Supplement to Prospectus Dated May 3, 1999
Supplement dated October 18, 1999
This Supplement should be retained with the current Prospectus for your variable
annuity contract issued by American Skandia Life Assurance Corporation
("American Skandia"). If you do not have a current prospectus, please contact
American Skandia at 1-800-SKANDIA.
The underlying Portfolios shown in bold below are being offered as new
Sub-accounts under your Annuity as of October 18, 1999. In addition, the
Underlying Mutual Fund Portfolio Annual Expenses for each Portfolio of American
Skandia Trust have been restated to reflect a deemed 12b-1 fee, as discussed in
Note 1 below.
<TABLE>
<CAPTION>
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Underlying Mutual Fund Portfolio Annual Expenses
(as a percentage of the average net assets of the underlying Portfolios)
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Management Other Estimated Total Annual Fee Net
Fees Expenses Distribution Portfolio Waivers and Annual
UNDERLYING PORTFOLIO and Service Operating Expense Fund
(12b-1) Expenses Reimbursement Operating
Fees(1) Expenses
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<S> <C> <C> <C> <C> <C> <C>
AST Founders Passport 1.00% 0.30% 0% 1.30% N/A 1.30%
AST T. Rowe Price International Equity 1.00% 0.25% 0% 1.25% N/A 1.25%
AST AIM International Equity 0.87% 0.26% 0.14% 1.27% N/A 1.27%
AST Janus Overseas Growth 1.00% 0.27% 0% 1.27% N/A 1.27%
AST American Century International Growth 1.00% 0.65% 0% 1.65% N/A 1.65%
AST MFS Global Equity(2) 1.00% 0.48% 0.06% 1.54% N/A 1.54%
AST Janus Small-Cap Growth 0.90% 0.22% 0.05% 1.17% N/A 1.17%
AST Kemper Small-Cap Growth 0.95% 0.60% 0.18% 1.73% 0.20% 1.53%
AST Lord Abbett Small Cap Value 0.95% 0.36% 0% 1.31% N/A 1.31%
AST T. Rowe Price Small Company Value 0.90% 0.21% 0% 1.11% N/A 1.11%
AST Neuberger Berman Mid-Cap Growth(3) 0.90% 0.17% 0.08% 1.15% N/A 1.15%
AST Neuberger Berman Mid-Cap Value(4) 0.90% 0.15% 0.19% 1.24% N/A 1.24%
AST T. Rowe Price Natural Resources 0.90% 0.26% 0.07% 1.23% N/A 1.23%
AST Oppenheimer Large-Cap Growth(5) 0.90% 0.22% 0.05% 1.17% N/A 1.17%
AST Marsico Capital Growth 0.90% 0.21% 0.06% 1.17% N/A 1.17%
AST JanCap Growth 0.90% 0.14% 0.01% 1.05% 0.02% 1.03%
AST MFS Growth(2) 0.90% 0.24% 0.06% 1.20% N/A 1.20%
AST Bankers Trust Managed Index 500 0.60% 0.26% 0% 0.86% 0.06% 0.80%
AST Cohen & Steers Realty 1.00% 0.30% 0.07% 1.37% N/A 1.37%
AST American Century Income & Growth 0.75% 0.25% 0.05% 1.05% N/A 1.05%
AST Lord Abbett Growth and Income 0.75% 0.16% 0.08% 0.99% N/A 0.99%
AST MFS Growth with Income(2) 0.90% 0.23% 0.06% 1.19% N/A 1.19%
AST INVESCO Equity Income 0.75% 0.18% 0.04% 0.97% N/A 0.97%
AST AIM Balanced 0.74% 0.26% 0.08% 1.08% N/A 1.08%
AST American Century Strategic Balanced 0.85% 0.28% 0% 1.13% N/A 1.13%
AST T. Rowe Price Asset Allocation 0.85% 0.24% 0% 1.09% N/A 1.09%
AST T. Rowe Price International Bond 0.80% 0.31% 0% 1.11% N/A 1.11%
AST Federated High Yield 0.75% 0.20% 0% 0.95% N/A 0.95%
AST PIMCO Total Return Bond 0.65% 0.18% 0% 0.83% N/A 0.83%
AST PIMCO Limited Maturity Bond 0.65% 0.21% 0% 0.86% N/A 0.86%
AST Money Market 0.50% 0.16% 0% 0.66% 0.06% 0.60%
INVESCO VIF Technology 0.75% 5.85% N/A 6.60% 5.20% 1.40%
INVESCO VIF Health Sciences 0.75% 3.57% N/A 4.32% 3.05% 1.27%
INVESCO VIF Financial Services(6) 0.75% 0.59% N/A 1.34% 0.09% 1.25%
INVESCO VIF Telecommunications(6) 0.75% 0.59% N/A 1.34% 0.09% 1.25%
INVESCO VIF Dynamics 0.60% 14.41% N/A 15.01% 13.56% 1.45%
Evergreen VA Global Leaders 0.95% 0.61% N/A 1.56% 0.56% 1.00%
Evergreen VA Special Equity(7) 1.45% 0.72% N/A 2.17% 1.17% 1.00%
ProFund VP Europe(8) 0.75% 0.78% 0.25% 1.78% N/A 1.78%
ProFund VP SmallCap(8) 0.75% 0.70% 0.25% 1.70% N/A 1.70%
ProFund VP UltraOTC(8) 0.75% 0.66% 0.25% 1.66% N/A 1.66%
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</TABLE>
