Registration No.33-58950
Registration No. 811-1705
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |_|
Pre-Effective Amendment No. --- |_|
Post-Effective Amendment No. 6 |X|
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AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |_|
Amendment No. 57
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(Check appropriate box or boxes)
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SEPARATE ACCOUNT A
of
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
(Exact Name of Registrant)
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THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
(Name of Depositor)
787 Seventh Avenue, New York, New York 10019
(Address of Depositor's Principal Executive Offices)
Depositor's Telephone Number, including Area Code: (212) 554-1234
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ANTHONY A. DREYSPOOL
VICE PRESIDENT AND SENIOR COUNSEL
The Equitable Life Assurance Society of the United States
787 Seventh Avenue, New York, New York 10019
(Names and Addresses of Agents for Service)
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Please send copies of all communications to:
PETER E. PANARITES
Freedman, Levy, Kroll & Simonds
1050 Connecticut Avenue, N.W., Suite 825
Washington, D.C. 20036
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4273/3AO_1
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Approximate Date of Proposed Public Offering: Continuous
It is proposed that this filing will become effective (check
appropriate box):
|_| Immediately upon filing pursuant to paragraph (b) of Rule 485.
| | On (date) pursuant to paragraph (b) of Rule 485.
|X| 60 days after filing pursuant to paragraph (a)(1) of Rule 485.
|_| On (date) pursuant to paragraph (a)(1) of Rule 485.
|_| 75 days after filing pursuant to paragraph (a)(2) of Rule 485.
|_| On (date) pursuant to paragraph (a)(3) of Rule 485.
If appropriate, check the following box:
This post-effective amendment designates a new effective date for
|_| previously filed post-effective amendment.
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The Registrant has registered an indefinite number of securities under
the Securities Act of 1933 pursuant to Rule 24f-2.
The Rule 24f-2 Notice of the Registrant for fiscal year 1995 was filed
on February 27, 1996.
4273/3AO_1
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CROSS REFERENCE SHEET
SHOWING LOCATION OF INFORMATION IN PROSPECTUS
---------------------------------------------
Form N-4 Item Prospectus Caption
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1. Cover Page Cover Page
2. Definitions General Terms
3. Synopsis Part 1: Summary
4. Condensed Financial Part 5: Accumulation Unit
Information Values
5. General Description of Part 1: Summary, Part 3:
Registrant, Depositor and Equitable's Separate Account
Portfolio Companies and its Investment Funds
6. Deductions and Expenses Part 6: Deductions and
Charges
7. General Description of Part 5: Provisions of the
Variable Annuity Contracts Contract and Services We
Provide
8. Annuity Period Part 5: Provisions of the
Contract and Services We
Provide
9. Death Benefit Part 5: Provisions of the
Contract and Services We
Provide - Death Benefit
10. Purchases and Contract Value Part 2: Investment
Performance, Part 5:
Provisions of the Contract and
Services We Provide
11. Redemptions Part 5: Provisions of the
Contract and Services We
Provide, Part 6: Deductions
and Charges - Contingent
Withdrawal Charge
12. Taxes Part 8: Federal Tax and ERISA
Matters
13. Legal Proceedings Not Applicable
14. Table of Contents of the Statement of Additional
Statement of Additional Information Table of
Information Contents
4273/3AO_1
<PAGE>
CROSS REFERENCE SHEET
SHOWING LOCATION OF INFORMATION
IN STATEMENT OF ADDITIONAL INFORMATION
--------------------------------------
Statement of Additional
Form N-4 Item Information Caption
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15. Cover Page Cover Page
16. Table of Contents Table of Contents
17. General Information Part 3: The
and History Reorganization,
Prospectus -
Part 1: Summary
18. Services Not Applicable
19. Purchases of Part 9: Distribution
Securities Being
Offered
20. Underwriters Part 9: Distribution
21. Calculation of Part 4: Accumulation
Performance Data Unit Values, Part 5:
Annuity Unit Values, Part
10: Money Market Fund Yield
Information, Prospectus -
Part 2: Investment
Performance
22. Annuity Payments Part 5: Annuity Unit
Values
23. Financial Statements Part 12: Financial
Statements
4273/3AO_1
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MOMENTUM PLUS
RETIREMENT PLANNING FROM EQUITABLE LIFE
Supplement, dated August 8, 1996, to
Prospectus, dated May 1, 1996
GROUP VARIABLE ANNUITY CONTRACT FUNDED THROUGH THE
INVESTMENT FUNDS OF SEPARATE ACCOUNT A
Issued By:
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
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This supplement adds and modifies certain information to the prospectus
(PROSPECTUS) of Momentum Plus (MOMENTUM PLUS) of The Equitable Life Assurance
Society of the United States (EQUITABLE LIFE), dated May 1, 1996. The purpose of
the supplement is to offer Employers or trustees of trusts established with
respect to the below mentioned 457 plans ("Trustees") an opportunity to fund
Code Section 457 employee deferred compensation (457) plans with a Momentum Plus
group variable annuity contract issued directly to Employers or Trustees
pursuant to the terms of their respective 457 plans. The supplement describes
the material differences between the Prospectus, as it applies to the Momentum
Plus Program applicable to tax qualified defined contribution plans, and its
application to 457 plans. You should keep this supplement to the Prospectus for
future reference. You may obtain an additional copy of the Prospectus and a copy
of the Statement of Additional Information (SAI), from us, free of charge, if
you write to the Processing Office, call 1-800-528-0204, or mail in the SAI
request form located at the end of the Prospectus. Special terms used in the
Prospectus have the same meaning in this supplement unless otherwise noted.
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Copyright 1996
The Equitable Life Assurance Society of the United States,
New York, New York, 10019.
All rights reserved.
888-1118
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MOMENTUM PLUS 457 CONTRACT
GENERAL TERMS. An "Employer" is either (i) a state, political subdivision of a
state, or an agency or instrumentality of any one or more of these entities or
(ii) any other organization exempt from tax which maintains a plan for a select
group of management or highly compensated employees as described under ERISA. A
"Participant" is an employee who is a participant under a plan, adopted by the
"Employer," that is intended to meet the requirements of an eligible deferred
compensation plan under Section 457 of the Code. The "Source" of a contribution
is either (i) the Employer or (ii) participant contributions pursuant to a
deferral election or (iii) a prior plan transfer or rollover from a prior 457
plan. As the 457 Contract does not provide for loans, the definition of "Active
Loan" is not applicable.
THE MOMENTUM PLUS PROGRAM. In addition to the Momentum Plus group variable
annuity contract available to qualified retirement plans that meet the
requirements of Code Section 401(a), the Momentum Plus Program now offers the
Momentum Plus 457 group variable annuity contract ("457 Contract") as a funding
vehicle for Employers or Trustees who sponsor 457 plans. There is no Master
Plan, Master Trust or Pooled Trust applicable to 457 plans. Each Employer or
Trustee, as applicable, participates directly in the 457 Contract, using it as a
funding vehicle for the Employer's plan. The 457 Contract must be used as the
exclusive funding vehicle of the plan unless Equitable Life agrees otherwise.
Contributions to the 457 Contract on behalf of a participant can be from current
year Employer contributions or prior plan contributions transferred from another
457 plan and are limited in amount (see "Public and Tax Exempt Organization
Employee Deferred Compensation Plan (457 Plans)" below). Post-tax contributions
by a Participant may not be made under the 457 Contract. The Momentum Plus
Program currently is not available for state, political subdivision, agency or
instrumentality 457 plans in Texas.
PLAN OR CONTRACT TERMINATION BY THE EMPLOYER. The Employer or the Trustees, in
their sole discretion, may terminate the plan's 457 Contract and transfer
amounts held under the 457 Contract to some other contract or account that
serves as a funding vehicle for the 457 plan. In addition, the Employer or the
Trustees, in their sole discretion, may decide to terminate the 457 plan. If
Plan Termination occurs in the first five years that the plan has participated
in the 457 Contract, all withdrawals from the Investment Funds made on behalf of
a Participant will be subject to a contingent withdrawal charge, except those
withdrawals exempted from such contingent withdrawal charge. See "Waiver of
Withdrawal Charge" below. Withdrawals during the period from the Guaranteed
Interest Account will be subject to the contingent withdrawal charge only if the
Market Value Adjustment is less than the contingent withdrawal charge. See
"Effects of Plan or Contract Termination" in Part 4. When Contract Termination
occurs in the first five years that the plan has participated in the 457
Contract, a contingent withdrawal charge will apply to the surrendered amounts
in the Investment Funds. Surrendered amounts in the Guaranteed Interest Account
will generally be paid in installments. See "Effects of Plan or Contract
Termination" in Part 4 of the Prospectus.
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 Momentum Plus Program, we assess a
contingent withdrawal charge described at pages 33 and 34 of the Prospectus. The
contingent withdrawal charge does not apply after the Employer's 457 plan has
participated in the Momentum Plus Program for five years.
WAIVER OF WITHDRAWAL CHARGE. Exceptions to the contingent withdrawal charge are
described in the Prospectus, at pages 33 and 34, amended, however, as follows:
The third sub-paragraph on page 34 of the Prospectus does not apply to the 457
Contract and is replaced by the following:
o the amount withdrawn is an amount in excess of the amount that may be
contributed under Section 457 of the Code, including income thereon, and is
refunded within one month of the date the amount was remitted as a
contribution.
The following exception is added:
o the amount withdrawn is a result of a request of a Participant faced with
an "unforeseen emergency" pursuant to Section 457(d)(1)(A)(iii) of the
Code.
Also, the fourth, fifth and seventh sub-paragraphs on page 34 of the Prospectus
do not apply to the 457 Contract.
PLAN LOANS NOT AVAILABLE. The 457 Contract does not provide for plan loans to
Participants. Accordingly, the information in the Prospectus relating to plan
loans and plan loan setup and recordkeeping charges does not apply to the 457
Contracts.
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FULL SERVICE PLAN RECORDKEEPING OPTIONS NOT AVAILABLE. The full service plan
recordkeeping option described in the Prospectus at pages 30 and 31 are not
available under the 457 Contract. The annual charge for these services,
therefore, will not apply under the 457 Contract.
FEES AND CHARGES. Except as described above, the fees and charges applicable to
the 457 Contract are the same as those described in the Prospectus for Momentum
Plus contracts used to fund qualified defined contribution plans. See "Fee
Table" in Part 1, and Part 6, of the Prospectus.
DISTRIBUTION REQUIREMENTS. The 457 Contract is subject to the Code's minimum
distribution requirements for qualified plans. Generally, distributions from the
contracts must commence by April 1 of the calendar year following the calendar
year in which the Participant attains age 70 1/2. Subsequent distributions must
be made by December 31st of each calendar year. If the Automatic Minimum
Withdrawal 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 "Code Section 457 Tax Matters," below for a discussion
of various special rules concerning the minimum distribution requirements.
AUTOMATIC MINIMUM WITHDRAWAL OPTION. We offer a payment option, which we call
"Automatic Minimum Withdrawal Option," which is intended to meet the minimum
distribution requirements applicable to 457 plans. As a Participant you may
elect the Automatic Minimum Withdrawal Option if you are at least age 70 1/2 and
your Retirement Account Value in the Investment Funds is at least $2,000.
Participants can elect the Automatic Minimum Withdrawal Option by filing the
proper election form provided by the Employer. If you elect the Automatic
Minimum Withdrawal Option, we will pay out of the Retirement Account Value in
the Investment Funds an amount which the Code requires to be distributed from
the 457 Contract. In performing this calculation, we assume that the only funds
subject to the Code's minimum distribution requirements are those held for the
Participant under the 457 Contract. We calculate the Automatic Minimum
Withdrawal Option amount based on information the Employer or Trustees give us
and on certain assumptions. Currently, the Automatic Minimum Withdrawal Option
payments will be made annually. We are not responsible for errors that result
from inaccuracies in the information provided to us.
The Automatic Minimum Withdrawal Option, if elected, will be subject to our
rules then in effect. This election is not revocable. Generally, electing this
option does not restrict making partial withdrawals or subsequently electing an
annuity distribution option. However, you must consult with your tax advisor
before making any partial withdrawal or electing an annuity distribution,
because the Internal Revenue Code and Treasury Regulations generally require
that payments under 457 plans have to be substantially equal in amount.
The minimum check that will be sent is $300, or, if less, the Participant's
Retirement Account Value. If, after the deduction of the amount of the minimum
distribution, the total Retirement Account Value of a Participant is less than
$500, we may pay that amount.
BENEFICIARY. Under the 457 Contract, the Employer or the Trustees must be the
beneficiary of all Participants under the 457 plan. Each Participant's actual
beneficiary designation will be maintained by the Employer or Trustees. Upon our
receipt of due proof of the death of a Participant, Equitable Life may, at the
request of the Employer or Trustees, change the beneficiary designation and pay
a death benefit to the then designated beneficiary. The amount of the death
benefit will be equal to the Retirement Account Value as of the applicable
Transaction Date. The beneficiaries may elect any of the methods of disposition,
described under "Death Benefit" in Part 5 of the Prospectus.
CODE SECTION 457 TAX MATTERS
Note: Except for the text on page 36 of the Prospectus preceding "Tax Aspects
of Contributions to a Plan" and "Impact of Taxes to Equitable Life" on
page 40, "Part 8: Federal Tax and ERISA Matters" in the Prospectus does
not apply to 457 plans and is replaced by the addition of this section.
PUBLIC AND TAX-EXEMPT ORGANIZATION EMPLOYEE DEFERRED COMPENSATION PLANS (457
PLANS). Employees and independent contractors who perform services for a state
(including any subdivision, agency or instrumentality) or other tax-exempt
employer may exclude from Federal gross income certain salary reduction amounts.
To qualify, the employer must maintain a 457 plan satisfying the requirements of
Section 457 of the Code. The contracts used to fund 457 plans must be owned by
the Employer or the Trustees, and, in any event, are subject to the claims of
the employer's general creditors. However, the 457 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 a 457 plan to a select group of management
or highly compensated employees.
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Generally, the maximum contribution amount that can be excluded from gross
income in any tax year under a 457 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 457 plan.
In general, no amounts may be withdrawn from a 457 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 a 457
plan are subject to Federal income tax when amounts are distributed or made
available to the employee or beneficiary.
Distributions from 457 plans generally must commence no later than April 1st of
the calendar year following the calendar year in which the employee attains age
70 1/2. Special rules apply, however, to employees in 457 plans which are
governmental plans. There is no 10% penalty tax imposed on distributions prior
to age 59 1/2.
If the participant in a 457 plan does not commence minimum distributions in the
calendar year in which he or she 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 participant must take two required minimum distributions
in that calendar year.
Distributions from a 457 plan may not be rolled over or transferred to an IRA.
Distributions to a 457 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 a 457 plan may
result in a reduction of an employee's Social Security benefits.
If the 457 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 life expectancy of the surviving spouse if the spouse is the
designated beneficiary).
Due to unrelated business income tax rules, the 457 Contracts may not be an
appropriate funding vehicle for a 457 plan maintained by an 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 457 plan.
TAX PENALTY FOR INSUFFICIENT DISTRIBUTIONS. Failure to make required
distributions may cause the disqualification of the 457 plan. Disqualification
results in current taxation of the Participant'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. We do not automatically make
distributions from a 457 Contract before the retirement date unless a request
has been made. We will notify you when our records show that your age 70 1/2 is
approaching. You should consult with your tax adviser concerning these rules and
their proper application to your situation.
FEDERAL AND STATE INCOME TAX WITHHOLDING. Payments under 457 plans are subject
to mandatory federal income tax withholding rules applicable to wages; no
election out is permitted. State income tax withholding generally also applies.
The Employer (and not Equitable Life) is generally responsible for such wage
withholding.
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 457 plans. 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.
