneficiary or other person
will be subordinate to any assignment, whenever made. The assignee will receive
any sum payable to the extent of his or her interest.
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<PAGE> 17
WHAT MAY THE COMPANY REQUIRE FOR CONTRACT PAYMENT?
In any settlement (payout) of this Contract, by reason of death, surrender, or
otherwise, we may require the return of the Contract. Due proof of death must
be submitted to us at our Administrative Office.
WHAT DO RELATIONSHIPS IN ANY BENEFICIARY OR OTHER DESIGNATION REFER TO?
Relationships used in any beneficiary or other designation will refer to the
Annuitant unless the wording indicates otherwise.
WHO HAS THE AUTHORITY TO CHANGE THIS CONTRACT?
No change in the Contract will be valid until it is approved by one of our
executive officers. This approval must be endorsed on or attached to this
Contract. No agent or other person has authority to change this Contract, waive
any of its provisions or accept representations or information not in the
written application.
CAN THE COMPANY POSTPONE ANY PAYMENTS OR TRANSFERS?
We will usually pay any amount payable on surrender or partial surrender within
7 days after we receive written request for the payment at our Administrative
Office. We will usually pay any death proceeds within 7 days after we receive
due proof of death.
But, any payment involving Cash Value in the Guaranteed Interest Account may be
postponed for up to 6 months from the date we receive the request for a
surrender. And, any payment involving a determination of Cash Value in
Sub-accounts may be postponed in any case whenever:
(a) the New York Stock Exchange (or International Exchange) is closed
(except for customary weekend and holiday closings), or trading on
the New York Stock Exchange is restricted as determined by the
Securities and Exchange Commission (SEC); or
(b) the SEC determines that a state of emergency exists, so that
valuation of the assets of the Variable Account or disposal of
securities is not reasonably practicable.
Transfers among Sub-accounts, and allocations to and against Sub-accounts, also
may be postponed under the circumstances described in (a) and (b) above.
WHAT REPORTS WILL THE COMPANY SEND?
We will send an annual report to the Owner showing the then current status of
the Contract. It will show since the last report: Purchase Payments received;
Annual Contract Charge; any partial surrenders (reflecting any Market Value
Adjustments and any surrender charges) ); and any transfers (reflecting any
Market Value Adjustments and any transfer charges).. It will show as of the
current report date: Cash Value. It will also show as of the current and prior
report dates: Fund Value; Sub-account Unit values; Fund Value in the Guaranteed
Interest Account; and any other information required by state law or regulation
We will also send an annual statement of investments held under the Sub-account
of the Variable Account.
We also will send to the Owner any reports required by the Investment Company
Act of 1940.
DOES THIS CONTRACT PAY DIVIDENDS?
We pay no dividends on this Contract.
- -----------------------------------------------------
19. . SETTLEMENT OPTIONS
WHAT IS A SETTLEMENT OPTION?
Instead of being paid in a single sum, you may elect to receive any death or
surrender proceeds from this Contract in the form of a Settlement Option. If
you elect a Settlement Option in the form of income payments, the dollar amount
of the payments and how long will we pay them (for example, over the lifetime
of a single payee or joint payees), will depend on the terms of that
settlement.
Any paid-up annuity, cash surrender, or death benefits that may be available
under the Contract are not less than the minimum benefits required by any
statute of the state in which the Contract is delivered.
CAN ANY PROCEEDS BE PAID IN A SINGLE SUM?
Yes, if one of the Settlement Options described below is not elected, any death
or surrender proceeds will be paid in a single sum.
WHOM CAN I SELECT AS THE PAYEE UNDER A SETTLEMENT OPTION?
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<PAGE> 18
Any natural person (not a business entity or trust) in his or her own right.
The payee must be the person to whom proceeds are payable under this Policy.
WHEN CAN I ELECT A SETTLEMENT OPTION?
At any time while the Annuitant is living, you may elect to have the proceeds
paid under one of the Settlement Options described below.
HOW CAN I ELECT OR CHANGE A SETTLEMENT OPTION FOR DEATH PROCEEDS?
You may choose an option or change a prior election while the Annuitant is
living by sending written request to us at our Administrative Office. However,
we must record this choice or change. You do not need to return the Contract to
us to make the choice or change unless we ask for it.
