SUPPLEMENT TO PROSPECTUS DATED MAY 3, 1999
SUPPLEMENT DATED JANUARY 3, 2000
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.
A. ADDITIONAL VARIABLE INVESTMENT OPTION
THE UNDERLYING PORTFOLIO SHOWN BELOW IS BEING OFFERED AS A NEW SUB-ACCOUNT UNDER
YOUR ANNUITY AS OF JANUARY 3, 2000.
<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
- -------------------------------------------- ---------------- ------------- --------------- -------------- -------------- ----------
- -------------------------------------------- ---------------- ------------- --------------- -------------- -------------- ----------
<S> <C> <C> <C> <C> <C> <C>
AST ALGER ALL-CAP GROWTH(2) 0.95% 0.22% 0.06% 1.23% N/A 1.23%
- -------------------------------------------- ---------------- ------------- --------------- -------------- -------------- ----------
</TABLE>
1 American Skandia Trust (the "Trust") 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. The staff of the Securities and
Exchange Commission takes the position that commission amounts received
under the Distribution Plan should be reflected as distribution expenses of
the Portfolios. The Portfolios would pay the same or comparable commission
amounts irrespective of the Distribution Plan; accordingly, total returns
for the Portfolios are not expected to be adversely affected. The
Distribution Fee estimate is derived from data regarding other similar
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 This Portfolio commenced operations as of December 30, 1999. "Other
expenses" shown are based on estimated amounts for the fiscal year ending
December 31, 2000.
EXPENSE EXAMPLES
THE EXPENSE EXAMPLE SHOWN BELOW IS BEING ADDED WITH RESPECT TO THE NEW PORTFOLIO
THAT IS BEING OFFERED AS A SUB-ACCOUNT UNDER YOUR ANNUITY AS OF JANUARY 3, 2000.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
EXPENSE EXAMPLES
(amounts shown are rounded to the nearest dollar)
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---------------------------------------------- ---- ------------------------------------
If you surrender your Annuity at the end If you do not surrender your Annuity at the end
of the applicable time period, you would of the applicable time period or begin taking
pay the following expenses on a $1,000 annuity payments at such time, you would pay the
investment, assuming 5% annual return on following expenses on a $1,000 investment,
assets: assuming 5% annual return on assets:
-------------------------------------------- ----- ----------------------------------------
AFTER: AFTER:
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- -------------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SUB-ACCOUNT: 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ----------
AST Alger All-Cap Growth 103 140 179 304 28 85 144 304
- ---------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ----------
</TABLE>
<PAGE>
THE FOLLOWING UNDERLYING PORTFOLIO IS BEING ADDED TO THE SECTION ENTITLED "WHAT
ARE THE INVESTMENT OBJECTIVES AND POLICIES OF THE PORTFOLIOS?"
INVESTMENT OPTIONS
<TABLE>
<CAPTION>
WHAT ARE THE INVESTMENT OBJECTIVES AND POLICIES OF THE PORTFOLIOS?
- ------------------- ------------------------------------------------------------------------------------------------ ---------------
<S> <C> <C> <C>
PORTFOLIO
STYLE/ INVESTMENT OBJECTIVES/POLICIES ADVISOR/
TYPE SUB-ADVISOR
- ------------------- ------------------------------------------------------------------------------------------------ ---------------
- ------------------- ------------------------------------------------------------------------------------------------ ---------------
AST ALGER ALL-CAP GROWTH: SEEKS LONG-TERM CAPITAL GROWTH.
The Portfolio invests primarily in equity securities, such
as common or preferred stocks, that are listed on U.S. Fred Alger
GROWTH exchanges or in the over-the-counter market. The Portfolio Management, Inc.
may invest in the equity securities of companies of all
sizes, and may emphasize either larger or smaller companies
at a given time based on the Sub-advisor's assessment of
particular companies and market conditions.
- ------------------- ------------------------------------------------------------------------------------------------ ---------------
</TABLE>
APPENDIX C-1 - PSA PRIOR CONTRACT
THE EXPENSE EXAMPLE SHOWN BELOW IS BEING ADDED WITH RESPECT TO THE NEW PORTFOLIO
THAT IS BEING OFFERED AS A SUB-ACCOUNT UNDER YOUR ANNUITY AS OF JANUARY 3, 2000.
The Expense Examples for the PSA contract are as follows:
<TABLE>
<CAPTION>
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EXPENSE EXAMPLES
(amounts shown are rounded to the nearest dollar)
- ------------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------- ---- ------------------------------------
If you surrender your Annuity at the end If you do not surrender your Annuity at the end
of the applicable time period, you would of the applicable time period or begin taking
pay the following expenses on a $1,000 annuity payments at such time, you would pay the
investment, assuming 5% annual return on following expenses on a $1,000 investment,
assets: assuming 5% annual return on assets:
-------------------------------------------- ----- ----------------------------------------
AFTER: AFTER:
- ------------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SUB-ACCOUNT: 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ----------
AST Alger All-Cap Growth 98 135 174 304 28 85 144 304
- ---------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ----------
</TABLE>
APPENDIX C-2: ALLIANCE CAPITAL NAVIGATOR PRIOR CONTRACT
THE EXPENSE EXAMPLE SHOWN BELOW IS BEING ADDED WITH RESPECT TO THE NEW PORTFOLIO
THAT IS BEING OFFERED AS A SUB-ACCOUNT UNDER YOUR ANNUITY AS OF JANUARY 3, 2000.