42257
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PROSPECTUS
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[MOMENTUM PLUS LOGO]
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MAY 1, 1996
[EQUITABLE -- POWER OVER TOMORROW LOGO]
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MOMENTUM PLUS
RETIREMENT PLANNING FROM EQUITABLE LIFE
PROSPECTUS, DATED MAY 1, 1996
GROUP VARIABLE ANNUITY CONTRACT FUNDED THROUGH THE
INVESTMENT FUNDS OF SEPARATE ACCOUNT A
Issued By:
The Equitable Life Assurance Society of the United States
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This prospectus describes a group variable annuity contract (the CONTRACT)
offered by The Equitable Life Assurance Society of the United States (EQUITABLE
LIFE). The Contract is designed to fund defined contribution plans. Employers
sponsoring such plans and trustees of such plans (PLAN TRUSTEES) can participate
in the Contract through the Momentum Plus Program. The Momentum Plus Program
consists of a defined contribution master plan and trust sponsored by Equitable
Life (the MASTER PLAN AND TRUST) or, for Employers who prefer to use their own
individually-designed or a prototype defined contribution plan, a pooled trust
(the POOLED TRUST).
Employers and Plan Trustees may choose from investment options (INVESTMENT
OPTIONS) available under the Contract. These Investment Options include the
Guaranteed Interest Account, which is part of Equitable Life's general account
and pays interest at a guaranteed fixed rate, and thirteen variable investment
funds (INVESTMENT FUNDS) of Separate Account A (SEPARATE ACCOUNT):
o Money Market o Growth & Income Asset Allocation Series:
o Intermediate Government o Equity Index o Conservative Investors
Securities o Common Stock o Balanced
o Quality Bond o Global o Growth Investors
o High Yield o International
o Aggressive Stock
We invest each Investment Fund in shares of a corresponding portfolio
(PORTFOLIO) of The Hudson River Trust, a mutual fund whose shares are purchased
by the separate accounts of insurance companies. Amounts allocated to the
Investment Funds will increase or decrease with the investment experience of the
Portfolios. The prospectus for The Hudson River Trust, directly following this
prospectus, describes the investment objectives, policies and risks of the
Portfolios.
Participants may choose from a variety of payout options, including annuities.
Fixed annuities are funded through Equitable Life's general account.
We provide Employers, Plan Trustees and Participants with a variety of services
and reports relating to the Contract. We also offer a variety of plan
recordkeeping services to plan administrators at an additional cost.
This prospectus provides information about the Contract 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 Hudson River Trust, which investors should also read
carefully.
A registration statement relating to the Separate Account has been filed with
the Securities and Exchange Commission (SEC). The statement of additional
information (SAI), dated May 1, 1996, which is part of that registration
statement, is available free of charge upon request by writing to the Processing
Office or calling 1-800-528-0204, 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, 1996 888-1111
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Copyright 1996
The Equitable Life Assurance Society of the United States,
New York, New York, 10019.
All rights reserved.
Cat. No. 126941
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PROSPECTUS TABLE OF CONTENTS
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<TABLE>
<S> <C>
GENERAL TERMS PAGE 4
PART 1: SUMMARY PAGE 6
Equitable Life 6
The Momentum Plus Program 6
Adopting the Momentum Plus Program 7
The Contract 7
Investment Options 7
Contributions 8
Transfers 8
Services We Provide 8
Distribution Options and Death Benefit 9
Withdrawals and Termination 9
Withdrawals for Plan Loans 10
Taxes 10
Deductions and Charges 10
Fee Table 11
PART 2: INVESTMENT PERFORMANCE PAGE 13
Creating an Investment Strategy 13
Investment Fund Performance 13
Standardized Computation of Performance 17
Communicating Performance Data 18
PART 3: EQUITABLE LIFE'S SEPARATE ACCOUNT AND ITS
INVESTMENT FUNDS PAGE 19
Separate Account A 19
The Hudson River Trust 19
The Hudson River Trust's Investment Adviser 20
Investment Policies And Objectives of The Hudson River Trust's Portfolios 20
PART 4: THE GUARANTEED INTEREST ACCOUNT PAGE 22
Effects of Plan or Contract Termination 22
PART 5: PROVISIONS OF THE CONTRACT AND SERVICES
WE PROVIDE PAGE 24
Selecting Investment Options 24
Contributions 24
Retirement Account Value 25
Transfers 26
Investment Simplifier: Automatic Transfer Service 26
Withdrawal for Plan Loans 27
Withdrawals and Contract Termination 27
Forfeitures 28
Distribution Options 28
Annuity Distribution Options 28
Electing an Annuity Distribution Option 29
Automatic Minimum Withdrawal (Over Age 70 1/2) 29
Death Benefit 30
Payment of Proceeds 30
Plan Recordkeeping Services 30
</TABLE>
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<TABLE>
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PART 6: DEDUCTIONS AND CHARGES PAGE 32
Charge to Investment Funds 32
Hudson River Trust Charges to Portfolios 32
Quarterly Administrative Charge 32
Applicable State and Local Taxes 33
Charge for Plan Recordkeeping Services 33
Contingent Withdrawal Charge 33
Loan Charges 34
Special Circumstances 34
PART 7: VOTING RIGHTS PAGE 35
Hudson River Trust Voting Rights 35
Separate Account Voting Rights 35
Voting Rights of Others 35
Changes in Applicable Law 35
PART 8: FEDERAL TAX AND ERISA MATTERS PAGE 36
Tax Aspects of Contributions to a Plan 36
Tax Aspects of Distributions from a Plan 37
Certain Rules Applicable to Plan Loans 40
Impact of Taxes to Equitable Life 40
Certain Rules Applicable to Plans Designed
to Comply with Section 404(c) of ERISA 41
STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS PAGE 42
HOW TO OBTAIN THE STATEMENT OF ADDITIONAL INFORMATION PAGE 42
</TABLE>
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GENERAL TERMS
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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 either the Employer, Trustee or the Participant as indicated.
ACCUMULATION UNIT
Contributions that are invested in an Investment Fund purchase Accumulation
Units in that Fund. The "Accumulation Unit Value" is the dollar value of each
Accumulation Unit on a given date.
ACTIVE LOAN
The principal amount of any Participant plan loan that has neither been repaid
nor deemed distributed under Section 72(p) of the Code.
BUSINESS DAY
Our Business Day is generally 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 Retirement Account Value minus any applicable withdrawal charge and/or any
Market Value Adjustment.
CODE
The Internal Revenue Code of 1986, as amended.
CONTRACT DATE
The date we receive the first contribution made with respect to a plan.
CONTRACT TERMINATION
Contract Termination occurs (i) when we receive written notice from the Employer
or Plan Trustee, as applicable, that it is terminating a plan's participation
under the Contract, in whole or in part, or (ii) when Equitable Life delivers
written notice to the Employer or Plan Trustee that Equitable Life is
terminating a plan's participation under the Contract because (a) the plan fails
to qualify under the Code or (b) the plan has failed to provide Equitable Life
with the Participant information necessary to properly administer the Contract.
DEFAULT OPTION
The Money Market Fund, if that Fund is selected by the Employer or Plan Trustee
as a funding option under the plan. Otherwise, the Guaranteed Interest Account.
EMPLOYER
An employer who has sponsored a defined contribution plan that participates in
the Momentum Plus Program through either the Master Plan and Trust or the Pooled
Trust.
ERISA
The Employee Retirement Income Security Act of 1974, as amended.
GUARANTEED INTEREST ACCOUNT
The Investment Option that is part of Equitable's General Account.
INVESTMENT FUNDS
The thirteen variable investment funds of the Separate Account that are listed
on the first page of this prospectus. Investment Funds are referred to as
"Investment Divisions" in the Contract.
INVESTMENT OPTIONS
The fourteen choices for investment contributions: the thirteen Investment Funds
and the Guaranteed Interest Account.
MARKET VALUE ADJUSTMENT
A downward adjustment applied to certain withdrawals from the Guaranteed
Interest Account after a Plan Termination or Contract Termination. The Market
Value Adjustment is subject to some important limitations more fully described
in Part 4: The Guaranteed Interest Account.
MASTER PLAN AND TRUST
The Members Retirement Plan of The Equitable Life Assurance Society of the
United States and The Members Retirement Trust of The Equitable Life Assurance
Society of the United States, respectively, a defined contribution master plan
and trust sponsored by Equitable Life.
PARTICIPANT
An individual who participates in an Employer's defined contribution plan and is
covered under the Contract.
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PLAN TERMINATION
Plan Termination means the termination, either in whole or in part, of the
Employer's defined contribution plan when there is no successor plan. The
Employer or Plan Trustee is required under the Contract to send written notice
to Equitable Life at least 90 days before the date the plan is scheduled to
terminate.
PLAN TRUSTEE
A trustee or trustees for an Employer's individually-designed or prototype
defined contribution plan.
POOLED TRUST
The Pooled Trust for Members Retirement Plans of The Equitable Life Assurance
Society of the United States.
PORTFOLIOS
The portfolios of The Hudson River Trust that correspond to the Investment Funds
of the Separate Account.
PROCESSING OFFICE
The addresses to which all payments (e.g., contributions, loan payments, etc.),
written requests (e.g., transfers, withdrawals, etc.) or other communications
must be sent.
RETIREMENT ACCOUNT VALUE
The sum of the amounts that a Participant has in the Investment Options under
the Contract.
SEPARATE ACCOUNT
Equitable Life's Separate Account A.
SOURCE
The source of a contribution. There are six potential sources: (i) employer,
(ii) employee post-tax, (iii) employer 401(k), (iv) employee salary deferral,
(v) employer matching, and (vi) prior plan (transfer or rollover from another
plan). A detailed description of these Sources is contained in the SAI.
SAI
The Statement of Additional Information.
TERMINATED PLAN PARTICIPANT
A Participant who is covered by a defined contribution plan (or a portion
thereof) for which Plan Termination has occurred.
TRANSACTION DATE
The Business Day we receive a contribution or an acceptable written or telephone
transaction request at our Processing Office or the date specified in the
request, if later. If the 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 following Business Day (unless a future date certain is
specified in the request).
VALUATION PERIOD
Each Business Day together with any preceding non-Business Day.
5
<PAGE>
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PART 1: SUMMARY
- --------------------------------------------------------------------------------
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 60.6%
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 assets of
approximately $195.3 billion as of December 31, 1995, including third party
assets of approximately $144.4 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 42,000 small
businesses, state and local retirement funds in more than half the 50 states,
approximately 250,000 employees of educational and non-profit institutions, as
well as nearly 500,000 individuals. Millions of Americans are covered by
Equitable Life's annuity, life, health and pension contracts.
THE MOMENTUM PLUS PROGRAM
(EMPLOYERS AND PLAN TRUSTEES)
The Momentum Plus Program offers, pursuant to the terms of either the Master
Trust or the Pooled Trust, a group variable annuity contract as a funding
vehicle for Employers who sponsor qualified defined contribution plans. A
defined contribution plan is a retirement plan which provides for an individual
account for each plan participant and for benefits based solely on the amounts
contributed to such account and any income, expenses, gains and losses. A
qualified defined contribution plan is a defined contribution plan that meets
the requirements of Section 401(a) of the Code and applicable Treasury
regulations.
The Employer or Plan Trustee, as applicable, is responsible for determining
whether the Contract is a suitable funding vehicle for its defined contribution
plan and should, therefore, carefully read this prospectus and the Contract
before entering into the Contract.
As an Employer, subject to Equitable Life's underwriting requirements, you can
elect to participate in the Momentum Plus Program and the Master Plan and Trust,
in which case the Master Trust will be the sole funding vehicle for your plan.
The Master Trust is funded by the Contract.
The Master Plan and Trust consists of Internal Revenue Service approved master
defined contribution plans all of which use the same basic plan document. They
include:
o a standardized and nonstandardized profit sharing plan (both with an optional
qualified cash or deferred arrangement pursuant to Section 401(k) of the
Code); and
o a standardized and a nonstandardized defined contribution pension plan.
An Employer may adopt one or more of these plans. The plans are all
participant-directed, that is, the plan participants choose which investment
options to use for the investment of their plan accounts. The plans are designed
to meet the requirements of ERISA Section 404(c). See "Certain Rules Applicable
to Plans Designed to Comply With Section 404(c) of ERISA" in Part 8.
Employers who elect the full service plan recordkeeping option must adopt the
Master Plan and Trust. A description of such services may be found under "Plan
Recordkeeping Services" in Part 5. More information about the Master Plan and
Trust may be found in the SAI.
6
<PAGE>
If you, as an Employer, elect our basic recordkeeping option, you may adopt the
Pooled Trust as your plan's sole funding vehicle. Note that the Contract
provides that it must be the exclusive funding vehicle for your plan unless we
agree otherwise. The same group variable annuity contract (i.e., the Contract)
is used under the Pooled Trust and the Master Plan and Trust.
The Pooled Trust is available for qualified defined contribution plans with
either participant-directed or trustee-directed investments. If you have elected
the basic plan recordkeeping option you may use your own individually designed
or prototype qualified defined contribution plan document, but you may not use
the Master Plan. You may choose to have us perform additional plan recordkeeping
services for an additional charge, but the full service recordkeeping option is
not available with the Pooled Trust.
Chase Manhattan Bank, N.A. currently acts as the trustee under both the Pooled
Trust and the Master Plan and Trust. The sole responsibility of the Chase
Manhattan Bank, N.A. is to serve as a party to the Contract. It has no
responsibility for the administration of the Momentum Plus Program or for any
distributions or duties under the Contract. In certain states and certain other
situations the Contract will be issued directly to the Employer or Plan Trustee
and, accordingly, the Master Plan and Trust as well as the Pooled Trust, will
not be available. As a consequence, those Employers in those states and
situations will not be able to use our full service plan recordkeeping option.
EMPLOYER'S RESPONSIBILITIES. If you adopt the Master Plan and Trust, you, as the
Employer and plan administrator, will have certain responsibilities relating to
the administration and qualification of your plan, including:
o Sending us contributions at the proper time;
o Determining the amount of all contributions for each Participant;
o Maintaining all personnel records necessary for administering your plan;
o Determining who is eligible to receive benefits;
o Forwarding to us all the forms that employees are required to submit;
o Arranging to have all reports distributed to employees and former employees;
o Arranging to have our prospectuses distributed;
o Filing an annual information return for your plan with the Internal Revenue
Service, if required;
o Providing us with the information needed for running special
non-discrimination tests, if you have a 401(k) plan or if your plan accepts
post-tax employee or employer matching contributions and making any
corrections if you do not pass the test;
o Selecting interest rates and monitoring default procedures, if you elect to
offer Participant loans in your plan; and
o Meeting the requirements of ERISA Section 404(c) if you, as Employer, intend
for your plan to comply with that section.
Other responsibilities of the Employer relating to administration and
qualification of your plan are indicated in the plan recordkeeping services
agreement which is required for all plans that elect the full service plan
recordkeeping option.
We will give you guidance and assistance in the performance of your
responsibilities. The ultimate responsibility, however, rests with you.
If you, as an Employer, use an individually-designed or a prototype plan, you
already have most of these responsibilities, which generally will not be
increased by your adoption of the Pooled Trust.
ADOPTING THE MOMENTUM PLUS PROGRAM
(EMPLOYERS AND PLAN TRUSTEES)
In addition to other installation forms and agreements, to adopt the Master Plan
and Trust, you, as the Employer, must complete a participation agreement and
have it executed on behalf of your company. To adopt the Pooled Trust, a Plan
Trustee must execute a Pooled Trust participation agreement. Return your
completed participation agreement to the address specified on the form. You
should keep copies of all completed forms for your own records. In addition,
either you, as Employer, or the Plan Trustee, as applicable, must complete a
Contract application in order to participate in the Contract.
Your Equitable Life Agent can help you complete the participation agreement and
the Contract application. We recommend that the participation agreement be
reviewed by your tax or benefits advisor.
THE CONTRACT
The Momentum Plus Program is funded through the Contract, a combination fixed
and variable group annuity contract issued by Equitable Life.
INVESTMENT OPTIONS
There are fourteen Investment Options available for Employers to fund their
plans: the Guaranteed Interest Account 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
7
<PAGE>
Investment Fund invests in shares of a corresponding Portfolio of a mutual fund
called The Hudson River Trust. The Hudson River Trust prospectus (found in the
second part of this booklet) describes the investment objectives and policies of
the available Portfolios. Employers or Plan Trustees may select the number of
Investment Options that they wish to use to fund their plans. If your Employer
or Plan Trustee does not select all fourteen Investment Options under the
Contract, your choices will be limited to the Investment Options selected. If
the Plan is intended to comply with the requirements of ERISA Section 404(c),
the Employer or the Plan Trustee is responsible for making sure that the
Investment Options chosen constitute a broad range of investment choices as
required by the Department of Labor (DOL) Section 404(c) regulation. See
"Certain Rules Applicable to Plans Designed to Comply with ERISA Section 404(c)"
in Part 8.