1 Pursuant to a vote of the shareholders of American Skandia Trust (the
"Trust"), the Trust has adopted a Distribution Plan (the "Distribution
Plan") under Rule 12b-1 of the Investment Company Act of 1940 to permit an
affiliate of the Trust's Investment Manager to receive brokerage
commissions in connection with purchases and sales of securities held by
Portfolios of the Trust, and to use these commissions to promote the sale
of shares of such Portfolios. While the brokerage commission rates and
amounts paid by the various Portfolios are not expected to increase as a
result of the Distribution Plan, the staff of the Securities and Exchange
Commission takes the position that commission amounts received under the
Distribution Plan should be reflected in the expenses of the Funds. Total
returns for the Portfolios are not expected to be adversely affected by the
deemed increase in fees. The Distribution Fee estimates are derived from
data regarding each Portfolio's brokerage transactions, and the proportions
of such transactions directed to selling dealers, for the period ended June
30, 1999. However, it is not possible to determine with accuracy actual
amounts that will be received under the Distribution Plan. Such amounts
will vary based upon the level of a Portfolio's brokerage activity, the
proportion of such activity directed under the Distribution Plan, and other
factors.
2 These portfolios commenced operations on October 18, 1999. "Other Expenses"
are based on estimated amounts for the fiscal year ending December 31,
1999.
3 Prior to May 1, 1998, the Investment Manager had engaged Berger Associates,
Inc. as Sub-advisor for the Portfolio (formerly, the Berger Capital Growth
portfolio), for a total Investment Management fee payable at the annual
rate of 0.75% of the average daily nets assets of the Portfolio. As of May
1, 1998, the Investment Manager engaged Neuberger Berman Management
Incorporated as Sub-advisor for the Portfolio, for a total Investment
Management fee payable at the annual rate of 0.90% of the average daily net
assets of the Portfolio. The Management Fee in the above chart reflects the
current Investment Management fee payable to the Investment Manager.
4 Prior to May 1, 1998, the Investment Manager had engaged Federated
Investment Counseling as Sub-advisor for the Portfolio (formerly, the
Federated Utility Income portfolio), for a total Investment Management fee
payable at the annual rate of 0.75% of the first $50 million of the average
daily net assets of the Portfolio, plus .60% of the Portfolio's average
daily net assets in excess of $50 million. As of May 1, 1998, the
Investment Manager engaged Neuberger Berman Management Incorporated as
Sub-advisor for the Portfolio, for a total Investment Management fee
payable at the annual rate of 0.90% of the average daily net assets of the
Portfolio. The Management Fee in the above chart reflects the current
Investment Management fee payable to the Investment Manager.
5 Prior to December 31, 1998, the Investment Manager had engaged Robertson,
Stephens & Company Investment Management, L.P. as Sub-advisor for the
Portfolio (formerly the Robertson Stephens Value + Growth portfolio), and
the total Investment Management fee was at the annual rate of 1.00% of the
average daily net assets of the Portfolio. As of December 31, 1998, the
Investment Manager engaged OppenheimerFunds, Inc. as Sub-advisor for the
Portfolio, and the Investment Management fee is payable at the annual rate
of 0.90% of the first $1 billion of the average daily net assets of the
Portfolio, plus .85% of the Portfolio's average daily net assets in excess
of $1 billion. The Management Fee in the above chart reflects the current
Investment Management fee payable to the Investment Manager.
