<PAGE>
Filed Pursuant to Rule 424(b)(4)
Registration File No.: 2-30070
EQUI-VEST(REGISTERED TRADEMARK)
SUPPLEMENT DATED NOVEMBER 20, 1995
TO THE
PROSPECTUS DATED MAY 1, 1995
VARIABLE ANNUITY CERTIFICATES
FUNDED THROUGH THE
INVESTMENT DIVISIONS OF SEPARATE ACCOUNT A
ISSUED BY:
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
- -----------------------------------------------------------------------------
This Supplement provides new and additional information which is not
contained in the prospectus dated May 1, 1995, which you previously received.
You should keep this Supplement with your prospectus and retain both for
future reference. Equitable will send you an additional copy of the
prospectus, without charge, upon written request to the Processing Office or
by calling 1-800-628-6673.
Terms used in this Supplement have the same meaning as in the prospectus,
unless otherwise noted.
- -----------------------------------------------------------------------------
For contracts issued in New York, the contingent withdrawal charge ("CWC")
applicable to contributions to the Fixed Maturity Account ("FMA") (including
amounts transferred to the FMA) and which are withdrawn from the FMA, will
never exceed that described in the prospectus for Series 400 contracts;
however, the CWC could be lower.
For the FMA, the CWC will be the greater of that determined by applying the
New York Declining Scale ("Declining Scale") and the New York Alternative
Scale ("Alternative Scale"), not to exceed the CWC for Series 400 Contracts.
For amounts transferred within the FMA from one Maturity Period to another,
the Alternative Scale is applied if it produces a higher charge than the
Declining Scale.
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<TABLE>
<CAPTION>
DECLINING SCALE ALTERNATIVE SCALE
<S> <C>
Year of Investment in FMA* Year of Transfer Within FMA*
Within Year 1 6% Within Year 1 5%
2 6% 2 4%
3 5% 3 3%
4 4% 4 2%
5 3% 5 1%
6 2% After Year 5 0%
After Year 6 0%
Not to exceed 1% times the number of
years remaining in Maturity Period,
rounded to the higher number of years.
In other words, if 4.3 years remain, it
would be a 5% charge.
________________________________________________________________________________
</TABLE>
*Measured from the Contract Anniversary Date.
For example, compare the CWC that would be applicable to a withdrawal from a
Series 400 Contract that has an Annuity Account Value of $10,000--$8,000 from
contributions made three years ago and $2,000 from positive investment
performance.
Copyright 1995
The Equitable Life Assurance Society of the United States
All Rights Reserved.
o For any contributions withdrawn in the first six years after they are
made, the normal Series 400 CWC would be $480 (6% of $8,000). However, if
the contributions were made to the FMA, the CWC would be lower. According
to the New York Declining Scale described above, in the third year, CWC
would be limited to 5% of the $8,000, or $400.
o Now assume that, although the contributions had been made to the FMA
three years ago, they were transferred to a new Maturity Period within
the FMA in the third year, and further assume that there is exactly one
year remaining in the Maturity Period to which the amounts were
transferred. Because there was a transfer within the FMA, the New York
Alternative Scale may now apply. Based on this Scale, a contribution that
was transferred within the FMA will be subject to a 5% CWC in the year of
the transfer, not to exceed 1% for each year remaining in the Maturity
Period. Since, in this example, the time remaining is exactly one year,
the Alternative Scale would limit CWC to 1%. However, New York
regulations allow that the GREATER of the Declining Scale or the
Alternative Scale is used. Therefore, the CWC would be 5%, or $400, based
on the Declining Scale.
o In no event would the CWC exceed that otherwise applicable under the
contract; application of the New York Scale can only result in a lower
CWC. Thus, if a contribution had been in the Contract for more than six
years and was thus exempt from CWC, no CWC would be applicable.
For withdrawals from an Investment Option other than the FMA, the amount
available for withdrawal without a CWC is reduced by the amount of
contributions in the FMA to which no CWC applies. Further, as of any date on
which 50% or more of your Annuity Account Value is held in the FMA, the Free
Corridor Amount is zero. In addition, if you have not made a prior election
for the reinvestment of your Maturity Amount when it reaches the Expiration
Date, such Amount will be reinvested in whichever Maturity Period then
offered has the nearest Expiration Date; if no Maturity Periods are being
offered, it will be reinvested in the Money Market Fund.
The potential for the CWC applicable to withdrawals from the FMA to be lower
than the otherwise applicable charge and the potential for the Free Corridor
Amount to also be lower than that which would otherwise apply should be
considered in making allocations to, or transfers to or from, the FMA.
<PAGE>
EQUI-VEST[SM]
PERSONAL RETIREMENT PROGRAMS
AND
EMPLOYER SPONSORED RETIREMENT PROGRAMS
PROSPECTUS, DATED MAY 1, 1995
---------------------------------
VARIABLE ANNUITY CONTRACTS FUNDED THROUGH THE
INVESTMENT FUNDS OF SEPARATE ACCOUNT A
Issued By:
The Equitable Life Assurance Society of the United States
This prospectus describes group and individual deferred variable annuity
contracts (CONTRACTS) offered by Equitable Life. These EQUI-VEST Contracts
are designed for retirement savings and long-range financial planning as part
of a retirement savings plan. Contributions accumulate on a Federal income
tax-deferred basis, and at a future date you can receive a stream of periodic
payments, including a fixed or variable annuity.
EQUI-VEST Personal Retirement Programs include individual retirement
annuities (IRAS) and those established through rollovers from tax-favored
retirement plans (QP IRAS) as well as non-qualified annuities (NQS).
EQUI-VEST Employer Sponsored Retirement Programs include SEPs, TSAs, EDCs,
TRUSTEED and Annuitant Owned HR-10 Plans, as described in this prospectus.
EQUI-VEST offers the investment options (INVESTMENT OPTIONS) listed below
except in certain states where all options are not yet available. These
Investment Options include the Guaranteed Interest Account, which is part of
Equitable Life's general account and pays interest at guaranteed fixed rates,
thirteen variable investment funds (INVESTMENT FUNDS) of Separate Account A
(SEPARATE ACCOUNT) and each Fixed Maturity Period (FIXED MATURITY PERIOD) in
the Fixed Maturity Account.
<TABLE>
<CAPTION>
INVESTMENT FUNDS OTHER INVESTMENT OPTIONS
- ------------------------------------------------------------------------ --------------------------------
<S> <C> <C> <C>
o Money Market o Growth & Income Asset Allocation Series: o Guaranteed Interest Account
o Intermediate o Equity Index o Conservative Investors o Fixed Maturity Periods with
Government o Common Stock o Balanced Expiration Dates 1996
Securities o Global o Growth Investors through 2005
o Quality Bond o International
o High Yield o Aggressive Stock
</TABLE>
We invest each Investment Fund in shares of a corresponding portfolio
(PORTFOLIO) of The Hudson River Trust (TRUST), a mutual fund whose shares are
purchased by the separate accounts of insurance companies. The prospectus for
the Trust, directly following this prospectus, describes the investment
objectives, policies and risks of the Portfolios. Subject to state regulatory
requirements, the International Fund will be available on or about September
1, 1995.
Amounts allocated to a Fixed Maturity Period accumulate on a fixed basis and
are credited with interest at a rate we set (RATE TO MATURITY) for the entire
period. On each business day (BUSINESS DAY) we will determine the Rate to
Maturity available for amounts newly allocated to Fixed Maturity Periods. A
market value adjustment (positive or negative) will be made for withdrawals,
transfers, terminations and certain other transactions from a Fixed Maturity
Period before its expiration date (EXPIRATION DATE). Each Fixed Maturity
Period has its own Rates to Maturity. Subject to state regulatory approval,
Fixed Maturity Periods will be available on or about June 30, 1995 under
certain IRA, QP IRA and NQ Contracts.
This prospectus provides information about EQUI-VEST that prospective
investors should know before investing. You should read it carefully and
retain it for future reference. The prospectus is not valid unless it is
attached to a current prospectus for the Trust, which you should also read
carefully.
<PAGE>
Registration statements relating to the Separate Account and to interests
under the Fixed Maturity Periods have been filed with the Securities and
Exchange Commission (SEC). The statement of additional information (SAI),
dated May 1, 1995, which is part of the registration statement for the
Separate Account, is available free of charge upon request by writing to the
Processing Office or calling 1-800-628-6673, our toll-free number. The SAI
has been incorporated by reference into this prospectus. The Table of
Contents for the SAI appears at the back of this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
May 1, 1995 888-1092
- -------------------------------------------------------------------------------
Copyright 1995
The Equitable Life Assurance Society of the United States, New York, New
York, 10019.
All rights reserved.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Equitable Life's Annual Report on Form 10-K for the year ended December
31, 1994 is incorporated herein by reference.
All documents or reports filed by Equitable Life pursuant to Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 (EXCHANGE
ACT) after the date hereof and prior to the termination of the offering of
the securities offered hereby shall be deemed to be incorporated by reference
in this prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this prospectus to the extent that a statement contained
herein or in any other subsequently filed document which also is or is deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as
so modified and superseded, to constitute a part of this prospectus.
Equitable Life will provide without charge to each person to whom this
prospectus is delivered, upon the written or oral request of such person, a
copy of any or all of the foregoing documents incorporated herein by
reference (other than exhibits not specifically incorporated by reference
into the text of such documents). Requests for such documents should be
directed to The Equitable Life Assurance Society of the United States, 787
Seventh Avenue, New York, New York 10019. Attention: Corporate Secretary
(telephone: (212) 554-1234).
2
<PAGE>
PROSPECTUS TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
GENERAL TERMS PAGE 4
PART 1:SUMMARY PAGE 7
Equitable Life 7
Deferred Variable Annuities 7
Types of Retirement Programs 7
Investment Options 8
Selecting Investment Options 8
Contributions 9
Transfers 9
10-Day Free Look 9
Services We Provide 9
Distribution Options and Death Benefits 10
Withdrawals 11
Taxes 11
Deductions and Charges 11
Fee Tables and Examples 13
PART 2: SEPARATE ACCOUNT A AND
ITS INVESTMENT FUNDS
PAGE 19
Separate Account A 19
The Trust 19
The Trust's Investment Adviser 20
Investment Policies and Objectives of the
Trust's Portfolios 20
PART 3: INVESTMENT PERFORMANCE PAGE 22
Creating an Investment Strategy 22
Long-Term Market Trends 22
Investment Fund Performance 24
PART 4: THE GUARANTEED INTEREST ACCOUNT PAGE 30
PART 5: THE FIXED MATURITY ACCOUNT PAGE 31
PART 6: PROVISIONS OF THE CONTRACTS PAGE 34
Selecting Investment Options 34
Contributions Under the Contracts 34
Annuity Account Value 35
Transfers 36
Automatic Transfer Options (Investment
Simplifier) 37
Loans (for TSA and Corporate TRUSTEED
only) 38
Assignment and Funding Changes 39
Partial Withdrawals and Termination 39
Third Party Transfers or Exchanges 40
Requirements for Distributions 40
Distribution Options 40
Guaranteed Death Benefit 42
Your Beneficiary 43
Proceeds 43
Qualified Plans Designed to Comply With
Section 404(c) of ERISA 43
Distribution of These and Other Contracts 44
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
PART 7: DEDUCTIONS AND CHARGES PAGE 45
All Contracts 45
Trust Charges to Portfolios 45
State Premium and Other Applicable
Taxes 45
IRA, QP IRA, SEP and NQ Contracts
(Series 300 and 400 only) 45
Charges to Investment Funds 45
Annual Administrative Charge 46
Contingent Withdrawal Charge 46
Allocation of Certain Charges to the
Fixed Maturity Account 47
Charge on Third Party Transfer or
Exchange 47
All EDC, TSA and TRUSTEED Contracts plus
IRA, QP IRA, SEP and NQ (Series 100 and
200 only) 48
Limitation on Charges 48
Charges to Investment Funds 48
Annual Administrative Charge 48
Contingent Withdrawal Charge 49
PART 8:VOTING RIGHTS PAGE 52
PART 9:TAX ASPECTS OF THE CONTRACTS PAGE 53
PART 10:INDEPENDENT ACCOUNTANTS PAGE 68
APPENDIX I: AN EXAMPLE OF MARKET VALUE
ADJUSTMENT PAGE 69
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS PAGE 70
HOW TO OBTAIN THE EQUI-VEST
STATEMENT OF ADDITIONAL INFORMATION PAGE 70
</TABLE>
3
<PAGE>
GENERAL TERMS
EQUI-VEST is designed as a funding vehicle for either personal or employer
sponsored retirement programs. EQUI-VEST may be offered either as an
individual Contract or as a group Contract with individual Certificates. The
difference is primarily one of state requirements; the basic provisions are
the same regardless of group or individual Contract form. Your Contract or
Certificate will indicate what form you have. Certain provisions of your
Contract may differ depending on the type of program purchased and the state
or date of issue. (See Part 1: "Summary" for a description of the types of
programs offered.) In this prospectus, we use a "series" number when
necessary to differentiate among Contracts. Currently, there are four series
of EQUI- VEST Contracts. You can identify the EQUI-VEST series you have by
referring to your confirmation notice, or you may contact your agent or call
our toll free number. In general, the series designations are:
<TABLE>
<CAPTION>
<S> <C>
TSA, SEP, EDC, Annuitant Owned HR-10 and Series 100
TRUSTEED Contracts issued before July 1, 1995
(date approximate)
IRA, QP IRA and NQ Contracts issued before
January 3, 1994
- ----------------------------------------- --------------
TSA, EDC, Annuitant Owned HR-10 and TRUSTEED Series 200
Contracts issued on or after July 1, 1995 (date
approximate); and SEP Contracts issued on or
after July 1, 1995 (date approximate) and before
November 1, 1995
- ----------------------------------------- --------------
IRA, QP IRA and NQ Contracts issued on or after Series 300
January 3, 1994 and before the date Series
400 Contracts became available in a state;
and SEP Contracts issued on or after November
1, 1995
- ----------------------------------------- --------------
IRA, QP IRA and NQ Contracts issued in states Series 400
where approved beginning on or about June 30,
1995
- ----------------------------------------- --------------
</TABLE>
In this prospectus, the terms "we," "our" and "us" mean The Equitable Life
Assurance Society of the United States (EQUITABLE LIFE). The terms "you" and
"your" refer to the Contract Owner. Some of the terms described below may be
called different names as between the Contracts and the Certificates. We have
indicated those differences in the following descriptions.
ACCUMULATION UNIT--Contributions that are invested in an Investment Fund
purchase Accumulation Units in that Investment Fund. The "Accumulation Unit
Value" is the dollar value of each Accumulation Unit in an Investment Fund on
a given date.
ANNUITANT/PARTICIPANT--We use the term Annuitant in our Contracts and in our
Certificates we use the term Participant. In either case, these terms mean
the individual who is the measuring life for determining annuity benefits and
generally the person who is entitled to receive those benefits. The person
may, in certain cases, not be the Contract or Certificate Owner. The
Annuitant or Participant will have the right to exercise rights under a
Contract or Certificate only if that person is also the Contract or
Certificate Owner. Throughout this prospectus, we will use the term
"Annuitant" to refer to both Annuitants and Participants.
ANNUITY ACCOUNT VALUE--The sum of the amounts in the Investment Options under
your Contract, plus the amount of any loan reserve account (including accrued
interest). The sum of the amounts in the Investment Options on any Business
Day equals (1) the value of your Investment Funds on that date, (2) the value
in the Guaranteed Interest Account on that date plus (3) the sum of your
Market Adjusted Amounts in the Fixed Maturity Periods on that date. See
"Annuity Account Value" in Part 6.
BUSINESS DAY--Generally, our Business Day is any day on which Equitable Life
is open and the New York Stock Exchange is open for trading. We are closed on
national business holidays and also on Martin Luther King, Jr. Day and the
Friday after Thanksgiving. Additionally, we may choose to close on the day
immediately preceding or following a national business holiday or due to
emergency conditions. For the purpose of determining the Transaction Date,
our Business Day ends at 4:00 p.m. Eastern Time or the closing of the New
York Stock Exchange, if earlier.
CASH VALUE--The Annuity Account Value minus any applicable withdrawal charges
and minus any outstanding loan (including accrued interest).
4
<PAGE>
CODE--The Internal Revenue Code of 1986, as amended.
CONTRACT/CERTIFICATE--When EQUI-VEST is offered under a group Contract, the
document provided to participating individuals is called a Certificate rather
than a Contract. When EQUI-VEST is offered on an individual basis, the
document provided is a Contract. Throughout this prospectus, we will use the
term "Contract" to refer to both Contracts and Certificates.
CONTRACT DATE/PARTICIPATION DATE--We use the term Contract Date in our
Contracts and in our Certificates we use the term Participation Date. In
either case, this is the Business Day we receive at our Processing Office,
the properly completed and signed application form for your Contract, any
other required documentation and a contribution (unless payment is being made
through your employer). Throughout this prospectus, we will use the term
"Contract Date" to refer to both the Contract Date and Participation Date.
CONTRACT OWNER/CERTIFICATE OWNER--The Annuitant, employer, trustee or other
party, whichever owns the Contract or Certificate. References to "Contracts"
and "Contract Owners" in this prospectus include the Certificates and their
Certificate Owners. Throughout this prospectus, we will use the term
"Contract Owner" to refer to both the Contract Owner and Certificate Owner.
CONTRACT YEAR/PARTICIPATION YEAR--We use the term Contract Year in our
Contracts and in our Certificates we use the term Participation Year. In
either case, this is the 12-month period beginning on either your Contract
Date or each anniversary of that date. Throughout this prospectus, we will
use the term "Contract Year" to refer to both Contract Year and Participation
Year.
CURRENT TOTAL ACCOUNT BALANCE--The sum of the amounts in your Investment
Funds and your Guaranteed Interest Account, plus the total Book Value of all
of your Fixed Maturity Periods.
EXPIRATION DATE--The date on which a Fixed Maturity Period ends.
FIXED MATURITY ACCOUNT--The Account that contains the Fixed Maturity Periods.
The Fixed Maturity Account is referred to as the "Guaranteed Period Account"
in the Contracts.
FIXED MATURITY PERIOD (PERIODS)--Any of the periods of time ending on an
Expiration Date that are available for investment under the Series 400
Contracts. Fixed Maturity Periods are referred to as "Guarantee Periods" in
the Contracts.
GUARANTEED INTEREST ACCOUNT--The Investment Option that pays interest at
guaranteed fixed rates and is part of our general account. The Guaranteed
Interest Account is referred to as "Guaranteed Interest Division" in the
Certificates.
INVESTMENT FUNDS--We use the term Investment Funds in our Contracts and in
our Certificates we use the term Investment Divisions. In either case, these
are the thirteen variable investment funds of the Separate Account that are
listed on the first page of this prospectus. Throughout this prospectus, we
will use the term "Investment Funds" to refer to both Investment Funds and
Investment Divisions.
INVESTMENT OPTIONS--The choices for investment of contributions: the thirteen
Investment Funds, the Guaranteed Interest Account and each available Fixed
Maturity Period.
MATURITY AMOUNT--The amount in a Fixed Maturity Period on its Expiration
Date. The Maturity Amount is referred to as the "Maturity Value" in the
Contracts.
MAXIMUM FUND CHOICE--One of two methods for selecting Investment
Options--Allows the Contract Owner to allocate contributions to any
Investment Fund, the Guaranteed Interest Account and (for Owners of Series
400 Contracts only) the Fixed Maturity Account. This election will result in
restrictions in the amount you can transfer out of the Guaranteed Interest
Account.
MAXIMUM TRANSFER FLEXIBILITY--One of two methods for selecting Investment
Options--Allows the Contract Owner to allocate contributions to the Balanced,
Growth & Income, Equity Index, Common Stock, Global, International,
Aggressive Stock and Growth Investors Funds only and to the Guaranteed
Interest Account, with no transfer restrictions in the amount you can
transfer out of the Guaranteed Interest Account.
<PAGE>
ORIGINAL CONTRACTS--EQUI-VEST Contracts issued in states where the
Intermediate Government Securities, Quality Bond, High Yield, Growth &
Income, Equity Index, Global, Conservative Investors and Growth Investors
Funds have not been approved. Also, Contracts under which the Contract Owner
has not elected to add any of the above-listed Investment Funds as Investment
Options. These Contracts:
o permit investment in only the Guaranteed Interest Account and the Money
Market, Balanced, Common Stock and Aggressive Stock Funds and
o prohibit transfers into the Money Market Fund.
PORTFOLIOS--The portfolios of the Trust that correspond to the Investment
Funds of the Separate Account.
5
<PAGE>
PROCESSING OFFICE--The office to which all contributions, written requests or
other written communications must be sent. See "Services We Provide" in Part
1.
RATE TO MATURITY--The interest rate established for each Business Day for
each Fixed Maturity Period. Rates to Maturity are referred to as "Guaranteed
Rates" in the Contracts.
SAI--The EQUI-VEST Statement of Additional Information.
SEPARATE ACCOUNT--Our Separate Account A.
SUCCESSOR ANNUITANT AND OWNER--The individual who upon the death of the
Annuitant and Owner succeeds as the Annuitant and Owner of the Contract. You
can designate a Successor Annuitant and Owner under Series 300 and 400
Contracts if the following conditions are met: (1) you are both Annuitant and
Owner and (2) you name your spouse as the sole beneficiary.
SUCCESSOR OWNER--The individual who upon your death will succeed you as Owner
of your Contract. A Successor Owner can be designated under Series 300 and
400 Contracts.
TRANSACTION DATE--The Business Day we receive a contribution or a transaction
request providing the information we need at our Processing Office. If your
contribution or request is not accompanied by complete information or is
mailed to the wrong address, the Transaction Date will be the date we receive
such complete information at our Processing Office. If your contribution or
request reaches our Processing Office on a non-Business Day, or after the
close of the Business Day, the Transaction Date will be the next following
Business Day.
TRUST--The Hudson River Trust, a mutual fund in which the assets of Separate
Account A are invested.
6
<PAGE>
PART 1: SUMMARY
The following Summary is qualified in its entirety by the terms of the
Contracts when issued and the more detailed information appearing elsewhere
in the prospectus (see "Prospectus Table of Contents" on page 3). Please be
sure to read the prospectus in its entirety.
EQUITABLE LIFE
EQUITABLE LIFE is a New York stock life insurance company that has been in
business since 1859. For more than 100 years we have been among the largest
life insurance companies in the United States. Equitable Life has been
selling annuities since the turn of the century. Our Home Office is located
at 787 Seventh Avenue, New York, New York 10019. We are authorized to sell
life insurance and annuities in all fifty states, the District of Columbia,
Puerto Rico and the Virgin Islands. We maintain local offices throughout the
United States.
Equitable Life is a wholly-owned subsidiary of The Equitable Companies
Incorporated (the "Holding Company"). The largest stockholder of the Holding
Company is AXA, a French insurance holding company. AXA beneficially owns
60.5% of the outstanding shares of common stock of the Holding Company as
well as $392.2 million stated value of its issued and outstanding Series E
Convertible Preferred Stock. Under its investment arrangements with Equitable
Life and the Holding Company, AXA is able to exercise significant influence
over the operations and capital structure of the Holding Company and its
subsidiaries, including Equitable Life. AXA is the principal holding company
for most of the companies in one of the largest insurance groups in Europe.
The majority of AXA's stock is controlled by a group of five French mutual
insurance companies.
Equitable Life, the Holding Company and their subsidiaries managed
approximately $174.5 billion of assets as of December 31, 1994, including
pension assets of approximately $128 billion. We are one of the nation's
leading pension fund managers. These assets are primarily managed for
retirement and annuity programs for businesses, tax-exempt organizations and
individuals. This broad customer base includes nearly half the Fortune 100,
more than 39,000 small businesses, state and local retirement funds in more
than half the 50 states, approximately 225,000 employees of educational and
non-profit institutions, as well as nearly 370,000 individuals. Millions of
Americans are covered by Equitable Life's annuity, life, health and pension
contracts.
DEFERRED VARIABLE ANNUITIES
DEFERRED VARIABLE ANNUITIES are designed for retirement savings and
long-range financial planning. Contributions accumulate on a Federal income
tax deferred basis and at a future date you can receive a stream of periodic
payments. Tax deferral is one of the advantages of an annuity over many other
kinds of investments. In addition, annuities offer individuals the
opportunity to receive an assured stream of payments for life.
Under Federal tax law, an individual, employer or trustee may, subject to
various limits, purchase an annuity to fund a tax-favored retirement program,
such as an IRA or qualified retirement plan. In many cases, the individual or
employer makes contributions to the tax-favored retirement program with
pre-tax dollars. Alternatively, annuities may be purchased with after-tax
dollars by individuals who wish to create additional retirement savings.
EQUI-VEST offers a variety of payout options at retirement, including a lump
sum. Your Contract combines fixed investment options (the Guaranteed Interest
Account and the Fixed Maturity Periods) with variable investment options (the
Investment Funds).
TYPES OF RETIREMENT PROGRAMS
EQUI-VEST is designed to meet the retirement savings needs of individuals and
businesses:
PERSONAL RETIREMENT PROGRAMS:
o IRA
An individual retirement annuity (IRA) for both deductible and
non-deductible IRA contributions made by an individual. The Contract
Owner must also be the Annuitant.
o QP IRA
An IRA for rollover distributions only (QP IRA) (generally from qualified
plans or tax-sheltered annuities). The Contract Owner must also be the
Annuitant. Unless otherwise noted, all references to IRA include QP IRA.
o NQ
An annuity generally for after-tax or non-qualified
7
<PAGE>
(NQ) dollars contributed by or on behalf of an individual. The Annuitant
and Contract Owner need not be the same.
EMPLOYER SPONSORED RETIREMENT PROGRAMS:
o SEP
An IRA Contract used to fund a simplified employee pension plan (SEP)
sponsored by sole proprietorships, partnerships or corporations.
Contributions are made directly by the employer, at the employer's
expense or under a salary reduction program (SARSEP) which permits an
employer to reduce an employee's salary for the purpose of making
contributions. Each individual employee covered by the SEP is the
Contract Owner of the IRA set up on his or her behalf and must also be
the Annuitant. Unless otherwise noted, all references to SEP Contracts
include SARSEP arrangements.
o UNINCORPORATED TRUSTEED
Trustee-owned Contracts used to fund qualified defined contribution plans
(QUALIFIED PLANS) of employers who are sole proprietorships, partnerships
or business trusts. These plans are known as "HR-10" or "Keogh" plans.
Contributions are made by the employer either directly or through a
salary reduction agreement entered into with the employee, who is the
Annuitant. We do not act as trustee for these plans, so the employer must
select a trustee.
o PAYROLL DEDUCTION IRA AND NQ
Contributions are made by the employer on behalf of the employee through
a payroll deduction program.
o TSA
A Code section 403(b) tax-sheltered annuity (TSA) for public schools and
nonprofit entities organized under Code section 501(c)(3). Contributions
are made by the employer either directly or through a salary reduction
agreement entered into with the employee. Each employee is the Contract
Owner and must also be the Annuitant.
O UNIVERSITY TSA
A TSA originally designed to meet the needs of restricted plans of some
universities, this TSA may be used for any TSA plan that prohibits loans
and has additional restrictions not found in the basic TSA. Contributions
are made by the employer either directly or through a salary reduction
agreement entered into with the employee. Each employee is the Contract
Owner and must also be the Annuitant. Unless otherwise noted, references
to TSA Contracts include University TSAs.
o EDC
Contracts used to fund Code section 457 employee deferred compensation
(EDC) plans of state and municipal governments and other tax-exempt
organizations. Contributions are made by the employer on behalf of the
employee and may be made pursuant to a salary reduction agreement. The
employer is the Contract Owner but the employee is the Annuitant. The EDC
program currently is not available for state or municipal government
plans in Texas.
In the past, EQUI-VEST was available to fund (i) Corporate TRUSTEED plans
where the employer was a corporation, and (ii) HR-10 (Keogh) plans where the
Contracts were owned by the Annuitants themselves (Annuitant-Owned HR-10),
rather than by a trustee. Although we still issue such Corporate TRUSTEED and
Annuitant-Owned HR-10 Contracts to employees whose employer's plans enrolled
on this basis, plans of this type are no longer available under EQUI-VEST to
new employer groups.
Later in this prospectus we refer to program features which are specific to
particular types of retirement programs. Under some employer sponsored plans,
the availability of certain features may be limited. Employers can provide
more detail about such plans.
Only NQ and TRUSTEED Contracts may be sold in Puerto Rico.
<PAGE>
INVESTMENT OPTIONS
EQUI-VEST Contracts offer the following Investment Options: The Guaranteed
Interest Account, Fixed Maturity Periods maturing in each of calendar years
1996 through 2005 and thirteen Investment Funds (Money Market, Intermediate
Government Securities, Quality Bond, High Yield, Growth & Income, Equity
Index, Common Stock, Global, International, Aggressive Stock and the Asset
Allocation Series: Conservative Investors, Balanced and Growth Investors).
Each Investment Fund invests in shares of a corresponding Portfolio of the
Trust. The attached Trust prospectus describes the investment objectives and
policies of the Portfolios available to Contract Owners. Subject to state
regulatory approval, certain Investment Funds may not be available in all
states and the International Fund will be available on or about September 1,
1995. Subject to state regulatory approval, Fixed Maturity Periods will be
available on or about June 30, 1995 under Series 400 Contracts.