CONTRIBUTIONS
Contributions may be made at any time and may be made only by the Employer or
Plan Trustee, by either wire transfer or check. Participants should not send
contributions (even if they are employee post-tax contributions) directly to
Equitable Life. There is no minimum contribution.
Employers and Plan Trustees should send all contributions to Equitable Life's
Processing Office. 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.
Contributions are credited as of the Transaction Date, if they are accompanied
by properly completed forms. Failure to use the proper form, or to complete the
form properly, may result in a delay in crediting contributions.
Based upon your Employer's plan, either you or the Plan Trustee, or both, must
instruct us to allocate contributions to one or more of the Investment Options
that are available under your Employer's Plan. Allocation percentages must be in
whole numbers and the sum must equal 100.
We have reserved the right to discontinue accepting contributions upon notice to
Employers and Plan Trustees.
TRANSFERS
Based upon your Employer's plan, either you or the Plan Trustee may direct us to
transfer funds among the Investment Options that are available under your
Employer's plan. There is no charge for these transfers. Depending upon the
Investment Funds selected to fund your Employer's plan, certain restrictions may
apply to transfers out of the Guaranteed Interest Account. See "Transfers" in
Part 5.
SERVICES WE PROVIDE
Your Equitable Life Agent can help with any questions you may have about the
Momentum Plus Program. Materials and seminars of an educational nature to assist
retirement planning needs of Participants can be arranged through your Equitable
Life Agent. Your Equitable Life Agent can also schedule retirement planning
workshops to facilitate plan enrollment periods. In addition, the Momentum Plus
Program includes a number of services designed to keep Participants, Employers
and Plan Trustees informed.
REGULAR PARTICIPANT REPORTS
We currently provide written confirmation of every financial transaction and two
additional reports each plan year:
o Annual statement of retirement account; and
o Semi-annual statement of retirement account.
We reserve the right to change the frequency of these reports.
TELEPHONE OPERATED PLAN SUPPORT (TOPS) SYSTEM
TOPS is designed to help Participants get up-to-date information about their
accounts via touch-tone telephone. TOPS is only available if your Employer has
elected this service for your Employer's plan.
You can use TOPS to obtain current Accumulation Unit Values for the Investment
Funds selected for your Employer's plan and the current interest rate for the
Guaranteed Interest Account (if available under your Employer's plan). In
addition, once you have completed the form necessary to obtain a special code
number and we have processed it, TOPS can tell you:
o Your current Retirement Account Value;
o Your current allocation percentages; and
o The number of units your account holds in the Investment Funds.
You may then also use TOPS to change your allocation percentages for future
contributions and transfer existing money among the Investment Options.
Procedures have been established by Equitable Life 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
Equitable Life does not employ reasonable proce-
8
<PAGE>
dures to confirm that instructions communicated by telephone are genuine, it may
be liable for any losses arising out of any action on its part or any failure or
omission to act as a result of its own negligence, lack of good faith, or
willful misconduct. In light of the procedures established, Equitable Life will
not be liable for following telephone instructions that it reasonably believes
to be genuine.
Local TOPS telephone numbers will be provided periodically. TOPS is also
available via a toll-free number. See "Toll-Free Telephone Services" below. Your
TOPS subscriber number for Momentum Plus is 66677. 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.
TOPS will not be available after Plan termination occurs.
TOLL-FREE TELEPHONE SERVICES
General information from one of our consultants is available between the hours
of 8:30 a.m. and 7:00 p.m. Eastern Time, every Business Day, by calling
1-800-528-0204. TOPS is available, as described above, by calling
1-800-821-7777.
PROCESSING OFFICE
FOR PAYMENTS (E.G., CONTRIBUTIONS, LOAN
PAYMENTS, ETC.) SENT BY REGULAR MAIL:
Equitable Life
Momentum Administrative Services
P.O. Box 13629
Newark, NJ 07188-0629
FOR PAYMENTS SENT BY EXPRESS MAIL:
First Chicago National Processing Center
300 Harmon Meadow Boulevard, 3rd Floor
Attention: Momentum 13629
Secaucus, NJ 07096
ALL OTHER COMMUNICATIONS (E.G., TRANSFERS,
WITHDRAWALS) SENT BY REGULAR MAIL:
Momentum Administrative Services
P.O. Box 2919
New York, NY 10116
ALL OTHER COMMUNICATIONS SENT BY EXPRESS MAIL:
Momentum Administrative Services
200 Plaza Drive HM-1
Harmon Meadow
Secaucus, NJ 07096
DISTRIBUTION OPTIONS AND DEATH BENEFIT
The Contract provides several different types of retirement benefits to
Participants or their beneficiaries, including lump sum payments and fixed
annuity benefits. The Contract is an annuity contract, even though you may elect
to receive your benefits in another form. Subject to the terms of your
Employer's plan, payout options include:
o Lump sum or partial withdrawals;
o Payments for as long as you live;
o Payments for as long as both you and your joint annuitant live; or
o Payments for a specific length of time (not longer than your life expectancy
or the joint life expectancy of you and your designated beneficiary).
You may also be eligible for our "Automatic Minimum Withdrawal" feature, which
is designed to help you satisfy the Code's "minimum distribution requirements."
See "Tax Aspects of Distributions from a Plan -- Distribution Requirements and
Limits" in "Part 8: Federal Tax and ERISA Matters."
If you die before distributions begin, your beneficiary will be paid your vested
Retirement Account Value.
See "Distribution Options", "Annuity Distribution Options", "Death Benefits" and
"Your Beneficiary" in Part 5 and "Tax Aspects of Distributions from a Plan" in
Part 8.
WITHDRAWALS AND TERMINATION
The Code gives qualified plans special tax status in order to encourage
long-term retirement savings. As a deterrent to premature withdrawals (generally
prior to age 59 1/2), the Code provides certain restrictions on and penalties
for early withdrawals. See "Federal Tax and ERISA Matters" in Part 8.
The Contract permits funds to be withdrawn from a Retirement Account Value at
any time. However, qualified plans, including the Master Plan and Trust,
generally place restrictions on when and under what circumstances withdrawals
can be made.
Subject to any restrictions in your Employer's plan, you may request a
withdrawal by filing the proper form with your Employer.
The Contract also permits you, as Employer or Plan Trustee, to terminate your
plan's participation under the Contract at any time. Equitable Life
9
<PAGE>
has also reserved the right to terminate the Contract if we learn that the
Employer's plan fails to qualify under the Code or if the Employer fails to
provide the Participant information necessary to administer the Contract.
Withdrawals or Contract Termination may result in a contingent withdrawal charge
on amounts in the Separate Account and either installment payments of amounts in
the Guaranteed Interest Account or a Market Value Adjustment. Withdrawals that
are made on behalf of a Terminated Plan Participant are treated differently than
withdrawals that are made from an active plan. See "Effects of Plan or Contract
Termination" in Part 4 and "Contingent Withdrawal Charge" in Part 6.
WITHDRAWALS FOR PLAN LOANS
The Contract permits your Employer to withdraw funds from your Retirement
Account Value, without incurring a contingent withdrawal charge, in order to
make a loan to you under your Employer's plan.
A plan loan will be in default if the amount of any scheduled repayment is not
received by us within 90 days of its due date, or if the Participant dies or
participation under the Contract is terminated. See "Certain Rules Applicable to
Plan Loans" in Part 8 for a discussion of the tax consequences of a loan
default.
TAXES
Any earnings attributable to your Retirement Account Value will not be included
in taxable income until distributions are made. See "Part 8: Federal Tax and
ERISA Matters."
We may deduct a charge for state premium taxes and other applicable state and
local taxes. See "Applicable State and Local Taxes" in Part 6.
DEDUCTIONS AND CHARGES
QUARTERLY ADMINISTRATIVE CHARGE
An administrative charge which is currently equal to $7.50 or, if less, .50% of
the total of your Retirement Account Value plus the amount of any Active Loan is
deducted from your Retirement Account Value on the last Business Day of each
calendar quarter. For accounts of participants in plans that, prior to October
1, 1993, were using EQUI-VEST Corporate TRUSTEED, EQUI-VEST Unincorporated
TRUSTEED, EQUI-VEST Annuitant-Owned HR-10 or Momentum as a funding vehicle, and
which transferred assets to this Contract, the administrative charge will be
waived if the Retirement Account Value of the Momentum Plus account is at least
$25,000 on the last business day of each calendar quarter. We reserve the right
to increase this charge upon 90 days written notice to Employers or Plan
Trustees. Your Employer may elect to pay this charge.
SEPARATE ACCOUNT CHARGE
We make a Separate Account charge (at an annual rate) for expenses (.25%) and
mortality and expense risks (1.10%). In certain cases, this charge may be
reduced. See "Charge to Investment Funds" in Part 6. The Accumulation Unit Value
is quoted net of these charges.
HUDSON RIVER TRUST CHARGES
Investment advisory fees and other expenses of The Hudson River Trust are
deducted prior to deducting the Separate Account charge described above. See
"Hudson River Trust Charges to Portfolios" in Part 6.
CONTINGENT WITHDRAWAL CHARGE
During the five years following the Contract Date your Retirement Account Value
may be subject to a contingent withdrawal charge if Contract Termination occurs
or when certain withdrawals are made. This charge is used to cover sales and
promotional expenses relating to the Contract.
This charge will not exceed 6% of the amount withdrawn. The amount withdrawn
includes the amount you request and the withdrawal charge. There are certain
important exceptions and limitations which eliminate or reduce the contingent
withdrawal charge. See "Contingent Withdrawal Charge" in Part 6.
LOAN CHARGES
A $25 set-up charge will be deducted from your Retirement Account Value at the
time a plan loan is made. Also, we will deduct a loan recordkeeping charge of $6
from your Retirement Account Value on the last Business Day of each calendar
quarter if there is an Active Loan on that date. Your Employer may elect to pay
these charges and we reserve the right to increase them.
CHARGE FOR PLAN RECORDKEEPING SERVICES
Equitable Life offers two plan recordkeeping options, one of which must be
elected, for each plan. The annual charge for basic recordkeeping is $300 per
plan and is billed directly to the Employer. The full service recordkeeping
option is available only for plans that satisfy Equitable's underwriting
requirements. Fees for the full service recordkeeping option are defined in the
plan recordkeeping services agreement which is required for all plans that elect
this option. We reserve the right to increase these charges. See "Charge for
Plan Recordkeeping Services" in Part 6.
10
<PAGE>
FEE TABLE
The purpose of this Table is to assist Employers and Participants in
understanding the various costs and expenses associated with the Contract. The
Table reflects expenses of both the Separate Account and The Hudson River Trust
for the period ended December 31, 1995.
As explained in Part 4, the Guaranteed Interest Account is part of our General
Account and is not a part of the Separate Account. Therefore, the Separate
Account Annual Expenses and The Hudson River Trust Annual Expenses shown below
do not apply to the Guaranteed Interest Account. See also "Effects of a Plan
Termination" in Part 4 and "Electing an Annuity Distribution Option" in Part 5
for a description of fixed annuity charges.
Certain expenses and fees shown in this Table may not apply. To determine
whether a particular item in the Table applies (and the actual amount, if any)
consult the portion of the prospectus indicated in the notes to the Table. A
charge for any applicable state or local taxes such as premium tax may be
deducted from an amount applied to provide an annuity benefit if a participant
elects to annuitize. See "Applicable State and Local Taxes" in Part 6.
CONTRACT TRANSACTION EXPENSES
SALES LOAD ON PURCHASES.......................... NONE
TRANSFER FEES.................................... NONE
MAXIMUM CONTINGENT WITHDRAWAL CHARGE (1)......... 6%
PLAN LOAN CHARGES (2)............................ $25 WHEN LOAN IS MADE
$6 PER QUARTER
ANNUAL ADMINISTRATIVE CHARGE (3).................... $30 PER PARTICIPANT
ANNUAL BASIC RECORDKEEPING CHARGE (4)............... $300 PER PLAN
SEPARATE ACCOUNT ANNUAL EXPENSES
Mortality and Expense Risk Charges............... 1.10%
Expenses......................................... 0.25%
----
Total Separate Account Annual Expenses (5).... 1.35%
====
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERMEDIATE
MONEY GOVT. QUALITY HIGH GROWTH & EQUITY
HUDSON RIVER TRUST ANNUAL EXPENSES MARKET SECURITIES BOND YIELD INCOME INDEX
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment Advisory Fee........................... 0.40% 0.50% 0.55% 0.55% 0.55% 0.35%
Other Expenses.................................... 0.04% 0.07% 0.04% 0.05% 0.05% 0.13%
---- ---- ---- ---- ---- ----
Total Annual Expenses for The Hudson River
Trust (6)................................. 0.44% 0.57% 0.59% 0.60% 0.60% 0.48%
==== ==== ==== ==== ==== ====
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
AGGRES- CONSERVA-
COMMON INTER- SIVE TIVE GROWTH
HUDSON RIVER TRUST ANNUAL EXPENSES STOCK GLOBAL NATIONAL STOCK INVESTORS BALANCED INVESTORS
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment Advisory Fee.................... 0.35% 0.53% 0.90% 0.46% 0.55% 0.37% 0.52%
Other Expenses............................. 0.03% 0.08% 0.13% 0.03% 0.04% 0.03% 0.04%
---- ---- ---- ---- ---- ---- ----
Total Annual Expenses for The Hudson
River Trust (6)..................... 0.38% 0.61% 1.03% 0.49% 0.59% 0.40% 0.56%
==== ==== ==== ==== ==== ==== ====
<FN>
- ----------
Notes:
(1) The maximum contingent withdrawal charge is 6% of the amount withdrawn or,
if less, 8.5% of contributions made on behalf of a Participant. Important
exceptions and limitations eliminate or reduce the contingent withdrawal
charge. See "Contingent Withdrawal Charge" in Part 6.
(2) Your Employer may elect to pay these charges and we reserve the right to
increase them.
(3) The administrative charge is deducted quarterly and is currently $7.50 per
quarter or, if less, .50% of your Retirement Account Value plus the amount
of any Active Loan. Your Employer may elect to pay this charge. We reserve
the right to increase this charge upon 90 days written notice to the
Employer or Plan Trustee. See "Quarterly Administrative Charge" in Part 6.
(4) This charge will be billed directly to the Employer if the basic plan
recordkeeping option has been elected. We reserve the right to increase
this charge upon 90 days written notice to the Employer or Plan Trustee.
See "Charge for Plan Recordkeeping Service" in Part 6.
(5) The amount shown in the Table under "Separate Account Annual Expenses," is
guaranteed not to exceed a total annual rate of 1.35% of the value of the
assets held in the Investment Funds for the Contract. Separate Account
expenses are shown as a percentage of each Investment Fund's average value.
These charges may be lowered for particular plans to an annual rate of no
less than .80% if the participation of the plan in the Contract is effected
in a manner which results in savings of sales or administrative expenses.
(6) Amounts shown for all Portfolios except the International Portfolio are for
the year ended December 31, 1995. The amount shown for the International
Portfolio which was established April 3, 1995 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 Hudson
River Trust. The maximum investment advisory fees, however, cannot be
changed 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 Hudson River Trust expenses are shown as a percentage
of each Portfolio's average value. See "Hudson River Trust Charges to
Portfolios" in Part 6.
</FN>
</TABLE>
11
<PAGE>
EXAMPLES
- --------
The examples below show the expenses that a hypothetical Participant would pay
in the two situations noted. The examples assume a single contribution of $1,000
on the Contract Date (which is assumed to be the first day of a calendar
quarter) invested in one of the Investment Funds listed, a 5% annual return on
assets, the contingent withdrawal charge is not waived and no loans have been
taken.(1) For purposes of these examples, an average quarterly administrative
charge has been used. These examples do not reflect the $300 annual charge for
basic plan recordkeeping services, which is billed directly to the Employer.