6 These portfolios commenced operations on August 31, 1999. "Other Expenses"
are estimated amounts for the fiscal year ended December 31, 1999.
7 This portfolio commenced operations on September 30, 1999. "Other Expenses"
are estimated amounts for the fiscal year ended December 31, 1999.
8 These portfolios commenced operations on October 18, 1999. "Other Expenses"
are estimated amounts for the fiscal year ended December 31, 1999.
EXPENSE EXAMPLES
The Expense Examples shown below are being added with respect to the new
Portfolios that are being offered as Sub-accounts under your Annuity as of
October 18, 1999. The Expense Examples for the American Skandia Trust Portfolios
shown below reflect the deemed 12b-1 fees (see Note 1 above).
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Expense Examples
(amounts shown are rounded to the nearest dollar)
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There is no Contingent Deferred Sales
Charge on withdrawals. Therefore, whether
or not you surrender your Annuity at the
end of the applicable time period or
begin taking annuity payments at such
time, you would pay the following
expenses on a $1,000 investment, assuming
5% annual return on assets:
-------------------------------------
After:
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Sub-Account: 1 Year 3 Years 5 Years 10 Years
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AST MFS Growth 27 83 142 300
AST MFS Growth with Income 27 83 142 300
AST MFS Global Equity 31 94 159 334
INVESCO VIF Technology 29 89 152 320
INVESCO VIF Health Sciences 28 86 146 308
INVESCO VIF Financial Services 28 85 145 307
INVESCO VIF Telecommunications 28 85 145 307
INVESCO VIF Dynamics 30 91 155 325
Evergreen VA Global Leaders 25 77 132 280
Evergreen VA Special Equity 25 77 132 280
ProFund VP Europe 33 101 171 356
ProFund VP SmallCap 32 98 167 349
ProFund VP UltraOTC 32 97 165 345
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The following underlying Portfolios are being added to the section entitled
"What are the Investment Objective and Policies of the Portfolios?"
<TABLE>
<CAPTION>
INVESTMENT OPTIONS
WHAT ARE THE INVESTMENT OBJECTIVES AND POLICIES OF THE PORTFOLIOS?
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PORTFOLIO
<S> <C> <C> <C>
STYLE/ INVESTMENT OBJECTIVES/POLICIES ADVISOR/
TYPE SUB-ADVISOR
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AST MFS Growth with Income: seeks reasonable current income
and long-term capital growth and income. Under normal
market conditions, the Portfolio invests at least 65% of
its total assets in common stocks and related securities,
GROWTH such as preferred stocks, convertible securities and Massachusetts
& depositary receipts. The stocks in which the Portfolio Financial Services
INCOME invests generally will pay dividends. While the Portfolio Company
may invest in companies of any size, the Portfolio
generally focuses on companies with larger market
capitalizations that the Sub-advisor believes have
sustainable growth prospects and attractive valuations
based on current and expected earnings or cash flow. The
Portfolio may invest up to 20% of its net assets in foreign
securities.
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AST MFS Growth: seeks long-term capital growth and future
income. Under normal market conditions, the Portfolio
invests at least 80% of its total assets in common stocks
and related securities, such as preferred stocks,
GROWTH convertible securities and depositary receipts, of Massachusetts
companies that the Sub-advisor believes offer better than Financial Services
average prospects for long-term growth. The Sub-advisor Company
seeks to purchase securities of companies that it considers
well-run and poised for growth. The Portfolio may invest up
to 30% of its net assets in foreign securities.
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INVESCO VIF Dynamics: seeks securities that will increase
in value over the long term. The Portfolio invests in a
variety of securities which are believed to present
opportunities for capital growth - primarily common stocks
MID-CAP of companies traded on U.S. securities exchanges, as well INVESCO Funds
GROWTH as over-the-counter. The Portfolio also may invest in Group, Inc.
preferred stocks and debt instruments that are convertible
into common stocks, as well as in securities of foreign
companies. In general, the Portfolio invests in securities
of companies in industries that are growing globally and
usually avoids stocks of companies in cyclical, mature or
slow-growing industries or economic sectors. The Portfolio
seeks to invest in stocks of leading companies in
attractive markets or industries, or emerging leaders that
have developed a new competitive advantage.
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ProFund VP SmallCap: seeks daily investment results that
correspond to the performance of the Russell 2000(R) Index.