SELECTING INVESTMENT OPTIONS
On your application, you can choose one of the following two methods for
selecting Investment Options:
8
<PAGE>
o Maximum Fund Choice, allowing you to allocate contributions to any
Investment Fund, the Guaranteed Interest Account and the Fixed Maturity
Periods; however, this election will result in restrictions in the amount
you can transfer out of the Guaranteed Interest Account; or
o Maximum Transfer Flexibility, allowing you to allocate contributions only
to the Balanced, Growth & Income, Equity Index, Common Stock, Global,
International, Aggressive Stock and Growth Investors Funds and the
Guaranteed Interest Account; and no transfer restrictions apply.
Subject to state regulatory approval, Fixed Maturity Periods maturing in each
of calendar years 1996 through 2005 will be available as Investment Options
to owners of Series 400 Contracts on or about June 30, 1995. Contributions
(or transfers) may be made to one or more Fixed Maturity Periods; however,
you may not make more than one contribution (or transfer) to any one Fixed
Maturity Period. If you want to invest in Fixed Maturity Periods, you must
select Maximum Fund Choice.
For Original Contracts, only the Guaranteed Interest Account and the Money
Market, Balanced, Common Stock and Aggressive Stock Funds are available
unless your Contract has been amended to add more Funds. Contract Owners may
request to add additional Funds but we reserve the right to decline such
requests.
CONTRIBUTIONS
Generally, contributions may be made at any time: in single sum amounts, on a
regular basis or as your financial situation permits. For some types of
retirement plans, contributions must be made by the employer. Different
minimum contribution limits apply to different EQUI-VEST Contracts.
Contributions are credited as of the Transaction Date. All contributions made
by check must be drawn on a bank in the U.S., in U.S. dollars and made
payable to Equitable Life. All checks are accepted subject to collection. You
may instruct us to allocate your contributions to one or several Investment
Options. Allocation percentages must be in whole numbers and the sum must
equal 100%. Contributions made to an Investment Fund purchase Accumulation
Units in that Investment Fund.
TRANSFERS
You may direct us to transfer funds among the Investment Options at any time
without tax liability or charge. If you have selected Maximum Fund Choice,
however, restrictions will apply to transfers out of the Guaranteed Interest
Account. If you have an Original Contract, restrictions will apply to
transfers into the Money Market Fund from any of the other Investment
Options. Minimum transfer amounts apply.
10-DAY FREE LOOK
You have the right to examine your Contract for a period of 10 days after you
receive it, and to return it to us for a refund. You cancel it by sending it
to our Processing Office. The free look is extended if your state requires a
refund period of longer than 10 days. This right applies only to the initial
owner of a Contract.
For contributions allocated to Investment Funds, your refund will equal those
contributions plus or minus any investment gain or loss through the date we
receive your Contract at our Processing Office. Certain daily charges will
also be automatically deducted. For contributions allocated to the Guaranteed
Interest Account, the refund will equal the amount allocated to the
Guaranteed Interest Account without interest. For contributions allocated to
the Fixed Maturity Account, the refund will equal the amount of your
contributions plus any crediting of interest, and plus or minus any market
value adjustment. Some states or Federal income tax regulations may require
that we calculate the refund differently. We follow these same procedures if
you change your mind before a Contract has been issued, but after a
contribution has been made.
In certain cases, there may be tax implications to cancelling your Contract
during the 10-day free look period.
SERVICES WE PROVIDE
Your Equitable Life Agent can help you with any questions you have about your
Contract. In addition, your Contract includes a number of services designed
to keep you informed about your Contract.
<PAGE>
REGULAR REPORTS
We currently provide written confirmation of every financial transaction.
We provide three additional reports each year:
o Annual statement of account
o Semi-annual statement of account
o Statement as of the last day of the Contract Year
We reserve the right to change the frequency of these reports.
9
<PAGE>
TELEPHONE OPERATED
POLICY SUPPORT (TOPS) SYSTEM
TOPS is designed to provide you with up-to-date information on your Contract
via touch-tone telephone. Use TOPS:
o for current Annuity Account Value;
o for current allocation percentages;
o for the number of units held in the Investment Funds under your Contract;
or
o to change your allocation percentages and transfer money among the
Investment Funds and the Guaranteed Interest Account (once a completed
form necessary to obtain a special code number has been received at our
Processing Office).
We have established procedures that are considered to be reasonable and are
designed to confirm that instructions communicated by telephone are genuine.
Such procedures include requiring certain personal identification information
prior to acting on telephone instructions and providing written confirmation
of instructions communicated by telephone. If we do not employ reasonable
procedures to confirm that instructions communicated by telephone are
genuine, we may be liable for any losses arising out of any action on our
part or any failure or omission to act as a result of our own negligence,
lack of good faith, or willful misconduct. In light of the procedures
established, we will not be liable for following telephone instructions that
we reasonably believe to be genuine. We reserve the right to terminate or
modify any telephone or automated transfer/ withdrawal service we provide
upon 90 days written notice.
A toll-free number is available, and local TOPS telephone numbers will
periodically be provided. TOPS is available between the hours of 8:00 a.m.
and 9:00 p.m. Eastern Time, every Business Day. Transfers made after 4:00
p.m. Eastern Time are not processed until the following Business Day.
In certain plans, the use of TOPS may be limited by the plan provisions.
TOLL-FREE TELEPHONE SERVICES
We maintain toll-free numbers for your convenience, as follows:
1-800-841-0801 Daily Unit Value
1-800-628-6673 Customer Service Representatives
(available 9 am-5 pm,
Eastern Time, on each
Business Day)
1-800-755-7777 TOPS
WRITTEN COMMUNICATION
All items received at the proper address prior to 4:00 p.m. Eastern Time on a
Business Day will be effective on the same Business Day. Written requests
will be processed as of the date a properly completed request is received at
our Processing Office.
WHERE TO REACH US
<TABLE>
<CAPTION>
CONTRIBUTIONS:
FOR ALL WRITTEN REQUESTS FOR EDC, TSA, TRUSTEED,
AND COMMUNICATIONS CONTRIBUTIONS: ANNUITANT OWNED HR-10, LOAN REPAYMENTS:
(OTHER THAN FOR IRA & NQ OWNERS SEP AND IRA AND NQ WHEN FOR TSA AND CORPORATE
CONTRIBUTIONS AND WHO CONTRIBUTE CONTRIBUTIONS ARE REMITTED TRUSTEED
LOAN REPAYMENTS) INDIVIDUALLY BY THE EMPLOYER LOAN REPAYMENTS
- ----------- ---------------------------- ------------------------- --------------------------------- ----------------------
<S> <C> <C> <C> <C>
Regular Individual Annuity Equitable Life Equitable Life Equitable Life Loan
Mail Center EQUI-VEST Individual EQUI-VEST Unit Annuity Repayment IAC Lockbox
Equitable Life Annuity Collections Collections Post Office Box 13496
Post Office Box 2996 Post Office Box 13459 Post Office Box 13463 Newark, NJ 07188-0496
New York, Newark, NJ 07188-0459 Newark, NJ 07188-0463
NY 10116-2996
Express Individual Annuity Equitable Life Equitable Life N/A
Mail Center c/o First Chicago c/o First Chicago National
Equitable Life National Processing Processing Center
Two Penn Plaza, 5-F Center 300 Harmon Meadow
New York, NY 10121 300 Harmon Meadow Boulevard, 3rd Floor
Boulevard, Attn: Box 13463
3rd Floor Secaucus, NJ 07094
Attn: Box 13459
Secaucus, NJ 07094
- ----------- ---------------------------- ------------------------- --------------------------------- --------------------------
</TABLE>
<PAGE>
DISTRIBUTION OPTIONS AND
DEATH BENEFITS
EQUI-VEST Contracts provide for several different types of distribution
options, including:
o fixed and variable annuities;
o lump sum payments;
o partial withdrawals;
o our Systematic Withdrawal option (not available for amounts allocated to
the Fixed Maturity Account); and
o our Automatic Withdrawal option.
10
<PAGE>
If the Annuitant dies before an annuity payout begins, EQUI-VEST provides a
death benefit. The beneficiary will be paid the greater of the Annuity
Account Value minus any outstanding loan balance (including accrued interest)
or the minimum death benefit. The minimum death benefit will not be less than
the total contributions adjusted for total with- drawals and any applicable
taxes, and less any outstanding loan balance (including accrued interest).
WITHDRAWALS
Withdrawals may be subject to income tax. Also as a deterrent to premature
withdrawal (generally prior to age 59 1/2 ), the Code provides certain
penalties and restrictions for early withdrawals.
Subject to these rules, you may withdraw funds from your Contract any time,
in any amount not less than $300 (or your Annuity Account Value, if less) by
completing and submitting a Request for Disbursement form. This form is
available from your Agent or from our Processing Office. Withdrawals may be
subject to a contingent withdrawal charge and withdrawals from Fixed Maturity
Periods prior to their Expiration Dates will result in a market value
adjustment.
TAXES
Generally, any increase in the value of contributions made to the Contract
will not be included in taxable income until distributions are made from the
Contract (or, for EDC plans, when the funds are made available to
individuals).
DEDUCTIONS AND CHARGES
Keep in mind that your Contract is designed for retirement savings and
long-range financial planning; certain charges will not apply unless you make
early withdrawals from your Contract.
Following is a summary of the different types of deductions and charges which
may be applicable to your Contract.
O CHARGE TO INVESTMENT FUNDS--We make a daily charge for certain expenses
of the Contract. It covers death benefits, mortality risks, expenses and
expense risks. The daily Accumulation Unit Value is quoted net of these
charges. These charges will vary by Contract, and are at a maximum of
1.35% (effective annual rate) for the Intermediate Government Securities,
Quality Bond, High Yield, Growth & Income, Equity Index, Global,
International, Aggressive Stock, Conservative Investors and Growth
Investors Funds and 1.49% (effective annual rate) for the Money Market,
Common Stock and Balanced Funds. Further, Series 100 and 200 Contracts
impose an overall limit of 1.75% on total Separate Account and Trust
expenses for the Money Market, Common Stock, Aggressive Stock and
Balanced Funds.
O TRUST CHARGES TO PORTFOLIOS--Investment advisory fees and other expenses
of the Trust are charged daily against the Trust's assets. These charges
are reflected in the Portfolio's daily share price and in the daily
Accumulation Unit Value for the Investment Funds.
O ANNUAL ADMINISTRATIVE CHARGE--Deducted each Contract Year from your
Annuity Account Value in the Investment Funds, the Guaranteed Interest
Account and in certain cases from the Fixed Maturity Periods. The annual
administrative charge is currently at a maximum of $30 annually but may
be less under different Contracts.
O STATE PREMIUM AND OTHER APPLICABLE TAXES-- Generally, charges for state
premium taxes and other applicable state and local taxes, if any, are
deducted when an annuity payment option is elected. The current premium
tax charge that might be imposed in your state ranges from 0% to 3.5%;
however, the rate is 1% in Puerto Rico and 5% in the Virgin Islands.
11
<PAGE>
O CONTINGENT WITHDRAWAL CHARGE--If you terminate your Contract or make a
partial withdrawal, your Annuity Account Value may be subject to a
contingent withdrawal charge that will be used to cover sales and
promotional expenses that relate to the Contracts. This charge will not
exceed 6% of the amount withdrawn. The amount withdrawn includes the
amount you request and the withdrawal charge. Important exceptions and
limitations eliminate or reduce the contingent withdrawal charge.
O CHARGE ON THIRD PARTY TRANSFER OR EXCHANGE--You may instruct us to make a
direct transfer to a third party of amounts under your Contract, or
request that your Contract be exchanged for another contract or
certificate issued by another carrier. Certain Contracts permit us to
deduct from the Annuity Account Value a charge of $25 per occurrence for
such transfers or exchanges.
12
<PAGE>
FEE TABLES AND EXAMPLES
The Contracts differ in terms of the fees that may be charged. One of the
following three Tables will apply to your Contract. These Tables, and the
related Examples, will assist you in understanding the various costs and
expenses under your Contract so that you may compare them with other
products. The Tables reflect expenses of both the Separate Account and the
Trust for the year ended December 31, 1994.
As explained in Parts 4 and 5, the Guaranteed Interest Account and the Fixed
Maturity Account are not a part of the Separate Account and are not covered
by the Tables and Examples. The only expenses shown in the Tables which apply
to the Guaranteed Interest Account and the Fixed Maturity Account are the
Contingent Withdrawal Charge, the Annual Administrative Charge and the Third
Party Transfer or Exchange Fee, if applicable. Also see "Income Annuity
Distribution Options" in Part 6 for a description of charges under income
annuities.
Certain expenses and fees shown in these Tables may not apply to your
Contract. To determine whether a particular item in a Table applies (and the
actual amount, if any) consult the section of the prospectus for your
Contract series indicated in the notes to the Table. A charge for applicable
state or local taxes may be deducted from contributions in some states. See
"State Premium and Other Applicable Taxes" in Part 7.
TABLE 1: SERIES 100
<TABLE>
<CAPTION>
Description of Expenses
<S> <C>
CONTRACT OWNER TRANSACTION EXPENSES
SALES LOAD ON PURCHASES ................... NONE
MAXIMUM CONTINGENT WITHDRAWAL CHARGE (1) .. 6%
MAXIMUM ANNUAL ADMINISTRATIVE CHARGE (2) .. $30
</TABLE>
<TABLE>
<CAPTION>
INTERMEDIATE
MONEY GOVERNMENT QUALITY GROWTH & EQUITY
MARKET SECURITIES BOND HIGH YIELD INCOME INDEX
---------- -------------- --------- ------------ ---------- --------
<S> <C> <C> <C> <C> <C> <C>
MAXIMUM SEPARATE ACCOUNT AND TRUST
ANNUAL EXPENSE (3) 1.75% N/A N/A N/A N/A N/A
Separate Account Annual Expenses
(4)
Mortality and Expense Risk Fees .65% .50% .50% .50% .50% .50%
Other Expenses .84% .84% .84% .84% .84% .84%
---------- -------------- --------- ------------ ---------- --------
Total Separate Account Annual
Expenses 1.49%(3) 1.34% 1.34% 1.34% 1.34% 1.34%
Trust Annual Expenses (4)
Investment Advisory Fees .40% .50% .55% .55% .55% .35%
Other Expenses .02% .06% .04% .06% .23% .14%
---------- -------------- --------- ------------ ---------- --------
Total Trust Annual Expenses (5) .42%(3) .56% .59% .61% .78% .49%
</TABLE>
<TABLE>
<CAPTION>
COMMON AGGRESSIVE CONSERVATIVE GROWTH
STOCK GLOBAL INTERNATIONAL STOCK INVESTORS BALANCED INVESTORS
---------- -------- --------------- ------------ ------------ -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
MAXIMUM SEPARATE ACCOUNT AND
TRUST ANNUAL EXPENSE (3) 1.75% N/A N/A 1.75% N/A 1.75% N/A
Separate Account Annual Expenses
(4)
Mortality and Expense Risk Fees .65% .50% .50% .50% .50% .65% .50%
Other Expenses .84% .84% .84% .84% .84% .84% .84%
---------- -------- --------------- ------------ -------------- ---------- -----------
Total Separate Account Annual
Expenses 1.49%(3) 1.34% 1.34% 1.34%(3) 1.34% 1.49%(3) 1.34%
Trust Annual Expenses (4)
Investment Advisory Fees .36% .54% .90% .47% .55% .37% .54%
Other Expenses .02% .15% .41% .02% .04% .02% .05%
---------- -------- --------------- ------------ -------------- ---------- -----------
Total Trust Annual Expenses (5) .38%(3) .69% 1.31% .49%(3) .59% .39%(3) .59%
</TABLE>
13
<PAGE>
TABLE 2: SERIES 200
<TABLE>
<CAPTION>
Description of Expenses
<S> <C>
CONTRACT OWNER TRANSACTION EXPENSES
SALES LOAD ON PURCHASES ................... NONE
MAXIMUM CONTINGENT WITHDRAWAL CHARGE (1) .. 6%
MAXIMUM ANNUAL ADMINISTRATIVE CHARGE (2) .. $30
</TABLE>
<TABLE>
<CAPTION>
INTERMEDIATE
MONEY GOVERNMENT QUALITY GROWTH & EQUITY
MARKET SECURITIES BOND HIGH YIELD INCOME INDEX
---------- -------------- --------- ------------ ---------- --------
<S> <C> <C> <C> <C> <C> <C>
MAXIMUM SEPARATE ACCOUNT AND TRUST
ANNUAL EXPENSE (3) 1.75% N/A N/A N/A N/A N/A
Separate Account Annual Expenses
(4)
Mortality and Expense Risk Fees 1.15% 1.09% 1.09% 1.09% 1.09% 1.09%
Other Expenses .25% .25% .25% .25% .25% .25%
---------- -------------- --------- ------------ ---------- --------
Total Separate Account Annual
Expenses 1.40%(3) 1.34% 1.34% 1.34% 1.34% 1.34%
Trust Annual Expenses (4)
Investment Advisory Fees .40% .50% .55% .55% .55% .35%
Other Expenses .02% .06% .04% .06% .23% .14%
---------- -------------- --------- ------------ ---------- --------
Total Trust Annual Expenses (5) .42%(3) .56% .59% .61% .78% .49%
</TABLE>
<TABLE>
<CAPTION>
COMMON AGGRESSIVE CONSERVATIVE GROWTH
STOCK GLOBAL INTERNATIONAL STOCK INVESTORS BALANCED INVESTORS
---------- -------- --------------- ------------ -------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
MAXIMUM SEPARATE ACCOUNT AND
TRUST ANNUAL EXPENSE (3) 1.75% N/A N/A 1.75% N/A 1.75% N/A
Separate Account Annual Expenses
(4)
Mortality and Expense Risk Fees 1.15% 1.09% 1.09% 1.09% 1.09% .1.15 1.09%
Other Expenses .25% .25% .25% .25% .25% .25% .25%
---------- -------- --------------- ------------ -------------- ---------- -----------
Total Separate Account Annual
Expenses 1.40%(3) 1.34% 1.34% 1.34%(3) 1.34% 1.40%(3) 1.34%
Trust Annual Expenses (4)
Investment Advisory Fees .36% .54% .90% .47% .55% .37% .54%
Other Expenses .02% .15% .41% .02% .04% .02% .05%
---------- -------- --------------- ------------ -------------- ---------- -----------
Total Trust Annual Expenses (5) .38%(3) .69% 1.31% .49%(3) .59% .39%(3) .59%
<FN>
- ---------------
Notes:
(1) The contingent withdrawal charge is a percentage of specified
contributions or amounts withdrawn, depending on the Contract. Important
exceptions and limitations eliminate or reduce the contingent withdrawal
charge. See "Contingent Withdrawal Charge" in Part 7.
(2) Many Contracts are exempt from this charge. The Annual Administrative
Charge is the lesser of $30 or 2% of the Annuity Account Value. See
"Annual Administrative Charge" in Part 7.
(3) The amounts shown in the Table under "Separate Account Annual Expenses"
and "Trust Annual Expenses," when added together, are not permitted to
exceed a total annual rate of 1.75% of the value of the assets held in
the Money Market, Common Stock, Aggressive Stock and Balanced Funds. For
Series 100 Contracts, without this expense limitation, total Separate
Account Annual Expenses plus Trust Annual Expenses for 1994 would have
been 1.91%, 1.87%, 1.83%, and 1.88% for the Money Market, Common Stock,
Aggressive Stock and Balanced Funds, respectively. For Series 200
Contracts, without this expense limitation, total Separate Account Annual
Expenses plus Trust Annual Expenses for 1994 would have been 1.82%,
1.78%, 1.83%, and 1.79% for the Money Market, Common Stock, Aggressive
Stock and Balanced Funds, respectively. See "Limitation on Charges" in
Part 7.
(4) Separate Account and Trust expenses are shown as a percentage of each
Investment Fund's or Portfolio's average value. "Mortality and Expense
Risks Fees" includes death benefit charges. "Other Expenses" under
"Separate Account Annual Expenses" includes financial accounting
expenses. See "Limitation on Charges," "Charges to Investment Funds" and
"Trust Charges to Portfolios" in Part 7.
(5) Expenses shown for all Portfolios except the International Portfolio are
for the fiscal year ended December 31, 1994. The amount shown for the
International Portfolio, which was established on April 3, 1995 and will
be offered under the Contracts on or about September 1,
1995, is an estimate. The amount shown for the Equity Index
Portfolio, which was established on March 1, 1994, is annualized. The
investment advisory fee for each Portfolio may vary from year to year
depending upon the average daily net assets of the respective
Portfolio of the Trust. The maximum investment advisory fees,
however, cannot be increased without a vote of that Portfolio's
shareholders. The other direct operating expenses will also fluctuate
from year to year depending on actual expenses. The Trust expenses
are shown as a percentage of each Portfolio's average value. See
"Trust Charges to Portfolios" in Part 7.
</TABLE>
14
<PAGE>
EXAMPLES: SERIES 100 AND 200
For each type of Series 100 and 200 Contract, the examples which follow
show the expenses that a hypothetical Contract Owner would pay in the
surrender and non-surrender situations noted below, assuming a single
contribution of $1,000 on the Contract Date invested in one of the
Investment Funds listed and a 5% annual return on assets and no waiver of
the contingent withdrawal charge.(1) For purposes of these examples, the
annual administrative charge is computed by reference to the actual
aggregate annual administrative charges as a percentage of the total assets
held under these Contracts.
These examples should not be considered a representation of past or future
expenses for each Investment Fund or Portfolio. Actual expenses may be
greater or less than those shown. Similarly, the annual rate of return
assumed in the examples is not an estimate or guarantee of future
investment performance.
IF YOU SURRENDER YOUR CONTRACT AT THE END OF EACH PERIOD SHOWN, THE EXPENSE
WOULD BE:
For IRA (including certain QP IRA(2)), SEP, EDC, TSA and Participant-Owned
HR-10 Contracts:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- --------- --------- ----------
<S> <C> <C> <C> <C>
Money Market $81.37 $126.09 $166.60 $260.97
Intermediate Government Securities 82.85 130.55 174.13 276.74
Quality Bond 83.15 131.44 175.63 279.87
High Yield 83.34 132.04 176.63 281.95
Growth & Income 85.02 137.07 185.09 299.44
Equity Index 82.16 128.47 170.62 269.41
Common Stock 81.37 126.09 166.60 260.97
Global 84.13 134.41 180.62 290.22
International 90.24 152.65 211.06 352.09
Aggressive Stock 81.37 126.09 166.60 260.97
Asset Allocation Series:
Conservative Investors 83.15 131.44 175.63 279.87
Balanced 81.37 126.09 166.60 260.97
Growth Investors 83.15 131.44 175.63 279.87
FOR QP IRA CONTRACTS:(3)
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- --------- --------- ----------
Money Market $75.19 $119.52 $166.60 $260.97
Intermediate Government Securities 76.68 124.02 174.13 276.74
Quality Bond 76.98 124.91 175.63 279.87
High Yield 77.17 125.51 176.63 281.95
Growth & Income 78.86 130.58 185.09 299.44
Equity Index 75.98 121.92 170.62 269.41
Common Stock 75.19 119.52 166.60 260.97
Global 77.97 127.90 180.62 290.22
International 84.12 146.27 211.06 352.09
Aggressive Stock 75.19 119.52 166.60 260.97
Asset Allocation Series:
Conservative Investors 76.98 124.91 175.63 279.87
Balanced 75.19 119.52 166.60 260.97
Growth Investors 76.98 124.91 175.63 279.87
FOR TRUSTEED AND NQ CONTRACTS:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- --------- --------- ----------
Money Market $75.19 $119.52 $163.86 $224.53
Intermediate Government
Securities 76.68 124.02 171.87 240.85
Quality Bond 76.98 124.91 173.46 244.08
High Yield 77.17 125.51 174.53 246.24
Growth & Income 78.86 130.58 183.52 264.35
Equity Index 75.98 121.92 168.14 233.26
Common Stock 75.19 119.52 163.86 224.53
Global 77.97 127.90 178.77 254.80
International 84.12 146.27 211.06 318.84
Aggressive Stock 75.19 119.52 163.86 224.53
Asset Allocation Series:
Conservative Investors 76.98 124.91 173.46 244.08
Balanced 75.19 119.52 163.86 224.53
Growth Investors 76.98 124.91 173.46 244.08
</TABLE>
15
<PAGE>
Examples: Series 100 and 200 (continued)
IF YOU DO NOT SURRENDER YOUR CONTRACT AT THE END OF EACH PERIOD SHOWN, THE
EXPENSE WOULD BE:
FOR ALL SERIES 100 AND 200 CONTRACTS:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- --------- --------- ----------
<S> <C> <C> <C> <C>
Money Market $19.54 $60.44 $103.86 $224.53
Intermediate Government
Securities 21.12 65.20 111.87 240.85
Quality Bond 21.43 66.15 113.46 244.08
High Yield 21.64 66.79 114.53 246.24
Growth & Income 23.43 72.16 123.52 264.35
Equity Index 20.38 62.98 108.14 233.26
Common Stock 19.54 60.44 103.86 224.53
Global 22.48 69.32 118.77 254.80
International 28.98 88.79 151.14 318.84
Aggressive Stock 19.54 60.44 103.86 224.53
Asset Allocation Series:
Conservative Investors 21.43 66.15 113.46 244.08
Balanced 19.54 60.44 103.86 224.53
Growth Investors 21.43 66.15 113.46 244.08
<FN>
- ---------------
(1) The amount accumulated could not be paid in the form of an annuity at the
end of any of the periods shown in the examples. If the amount applied to
purchase an annuity is less than $2,000, or the initial annuity payment
is less than $20 we may pay the amount to the payee in a single sum
instead of as payments under an annuity form. See "Distribution Options"
in Part 6. In some cases, charges for state premium or other taxes will
be deducted from the amount applied, if applicable.
(2) These expenses also apply to a Series 100 or 200 QP IRA purchased in a
state where group Contracts are issued.
(3) These expenses apply only to a Series 100 or 200 QP IRA purchased in a
state where individual Contracts are issued.
</TABLE>
16
<PAGE>
TABLE 3: SERIES 300 AND 400
<TABLE>
<CAPTION>
Description of Expenses
- --------------------------------------------------------------------
<S> <C>
CONTRACT OWNER TRANSACTION EXPENSES
SALES LOAD ON PURCHASES ........................................... NONE
MAXIMUM CONTINGENT WITHDRAWAL CHARGE (1) .......................... 6%
MAXIMUM/CURRENT ANNUAL ADMINISTRATIVE CHARGE (2) .................. $65/30
MAXIMUM/CURRENT THIRD PARTY TRANSFER OR EXCHANGE FEE (3) .......... $65/25 PER OCCURRENCE
SEPARATE ACCOUNT ANNUAL EXPENSES
Mortality and Expense Risk Fees (including Death Benefit Charges) . 1.10%
Other Expenses (4) ................................................ .25%
-----
Total Separate Account Annual Expenses (5) ....................... 1.35%
=====
</TABLE>
<TABLE>
<CAPTION>
INTERMEDIATE
MONEY GOVERNMENT QUALITY HIGH GROWTH & EQUITY
MARKET SECURITIES BOND YIELD INCOME INDEX
---------- ---------------- ----------- --------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
TRUST ANNUAL EXPENSES:
Investment Advisory Fees .40% .50% .55% .55% .55% .35%
Other Expenses .02% .06% .04% .06% .23% .14%
---------- ---------------- ----------- --------- ------------ ----------
Total Trust Annual Expenses (6) .42% .56% .59% .61% .78% .49%
========== ================ =========== ========= ============ ==========
</TABLE>
<TABLE>
<CAPTION>
COMMON AGGRESSIVE CONSERVATIVE GROWTH
STOCK GLOBAL INTERNATIONAL STOCK INVESTORS BALANCED INVESTORS
-------- -------- -------------- ----------- ---------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
TRUST ANNUAL EXPENSES:
Investment Advisory Fees .36% .54% .90% .47% .55% .37% .54%
Other Expenses .02% .15% .41% .02% .04% .02% .05%
-------- -------- -------------- ----------- ---------------- ------------ -------------
Total Trust Annual
Expenses (6) .38% .69% 1.31% .49% .59% .39% .59%
======== ======== ============== =========== ================ ============ =============
<FN>
- ---------------
Notes:
(1) The contingent withdrawal charge is a percentage of specified
contributions. See "Contingent Withdrawal Charge" in Part 7. Important
exceptions and limitations eliminate or reduce the contingent withdrawal
charge.
(2) The Annual Administrative Charge is the lesser of $30 or 2% of the
Annuity Account Value (adjusted to include any withdrawals made during
that year) during the first two Contract Years; and $30 for each Contract
Year thereafter. See "Annual Administrative Charge" in Part 7. We reserve
the right to increase this fee in the future if our administrative costs
increase, but such fee may not exceed an annual maximum of $65, subject
to applicable law.
(3) There is a Third Party Transfer or Exchange Fee of $25 per occurrence. We
reserve the right to increase this fee in the future, but such fee may
not exceed a maximum of $65 per occurrence, subject to applicable law.
(4) For a limited period of time, we will charge .24% against the assets of
the Intermediate Government Securities, Quality Bond, High Yield, Growth
& Income, Equity Index, Global, International, Conservative Investors and
Growth Investors Funds for expenses.
(5) The amounts shown in the Table under "Separate Account Annual Expenses"
are not permitted to exceed a total annual rate of 1.35% of the value of
the assets held in the Investment Funds. Separate Account expenses are
shown as a percentage of each Investment Fund's average value. See
"Limitation on Charges" in Part 7.