WHAT IS THE MINIMUM AMOUNT OF PROCEEDS I CAN ELECT TO HAVE APPLIED TOWARD ONE
OF THESE SETTLEMENT OPTIONS?
The amount of proceeds applied toward any of these Settlement Options must be
at least $1,000.
CAN THE PAYEE CHOOSE A SETTLEMENT OPTION?
Yes, if the Payee was to receive the proceeds in a single sum, the Payee may
instead choose one of the Settlement Options for proceeds not yet paid. This
must be done by written request to us at our Administrative Office not more
than 1 month after the proceeds become payable.
WHAT SETTLEMENT OPTIONS ARE AVAILABLE?
- Option 1. Interest Income. Under this option, we hold the proceeds and
credit interest earned on those proceeds to the Payee. We set the
rate of interest for each year, but that rate will never be less than
2 3/4% a year. This Option will continue until the earlier of the
date the Payee dies or the date you elect another Settlement Option.
- Option 2. Income for Specified Period. Under this option, the Payee
receives an income for the number of years chosen. We then calculate
an income that will be based on the Minimum Monthly Income Table 2
for that period. Note that the longer the period selected (i.e.
number of years) the lower the dollar amount per $1,000 of proceeds.
Payments may be increased by additional interest as we may determine
for each year.
- Option 3. Single Life Income. Under this option, a number of years
called the period certain is chosen. We will then pay income to a
single Payee for as long as that Payee lives or for the number of
years chosen (the period certain), whichever is longer. If the Payee
dies after the end of the period certain, the income payments will
stop.
The period certain elected may be:
(a) 0, 10, or 20 years; or
(b) until the total income payments equal the proceeds applied (this
is called a refund period certain).
The amount of the income payments will be figured by us on the date
the proceeds become payable. This amount will be at least as much as
the applicable amount shown in the Minimum Monthly Income Table 3.
The income amounts are based on the 1983 Table a (discrete functions,
without projections for future mortality) with 3 1/2% interest.
If the income payments for the period certain elected are the same as
income payments based on another available longer period certain, we
will deem an election to have been made for the longer period
certain.
- Option 3A. Joint Life Income. We pay income during the joint lifetime
of two people (the Payee and another person). That means if one
person dies, we will continue to pay the same income (or a lesser
income) to the survivor for as long as the survivor lives.
The survivor may receive the same dollar amount that we were paying
before the first Payee died or two-thirds of that amount depending on
the election made at the time of settlement. Note that the lesser
(two-thirds) amount paid to the survivor is elected, the dollar
amount payable while both persons are living will be larger than it
would have been if the same amount paid to the survivor had been
elected.
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The amount of income payable while both persons are living (the joint
lifetime) will be figured by us on the date the proceeds become
payable. This amount will be at least as much as the applicable
amount shown in the Minimum Monthly Income Table 3A. The minimum
income amounts are based on the 1983 Table a (discrete functions,
without projections for future mortality) with 3 1/2% interest.
If a person for whom Option 3A is chosen dies before the first income
amount is payable, the survivor will receive settlement instead under
Option 3 with 10 years certain.
- Option 4. Income of Specified Amount. Under this Option, the dollar
amount of the income payments is chosen. We will pay that amount for
as long as the proceeds and interest last; but, the dollar amount
chosen must add up to a yearly amount of at least 10% of the proceeds
applied. Interest will be credited annually on the balance of the
proceeds. We set the rate of interest for each year, but that rate
will never be less than 2 3/4% a year.
ARE ANY OTHER SETTLEMENT OPTIONS AVAILABLE?
Yes, the proceeds may be settled under any other option we may agree to.
HOW OFTEN WILL THE PAYEE RECEIVE INCOME PAYMENTS?
Payment will be made monthly unless quarterly, semi-annual or annual payment is
requested by you (or the Payee) when the option is chosen. If payments of the
chosen frequency would be less than $25 each, we may use a less frequent
payment basis.
Multiply the monthly payment by the appropriate factor to obtain less frequent
payment amounts.
<TABLE>
<CAPTION>
Ann. Semi-Ann.