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.(2)
If your entire Retirement Account Value is withdrawn under circumstances where
the contingent withdrawal charge applies, the expense at the end of each period
shown would be:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
SURRENDERED 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Money Market 82.29 128.86 178.22 234.69
Intermediate Government Securities 83.57 132.72 184.67 248.71
Quality Bond 83.77 133.31 185.66 250.85
High Yield 83.87 133.61 186.15 251.92
Growth & Income 83.87 133.61 186.15 251.92
Equity Index 82.68 130.05 180.21 239.02
Common Stock 81.70 127.08 175.23 228.15
Global 83.96 133.90 186.65 252.98
International 88.10 146.29 207.22 296.86
Aggressive Stock 82.78 130.35 180.70 240.10
Asset Allocation Series:
Conservative Investors 83.77 133.31 185.66 250.85
Balanced 81.90 127.67 176.22 230.34
Growth Investors 83.47 132.42 184.17 247.64
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
If you do not withdraw any Retirement Account Value, the expense at the end of
each period shown would be:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
UNSURRENDERED 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Money Market 20.52 63.40 108.84 234.69
Intermediate Government Securities 21.88 67.51 115.75 248.71
Quality Bond 22.09 68.15 116.81 250.85
High Yield 22.20 68.46 117.34 251.92
Growth & Income 22.20 68.46 117.34 251.92
Equity Index 20.94 64.66 110.97 239.02
Common Stock 19.89 61.49 105.63 228.15
Global 22.30 68.78 117.87 252.98
International 26.71 82.00 139.90 296.86
Aggressive Stock 21.05 64.98 111.50 240.10
Asset Allocation Series:
Conservative Investors 22.09 68.15 116.81 250.85
Balanced 20.10 62.13 106.70 230.34
Growth Investors 21.78 67.20 115.22 247.64
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The amount you have accumulated could not be paid to you in the form of an
annuity at the end of any of the periods shown in the examples. The minimum
amount applied to purchase an annuity must be $3,500. See "Electing an
Annuity Distribution Option" in Part 5. In some cases, charges for state
premium or other taxes will be deducted from the amount applied, if
applicable.
(2) Actual administrative charges may be less if you, as Employer, pay the
quarterly administrative charge directly or if the quarterly administrative
charge is not deducted. See "Quarterly Administrative Charge" in Part 6.
12
<PAGE>
- --------------------------------------------------------------------------------
PART 2: INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
CREATING AN INVESTMENT STRATEGY
The Contract provides you with the flexibility to create a personalized
retirement savings investment strategy using the different Investment Options
your Employer has selected under the Contract. Thirteen of the Investment
Options available under the Contract are Investment Funds of the Separate
Account. The Separate Account invests in The Hudson River Trust, a mutual fund.
The Portfolios of The Hudson River Trust invest in a wide range of financial
instruments, including stocks, corporate and government bonds and U.S. Treasury
Bills. See Part 3: "Equitable Life's Separate Account and its Investment Funds,"
for a summary of the investment strategies of the various Portfolios. For more
detailed information, see The Hudson River Trust prospectus, which is in the
second part of this booklet.
This section is designed 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, which is part of
Equitable Life's General Account.
INVESTMENT FUND PERFORMANCE
In order to help you understand how the actual performance of the Investment
Funds can affect Retirement Account Values, the following tables provide a
historical view of investment performance. The information presented compares
annualized rates of return for each Investment Fund along with appropriate
benchmarks. Note that the International Fund figures are not annualized.
Performance data of the Money Market, Common Stock, Balanced and Aggressive
Stock Funds for the periods prior to December 18, 1987, reflect the investment
results of four open-end management separate accounts (the "predecessor separate
accounts") which were reorganized into the Separate Account in unit investment
trust form. The "since inception" figures for these Funds are based on the date
of inception of the predecessor separate accounts. This performance data has
been adjusted to reflect the maximum investment advisory fee payable for the
corresponding Portfolio of The Hudson River Trust as well as an assumed charge
of .06% for direct operating expenses. For a discussion of the reorganization of
the predecessor separate accounts into the Separate Account, see "Part 3: The
Reorganization" in the SAI.
The performance data shown from December 18, 1987 through September 5, 1991 for
these Investment Funds reflects the investment results of The Equitable Trust, a
mutual fund, which was replaced by The Hudson River 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 Hudson River Trust.
Performance data for the remaining Investment Funds reflect (i) the investment
results of the corresponding Portfolios of The Hudson River 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 of 1.35% relating to the Contract.
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 by a
particular Participant.
HOW SEPARATE ACCOUNT PERFORMANCE DATA ARE PRESENTED
The performance data for all periods has also been adjusted to reflect the
Separate Account asset charges of 1.35% relating to the Contract.
The annualized rates of return are calculated in the same manner as the average
annual total returns described under "Standardized Computation of Performance"
which follows, except that the quarterly administrative charge and the
contingent withdrawal charge are not reflected in the following performance
tables. These additional charges would effectively reduce the rates of return
presented. The plan recordkeeping fee is not reflected in either the annualized
rates of return or the annual total returns shown
13
<PAGE>
under "Standardized Computation of Performance" because your Employer is billed
directly for this fee.
Investment return and principal will fluctuate and your units may be worth more
or less than the original cost when redeemed.
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 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 High Yield Master Index (Master High
Yield).
GROWTH & INCOME: October 1, 1993; 75% Standard & Poor's 500 Index (S&P 500) and
25% Value Line Convertible's Index (75% S&P 500/25% Value Line Conv.).
EQUITY INDEX: March 1, 1994; S&P 500.
COMMON STOCK: August 1, 1968; S&P 500.
GLOBAL: August 31, 1987; Morgan Stanley Capital International World Index (MSCI
World).
INTERNATIONAL: April 3, 1995; Morgan Stanley Capital International Europe,
Australia, Far East Index (MSCI EAFE).
AGGRESSIVE STOCK: May 1, 1984; 50% Russell 2000 Small Stock Index and 50% S&P
Mid-Cap Total Return (50% Russell 2000/50% S&P MidCap).
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 Corp./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 expenses and asset-based charges applicable
under insurance policies or annuity contracts. Lipper data provide a more
accurate picture than market indices of the Momentum Plus Program 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.
14
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
ANNUALIZED RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1995:
- -----------------------------------------------------------------------------------------------------------------------------
SINCE INCEPTION
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION DATE
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
MONEY MARKET 4.32% 2.83% 3.08% 4.63% --% 5.65% 5/11/82
Lipper Money Market 4.35 2.88 3.10 4.71 -- 5.91
3-Month T-Bill 5.74 4.34 4.47 5.77 -- 6.68
INTERMEDIATE GOVERNMENT
SECURITIES 11.80 4.79 -- -- -- 6.18 4/1/91
Lipper U.S. Government 15.47 6.27 -- -- -- 7.87
Lehman Intermediate Government 14.41 6.74 -- -- -- 8.17
QUALITY BOND 15.45 -- -- -- -- 3.13 10/1/93
Lipper Corporate Bond A-Rated 18.15 -- -- -- -- 4.58
Lehman Aggregate 18.47 -- -- -- -- 6.46
HIGH YIELD 18.30 11.29 13.40 -- -- 8.72 1/2/87
Lipper High Yield 17.36 9.80 15.79 -- -- 8.87
Master High Yield 19.91 11.57 17.17 -- -- 11.28
GROWTH & INCOME 22.40 -- -- -- -- 8.19 10/1/93
Lipper Growth & Income 31.18 -- -- -- -- 12.76
75% S&P 500/25% Value Line Conv. 34.93 -- -- -- -- 15.45
EQUITY INDEX 34.65 -- -- -- -- 17.57 3/1/94
Lipper S&P Index Funds 35.31 -- -- -- -- 17.62
S&P 500 37.54 -- -- -- -- 9.89
COMMON STOCK 30.67 15.81 16.55 13.71 13.73 10.65 8/1/68
Lipper Growth 31.08 12.09 15.53 12.05 12.79 N/A
S&P 500 37.54 15.30 16.57 14.87 14.59 11.18
GLOBAL 17.22 16.62 14.93 -- -- 9.87 8/27/87
Lipper Global 13.87 13.45 9.10 -- -- 2.52
MSCI World 20.72 15.83 11.74 -- -- 6.75
INTERNATIONAL -- -- -- -- -- 9.59* 4/3/95
Lipper International -- -- -- -- -- 12.21*
MSCI EAFE -- -- -- -- -- 9.17*
AGGRESSIVE STOCK 29.87 12.38 20.14 16.31 -- 17.85 5/1/84
Lipper Small Company Growth 28.19 15.26 25.72 16.42 -- 18.71
50% Russell 2000/50% S&P MidCap 29.69 13.67 20.16 13.66 -- N/A
THE ASSET ALLOCATION SERIES:
CONSERVATIVE INVESTORS 18.78 7.08 8.67 -- -- 8.18 10/2/89
Lipper Income 21.25 9.65 11.99 -- -- 9.79
70% Lehman Treas./30% S&P 500 24.11 10.41 11.73 -- -- 10.55
BALANCED 18.14 5.90 9.80 8.97 -- 10.18 5/1/84
Lipper Flexible Portfolio 21.58 9.32 11.43 10.13 -- 11.57
50% S&P 500/50% Lehman Corp. 28.39 12.01 13.39 12.53 -- 13.94
GROWTH INVESTORS 24.67 10.64 15.55 -- -- 14.50 10/2/89
Lipper Flexible Portfolio 21.58 9.32 11.43 -- -- 9.44
30% Lehman Corp./70% S&P 500 32.05 13.35 14.70 -- -- 11.97
- -----------------------------------------------------------------------------------------------------------------------------
<FN>
*Unannualized
</FN>
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
CUMULATIVE RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1995:
- -----------------------------------------------------------------------------------------------------------------------------
SINCE INCEPTION
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION DATE
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
MONEY MARKET 4.32% 8.74% 16.40% 57.23% --% 111.73% 5/11/82
Lipper Money Market 4.34 8.87 16.48 58.55 -- 119.52
3-Month T-Bill 5.74 13.58 24.45 75.23 -- 141.98
INTERMEDIATE GOVERNMENT
SECURITIES 11.80 15.06 -- -- -- 32.96 4/1/91
Lipper U.S. Government 15.47 20.05 -- -- -- 43.43
Lehman Intermediate Government 14.41 21.60 -- -- -- 45.17
QUALITY BOND 15.45 -- -- -- -- 7.18 10/1/93
Lipper Corporate Bond A-Rated 18.15 -- -- -- -- 10.67
Lehman Aggregate 18.47 -- -- -- -- 15.09
HIGH YIELD 18.30 37.83 87.50 -- -- 112.11 1/2/87
Lipper High Yield 17.36 32.45 108.96 -- -- 117.28
Master High Yield 19.91 38.89 120.85 -- -- 161.50
GROWTH & INCOME 22.40 -- -- -- -- 19.35 10/1/93
Lipper Growth & Income 31.18 -- -- -- -- 31.42
75% S&P 500/25% Value Line Conv. 34.93 -- -- -- -- 38.14
EQUITY INDEX 34.65 -- -- -- -- 34.57 3/1/94
Lipper S&P Index Funds 35.31 -- -- -- -- 34.65
S&P 500 37.54 -- -- -- -- 39.30
COMMON STOCK 30.67 55.34 115.04 261.29 1210.01 1504.78 8/1/68
Lipper Growth 31.08 41.29 107.30 215.49 1036.49 N/A
S&P 500 37.54 53.30 115.25 300.11 1425.04 1728.76
GLOBAL 17.22 58.61 100.49 -- -- 119.35 8/27/87
Lipper Global 13.87 46.36 55.44 -- -- 23.09
MSCI World 20.72 55.39 74.20 -- -- 72.38
INTERNATIONAL -- -- -- -- -- 9.59* 4/3/95
Lipper International -- -- -- -- -- 12.21*
MSCI EAFE -- -- -- -- -- 9.17*
AGGRESSIVE STOCK 29.87 41.93 150.25 353.26 -- 579.45 5/1/84
Lipper Small Company Growth 28.19 55.24 268.67 357.25 -- 588.33
50% Russell 2000/50% S&P MidCap 29.69 46.89 150.49 259.88 -- 465.90
THE ASSET ALLOCATION SERIES:
CONSERVATIVE INVESTORS 18.78 22.80 51.52 -- -- 63.41 10/2/89
Lipper Income 21.25 31.95 76.42 -- -- 79.42
70% Lehman Treas./30% S&P 500 24.11 34.58 74.09 -- -- 87.24
BALANCED 18.14 18.78 59.57 136.07 -- 209.90 5/1/84
Lipper Flexible Portfolio 21.58 30.92 72.73 163.91 -- 248.20
50% S&P 500/50% Lehman Corp. 28.39 40.53 87.43 225.59 -- 359.14
GROWTH INVESTORS 24.67 35.45 105.98 -- -- 132.97 10/2/89
Lipper Flexible Portfolio 21.58 30.92 72.73 -- -- 76.92
30% Lehman Corp./70% S&P 500 32.05 45.64 98.56 -- -- 102.72
- -----------------------------------------------------------------------------------------------------------------------------
<FN>
*Unannualized
</FN>
</TABLE>
16
<PAGE>
YEAR-BY-YEAR RATES OF RETURN
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
INTERMEDIATE
MONEY GOVERNMENT QUALITY HIGH GROWTH & EQUITY COMMON
MARKET SECURITIES BOND YIELD INCOME INDEX STOCK
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1984 9.41% % % % % % -3.41%
1985 6.70 -- -- -- -- -- 32.51
1986 5.17 -- -- -- -- -- 15.43
1987 5.23 -- -- 3.27* -- -- 6.08
1988 5.95 -- -- 8.25 -- -- 21.64
1989 7.78 -- -- 3.71 -- -- 24.20
1990 6.89 -- -- -2.43 -- -- -9.18
1991 4.77 10.94* -- 22.78 -- -- 35.95
1992 2.16 4.17 -- 10.80 -- -- 1.82
1993 1.58 9.09 -0.84* 21.48 -0.59* -- 23.14
1994 2.62 -5.66 -6.38 -4.09 -1.91 -0.05* -3.46
1995 4.32 11.80 15.45 18.30 22.40 34.65 30.67
- ---------------------------------------------------------------------------------------------------------
</TABLE>
YEAR-BY-YEAR RATES OF RETURN
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
AGGRESSIVE CONSERVATIVE GROWTH
GLOBAL INTERNATIONAL STOCK INVESTORS BALANCED INVESTORS
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1984 % % 4.85% % 6.03%* %
1985 -- -- 42.98 -- 23.81 --
1986 -- -- 21.75 -- 11.70 --
1987 -13.67* -- -1.13 -- -5.05 --
1988 9.38 -- -0.39 -- 13.35 --
1989 25.02 -- 42.87 2.75* 24.72 3.65*
1990 -7.33 -- 5.73 4.97 -1.33 9.12
1991 28.79 -- 84.57 18.23 40.16 46.90
1992 -1.86 -- -4.47 4.36 -4.15 3.52
1993 30.34 -- 15.17 9.27 10.80 13.71
1994 3.81 -- -5.11 -5.39 -9.26 -4.45
1995 17.22 9.59* 29.87 18.78 18.14 24.67
- ---------------------------------------------------------------------------------------------------------
<FN>
*Unannualized
</FN>
</TABLE>
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 participation under 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 using the same adjustments as described above under "How
Performance Data are Presented." 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.
Each calculation assumes that the $1,000 contribution was allocated to only one
Investment Fund, no transfers or additional contributions were made, no amounts
were allocated to any other Investment Fund and the Participant has not taken
any loans.
In order to calculate the annualized rates of return, we divide the termination
value as of December 31, 1995 by a $1,000 contribution 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 Retirement Account Value less the contingent
withdrawal charge. The contingent withdrawal charge will never be greater than
6%. See "Part 6: Deductions and Charges." The Retirement Account Value has been
adjusted to reflect the quarterly administrative charge.