(6) Expenses shown for all Portfolios except the International Portfolio are
for the fiscal year ended December 31, 1994. The amount shown for the
International Portfolio, which was established on April 3, 1995 and will
be offered under the Contracts on or about September 1, 1995, is an
estimate. The amount shown for the Equity Index Portfolio, which was
established on March 1, 1994, is annualized. The investment advisory fee
for each Portfolio may vary from year to year depending upon the average
daily net assets of the respective
Portfolio of the Trust. The maximum investment advisory fees,
however, cannot be increased without a vote of that Portfolio's
shareholders. The other direct operating expenses will also fluctuate
from year to year depending on actual expenses. The Trust expenses
are shown as a percentage of each Portfolio's average value. See
"Trust Charges to Portfolios" in Part 7.
</TABLE>
17
<PAGE>
EXAMPLES: SERIES 300 AND 400
For each type of Series 300 and 400 Contract, the examples which follow
show the expenses that a hypothetical Contract Owner would pay in the
surrender and non-surrender situations noted below, assuming a single
contribution of $1,000 on the Contract Date invested in one of the
Investment Funds listed, a 5% annual return on assets and no waiver of the
contingent withdrawal charge.(1) For purposes of these examples the annual
administrative charge is computed by reference to the actual aggregate
annual administrative charges as a percentage of the total assets held
under these Contracts.
These examples should not be considered a representation of past or future
expenses for each Investment Fund or Portfolio. Actual expenses may be
greater or less than those shown. Similarly, the annual rate of return
assumed in the examples is not an estimate or guarantee of future
investment performance.
IF YOU SURRENDER YOUR CONTRACT AT THE END OF EACH PERIOD SHOWN, THE EXPENSE
WOULD BE:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- --------- --------- ----------
<S> <C> <C> <C> <C>
Money Market $75.39 $120.12 $164.93 $226.72
Intermediate Government
Securities 76.68 124.02 171.87 240.85
Quality Bond 76.98 124.91 173.46 244.08
High Yield 77.17 125.51 174.53 246.24
Growth & Income 78.86 130.58 183.52 264.35
Equity Index 75.98 121.92 168.14 233.26
Common Stock 74.99 118.92 162.79 222.33
Global 77.97 127.90 178.77 254.80
International 84.12 146.27 211.06 318.84
Aggressive Stock 76.08 122.22 168.67 234.35
Asset Allocation Series:
Conservative Investors $76.98 $124.91 $173.46 $244.08
Balanced 75.09 119.22 163.32 223.43
Growth Investors 76.98 124.91 173.46 244.08
IF YOU DO NOT SURRENDER YOUR CONTRACT AT THE END OF EACH PERIOD SHOWN, THE
EXPENSE WOULD BE:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- --------- --------- ----------
Money Market $19.75 $ 61.07 $104.93 $226.72
Intermediate Government
Securities 21.12 65.20 111.87 240.85
Quality Bond 21.43 66.15 113.46 244.08
High Yield 21.64 66.79 114.53 246.24
Growth & Income 23.43 72.16 123.52 264.35
Equity Index 20.38 62.98 108.14 233.26
Common Stock 19.33 59.80 102.79 222.33
Global 22.48 69.32 118.77 254.80
International 28.98 88.79 151.14 318.84
Aggressive Stock 20.49 63.30 108.67 234.35
Asset Allocation Series:
Conservative Investors $21.43 $ 66.15 $113.46 $244.08
Balanced 19.44 60.12 103.32 223.43
Growth Investors 21.43 66.15 113.46 244.08
<FN>
- ---------------
(1) The amount accumulated could not be paid in the form of an annuity at the
end of any of the periods shown in the examples. If the amount applied to
purchase an annuity is less than $2,000, or the initial annuity payment
is less than $20, we may pay the amount to the payee in a single sum
instead of as payments under an annuity form. See "Distribution Options"
in Part 6. In some cases, charges for state premium or other taxes will
be deducted from the amount applied, if applicable.
</TABLE>
18
<PAGE>
PART 2: SEPARATE ACCOUNT A AND
ITS INVESTMENT FUNDS
SEPARATE ACCOUNT A
Separate Account A is organized as a unit investment trust, a type of
investment company, and is registered with the SEC under the Investment
Company Act of 1940 (1940 ACT). This registration does not involve any
supervision by the SEC of the management or investment policies of the
Separate Account. The Separate Account has several Investment Funds, each of
which invests in shares of a corresponding Portfolio of the Trust. You may
allocate some or all contributions among the Investment Funds.
The assets of the Separate Account are our property. As a separate account
under the New York Insurance Law, the portion of the Separate Account's
assets equal to the reserves and other liabilities relating to the contracts
will not be chargeable with liabilities arising out of any other business we
may conduct. Accordingly, income, gains or losses, whether or not realized,
from assets of the Separate Account are credited to or charged against the
Separate Account without regard to our other income, gains or losses. We are
the issuer of the contracts, and the obligations set forth in the contracts
(other than those of Annuitants or Contract Owners) are our obligations.
In addition to contributions made under your contracts, we may allocate to
the Separate Account monies received under other annuity contracts,
certificates or agreements. Owners of all such contracts, certificates or
agreements will participate in the Separate Account in proportion to the
amounts they have in the Investment Funds that relate to their contracts,
certificates or agreements. We may retain in the Separate Account assets that
are in excess of the reserves and other liabilities relating to the Contracts
or to other contracts, certificates or agreements, or we may transfer them to
our general account.
We reserve the right, subject to compliance with applicable law, including
approval of Contract Owners if required, (1) to add new Investment Funds (or
sub-divisions of Investment Funds) to, or remove Investment Funds (or
sub-divisions of Investment Funds) from, the Separate Account, (2) to combine
any two or more Investment Funds or sub-divisions thereof, (3) to transfer
assets determined by us to be the proportionate share of the class to which
the contracts belong from any of the Investment Funds to another Investment
Fund by withdrawing the same percentage of each investment in that Investment
Fund with appropriate adjustments to avoid odd lots and fractions, (4) to
operate the Separate Account or any Investment Fund as a management
investment company under the 1940 Act (which may be directed by a committee
which may be composed of a majority of persons who are "interested persons"
of Equitable Life under the 1940 Act, which committee may be discharged by us
at any time) or in any other form permitted by law, including a form that
allows us to make direct investments, (5) to deregister the Separate Account
under the 1940 Act, (6) to cause one or more Investment Funds to invest in a
mutual fund other than or in addition to the Trust, (7) to discontinue the
sale of contracts, (8) to terminate any employer or plan trustee agreement
pursuant to its terms and (9) to restrict or eliminate any voting rights of
Contract Owners or other people who have voting rights that affect the
Separate Account.
If any changes are made that result in a material change in the underlying
investments of an Investment Fund, Contract Owners will be notified. We may
make other changes in the contracts that do not reduce any Cash Value,
annuity benefit, Annuity Account Value or other accrued rights or benefits.
THE TRUST
The Trust is an open-end, diversified management investment company, more
commonly called a mutual fund. As a "series" type of mutual fund, it issues
several different series of stock, each of which relates to a different
Portfolio of the Trust. The Trust commenced operations in January 1976 with a
predecessor of its Common Stock Portfolio. The Trust does not impose a sales
charge or "load" for buying and selling its shares. All dividend
distributions to the Trust are reinvested in full and fractional shares of
the Portfolio to which they relate.
More detailed information about the Trust, its investment objectives,
policies, restrictions, risks, expenses and all other aspects of its
operations, appears in its prospectus, or in its statement of additional
information.
19
<PAGE>
THE TRUST'S INVESTMENT ADVISER
The Trust is advised by Alliance Capital Management LP (ALLIANCE), which is
registered with the SEC as an investment adviser under the Investment
Advisers Act of 1940. Alliance, a publicly traded limited partnership, is
indirectly majority-owned by Equitable Life. On December 31, 1994, Alliance
was managing over $121 billion in assets. Alliance acts as investment adviser
to various separate accounts and general accounts of Equitable Life and other
affiliated insurance companies. Alliance also provides management and
consulting services to mutual funds, endowments funds, insurance companies,
foreign entities, qualified and non-tax qualified corporate funds, public and
private pension and profit-sharing plans, foundations and tax-exempt
organizations.
Alliance's record as an investment manager is based, in part, on its ability
to provide a diversity of investment services to domestic, international and
global markets. Alliance prides itself on its ability to attract and retain a
quality, professional work force. Alliance employs 179 investment
professionals, including 81 research analysts. Portfolio managers have
average investment experience of more than 16 years.
Alliance's main office is located at 1345 Avenue of the Americas, New York,
New York 10105.
INVESTMENT POLICIES AND OBJECTIVES OF THE TRUST'S PORTFOLIOS
Each Portfolio has a different investment objective which it tries to achieve
by following separate investment policies. The policies and objectives of
each Portfolio will affect its return and its risks. There is no guarantee
that these objectives will be achieved.
The policies and objectives of the Trust's Portfolios are as follows:
<TABLE>
<CAPTION>
PORTFOLIO INVESTMENT POLICY OBJECTIVE
- -------------------- ---------------------------------------------- -------------------------------------------
<S> <C> <C>
Money Market ........ Primarily high quality short-term money market High level of current income while
instruments preserving assets and maintaining liquidity
Intermediate ........ Primarily debt securities issued or High current income consistent with
Government guaranteed by the U.S. Government, its relative stability of principal
Securities agencies and instrumentalities. Each
investment will have a final maturity of not
more than 10 years or a duration not exceeding
that of a 10-year Treasury note
Quality Bond ........ Primarily investment grade fixed income High current income consistent with
securities preservation of capital
High Yield .......... Primarily a diversified mix of high yield, High return by maximizing current income
fixed-income securities involving greater and, to the extent consistent with that
volatility of price and risk of principal and objective, capital appreciation
income than high quality fixed- income
securities. The medium and lower quality debt
securities in which the Portfolio may invest
are known as "junk bonds"
Growth & ............ Primarily income producing common High total return through a combination
Income stocks and securities convertible into common of current income and capital appreciation
stocks
Equity Index ........ Selected securities in the S&P 500 Index (the Total return performance (before trust
"Index") which the advisor believes will, in expenses) that approximates the investment
the aggregate, approximate the performance performance of the Index (including
results of the Index reinvestment of dividends) at risk level
consistent with that of the Index
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO INVESTMENT POLICY OBJECTIVE
- -------------------- ---------------------------------------------- -------------------------------------------
<S> <C> <C>
Common Stock ........ Primarily common stock and other equity- type Long-term growth of capital and
instruments increasing income
Global .............. Primarily equity securities of non-United Long-term growth of capital
States as well as United States companies
International* ...... Primarily equity securities selected Long-term growth of capital
principally to permit participation in
non-United States companies with prospects for
growth
Aggressive Stock ... Primarily common stocks and other equity-type Long-term growth of capital
securities issued by medium and other smaller
sized companies with strong growth potential
Asset Allocation Series:
Conservative Diversified mix of publicly-traded, fixed- High total return without, in the
Investors .......... income and equity securities; asset mix and Adviser's opinion, undue risk to
security selection are primarily based upon principal
factors expected to reduce risk. The Portfolio
is generally expected to hold approximately
70% of its assets in fixed income securities
and 30% in equity securities.
Balanced ............ Primarily common stocks, publicly-traded debt High return through a combination of
securities and high quality money market current income and capital appreciation
instruments. The Portfolio is generally
expected to hold 50% of its assets in equity
securities and 50% in fixed income securities.
Growth Investors ... Diversified mix of publicly-traded, fixed- High total return consistent with the
income and equity securities; asset mix and adviser's determination of reasonable
security selection based upon factors expected risk
to increase possibility of high long-term
return. The Portfolio is generally expected to
hold approximately 70% of its assets in equity
securities and 30% in fixed income securities.
<FN>
- ---------------
* The International Portfolio was established on April 3, 1995 and will
become available under EQUI-VEST Contracts on or about September 1,
1995.
</TABLE>
21
<PAGE>
PART 3: INVESTMENT PERFORMANCE
CREATING AN INVESTMENT STRATEGY
Whether you participate in a personal or employer sponsored retirement
program, EQUI-VEST provides the flexibility to create a personalized
retirement savings investment strategy using different Investment Options.
Thirteen of these Investment Options are Investment Funds of the Separate
Account. The Separate Account invests in the Trust, a mutual fund. The
Portfolios of the Trust invest in a wide range of financial instruments,
including stocks, corporate and government bonds and U.S. Treasury Bills. See
"Part 2: Separate Account A and its Investment Funds" for a summary of the
investment strategies of the various Portfolios. For more detailed
information, see the Trust prospectus, which is in the second part of this
booklet.
This section is designed to help show how different savings strategies may
affect long-term rates of return and to provide you with information on the
actual performance of the Investment Funds. See "Part 4: The Guaranteed
Interest Account" for information on the Guaranteed Interest Account, and
"Part 5: The Fixed Maturity Account" for information on Fixed Maturity
Periods.
LONG-TERM MARKET TRENDS
As a tool for understanding how different investment strategies may affect
long-term results, it may be useful to consider the historical returns on
different types of assets. The following charts present historical return
trends for various types of securities. The information presented, while not
directly related to the performance of the Investment Funds, helps to provide
a perspective on the potential returns of different asset classes over
different periods of time. By combining this information with knowledge of
personal financial needs (e.g., the length of time until retirement,
financial requirements at retirement), you may be able to better determine
how to allocate your contributions among the available Investment Options.
Historically, the long-term investment performance of common stocks has
generally been superior to that of long- or short-term debt securities. For
those investors who have many years until retirement, or whose primary focus
is on long-term growth potential and protection against inflation, there may
be advantages to allocating some or all of their Annuity Account Value to
those Investment Funds that invest in stocks.
GROWTH OF $1 INVESTED ON JANUARY 1, 1954
(VALUES ARE AS OF LAST BUSINESS DAY)
[GRAPH TO COME]
Source: Ibbotson Associates, Inc. See discussion and information preceding and
following chart on next page.
Over shorter periods of time, however, common stocks tend to be subject to
more dramatic changes in value than fixed income (debt) securities. Investors
who are nearing retirement age, or who have a need to limit short-term risk,
may find it preferable to allocate a smaller percentage of their Annuity
Account Value to those Investment Funds that invest in common stocks.
The following graph illustrates the monthly fluctuations in value of $1 based
on monthly returns of the Standard & Poor's 500 during 1990, a year that
represents more typical volatility than 1994.
22
<PAGE>
GROWTH OF $1 INVESTED ON JANUARY 1, 1990
(VALUES ARE AS OF LAST BUSINESS DAY)
[GRAPH TO COME]
Source: Ibbotson Associates, Inc. See discussion and information preceding
and following chart.
The following chart illustrates average annual rates of return over selected
time periods between December 31, 1926 and December 31, 1994 for different
types of securities: common stocks, long-term government bonds, long-term
corporate bonds, intermediate-term government bonds and U.S. Treasury Bills.
For comparison purposes, the Consumer Price Index is shown as a measure of
inflation. The average annual returns shown in the chart reflect capital
appreciation and assume the reinvestment of dividends and interest. No
investment management fees or expenses, and no charges typically associated
with deferred annuity products, are reflected.
The information presented is merely a summary of past experience for
unmanaged groups of securities and is neither an estimate nor guarantee of
future performance. Any investment in securities, whether equity or debt,
involves varying degrees of potential risk, in addition to offering varying
degrees of potential reward.
The rates of return illustrated do not represent returns of the Investment
Funds. In addition, there is no assurance that the performance of the
Investment Funds will correspond to rates of return such as those illustrated
in the chart. For a comparative illustration of performance results of the
Investment Funds (which reflect the Trust and Separate Account charges), see
"Investment Funds Performance" in the following section.
MARKET TRENDS:
ILLUSTRATIVE ANNUAL RATES OF RETURN
<TABLE>
<CAPTION>
LONG-TERM INTERMEDIATE-
FOR THE FOLLOWING PERIODS COMMON LONG-TERM CORPORATE TERM GOV'T. U.S. TREASURY CONSUMER
ENDING 12/31/94: STOCKS GOV'T. BONDS BONDS BONDS BILLS PRICE INDEX
- ----------------------------- -------- -------------- ----------- --------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
1 Year 1.31% (7.77)% (5.76)% (5.14)% 3.90% 2.78%
3 Years 6.26 5.62 5.28 4.19 3.43 2.81
5 Years 8.69 8.34 8.36 7.46 4.73 3.51
10 Years 14.40 11.86 11.57 9.40 5.76 3.59
20 Years 14.58 9.42 10.00 9.25 7.29 5.45
30 Years 9.95 6.96 7.31 7.84 6.66 5.36
40 Years 10.66 5.62 6.14 6.58 5.63 4.40
50 Years 11.92 4.99 5.34 5.59 4.69 4.35
60 Years 11.48 4.81 5.21 5.19 3.92 4.10
Since 12/31/26 10.19 4.83 5.41 5.09 3.69 3.13
Inflation adjusted since 1926 6.85 1.65 2.22 1.91 0.55 --
</TABLE>
SOURCE: Stocks, Bonds, Bills, and Inflation 1995 Yearbook(Trademark),
Ibbotson Associates, Chicago (annually updates work by Roger G. Ibbotson and
Rex A. Sinquefield). All rights reserved.
COMMON STOCKS (S&P 500)--Standard and Poor's Composite Index, an unmanaged
weighted index of the stock performance of 500 industrial, transportation,
utility and financial companies.
LONG-TERM GOVERNMENT BONDS--Measured using a one-bond portfolio constructed
each year containing a bond with approximately a twenty year maturity and a
reasonably current coupon.
<PAGE>
LONG-TERM CORPORATE BONDS--For the period 1969-1994, represented by the
Salomon Brothers Long-term, High-Grade Corporate Bond Index; for the period
1946-1968, the Salomon Brothers Index was backdated using Salomon Brothers
monthly yield data and a methodology similar to that used by Salomon Brothers
for 1969-1994; for the period 1927-1945, the Standard and Poor's monthly
High-Grade Corporate Composite yield data were used, assuming a 4 percent
coupon and a twenty year maturity.
INTERMEDIATE-TERM GOVERNMENT BONDS--Measured by a one-bond portfolio
constructed each year containing a bond with approximately a five year
maturity.
U.S. TREASURY BILLS--Measured by rolling over each month a one-bill portfolio
containing, at the beginning of each month, the bill having the shortest
maturity not less than one month.
INFLATION--Measured by the Consumer Price Index for all Urban Consumers
(CPI-U), not seasonally adjusted.
23
<PAGE>
INVESTMENT FUND PERFORMANCE
In order to help show how the actual performance of the Investment Funds has
affected Annuity Account Values, the following tables provide a historical
view of investment performance. The information presented includes
performance results for each Investment Fund (other than the International
Fund which will be offered under these Contracts on or about September 1,
1995) along with data representing unmanaged market indices and similarly
managed funds.
Performance data for the Money Market, Balanced, Common Stock and Aggressive
Stock Funds shown in this section include periods prior to December 18, 1987,
when EQUI-VEST was funded by four predecessor separate accounts. The "since
inception" figures are based on the date of inception of the predecessor
separate account. Also, the performance data shown from December 18, 1987
through December 31, 1990 reflects the investment results of The Equitable
Trust, which was replaced by the Trust on September 6, 1991. The investment
objectives and policies of the Portfolios are substantially similar to those
of the corresponding portfolios of The Equitable Trust. At all times,
Equitable Life and/or one of its subsidiaries has served as the investment
adviser to the predecessor separate accounts, The Equitable Trust and the
Trust. Performance data for the remaining Investment Funds reflect (i) the
investment results of the corresponding Portfolios of the Trust from the date
of inception of those Portfolios, (ii) the actual investment advisory fee and
direct operating expenses of the relevant Portfolio and (iii) the Separate
Account asset charges.
The performance for all periods has been adjusted to reflect the Separate
Account asset charges as well as the Trust expenses.
Because amounts allocated to the Investment Funds are invested in a mutual
fund, investment return and principal will fluctuate and Accumulation Units
may be worth more or less than the original cost when redeemed. The results
shown are not an estimate or guarantee of future investment performance, and
do not reflect the actual experience of amounts invested under a particular
Contract.
HOW PERFORMANCE DATA ARE PRESENTED
The tables on the following pages compare annualized rates of return for each
Investment Fund (other than the International Fund) along with appropriate
benchmarks. These performance results are based on the change in the
accumulation unit value for each Investment Fund for the periods shown.
Investment results in these tables are net of all charges and expenses
assessed against the Investment Funds (including investment advisory fees and
the direct operating expenses of the Trust and the expenses of the Contracts)
but excluding the annual administrative charge and any withdrawal charges
which would also reduce the actual return. There are variations in the fees
and charges among the Contracts offered in EQUI-VEST. The rates of return
shown reflect the highest charges that are currently being assessed. The
tables under "Standardized Computation of Performance" in the next Section
show performance results after giving effect to all charges including the
annual administrative charge and the contingent withdrawal charge.
BENCHMARKS
Market indices are not subject to any charges for investment advisory fees
typically associated with a managed portfolio. Comparisons with these
benchmarks, therefore, are of limited use. We include them because they are
widely known and may help you to understand the universe of securities from
which each Portfolio manager is likely to make selections.
INCEPTION DATES AND COMPARATIVE
BENCHMARKS
MONEY MARKET: May 11, 1982; Salomon Brothers Three-Month T-Bill Index
(3-Month T-Bill).
INTERMEDIATE GOVERNMENT SECURITIES: April 1, 1991; Lehman Intermediate
Government Bond Index (Lehman Intermediate Government).
QUALITY BOND: October 1, 1993; Lehman Aggregate Bond Index (Lehman
Aggregate).
HIGH YIELD: January 2, 1987; Merrill Lynch Master High Yield Index (Master
High Yield).
<PAGE>
GROWTH & INCOME: October 1, 1993; 75% Standard & Poor's 500 Index (including
reinvested dividends) (S&P 500) and 25% Value Line Convertible Index (75% S&P
500/25% Value Line Conv.).
EQUITY INDEX: March 1, 1994; Standard & Poor's 500 Index (S&P 500) which
includes reinvested dividends.
COMMON STOCK: August 1, 1968; Standard & Poor's 500 Index (S&P 500) which
includes reinvested dividends.
GLOBAL: August 27, 1987; Morgan Stanley Capital International World Index
(MSCI World).
INTERNATIONAL: April 3, 1995; Morgan Stanley Capital International Europe,
Australia, Far East Index (MSCI EAFE). (This Fund is to be offered under
these Contracts on or about September 1, 1995.)
24
<PAGE>
AGGRESSIVE STOCK: May 1, 1984; 50% S&P 500 and 50% National Association of
Securities Dealers Automated Quotation System Composite (50% S&P 500/50%
NASDAQ).
CONSERVATIVE INVESTORS: October 2, 1989; 70% Lehman Treasury Bond Composite
Index and 30% S&P 500 (70% Lehman Treas./30% S&P 500).
BALANCED: May 1, 1984; 50% S&P 500 and 50% Lehman Government/Corporate Bond
Index (50% S&P 500/50% Lehman Corp.).
GROWTH INVESTORS: October 2, 1989; 30% Lehman Government/Corporate Bond Index
and 70% S&P 500 (30% Lehman Treas./70% S&P 500).
The Lipper Variable Insurance Products Performance Analysis Survey (Lipper)
records the performance of a large group of variable annuity and variable
life products, including managed separate accounts of insurance companies.
According to Lipper Analytical Services, Inc., the data are presented net of
investment management fees, direct operating and asset-based charges
applicable under insurance policies or annuity contracts. Lipper data provide
a more accurate picture than market indices of EQUI-VEST performance relative
to other annuity products.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends. Cumulative rates of
return reflect performance over a stated period of time. Annualized rates of
return represent the annual rate of growth that would have produced the same
cumulative return, if performance had been constant over the entire period.
25
<PAGE>
ANNUALIZED RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1994:
<TABLE>
<CAPTION>
SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION
-------- --------- --------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
MONEY MARKET 2.62% 2.12% 3.57% 4.87% -- 5.74%
Lipper Money Market 2.62 2.15 3.56 4.94 -- 5.94
3-Month T-Bill 4.22 3.63 4.90 5.98 -- 6.75
INTERMEDIATE GOVERNMENT
SECURITIES (5.65) 2.35 -- -- -- 4.73
Lipper U.S. Government (4.94) 2.87 -- -- -- 5.57
Lehman Intermediate Government (1.75) 4.36 -- -- -- 6.55
QUALITY BOND (6.37) -- -- -- -- (5.77)
Lipper Corporate Bond A-Rated (5.64) -- -- -- -- (4.82)
Lehman Aggregate (2.92) -- -- -- -- (2.30)
HIGH YIELD (4.09) 8.89 9.11 -- -- 7.58
Lipper High Yield (4.23) 9.45 10.59 -- -- 8.07
Master High Yield (1.16) 11.03 11.99 -- -- 10.24
GROWTH & INCOME (1.90) -- -- -- -- (1.99)
Lipper Growth & Income (1.62) -- -- -- -- 0.03
75% S&P 500/25% Value Line Conv. 0.01 -- -- -- -- 1.84
EQUITY INDEX -- -- -- -- -- (0.04)*
Lipper S&P 500 Index Funds -- -- -- -- -- (0.54)*
S&P 500 -- -- -- -- -- 1.28 *
COMMON STOCK (3.48) 6.55 8.31 13.83 13.50% 9.96
Lipper Growth (2.42) 5.10 7.90 11.81 12.54 N/A
S&P 500 1.32 6.25 8.68 14.38 14.58 10.28
GLOBAL 3.82 9.92 9.65 -- -- 8.91
Lipper Global (2.40) 7.58 4.57 -- -- 3.52
MSCI World 5.08 6.85 3.67 -- -- 4.97
AGGRESSIVE STOCK (5.11) 1.45 15.30 17.44 -- 16.78
Lipper Small Company Growth (2.68) 20.63 12.56 17.55 -- 16.92
50% S&P 500/50% NASDAQ (0.94) 7.46 9.65 13.14 -- 12.71
The Asset Allocation Series:
CONSERVATIVE INVESTORS (5.38) 2.57 6.01 -- -- 6.27
Lipper Income (3.13) 5.30 7.67 -- -- 7.77
70% Lehman Treas./30% S&P 500 (1.97) 5.14 7.85 -- -- 8.11
BALANCED (9.27) (1.23) 5.86 9.45 -- 9.44
Lipper Flexible Portfolio (3.65) 4.46 7.01 10.11 -- 9.97
50% S&P 500/50% Lehman Corp. (1.09) 5.55 8.20 12.31 -- 12.55
GROWTH INVESTORS (4.44) 4.00 12.51 -- -- 12.66
Lipper Flexible Portfolio (3.65) 4.46 7.01 -- -- 6.86
30% Lehman Corp./70% S&P 500 (0.13) 5.83 8.39 -- -- 8.49
<FN>
- ---------------
* Unannualized.
</TABLE>
26
<PAGE>
CUMULATIVE RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1994:
<TABLE>
<CAPTION>
SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION
-------- --------- --------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
MONEY MARKET 2.62% 6.49% 19.16% 60.83% --% 102.51%
Lipper Money Market 2.62 6.60 19.12 62.02 -- 107.76
3-Month T-Bill 4.22 11.29 26.99 78.68 -- 128.84
INTERMEDIATE GOVERNMENT
SECURITIES (5.65) 7.21 -- -- -- 18.94
Lipper U.S. Government (4.94) 8.85 -- -- -- 22.56
Lehman Intermediate Government (1.75) 13.65 -- -- -- 26.89
QUALITY BOND (6.37) -- -- -- -- (7.16)
Lipper Corporate Bond A-Rated (5.64) -- -- -- -- (5.99)
Lehman Aggregate (2.92) -- -- -- -- (2.86)
HIGH YIELD (4.09) 29.10 54.66 -- -- 79.31
Lipper High Yield (4.23) 31.12 65.43 -- -- 86.07
Master High Yield (1.16) 36.87 76.16 -- -- 118.08
GROWTH & INCOME (1.90) -- -- -- -- (2.48)
Lipper Growth & Income (1.62) -- -- -- -- 0.04
75% S&P 500/25% Value Line Conv. 0.01 -- -- -- -- 2.30
EQUITY INDEX -- -- -- -- -- (0.04)*
Lipper S&P 500 Index Funds -- -- -- -- -- (0.54)
S&P 500 -- -- -- -- -- 1.28
COMMON STOCK (3.48) 20.98 49.07 265.35 1,158.39 1,128.16
Lipper Growth (2.42) 16.11 46.28 205.37 961.72 N/A
S&P 500 1.32 19.95 51.64 283.20 1,421.23 1,229.62
GLOBAL 3.82 32.82 58.52 -- -- 87.15
Lipper Global (2.40) 24.49 25.04 -- -- 29.26
MSCI World 5.08 21.99 19.74 -- -- 42.79
AGGRESSIVE STOCK (5.11) 4.41 103.75 399.03 -- 423.21
Lipper Small Company Growth (2.68) 75.55 80.72 403.83 -- 429.61
50% S&P 500/50% NASDAQ (0.94) 24.10 58.49 243.61 -- 258.78
The Asset Allocation Series:
CONSERVATIVE INVESTORS (5.38) 7.90 33.91 -- -- 37.58
Lipper Income (3.13) 16.75 44.72 -- -- 48.12
70% Lehman Treas./30% S&P 500 (1.97) 16.24 45.93 -- -- 50.68
BALANCED (9.27) (3.64) 32.96 146.79 -- 161.78
Lipper Flexible Portfolio (3.65) 14.00 40.35 162.01 -- 175.72
50% S&P 500/50% Lehman Corp. (1.09) 17.61 48.29 219.37 -- 253.31
GROWTH INVESTORS (4.44) 12.48 80.31 -- -- 86.89
Lipper Flexible Portfolio (3.65) 14.00 40.35 -- -- 41.66
30% Lehman Corp./70% S&P 500 (0.13) 18.54 49.63 -- -- 53.39
</TABLE>
YEAR-BY-YEAR RATES OF RETURN
<TABLE>
<CAPTION>
INTERMEDIATE
MONEY GOVERNMENT QUALITY HIGH GROWTH & EQUITY
MARKET SECURITIES BOND YIELD INCOME INDEX
-------- -------------- --------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
1985 6.70% --% --% --% --% --%
1986 5.17 -- -- -- -- --
1987 5.23 -- -- 3.27* -- --
1988 5.90 -- -- 8.25 -- --
1989 7.70 -- -- 3.71 -- --
1990 6.80 -- -- (2.43) -- --
1991 4.70 10.94* -- 22.78 -- --
1992 2.16 4.17 -- 10.80 -- --
1993 1.58 9.09 (0.84)* 21.48 (0.59)* --
1994 2.62 (5.65) (6.37) (4.09) (1.90) (0.04)*
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
COMMON AGGRESSIVE CONSERVATIVE GROWTH
STOCK GLOBAL STOCK INVESTORS BALANCED INVESTORS
-------- ---------- ------------ -------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
1985 32.51% --% 42.98% --% 23.81% --%
1986 15.43 -- 21.75 -- 11.70 --
1987 6.08 (13.67)* (1.13) -- (5.05) --
1988 21.60 9.38 (0.39) -- 13.30 --
1989 24.10 25.02 42.87 2.75* 24.60 3.65*
1990 (9.30) (7.33) 5.73 4.97 (1.50) 9.12
1991 35.80 28.79 84.57 18.23 40.00 46.90
1992 1.80 (1.86) (4.47) 4.36 (4.20) 3.52
1993 23.10 30.34 15.17 9.27 10.80 13.71
1994 (3.48) 3.82 (5.11) (5.38) (9.27) (4.44)
<FN>
- ---------------
* Unannualized
</TABLE>
27
<PAGE>
STANDARDIZED COMPUTATION OF
PERFORMANCE
The performance data in the following tables, which are prepared in a manner
prescribed by the SEC for use when we advertise the performance of the
Separate Account, illustrate the average annual total return of the
Investment Funds over the periods shown assuming a single initial
contribution of $1,000 and termination of the Contract at the end of each
period under circumstances in which the contingent withdrawal charge applies.