The Portfolio principally invests in futures contracts on
stock indexes and options on futures contracts and ProFund Advisors
financial instruments such as equity caps, collars, floors LLC
and options on securities and stock indexes of diverse,
widely traded, small capitalization companies.
Additionally, the Portfolio may invest in a combination of
SMALL stocks that in the investment advisor's opinion should
CAPITALIZATION simulate the movement of the Russell 2000(R) Index.
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Evergreen VA Special Equity: seeks capital growth. The
Portfolio strives to provide a return greater than broad
stock market indices such as the Russell 2000(R) Index by
investing principally in a diversified portfolio of common
stocks of domestic companies. The Portfolio's Investment Meridian Investment
Adviser principally chooses companies which it expects will Company
experience growth in earnings and price, and which have
small market capitalizations (under $1 billion) and medium
market capitalizations (between $1 billion and $5 billion).
The Portfolio may also invest in companies that have large
market capitalizations (over $5 billion).
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AST MFS Global Equity: seeks capital growth. Under normal
market conditions, the Portfolio invests at least 65% of
INTERNATIONAL its total assets in common stocks and related securities, Massachusetts
EQUITY such as (including issuers in developing countries). The Financial Services
Portfolio generally seeks to purchase securities of Company
companies with relatively large market capitalizations
relative to the market in which they are traded.
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<PAGE>
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PORTFOLIO
STYLE/ INVESTMENT OBJECTIVES/POLICIES ADVISOR/
TYPE SUB-ADVISOR
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ProFund VP Europe: seeks daily investment results that
correspond to the performance of the ProFunds Europe Index.
The ProFunds Europe Index ("PEI") is a combined measure of
European stock performance created by the Investment
Advisor from the leading stock indexes of Europe's three
largest economies giving equal weight to each index each
day. The PEI averages the daily results of The Financial ProFund Advisors
Times Stock Exchange 100, The Deutsche Aktienindex and the LLC
CAC-40. The Portfolio principally invests in futures
contracts on stock indexes and options on futures contracts
INTERNATIONAL and financial instruments such as equity caps, collars,
EQUITY floors and options on securities and stock indexes of large
(Cont.) capitalization, widely traded, European stocks. The
Portfolio invests in financial instruments with values that
reflect the performance of stocks of European companies.
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Evergreen VA Global Leaders: seeks to provide investors
with long-term capital growth. The Portfolio normally
invests as least 65% of its assets in a diversified
portfolio of U.S. and non-U.S. equity securities of
companies located in the world's major industrialized Evergreen Asset
countries. The Portfolio will invest in no less than three Management Corp.
countries, which may include the U.S., but may invest more
than 25% of its total assets in one country. The Portfolio
invests only in the best 100 companies, which are selected
by the investment advisor based on qualitative and
quantitative criteria such as high return on equity,
consistent earnings growth and established market presence.
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Sector funds generally diversify their investments across particular economic
sectors. However, because those investments are limited to a comparatively
narrow segment of the economy, sector funds are generally not as diversified as
most mutual funds. Sector funds tend to be more volatile than other types of
funds. The value of fund shares may go up and down more rapidly than other
funds. Each sector of the economy may also have different regulatory or other
risk factors that can cause greater fluctuations in the share price. Please read
the prospectus for the underlying sector fund for further details about the
risks of the particular sector of the economy.
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INVESCO VIF Technology: seeks capital appreciation. The
Portfolio normally invests at least 80% of its total assets
in the equity securities of companies engaged in
technology-related industries. These include, but are not
limited to, communications, computers, video, electronics, INVESCO Funds
oceanography, office and factory automation, and robotics. Group, Inc.
A core portion of the Portfolio's holdings are invested in
market-leading technology companies which the Investment
Advisor believes will maintain or improve their market
share regardless of overall conditions.
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INVESCO VIF Health Sciences: seeks capital appreciation.
The Portfolio invests at least 80% of its assets in the
equity securities of companies that develop, produce or
SECTOR distribute products or services related to health care.
These industries include, but are not limited to, medical INVESCO Funds
equipment or supplies, pharmaceuticals, health care Group, Inc.
facilities, and applied research and development of new
products or services. The Investment Advisor attempts to
blend well-established healthcare firms with
faster-growing, more dynamic health care companies, which
have new products or are increasing their market share of
existing products.
------------------------------------------------------------------------------------------------ ---------------
INVESCO VIF Financial Services: seeks capital appreciation.