---------------
Quarterly
- ---------
<S> <C> <C> <C>
Option 2 11.85 5.97 2.99
- ------------------------------------------------------
Optn 3 (0 Yrs Certain) 11.68 5.90 2.97
- ------------------------------------------------------
Option 3 (20 Yrs Certain or
Refund Period Certain) 11.80 5.95 2.99
- ------------------------------------------------------
Option 3 (10 Yrs Certain) or
Option 3A 11.74 5.92 2.97
- ------------------------------------------------------
</TABLE>
WILL I (OR THE PAYEE) RECEIVE AN EXPLANATION OF THE SETTLEMENT OPTION?
Yes, you (or the Payee) will receive a supplementary contract when the proceeds
are settled under one of these options. The contract will state the terms of
the settlement.
WHAT WILL BE PAID WHEN THE PAYEE DIES AFTER THE EFFECTIVE DATE OF THE OF THE
SUPPLEMENTARY CONTRACT?
The amount payable under each Option at the Payee's death will be paid as
stated below in a single sum to the Payee's executors or administrators unless
otherwise provided in the settlement approved by us at the time it was chosen.
Option 1 or 4 - Any unpaid proceeds and interest to the date of death.
Options 2 or 3 - The amount which, with compound annual interest, would have
provided any future income payments for: (a) the specified period (Option 2);
or (b) the specified period certain (Option 3). Interest will be at the rate or
rates assumed in computing the amount of income.
WHAT ELSE SHOULD I KNOW ABOUT SETTLEMENT OPTIONS?
Before we pay Option 3 or 3A, we shall need proof of age of the Payee(s) which
satisfies us.
MINIMUM MONTHLY INCOME TABLES
THESE TABLES SHOW THE MINIMUM MONTHLY INCOME PER $1,000 OF PROCEEDS APPLIED
UNDER THE APPLICABLE OPTION.
Table 2 - Income for a Specified Period Option
<TABLE>
<CAPTION>
Years Monthly Amount Years Monthly Amount
- -------------------------------------------
<S> <C> <C> <C>
1 $84.37 11 $8.75
- ---------------------------------------
2 42.76 12 8.13
- --------------------------------------
3 28.89 13 7.60
- --------------------------------------
4 21.96 14 7.15
- --------------------------------------
5 17.80 15 6.76
- --------------------------------------
6 15.03 16 6.41
- --------------------------------------
7 13.06 17 6.11
- --------------------------------------
8 11.58 18 5.85
- --------------------------------------
9 10.42 19 5.61
- --------------------------------------
10 9.50 20 5.39
- --------------------------------------
</TABLE>
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<PAGE> 20
MINIMUM MONTHLY INCOME TABLES (CONTINUED)
TABLE 3 - SINGLE LIFE INCOME OPTION.
The life income shown is based on Payee's age last birthday on the due date of
the first income payment.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
10 YEARS CERTAIN 20 YEARS CERTAIN 10 YEARS CERTAIN 20 YEARS CERTAIN
MALE FEMALE AGE MALE FEMALE MALE FEMALE AGE MALE FEMALE
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$3.21 $3.14 10* $3.20 $3.13 $3.74 $3.56 35 $3.71 $3.55
3.22 3.15 11 3.21 3.14 3.78 3.59 36 3.75 3.58
3.23 3.16 12 3.23 3.15 3.82 3.62 37 3.78 3.61
3.24 3.17 13 3.24 3.17 3.86 3.65 38 3.82 3.64
3.26 3.18 14 3.25 3.18 3.90 3.69 39 3.85 3.67
3.27 3.19 15 3.27 3.19 3.94 3.72 40 3.89 3.70
3.29 3.20 16 3.28 3.20 3.99 3.76 41 3.93 3.73
3.30 3.22 17 3.30 3.21 4.04 3.80 42 3.98 3.77
3.32 3.23 18 3.31 3.23 4.09 3.84 43 4.02 3.81
3.34 3.24 19 3.33 3.24 4.14 3.88 44 4.06 3.84