The values shown are also net of all other charges and expenses assessed
against the Investment Funds. An Investment Fund's average annual total
return is the annual rate of growth of the Investment Fund that would be
necessary to achieve the ending value of a contribution kept in the
Investment Fund for the period specified.
Since charges under the Contracts may vary, we have assumed, for each charge,
the highest that might apply. Each calculation further assumes that the
$1,000 contribution was allocated to only one Investment Fund, no transfers
or additional contributions were made and no amounts were allocated to any
other Investment Fund under the Contract.
In order to calculate the standardized performance information, we divide the
termination value (defined below) of a Contract which is terminated on
December 31, 1994 by the $1,000 investment made at the beginning of each
period illustrated. The result of that calculation is the total growth rate
for the period. Then we annualize that growth rate to obtain the average
annual percentage increase (decrease) during the period shown. When we
"annualize," we assume that a single rate of return applied each year during
the period will produce the ending value, taking into account the effect of
compounding. "Termination value" means the Annuity Account Value less the
contingent withdrawal charge, the annual administrative charge and all other
charges and expenses which are applied against an Investment Fund. See "Part
7: Deductions and Charges."
TABLE 1: GROWTH OF $1,000 FOR CONTRACTS TERMINATED ON DECEMBER 31, 1994
<TABLE>
<CAPTION>
LENGTH OF INVESTMENT PERIOD
------------------------------------------------------------
INVESTMENT THREE SINCE
FUND ONE YEAR YEARS FIVE YEARS TEN YEARS INCEPTION*
- -------------- --------- ---------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Money Market $945.46 $ 939.15 $ 996.46 $1,271.92 $ --
Intermediate
Government
Securities 869.14 945.68 -- -- 1,031.55
Quality Bond 862.55 -- -- -- 851.04
High Yield 883.57 1,142.40 1,323.35 -- 1,462.10
Growth &
Income 903.66 -- -- -- 893.86
Equity Index -- -- -- -- 923.89
Common Stock 889.13 1,070.35 1,274.69 3,081.00 --
Global 956.43 1,175.31 1,356.09 -- 1,546.67
Aggressive
Stock 874.85 920.21 1,800.93 4,353.77 --
Asset Allocation Series:
Conservative
Investors 871.64 951.92 1,136.65 -- 1,164.72
Balanced 835.76 847.18 1,132.59 2,023.48 --
Growth
Investors 880.30 993.55 1.562.70 -- 1,619.51
</TABLE>
<PAGE>
TABLE 2: AVERAGE ANNUAL TOTAL RETURN UNDER CONTRACTS TERMINATED ON DECEMBER
31, 1994
<TABLE>
<CAPTION>
LENGTH OF INVESTMENT PERIOD
---------------------------------------------------------------
INVESTMENT THREE SINCE
FUND ONE YEAR YEARS FIVE YEARS TEN YEARS INCEPTION*
- ---------------- ----------- ---------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C>
Money Market -5.45% -2.07% -0.07% 2.43% --
Intermediate
Government
Securities -13.09% -1.84% -- -- 0.83%
Quality Bond -13.75% -- -- -- -12.12%
High Yield -11.64% 4.54% 5.76% -- 4.87%
Growth & Income -9.63% -- -- -- -8.60%
Equity Index -- -- -- -- -7.61%
Common Stock -11.09% 2.29% 4.97% 11.91% --
Global -4.36% 5.53% 6.28% -- 6.12%
Aggressive Stock -12.51% -2.73% 12.49% 15.85% --
Asset Allocation Series:
Conservative
Investors -12.84% -1.63% 2.59% -- 2.95%
Balanced -16.42% -5.38% 2.52% 7.30% --
Growth Investors -11.97% -0.22% 9.34% -- 9.63%
</TABLE>
* Inception dates are as follows: Money Market (May 11, 1982);
Intermediate Government Securities (April 1, 1991); Quality Bond (October 1,
1993); High Yield (January 2, 1987); Growth & Income (October 1, 1993);
Equity Index (March 1, 1994); Common Stock (August 1, 1968); Global (August
27, 1987); Aggressive Stock (May 1, 1984); Conservative Investors (October 2,
1989); Balanced (May 1, 1984) and Growth Investors (October 2, 1989). The
"Since Inception" number for the Equity Index Fund is unannualized.
28
<PAGE>
COMMUNICATING PERFORMANCE DATA
In reports or other communications or in advertising material, we may
describe general economic and market conditions affecting the Separate
Account and the Trust and may compare the performance of the Investment Funds
with (1) that of other insurance company separate accounts or mutual funds
included in the rankings prepared by Lipper Analytical Services, Inc.,
Morningstar Inc., VARDS or similar investment services that monitor the
performance of insurance company separate accounts or mutual funds, (2) other
appropriate indices of investment securities and averages for peer universes
of funds which are described in this prospectus on pages 17 and 18, or (3)
data developed by us derived from such indices or averages. The Morningstar
Variable Annuity/Life Report consists of nearly 700 variable life and annuity
funds, all of which report their data net of investment management fees,
direct operating expenses and separate account charges. VARDS is a monthly
reporting service that monitors approximately 760 variable life and variable
annuity funds on performance and account information. Advertisements or other
communications furnished to present or prospective Contract Owners may also
include evaluations of an Investment Fund or Portfolio by financial
publications that are nationally recognized such as Barron's, Morningstar's
Variable Annuity Sourcebook, Business Week, Chicago Tribune, Forbes, Fortune,
Institutional Investor, Investment Adviser, Investment Dealer's Digest,
Investment Management Weekly, Los Angeles Times, Money, Money Management
Letter, Kiplinger's Personal Finance, Financial Planning, National
Underwriter, Pension & Investments, USA Today, Investor's Daily, The New York
Times and The Wall Street Journal.
29
<PAGE>
PART 4: THE GUARANTEED INTEREST ACCOUNT
You may allocate some or all of your Annuity Account Value to the Guaranteed
Interest Account which is part of our general account and pays interest at a
guaranteed rate. The general account supports all of our policy and contract
guarantees, as well as our general obligations. The general account is
subject to regulation and supervision by the Insurance Department of the
State of New York and to the insurance laws and regulations of all
jurisdictions where we are authorized to do business. Because of applicable
exemptive and exclusionary provisions, interests in the general account have
not been registered under the Securities Act of 1933 (1933 ACT), nor is the
general account an investment company under the 1940 Act. Accordingly, the
general account is not subject to regulation under the 1933 Act or the 1940
Act. We have been advised that the staff of the SEC has not made a review of
the disclosures that are included in the prospectus for your information and
that relate to the general account and the Guaranteed Interest Account. These
disclosures, however, may be subject to certain generally applicable
provisions of the Federal securities laws relating to the accuracy and
completeness of statements made in prospectuses.
The amount that you have in the Guaranteed Interest Account at any time is
equal to the sum of all contributions and transfers that have been allocated
to that Account on your behalf plus interest, less the sum of all amounts
that have been withdrawn, transferred or deducted from that Account.
All Contracts have a minimum guaranteed interest rate of 3% (or 4% in the
case of TRUSTEED and Series 100 NQ group Contracts). We also declare a yearly
guaranteed interest rate which will remain in effect throughout the next year
and will never be less than the Contract's minimum guaranteed interest rate.
Allocations to the Guaranteed Interest Account will earn interest at least
equal to the yearly guaranteed interest rate. The yearly guaranteed interest
rate for 1995 is 3% (or 4% in the case of TRUSTEED and Series 100 NQ group
Contracts). At least 15 days before the beginning of a calendar year, we will
notify you in writing of the yearly guaranteed interest rate for the next
year. We may credit additional amounts of interest at our discretion.
In addition to the contractual and yearly minimums described above, (for
Contracts other than Corporate Trusteed Contracts and EDC Contracts issued to
governmental employers in New York whose EQUI- VEST funding arrangements
became effective on or after July 1, 1989), an interest rate may be assigned
to each allocation to the Guaranteed Interest Account and the rate may be
guaranteed for a certain period of time, depending on when the allocation was
made. Therefore, for these Contracts, different interest rates may apply to
different amounts held in the Guaranteed Interest Account, depending on when
the amount was allocated. We reserve the right to apply this approach to all
EQUI-VEST Contracts.
30
<PAGE>
PART 5: THE FIXED MATURITY ACCOUNT
ALLOCATIONS TO FIXED MATURITY PERIODS
Your Fixed Maturity Account contains the Fixed Maturity Periods to which you
have made a contribution or transfer. Each amount contributed (including
amounts transferred) to a Fixed Maturity Period and held to that Period's
Expiration Date accumulates interest at the Rate to Maturity in effect on the
date of your contribution to that Period. Thus, your Rate to Maturity is the
interest rate your contribution will earn if your money remains in that Fixed
Maturity Period until its Expiration Date.
Your Maturity Amount in a Fixed Maturity Period on its Expiration Date is
your original contribution plus interest, using the Rate to Maturity in
effect on the date of your contribution (or transfer) for the Fixed Maturity
Period (less appropriate adjustments for any charges or premature
withdrawals).
Before maturity, you have a Market Adjusted Amount in each Fixed Maturity
Period to which you have made a contribution. The Market Adjusted Amount is
the present value of your Maturity Amount, discounted at the Rate to Maturity
in effect for new contributions on the date of the calculation. It thus
reflects whatever market value adjustment (see details below) would apply on
that day were you to withdraw the entire amount in your Fixed Maturity
Period. (On the Expiration Date, your Market Adjusted Amount equals your
Maturity Amount.)
Contributions may be made to one or more Fixed Maturity Periods; however, you
may not make more than one contribution to any one Fixed Maturity Period. You
may not make a contribution to a Fixed Maturity Period which has an
Expiration Date beyond the date on which annuity payments are to commence
under your Contract. If you have contributed funds to one or more Fixed
Maturity Periods and to the Guaranteed Interest Account, the amount you can
transfer out of the Guaranteed Interest Account will be restricted. See
"Transfers" in Part 6.
AVAILABILITY OF FIXED MATURITY PERIODS
Subject to state regulatory approval, Fixed Maturity Periods will be
available as Investment Options only to Owners of Series 400 Contracts on or
about June 30, 1995.
We will offer Fixed Maturity Periods ending on June 15 (or the preceding
Business Day) for each of the maturity years 1996 through 2005. Not all Fixed
Maturity Periods will be available in all states. As Fixed Maturity Periods
expire, we expect to add maturity years so that generally ten are available
in most states at any time.
RATES TO MATURITY AND PRESENT VALUE PER $100 OF MATURITY AMOUNT
Because the Maturity Amount of a contribution to a Fixed Maturity Period can
be determined at the time it is made, you can determine the amount required
to be contributed to a Fixed Maturity Period in order to produce a target
Maturity Amount (assuming no transfers or withdrawals are made and no charges
are allocated to the Fixed Maturity Period). The required contribution is the
present value of that Maturity Amount discounted at the Rate to Maturity on
the Transaction Date for the contribution.
The same approach as described above may also be used to determine the amount
which you would need to allocate to each Fixed Maturity Period in order to
create a series of constant Maturity Amounts for two or more years.
The Rates to Maturity that will be available on or about June 30, 1995, for
new contributions can be obtained from your agent or by calling (800) 841-
0801.
OPTIONS AT EXPIRATION DATE
We will notify you at least 45 days before the Expiration Date of each Fixed
Maturity Period in which you have any money. You may elect one of the
following options to be effective at the Expiration Date:
(a)to transfer the Maturity Amount into any Fixed Maturity Period we are
then offering, or into any of our other Investment Options.
(b)to withdraw the Maturity Amount (subject to any contingent withdrawal
charge which may apply under your Contract).
If we have not received your election as of the Expiration Date, the Maturity
Amount in the expired Fixed Maturity Period will be transferred into the
Money Market Fund (or another Investment Option if required by state
regulation).
31
<PAGE>
MARKET VALUE ADJUSTMENT FOR
TRANSFERS, WITHDRAWALS OR
TERMINATION PRIOR TO THE
EXPIRATION DATE
Any withdrawal (including transfers, terminations and deductions) from a
Fixed Maturity Period prior to its Expiration Date will result in a positive
or negative market value adjustment, which is reflected in your Market
Adjusted Amount. The amount of the adjustment will depend on two factors: (a)
the difference between the Rate to Maturity on the date of your contribution
or transfer and the Rate to Maturity for the same Fixed Maturity Period on
the date of the calculation, and (b) the length of time remaining until the
Expiration Date. In general, if interest rates have risen between the time
when an amount was originally contributed to a Fixed Maturity Period and the
time it is withdrawn, the market value adjustment will be negative, and vice
versa; and the longer the period of time remaining until the Expiration Date,
the greater the impact of the interest rate difference. Therefore, it is
possible that a significant rise in interest rates could result in a
substantial reduction in your Market Adjusted Amount should you withdraw
before the Expiration Date.
The market value adjustment (positive or negative) resulting from a
withdrawal of all funds from a Fixed Maturity Period will be determined for
each contribution allocated to that Fixed Maturity Period as follows:
(1) We determine the Market Adjusted Amount on the Transaction Date as
follows:
(a)We determine the Book Value that would be payable on the Expiration Date,
using the applicable Rate to Maturity. The Book Value equals your
contribution to the Fixed Maturity Period, reduced by any prior
withdrawals, transfers and charges and reflecting any prior market value
adjustments, accumulated at the Rate to Maturity on the date of the
contribution.
(b)We determine the time remaining in your Fixed Maturity Period (based on
the Transaction Date) and convert it to fractional years based on a 365
day year. For example three years and 12 days becomes 3.0329.
(c)We determine the current Rate to Maturity which applies on the
Transaction Date to new contributions to the same Fixed Maturity Period.
(d)We determine the present value of the Book Value payable at the
Expiration Date, using the period determined in (b) and the rate
determined in (c).
(2) We determine the Book Value as of the current date.
(3) We subtract (2) from the result in (1)(d). The result is the market
value adjustment applicable to such Fixed Maturity Period, which may be
positive or negative.
The market value adjustment (positive or negative) resulting from a
withdrawal of a portion of the amount in a Fixed Maturity Period will be a
percentage of the market value adjustment that would be applicable upon a
withdrawal of all funds from a Fixed Maturity Period. This percentage is
determined by (i) dividing the amount of the withdrawal or transfer from the
Fixed Maturity Period by (ii) the Market Adjusted Amount in such Fixed
Maturity Period prior to the withdrawal or transfer. See Appendix I for an
example.
The Rate to Maturity for new contributions to a Fixed Maturity Period is the
rate we have in effect for this purpose even if new allocations to that Fixed
Maturity Period would not be accepted at the time. If we do not have a Rate
to Maturity in effect for a Fixed Maturity Period to which the "current Rate
to Maturity" in (1)(c) would apply, we will use the rate at the next closest
Expiration Date. If we are no longer offering new Fixed Maturity Periods, the
"current Rate to Maturity" will be determined in accordance with our
procedures then in effect. For purposes of calculating the market value
adjustment only, we reserve the right to add up to 0.50% to the current rate
in (1)(c) above.
<PAGE>
INVESTMENTS
Contributions received under the Contracts and allocated to Fixed Maturity
Periods will be held in a "nonunitized" separate account established by us
under the laws of New York. A nonunitized separate account is a separate
account in which the Contract Owner has no claim on, or participation in the
performance of, the assets held in the account. Investments purchased with
amounts contributed to the Fixed Maturity Account (and any earnings on those
amounts) are our property. Any favorable investment performance on the assets
held in the separate account accrues solely to our benefit. We may, subject
to applicable state law, transfer all assets allocated to the separate
account to our general account. Regardless of whether assets supporting Fixed
Maturity Accounts are held in a separate account or our general account, all
benefits relating to the value in the Fixed Maturity Account are guaranteed
by us.
We have no specific formula for establishing the Rates to Maturity for the
Fixed Maturity Periods.
32
<PAGE>
We expect the rates to be influenced by, but not necessarily correspond to,
among other things, the yields on the fixed income securities to be acquired
with amounts that are allocated to the Fixed Maturity Periods at the time
that the Rates to Maturity are established. Our current plans are to invest
such amounts in fixed income obligations, including corporate bonds, mortgage
backed and asset backed securities and government and agency issues having
durations in the aggregate consistent with those of the Fixed Maturity
Periods.
Although the foregoing generally describes our plans for investing the assets
supporting our obligations under the fixed portion of the Contracts, we are
not obligated to invest those assets according to any particular plan except
as may be required by state insurance laws nor will the Rates to Maturity we
establish be determined by the performance of the nonunitized separate
account. Interests held in the nonunitized separate account are registered
under the 1933 Act. See "Part 4: The Guaranteed Interest Account" for a
discussion of our general account.
33
<PAGE>
PART 6: PROVISIONS OF THE CONTRACTS
The provisions of your Contract may be restricted by any plan or agreement
relating to it or by applicable laws or regulations.
SELECTING INVESTMENT OPTIONS
You can choose one of the following two methods for selecting Investment
Options:
o Maximum Fund Choice, allowing you to allocate contributions to any
Investment Fund, the Guaranteed Interest Account and the Fixed Maturity
Periods; however, this election will result in restrictions in the amount
you can transfer out of the Guaranteed Interest Account; or
o Maximum Transfer Flexibility, allowing you to allocate contributions only
to the Balanced, Growth & Income, Equity Index, Common Stock, Global,
International, Aggressive Stock and Growth Investors Funds and the
Guaranteed Interest Account; and no transfer restrictions apply.
Once this selection is made, you may allocate contributions to, or transfer
among, only the Investment Options that you have chosen. After your Contract
is issued, you may request in writing to add any remaining Funds or eliminate
Funds that result in transfer restrictions, but we have the right to deny the
request. See "Transfers" elsewhere in this Section.
The Guaranteed Interest Account is always available as an Investment Option.
Subject to state regulatory approval, the Fixed Maturity Periods will be
available on or about June 30, 1995 only to Owners of Series 400 Contracts.
If you want to invest in the Fixed Maturity Periods, you must select Maximum
Fund Choice.
For Original Contracts, only the Guaranteed Interest Account and the Money
Market, Balanced, Common Stock and Aggressive Stock Funds are available. In
most cases, you may request to add additional Funds to your Original
Contract, although we have the right to deny such requests. See "Transfers"
elsewhere in this Section for the transfer restrictions applicable to
Original Contracts.
CONTRIBUTIONS UNDER THE CONTRACTS
Generally, contributions may be made at any time: in single sum amounts, on a
regular basis or as your financial situation permits. For some types of
retirement plans, contributions must be made by the employer.
Contributions are credited as of the Transaction Date, providing they are
accompanied with complete information. All contributions made by check must
be drawn on a bank in the U.S., in U.S. dollars and made payable to Equitable
Life. All checks are accepted subject to collection.
Minimum amounts that may be contributed are as follows:
o IRA
--Series 100 and 200--$20
--Series 300 and 400--$50
o QP IRA
--Series 100 and 200--$1,000
--Series 300 and 400--$2,500
o NQ
--$1,000 (initial); $50
(initial for payroll
deduction)
--$50 (ongoing)
o All others
--$20
We reserve the right to change minimum and maximum contribution amounts upon
90 days prior written notice.
<PAGE>
Special Limits
NQ: Subsequent contributions to Series 100 and 200 NQ Contracts will be
restricted for Annuitants age 59 and older in states where individual
Contracts are issued. Subsequent contributions to Series 300 and 400 NQ
Contracts may not be accepted for Annuitants age 80 and older.
TSA: In certain cases, provided the total annual contribution to the
EQUI-VEST TSA will be at least $200 annually, we may accept contributions of
less than $20.
IRA: Contributions to IRA Contracts may be subject to maximums, as discussed
below and in "Part 9: Tax Aspects of the Contracts." Subsequent contributions
may be "regular" IRA contributions, "rollover" contributions or "direct
transfers." A $2,000 annual limit applies to regular contributions, but not
to rollovers or direct transfers.
34
<PAGE>
"Regular" IRA contributions may no longer be made for the taxable year in
which you attain 70 1/2 and thereafter. Rollover and direct transfer
contributions may be made after you attain age 70 1/2 . However, any amount
contributed must be net of your required minimum distibution for the year in
which the rollover or direct transfer contribution is made.
The Code imposes certain limitations on contributions to IRA Contracts. See
"Part 9: Tax Aspects of the Contracts -- Tax-Qualified Individual Retirement
Annuities (IRAs)."
Contributions to the Investment Funds and the
Guaranteed Interest Account
We allocate contributions to the Investment Funds and the Guaranteed Interest
Account on the Transaction Date according to your allocation percentages.
Allocation percentages can be changed at any time by writing to our
Processing Office or by using TOPS. Your request must indicate the specific
change and must be signed. The change will be effective on the Transaction
Date and will remain in effect for future contributions unless another change
is requested.
A contribution allocated to an Investment Fund purchases Accumulation Units
in that Investment Fund. The number of Accumulation Units purchased equals
the dollar amount of the contribution divided by the Accumulation Unit Value
for that Investment Fund computed at the end of the Valuation Period in which
we receive the contribution at our Processing Office. A VALUATION PERIOD is
each Business Day together with any consecutive, preceding non- business
days. The number of Accumulation Units purchased will not vary because of any
later change in the Accumulation Unit Value. The Accumulation Unit Value
varies with the investment performance of the corresponding Portfolios of the
Trust, which in turn reflects the investment income and realized and
unrealized capital gains and losses of the Portfolios, as well as the Trust
expenses. A description of the computation of the Accumulation Unit Value is
found in the SAI.
Contributions allocated to the Guaranteed Interest Account become part of our
general account on the Transaction Date and begin to accrue interest at the
guaranteed interest rate then in effect.
Contributions to the Fixed Maturity Account (Series 400 Contracts only)
You must provide specific instructions for contributions to the Fixed
Maturity Account. Contributions (or transfers) to a Fixed Maturity Period
will have the Rate to Maturity for the specified Period offered on the
Transaction Date. Contributions may be made to one or more Fixed Maturity
Periods; however, you may not make more than one contribution (or transfer)
to any one Fixed Maturity Period. In no event may contributions be made to
Fixed Maturity Periods with maturities beyond the date on which annuity
payments are to commence under your Contract. See "Distribution Options"
elsewhere in this Section.
Automatic Investment Program
Our Automatic Investment Program (AIP) provides for a specified amount to be
automatically deducted from a bank checking account, bank money market
account or credit union checking account and to be contributed into an NQ or
IRA Contract on a monthly basis. AIP contributions may be made to any
Investment Option available under your Contract except the Fixed Maturity
Periods. You may elect AIP by properly completing the appropriate form, which
is available from your Equitable Life Agent, and returning it to our
Processing Office. You elect which day of the month (other than the 29th,
30th or 31st) you wish to have your bank account debited. That date, or the
next Business Day if that day is a non-Business Day, will be the Transaction
Date. AIP is not available to QP IRA Contract Owners.
You may cancel AIP at any time by notifying our Processing Office in writing.
Equitable Life is not responsible for any debits made to your account prior
to the time written notice of revocation is received at our Processing
Office.
ANNUITY ACCOUNT VALUE
Your Annuity Account Value for an EQUI-VEST Contract is the sum of your
amounts in the Investment Options, plus the amount in any loan reserve
account, including accrued interest. These amounts are defined below and
include your value in the Investment Funds, your value in the Guaranteed
Interest Account and your value in the Fixed Maturity Account. The loan
reserve account, applicable only to certain TSA and Corporate TRUSTEED
Contracts, is described in the SAI.
<PAGE>
Value in the Investment Funds
Your value in an Investment Fund on any Business Day under your Contract is
equal to the number of your Accumulation Units in that Investment Fund times
the Accumulation Unit Value for that Fund for that date. Your number of
Accumulation Units in an Investment Fund at any time is equal to the sum of
Accumulation Units purchased by your contributions and transfers less any
Accumulation Units redeemed for withdrawals, transfers or deductions for
applicable charges.
The number of Accumulation Units you purchase or sell in any Investment Fund
is equal to the dollar
35
<PAGE>
amount of your transaction divided by the Accumulation Unit Value for the
Investment Fund on the Transaction Date. The number of Accumulation Units you
own will not vary because of any later change in the Accumulation Unit Value.
However, the Accumulation Unit Value varies with the investment performance
of the Fund, which in turn reflects the investment income and realized and
unrealized capital gains and losses of the corresponding Portfolio, as well
as Trust fees and expenses. The Accumulation Unit Value is also stated after
deduction of the Separate Account asset charges relating to the Contracts. A
description of the computation of the Accumulation Unit Values is found in
the SAI.
Accumulation Unit Values
The following tables show the Accumulation Unit Values, as of the last
Business Day for the periods shown, commencing with the initial offering of
each Fund under the Contracts indicated below. Accumulation Unit Values are
not shown for Series 200 and 400 because they are being offered for the first
time as of the date of this prospectus. When offered, however, Series 200
Contracts will have identical Accumulation Unit Values as Series 100
Contracts, and Series 400 Contracts will have identical Accumulation Unit
Values as Series 300 Contracts.
EQUI-VEST: SERIES 100
<TABLE>
<CAPTION>
LAST INTERMEDIATE
BUSINESS MONEY GOVERNMENT QUALITY HIGH GROWTH & EQUITY
DAY OF MARKET SECURITIES BOND YIELD INCOME INDEX
- --------------- -------- -------------- --------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
December 1985 $17.31 -- -- -- -- --
December 1986 18.22 -- -- -- -- --
December 1987 19.18 -- -- -- -- --
December 1988 20.32 -- -- -- -- --
December 1989 21.89 -- -- -- -- --
December 1990 23.38 -- -- -- -- --
December 1991 24.48 -- -- -- -- --
December 1992 25.01 -- -- -- -- --
December 1993 25.41 -- -- -- -- --
December 1994 26.08 $ 98.19 $93.87 $95.88 $ 98.86 $100.95
March 1995 26.37 101.47 97.14 99.85 103.72 110.21
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
LAST
BUSINESS COMMON AGGRESSIVE CONSERVATIVE GROWTH
DAY OF STOCK GLOBAL STOCK INVESTORS BALANCED INVESTORS
- --------------- -------- --------- ------------ -------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
December 1985 $ 45.11 -- $15.03 -- $13.14 --
December 1986 52.10 -- 18.33 -- 14.69 --
December 1987 55.30 -- 18.15 -- 13.95 --
December 1988 67.22 -- 18.09 -- 15.80 --
December 1989 83.40 -- 25.86 -- 19.69 --
December 1990 75.67 -- 27.36 -- 19.40 --
December 1991 102.76 -- 50.51 -- 27.17 --
December 1992 104.63 -- 48.30 -- 26.04 --
December 1993 128.80 -- 55.68 -- 28.85 --
December 1994 124.32 $104.12 52.88 $95.10 26.18 $ 96.31
March 1995 131.77 103.96 55.93 98.89 27.07 100.77
</TABLE>
EQUI-VEST: SERIES 300
<TABLE>
<CAPTION>
LAST INTERMEDIATE
BUSINESS MONEY GOVERNMENT QUALITY HIGH GROWTH & EQUITY
DAY OF MARKET SERIES BOND YIELD INCOME INDEX
- --------------- --------- -------------- --------- -------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
December 1994 $102.61 $ 98.19 $93.87 $95.88 $ 98.86 $100.95
March 1995 103.73 101.47 97.14 99.85 103.72 110.21
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
LAST
BUSINESS COMMON AGGRESSIVE CONSERVATIVE GROWTH
DAY OF STOCK GLOBAL STOCK INVESTORS BALANCED INVESTORS
- --------------- --------- --------- ------------ -------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
December 1994 $ 97.03 $104.12 $ 95.45 $95.10 $91.64 $ 96.31
March 1995 102.84 103.96 100.93 98.89 94.76 100.77
</TABLE>
<PAGE>
Value in the Guaranteed Interest Account
Your value in the Guaranteed Interest Account on any Business Day is equal to
contributions made to the Guaranteed Interest Account plus interest, less
withdrawals, transfers and deductions for applicable charges.