17
<PAGE>
- --------------------------------------------------------------------------------
Growth of $1,000 For Participant Terminated on December 31, 1995:
<TABLE>
<CAPTION>
LENGTH OF INVESTMENT PERIOD
-------------------------------------------------------------------------------------------------
INVESTMENT ONE THREE FIVE TEN SINCE
FUND YEAR YEARS YEARS YEARS INCEPTION
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Money Market $ 961.15 $ 962.47 $ 989.75 $1,286.68 $ --
Intermediate
Government
Securities 1,030.09 1,018.41 -- -- 1,136.90
Quality Bond 1,063.68 -- -- -- 963.02
High Yield 1,089.98 1,220.01 1,614.20 -- 1,777.64
Growth &
Income 1,127.76 -- -- -- 1,072.42
Equity Index 1,240.54 -- -- -- 1,215.27
Common Stock 1,203.90 1,377.73 1,869.28 3,068.75 --
Global 1,079.97 1,408.53 1,736.40 -- 1,859.34
International -- -- -- -- 1,014.82
Aggressive Stock 1,196.50 1,256.26 2,212.40 3,903.15 --
Asset Allocation Series:
Conservative
Investors 1,094.39 1,086.90 1,288.39 -- 1,441.63
Balanced 1,088.46 1,051.33 1,358.49 1,958.62 --
Growth
Investors 1,148.64 1,198.91 1,787.58 -- 2,078.49
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Average Annual Total Return For Participant Terminated on December 31, 1995:
<TABLE>
<CAPTION>
LENGTH OF INVESTMENT PERIOD
---------------------------------------------------------------------------------------------------------
INVESTMENT ONE THREE FIVE TEN SINCE
FUND YEAR YEARS YEARS YEARS INCEPTION
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Money Market -3.88% -1.27% -0.21% 2.55% --%
Intermediate
Government
Securities 3.01 0.61 -- -- 2.73
Quality Bond 6.37 -- -- -- -1.66
High Yield 9.00 6.85 10.05 -- 6.61
Growth &
Income 12.78 -- -- -- 3.16
Equity Index 24.05 -- -- -- 11.21
Common Stock 20.39 11.27 13.33 11.87 --
Global 8.00 12.10 11.67 -- 7.72
International* -- -- -- -- 1.48
Aggressive Stock 19.65 7.90 17.21 14.59 --
Asset Allocation Series:
Conservative
Investors 9.44 2.82 5.20 -- 6.03
Balanced 8.85 1.68 6.32 6.95 --
Growth
Investors 14.86 6.23 12.32 -- 12.43
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
*Unannualized
Note: Unit values and performance results prior to 9/8/93 are hypothetical.
</FN>
</TABLE>
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
Hudson River 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 the SAI, or (3) data developed by us derived from such indices or
averages. The Morningstar Variable Annuity/Life Report consists of over 700
variable life and annuity funds, all of which report their data net of
investment management fees, direct operating expenses and separate account level
charges. VARDS is a monthly reporting service that monitors over 2500 variable
life and variable annuity funds on performance and account information.
Advertisements or other communications furnished to present or prospective
Participants 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.
18
<PAGE>
- --------------------------------------------------------------------------------
PART 3: EQUITABLE LIFE'S SEPARATE ACCOUNT 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 Investment Funds, each of which invests in shares of a corresponding
Portfolio of The Hudson River Trust. You may allocate some or all of your
contributions among the Funds that your Employer has selected to fund your plan.
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 Contract cannot 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 Contract, and the obligations set forth in the Contract (other
than those of Employers or Plan Trustees) are our obligations.
In addition to contributions made under the Contract, we may allocate to the
Separate Account monies received under other annuity contracts, certificates or
agreements. Owners of all such certificates, contracts 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 Contract 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 Participants and Plan Trustees if required, (1) to add new
Investment Funds (or subdivisions of Investment Funds) to, or remove Investment
Funds (or subdivisions of Investment Funds) from, the Separate Account, or to
add new separate accounts (2) to combine any two or more Investment Funds or
subdivisions thereof, (3) to transfer assets determined by us to be the
proportionate share of the class of contracts to which the Contract belongs 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, any Investment Fund or any additional separate account 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 Hudson River Trust, (7) to terminate any
employer or plan trustee agreement pursuant to its terms and (8) to restrict or
eliminate any voting rights of Participants, Plan Trustees 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
investment policy of an Investment Fund, we will notify the appropriate persons
as required by law. We may make other changes that do not reduce any Cash Value,
annuity benefit, Retirement Account Value or other accrued rights or benefits.
THE HUDSON RIVER TRUST
The Hudson River 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 Hudson River Trust. The Hudson River Trust commenced
operations in January 1976 with a predecessor of its Common Stock Portfolio. The
Hudson River Trust does not impose a sales charge or "load" for buying and
selling its shares. All dividend distributions to The Hudson River Trust are
reinvested in full and fractional shares of the Portfolio to which they relate.
More detailed information about The Hudson River Trust, its investment
objectives, policies, restrictions, risks, expenses and other aspects of its
operations,
19
<PAGE>
appears in its prospectus which is attached, or in its statement of additional
information.
THE HUDSON RIVER TRUST'S INVESTMENT ADVISER
The Hudson River 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. On December 31, 1995, Alliance was managing over $146.5
billion in assets. Alliance acts as an 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, endowment 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 162 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 HUDSON RIVER 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 Hudson River 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 guaranteed by the High current income consistent with
GOVERNMENT U.S. Government, its agencies and instrumentalities. relative stability of principal
SECURITIES 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 securities High current income consistent with
preservation of capital
HIGH YIELD.............. Primarily a diversified mix of high yield, fixed-income High return by maximizing current
securities involving greater volatility of price and income and, to the extent
risk of principal and income than high quality consistent with that objectives,
objective, fixed-income securities. The medium and capital appreciation
lower quality debt securities in which the Portfolio
may invest are known as "junk bonds"
GROWTH &................ Primarily income producing common stocks and securities High total return through a
INCOME convertible into common stocks combination of current
appreciation
EQUITY INDEX............ Selected securities in the S&P 500 Index (the "Index") Total return performance (before
which the advisor believes will, in the aggregate, trust expenses) that
approximate the performance results of the Index approximates the investment
performance of the Index
(including reinvestment of
dividends), at risk level
consistent with that of the Index
COMMON STOCK............ Primarily common stock and other equity-type instruments Long-term growth of capital and
increasing income
GLOBAL.................. Primarily equity securities of non-United States as well Long-term growth of capital
as United States companies
INTERNATIONAL........... Primarily equity securities selected principally to Long-term growth of capital
permit participation in non-United States companies
with prospects for growth
AGGRESSIVE STOCK........ Primarily common stocks and other equity-type securities Long-term growth of capital
issued by medium and other smaller sized companies
with strong growth potential
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
PORTFOLIO INVESTMENT POLICY OBJECTIVE
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSET ALLOCATION SERIES:
CONSERVATIVE............ Diversified mix of publicly-traded, fixed-income and High total return without, in the
INVESTORS equity securities; asset mix and security selection adviser's opinion, undue risk to
are primarily based upon factors expected to principal
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 securities High return through a combination
and high quality money market instruments. The of current income and capital
Portfolio is generally expected to hold 50% of its appreciation
assets in equity securities and 50% in fixed income
securities.
GROWTH.................. Diversified mix of publicly-traded, fixed-income and High total return consistent with
INVESTORS equity securities; asset mix and security selection the adviser's determination of
based upon factors expected to increase reasonable risk
possibility of high long-term return. The
Portfolio is generally expected to hold approx-
imately 70% of its assets in equity securities
and 30% in fixed income securities.
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
21
<PAGE>
- --------------------------------------------------------------------------------
PART 4: THE GUARANTEED INTEREST ACCOUNT
- --------------------------------------------------------------------------------
You may allocate some or all of your Retirement Account Value to the Guaranteed
Interest Account if this Investment Option is available under your Employer's
plan. The Guaranteed Interest Account is part of our general account. The
general account supports all of our insurance and annuity guarantees, as well as
our general obligations. We are subject to regulation and supervision with
respect to our general account 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, neither the general account, the
Guaranteed Interest Account nor any interests therein are 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 a Participant has in the Guaranteed Interest Account at any time
is equal to the sum of all contributions, transfers and loan repayments
(including principal and interest) that have been allocated to the Guaranteed
Interest Account plus interest, less the sum of all amounts that have been
withdrawn, borrowed, transferred or deducted.
We declare a yearly guaranteed interest rate which will remain in effect
throughout the next year. We guarantee that the yearly guaranteed interest rate
will never be less than 3%. Allocations to the Guaranteed Interest Account are
guaranteed to earn interest at least equal to the yearly guaranteed interest
rate. The guaranteed interest rate for 1996 and 1997 is 4% for all Participants.
We may credit additional amounts of interest at our discretion. We currently
declare a quarterly interest rate that will not be lower than the yearly
guaranteed interest rate. The current quarterly rate applies to all amounts in
the Guaranteed Interest Account.
We can discontinue our practice of declaring quarterly rates at our discretion.
We also reserve the right to declare rates that are based upon when amounts were
credited to the Account or the date your Employer's plan enrolled under the
Contract.
EFFECTS OF PLAN OR CONTRACT TERMINATION
Retirement Account Values in the Guaranteed Interest Account will generally be
paid in six annual installments when a withdrawal is made on behalf of a
Terminated Plan Participant or following a Contract Termination. However, when
Contract Termination occurs, the employer has the option of having amounts in
the Guaranteed Interest Account paid in installments or immediately receiving a
lump sum payment, subject to a Market Value Adjustment (discussed below).
Withdrawals made as a result of the Participant's death, attainment of the
normal retirement age under the Employer's plan, disability, separation from
service, or to purchase a life contingent annuity distribution option or satisfy
the Code's minimum distribution requirements applicable after the Participant
attains age 70 1/2 are not subject to the installment payout (or a Market Value
Adjustment). Amounts payable in installments will not be subject to a contingent
withdrawal charge.
Once installment payments commence following a Contract Termination, funds may
not be transferred from, or applied to, the Guaranteed Interest Account.
Transfers out of the Guaranteed Interest Account are also restricted for
Terminated Plan Participants once we receive notice of a Plan Termination
(Employers and Plan Trustees are required to give us such notice 90 days in
advance of a Plan Termination). See "Transfers" in Part 5.
There may be circumstances under which we will make a lump sum payment rather
than make installment payments as described above. For example, when there are
relatively few Participants remaining following a Plan Termination. If we make a
lump sum payment we will impose a Market Value Adjustment to reduce the
Retirement Account Value.
To determine the Market Value Adjustment, we calculate the amount of the market
value change (which may be positive or negative) for each calendar quarter that
your Employer's plan held Retirement Account Values in the Guaranteed
22
<PAGE>
Interest Account (each a "Quarterly Generation"). To determine the amount of
each market value change for each Quarterly Generation:
o We multiply the Employer plan's net cash flow in the Guaranteed Interest
Account (contributions plus transfers in minus withdrawals minus transfers
out minus fees) for the given Quarterly Generation by the difference between
the interest rate of a 5-year U.S. Treasury note on the Calculation Date and
the average interest rate on 5-year U.S. Treasury notes during the Quarterly
Generation. The CALCULATION DATE will be the fifth Business Day prior to the
date the withdrawal is paid. Since we calculate the Market Value Adjustment
based on the cash flow of your Employer's plan, this means that actions taken
by other Participants (e.g., transfers, withdrawals, etc.) can effect the
amount of the Market Value Adjustment applied to your withdrawal.
o We then multiply by a fraction equal to the number of calendar days from the
date of the withdrawal to the maturity date for the given Quarterly
Generation over 365. The result is the amount of the market value change for
a Quarterly Generation.
We then add together the amount of each market value change for each Quarterly
Generation and divide by the total amount of Retirement Account Values held in
the Guaranteed Interest Account under your Employer's plan on the date the with-
drawal is made. If the sum of these market value changes is negative, then the
Market Value Adjustment is zero. If it is positive, this is the Market Value
Adjustment that is imposed, subject to the following conditions:
1) the Market Value Adjustment may not exceed 7%;
2) imposition of the Market Value Adjustment will never result in the
forfeiture of amounts contributed to the Guaranteed Interest Account on
behalf of a Participant plus an amount of credited interest based upon
the minimum guaranteed interest rate of 3%; and
3) if the contingent withdrawal charge is still in effect, the Market Value
Adjustment must exceed the amount of the contingent withdrawal charge
applicable to the amount withdrawn from the Guaranteed Interest Account
(otherwise, the contingent withdrawal charge will be imposed in lieu of
the Market Value Adjustment).
The Market Value Adjustment will be reduced accordingly if either of the first
two conditions are not satisfied.
The Momentum Plus Contract prohibits the Employer or Plan Trustee from
influencing Participants' decisions with regard to allocating, transferring or
withdrawing amounts to or from the Guaranteed Interest Account. In the event of
noncompliance with this provision of the Contract, Equitable Life:
(a) reserves the right to decline further requests for transfers to or from
the Guaranteed Interest Account; and/or
(b) may deem that a Contract Termination, with respect to the Employer
Plan's participation in the Contract, has occurred.
23
<PAGE>
- --------------------------------------------------------------------------------
PART 5: PROVISIONS OF THE CONTRACT
AND SERVICES WE PROVIDE
- --------------------------------------------------------------------------------
Bear in mind that the provisions of your plan or applicable laws or regulations
may be more restrictive than the Contract. We reserve the right to amend the
Contract without the consent of any other person in order to comply with
applicable laws and regulations. Such right includes, but is not limited to, the
right to conform the Contract to the Code, ERISA and applicable regulations.
SELECTING INVESTMENT OPTIONS
(EMPLOYERS AND PLAN TRUSTEES ONLY)
You, as Employer or Plan Trustee, can elect to fund your plan with any number of
the Investment Options available under the Contract. This selection is made on
the application. You may request to change this selection subject to our rules
then in effect. If you elect to fund your plan with any one of the Intermediate
Government Securities, High Yield, Quality Bond or Conservative Investors Funds,
you must also select the Money Market Fund. If you select the above-listed Funds
and the Guaranteed Interest Account, certain restrictions will apply to
transfers out of the Guaranteed Interest Account. See "Transfers" below. Lastly,
you, as Employer, must elect the Guaranteed Interest Account as a funding option
if you only select from among the Balanced, Growth & Income, Equity Index,
Common Stock, Global, International, Aggressive Stock or Growth Investors Funds.
CONTRIBUTIONS
Contributions may be made at any time and may be made only by the Employer or
Plan Trustee by either wire transfer or check. Participants should not send
contributions directly to Equitable Life. There is no minimum contribution.
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 subject to
collection. Contributions are credited as of the Transaction Date, if they are
accompanied by properly completed forms. Failure to use the proper form, or to
complete the form properly, may result in a delay in crediting contributions.
Employers should send all contributions to Equitable Life at the Processing
Office.
We allocate contributions to the Investment Options according to the allocation
percentages on the Participant's enrollment form or as later changed. Under
participant-directed plans, you, as Participant, will provide those allocation
percentages. In trustee-directed plans, the Plan Trustee will provide those
percentages. Employee and Employer contributions may be allocated in different
percentages. Some plans may be participant-directed only with respect to
employee post-tax and salary-deferral contributions.
If we receive your initial contribution before we receive your signed enrollment
form or your allocation instructions on the form are incomplete (e.g., do not
add up to 100%), we will allocate all or a portion of your initial contribution
to the Money Market Fund (if that Fund has been selected as an available
Investment Option under your Employer's Plan). If your instructions add up to
less than 100%, only the portion of the contribution for which we do not have
instructions will be allocated to the Money Market Fund. If your instructions
add up to more than 100%, the entire amount of the contribution will be
allocated to the Money Market Fund. We will then notify your Employer or Plan
Trustee and request that the signed form or corrected instructions be forwarded
to us. If we do not receive the instructions after three notices have been sent,
but in no event later than 105 days from the date a contribution is first
credited to the Money Market Fund, we will return to the Employer or Plan
Trustee, as applicable, all contributions for which notices had been sent, plus
earnings.
If, however, the Money Market Fund is not an available option under your
Employer's plan, we will return the contribution to the Employer or Plan Trustee
in five Business Days if we have not received the signed form or corrected
allocation instructions, unless we have obtained your permission to continue to
hold the contribution.