3.36 3.26 20 3.35 3.25 4.20 3.92 45 4.11 3.88
3.37 3.27 21 3.37 3.27 4.25 3.97 46 4.16 3.93
3.39 3.29 22 3.38 3.28 4.31 4.02 47 4.21 3.97
3.41 3.30 23 3.40 3.30 4.38 4.07 48 4.26 4.01
3.43 3.32 24 3.42 3.32 4.44 4.12 49 4.31 4.06
3.46 3.34 25 3.45 3.33 4.51 4.18 50 4.37 4.11
3.48 3.36 26 3.47 3.35 4.58 4.24 51 4.42 4.16
3.50 3.38 27 3.49 3.37 4.66 4.30 52 4.48 4.21
3.53 3.40 28 3.52 3.39 4.74 4.36 53 4.54 4.27
3.56 3.42 29 3.54 3.41 4.82 4.43 54 4.60 4.32
3.58 3.44 30 3.57 3.43 4.91 4.51 55 4.66 4.38
3.61 3.46 31 3.59 3.45 5.00 4.58 56 4.72 4.44
3.64 3.49 32 3.62 3.48 5.10 4.66 57 4.78 4.51
3.67 3.51 33 3.65 3.50 5.20 4.75 58 4.85 4.57
3.71 3.54 34 3.68 3.52 5.31 4.84 59 4.91 4.64
<CAPTION>
- -----------------------------------------------------------------------
10 YEARS CERTAIN 20 YEARS CERTAIN 0 YEARS CERTAIN
MALE FEMALE AGE MALE FEMALE MALE AGE FEMALE
- -----------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C>
$5.42 $4.93 60 $4.97 $4.71 $3.46 25 $3.34
5.54 5.04 61 5.04 4.77 3.59 30 3.44
5.67 5.14 62 5.10 4.84 3.75 35 3.57
5.80 5.25 63 5.16 4.91 3.96 40 3.73
5.94 5.37 64 5.22 4.98 4.22 45 3.93
6.08 5.50 65 5.28 5.05 4.56 50 4.20
6.23 5.63 66 5.33 5.12 4.99 55 4.54
6.38 5.77 67 5.38 5.19 5.57 60 5.00
6.54 5.92 68 5.43 5.25 6.39 65 5.64
6.71 6.07 69 5.48 5.32 7.53 70 6.53
6.88 6.23 70 5.52 5.38
7.05 6.40 71 5.55 5.43
7.22 6.58 72 5.59 5.48 REFUND PERIOD
7.40 6.76 73 5.62 5.53 CERTAIN
7.57 6.95 74 5.64 5.57 MALE AGE FEMALE
---------------------
7.75 7.15 75 5.66 5.60 $3.44 25 $3.33
7.92 7.34 76 5.68 5.63 3.56 30 3.42
8.09 7.54 77 5.70 5.66 3.70 35 3.54
8.26 7.74 78 5.71 5.68 3.88 40 3.69
8.42 7.94 79 5.72 5.70 4.11 45 3.87
8.57 8.14 80+ 5.73 5.71 4.38 50 4.11
4.73 55 4.40
5.18 60 4.78
5.76 65 5.28
6.52 70 5.94
</TABLE>
* AND UNDER
+ AND OVER
The minimum income for any age not shown in the 0 Years Certain and Refund
Period Certain columns is calculated on the same mortality and interest
assumptions as the minimum income ages shown and will be quoted on request.
- --------------------------------------------------------------------------------
TABLE 3A - JOINT LIFE INCOME OPTION
The income shown is based on the ages (at last birthday on the due date of the
first income payment) of the 2 persons during whose joint lifetime payments are
to be made.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SAME INCOME CONTINUED TO SURVIVOR TWO-THIRDS OF INCOME CONTINUED TO SURVIVOR
-------------------------------------------------------- --------------------------------------------------------
AGE AGE
OF AGE OF MALE OF AGE OF MALE
FEMALE 50 55 60 65 70 FEMALE 50 55 60 65 70
-------------------------------------------------------- --------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $3.89 $3.98 $4.04 $4.09 $4.13 50 $4.20 $4.35 $4.51 $4.69 $4.89
55 4.03 4.16 4.27 4.36 4.42 55 4.36 4.54 4.73 4.95 5.18
60 4.16 4.34 4.51 4.66 4.78 60 4.55 4.76 4.99 5.25 5.53
65 4.27 4.51 4.76 4.99 5.20 65 4.76 5.01 5.29 5.62 5.97
70 4.37 4.66 4.99 5.34 5.67 70 4.99 5.28 5.63 6.04 6.49
</TABLE>
The minimum income for any other combination of ages or for 2 persons of the
same gender are calculated on the same mortality and interest assumptions as the
minimum income for the combination of ages shown will be quoted on request.
- ------------------
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