Value in the Fixed Maturity Account
Your value in each Fixed Maturity Period on any Business Day is your Market
Adjusted Amount in that Period. See "Part 5: The Fixed Maturity Account."
TRANSFERS
You may transfer all or portions of your Annuity Account Value among the
Investment Options you have chosen at any time, subject to the restrictions
stated below. The amount transferred must be at least $300 or, if less, the
entire amount in the Investment Option.
o If you have selected to make only the Balanced, Growth & Income, Equity
Index, Common Stock, Global, International, Aggressive Stock and Growth
Investors Funds and the Guaranteed Interest Account available (Maximum
Transfer Flexibility), no transfer restrictions will apply among these
Funds and the Guaranteed Interest Account.
o If you have selected to make all Investment Options available (Maximum
Fund Choice), then the maximum amount which you may transfer in any
Contract Year from the Guaranteed Interest
36
<PAGE>
Account to any other Investment Option is the greater of (a) 25% of the
amount you had in the Guaranteed Interest Account on the last day of the
prior Contract Year or (b) the total of all amounts you transferred from
the Guaranteed Interest Account to any other Investment Option in the
prior Contract Year.
o Transfers out of a Fixed Maturity Period other than at the Expiration
Date will result in a market value adjustment. See "Part 5: The Fixed
Maturity Account."
o Transfers may not be made to Fixed Maturity Periods to which you have
already made a contribution or transfer.
If you transfer money to the Guaranteed Interest Account from another
financial institution during your first Contract Year, and if you have
selected Maximum Fund Choice, you will be permitted, during the balance of
that Contract Year, to transfer up to 25% of such initial Guaranteed Interest
Account balance to any other Investment Option.
However, for Original Contract Owners, including Original Contract Owners who
elect to amend their Contract by selecting Maximum Transfer Flexibility, the
Money Market Fund is always available but we do not permit transfers into
that Fund from any other Investment Option. No other transfer limitations
apply to Original Contracts.
Upon 90 days advance notice, we have the right to change or establish
additional restrictions on transfers among the Investment Options.
A transfer request will be effective on the Transaction Date. Transfers in or
out of the Investment Funds will be at the Accumulation Unit Value next
computed after the Transaction Date. Transfers out of the Fixed Maturity
Periods will be at the Market Adjusted Amount on that Transaction Date.
Transfers into the Fixed Maturity Periods will be at the Rate to Maturity on
that Transaction Date. A transfer request does not change your percentages
for allocating current or future contributions among the Investment Options.
All transfers among the Investment Options will be confirmed in writing.
Written transfer requests should be sent directly to the Processing Office.
Your signed request for a transfer should specify your Contract number, the
amounts to be transferred and the Investment Options to and from which the
amounts are to be transferred. You can use our TOPS service to make transfers
among any Investment Options other than the Fixed Maturity Periods. Please
contact your Equitable Life Agent or the Processing Office to receive the
form necessary to obtain a special code number required for TOPS.
AUTOMATIC TRANSFER OPTIONS
(INVESTMENT SIMPLIFIER)
We offer two automatic options for transferring amounts from the Guaranteed
Interest Account to the Investment Funds: the Fixed-Dollar and the Interest
Sweep. You may select either, but not both, of these options.
o Fixed Dollar Option
Under the Fixed-Dollar Option you may elect to have a fixed dollar amount
transferred out of the Guaranteed Interest Account and into the Investment
Funds of your choosing (unless transfers to the Money Market Fund are
prohibited) on a monthly basis. You can either specify the number of
monthly transfers or instruct us to continue to make monthly transfers
until amounts in the Guaranteed Interest Account are depleted. In order to
elect this option you must have a minimum amount of $5,000 in the
Guaranteed Interest Account on the date we receive your election form at
our Processing Office and you must elect to transfer at least $50 per
month. The Fixed- Dollar Option is subject to the Guaranteed Interest
Account transfer limitation described in "Transfers" in this Section.
The Fixed-Dollar Option relies upon the principles of dollar cost
averaging. Dollar cost averaging is an investment strategy whereby equal
dollar amounts are invested at regular intervals. By allocating fixed
amounts on a regularly scheduled basis--as opposed to allocating the total
amount at one particular time--an investor may be less susceptible to the
impact of market fluctuations. Although dollar cost averaging is designed
to lessen the impact of market fluctuations, it does not assure a profit
nor protect against loss in a declining market.
<PAGE>
o Interest Sweep
Under the Interest Sweep, an amount of interest is transferred each month
from the Guaranteed Interest Account to the Investment Funds of your choice
(except transfers to the Money Market Fund when prohibited). Interest is
calculated based on your Annuity Account Value in the Guaranteed Interest
Account at the beginning of the month and is not adjusted for financial
transactions that occur during the month. Therefore, if you conduct such
financial transactions, the amount transferred may be more or less than
actual interest accrued.
To be eligible for the Interest Sweep option, you must have at least $7,500
in the Guaranteed Interest Account on the date we receive your election
form and on the first Business Day of each month thereafter.
37
<PAGE>
You may elect either option by completing an election form and sending it to
our Processing Office. You can obtain a form from your Equitable Life Agent.
For the Fixed Dollar Option, the first monthly transfer will occur on the
last Business Day of the month in which we receive your election form at our
Processing Office. For the Interest Sweep, the first monthly transfer will
occur on the last Business Day of the month following the month in which we
receive your election form at our Processing Office.
Termination of Automatic Options
Automatic transfer options will terminate:
-- Under the Fixed-Dollar Option, when either the number of designated
monthly transfers have been completed or the amount you have in the
Guaranteed Interest Account has been depleted, as applicable; or
-- Under the Interest Sweep, when the amount you have in the Guaranteed
Interest Account falls below $7,500 (determined on the first Business
Day of the month) for two consecutive months; or
-- Under either option, on the date we receive your written request to
terminate automatic transfers at our Processing Office or on the date
your Contract terminates.
LOANS (FOR TSA AND CORPORATE
TRUSTEED ONLY)
Unless restricted by the employer's retirement plan, loans are permitted
against the Annuity Account Value of TSA and Corporate TRUSTEED Contracts
only. Loans under a Corporate TRUSTEED Contract, however, may not be
available in all states. The Code and the Employee Retirement Income Security
Act of 1974 (ERISA) generally prohibit loans to a 5% owner of an "S
corporation" or an owner-employee. Loans are currently not available under
individual TSA Contracts where the TSA plan is subject to Title I of ERISA;
however, we may offer these loans in the future. Also, loans are not
available under University TSA Contracts and when an Automatic Withdrawal
option has been elected.
The trustee or sponsoring employer is responsible for insuring that any loan
meets applicable Department of Labor (DOL) requirements. The DOL regulations
concerning the availability of loans to retirement plan participants state,
among other things, that although a minimum loan amount of greater than
$1,000 does not violate the DOL regulations, a loan program may provide for a
$1,000 minimum loan amount as a safe harbor in order to assure that loans are
available to all plan participants on a "reasonably equivalent basis." In
addition, the DOL regulations set forth an upper limit on the amount of a
plan participant's vested account benefit which may be used as security for a
loan. Specifically, 50% of a plan participant's Annuity Account Value may be
used as security. Finally, the DOL regulations provide that the loan must
bear a reasonable rate of interest. The DOL stated that a loan will be
considered to bear a reasonable rate of interest if the loan provides the
plan with a return commensurate with the interest rates charged by persons in
the business of lending money for loans made under similar circumstances.
Before a loan can be made under either a Corporate TRUSTEED or TSA Contract,
a properly completed Loan Agreement and Application must be signed. A loan
application form can be obtained from your Equitable Life Agent, by writing
to our Processing Office or calling our toll-free number. In the case of
Corporate TRUSTEED and certain TSA Contracts, the written consent of the plan
participant's spouse will be required before a loan can be made. More details
of the loan provisions are stated in the Contract and the loan application
form. Before taking a loan, a plan participant should check with the employer
and a tax adviser.
The trustee of a qualified plan purchasing a Corporate TRUSTEED Contract may
set any interest rate for a loan so long as it is not less than 6% nor more
than the maximum rate permitted by applicable law. The trustee (Contract
Owner) must bill the plan participant (Annuitant) for the difference, if any,
between 6% and the rate the trustee charges. Under the terms of the Code and
ERISA, if an unreasonably high or low rate of interest is charged for loans,
the plan may be disqualified and the amount of the loan may be treated as a
taxable distribution. In that case, the trustee would be required to report
the "deemed" distribution to the Internal Revenue Service (IRS). It is the
responsibility of the plan administrator, the trustee of the qualified plan
and/or the employer, and not Equitable Life, to properly administer any loan
made to plan participants.
<PAGE>
For TSA Contracts that are not subject to the requirements of ERISA: (1) the
minimum loan amount is $3,000 and (2) the maximum amount of the loan is 80%
of the Annuity Account Value, if the amount of the Annuity Account Value is
at least $3,750 but less than $12,500; $10,000 if the amount of the Annuity
Account Value is at least $12,500 but less than $20,000; or 50% of the
Annuity Account Value if the amount of the Annuity Account Value is $20,000
or more.
In no event may any loan be greater than $50,000 less the highest outstanding
loan balance in the preceding twelve calendar months measured from the loan
effective date.
38
<PAGE>
Failure to repay a loan may have adverse tax consequences. See "Part 9: Tax
Aspects of the Contracts" and "Part 2: Loan Provisions" in the SAI.
The Code limits loans, when aggregated with all other loans from all TSAs and
qualified plans, to the greater of (1) $10,000, or (2) 50% of the value of
the non-forfeitable accrued benefits, and, in any event, to a maximum of
$50,000 (reduced by the highest outstanding loan balance in the preceding
twelve calendar months measured from the loan effective date).
The loan term will be either (1) ten years, if the Annuitant represents that
the purpose of the loan is to acquire a dwelling unit which, within a
reasonable period of time, is to be used as the Annuitant's principal
residence, or (2) five years.
At anytime after the loan has been issued, a loan may be repaid and
terminated earlier than scheduled. The loan term under Corporate TRUSTEED and
TSA Contracts may not extend beyond the earliest of: (1) election and
commencement of annuity benefits, (2) the date of termination of the Contract
and (3) the date a death benefit is paid. Also, we reserve the right to
accelerate loan repayment in the event that any future federal tax rules
would adversely affect the tax treatment of the Contract.
Payment to us to cover loan interest and to amortize a loan will be due
beginning the first day of the third month following the effective date of
the loan and quarterly thereafter. All loan payments made by check must be
drawn on a bank in the U.S., in U.S. dollars and made payable to Equitable
Life. For additional information, see "Part 2: Loan Provisions" in the SAI.
ASSIGNMENT AND FUNDING CHANGES
Generally, the Contract Owner may not assign a Contract for any purpose;
however, an NQ Contract may be assigned for any purpose other than as
security for a loan. In addition, a trustee owner of a TRUSTEED Contract can
transfer ownership to the Annuitant. We will not be bound by an assignment
unless it is in writing and we have received it at the Processing Office. In
some cases, an assignment may have adverse tax consequences. See "Part 9: Tax
Aspects of the Contracts."
An employer or trustee can change the funding vehicle for an EDC or TRUSTEED
Contract, respectively. You can change the funding vehicle for an NQ, TSA,
IRA or SEP Contract.
You may be able to move amounts you have invested with another carrier to
your EQUI-VEST Contract. To make such a change, funds must be remitted via
wire or check. Therefore, any assets accumulated under an existing program
will have to be liquidated. For example, existing insurance policies and
annuity Contracts funding a qualified plan must be converted into cash.
PARTIAL WITHDRAWALS AND
TERMINATION
You may withdraw funds from your Contract at any time before the Contract
annuitizes and while the Annuitant is alive.
As a deterrent to premature withdrawal (generally prior to age 59-1/2) the
Code provides certain penal- ties for and restrictions on early
distributions. Distributions under your Contract are subject to the Code's
restrictions. We may be required to withhold income taxes from the amount
withdrawn. These rules are outlined in "Part 9: Tax Aspects of the
Contracts."
Subject to the above Code restrictions you may withdraw funds from your
Contract in any amount of at least $300 (or your Cash Value, if less). Unless
you specify otherwise, withdrawals will be taken on a pro rata basis from the
Investment Funds and the Guaranteed Interest Account. We will make
withdrawals from the Fixed Maturity Periods as you direct. Partial
withdrawals or terminations may result in a contingent withdrawal charge,
explained fully in "Part 7: Deductions and Charges." Withdrawals may also be
taxable and subject to tax penalty. In some cases, withdrawals may be
prohibited or limited by the terms of your retirement plan. See "Part 9: Tax
Aspects of the Contracts." Partial withdrawals or terminations of amounts
held in the Fixed Maturity Periods prior to an Expiration Date will result in
a market value adjustment. See "Market Value Adjustment for Transfers,
Withdrawals or Termination Prior to the Expiration Date" in Part 5.
<PAGE>
To make a withdrawal, you should complete a Request for Disbursement form
which leads you through the withdrawal process, step by step. This form is
available from your Agent or from our Processing Office. In order to process
your request, we may require additional information, depending on the
provisions of your Contract or retirement plan. If we have received the
information we require, the requested partial withdrawal or termination will
become effective on the Transaction Date and proceeds will be mailed within
seven days thereafter. If we receive only partially completed information, we
will return the request to you for completion prior to processing.
We may terminate your Contract and pay your Annuity Account Value, less any
outstanding loan (and accrued interest) (1) if no contributions are made for
three Contract Years and the Annuity
39
<PAGE>
Account Value is less than $500, or (2) if you request a partial withdrawal
that would result in the Annuity Account Value falling below $500. We may
also terminate your Contract if no contributions are made within 120 days
from the Contract Date. For group certificates, we may terminate your
certificate if no contributions are made within 120 days from the issue date.
The amount of any outstanding loan balance plus any applicable contingent
withdrawal charge on the loan balance will be deducted from the proceeds paid
upon termination.
For participants in a Texas Optional Retirement Program, Texas law permits
withdrawals only after one of the following distributable events occur:
attainment of age 70 1/2 , death, retirement, or termination of employment in
all Texas public institutions of higher education. To make a withdrawal, a
properly completed written acknowledgment must be received from the employer.
If a distributable event occurs prior to your being vested, any amounts
provided by an employer's first-year matching contribution will be refunded
to the employer. We reserve the right to change these provisions without your
consent, but only to the extent necessary to maintain compliance with
applicable law.
THIRD PARTY TRANSFERS OR EXCHANGES
You may request that your Contract be exchanged for another contract or
certificate of the same type issued by another carrier at any time by
completing the Transfer/Rollover of Assets to Another Carrier form. This form
is available from your Agent.
A contingent withdrawal charge and third party transfer charge, if
applicable, may be imposed on your Annuity Account Value prior to the
transfer or exchange. Any higher investment return which you anticipate as a
result of this transfer or exchange may be outweighed by the cost of these
charges, if applicable. See "Part 7: Deductions and Charges." Consult your
tax or legal advisor before making any such transfers or exchanges.
REQUIREMENTS FOR DISTRIBUTIONS
Payouts may be subject to applicable withdrawal charges. See "Part 7:
Deductions and Charges." Distributions may also be taxable and subject to tax
penalties. See "Part 9: Tax Aspects of the Contracts." Amounts in the Fixed
Maturity Periods that are applied to a distribution option prior to an
Expiration Date will result in a market value adjustment. See "Market Value
Adjustment for Transfers, Withdrawals or Termination Prior to the Expiration
Date" in Part 5.
IRA, EDC, Annuitant-Owned HR-10, SEP, TSA and TRUSTEED Contracts are subject
to the Code's minimum distribution requirements for qualified plans.
Generally, distributions from these Contracts must commence by April 1 of the
calendar year following the calendar year in which you attain age 70 1/2 .
Subsequent distributions must be made by December 31st of each calendar year.
If the required minimum distribution is not made, a penalty tax in an amount
equal to 50% of the difference between the amount required to be withdrawn
and the amount actually withdrawn may apply. See "Part 9: Tax Aspects of the
Contracts" for a discussion of various special rules concerning the minimum
distribution requirements.
In addition, distributions from a qualified plan, including our prototype
plans through which Annuitant-Owned HR-10 Contracts are issued, may be
subject to the provisions of the plan document.
DISTRIBUTION OPTIONS
The Contract is an annuity Contract, even though you may elect to receive
your benefits in a non- annuity form. In addition to a lump sum distribution
option, two other types of distribution options are available: income annuity
and flexible payment distribution options.
An annuity form of distribution option or "annuitization" pays out
contributions and earnings under the Contract in installments over a
specified period of time which may be fixed or may be based on the
Annuitant's life. Annuitization payments are calculated as of the retirement
date chosen, which is on file with our Processing Office. You can change the
retirement date by writing to our Processing Office any time before the
retirement date, subject to certain restrictions as described in the
Contract.
<PAGE>
Except for EDC, TRUSTEED and NQ Contracts, the Contract Owner is always the
Annuitant. In an EDC or TRUSTEED Contract, the Annuitant is generally the
covered employee. For EDC Contracts, the employer is the Contract Owner and,
for TRUSTEED Contracts, the Owner is the trustee. For NQ Contracts, Contract
Owners may name an Annuitant other than themselves if they wish.
Before your retirement date, we will send a letter advising that retirement
benefits may be elected. Unless you otherwise elect, we will pay you an
annuity benefit on the "normal form" indicated for your Contract as of your
retirement date. For IRA retirement benefits subject to minimum distribution
requirements, we will send a form outlining the distribution options
available before you reach age 70 1/2 (if you have not annuitized before that
time).
40
<PAGE>
INCOME ANNUITY DISTRIBUTION OPTIONS:
o LIFE ANNUITY: An annuity which guarantees payments for the rest of the
Annuitant's life. Payments end with the last monthly payment before the
Annuitant's death. Because there is no death benefit associated with this
annuity form, it provides the highest monthly payment of any of the life
annuity distribution options. This is the normal form of annuity payment
for Annuitants under IRA Contracts who do not have a spouse at their
retirement date, and for SEP, TRUSTEED, TSA, Annuitant-Owned HR-10 and
EDC (other than governmental EDC plans in New York) Contracts.
o LIFE ANNUITY-PERIOD CERTAIN: This annuity form guarantees payments for
the rest of the Annuitant's life. In addition, if the Annuitant dies
before the end of a selected period of time (the "certain period"),
payments will continue to the beneficiary for the balance of the certain
period. The certain period cannot exceed life expectancy (or joint life
expectancy for qualified retirement plans). A life annuity with a certain
period of 10 years is the normal form of annuity under NQ Contracts.
o LIFE ANNUITY-REFUND CERTAIN: This annuity form guarantees payments for
the rest of the Annuitant's life. In addition, if the Annuitant dies
before the amount applied to purchase this annuity option has been
recovered, payments will continue to the beneficiary until that amount
has been recovered. This annuity option is available only as a fixed
annuity.
o PERIOD CERTAIN ANNUITY: This annuity form guarantees payments for a
specific period of time, usually 5, 10, 15 or 20 years, and does not
involve life contingencies. It does not permit any prepayment of the
unpaid principal, so you could not elect to receive part of the payments
as a single sum payment with the rest paid in monthly annuity payments.
This is the normal form of annuity for Annuitants in governmental EDC
plans in New York. Currently, this annuity option is available only as a
fixed annuity.
o JOINT AND SURVIVOR LIFE ANNUITY: This annuity form guarantees payments
for the rest of the Annuitant's life and, after his or her death,
continuation of payments to the survivor. Generally, unless the Annuitant
elects otherwise with the written consent of the spouse, this will be the
normal form of annuity payment under qualified plans and TSAs for married
Annuitants.
All of the life annuity distribution options outlined above (with the
exception of Joint and Survivor Life Annuity) are available as either Single
or Joint life annuities. Life annuity distribution options are not available
for Annuitants in governmental EDC plans in New York. Variable benefits are
also not allowed for governmental EDC plans in New York.
We offer the annuity distribution options outlined above in both fixed and
variable form, unless otherwise indicated. Fixed annuity payments, funded
through our general account, do not change and will be based on the tables of
guaranteed annuity payments in your Contract or on our then current annuity
rates, whichever is more favorable for the Annuitant. For all Annuitants, the
normal form of annuity provides for fixed payments. Variable payments will be
funded through the Common Stock Fund through the purchase of annuity units.
The amount of each variable annuity payment may fluctuate, depending upon the
performance of the Common Stock Fund. See "Annuity Unit Values" in the SAI.
On or about September 1, 1995, variable payments will be funded through your
choice among the Investment Funds.
We may offer other forms not outlined here. Your Equitable Life Agent can
provide details.
For each annuity distribution option, we will issue a separate written
agreement putting the option into effect. Before we pay any annuity benefit,
we require the return of the Contract. If your Contract is lost, you must
provide us with a written statement to this effect.
If, at the time you elect an annuity distribution option, the Annuity Account
Value is less than $2,000 or the initial payment under the option elected is
less than $20, we reserve the right to pay the Annuity Account Value in a
single sum rather than as payments under the annuity form chosen.
The size of the payments will depend on the amount applied to purchase the
annuity, the type of annuity chosen and, in the case of a life annuity
distribution option, the Annuitant's age (or the Annuitant's and joint
annuitant's ages) and in certain instances, the sex of the Annuitant(s). Once
an annuity distribution option is chosen and payments have commenced, no
change can be made.
A $200 administrative charge applies if an income annuity distribution option
is chosen before five Contract Years have been completed. This charge does
not apply when our guaranteed rates are used to calculate benefits.
Beneficiaries do not pay this charge.
FLEXIBLE PAYMENT DISTRIBUTION OPTIONS:
o PARTIAL WITHDRAWALS: See "Partial Withdrawals and Termination" above.
41
<PAGE>
O SYSTEMATIC WITHDRAWAL: You may elect either at the time of Contract issue
or any time after the first anniversary date of the Contract, to have an
amount periodically withdrawn from your Contract. A check for the amount
withdrawn will be made payable to you and mailed to your address. You
determine on which day of the month (1st through 28th) you wish to have
the Systematic Withdrawal occur. A minimum Annuity Account Value in the
Investment Funds and the Guaranteed Interest Account of $20,000 is
required at the time this feature is elected and you may terminate it at
any time.
The amount withdrawn may be either the amount of interest earned under the
Guaranteed Interest Account or a fixed dollar amount of the Annuity Account
Value in the Investment Funds or in the Guaranteed Interest Account. When
the interest option is elected, a minimum of $20,000 must be maintained in
the Guaranteed Interest Account. No minimum Annuity Account Value is
required to be maintained when the fixed dollar option is elected.
Withdrawals may be scheduled monthly or quarterly, subject to minimum
amount of $300. Amounts withdrawn which are in excess of the 10% Free
Corridor amount are subject to the contingent withdrawal charge. See
"Contingent Withdrawal Charge" in Part 7.
o AUTOMATIC WITHDRAWAL: This is our special minimum distribution option for
IRA, SEP, TSA and EDC Contracts. You may elect Automatic Withdrawal if
the Annuitant is at least 70 1/2 and your Contract has an Annuity Account
Value in the Investment Funds and the Guaranteed Interest Account of at
least $2,000. You can elect Automatic Withdrawal by filing the proper
election form with us. If you elect Automatic Withdrawal, we will pay out
of the Annuity Account Value in the Investment Funds and the Guaranteed
Interest Account an amount which the Code requires to be distributed from
your Contract. If such amounts are insufficient and you hold amounts in
the Fixed Maturity Account, we will then pay out required amounts from
the Fixed Maturity Account. In performing this calculation, we assume
that the only funds subject to the Code's minimum distribution
requirements are those held under your Contract. We calculate the
Automatic Withdrawal amount based on the information you give us, the
various choices you make and certain assumptions. Currently, Automatic
Withdrawal payments will be made annually. We are not responsible for
errors that result from inaccuracies in the information you provide. The
choices you can make are described in the SAI.
You may elect Automatic Withdrawal for each Contract you own, subject to
our rules then in effect. This election is revocable except for EDC
Contracts. Automatic Withdrawal is not available under Contracts which have
an outstanding loan. Electing this option does not restrict making partial
withdrawals, or, except for EDC contracts, subsequently electing an annuity
distribution option.
The minimum check that will be sent is $300, or, if less, your Annuity
Account Value. If, after the deduction of the amount of the Automatic
Withdrawal, the total Annuity Account Value is less than $500, we may
terminate the Contract and pay the Cash Value. See "Partial Withdrawals and
Termination" above.
Any applicable withdrawal charges will be deducted in addition to the
amount of the Automatic Withdrawal. Withdrawal charges will be deducted on
a pro rata basis from the Investment Funds and the Guaranteed Interest
Account or, if there is an insufficient amount in these Options, on a pro
rata basis from the Fixed Maturity Periods. See "Contingent Withdrawal
Charge" in Part 7.
If you have a TSA that was purchased before December 31, 1986 and
transferred to EQUI- VEST, your pre-1987 account balance is not subject to
the minimum distribution rules at age 70 1/2 .
o DEPOSIT OPTION: This distribution option is for NQ Contracts only.
Proceeds from your NQ Contract can be deposited for a period selected
(including one for as long as the Annuitant lives), and will be credited
with a guaranteed rate of interest for that period.
GUARANTEED DEATH BENEFIT
When the Annuitant Dies
Generally, upon receipt of due proof of the Annuitant's death, we will pay a
death benefit to the beneficiary named in your Contract. You designate the
beneficiary on the application. You may change your beneficiary by writing to
our Processing Office. The change is effective on the date the written
submission was signed. A beneficiary change request must be received by the
Processing Office before the submission of a death claim.
<PAGE>
In general, the death benefit is equal to the greater of: (i) the Annuity
Account Value (less any outstanding loan and accrued interest, if any) and
(ii) the "minimum death benefit." The minimum death benefit will not be less
than all contributions made (less any applicable taxes and any outstanding
loan and accrued interest, if any) adjusted for total withdrawals. We will
pay the death benefit to the beneficiary in the form of an annuity
distribution option if you have chosen such form under your Contract. If no
annuity option is in effect at the Annuitant's death, the beneficiary will
receive the death benefit in a lump sum. However, subject to certain
exceptions in the Contract, our rules then in effect and any other applicable
legal requirements, the beneficiary may elect to: (a) apply the death benefit
to an annuity
42
<PAGE>
distribution option we offer, (b) apply the death benefit to provide any
other form of distribution option we offer, (c) elect any combination of
forms of distribution option, or (d) in certain circumstances, continue the
Contract.
For Series 300 and 400 Contracts only, if the Annuitant is also the Contract
Owner and the Owner/ Annuitant elects his or her spouse to be the sole
primary beneficiary and to be the Successor Annuitant and Contract Owner,
then the surviving spouse automatically becomes both the successor Contract
Owner and Annuitant, and no death benefit is payable until the surviving
spouse's death.
When the Contract Owner Dies Before the Annuitant (NQ Contracts Only)
For all NQ Contracts, when the Contract Owner is not the Annuitant and the
Contract Owner dies before any annuity distribution payments have begun, the
beneficiary named to receive the death benefit upon the Annuitant's death
will automatically succeed as Contract Owner. For Series 300 and 400
Contracts only, you have the right to designate a Successor Owner either on
the application form or in a written request sent to our Processing Office.
The Code requires that the original Contract Owner's entire interest in the
Contract be completely distributed to the named beneficiary by the fifth
anniversary of such Owner's death (unless an annuity distribution option is
elected and payments begin within one year after the Contract Owner's death
and are made over the beneficiary's life or over a period not exceeding the
beneficiary's life expectancy). If an annuity distribution option has not
been elected, as described above, we will pay any remaining Annuity Account
Value (less any applicable contingent withdrawal charge) on the fifth
anniversary of the Contract Owner's death. If the named beneficiary is the
Contract Owner's surviving spouse, no distributions are required as long as
both the surviving spouse and the Annuitant are living.
YOUR BENEFICIARY
You designate the beneficiary for the death benefit under the Contract on the
application. You may change your beneficiary by writing to our Processing
Office. The change is effective on the Transaction Date. The employer must be
the beneficiary under EDC plans and the trustee must be the beneficiary under
most TRUSTEED plans.
The death benefit available to the beneficiary is determined as of the
Business Day due proof of death is received at our Processing Office. On that
Business Day, the Annuity Account Value is deducted from the Investment
Options and earns voluntary interest at an interest rate not less than the
rate required by law. If you have transferred the value of another Equitable
Life annuity contract to your EQUI-VEST Contract, the value of that
contract's minimum death benefit calculated as of the time of transfer will
be included in total contributions for purposes of calculating the minimum
death benefit.