You should review your confirmation notices carefully to determine whether your
contributions have been allocated correctly.
Unless restricted by your Employer's plan, allocation percentages can be changed
at any time. To change your allocation instruction, you can file a change of
investment allocation form with your Employer or Plan Trustee. In addition, your
Employer may have opted to use our Telephone Operated Plan Support (TOPS) system
to enable you to change your allocation percentages over the phone. The change
will be effective on the Transaction Date and will remain in effect
24
<PAGE>
for future contributions unless another change is requested.
A contribution allocated to an Investment Fund purchases Accumulation Units in
that Investment Fund based on 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. Contributions allocated to the Guaranteed
Interest Account become part of our General Account on the Transaction Date.
RETIREMENT ACCOUNT VALUE
The Retirement Account Value is the sum of the amounts that a Participant has in
the Guaranteed Interest Account and the Investment Funds of the Separate
Account. See Part 4: "The Guaranteed Interest Account."
The amount you have in an Investment Fund at any time is equal to the number of
Accumulation Units you have in that Investment Fund times the Accumulation Unit
Value for the Investment Fund for that date. The number of Accumulation Units in
an Investment Fund at any time is equal to the sum of Accumulation Units
purchased by contributions, transfers and loan repayments (including principal
and interest) less the sum of Accumulation Units redeemed for withdrawals,
transfers, loans or deductions for charges.
The number of Accumulation Units purchased or sold in any Investment Fund is
equal to the dollar amount of the transaction divided by the Accumulation Unit
Value for the Investment Fund for the applicable Valuation Period. For each
Valuation Period, the Accumulation Unit Value is the Accumulation Unit Value at
the end of the immediately preceding Valuation Period multiplied by the Net
Investment Factor for that Valuation Period.
The number of Accumulation Units 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 Hudson River
Trust, which in turn reflects the investment income and realized and unrealized
capital gains and losses of the Portfolios, as well as The Hudson River Trust
fees and expenses. The Accumulation Unit Value is also stated after deduction of
the Separate Account asset charges relating to the Contract. A description of
the computation of the Accumulation Unit Value is found in the SAI.
ACCUMULATION UNIT VALUES
The following table shows the Accumulation Unit Values, as of the last Business
Day for the periods shown, commencing with the initial offering of each Fund
under the Program.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
LAST INTERMEDIATE
BUSINESS MONEY GOVERNMENT QUALITY HIGH GROWTH & EQUITY COMMON
DAY OF MARKET SECURITIES BOND YIELD INCOME INDEX STOCK
- -----------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C>
September
1993 $100.08 $ 99.60 $ -- $100.20 $ -- $ -- $101.31
December
1993 100.47 100.44 -- 106.74 -- -- 105.01
December
1994 103.10 94.76 99.07 102.37 99.06 100.94 101.38
December
1995 107.55 105.94 114.38 121.10 121.25 135.92 132.47
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
LAST
BUSINESS AGGRESSIVE CONSERVATIVE GROWTH
DAY OF GLOBAL INTERNATIONAL STOCK INVESTORS BALANCED INVESTORS
- -----------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
September
1993 $101.14 $ -- $104.38 $ 99.51 $100.72 $101.79
December
1993 102.14 -- 105.90 98.60 101.63 101.99
December
1994 106.04 -- 100.49 93.29 92.22 97.45
December
1995 124.30 104.15 130.50 110.81 108.95 121.49
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
25
<PAGE>
TRANSFERS
Subject to certain restrictions, the Contract permits transfers of all or a
portion of Retirement Account Value among the Investment Options at any time.
Your Employer's plan may however, impose restrictions on transfers. We also
offer an automatic transfer service described under "Investment Simplifier:
Automatic Transfer Service" below.
Participant transfer requests can be made by filing a written request to
transfer with your Employer or Plan Trustee. Transfers may also be arranged
through the TOPS service.
A transfer request will be effective on the Transaction Date and the transfer
will be made at the Accumulation Unit Value for 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.
If your Employer elects to fund your plan with the Guaranteed Interest Account
and any of the Money Market, Intermediate Government Securities, Quality Bond,
High Yield or Conservative Investors Funds, certain limitations will apply to
funds transferred out of the Guaranteed Interest Account to any other Fund.
During any Transfer Period the maximum amount that may be transferred from the
Guaranteed Interest Account is an amount equal to the greater of: (i) 25% of the
amount you had in the Guaranteed Interest Account as of the last Business Day of
the calendar year immediately preceding the current calendar quarter and (ii)
the total of all amounts you transferred out of the Guaranteed Interest Account
during that same calendar year. A TRANSFER PERIOD is the calendar quarter in
which the transfer request is made and the preceding three calendar quarters.
Generally, this means that new Participants will not be able to transfer funds
out of the Guaranteed Interest Account during the first calendar year of their
participation under the Contract.
No transfers out of the Guaranteed Interest Account will be allowed for 90 days
from the date we receive notice of a Plan Termination. When the 90 days has
elapsed, the transfer limitation described above will go into effect (regardless
of which Investment Funds are available under your Employer's plan).
Transfers out of the Guaranteed Interest Account that are made at a time when no
transfer limitation is in effect will not be counted for purposes of determining
the maximum transfer amount if the transfer limitation subsequently goes into
effect.
If assets have been transferred to the Contract from another funding vehicle by
the Employer or Plan Trustee, you may, for the remainder of that calendar year,
transfer up to 25% of the amount that is initially allocated to the Guaranteed
Interest Account on your behalf.
INVESTMENT SIMPLIFIER: AUTOMATIC TRANSFER SERVICE
Your Employer can elect to provide two automatic transfer options out of the
Guaranteed Interest Account: the Fixed-Dollar Option and the Interest Sweep. The
Fixed-Dollar Option is subject to the transfer limitation described above. These
automatic transfers will continue, however, during the 90-day period that
transfers out of the Guaranteed Interest Account are stopped following notice of
a Plan Termination.
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 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 and you must elect to transfer
at least $50 per month. Under the Interest Sweep Option, the amount transferred
each month will equal the amount of interest that has been credited to amounts
you have in the Guaranteed Interest Account from the last Business Day of the
prior month to the last Business Day of the current month. To be eligible for
this option you must have at least $7,500 in the Guaranteed Interest Account on
the date we receive your election and on the last Business Day of each month
thereafter.
You may elect either option by filing an election form with your Employer or
Plan Trustee. 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.
Automatic transfers will terminate:
o 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
o Under the Interest Sweep, when the amount you have in the Guaranteed Interest
Account falls below $7,500 (determined on the last Business Day of the month)
for two consecutive months; or
o Under either option, on the date we receive your written request to terminate
automatic transfers, the date the Participant's participation is terminated,
or on the date of Contract termination.
26
<PAGE>
WITHDRAWAL FOR PLAN LOANS
The Contract permits your Employer, or Plan Trustee, to withdraw funds from your
Retirement Account Value, without incurring a contingent withdrawal charge, in
order to make a loan to you under your Employer's plan. Your Employer can tell
you whether loans are available under your plan.
Employers who adopt the Master Plan and Trust may choose to offer its loan
feature. The availability of loans under an individually designed or prototype
plan depends on the terms of the plan.
If you are a partner who owns more than 10% of the business or a
shareholder-employee of an S Corporation who owns more than 5% of the business,
you presently may not borrow from your vested Retirement Account Value without
first obtaining a prohibited transaction exemption from the Department of Labor
(DOL). Consult with your attorney or tax advisor regarding the advisability and
procedures for obtaining such an exemption.
Participants should apply for a plan loan through their Employer or the Plan
Trustee, as applicable. Prior to the making of any plan loan, the Employer or
Plan Trustee, and the Participant must first properly complete and sign a loan
agreement and application. Employers and Plan Trustees can obtain loan
application forms from their Equitable Life Agent, by writing to our Processing
Office or calling our toll-free number.
Before taking a plan loan married Participants must generally obtain written
spousal consent.
Only one outstanding plan loan will be permitted at any time; any number of
takeover loans will be permitted at any time. However, you may not have both
takeover loans and plan loans outstanding simultaneously. Under the Contract,
(1) the minimum amount of the loan is $1,000 and (2) the maximum amount of the
loan is 50% of the Participant's vested Retirement Account Value. In no event
may any plan loan be greater than $50,000 less the highest outstanding loan
balance in the preceding twelve calendar months. You may specify from which
Investment Options the plan loan is to be deducted when you request the loan.
The loan term must comply with applicable law. See "Part 8: Federal Tax and
ERISA Matters: Certain Rules Applicable to Plan Loans."
Certain charges may be deducted while an Active Loan is outstanding. See "Plan
Loan Charges" in Part 6.
The interest rate applicable to your plan loan will be set by your Employer or
the Plan Trustee under the terms of your Employer's plan. All interest (as well
as principal) that you pay will be added to your Retirement Account Value. The
interest paid in repaying a loan may not be deductible, but amounts paid as
interest on your loan will be taxable on distribution. It is the responsibility
of each Employer or Plan Trustee to determine the interest rate applicable to
each loan.
Plan loan repayments covering interest and principal will be due in accordance
with the repayment schedule determined in accordance with the terms of the
Employer's plan. Participants should send plan loan repayments to the plan
administrator and not to Equitable Life. All plan loan payments made by the plan
administrator to us must be made by check or wire transfer. Checks must be drawn
on a bank in the U.S., in U.S. dollars, made payable to Equitable Life and are
subject to collection.
A plan loan may be prepaid in whole or in part at any time. Any payments we
receive will first be applied to interest, with the balance applied to repayment
of the loan.
Plan loan repayments will be allocated to the Investment Options in accordance
with the same allocation instructions used in making the loan. However, a
Participant may elect, in writing, to override these instructions and allocate
all plan loan repayments to the Guaranteed Interest Account.
A plan loan will be in default if the amount of any scheduled repayment is not
received by us within 90 days of its due date, or if the Participant dies or
participation under the Contract is terminated. See "Federal Tax and ERISA
Matters: Certain Rules Applicable to Plan Loans" in Part 8, for the consequences
of defaulting a loan and other applicable tax matters.
If you, as the Employer, are transferring plan assets to the Momentum Plus
Program, outstanding plan loans may also be transferred to the Contract. We
refer to these loans as "takeover loans." Repayments of takeover loans will be
allocated to the Default Option.
WITHDRAWALS AND CONTRACT TERMINATION
Subject to any restrictions in your Employer's plan, the Contract allows your
Employer or Plan Trustee, as applicable, to make a withdrawal from a Retirement
Account Value on behalf of a Participant by writing to our Processing Office.
Your request for withdrawal must be on the proper form which is available from
your Employer. If we have received the information we require, the requested
withdrawal will become effective on the Transaction Date. Withdrawal proceeds
will be sent to your Employer or Plan Trustee, unless your Employer has elected
our full service plan recordkeeping option which provides for direct
distribution to Participants. If we receive only partially completed
information, we will return the request to the Em-
27
<PAGE>
ployer or Plan Trustee for completion prior to processing.
As a deterrent to premature withdrawal (generally prior to age 59 1/2) the Code
provides certain restrictions on and penalties for early withdrawals. In
addition, for payments made directly to Participants, we generally will withhold
income taxes from the amount withdrawn unless an exception applies. See Part 8:
"Federal Tax and ERISA Matters."
The Employer or Plan Trustee may also terminate its plan's entire participation
under the Contract by writing to our Processing Office. In addition, if your
Employer's Plan is found not to qualify under the Code, or, if you, as Employer
or Plan Trustee, fail to provide us with the Participant data necessary to
administer the Contract we may return the plan assets to the Employer or Plan
Trustee.
Certain withdrawals or amounts payable following a Contract Termination may be
subject to a contingent withdrawal charge, an installment payout or a Market
Value Adjustment. See "Contingent Withdrawal Charge" in Part 6 and "Effects of a
Plan or Contract Termination" in Part 4.
FORFEITURES
Forfeitures can arise when a Participant who is not fully vested under a plan
terminates employment. Under the terms of the Master Plan and Trust and the
Pooled Trust, we are directed under these circumstances to withdraw the unvested
portion of the Retirement Account Value and deposit such amount in a Forfeiture
Account, which is to be allocated to the Default Option.
We will re-allocate amounts in the Forfeiture Account as contributions in
accordance with instructions received by the Employer or Plan Trustee. Special
rules apply to the application of the contingent withdrawal charge when
forfeitures have occurred. See "Contingent Withdrawal Charge" in Part 6.
DISTRIBUTION OPTIONS
The Contract is an annuity contract, even though you may elect to receive your
benefits in another form.
Subject to the terms of your Employer's plan, payout options under the Contract
include:
o Lump sum or partial withdrawals;
o Payments for as long as you live;
o Payments for as long as both you and your joint annuitant live; or
o Payments for a specific length of time (not longer than your life expectancy
or that of the joint life expectancy of you and your designated beneficiary).
You may also be eligible for our "Automatic Minimum Withdrawal" feature, which
is designed to help you satisfy the Code's "minimum distribution requirements."
Qualified plans are subject to the Code's minimum distribution requirements.
Generally, such distributions must commence by April 1 of the calendar year
following the calendar year in which the Participant attains age 70 1/2. The
plan administrator is responsible for complying with the Code's minimum
distribution requirements. For more information about the minimum distribution
requirements, see "Part 8: Federal Tax and ERISA Matters."
Your choice may be subject to applicable withdrawal charges. See "Part 6:
Deductions and Charges."
ANNUITY DISTRIBUTION OPTIONS
The annuity distribution options available under the Contract include:
o LIFE ANNUITY: An annuity which guarantees payments to you for the rest of
your life. Payments end with the last monthly payment before your 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.
o LIFE ANNUITY-PERIOD CERTAIN: This annuity form also guarantees payments to
you for the rest of your life. In addition, if you die before a previously
selected minimum payment period (the "certain period") has ended, payments
will continue to your beneficiary for the balance of the certain period. The
period is usually 5, 10, 15 or 20 years.
o LIFE ANNUITY-REFUND CERTAIN: This annuity form guarantees payments to you for
the rest of your life. In addition, if you die before the amount applied to
purchase this annuity option has been recovered, payments will continue to
your beneficiary until that amount has been recovered. This option is
available only as a fixed annuity.
o PERIOD CERTAIN ANNUITY: This annuity form guarantees payments to you for a
specific period of time, usually 5, 10, 15 or 20 years. If you die before the
period certain has ended, payments will continue to your beneficiary for the
balance of the period certain.
o QUALIFIED JOINT AND SURVIVOR LIFE ANNUITY: This annuity form guarantees life
income to you and, after your death, continuation of income to your surviving
spouse. Generally, unless married Participants elect otherwise with the
written consent of their spouse, this will be the normal form of annuity
payment for plans such as the Master Plan and Trust. See Part 8: "Federal Tax
and ERISA Matters."
28
<PAGE>
We offer other forms not outlined here. Your Equitable Life Agent can provide
details.
All of the life annuity distribution options outlined above (with the exception
of Qualified Joint and Survivor Life Annuity) are available as either Single or
Joint life annuities.
The chart below shows the relative financial value of the different annuity
options, based on the rates for fixed annuities that are currently guaranteed in
the Contract. We have reserved the right to change the actuarial basis for these
rates at any time after the fifth anniversary from the date the Contract is
issued and no earlier than five years from the date of the last change
thereafter. Contributions received up to the date of a change, and amounts
already applied to annuity distribution options, would not be affected by the
change. The example assumes that at the time payments commence, both the
annuitant and the joint annuitant are 65, and the amount used to purchase the
annuity is $100,000. Certain legal requirements may limit the forms of annuity
available to you. Values do not reflect any state premium taxes or contingent
withdrawal charges.