The Portfolio normally invests at least 80% of its assets
in the equity securities of companies involved in the
financial services sector. This sector includes, among
others, banks (regional and money-centers), insurance INVESCO Funds
companies (life, property and casualty, and multiline), and Group, Inc.
investment and miscellaneous industries (asset managers,
brokerage firms, and government-sponsored agencies). The
Investment Advisor seeks companies which it believes can
grow their revenues and earnings regardless of the interest
rate environment - although securities prices of financial
services companies generally are interest rate-sensitive.
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<PAGE>
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PORTFOLIO
STYLE/ INVESTMENT OBJECTIVES/POLICIES ADVISOR/
TYPE SUB-ADVISOR
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INVESCO VIF Telecommunications: seeks capital appreciation.
The Portfolio normally invests at least 80% of its assets
in the equity securities of companies that are primarily
engaged in the design, development, manufacture,
distribution, or sale of communications services and
SECTOR (Cont.) equipment, and companies that are involved in developing, INVESCO Funds
constructing, or operating communications infrastructure Group, Inc.
projects throughout the world, or in supplying equipment or
services to such companies. The telecommunications sector
includes companies that offer telephone services, wireless
communications, satellite communications, television and
movie programming and broadcasting. Normally, the Portfolio
will invest at least 65% of its assets in companies located
in at least three different countries, although U.S.
issuers will often dominate the holdings.
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The ProFund VP UltraOTC portfolio is available to all Owners. However, it is
recommended that only those Owners who engage a financial advisor to allocate
their funds in strategic or tactical asset allocation strategies invest in this
portfolio. There can be no assurance that any financial advisor will
successfully predict market fluctuations.
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ProFund VP UltraOTC: seeks daily investment results that
correspond to twice (200%) the performance of the NASDAQ
100 Index(TM). The Portfolio principally invests in futures
STRATEGIC contracts on stock indexes and options on futures contracts ProFund Advisors
OR and financial instruments such as equity caps, collars, LLC
TACTICAL floors and options on securities and stock indexes of large
ALLOCATION capitalization companies. If the Portfolio is successful in
meeting its objective, it should gain approximately twice
as much as the growth oriented NASDAQ 100 Index(TM) when
the prices of the securities in that index rise on a given
day and should lose approximately twice as much when such
prices decline on that day.
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</TABLE>
Portfolio/Sub-account Name Changes:
Pursuant to a shareholder vote, portfolios of Life & Annuity Trust (LAT) are
being reorganized into new portfolios of Wells Fargo Variable Trust (WFVT).
Effective September 20, 1999, the name of the LAT Equity Value portfolio has
changed to the WFVT Equity Value portfolio.
Effective October 18, 1999, the name of the AST Bankers Trust Enhanced 500
portfolio has been changed to the AST Bankers Trust Managed Index 500 portfolio.
The investment objective and policies of the portfolio are not changed.
The following paragraph replaces the second paragraph in the section entitled
"May I Authorize my Financial Representative to Manage my Account?"
MAY I AUTHORIZE MY FINANCIAL REPRESENTATIVE TO MANAGE MY ACCOUNT?
We may also establish different "cut-off times" by which we must receive all
financial transactions for certain underlying portfolios. Currently, the
portfolios of Rydex Variable Trust and ProFund VP are subject to this
restriction. Financial transactions involving a Rydex or ProFund VP Sub-account
must be received by us no later than one hour prior to any announced closing
time of the applicable securities exchange (generally, 3:00 p.m. Eastern time)
to be processed on the current Valuation Day. If you request a transaction
involving the purchase or redemption of Units in one of the Rydex or ProFund VP
Sub-accounts after the "cut-off" time, we will deem your request as received by
us on the next Valuation Day. You may be required to submit a new request on the
following day.
The following paragraph replaces the sixth paragraph in the section entitled
"When Do You Process and Value Transactions?"
WHEN DO YOU PROCESS AND VALUE TRANSACTIONS?
Transactions in Rydex and ProFund VP Sub-accounts: Any financial transactions
involving the Rydex or ProFund VP Sub-accounts must be received by us no later
than one hour prior to any announced closing of the applicable securities
exchange (generally, 3:00 p.m. Eastern time) to be processed on the current
Valuation Day. If you request a transaction involving the purchase or redemption
of Units in one of the Rydex or ProFund VP Sub-accounts after the "cut-off"
time, we will deem your request as received by us on the next Valuation Day. You
may be required to submit a new request on the following day.
ASL-SUPP. (10/18/99) VAASL10/18