If no benefit option is in effect at the Annuitant's death, the beneficiary
can select a lump sum option or one of the forms of annuity benefit. Under
certain circumstances the beneficiary may elect to continue the Contract. In
some cases, this may result in a deemed taxable distribution. Any option
selected must provide for distribution of the Annuity Account Value within
the period of time permitted by the Code. For EDC Contracts, benefits must be
distributed within a period not to exceed 15 years (or within the period of
the life expectancy of the surviving spouse if the spouse is the designated
beneficiary). See "Part 9: Tax Aspects of the Contracts."
If a lump sum is selected, it is generally paid through the Equitable Life
Access Account(Trademark), an interest bearing checking account. A
beneficiary has immediate access to the proceeds by writing a check on the
account. We pay interest from the date the lump sum is deposited into the
Access Account until the date the Access Account is closed.
PROCEEDS
Application of proceeds from the Investment Funds to a variable annuity,
payment of a death benefit from the Investment Funds and payment of any
portion of the Annuity Account Value in the Investment Funds (less any
applicable withdrawal charge) will be made within seven days after the
Transaction Date. Payments or applications of proceeds from the Investment
Funds can be deferred for any period during which (1) the New York Stock
Exchange is closed or trading on it is restricted, (2) sales of securities or
determination of the fair value of an Investment Fund's assets is not
reasonably practicable because of an emergency, or (3) the SEC, by order,
permits us to defer payment in order to protect persons with interests in the
Investment Funds. We can defer payment of any portion of the Annuity Account
Value in the Guaranteed Interest Account and in the Fixed Maturity Account
for up to six months while you are living.
<PAGE>
QUALIFIED PLANS DESIGNED TO COMPLY WITH SECTION 404(C) OF ERISA
Section 404(c) of ERISA, and the related DOL regulation, provide that if a
plan participant or beneficiary exercises control over the assets in his or
her plan account, plan fiduciaries will not be liable for any loss that is
the direct and necessary result of the plan participant's or beneficiary's
exercise of control. As a result, if the plan complies with Section 404(c)
and the DOL regulation thereunder, the plan participant can make and is
responsible for the results of his or her own investment decisions.
Furthermore, if the plan is intended to comply with Section
43
<PAGE>
404(c), it is the employer's responsibility to see that all the disclosure
requirements of Section 404(c) are met.
DISTRIBUTION OF THESE AND
OTHER CONTRACTS
As the distributor of the Contracts, Equico Securities, Inc. (EQUICO), an
indirect wholly owned subsidiary of Equitable Life, has responsibility for
sales and marketing functions for the Contracts. Equico also serves as the
principal underwriter of the Separate Account under the 1940 Act. Equico is
registered with the SEC as a broker-dealer under the Exchange Act and is a
member of the National Association of Securities Dealers, Inc. Equico's
principal business address is 1755 Broadway, New York, New York 10019. For
1994, Equico was paid a fee of $216,920 for its services under a Distribution
and Services Agreement.
The Contracts are sold by licensed insurance agents, who are registered
representatives of Equico. For Series 400 IRA and NQ Contracts, broker-dealer
compensation will not exceed 7 percent of total contributions made under such
Contracts. In addition to EQUI-VEST, Equitable Life offers other IRA and NQ
annuities with a variety of features. Your Equitable Life Agent can provide
complete information, including charges and fees.
The offering of the Contracts is intended to be continuous.
44
<PAGE>
PART 7: DEDUCTIONS AND CHARGES
ALL CONTRACTS
Most charges applied to your Contract apply to all Investment Options.
However, Trust Charges to Portfolios and Charges to Investment Funds do not
apply to the Guaranteed Interest Account or to the Fixed Maturity Account.
See "Allocation of Certain Charges to the Fixed Maturity Account" below.
TRUST CHARGES TO PORTFOLIOS
Investment advisory fees charged daily against the Trust's assets, direct
operating expenses of the Trust (such as trustees' fees, expenses of
independent auditors and legal counsel, bank and custodian charges and
liability insurance), and certain investment-related expenses of the Trust
(such as brokerage commissions and other expenses related to the purchase and
sale of securities), are reflected in each Portfolio's daily share price. The
maximum investment advisory fees paid annually by the Portfolios cannot be
increased without a vote of that Portfolio's shareholders. The maximum fees
are as follows:
<TABLE>
<CAPTION>
DAILY AVERAGE NET ASSETS
-------------------------------
FIRST
$350 NEXT $400 OVER $750
MILLION MILLION MILLION
--------- --------- ---------
<S> <C> <C> <C>
Common Stock,
Money Market
and Balanced ...... .400% .375% .350%
Aggressive Stock
and Intermediate
Government
Securities ........ .500% .475% .450%
High Yield, Global,
Conservative
Investors and
Growth Investors . .550% .525% .500%
</TABLE>
<TABLE>
<CAPTION>
DAILY AVERAGE NET ASSETS
-------------------------------
FIRST
$500 NEXT $500 OVER $1
MILLION MILLION BILLION
--------- --------- ---------
<S> <C> <C> <C>
Quality Bond and
Growth & Income .550% .525% .500%
</TABLE>
<TABLE>
<CAPTION>
FIRST
$750 NEXT $750 OVER $1.5
MILLION MILLION BILLION
--------- --------- ---------
<S> <C> <C> <C>
EQUITY INDEX . .350% .300% .250%
</TABLE>
<TABLE>
<CAPTION>
FIRST
$500 NEXT $1 OVER $1.5
MILLION BILLION BILLION
--------- --------- ---------
<S> <C> <C> <C>
International . .900% .850% .800%
</TABLE>
Investment advisory fees are established under investment advisory agreements
between the Trust and its investment adviser, Alliance. All of these fees and
expenses are described more fully in the Trust prospectus. Since Trust shares
are purchased at their net asset value, these fees and expenses are, in
effect, passed on to the Separate Account and are reflected in the
Accumulation Unit Values for the Investment Funds.
STATE PREMIUM AND OTHER APPLICABLE TAXES
Currently, we deduct any applicable charges for state and local taxes from
the amount applied to provide an annuity distribution option if you elect to
annuitize. The current premium tax charge that might be imposed in your state
ranges from 0% to 3.5%; however, the rate is 1% in Puerto Rico and 5% in the
Virgin Islands.
<PAGE>
We reserve the right to deduct any such charge from each contribution or from
distributions or upon termination. If we have deducted any applicable tax
charges from contributions, we will not deduct a charge for the same taxes at
a later time. If, however, an additional tax is later imposed upon us when
you withdraw from, terminate or annuitize your Contract, we reserve the right
to deduct a charge at such time.
IRA, QP IRA, SEP AND NQ CONTRACTS (SERIES 300 AND 400 ONLY)
CHARGES TO INVESTMENT FUNDS
We make a daily charge at a guaranteed maximum effective annual rate of 1.35%
against the assets held in each of the Investment Funds. This charge is
reflected in the Accumulation Unit Values for the particular Investment Fund
and covers mortality and expense risk charges of 1.10% and expenses of .25%.
For a limited period of time we will charge .24% against the assets of the
Intermediate Government Securities, Quality Bond, High Yield, Growth
45
<PAGE>
IRA, QP IRA, SEP AND NQ CONTRACTS (SERIES 300 AND 400 ONLY) (Continued)
& Income, Equity Index, Global, International, Conservative Investors and
Growth Investors Funds for expenses.
The mortality and expense risk charge is comprised of .60% for mortality risk
and .50% for expense risk, although the allocation of these risk charges may
vary. We assume a mortality risk by (a) our obligation to pay a death benefit
that will not be less than the total value of all contributions made (less
any applicable taxes) adjusted for total withdrawals, (b) our obligation to
make annuity payments for the life of the Annuitant under guaranteed fixed
annuity options, regardless of the Annuitant's longevity, (c) our guarantees
relating to annuity purchase rates, the actuarial basis for which can be
changed only for new contributions and only on the fifth anniversary of the
Contract Date and every five years thereafter, and (d) our obligation to
waive the contingent withdrawal charge upon the payment of a death benefit.
The expense risk we assume is the risk that, over time, our actual expense of
administering the Contracts may exceed the amounts realized from the expense
charge and the annual administrative expense charge. Part of the mortality
and expense risk charge may be considered to be an indirect reimbursement for
certain sales and promotional expenses relating to the Contracts to the
extent that the charge is not needed to meet the actual expenses incurred.
The charge for expenses, together with the annual administrative charge
described below, is designed to reimburse us for our costs in providing
administrative services in connection with the Contracts, and is not designed
to include an element of profit.
ANNUAL ADMINISTRATIVE CHARGE
On the last Business Day of each Contract Year, we deduct from the Annuity
Account Value an annual administrative charge equal to the lesser of $30 or
2% of the Annuity Account Value on such Business Day (adjusted to include any
withdrawals made during the year) for the first two Contract Years, and $30
for each Contract Year thereafter. This charge is deducted on a pro rata
basis from the Investment Funds and the Guaranteed Interest Account, and from
the Fixed Maturity Account should collection from the other Options be
insufficient and we have not been otherwise reimbursed. This charge will be
prorated for a fractional year if, before the end of the Contract Year, you
surrender your Contract, the Annuitant dies or you elect an annuity
distribution option. Accumulation Units will be redeemed in order to pay any
portion of the charge deducted from an Investment Fund. Any portion of the
charge deducted from the Guaranteed Interest Account is withdrawn in dollars.
We reserve the right to increase this charge if our administrative costs
increase, but the charge is guaranteed never to exceed $65 annually, subject
to applicable law. We also reserve the right to eliminate the administrative
charge for IRA Contracts and NQ Contracts having a minimum Annuity Account
Value of a specified amount currently set at $20,000 and $25,000,
respectively. We also reserve the right to deduct this charge on a quarterly,
rather than annual, basis.
CONTINGENT WITHDRAWAL CHARGE
No sales charges are deducted from contributions. However, to assist us in
defraying the various sales and promotional expenses incurred in connection
with selling the Contracts, we assess a charge on amounts withdrawn when you
make a partial withdrawal or terminate your Contract if the amount withdrawn
is in excess of the free corridor amount (defined below) or if no exception
applies. The amount of the withdrawal and the applicable withdrawal charge
are deducted pro rata from the Investment Funds and the Guaranteed Interest
Account and from the Fixed Maturity Account should collection from the other
Options be insufficient. The amount deducted to pay the withdrawal charge is
also subject to the withdrawal charge.
The contingent withdrawal charge is equal to 6% of the amount attributable to
withdrawn contributions which have been made in the current and five prior
Contract Years. In the case of a termination, we will pay the greater of (i)
the Annuity Account Value after the withdrawal charge has been imposed, as
described above or (ii) the free corridor amount plus 94% of the remaining
Annuity Account Value. For purposes of calculating the withdrawal charge (i)
we treat contributions as being withdrawn before earnings on a first-in,
first-out basis, and (2) amounts withdrawn up to the free corridor amount are
not considered a withdrawal of contributions. Although we treat contributions
as withdrawn before earnings for purposes of calculating the withdrawal
charge, the Federal income tax law treats earnings on NQ Contracts as
withdrawn first. See "Part 9: Tax Aspects of the Contracts." Unless you
instruct us otherwise, we will make withdrawals from the Investment Funds and
the Guaranteed Interest Account in proportion to the amount in them and from
the Fixed Maturity Account as you direct. The minimum withdrawal permitted is
$300; however, the Annuity Account Value must be at least $500 after the
withdrawal is made.
46
<PAGE>
IRA, QP IRA, SEP AND NQ CONTRACTS (SERIES 300 AND 400 ONLY) (Continued)
We reserve the right to change the amount of the contingent withdrawal
charge, provided that it will not exceed 6% of the amount deemed attributable
to withdrawn contributions. Applicable regulations would not permit such a
change where it would be unfairly discriminatory to any person. Moreover, the
withdrawal charge will be reduced if needed in order to comply with any state
law that applies. The tax consequences of withdrawals are discussed under
"Part 9: Tax Aspects of the Contracts."
Free Withdrawal Amount (Free Corridor)
No withdrawal charge will be applied during any Contract Year in which the
amount withdrawn is less than or equal to 10% of the Annuity Account Value at
the time the withdrawal is requested minus any amount previously withdrawn
during that Contract Year. This 10% portion is called the FREE CORRIDOR
AMOUNT. Any withdrawal requested that exceeds the free corridor amount will
be subject to the contingent withdrawal charge, unless one of the following
exceptions applies.
Exceptions to the Contingent Withdrawal Charge
A contingent withdrawal charge generally will not apply upon any of the
events listed below. However, we reserve the right to impose such charges, in
accordance with your Contract and applicable state law, for pre-existing
conditions or conditions which began within 12 months of your Contract Date.
The events are:
o the Annuitant dies and a death benefit is payable to the beneficiary, or
o we receive a properly completed election form providing for the Annuity
Account Value to be used to buy a life contingent annuity, or
o the Annuitant has qualified to receive Social Security disability
benefits as certified by the Social Security Administration, or
o we receive proof satisfactory to us that the Annuitant's life expectancy
is six months or less (such proof must include, but is not limited to,
certification by a licensed physician), or
o the Annuitant has been confined to a nursing home for more than a 90 day
period (or such other period, if required in your state) as verified by a
licensed physician. A nursing home for this purpose means one which is
(a) approved by Medicare as a provider of skilled nursing care service,
or (b) licensed as a skilled nursing home by the state or territory in
which it is located (it must be within the United States, Puerto Rico,
U.S. Virgin Islands, or Guam) and meets all of the following:
-- its main function is to provide skilled, intermediate, or custodial
nursing care;
-- it provides continuous room and board to three or more persons;
-- it is supervised by a registered nurse or licensed practical nurse;
-- it keeps daily medical records of each patient;
-- it controls and records all medications dispensed; and
-- its primary service is other than to provide housing for residents.
Additionally, a withdrawal charge will not apply to an IRA or SEP Contract
upon the following events:
o the Annuitant has completed at least six Contract Years and has attained
age 59 1/2 or
o a request is made for a refund of a contribution in excess of amounts
allowed to be contributed under the Code within one month of the date on
which the contribution is made.
ALLOCATION OF CERTAIN CHARGES TO THE
FIXED MATURITY ACCOUNT
The annual administration charge and the contingent withdrawal charge will be
deducted from the Guaranteed Interest Account and the Investment Funds, as
discussed above. In the event that amounts in those Options are insufficient
to cover these charges, we reserve the right to deduct those charges from the
Fixed Maturity Periods. Charges applied to the Fixed Maturity Periods are
considered withdrawals and, as such, will result in a market value
adjustment. See "Part 5: The Fixed Maturity Account."
<PAGE>
CHARGE ON THIRD PARTY TRANSFER OR EXCHANGE
If you ask us to make a direct transfer to a third party of amounts under
your Contract, or request that your Contract be exchanged for another
contract or certificate issued by another carrier, we deduct from the Annuity
Account Value both a contingent withdrawal charge as described above (if any)
and a charge of $25 per occurrence. We reserve the right to increase this $25
fee to a maximum of $65 for each direct transfer or exchange.
47
<PAGE>
ALL EDC, TSA AND TRUSTEED CONTRACTS PLUS IRA, QP IRA, SEP AND NQ (SERIES 100
AND 200 ONLY)
LIMITATION ON CHARGES
Under the terms of these Contracts, for the Money Market, Balanced, Common
Stock and Aggressive Stock Funds, the aggregate amount of the Separate
Account charge made to those Funds, the Trust charges for investment advisory
fees and the direct operating expenses of the Trust may not exceed a total
effective annual rate of 1.75% of the value of the assets held in those
Investment Funds.
CHARGES TO INVESTMENT FUNDS
We make a daily charge against the assets held in each of the Investment
Funds. This charge is reflected in the Accumulation Unit Values for the
particular Investment Fund and covers expenses, expense risks, mortality
risks (for the annuity rate guarantee), death benefits (for the minimum death
benefit) and financial accounting. For the Money Market, Balanced and Common
Stock Funds, the charge is made at an annual rate guaranteed not to exceed
1.49%. For all other Investment Funds, the charge is made at an annual rate
guaranteed not to exceed 1.34%.
Specific charges for each series are set forth below:
<TABLE>
<CAPTION>
SERIES 100
- -----------------------------------------------
MONEY MARKET,
BALANCED, COMMON OTHER
STOCK FUNDS FUNDS
---------------- -------
<S> <C> <C>
Expenses .60% .60%
Expense Risks .30 .15
Mortality Risks .30 .30
Death Benefits .05 .05
Financial Accounting .24 .24
- -------------------- ---------------- -------
</TABLE>
<TABLE>
<CAPTION>
SERIES 200
- -------------------------------------------------
MONEY MARKET,
BALANCED, COMMON OTHER
STOCK FUNDS FUNDS
<S> <C> <C>
Expenses and Financial
Accounting .25% .25%
Expense Risks .55 .49
Mortality Risks and
Death Benefits .60 .60
- ---------------------- ---------------- -------
</TABLE>
The charge for expenses is designed to reimburse us for various research and
development costs and for administrative expenses that exceed the annual
administrative charge described below. The expense risk we assume is the risk
that, over time, our actual administrative expense may exceed the amounts
realized from the expense and the annual administrative expense charges,
which may not be increased. The mortality risk we assume is that annuitants,
as a group, may live longer than anticipated. The charge for death benefits
is designed to assure that adequate proceeds will be available to pay the
minimum death benefit. The charge for financial accounting services is
designed to reimburse us for our costs in providing those services in
connection with the Contracts, and, like the charge for expenses, is not
designed to include an element of profit. The total of these charges may be
reallocated among the categories of charges shown above; however, we intend
to limit any possible reallocation to include only the charges for expense
risks, mortality risks and death benefits.
Part of the respective charges for expense risks, mortality risks and death
benefits may be considered to be an indirect reimbursement for certain sales
and promotional expenses relating to the Contracts to the extent that the
charges are not needed to meet the actual expenses incurred.
ANNUAL ADMINISTRATIVE CHARGE
Except as discussed below, on the last Business Day of each Contract Year we
deduct from the Annuity Account Value an annual administrative charge equal
to the lesser of $30 or 2% of the Annuity Account Value on such Business Day
(adjusted to include any withdrawals made during the year). This charge is
deducted from each Investment Option on a pro rata basis. This charge will be
prorated for a fractional year if, before the end of the Contract Year, you
surrender your Contract, the Annuitant dies or you elect an annuity
distribution option. Accumulation Units will be redeemed in order to pay any
portion of the charge deducted from an Investment Fund.
Any portion of the charge deducted from the Guaranteed Interest Account is
withdrawn in dollars.
<PAGE>
Exceptions to Annual Administrative Charge
For IRA, NQ, SEP, Unincorporated TRUSTEED, and Annuitant-Owned HR-10
Contracts, the charge is zero if the Annuity Account Value is at least
$10,000 at the end of the Contract Year.
48
<PAGE>
ALL EDC, TSA AND TRUSTEED CONTRACTS PLUS IRA, QP IRA, SEP AND NQ (SERIES 100
AND 200 ONLY) (Continued)
For TSA, EDC and Corporate TRUSTEED Contracts, the charge is zero if the
Annuity Account Value is at least $25,000 at the end of the Contract Year.
CONTINGENT WITHDRAWAL CHARGE
No sales charges are deducted from contributions. However, to assist us in
defraying the various and promotional expenses incurred in connection with
selling the Contracts, we assess a charge on amounts withdrawn when you make
a partial withdrawal or terminate your Contract if the amount withdrawn is in
excess of the free corridor amount (defined below) or if no exception
applies. The withdrawal charge is deducted pro rata from the Annuity Account
Value in addition to the amount of the requested withdrawal; the amount
deducted which is applied to pay the withdrawal charge is also subject to the
withdrawal charge.
Unless you instruct us otherwise, we will make withdrawals from the
Investment Options in proportion to the amount in them. The minimum
withdrawal permitted is $300; however, the Annuity Account Value must be at
least $500 after the withdrawal is made or we reserve the right to process a
total withdrawal.
Free Withdrawal Amount (Free Corridor)
For NQ, TRUSTEED, TSA and QP IRA Contracts, (but not QP IRA group Contracts),
no withdrawal charge will be applied during any Contract Year in which the
amount withdrawn is less than or equal to 10% of the Annuity Account Value at
the time the withdrawal is requested minus any amount previously withdrawn
during that Contract Year. This 10% portion is called the FREE CORRIDOR
AMOUNT. For EDC, SEP and QP IRA Series 100 and 200 group Contracts, the free
corridor amount is available only after three Contract Years have been
completed or the Annuitant has reached age 59 1/2 .
HOW THE CONTINGENT WITHDRAWAL CHARGE IS APPLIED FOR SERIES 100 AND 200 NQ AND
TRUSTEED CONTRACTS
Partial withdrawals in excess of the free corridor amount will be subject to
a withdrawal charge of 6% of the amount of the contributions made during the
current and five prior Contract Years. In the case of a termination, we will
pay the greater of (i) the Annuity Account Value after the withdrawal charge
has been imposed, as described above and after giving effect to any
outstanding loan balance (including accrued interest), or (ii) the free
corridor amount plus 94% of the remaining Annuity Account Value. For NQ
Contracts issued to Annuitants age 59 or older, this percentage will be 95%
in the fifth Contract Year and 96% in the sixth Contract Year. For TRUSTEED
Contracts issued to Annuitants age 60 or older, this percentage is 95% in the
fifth Contract Year. For NQ and TRUSTEED group Contracts, there is no
reduction in the contingent withdrawal charge for older Annuitants (referred
to above) in the fifth and sixth Contract Year.
For purposes of calculating the withdrawal charge, (1) we treat contributions
as being withdrawn before earnings, on a first-in first-out basis, and (2)
amounts withdrawn up to the free corridor amount are not considered a
withdrawal of any contributions. Although we treat contributions as withdrawn
before earnings for purposes of calculating the withdrawal charge, the
federal income tax law treats earnings on NQ Contracts as withdrawn first.
See "Part 9: Tax Aspects of The Contracts."
No charge will be applied to any amount withdrawn from an NQ or TRUSTEED
Contract if:
o the amount withdrawn is applied to the election of a life annuity
distribution option; or
o the Annuitant dies and the death benefit is made available to the
beneficiary.
No charge will be applied to any amount withdrawn from a TRUSTEED Contract
if:
o the Owner has completed at least five Contract Years and the Annuitant
has reached age 59 1/2 ; or
o a request is made for a refund of an excess contribution within one month
of the date on which the contribution is made.
No charge will be applied to any amount withdrawn from a Corporate TRUSTEED
Contract if the Annuitant has reached age 59 1/2 and has either retired or
terminated employment, regardless of the number of completed Contract Years.
<PAGE>
HOW THE CONTINGENT WITHDRAWAL CHARGE
IS APPLIED FOR SERIES 100 AND 200 IRA, SEP, TSA, EDC AND ANNUITANT-OWNED
HR-10 CONTRACTS
Withdrawals under these Contracts and defaulted loan amounts under TSA
Contracts (in excess of the free corridor amount, if applicable) may be
subject to a charge of up to 6% of the amount withdrawn or the defaulted loan
amount, as the case may be. The percentage charged will be based on the
Contract
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<PAGE>
ALL EDC, TSA AND TRUSTEED CONTRACTS PLUS IRA, QP IRA, SEP AND NQ (SERIES 100
AND 200 ONLY) (Continued)
Year in which the withdrawal is made, as shown below:
<TABLE>
<CAPTION>
CONTRACT
YEAR(S) CHARGE
- ---------------- ----------
<S> <C>
1 through 5 6%*
6 through 8 5
9 4
10 3
11 2
12 1
13 and later 0
</TABLE>
* This percentage will be reduced to 5% for Contracts issued to Annuitants
age 60 or older under individual Contracts only.
The total of all withdrawal charges assessed will not exceed 8% of all
contributions made during the current Contract Year and the nine prior
Contract Years before the withdrawal is made.
No charge will be applied to any amount withdrawn from an IRA, SEP, TSA, EDC
or Annuitant-Owned HR-10 Contract if:
o the Contract Owner has completed at least five Contract Years and the
Annuitant has reached age 59 1/2 ;
o a request is made for a refund of an excess contribution within one month
of the date on which the contribution is made;
o the Annuitant dies and the death benefit is made available to the
beneficiary;
o the Contract Owner has completed at least five Contract Years, the
Annuitant has reached age 55 and the amount withdrawn is used to purchase
from us a period certain annuity that extends beyond the Annuitant's age
59 1/2 and allows no prepayment;
o the Contract Owner has completed at least three Contract Years and the
amount withdrawn is used to purchase from us a period certain annuity for
a term of at least 10 years that allows no prepayment;
o the amount withdrawn is applied to the election of a life contingent
annuity distribution option (this form of payment is not available for
Annuitants in governmental EDC plans in New York);
o the amount withdrawn is applied to the election of a period certain
annuity of at least 15 years, but not in excess of the Annuitant's life
expectancy, that allows no prepayment (this provision is available only
for Annuitants in governmental EDC plans in New York).
No charge will be applied to any amount withdrawn from a TSA Contract if:
o the Contract Owner has completed at least five Contract Years, the
Annuitant has reached age 55 and has separated from service.
No charge will be applied to any amount withdrawn from a SEP Contract funding
SARSEP arrangements if:
o the amount withdrawn is a distribution of deferrals disallowed (plus or
minus any gain or loss) by reason of the employer's failure to meet the
Code's requirement that 50% of eligible employees elect SARSEP within the
plan year and the request for withdrawal is made by the April 15th of the
calendar year following the calendar year in which you were notified of
such disallowance; or
o the amount withdrawn is an "excess contribution" (as such term is defined
in Section 408(k)(6)(C)(ii) of the Code), plus or minus any gain or loss,
and the request for withdrawal is made by the April 15th of the calendar
year following the calendar year in which the excess contributions were
made; or
o the amount withdrawn is an "excess deferral" (as such term is defined in
Section 402(g)(2) of the Code), plus or minus any gain or loss, and the
request for withdrawal is made by the April 15th of the calendar year
following the calendar year in which such excess deferrals were made.
<PAGE>
We reserve the right to reduce or eliminate the withdrawal charge in certain
cases, including transfers to an IRA from another EQUI-VEST Contract. In no
event would such reduction or elimination be permitted where it would be
unfairly discriminatory to any person.
The tax consequences of withdrawals are discussed under "Part 9: Tax Aspects
of the Contracts."
As a result of regulations which apply to EDC plans of governmental employers
in New York (NY EDC PLANS), EQUI-VEST Contracts which fund New York EDC Plans
contain special provisions which apply to all NY EDC Plans whose EQUI-VEST
funding arrangements became effective or were renewed on or after July 1,
1989.
These provisions permit the automatic termination of all Contracts issued in
connection with a NY EDC
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<PAGE>
ALL EDC, TSA AND TRUSTEED CONTRACTS PLUS IRA, QP IRA, SEP AND NQ (SERIES 100
AND 200 ONLY) (Continued)
Plan five years after the effective date (or any renewal date) of its
EQUI-VEST funding arrangement without the deduction of any contingent
withdrawal charges. If agreed to by the employer and us, the period may be
shorter than five years. A decision to permit the automatic termination of
all Contracts would result in the transfer of each Contract's Annuity Account
Value to a successor funding vehicle designated by the employer. See "Part 1:
Summary" and "Part 6: Provisions of the Contracts."
The employer sponsoring a NY EDC Plan can prevent such a termination and
transfer by renewing the EQUI-VEST funding arrangement in a written notice to
us which includes a certification of compliance with procedures under the
applicable regulations. We are not responsible for the validity of any
certification by the employer. The written notice must be received at our
Processing Office and accepted by us not later than seven days before the
date on which a transfer would otherwise occur.
No further investment experience, whether positive or negative, will be
credited under a NY EDC Plan Contract once the Contract terminates. As with
other tax-favored retirement programs in which the funding is affected by
actions of a sponsoring employer, we are not required to provide Annuitants
with information relating to an employer's decision to exercise any
termination right.
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<PAGE>
PART 8: VOTING RIGHTS
TRUST VOTING RIGHTS
As explained previously, contributions allocated to the Investment Funds are
invested in shares of the corresponding Portfolios of the Trust. Since we own
the assets of the Separate Account, we are the legal owner of the shares and,
as such, have the right to vote on certain matters. Among other things, we
may vote:
o to elect the Trust's Board of Trustees,
o to ratify the selection of independent auditors for the Trust, and
o on any other matters described in the Trust's current prospectus or
requiring a vote by shareholders under the 1940 Act.
Because the Trust is a Massachusetts business trust, annual meetings are not
required. Whenever a shareholder vote is taken, we will give Contract Owners
the opportunity to instruct us how to vote the number of shares attributable
to their Contracts. If we do not receive instructions in time from all
Contract Owners, we will vote the shares of a Portfolio for which no
instructions have been received in the same proportion as we vote shares of
that Portfolio for which we have received instructions. We will also vote any
shares that we are entitled to vote directly because of amounts we have in an
Investment Fund in the same proportions that Contract Owners vote.
All Trust shares are entitled to one vote. Fractional shares will be counted.
Voting generally is on a Portfolio-by-Portfolio basis except that shares will
be voted on an aggregate basis when universal matters, such as election of
Trustees and ratification of independent auditors, are voted upon. However,
if the Trustees determine that shareholders in a Portfolio are not affected
by a particular matter, then such shareholders generally would not be
entitled to vote on that matter.