- ---------------------------------------------------------------------------
RATE
PER
AMOUNT TO BE $1.00
APPLIED ON OF MONTHLY
ANNUITY MONTHLY ANNUITY
ANNUITY FORM FORM ELECTED ANNUITY PROVIDED
- ---------------------------------------------------------------------------
Life ............................ $100,000 $207.42 $482.11
5 Year Certain Life ............. 100,000 208.32 480.04
10 Year Certain Life ............ 100,000 211.15 473.60
15 Year Certain Life ............ 100,000 216.29 462.34
20 Year Certain Life ............ 100,000 224.23 445.98
100% Joint & Survivor Life ...... 100,000 243.17 411.23
75% Joint & Survivor Life ....... 100,000 234.24 426.92*
50% Joint & Survivor Life ....... 100,000 225.30 443.86*
100% Joint & Survivor--
5 Year Certain Life** ......... 100,000 243.19 411.20
100% Joint & Survivor--
10 Year Certain Life** ........ 100,000 243.37 410.90
100% Joint & Survivor--
15 Year Certain Life** ........ 100,000 244.03 409.79
100% Joint & Survivor--
20 Year Certain Life** ........ 100,000 245.83 406.79
- ---------------------------------------------------------------------------
*Represents the amount payable to the primary annuitant. A surviving joint
annuitant would receive the applicable percentage of the amount paid to the
primary annuitant.
** You may also elect a Joint and Survivor Annuity-Period Certain with a monthly
benefit payable to the surviving joint annuitant in any percentage between 50
and 100.
We offer other forms not outlined here. Your Equitable Agent can provide
details.
ELECTING AN ANNUITY DISTRIBUTION OPTION
In order to elect an annuity distribution option, a Retirement Account Value
must be at least $3,500.
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 contingency
annuity distribution option, the Participant's age (or the Participant's and
joint annuitant's ages).
Once you choose an annuity distribution option and payments have commenced, no
change can be made. Remember, as a deterrent to premature withdrawal (generally
prior to age 59 1/2) the Code provides certain restrictions on and penalties for
early withdrawals. See Part 8: "Federal Tax and ERISA Matters."
AUTOMATIC MINIMUM WITHDRAWAL (OVER AGE 70 1/2)
Under the Code, distributions from qualified plans must generally begin no later
than April 1st of the calendar year following the calendar year in which you
attain age 70 1/2 (the "required beginning date"). Subsequent distributions must
be made by December 31st of each calendar year (including the calendar year of
your required beginning date). If the required minimum distribution is not paid,
you may be required to pay a penalty tax equal to 50% of the difference between
the amount required to be distributed and the amount actually distributed. See
"Part 8: Federal Tax and ERISA Matters" for a discussion of various special
rules concerning the minimum distribution requirements.
"Automatic Minimum Withdrawal" is our special minimum distribution option. You
may elect Automatic Minimum Withdrawal if you are at least age 70 1/2 and have a
Retirement Account Value of at least $3,500. You can elect Automatic Minimum
Withdrawal by filing the proper election form with your Employer. If you elect
Automatic Minimum Withdrawal, we will withdraw the amount which the Code
requires you to withdraw from your Retirement Account Value. We calculate the
Automatic Minimum Withdrawal amount based on the information you give us, the
various choices you make and certain assumptions. In performing this
calculation, we assume that the only funds subject to the Code's minimum
distribution requirements are those held under the Contract. In addition, we
rely on the information you provide to us, and we will not be responsible for
errors that result from inaccuracies in this information. The choices you can
make are described in the SAI.
Your Automatic Minimum Withdrawal election is revocable. Automatic Minimum
Withdrawal is not available to Participants who have an outstanding loan.
Electing this option does not restrict you from taking partial withdrawals or
subsequently electing an annuity distribution option.
The minimum check that will be sent is $300, or, if less, your Retirement
Account Value.
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DEATH BENEFIT
Unless payments under an annuity distribution option have begun, the death
benefit is equal to the Retirement Account Value.
The Master Plan and Trust and the Pooled Trust direct the automatic transfer of
a Retirement Account Value to the Default Option on the date Equitable receives
due proof of a Participant's death, unless the beneficiary provides contrary
instructions. All amounts are held in the Default Option until your beneficiary
requests a distribution or transfer.
The law requires the distribution of benefits to be completed no more than five
years after the date of your death, unless payments of your benefit to a
designated beneficiary commence within one year after your death and are made
over the beneficiary's life or over a period not exceeding the beneficiary's
life expectancy. If the beneficiary is your surviving spouse, the spouse can
elect to begin distributions over the spouse's life or over a period not
exceeding the spouse's life expectancy at any time up to when you would have
attained age 70 1/2. If you had already begun to receive benefits, your
beneficiary can continue to receive benefits based on the payment option you
selected. To designate a beneficiary or to change an earlier designation, you
should file a beneficiary designation with your plan administrator. Your spouse
must consent in writing to a designation of any non-spouse beneficiary, as
explained in Part 8: "Federal Tax and ERISA Matters: Spousal Requirements."
If you die while a loan is outstanding, the loan will automatically default and
be subject to federal income tax as a plan distribution.
Your beneficiary may elect, subject to certain exceptions explained below,
Equitable Life's rules then in effect and any other applicable requirements
under the Code, to: (a) receive the death benefit in a single sum, (b) apply the
death benefit to an annuity distribution option offered by Equitable Life, (c)
apply the death benefit to provide any other form of benefit payment offered by
Equitable Life, or (d) have the death benefit credited to an account under the
Contract maintained on behalf of the beneficiary in accordance with the
beneficiary's investment allocation instructions. If the beneficiary elects (d)
then (1) the beneficiary will be entitled to delay distribution of his or her
account as permitted under the terms of the Employer's plan and the minimum
distribution rules under the Code and (2) the value of the beneficiary's account
will be determined at the time of distribution to the beneficiary and, depending
upon investment gains or losses, may be worth more or less than the value of the
beneficiary's initial account.
If you die before your entire vested benefit has been distributed to you, the
remainder of your benefit will be payable to your beneficiary.
PAYMENTS OF PROCEEDS
Except for amounts in the Guaranteed Interest Account that are payable in
installments, payments of proceeds will generally be made within seven days of
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 has been closed or
trading on it is restricted, (2) sales of securities or determination of the
fair market value of an Investment Fund's assets are 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 or transfer of any portion of your Retirement Account Value in the
Guaranteed Interest Account for up to six months while you are living.
PLAN RECORDKEEPING SERVICES
Equitable offers two plan recordkeeping options, one of which must be elected
for each plan. Employers can elect our basic plan recordkeeping service option,
which includes:
o Accounting by Participant;
o Accounting by Source;
o Provision of annual 5500 series Schedule A report information for use in
making the plan's annual Report to the Internal Revenue Service ("IRS") and
DOL; and
o Plan loan processing, if applicable.
As an added service under our Basic Recordkeeping Service, Employers may enter
into a written agreement with us whereby we, based on information submitted by
Employers, direct distribution of plan benefits and withdrawals to participants,
including tax withholding and reporting to the IRS. The written agreement will
specify the fees for such service.
The Momentum Plus Program also offers a full service plan recordkeeping option.
This option is only available to Employers who have adopted the Master Plan and
Trust. If this option is chosen, we will provide the following plan
recordkeeping services in addition to the services described above:
o Master Plan and Trust documents approved by the Internal Revenue Service
(IRS);
o Assistance in interpreting the Master Plan and Trust, including plan
installation and ongoing Administrative support;
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o Assistance in annual reporting with the IRS and DOL;
o Plan administration manual and forms (including withdrawal, transfer, loan
processing, and account allocation forms);
o Performance of vesting calculations;
o Performance of special non-discrimination tests applicable to Code Section
401(k) plans;
o Tracking of hardship withdrawal amounts in Code Section 401(k) plans; and
o Direct distribution of plan benefits and withdrawals to Participants,
including tax withholding and reporting to the IRS.
Any additional services that Equitable Life will provide are indicated in the
plan recordkeeping services agreement. This agreement is required for Employers
or Plan Trustees who elect the full service recordkeeping option and specifies
the fees for the services to be provided. See "Deductions and Charges: Charge
for Plan Recordkeeping Services" in Part 6.
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- --------------------------------------------------------------------------------
PART 6: DEDUCTIONS AND CHARGES
- --------------------------------------------------------------------------------
CHARGE TO INVESTMENT FUNDS
We make a daily charge against the assets held in each of the Separate Account
Investment Funds. This charge is reflected in the Accumulation Unit Values for
the particular Investment Fund and covers expense risks, mortality risks and
expenses. The charge is made at an annual rate guaranteed not to exceed a total
of 1.35% for each Investment Fund. The charge is .50% for mortality risks, .60%
for expense risks and .25% for expenses. The expense risk we assume is the risk
that, over time, our actual expense of administering the Contract may exceed the
amounts realized from the quarterly administrative expense charge, the Separate
Account expense charge and the loan charges. The mortality risk we assume is
that annuitants, as a group, may live longer than anticipated under annuity
options that involve life contingencies. The charge for expenses is designed to
reimburse us for our costs in providing administrative services in connection
with the Contract, and is not designed to include an element of profit.
Part of the respective charges for expense risks and mortality risks may be
considered to be an indirect reimbursement for certain sales and promotional
expenses relating to the Contract to the extent that the charges are not needed
to meet the actual expenses incurred. These asset charges do not apply to the
Guaranteed Interest Account.
In particular cases, we may reduce these risk and expense charges if the
participation of the plan in the Contract is effected in a manner which results
in savings of sales or administrative expenses.
HUDSON RIVER TRUST CHARGES TO PORTFOLIOS
Investment advisory fees charged daily against assets of The Hudson River Trust,
direct operating expenses of The Hudson River 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 Hudson
River 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 are
listed below. They cannot be changed without a vote by shareholders. See "Part
7: Voting Rights."
DAILY AVERAGE NET ASSETS
-----------------------------------------------
FIRST NEXT OVER
$350 $400 $750
MILLION MILLION MILLION
- --------------------------------------------------------------------------------
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%
- --------------------------------------------------------------------------------
FIRST NEXT OVER
$500 $500 $1
MILLION MILLION BILLION
- --------------------------------------------------------------------------------
Quality Bond and
Growth & Income.............. .550% .525% .500%
- --------------------------------------------------------------------------------
FIRST NEXT OVER
$750 $750 $1.5
MILLION MILLION BILLION
- --------------------------------------------------------------------------------
Equity Index................... .350% .300% .250%
- --------------------------------------------------------------------------------
FIRST NEXT OVER
$500 $1 $1.5
MILLION BILLION BILLION
- --------------------------------------------------------------------------------
International.................. .900% .850% .800%
- --------------------------------------------------------------------------------
Investment advisory fees are established under the investment advisory
agreements between The Hudson River Trust and its investment adviser, Alliance.
All of these fees and expenses are described more fully in The Hudson River
Trust prospectus. Since The Hudson River 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.
QUARTERLY ADMINISTRATIVE CHARGE
On the last Business Day of each calendar quarter we deduct from your Retirement
Account Value an administrative charge which is currently equal to $7.50 or, if
less, .50% of the total of your Retirement Account Value plus the value of any
Active Loan. For accounts of participants in plans that, prior to October 1,
1993, were using EQUI-VEST Corporate TRUSTEED, EQUI-VEST Unincorporated
TRUSTEED, EQUI-VEST Annuitant-Owned HR-10
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<PAGE>
or Momentum as a funding vehicle, and which transferred assets to this Contract,
the administrative charge will be waived if the Retirement Account Value of the
Momentum Plus account is at least $25,000 on the last business day of each
calendar quarter. This charge will be prorated for the calendar quarter in which
the Employer's plan enrolls under the Contract. The charge will not be prorated,
however, if a Participant enrolls during any subsequent calendar quarter.
The charge is deducted by Source from each Investment Option in a specified
order described under "How We Deduct the Quarterly Administrative Charge" in the
SAI. Any portion of the charge deducted from an Investment Fund will reduce the
number of Accumulation Units you have in that 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 upon 90 days written notice to
Employers and Plan Trustees if our administrative costs increase. We may also
reduce this charge under special circumstances. See "Special Circumstances"
below.
You, as Employer, may choose to have this quarterly administrative charge billed
to you directly. However, we reserve the right to deduct the charge from
Retirement Account Values if we do not receive the direct payment.
APPLICABLE STATE AND LOCAL TAXES
Currently, we deduct any applicable charges for state and local taxes from the
amount applied to provide an annuity benefit if a Participant elects to
annuitize. We reserve the right to deduct any such charge from each contribution
or from withdrawals or upon Contract Termination. If we have deducted any
applicable tax charges from contributions we will not deduct charges for the
same taxes from withdrawals or upon Contract Termination or application to an
annuity distribution option. If, however, a tax is later imposed upon us when
you make a withdrawal from, terminate or annuitize the Retirement Account Value,
we reserve the right to deduct a charge at such time. The current premium tax
charge which might be imposed in your State ranges from 0% to 2.25%. However,
the rate is 1% in Puerto Rico and 5% in the Virgin Islands.
CHARGE FOR PLAN RECORDKEEPING SERVICES
The annual charge for the basic plan recordkeeping option is $300 for Employers
who elect this option (prorated in the first year). This charge will be billed
directly to the Employer. Employers may enter into a written agreement with
Equitable Life for direct distribution of plan benefits and withdrawals to
Participants, including tax withholding and reporting to the IRS, a $25 check
writing fee is currently charged by us on each check drawn. We reserve the right
to increase these charges upon 90 days written notice to the Employer or Plan
Trustee. We may also reduce these charges under special circumstances.
See "Special Circumstances" below.
There are additional charges if the Employer or Plan Trustee elects the full
service plan recordkeeping option offered by us. Employers will be required to
execute an agreement governing additional recordkeeping services and related
charges.
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 Contract, we assess a sales charge under certain circumstances
described below. The contingent withdrawal charge does not apply after the
Employer's plan has participated in the Contract for five years.
As long as neither a Plan Termination nor a Contract Termination has occurred,
we will only assess a contingent withdrawal charge on in-service withdrawals
that are direct rollovers to an individual retirement account or another
qualified plan not funded by an Equitable Life contract and then, only if the
Employer's Plan has participated in the Contract for less than five years. All
other in-service withdrawals, including hardship withdrawals, are never subject
to a contingent withdrawal charge. If Plan Termination occurs in the first five
years that the plan has participated in the Contract, all in-service withdrawals
from the Investment Funds will be subject to a contingent withdrawal charge.
In-service withdrawals from the Guaranteed Interest Account will be subject to
the contingent withdrawal charge only if the Market Value Adjustment is less
than the contingent withdrawal charge. See "Effects of Plan or Contract
Termination" in Part 4. When Contract Termination occurs in the first five years
that the plan has participated in the Contract, a contingent withdrawal charge
will apply to the surrendered amounts in the Investment Funds. Surrendered
amounts in the Guaranteed Interest Account will generally be paid in
installments. See "The Guaranteed Interest Account: Effects of Plan or Contract
Termination" in Part 4.
The contingent withdrawal charge is 6% of the amount withdrawn or, if less, 8.5%
of contributions made on behalf of the Participant.
No contingent withdrawal charge will be applied to any amount withdrawn, if:
o the amount withdrawn is applied to the election of a life annuity
distribution option;
o you die, retire or become disabled;
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<PAGE>
o you have separated from service (see Section 402(d)(4)(A) of the Code as in
effect under the Tax Reform Act of 1986);
o the amount withdrawn is intended to satisfy the Code's minimum distribution
requirements (Section 401(a)(9)) applicable after you turn age 70 1/2;
o the amount withdrawn is the result of a request for a refund of "excess
contributions" or "excess aggregate contributions" as such terms are defined
in Sections 401(k)(8)(B) and 401(m)(6)(B), respectively, of the Code,
including any gains or losses, and the withdrawal is made no later than the
end of the plan year following the plan year for which such contributions
were made;
o the amount withdrawn is defined as a "hardship withdrawal" pursuant to Treas.
Reg. 1.401(k)-1(d)(2);
o the amount withdrawn is a request for a refund of "excess deferrals" as such
term is defined in Section 402(g)(2) of the Code, including any gains or
losses, provided the withdrawal is made no later than April 15, following the
calendar year in which such excess deferrals were made;
o the amount withdrawn is a request for a refund of contributions made due to
mistake of fact made in good faith, provided the withdrawal is made within 12
months of the date such mistake of fact contributions were made and any
earnings attributable to such contributions are not included in such
withdrawal; or
o the amount withdrawn is a request for a refund of contributions disallowed as
a deduction by the Employer for Federal income tax purposes, provided such
withdrawal is made within 12 months after the disallowance of the deduction
has occurred and no earnings attributable to such contributions are included
in such withdrawal.