The Expense Examples for the Alliance contract are as follows:
<TABLE>
<CAPTION>
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EXPENSE EXAMPLES
(amounts shown are rounded to the nearest dollar)
- ------------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------- ---- ------------------------------------
If you surrender your Annuity at the end If you do not surrender your Annuity at the end
of the applicable time period, you would of the applicable time period or begin taking
pay the following expenses on a $1,000 annuity payments at such time, you would pay the
investment, assuming 5% annual return on following expenses on a $1,000 investment,
assets: assuming 5% annual return on assets:
-------------------------------------------- ----- ----------------------------------------
AFTER: AFTER:
- ------------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SUB-ACCOUNT: 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ----------
AST Alger All-Cap Growth 103 140 179 304 28 85 144 304
- ---------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ----------
</TABLE>
APPENDIX D - SALE OF CONTRACTS OUTSIDE OF THE STATE OF NEW YORK
THE EXPENSE EXAMPLE SHOWN BELOW IS BEING ADDED WITH RESPECT TO THE NEW PORTFOLIO
THAT IS BEING OFFERED AS A SUB-ACCOUNT UNDER YOUR ANNUITY AS OF JANUARY 3, 2000
.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
EXPENSE EXAMPLES
(amounts shown are rounded to the nearest dollar)
- ------------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------- ---- ------------------------------------
If you surrender your Annuity at the end If you do not surrender your Annuity at the end
of the applicable time period, you would of the applicable time period or begin taking
pay the following expenses on a $1,000 annuity payments at such time, you would pay the
investment, assuming 5% annual return on following expenses on a $1,000 investment,
assets: assuming 5% annual return on assets:
-------------------------------------------- ----- ----------------------------------------
AFTER: AFTER:
- ------------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SUB-ACCOUNT: 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ----------
AST Alger All-Cap Growth 103 145 184 304 28 85 144 304
- ---------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ----------
</TABLE>
B. NOTICE OF SUBSTITUTION
PROPOSED SUBSTITUTION
American Skandia has filed an application with the Securities and Exchange
Commission ("SEC") to substitute the following "Replaced Portfolio/Sub-Account"
with the "Substitute Portfolio/Sub-Account".
<TABLE>
<CAPTION>
- ----------------------------------------------------------------- ------ -----------------------------------------------------------
REPLACED PORTFOLIO/SUB-ACCOUNT SUBSTITUTE PORTFOLIO/SUB-ACCOUNT
- ----------------------------------------------------------------- ------ -----------------------------------------------------------
- ----------------------------------------------------------------- ------ -----------------------------------------------------------
<S> <C>
Alger American Growth portfolio of The Alger American Fund/AA AST MFS Growth portfolio of American Skandia Trust/AST MFS
Growth Sub-account Growth Sub-account
- ----------------------------------------------------------------- ------ -----------------------------------------------------------
- ----------------------------------------------------------------- ------ -----------------------------------------------------------
Alger American MidCap Growth portfolio of The Alger American AST Alger All-Cap Growth portfolio of American Skandia
Fund/AA MidCap Growth Sub-account Trust/AST Alger All-Cap Growth Sub-account
- ----------------------------------------------------------------- ------ -----------------------------------------------------------
</TABLE>
In the application to the SEC, American Skandia is seeking permission to allow
transfers from the Replaced Portfolio/Sub-account to any other investment
options available under the Annuity for a period of 30 days following the
substitution without the imposition of any transfer fee. Under the proposed
substitution, such transfers would not count in determining whether the maximum
number of free transfers has been exceeded. Furthermore, under the proposed
substitution, the transfer of Account Value from the Replaced
Portfolio/Sub-account to the Substitute Portfolio/Sub-account would likewise not
be subject to a transfer fee nor count in determining whether the maximum number
of free transfers have been exceeded. The proposed substitution will not affect
your rights or our obligations under the Annuity. American Skandia will bear any
expenses in connection with the proposed substitution.
CONTRACT OWNERS WITH ACCOUNT VALUE ALLOCATED TO THE REPLACED
PORTFOLIO/SUB-ACCOUNT MAY REMAIN IN THE SUB-ACCOUNT UNTIL THE EARLIEST TO OCCUR
OF: (1) THE DATE THEY TRANSFER ACCOUNT VALUE OUT OF THE REPLACED
PORTFOLIO/SUB-ACCOUNT; OR (2) THE DATE THE PROPOSED SUBSTITUTION IS COMPLETED.
ON OR AFTER THE DATE OF THE SUBSTITUTION, THE REPLACED PORTFOLIO/SUB-ACCOUNT
WILL NO LONGER EXIST. CONTRACT OWNERS WILL NO LONGER BE ABLE TO ALLOCATE ACCOUNT
VALUE TO THE REPLACED PORTFOLIO/SUB-ACCOUNT AFTER THE SUBSTITUTION DATE.
ASAP-SUPP. (01/03/2000) VAASAP 01/03