SEPARATE ACCOUNT VOTING RIGHTS
Under the 1940 Act, certain actions (such as some of those described under
"Changes in Applicable Law and Otherwise," below) may require Contract Owner
approval. In that case, Contract Owners will be entitled to one vote for each
Accumulation Unit they have in the Investment Funds. We will cast votes
attributable to any amounts we have in the Investment Divisions in the same
proportion as votes cast by Contract Owners.
VOTING RIGHTS OF OTHERS
Currently, we control the Trust. Trust shares are held by other separate
accounts of ours and by separate accounts of insurance companies affiliated
and unaffiliated with us. Shares held by these separate accounts will
probably be voted according to the instructions of the owners of insurance
policies and contracts issued by those insurance companies. While this will
dilute the effect of the voting instructions of Contract Owners, we currently
do not foresee any disadvantages arising out of this. The Trust's Board of
Trustees intends to monitor events in order to identify any material
irreconcilable conflicts that possibly may arise and to determine what
action, if any, should be taken in response. If we believe that the Trust's
response to any of those events insufficiently protects our Contract Owners,
we will see to it that appropriate action is taken to protect our Contract
Owners.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under applicable
Federal securities laws. To the extent that those laws or the regulations
promulgated under those laws eliminate the necessity to submit matters for
approval by persons having voting rights in separate accounts of insurance
companies, we reserve the right to proceed in accordance with those laws or
regulations.
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<PAGE>
PART 9: TAX ASPECTS OF THE CONTRACTS
ANNUITIES
Under Federal income tax law, an individual can purchase an annuity with
after-tax dollars and not be taxed on any earnings until he or she receives a
distribution from the annuity. Alternatively, an individual, employer or
trustee may, subject to various limits, purchase an annuity to fund a
tax-favored retirement program, such as an IRA or tax-qualified retirement
plan. In many cases, the individual or employer makes contributions to the
tax-favored retirement program with pre-tax dollars.
This prospectus generally covers the current, Federal income tax rules that
apply to an annuity purchased with after-tax dollars (non-qualified annuity)
and some of the special tax rules that apply to an annuity purchased to fund
a tax-favored retirement program (qualified annuity). A qualified annuity is
purchased under a TSA, IRA, SEP, EDC plan or qualified plan. (The term
qualified plan includes both plans funded by TRUSTEED and Annuitant- Owned
HR-10 contracts.) Although the rules are often similar, you should be aware
that an annuity purchased for a tax-favored retirement program may restrict
your rights and benefits in order to qualify for its special treatment under
the Federal tax law. Special tax rules may apply to individuals with existing
arrangements who roll over, exchange or transfer amounts from other annuities
or tax- favored arrangements. Some of these rules are noted in this
prospectus.
Additional tax information appears in the SAI. This prospectus and the SAI do
not provide detailed tax information and do not address state and local
income and other taxes, or federal gift and estate taxes. Not every Contract
has every feature discussed in this section. Please consult a tax adviser
when considering the tax aspects of your Contract.
TAXATION OF NON-QUALIFIED ANNUITIES
Equitable has designed your Contract to qualify as an "annuity" for purposes
of Federal income tax law. This includes monitoring the assets of the Trust
to make sure the Separate Account complies with the investment
diversification requirements applicable to non-qualified variable annuities.
Gains in the Annuity Account Value of the Contract generally will not be
taxable to an individual until a distribution occurs, either by a withdrawal
of part or all of its value or as a series of periodic payments. However,
there are some exceptions to this rule: (1) if a Contract fails the
investment diversification requirements; (2) if an individual transfers a
Contract as a gift to someone other than a spouse (or divorced spouse), any
gain in its Annuity Account Value will be taxed at the time of transfer; (3)
the assignment or pledge of any portion of the value of a Contract will be
treated as a distribution of that portion of the Contract; and (4) when an
insurance company (or its affiliate) issues more than one non- qualified
deferred annuity Contract during any calendar year to the same taxpayer, the
contracts are required to be aggregated in computing the taxable amount of
any distribution.
Corporations, partnerships, trusts and other non- natural persons generally
cannot defer the taxation of current income credited to the Contract unless
an exception under the Code applies.
Prior to the annuity starting date, any partial withdrawals are taxable to
the Contract Owner to the extent that there has been a gain in the Annuity
Account Value. The balance of the distribution is treated as a return of the
"investment" or "basis" in the Contract and is not taxable. Generally, the
investment or basis in the Contract equals the contributions made less any
amounts previously withdrawn which were not taxable. Special rules may apply
if contributions made to another annuity contract prior to August 14, 1982
are transferred to your Contract in a tax-free exchange. To take advantage of
these rules, you should notify us prior to such an exchange.
If you surrender your Contract, the distribution is taxable to the extent it
exceeds the investment in the Contract.
Once annuity payments begin, a portion of each payment is considered a
tax-free return of investment based on the ratio of the investment to the
expected return under the Contract. The remainder of each payment will be
taxable. In the case of a variable annuity, special rules apply if the
payments received in a year are less than the amount permitted to be
recovered tax-free. After the total investment has been recovered, future
payments are fully taxable. If payments cease as a result of death, a
deduction for any unrecovered investment will be allowed.
53
<PAGE>
The taxable portion of a distribution is treated as ordinary income and is
subject to income tax withholding. See "Federal and State Income Tax
Withholding," below. In addition, a penalty tax of 10% applies to the taxable
portion of a distribution unless the distribution is (1) made on or after the
date the taxpayer attains age 59-1/2, (2) made on or after the death of the
Contract Owner, (3) attributable to the disability of the taxpayer, (4) part
of a series of substantially equal installments as an annuity for the life
(or life expectancy) of the taxpayer or the joint lives (or joint life
expectancies) of the taxpayer and a beneficiary, or (5) with respect to
income allocable to amounts contributed to an annuity contract prior to
August 14, 1982 which are transferred to the Contract in a tax-free exchange.
If, as a result of the Annuitant's death, the beneficiary is entitled to
receive the death benefit described in Part 6, the beneficiary is generally
subject to the same tax treatment as the Contract Owner (discussed above).
If the beneficiary elects to take the death benefit in the form of a life
income or installment option, the election should be made within 60 days
after the day on which a lump sum death benefit first becomes payable and
before any benefit is actually paid. The tax computation will reflect your
investment in the Contract.
Special distribution requirements apply upon the death of the owner of a
non-qualified annuity. See "Part 1--Tax Rules: Special Aspects" in the SAI.
SPECIAL RULES FOR TAX-FAVORED
RETIREMENT PROGRAMS
An annuity Contract may be used to fund certain tax-favored retirement
programs.
The Code describes how a retirement program can qualify for tax-favored
status and sets requirements for various features including: participation,
nondiscrimination, vesting and funding; limits on contributions,
distributions and benefits; penalties; duties of fiduciaries; prohibited
transactions; and withholding, reporting and disclosure. This section
provides a brief description of the various tax-favored retirement programs
which can be funded through EQUI- VEST. More information appears in the SAI.
Certain tax advantages of a tax-favored retirement program may not be
available under state and local tax laws.
TAX-QUALIFIED RETIREMENT PLANS
(QUALIFIED PLANS)
Corporations, partnerships and sole proprietorships may establish qualified
plans for the working owners and their employees which provide for
contributions to be made to the Contracts. Both employer and employee
contributions to these plans are subject to a variety of limitations, some of
which are discussed here briefly. Certain penalties for violating
contribution limits are discussed further in the SAI. Qualified plans must
not discriminate in favor of highly compensated employees. In addition, "top
heavy" rules apply to plans where more than 60% of the account balances are
allocated to "key employees" as defined in the Code. See your tax adviser for
more information.
The annual limit of employer and employee contributions (as defined in
Section 415(c) of the Code) which may be made on behalf of an employee to all
of the defined contribution plans of an employer is the lesser of $30,000 or
25% of compensation or earned income. Compensation or earned income in excess
of $150,000 cannot be considered in calculating contributions to the plan.
This amount may be adjusted for cost of living changes in future years. Any
reallocated forfeitures and voluntary nondeductible employee contributions
will generally be included for purposes of the contribution limit. For
individuals who are self-employed persons or owner- employees, earned income
is based on net earnings from self- employment (less the deduction for one-
half the individual's self-employment tax), reduced by the qualified plan
contributions made on behalf of such person. Salary reduction contributions
made under a cash or deferred arrangement (401(K) PROGRAM) are limited to
$7,000, adjusted annually for cost of living changes. In 1995, the annual
dollar limit for these "elective deferrals" is $9,240. This limit applies to
the aggregate of all elective deferrals under all tax-favored plans in which
the individual participates, including those made under SARSEPs, EDC plans
and TSAs.
Section 404 of the Code provides limitations on the deductibility of
contributions to qualified plans. Employer deductions for contributions to
profit sharing plans cannot exceed 15% of all plan participants'
compensation. Employer deductions for contributions to defined contribution
plans other than profit sharing plans cannot exceed the total of the employer
contributions required under the plan to be allocated to the accounts of all
plan participants.
<PAGE>
Special limits on contributions apply to anyone who participates in more than
one qualified plan or who controls another trade or business. There is also
an overall limit on the total amount of contributions and benefits under all
tax-favored retirement programs in which a person participates.
In certain cases a Contract may be funded by a tax-deferred rollover
contribution not subject to the above limits.
54
<PAGE>
TAX-SHELTERED ANNUITY
(TSAS) ARRANGEMENTS
An employee of an employer which is either (i) an organization described in
Section 501(c)(3) of the Code which is exempt from Federal income tax under
Section 501(a) of the Code or (ii) a state, political subdivision of a state,
or an agency or instrumentality of any one or more of these entities (but
only where the employee performs services for an educational organization
described in Section 170(b)(1)(A)(ii) of the Code) may exclude from Federal
gross income for a tax year contributions made by the employer to a TSA
Contract. Some or all of the contributions may be made under a salary
reduction agreement between the employee and the employer, subject to certain
limitations. Generally, the contribution limit is the lowest of the
following: (1) the annual limit on employer contributions to TSAs, (2) the
annual exclusion allowance for the employee (20% of includable salary times
years of service less previous contributions to qualified plans, TSAs and EDC
plans) and (3) the annual limit on all elective deferrals, discussed in "Tax
Qualified Retirement Plans (Qualified Plans)," above. Contributions under a
salary reduction agreement cannot exceed $9,500 per year. Special provisions
may allow "catch- up" contributions to compensate for smaller contributions
made in previous years. In addition, there may be adverse tax consequences
for excess elective deferrals. See "Penalties for Excess Deferrals" in the
SAI. Tax-free transfer or rollover contributions from another TSA arrangement
are not subject to the above limits. Note, however, that the maximum salary
reduction contribution that may be made by an annuitant who participates both
in a TSA arrangement and an EDC plan will be limited to the maximum allowed
under Code Section 457 (i.e., generally $7,500).
Employees are permitted to enter into only one salary reduction agreement per
year with each Employer. Equitable Life and its Agents are not responsible
for monitoring such agreements.
See the discussion in Part 6 under "Loans (for TSA and Corporate TRUSTEED
only)", the discussion below and in Part 2 of the SAI for certain additional
rules covering loans from TSAs.
DISTRIBUTIONS FROM QUALIFIED PLANS
AND TSAS
Amounts held under qualified plans and TSAs are generally not subject to
Federal income tax until benefits are distributed. Generally, amounts
distributed are fully taxable as ordinary income. In addition, qualified plan
and TSA distributions may be subject to additional tax penalties. For
information regarding tax penalties which may apply, see "Penalty Tax on
Early Distributions" and "Tax Penalties for Insufficient Distributions". The
SAI contains additional information about qualified plan distributions,
including penalties on excessive retirement plan distributions.
In certain cases, direct transfers between TSA issuers are not treated as
taxable distributions. A tax- deferred rollover, if permitted, can also
postpone taxation. See ''Tax-Free Rollover," in this section. For rules
requiring 20% Federal income tax withholding applicable to certain
distributions from qualified plans or TSAs, see "Federal and State Income Tax
Withholding" below.
If a Contract is surrendered for its value, the distribution is taxable to
the extent the amount received exceeds the basis (if any). A taxpayer will
have a basis in the Contract if, for example, after-tax contributions have
been made.
The amount of any partial distribution from a qualified plan or a TSA prior
to the annuity starting date is generally taxable, except to the extent that
the distribution is treated as a withdrawal of after-tax contributions.
Distributions are normally treated as pro rata withdrawals of after-tax
contributions and earnings on those contributions. In certain situations,
taking a loan or failing to repay an outstanding loan as required may be
treated as a partial distribution.
If an annuity distribution option is elected, any basis will be recovered
under the rules which apply to non-qualified annuities. See "Taxation of Non-
qualified Annuities."
Qualified plan distributions may be eligible for the special tax treatment
accorded lump sum distributions (favorable five-year averaging, and in
certain cases, favorable ten-year averaging and long-term capital gain
treatment). This treatment is not available unless the balance to the credit
of a plan participant who has participated in the plan for at least five
years is paid to the recipient within one taxable year, and is payable (i)
after the participant attains age 59-1/2 or (ii) on account of the
participant's (a) death, (b) separation from service (not applicable to
self-employed individuals), or (c) disability (applicable only to
self-employed individuals).
<PAGE>
The rules governing taxation of distributions made on account of the death of
the Annuitant in a qualified plan or TSA are similar to those governing death
benefit distributions in non-qualified annuities. See "Taxation of
Non-Qualified Annuities," above. In some instances, distributions from a
qualified plan or TSA made to a surviving spouse may be
55
<PAGE>
rolled over to an IRA or other individual retirement arrangement on a
tax-deferred basis. See "Tax Free Rollover," and "Tax-Qualified Individual
Retirement Annuities (IRAs)," below.
Tax Free Rollover
Any distribution from a qualified plan or a TSA which is an "eligible
rollover distribution" may be rolled over into another eligible retirement
plan, either as a direct rollover or a rollover within 60 days of receiving
the distribution. To the extent a distribution is rolled over, it remains tax
deferred.
A distribution from a qualified plan may be rolled over to another qualified
plan which will accept rollover contributions or an individual retirement
arrangement; a TSA distribution may be rolled over to another TSA or
individual retirement arrangement. Death benefits received by a spousal
beneficiary may only be rolled over to an IRA.
The taxable portion of most distributions will be eligible for rollover,
except as specifically excluded under the Code. Distributions which cannot be
rolled over generally include periodic payments for life or for a period of
10 years or more, and minimum distributions required under Section 401(a)(9)
of the Code (discussed below). Eligible rollover distributions are discussed
in greater detail under "Federal and State Income Tax Withholding", below.
Required Minimum Distributions
Distributions from qualified plans and TSAs generally must commence no later
than April 1st of the calendar year following the calendar year in which the
Annuitant attains age 70-1/2. Subsequent distributions must be made by
December 31st of each calendar year. If the Annuitant does not commence
minimum distributions in the calendar year in which the Annuitant attains age
70 1/2 , and waits until the three month (January 1-April 1) period in the
next calendar year to commence minimum distributions, then the Annuitant must
take two required minimum distributions in that calendar year. Special rules
may apply, however, to Annuitants in church or governmental plans and with
respect to TSA contributions made prior to 1987. To take advantage of these
rules, you must properly notify us in writing at our Processing Office if you
have qualifying amounts transferred to your TSA Contract.
Distributions may be in the form of a life annuity, a joint and survivor
annuity, or some other periodic or lump sum payout which does not extend
beyond the life or life expectancy of the Annuitant or the lives or joint
life expectancies of the Annuitant and a beneficiary.
If an Annuitant dies before required distributions begin, distributions of
the entire interest under the Contract must be completed within five years
after death, unless payments to a designated beneficiary begin within one
year of the Annuitant's death and are made over the beneficiary's life or
over a period certain which does not extend beyond the Beneficiary's life
expectancy. If the surviving spouse is the designated beneficiary, the spouse
may delay the commencement of such payments up until the Annuitant would have
attained age 70-1/2. In the alternative, such spouse can roll over the death
benefit to an IRA. See "Tax-Free Rollover" above. If an Annuitant dies after
required payments have begun, payments after death must continue to be made
at least as rapidly as the payments made before the death of the Annuitant.
Distributions received by a beneficiary are generally given the same tax
treatment the Annuitant would have received if distribution had been made to
the Annuitant.
Limitations on Distributions
Restrictions apply to the salary reduction (elective deferral) portion of a
TSA or 401(k) program, including both contributions and earnings.
Distributions of restricted salary reduction amounts generally may be made
only if the Annuitant attains age 59-1/2, dies, is disabled, separates from
service or on account of financial hardship. Hardship withdrawals are limited
to the amount actually contributed under a salary reduction agreement,
without earnings. These restrictions do not apply to the amount of your TSA
Contract as of December 31, 1988 attributable to salary reduction
contributions and earnings (or to the extent such amount is properly carried
over from an existing TSA to an EQUI-VEST TSA Contract). To take advantage of
this grandfathering you must properly notify us in writing at our Processing
Office of your December 31, 1988 account balance if you have qualifying
amounts transferred to your TSA Contract.
Spousal consent rules
In the case of many qualified plans and certain TSAs, if an Annuitant is
married at the time a loan, withdrawal, or other distribution is requested
under the Contract, spousal consent is required. In addition, unless the
Annuitant elects otherwise with the written consent of the spouse, the
retirement benefits payable under the plan or arrangement must be paid in the
form of a "qualified joint and survivor annuity" (QJSA). A QJSA is an annuity
payable for the life of the Annuitant with a survivor annuity for the life of
the spouse in an amount which is not less than one-half of the amount payable
to the Annuitant during his or her lifetime. In addition, a
56
<PAGE>
married Annuitant's beneficiary must be the spouse, unless the spouse
consents in writing to the designation of a different beneficiary.
TAX-QUALIFIED INDIVIDUAL RETIREMENT
ANNUITIES (IRAS)
Your Contract is designed to qualify as an IRA under Section 408(b) of the
Code. Your rights under the Contract cannot be forfeited.
This prospectus contains the information which the IRS requires to be
disclosed to an individual before he or she purchases an IRA.
This section of Part 9 covers some of the special tax rules that apply to
individual retirement arrangements. You should be aware that an IRA is
subject to certain restrictions in order to qualify for its special treatment
under the Federal tax law.
Further information on IRA tax matters can be obtained from any IRS district
office. Additional information regarding IRAs, including a discussion of
required distributions, can be found in Internal Revenue Service Publication
590, entitled "Individual Retirement Arrangements (IRAs)," which is generally
updated annually.
We have received a favorable opinion letter from the IRS approving both the
form of individual Contract and group certificate for EQUI-VEST Series 100
and 300 Contracts as an IRA. Such IRS approval is a determination only as to
the form of the annuity and does not represent a determination of the merits
of the annuity as an investment. The Contract is also subject to certain
state regulatory requirements. We expect to secure a favorable opinion letter
from the IRS concerning the form of EQUI-VEST Series 400 Contract as an IRA.
Cancellation
You can cancel a Contract issued as an IRA by following the directions in
Part 1 under "10-Day Free Look." Since there may be adverse tax consequences
if a Contract is cancelled (and because we are required to report to the IRS
certain IRA distributions from cancelled IRAs), you should consult with a tax
adviser before making any such decision. If you cancel this Contract, you may
establish a new individual retirement arrangement if at the time you meet the
requirements for establishing an individual retirement arrangement.
Contributions to IRAs
The Code permits a working individual to make deductible or nondeductible
contributions to a Contract that qualifies as an IRA. The Code also allows
tax-free rollovers (directly or otherwise) of certain distributions from
tax-qualified plans which are used to purchase an IRA. A separate IRA
Contract (QP IRA), subject to separate charges, can be issued to accept these
tax-free rollovers as contributions.
Contributions you make may be any of "regular" IRA contributions, rollovers,
or direct custodian-to- custodian transfers from other individual retirement
arrangements ("direct transfers"). See "Contributions Under the Contracts" in
Part 6. The immediately following discussion relates to "regular" IRA
contributions.
Generally, $2,000 is the maximum amount of deductible and nondeductible
contributions which may be made to all IRAs by an individual in any taxable
year. The above limits may be less where the individual's earnings are above
the applicable amount. These limits do not apply to rollover or direct
transfer contributions into an IRA.
If neither the individual nor the individual's spouse is covered during any
part of the taxable year by an employer-sponsored tax-favored retirement plan
(including a qualified plan, TSA or SEP, but not an EDC plan), then
regardless of adjusted gross income (AGI), each working spouse may make a
deductible contribution to an IRA for each tax year (MAXIMUM PERMISSIBLE
DOLLAR DEDUCTION) up to the lesser of $2,000 or 100% of compensation. If the
spouse does not work or elects to be treated as having no compensation, the
individual and the individual's spouse may contribute up to $2,250 to
individual retirement arrangements (but no more than $2,000 to any one
individual retirement arrangement). The non- working spouse owns his or her
individual retirement arrangements, even if the working spouse makes
contributions to purchase the spousal individual retirement arrangements.
In certain cases, individuals covered by a tax- favored retirement plan
include persons eligible to participate in the plan although not actually
participating. Whether or not a person is covered by a retirement plan will
be reported on an employee's Form W-2.
<PAGE>
If the individual is single and covered by a retirement plan during any part
of the taxable year, the IRA deduction phases out with AGI between $25,000
and $35,000. If the individual is married and files a joint return, and
either the individual or the spouse is covered by a tax-favored retirement
plan during any part of the taxable year, the IRA deduction phases out with
AGI between $40,000 and $50,000. If the individual is married, files a
separate return and is covered by a tax-favored retirement plan during any
part of the taxable year, the IRA deduc-
57
<PAGE>
tion phases out with AGI between $0 and $10,000. Married individuals filing
separate returns must take into account the retirement plan coverage of the
other spouse, unless the couple has lived apart for the entire taxable year.
If AGI is below the phase-out range, an individual is entitled to the Maximum
Permissible Dollar Deduction. In computing the partial IRA deduction the
individual must round the amount of the deduction to the nearest $10. The
permissible deduction for IRA contributions is a minimum of $200 if AGI is
less than the amount at which the deduction entirely phases out.
If the individual (or the individual's spouse, unless the couple has lived
apart the entire taxable year and their filing status is married, filing
separately) is covered by a tax-favored retirement plan, the deduction for
IRA contributions must be computed using one of two methods. Under the first
method, the individual determines AGI and subtracts $25,000 if the individual
is a single person, $40,000 if the individual is married and files a joint
return with the spouse, or $0 if the individual is married and files a
separate return. The resulting amount is the individual's Excess AGI. The
individual then determines the limit on the deduction for IRA contributions
using the following formula:
$10,000-EXCESS AGI
-------------------- x Maximum Permissible = Adjusted Dollar
$10,000 Dollar Deduction Deduction Limited
Under the second method, the individual determines his or her Excess AGI and
then refers to the following chart originally prepared by the IRS to
determine the deduction.
58
<PAGE>
IRS Chart
- -----------------------------------------------------------------------------
ESTIMATED DEDUCTION TABLE
If your Maximum Permissible Dollar Deduction is $2,000, use this table to
estimate the amount of your contribution which will be deductible.
<TABLE>
<CAPTION>
EXCESS AGI DEDUCTION EXCESS AGI DEDUCTION EXCESS AGI DEDUCTION EXCESS AGI DEDUCTION
- ------------ ----------- ------------ ----------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 0 $2,000 $2,550 $1,490 $5,050 $990 $ 7,550 $490
50 1,990 2,600 1,480 5,100 980 7,600 480
100 1,980 2,650 1,470 5,150 970 7,650 470
150 1,970 2,700 1,460 5,200 960 7,700 460
200 1,960 2,750 1,450 5,250 950 7,750 450
250 1,950 2,800 1,440 5,300 940 7,800 440
300 1,940 2,850 1,430 5,350 930 7,850 430
350 1,930 2,900 1,420 5,400 920 7,900 420
400 1,920 2,950 1,410 5,450 910 7,950 410
450 1,910 3,000 1,400 5,500 900 8,000 400
500 1,900 3,050 1,390 5,550 890 8,050 390
550 1,890 3,100 1,380 5,600 880 8,100 380
600 1,880 3,150 1,370 5,650 870 8,150 370
650 1,870 3,200 1,360 5,700 860 8,200 360
700 1,860 3,250 1,350 5,750 850 8,250 350
750 1,850 3,300 1,340 5,800 840 8,300 340
800 1,840 3,350 1,330 5,850 830 8,350 330
850 1,830 3,400 1,320 5,900 820 8,400 320
900 1,820 3,450 1,310 5,950 810 8,450 310
950 1,810 3,500 1,300 6,000 800 8,500 300
1,000 1,800 3,550 1,290 6,050 790 8,550 290
1,050 1,790 3,600 1,280 6,100 780 8,600 280
1,100 1,780 3,650 1,270 6,150 770 8,650 270
1,150 1,770 3,700 1,260 6,200 760 8,700 260
1,200 1,760 3,750 1,250 6,250 750 8,750 250
1,250 1,750 3,800 1,240 6,300 740 8,800 240
1,300 1,740 3,850 1,230 6,350 730 8,850 230
1,350 1,730 3,900 1,220 6,400 720 8,900 220
1,400 1,720 3,950 1,210 6,450 710 8,950 210
1,450 1,710 4,000 1,200 6,500 700 9,000 200
1,500 1,700 4,050 1,190 6,550 690 9,050 200
1,550 1,690 4,100 1,180 6,600 680 9,100 200
1,600 1,680 4,150 1,170 6,650 670 9,150 200
1,650 1,670 4,200 1,160 6,700 660 9,200 200
1,700 1,660 4,250 1,150 6,750 650 9,250 200
1,750 1,650 4,300 1,140 6,800 640 9,300 200
1,800 1,640 4,350 1,130 6,850 630 9,350 200
1,850 1,630 4,400 1,120 6,900 620 9,400 200
1,900 1,620 4,450 1,110 6,950 610 9,450 200
1,950 1,610 4,500 1,100 7,000 600 9,500 200
2,000 1,600 4,550 1,090 7,050 590 9,550 200
2,050 1,590 4,600 1,080 7,100 580 9,600 200
2,100 1,580 4,650 1,070 7,150 570 9,650 200
2,150 1,570 4,700 1,060 7,200 560 9,700 200
2,200 1,560 4,750 1,050 7,250 550 9,750 200
2,250 1,550 4,800 1,040 7,300 540 9,800 200
2,300 1,540 4,850 1,030 7,350 530 9,850 200
2,350 1,530 4,900 1,020 7,400 520 9,900 200
2,400 1,520 4,950 1,010 7,450 510 9,950 200
2,450 1,510 5,000 1,000 7,500 500 10,000 0
2,500 1,500
<FN>
- ---------------
Excess AGI = Your AGI minus your THRESHOLD LEVEL:
If you are single, your Threshold Level is $25,000.
If you are married, your Threshold Level is $40,000.
If you are married and file a separate tax return, your Excess
AGI = your AGI.
</TABLE>
59
<PAGE>
Contributions may be made for a tax year until the deadline for filing a
Federal income tax return for that tax year (without extensions). No
contributions are allowed for the tax year in which an individual attains age
70-1/2 or any tax year after that. A working spouse age 70-1/2 or over,
however, can contribute up to the lesser of $2,000 or 100% of "earned income"
to a spousal IRA for a non-working spouse until the year in which the
non-working spouse reaches age 70-1/2.
An individual not eligible to deduct part or all of the IRA contribution may
still make nondeductible contributions on which earnings will accumulate on a
tax-deferred basis. The deductible and nondeductible contributions may not,
however, together exceed the lesser of the $2,000 limit (or $2,250 spousal
limit) or 100% of compensation for each tax year. See "Excess Contributions."
Individuals must keep their own records of deductible and nondeductible
contributions in order to prevent double taxation on the distribution of
previously taxed amounts. See "Distributions from IRA Contracts."
An individual making nondeductible contributions in any taxable year, or
receiving amounts from any IRA to which he or she has made nondeductible
contributions, must file the required information with the IRS. Moreover,
individuals making nondeductible IRA contributions must retain all income tax
returns and records pertaining to such contributions until interests in such
IRAs are fully distributed.
Excess Contributions
No deduction for a tax year is allowed for "regular" IRA contributions in
excess of the maximum amounts discussed above. In addition, "regular" IRA
contributions (whether deductible or nondeductible) in excess of the lesser
of $2,000 or 100% of compensation or earned income are subject to a 6% excise
tax for the year in which made and for each year thereafter until withdrawn.
An excess contribution withdrawn, however, before the time for filing the
individual's federal income tax return for the tax year (including
extensions) is not includable in income and is not subject to the 10% penalty
tax on early distributions (discussed below under "Penalty Tax on Early
Distributions"), provided any earnings attributable to the excess
contribution are also withdrawn and no tax deduction is taken for the excess
contribution. The withdrawn earnings on the excess contribution, however,
would be includable in the individual's gross income for the tax year in
which the excess contribution from which they arose was made and would be
subject to the 10% penalty tax. If excess contributions are not withdrawn
before the time for filing the individual's federal income tax return for the
tax year (including extensions), the "regular" contributions may still be
withdrawn after that time if the IRA contribution for the tax year did not
exceed $2,250 and no tax deduction was taken for the excess contribution; in
that event, the excess contribution would not be includable in gross income
and would not be subject to the 10% penalty tax. Lastly, excess "regular"
contributions may also be removed by underutilizing the allowable
contribution limits for a later year.
If excess rollover contributions are not withdrawn before the time for filing
the individual's Federal tax return for the year (including extensions) and
the excess contribution occurred as a result of incorrect information
provided by the plan, any such excess amount can be withdrawn if no tax
deduction was taken for the excess contribution. As above, excess rollover
contributions withdrawn under those circumstances would not be includable in
gross income and would not be subject to the 10% penalty tax.
Tax-Free Transfers and Rollovers
Under the conditions and limitations of the Code, an individual may elect for
each IRA to make a tax-free rollover once every twelve month period among
individual retirement arrangements (including rollovers from retirement bonds
purchased before 1983). An individual may also make a rollover contribution
into an IRA with the proceeds of certain distributions from qualified
retirement plans and TSAs (see below). Custodian-to-custodian transfers are
not rollovers and can be made more frequently than once a year.
Your IRA Contract will accept a rollover from an individual retirement
account or retirement bond or another IRA that consists of amounts which were
accumulated from previous individual retirement accounts or IRA contributions
(and any earnings thereon) and amounts derived from eligible rollover
distributions from qualified plans and TSAs (and any earnings thereon). A
separate QP IRA Contract designed to serve as a "conduit" IRA can be issued
for any rollovers containing amounts derived from qualified plans or TSAs,
since these amounts may be eligible to be rolled over into another qualified
plan or TSA which accepts such contributions.
The rollover amount must be transferred to the Contract either as a direct
rollover of an "eligible rollover distribution" or as a rollover by the
individual plan participant or owner of the individual retirement
arrangement. In the latter cases, the rollover must be made within 60 days of
the date the proceeds from another individual retirement arrangement or an
eligible rollover distribution from a qualified plan or TSA were received.
The taxable
60
<PAGE>
portion of any distribution (except for any required minimum distribution
described under Section 401(a)(9) of the Code) to a qualified plan or TSA
participant may be rolled over tax-free to an IRA (or in the case of a
qualified plan) another qualified plan or (in the case of TSAs) another TSA,
unless the distribution is one of a series of substantially equal periodic
payments made (not less frequently than annually) (1) for the life (or life
expectancy) of the plan participant or the joint lives (or joint life
expectancies) of the plan participant and his or her designated beneficiary,
or (2) for a specified period of ten years or more.
The same tax-free treatment applies to amounts withdrawn from the Contract
and rolled over into other individual retirement arrangements unless the
distribution was received under an inherited IRA.
Tax-free rollovers are also available to the surviving spouse beneficiary, of
a deceased individual, or a spousal alternate payee of a qualified domestic
relations order applicable to a qualified plan or TSA. In some cases, IRAs
can be transferred on a tax-free basis between spouses or former spouses
incidental to a judicial decree of divorce or separation.
Distributions from IRA Contracts
Income or gains on contributions under IRAs are not subject to Federal income
tax until benefits are distributed to the individual. Except as discussed
below, the amount of any distribution from an IRA is fully includable by the
individual in gross income.
If the individual makes nondeductible IRA contributions, those contributions
are recovered tax-free when distributions are received. The individual must
keep records of all nondeductible contributions. At the end of each tax year
in which the individual has received a distribution, the individual
determines a ratio of the total nondeductible IRA contributions (less any
amounts previously withdrawn tax-free) to the total account balances of all
IRAs held by the individual at the end of the tax year (including rollover
IRAs and SEPs) plus all IRA distributions made during such tax year. The
resulting ratio is then multiplied by all distributions from the IRA during
that tax year to determine the nontaxable portion of each distribution.
In addition, a distribution (other than a required minimum distribution
received after age 70-1/2) is not taxable if (1) the amount received is a
return of excess contributions which are withdrawn, as described under
"Excess Contributions," (2) the entire amount received is rolled over to
another individual retirement arrangement (see "Tax-Free Transfers and
Rollovers") or (3) in certain limited circumstances, where the IRA acts as a
"conduit," the entire amount is paid into a qualified plan or TSA that
accepts such contributions.
Distributions from an IRA are not entitled to the special favorable five-year
averaging method (or, in certain cases, favorable ten-year averaging and
long- term capital gain treatment) available in certain cases to
distributions from qualified plans. Distributions from IRAs generally must
commence no later than April 1st of the calendar year following the calendar
year in which the individual attains age 701/2. Subsequent distributions must
be made by December 31st of each calendar year. If the individual does not
commence minimum distributions in the calendar year in which the individual
attains age 70 1/2 and waits until the three month (January 1-April 1) period
in the next calendar year to commence minimum distributions, then the
individual must take two required minimum distributions in that calendar
year. Distributions can generally be made (1) in a lump sum payment, (2) over
the life of the individual, (3) over the joint lives of the individual and
his or her designated beneficiary, (4) over a period not extending beyond the
life expectancy of the individual or (5) over a period not extending beyond
the joint life expectancies of the individual and his or her designated
beneficiary.
The minimum amount required to be distributed in each year after age 70-1/2
is described in the Code and Treasury regulations. An individual may
recompute his or her life expectancy each year so that the minimum
distribution amount each year is based on the individual's current life
expectancy as well as that of the spouse. No recomputation of life expectancy
is permitted, however, for a beneficiary other than a spouse. If there is an
insufficient distribution in any year, a 50% tax may be imposed on the amount
by which the minimum required to be distributed exceeds the amount actually
distributed. The penalty tax may be waived by the Secretary of the Treasury
in certain limited circumstances. Failure to have distributions made as the
Code and Treasury regulations require may result in disqualification of your
IRA. See "Tax Penalties for Insufficient Distributions" below.
If the individual dies after required distribution has begun, payment of the
remaining interest must be made at least as rapidly as under the method used
prior to the individual's death. If an individual dies before required
distributions begin, distributions of the individual's entire interest under
the Contract must be completed within five years after death, unless payments
to a designated beneficiary begin within one year of the individual's death
and are made over the beneficiary's life or over a period
61
<PAGE>
certain which does not extend beyond the beneficiary's life expectancy. If
the surviving spouse is the designated beneficiary, the spouse may delay the
commencement of such payments up until the individual would have attained age
70-1/2. In the alternative, a surviving spouse may elect to roll over the
inherited IRA into the surviving spouse's own IRA. Under Series 300 and 400
Contracts, if you elect to have your spouse be the sole primary beneficiary
and to be the Successor Annuitant and Contract Owner, then your surviving
spouse automatically becomes both the successor Contract Owner and Annuitant,
and no death benefit is payable until the surviving spouse's death.
Distributions received by a beneficiary are generally given the same tax
treatment the individual would have received if distribution had been made to
the individual.
Prohibited Transaction
An IRA may not be borrowed against or used as collateral for a loan or other
obligation. If the IRA is borrowed against or used as collateral, its tax-
favored status will be lost as of the first day of the tax year in which the
event occurred. If this happens, the individual must include in Federal gross
income for that year an amount equal to the fair market value of the IRA
Contract as of the first day of that tax year, less the amount of any
nondeductible contributions not previously withdrawn. Also, the early
distribution penalty tax of 10% will apply if the individual has not reached
age 59-1/2 before the first day of that tax year. See "Penalty Tax on Early
Distributions."
Illustration of Guaranteed Rates
The following two tables which the IRS requires us to furnish to prospective
IRA Contract Owners illustrate guaranteed rates for contributions assumed to
be allocated entirely to the Guaranteed Interest Account under Series 300 and
400 Contracts. Table I illustrates a $1,000 contribution made annually on the
Contract Date and on each subsequent anniversary, assuming no withdrawals or
transfers were made from the Contract. Table II assumes a single initial
contribution of $1,000, with no further contributions, withdrawals or
transfers. The 3% guaranteed rate is the minimum guaranteed interest rate in
the Contract.
As explained in "Part 7: Deductions and Charges," the values shown assume the
contingent withdrawal charge applies. These values reflect the effect of the
annual administrative charge deducted at the end of each Contract Year in
which the Annuity Account Value is less than $20,000.
To find the appropriate value for the end of the Contract Year at any
attained age, subtract the issue age (age nearest birthday) from the attained
age and enter the table at the corresponding year. Years that correspond to
an attained age in excess of 70 should be ignored.
The information shown in the tables should be considered in light of your
present age and (with respect to Table I) your ability to contribute $1,000
annually. You should also understand that in order to avoid severe tax
penalties, distribution of the values under your Contract generally must
commence not later than April 1st of the calendar year after the calendar
year you attain age 70-1/2. Subsequent distributions must be made by December
31st of each calendar year. See "Penalty Tax on Early Distributions" and "Tax
Penalties for Insufficient Distributions." Any change in the amounts
contributed annually, or in the amount of the single contribution, would, of
course, change the results shown.
62
<PAGE>
TABLE I
ANNUITY ACCOUNT VALUES AND
CASH VALUES
(Assuming $1,000 Contributions Made Annually
at the beginning of the Contract Year)
<TABLE>
<CAPTION>
3% MINIMUM GUARANTEE
- --------------------------------------
ANNUITY
CONTRACT ACCOUNT
YEAR END VALUE CASH VALUE
- ---------- ------------ ------------
<S> <C> <C>
1 $ 1,009.40 $ 954.89
2 2,039.68 1,929.54
3 3,100.87 2,933.43
4 4,193.90 3,967.43
5 5,319.72 5,032.45
6 6,479.31 6,129.42
7 7,673.69 7,313.69
8 8,903.90 8,543.90
9 10,171.01 9,811.01
10 11,476.14 11,116.14
11 12,820.43 12,460.43
12 14,205.04 13,845.04
13 15,631.19 15,271.19
14 17,100.13 16,740.13
15 18,613.13 18,253.13
16 20,201.53 19,841.53
17 21,837.57 21,477.57
18 23,522.70 23,162.70
19 25,258.38 24,898.38
20 27,046.13 26,686.13
21 28,887.52 28,527.52
22 30,784.14 30,424.14
23 32,737.67 32,377.67
24 34,749.80 34,389.80
25 36,822.29 36,462.29
26 38,956.96 38,596.96
27 41,155.67 40,795.67
28 43,420.34 43,060.34
29 45,752.95 45,392.95
30 48,155.53 47,795.53
31 50,630.20 50,270.20
32 53,179.11 52,819.11
33 55,804.48 55,444.48
34 58,508.61 58,148.61
35 61,293.87 60,933.87
36 64,162.69 63,802.69
37 67,117.57 66,757.57
38 70,161.10 69,801.10
39 73,295.93 72,935.93
40 76,524.81 76,164.81
41 79,850.55 79,490.55
42 83,276.07 82,916.07
43 86,804.35 86,444.35
44 90,438.48 90,078.48
45 94,181.64 93,821.64
46 98,037.08 97,677.08
47 102,008.20 101,648.20
48 106,098.44 105,738.44
49 110,311.40 109,951.40
50 114,650.74 114,290.74
</TABLE>
<PAGE>
TABLE II
ANNUITY ACCOUNT VALUES AND
CASH VALUES
(Assuming a Single Contribution of $1,000 and
No Further Contribution)
<TABLE>
<CAPTION>
3% MINIMUM GUARANTEE
- --------------------------------------
ANNUITY
CONTRACT ACCOUNT
YEAR END VALUE CASH VALUE
- -------------------- ----------- ----------
<S> <C> <C>
1 $1,009.40 $ 954.89
2 1,018.89 963.87
3 1,019.46 964.40
4 1,020.04 964.96
5 1,020.64 965.53
6 1,021.26 966.11
7 1,021.90 1,021.90
8 1,022.55 1,022.55
9 1,023.23 1,023.23
10 1,023.93 1,023.93
11 1,024.65 1,024.65
12 1,025.38 1,025.38
13 1,026.15 1,026.15
14 1,026.93 1,026.93
15 1,027.74 1,027.74
16 1,028.57 1,028.57
17 1,029.43 1,029.43
18 1,030.31 1,030.31
19 1,031.22 1,031.22
20 1,032.16 1,032.16
21 1,033.12 1,033.12
22 1,034.11 1,034.11
23 1,035.14 1,035.14
24 1,036.19 1,036.19
25 1,037.28 1,037.28
26 1,038.40 1,038.40
27 1,039.55 1,039.55
28 1,040.73 1,040.73
29 1,041.96 1,041.96
30 1,043.22 1,043.22
31 1,044.51 1,044.51
32 1,045.85 1,045.85
33 1,047.22 1,047.22
34 1,048.64 1,048.64
35 1,050.10 1,050.10
36 1,051.60 1,051.60
37 1,053.15 1,053.15
38 1,054.74 1,054.74
39 1,056.39 1,056.39
40 1,058.08 1,058.08
41 1,059.82 1,059.82
42 1,061.61 1,061.61
43 1,063.46 1,063.46
44 1,065.37 1,065.37
45 1,067.33 1,067.33
46 1,069.35 1,069.35
47 1,071.43 1,071.43
48 1,073.57 1,073.57
49 1,075.78 1,075.78
50 1,078.05 1,078.05
</TABLE>
63
<PAGE>
SIMPLIFIED EMPLOYEE PENSIONS (SEPS)
An employer can establish a SEP for its employees and can make contributions
to a Contract for each eligible employee. A SEP Contract is a form of IRA
Contract, owned by the employee-Annuitant and most of the rules applicable to
IRAs discussed above apply. A major difference is the amount of permissible
contributions. Rules similar to those discussed above under "Tax Qualified
Retirement Plans" (Qualified Plans) apply. Due to statutory limits, in 1995
an employer can annually contribute an amount for an employee up to the
lesser of $22,500 or 15% of the employee's compensation, determined without
taking into account the employer's contribution to the SEP. This $22,500
maximum, based on the statutory compensation limit of $150,000, may be
adjusted for cost of living changes in future years. Under our current
practice, IRA contributions by the employee may not be made under a SEP
Contract and are put into a separate IRA Contract. Employers with 25 or fewer
eligible employees may allow such employees to make salary reduction
contributions to a SEP (SARSEP). SARSEP programs are subject to a number of
special rules, some of which are discussed in the SAI.
On or about November 1, 1995, SEP plans will be available under EQUI-VEST
Series 300. Thereafter, EQUI-VEST SEP Series 200 will only be available in
states where the 300 Series is not available.
PUBLIC AND TAX-EXEMPT ORGANIZATION
EMPLOYEE DEFERRED COMPENSATION
PLANS (EDC PLANS)
Employees and independent contractors who perform services for a state
(including any subdivision or agency of the state) or other tax-exempt
employer may exclude from Federal gross income certain salary reduction
amounts. To qualify, the employer must maintain an EDC plan satisfying the
requirements of Section 457 of the Code. EQUI-VEST Series 100 or 200
Contracts are used to fund EDC plans that must be owned by the employer, and
are subject to the claims of the employer's general creditors. However, the
EDC plan may permit the employee to choose among various investment options.
Tax-exempt, non-governmental employers are generally subject to ERISA, and
may be required by the provisions of that Act to limit participation in an
EDC plan to a select group of management or highly compensated employees.
Generally, the maximum contribution amount that can be excluded from gross
income in any tax year under an EDC plan is 33 1/3 % of the employee's
"includable compensation," up to $7,500. Special rules may permit "catch-up"
contributions during the three years preceding normal retirement age under
the EDC plan.
In general, no amounts may be withdrawn from an EDC plan prior to the
calendar year in which the employee attains age 70-1/2, separates from
service or in the event of an unforeseen emergency. Income or gains on
contributions under an EDC plan are subject to Federal income tax when
amounts are distributed or made available to the employee or beneficiary.
Distributions from EDC plans generally must commence no later than April 1st
of the calendar year following the calendar year in which the employee
attains 70-1/2. Special rules apply, however, to employees in EDC plans which
are governmental plans.
If the Annuitant does not commence minimum distributions in the calendar year
in which the Annuitant attains age 70 1/2 , and waits until the three month
(January 1-April 1) period in the next calendar year to commence minimum
distributions, then the Annuitant must take two required minimum
distributions in that calendar year.
Distributions from an EDC plan may not be rolled over or transferred to an
IRA.
Distributions to an EDC plan participant are characterized as "wages" for
income tax reporting and withholding purposes. No election out of withholding
is possible. See "Federal and State Income Tax Withholding," below. These
amounts are not subject to FICA tax, if FICA tax was withheld by the employer
when wages were deferred. In certain circumstances, receipt of payments from
an EDC plan may result in a reduction of an employee's Social Security
benefits.
If the EDC plan so provides, a deceased employee's beneficiary may be able to
elect to receive death benefits in installments instead of a lump sum, and
will be taxed as the payments are received. However, the death benefits must
be received within 15 years of the date of the deceased employee's death (or
within the period of the life expectancy of the surviving spouse if the
spouse is the designated beneficiary).
Due to unrelated business income tax rules, annuity Contracts may not be an
appropriate funding vehicle for an EDC plan maintained by any organization
exempt from tax under the following Code Sections: 501(c)(7) (social club);
501(c)(9) (VEBA); 501(c)(17) (supplemental unemployment compensation benefit
plan trust); or 501(c)(20) (legal services plan trust). Please contact your
tax adviser to see if these limits may apply to your EDC plan.
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PENALTY TAX ON EARLY DISTRIBUTIONS
Distributions from a qualified plan or TSA will be subject to a 10% penalty
tax unless the distribution is made on or after the Annuitant's death,
attributable to the Annuitant becoming disabled, or when the Annuitant
reaches age 59-1/2. The penalty tax will also not apply if the Annuitant (i)
separates from service and elects a payout over his or her life or life
expectancy (or joint and survivor lives or life expectancies), (ii) has
attained age 55 and separates from service, or (iii) uses the distribution to
pay certain extraordinary medical expenses. The taxable portion of IRA and
SEP distributions are also subject to the 10% penalty tax unless the
distribution is made (1) on or after your death, (2) because you have become
disabled, or (3) on or after the date when you reach age 59 1/2 . A payout
over your life or life expectancy (or joint and survivor lives or life
expectancies), which is part of a series of substantially equal periodic
payments made at least annually, is also not subject to penalty tax.
This penalty tax does not apply to employees in an EDC plan.
TAX PENALTIES FOR INSUFFICIENT
DISTRIBUTIONS
Annuitants must begin receiving minimum distributions from an IRA, SEP, TSA,
qualified plan or EDC plan no later than April 1st of the calendar year
following the calendar year in which the Annuitant attains age 70-1/2. Once
distributions begin, subsequent distributions must be made by December 31st
of each calendar year. Failure to make required distributions may cause the
disqualification of the IRA, SEP, TSA, qualified plan, or EDC plan.
Disqualification results in current taxation of the Annuitant's entire
benefit. In addition, a 50% penalty tax is imposed on the difference between
the required distribution amount and the amount actually distributed, if any.
Special rules may apply, however, to Annuitants in church or governmental
plans and with respect to TSA contributions made prior to 1987.
We are not permitted to make distributions from a Contract before the
Retirement Date unless a request has been made. It is your responsibility to
comply with the minimum distribution rules. You should consult with your tax
adviser concerning these rules and their proper application to your
situation.
FEDERAL AND STATE INCOME TAX
WITHHOLDING
Equitable Life is required to withhold Federal income tax on the taxable
portion of pension payments and payments from annuity contracts. The rate of
withholding will depend on the type of distribution and, in certain cases,
the amount of the distribution. (In the case of TRUSTEED Contracts which
continue to be owned by the trustee, any required Federal income tax
withholding is the responsibility of the plan administrator.) Unless the
payment is an "eligible rollover distribution" from a qualified plan or a
TSA, the recipient generally may elect not to be subject to income tax
withholding. However, payments under EDC plans are also subject to mandatory
wage withholding rules; no election out is permitted. The employer (and not
Equitable Life) is generally responsible for such wage withholding.
Certain states have indicated that pension and annuity withholding will apply
to payments made to residents. Generally, an election out of Federal
withholding will also be considered an election out of state withholding. In
some states, a recipient may elect out of state withholding, even if Federal
withholding applies. It is not clear whether such states may require
mandatory withholding with respect to eligible rollover distributions
(described below). Contact your tax adviser to see how state income tax
withholding may apply to your payment.
Special withholding rules apply to foreign recipients and United States
citizens residing outside the United States. See your tax adviser if you may
be affected by such rules. Withholding may also apply to taxable amounts paid
under a 10-day free look cancellation.
Elective Withholding
Requests not to withhold Federal income tax must be made in writing prior to
receiving benefits under the Contract. The Processing Office will provide
forms for this purpose. No election out of withholding is valid unless the
recipient provides us with the correct taxpayer identification number and a
United States residence address.
If a recipient does not have sufficient income tax withheld or does not make
sufficient estimated income tax payments, the recipient may incur penalties
under the estimated income tax rules. Recipients should consult their tax
advisers to determine whether they should elect out of withholding.
<PAGE>
A recipient of periodic payments (e.g., monthly or annual payments, other
than "eligible rollover distributions" discussed below), which total less
than a certain Federal minimum (for 1995, $13,900 per year) will generally be
exempt from the Federal income tax withholding rules, unless the recipient
elects to have tax withheld. A recipient of periodic payments which equal or
exceed the Federal minimum (for 1995, $13,900) will generally be subject to
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wage-bracket type withholding (as if such payments were payments of wages by
an employer to an employee) unless the recipient elects no withholding. A
withholding election may be revoked at any time and remains effective until
revoked. If a recipient does not elect out of withholding or does not specify
the number of withholding exemptions, withholding will generally be made as
if the recipient is married and claiming three withholding exemptions. If a
recipient fails to provide a correct taxpayer identification number,
withholding is made as if the recipient is single with no exemptions.
A recipient of a partial or total non-periodic distribution (other than
"eligible rollover distributions" discussed below) will generally be subject
to withholding at a flat 10% rate. A recipient who provides a United States
residence address and a correct taxpayer identification number will generally
be permitted to elect not to have tax withheld.
All recipients receiving periodic and non-periodic payments will be further
notified of the withholding requirements and of their right, if any, to make
withholding elections.
Mandatory Withholding From Qualified Plans and TSAs
All "eligible rollover distributions" are subject to mandatory Federal income
tax withholding of 20% unless the employee elects to have the distribution
directly rolled over to a qualified plan or individual retirement
arrangement. An "eligible rollover distribution" is a distribution from a
qualified plan or TSA of the taxable portion of all or any portion of the
balance to the credit of an employee (other than a required minimum
distribution made under Section 401(a)(9) of the Code) unless the
distribution is one of a series of substantially equal periodic payments made
(not less frequently than annually) (1) for the life (or life expectancy) of
the employee or the joint lives (or joint life expectancies) of the employee
and his or her designated beneficiary, or (2) for a specified period of 10
years or more. In addition, applicable income tax regulations provide that
the following are not eligible rollover distributions subject to mandatory
20% withholding:
o certain corrective distributions under Code Sections 401(k), 401(m) and
402(g);
o certain loans that are treated as distributions;
o P.S. 58 costs (incurred if the plan provides life insurance protection
for participants); and
o a distribution to a beneficiary other than to a surviving spouse or a
current or former spouse under a qualified domestic relations order.
If a distribution is made to a plan participant's surviving spouse, or to a
current or former spouse under a qualified domestic relations order, the
distribution may be an eligible rollover distribution, subject to mandatory
20% withholding, unless one of the exceptions described above applies.
If a distribution is not an "eligible rollover distribution," the rules on
elective withholding described above, apply.
GENERATION SKIPPING TAX
As a general rule, if benefits payable upon death of a Contract Owner are
payable to a person two or more generations younger than the Contract Owner,
a Federal generation skipping tax may be payable with respect to the benefit
at rates similar to the maximum estate tax rate in effect at the time. The
generation skipping tax provisions generally apply to transfers which would
also be subject to the gift and estate tax rules. Individuals are generally
allowed an aggregate generation skipping tax exemption of $1 million. If we
believe a benefit may be subject to generation skipping tax we may be
required to withhold for such tax unless we receive acceptable written
confirmation that no such tax is payable. Because these rules are complex,
you should consult with your tax adviser for specific information, especially
where benefits are passing to younger generations, as opposed to a spouse or
child.
SPECIAL RULES FOR NQ AND TRUSTEED CONTRACTS ISSUED IN PUERTO RICO
Only NQ and TRUSTEED Contracts are available in Puerto Rico.
EQUI-VEST TRUSTEED--The tax treatment of qualified plans by the United States
and by Puerto Rico is similar in many respects, but may not be identical.
Please consult your tax adviser to determine any differences which may affect
your own situation.
<PAGE>
NQ--Under current laws, Equitable Life treats income from such Contracts as
U.S.-source. A Puerto Rico resident is subject to U.S. taxation on such
U.S.-source income. Only Puerto Rico-source income of Puerto Rico residents
is excludable from U.S. taxation. Income from these Contracts is also subject
to Puerto Rico tax. The computation of the taxable portion of amounts
distributed from a Contract may differ in the two jurisdictions. Therefore,
an individual might have to file both U.S. and Puerto Rico tax returns,
showing different amounts of income for each. Puerto Rico generally provides
a credit against Puerto Rico tax for U.S. tax paid. Depending on an
individual's personal situation and
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the timing of the different tax liabilities, an individual may not be able to
take full advantage of this credit.
Please consult your tax adviser to determine the applicability of these rules
to your own tax situation.
IMPACT OF TAXES TO EQUITABLE LIFE
The Contracts provide that we may charge the Separate Account for taxes. We
can also set up reserves for taxes.
TRANSFERS AMONG INVESTMENT OPTIONS
There will not be any tax liability if you transfer the Annuity Account Value
among the Investment Funds, the Guaranteed Interest Account and the Fixed
Maturity Account.
TAX CHANGES
The United States Congress has in the past considered, and may in the future
consider legislation that, if enacted, could change the tax treatment of
annuities. In addition, the Treasury Department may amend existing
regulations, issue new regulations, or adopt new interpretations of existing
laws. State tax laws or, if you are not a United States resident, foreign tax
laws, may affect the tax consequences to you or the beneficiary. These laws
may change from time to time without notice and, as a result, the tax
consequences may be altered. There is no way of predicting whether, when or
in what form any such change would be adopted. Any such change could have
retroactive effects regardless of the date of enactment. We suggest you
consult your legal or tax adviser.
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PART 10: INDEPENDENT ACCOUNTANTS
The consolidated financial statements of Equitable Life for the years ended
December 31, 1994 and 1993 included in Equitable Life's Annual Report on Form
10-K for the year ended December 31, 1994, incorporated by reference in the
prospectus, have been audited by Price Waterhouse LLP, independent
accountants, whose report thereon is incorporated herein by reference. Such
consolidated financial statements have been incorporated herein by reference
in reliance upon the report of Price Waterhouse LLP given upon their
authority as experts in accounting and auditing.
The consolidated financial statements of Equitable Life for the year ended
December 31, 1992 included in Equitable Life's Annual Report on Form 10-K for
the year ended December 31, 1994, incorporated by reference in the
prospectus, have been audited by Deloitte & Touche LLP, independent
accountants, whose report thereon is incorporated herein by reference. Such
consolidated financial statements have been incorporated herein by reference
in reliance upon the report of Deloitte & Touche LLP given upon their
authority as experts in accounting and auditing.
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APPENDIX I: AN EXAMPLE OF MARKET VALUE ADJUSTMENT
The example below shows how the market value adjustment would be
determined and how it would be applied to a withdrawal, assuming that
$100,000 were to be invested on June 14, 1996 to a Fixed Maturity Period with
an Expiration Date of June 15, 2005 at a Rate to Maturity of 7.00% resulting
in a Maturity Amount at the Expiration Date of $183,846. We further assume
that a withdrawal of $50,000 will be made on June 15, 2000. See "Part 5: The
Fixed Maturity Account" for a description of the market value adjustment.
<TABLE>
<CAPTION>
ASSUMED
FIXED MATURITY RATE ON
JUNE 15, 2000
----------------------
5.00% 9.00%
---------- ----------
<S> <C> <C>
As of June 15, 2000 (Before Withdrawal)
- -------------------------------------------------
(1)Market Adjusted Amount ........................ $144,048 $119,487
(2)Book Value .................................... 131,080 131,080
(3)Market Value Adjustment: (1)-(2) .............. 12,968 (11,593)
On June 15, 2000 (After Withdrawal)
- -------------------------------------------------
(4)Portion of Market Value Adjustment Associated
with Withdrawal: (3) X [$50,000 / (1)] .......... 4,501 (4,851)
(5)Reduction in Book Value: [$50,000-(4)] ....... 45,499 54,851
(6)Book Value: (2)-(5) ........................... 85,581 76,229
(7)Maturity Amount ............................... 120,032 106,915
(8)Revised Market Adjusted Amount ................ 94,048 69,487
</TABLE>
You should note that under this example if a withdrawal is made when rates
have increased from 7.00% to 9.00% (right column), a negative market value
adjustment is realized. On the other hand, if a withdrawal is made when rates
have decreased from 7.00% to 5.00% (left column), a positive market value
adjustment is realized.
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- -----------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
PART 1: TAX RULES: SPECIAL ASPECTS Page 3
PART 2: LOAN PROVISIONS Page 4
PART 3: AUTOMATIC WITHDRAWAL Page 6
PART 4: ACCUMULATION UNIT VALUES Page 6
PART 5: ANNUITY UNIT VALUES Page 6
PART 6: CUSTODIAN AND INDEPENDENT ACCOUNTANTS Page 8
PART 7: MONEY MARKET FUND YIELD INFORMATION Page 8
PART 8: OTHER YIELD INFORMATION Page 9
PART 9: KEY FACTORS IN RETIREMENT PLANNING Page 9
PART 10: FINANCIAL STATEMENTS Page 14
</TABLE>
HOW TO OBTAIN THE EQUI-VEST STATEMENT OF
ADDITIONAL INFORMATION
Send this request form to:
Individual Annuity Center
The Equitable
P.O. Box 2996
New York, NY 10116-2996
Please send me an EQUI-VEST Statement of Additional Information
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Name
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Address
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City State Zip
70