The withdrawal charge described above is deducted from the Retirement Account
Value in addition to the amount of the requested withdrawal; the portion of the
amount withdrawn that is applied to pay the withdrawal charge is also subject to
the withdrawal charge.
If a portion of a Participant's Retirement Account Value is forfeited under the
terms of the plan, we will not assess a contingent withdrawal charge against
unvested amounts. However, if you, as the Employer or Plan Trustee, withdraw the
forfeited amount from the Contract before it is reallocated to other
Participants, you will incur the contingent withdrawal charge at that time.
We may reduce the contingent withdrawal charge under special circumstances. See
"Special Circumstances" below.
LOAN CHARGES
A $25 loan set-up charge will be deducted from your Retirement Account Value at
the time a plan loan is made. Also, we will deduct a recordkeeping charge of $6
from your Retirement Account Value on the last Business Day of each calendar
quarter if there is an Active Loan on that date.
The $6 per quarter recordkeeping charge, but not the $25 set-up charge, will be
applicable to takeover loans.
Your Employer may elect to pay these charges. These charges are intended to
reimburse us for the added administrative costs associated with processing
loans. We reserve the right to increase these administrative charges if our
costs increase. We will give Employers or Plan Trustees 90 days written notice
of any increase.
SPECIAL CIRCUMSTANCES
Subject to any necessary governmental or regulatory approvals, the contingent
withdrawal charge, quarterly administrative charge, separate account annual
expense charge, loan charges and basic plan recordkeeping fee for a particular
plan participating under the Contract may be reduced or eliminated when sales
are made in a manner that results in savings of sales or administrative
expenses. The entitlement to such a reduction or elimination will be determined
by us based on factors such as the number of Participants, performance of sales
or administration functions by the Employer or plan administrator, frequency of
contributions or the use of automated techniques in transmitting data.
There may be other circumstances, of which we are presently unaware, which could
result in reduced sales or administrative expenses. If, after consideration of
such factors, we determine that participation under the Contract by a particular
plan would result in reduced or eliminated sales or administrative expenses,
such a plan would be entitled to a reduction or elimination of the relevant
charge. In no event would such a reduction or elimination be permitted where it
would be unfairly discriminatory to any person.
34
<PAGE>
- --------------------------------------------------------------------------------
PART 7: VOTING RIGHTS
- --------------------------------------------------------------------------------
HUDSON RIVER TRUST VOTING RIGHTS
As explained previously, contributions allocated to the Investment Funds are
invested in shares of the corresponding Portfolios of The Hudson River 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 Hudson River Trust's Board of Trustees;
o to ratify the selection of independent auditors for The Hudson River Trust;
and
o on any other matters described in The Hudson River Trust's current prospectus
or requiring a vote by shareholders under the 1940 Act.
Because The Hudson River Trust is a Massachusetts business trust, annual
meetings are not required. Whenever a shareholder vote is taken, we will give
Participants or Plan Trustees, as applicable, the opportunity to instruct us how
to vote the number of shares attributable to the Retirement Account Values. If
we do not receive instructions for all the shares, 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 all persons
entitled with an interest in such shares vote.
Each share of The Hudson River Trust is 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," below) may require Participant approval. In that
case, Participants 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 Funds in the same proportion as votes cast by all persons
who participate in the Separate Account.
VOTING RIGHTS OF OTHERS
Currently, we control The Hudson River Trust. Shares of The Hudson River Trust
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 Participants and
Plan Trustees, we currently do not foresee any disadvantages arising out of
this. The Hudson River 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 Hudson River Trust's response to any of those events insufficiently
protects our Participants, we will see to it that appropriate action is taken to
protect Participants.
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.
35
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- --------------------------------------------------------------------------------
PART 8: FEDERAL TAX AND ERISA MATTERS
- --------------------------------------------------------------------------------
Employer retirement plans that may qualify for tax-favored treatment are
governed by the provisions of the Code and ERISA. The Code is administered by
the IRS. ERISA is administered primarily by the Department of Labor (DOL).
Provisions of the Code and ERISA include requirements for various features
including:
o participation, vesting and funding;
o nondiscrimination;
o limits on contributions and benefits;
o distributions;
o penalties;
o duties of fiduciaries;
o prohibited transactions; and
o withholding, reporting and disclosure.
IT IS THE RESPONSIBILITY OF THE EMPLOYER, PLAN TRUSTEE AND PLAN ADMINISTRATOR TO
SATISFY THE REQUIREMENTS OF THE CODE AND ERISA.
This prospectus does not provide detailed tax or ERISA information. The
following discussion briefly outlines the Code provisions relating to
contributions to and distributions from certain tax-qualified retirement plans,
although some information on other provisions is also provided. Various tax
disadvantages, including penalties, may result from actions that conflict with
requirements of the Code or ERISA, and regulations or other interpretations
thereof. In addition, Federal tax laws and ERISA are continually under review by
the Congress, and any changes in those laws, or in the regulations pertaining to
those laws, may affect the tax treatment of amounts contributed to tax-qualified
retirement plans or the legality of fiduciary actions under ERISA.
Certain tax advantages of a tax-qualified retirement plan may not be available
under certain state and local tax laws. This outline does not discuss the effect
of any state or local tax laws. It also does not discuss the effect of federal
estate and gift tax laws (or state and local estate, inheritance and other
similar tax laws). This outline assumes that the participant does not
participate in any other qualified retirement plan. Finally, it should be noted
that many tax consequences depend on the particular jurisdiction or
circumstances of a participant or beneficiary.
THE PROVISIONS OF THE CODE AND ERISA ARE HIGHLY COMPLEX. FOR COMPLETE
INFORMATION ON THESE PROVISIONS, AS WELL AS ALL OTHER FEDERAL, STATE, LOCAL AND
OTHER TAX CONSIDERATIONS, QUALIFIED LEGAL AND TAX ADVISERS SHOULD BE CONSULTED.
TAX ASPECTS OF CONTRIBUTIONS TO A PLAN
Corporations, partnerships and self-employed individuals can establish qualified
plans for the working owners and their employees who participate in the plan.
The trustee or plan administrator may make contributions on behalf of the plan
participants which are deductible from the employer's Federal gross income.
Employer contributions which exceed the amount currently deductible are subject
to a 10% penalty tax. There are specific rules that affect owner-employees
(i.e., a person who owns 100% of an unincorporated trade or business or a person
who owns more than 10% of either the capital or profits of a partnership) who
participate in a Keogh plan. In addition, there are special rules for corporate
plans and Keogh plans which are top heavy plans (i.e., more than 60% of the
contributions or benefits are allocated to certain highly compensated employees
otherwise known as key employees).
The limits on the amount of contributions that can be made and/or forfeitures
that can be allocated to each participant of defined contribution plans is the
lesser of $30,000 or 25% of the compensation or earned income for each
participant. For self-employed individuals, earned income is defined so as to
exclude deductible contributions made to all tax-qualified retirement plans,
including Keogh plans, and takes into account the deduction for one-half the
individual's self-employment tax. Deductions for aggregate contributions to
profit sharing plans may not exceed 15% of all participants' compensation.
The employer may not consider compensation in excess of $150,000 in calculating
contributions to the plan. This amount may be adjusted for inflation in future
years. Special limits on contributions apply to anyone who participates in more
than one qualified plan or who controls another trade or business. In addition,
there is an overall limit on the total amount of contributions and benefits
under all tax-qualifed retirement plans in which an individual participates.
A qualified plan may allow the participant to direct the employer to make
contributions which will not be
36
<PAGE>
included in the employee's income (elective deferrals) by entering into a salary
reduction agreement with the employer under Section 401(k) of the Code. The
401(k) plan, otherwise known as a cash or deferred arrangement, must not allow
withdrawals of elective deferrals and the earnings thereon prior to the earliest
of the following events: (i) attainment of age 59 1/2 , (ii) death, (iii)
disability, (iv) certain business dispositions and plan terminations or (v)
termination of employment. In addition, in-service withdrawals of elective
deferrals (but not earnings after 1988) may be made in the case of financial
hardship.
A participant cannot elect to defer annually more than $7,000 ($9,500 as indexed
for inflation in 1996) under all salary reduction arrangements in which the
individual participates. If an individual's aggregate elective deferrals under
all such salary reduction arrangements exceeds the permitted elective deferral
limit in any taxable year, the individual will be taxed twice on the excess
deferral--once in the year of the deferral and again when a distribution occurs.
If the participant notifies the affected plan or plans by March 1 of the
following year and by April 15 of such year takes a distribution of the excess
deferral and related income, the excess deferral will only be taxed once in the
year of the distribution. The excess deferral distribution will not be treated
as an impermissible withdrawal or an "eligible rollover distribution" and will
not be subject to the 10% penalty tax on premature distributions, discussed
below.
A qualified plan must not discriminate in favor of highly compensated employees.
Two special nondiscrimination rules limit contributions and benefits for highly
compensated employees in the case of (1) a 401(k) plan and (2) any defined
contribution plan, whether or not a 401(k) plan, which provides for employer
matching contributions to employee post-tax contributions or elective deferrals.
In both cases the special nondiscrimination tests compare the deferrals or the
aggregate contributions, as the case may be, made by the eligible highly
compensated employees with those made by the non-highly compensated employees.
Coordination rules between the two provisions are prescribed. Highly compensated
participants include five percent owners, employees earning more than $100,000
per year, employees earning more than $66,000 per year and who are in the top
20% of all employees based on compensation, and officers (or deemed officers)
earning more than $60,000 per year (in each case after indexing for inflation in
1996).
If a 401(k) plan or defined contribution plan with an employer match makes
contributions to highly compensated employees exceeding applicable
nondiscrimination limits for any plan year, the plan may be disqualified unless
the excess amounts including earnings are distributed before the close of the
next plan year. In addition, the employer is subject to a 10% penalty on any
such excess contributions or excess aggregate contributions. The employer may
avoid the penalty by distributing the excess contributions or excess aggregate
contributions, plus income, within two and one-half months after the close of
the plan year. Except where the distribution is de minimis (under $100), the
participant receiving any such distribution is taxed on the distribution and the
related income for the year of the excess contribution or excess aggregate
contribution. Such a distribution is not treated as an impermissible withdrawal
by the employee or an eligible rollover distribution and will not be subject to
the 10% penalty tax on premature distributions.
Contributions to a 401(k) plan or a defined contribution plan as matching
contributions, within the meaning of section 401(m) of the Code, may not be
deductible by the employer for a particular taxable year if the plan
contributions are attributable to compensation earned by a participant after the
end of the taxable year.
TAX ASPECTS OF DISTRIBUTIONS FROM A PLAN
Amounts held under qualified plans are generally not subject to Federal income
tax until benefits are distributed to the participant or other recipient. In
addition, there will not be any tax liability for transfers of any part of the
Retirement Account Value among the Investment Options.
The various types of benefit payments include withdrawals, annuity payments and
lump sum distributions. Each benefit payment made to the participant or other
recipient is generally fully taxable as ordinary income. An exception to this
general rule is made, however, to the extent a distribution is treated as a
recovery of post-tax contributions made by the participant.
In addition to income tax, the taxable portion of any distribution may be
subject to a 10% penalty tax. See "Penalty Tax on Premature Distributions,"
below.
Income Taxation of Withdrawals
The amount of any distribution prior to the annuity starting date is treated as
ordinary income except to the extent the distribution is treated as a withdrawal
of post-tax contributions. Withdrawals from a qualified plan are normally
treated as pro rata withdrawals of post-tax contributions and earnings on those
contributions. If the plan allowed withdrawals prior to separation from service
as of May 5, 1986, however, all post-tax contributions made prior to January 1,
1987 may be withdrawn tax-free prior to withdrawing any taxable amounts.
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As discussed below in "Certain Rules Applicable to Plan Loans," taking a loan or
failing to repay an outstanding loan as required may, in certain situations, be
treated as a taxable withdrawal.
Income Taxation of Annuity Payments
In the case of a distribution in the form of an annuity, the amount of each
annuity payment is treated as ordinary income except where the participant has a
cost basis in the annuity. The cost basis is equal to the amount of post-tax
contributions, plus any employer contributions that had to be included in gross
income in prior years. If the participant has a cost basis in the annuity, a
portion of each payment received will be excluded from gross income to reflect
the return of the cost basis. The remainder of each payment will be includable
in gross income as ordinary income.
The excludable portion is based on the ratio of the participant's cost basis in
the annuity on the annuity starting date to the expected return under the
annuity as of such date. Under an annuity with a life contingency, the expected
return is based on the annuitant's life expectancy, that is, the number of
annuity payments anticipated to be made during the annuitant's lifetime. In the
case of a joint and survivor annuity, the expected return is based on the joint
life expectancy, that is, the number of payments anticipated to be made during
both of their lifetimes. An adjustment will be required in computing the
expected return of the annuity with a life contingency if payments are to be
made for any certain period. If the participant (and beneficiary under a joint
and survivor annuity) live beyond their life expectancies the full amount of the
payments received after the cost basis of the annuity is recovered is fully
taxable. If the participant (and beneficiary under a joint and survivor annuity)
die prior to recovering the full cost basis of the annuity, a deduction is
allowed on the participant's (or beneficiary's) final tax return. If there is a
refund feature under the annuity, the beneficiary of the refund may recover the
remaining cost basis as payments are made.
Income Taxation of Lump Sum Distributions
If benefits are paid in a lump sum, the payment may be eligible for the special
tax treatment accorded lump sum distributions. Under the five-year averaging
method (and in certain cases, favorable ten-year averaging and long-term capital
gain treatment), the tax on the distribution is calculated separately from taxes
on other income for that year. To qualify, the participant must have
participated in the plan for at least five years and the distribution must
consist of the entire balance to the credit of the participant. The distribution
must be made in one taxable year of the recipient and must be made (i) after the
participant has attained 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).
Eligible Rollover Distributions
Many types of distributions from qualified plans are "eligible rollover
distributions" that can be rolled over directly to another qualified plan or an
individual retirement arrangement (IRA), or rolled over by the individual to
another plan or IRA within 60 days of receipt. Death benefits received by a
spousal beneficiary may only be rolled over into an IRA. To the extent a
distribution is rolled over, it remains tax deferred. Distributions not rolled
over directly are subject to 20% mandatory withholding. See "Federal Income Tax
Withholding" below.
The taxable portion of most distributions will generally be an "eligible
rollover distribution" 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 participant or the joint lives (or
joint life expectancies) of the participant and his or her designated
beneficiary, or (2) for a specified period of ten years or more. Nondeductible
voluntary contributions may not be rolled over.
In addition, none of the following is treated as an eligible rollover
distribution:
o any distribution to the extent that it is a minimum distribution required
under Section 401(a)(9) of the Code (see "Distribution Requirements and
Limits" below);
o certain corrective distributions in plans subject to Sections 401(k), 401(m)
or 402(g) of the Code;
o loans that are treated as deemed distributions under Section 72(p) of the
Code;
o P.S. 58 costs (incurred if the plan provides life insurance protection for
participants);
o dividends paid on employer securities as described in Section 404(k) of the
Code; and
o a distribution to a non-spousal beneficiary.
If a distribution is made to a 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 distributions eligible for rollover are in fact rolled over, the favorable
averaging rules discussed above in "Income Taxation of Lump Sum Distributions"
will not be available for future distributions.
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Penalty Tax on Premature Distributions
An additional 10% penalty tax is imposed on all taxable amounts distributed to a
participant who has not reached age 59 1/2 unless the distribution falls within
a specified exception or is rolled over into an IRA or other qualified plan. The
specified exceptions are for (a) distributions made on account of the
participant's death or disability, (b) distributions (which begin after
separation from service) in the form of a life annuity or substantially equal
periodic installments over the participant's life expectancy (or the joint life
expectancy of the participant and the beneficiary), (c) distributions due to
separation from active service after age 55 and (d) distributions used to pay
certain extraordinary medical expenses.
Federal Income Tax Withholding
Mandatory Federal income tax withholding at a 20% rate will apply to all
"eligible rollover distributions" unless the participant elects to have the
distribution directly rolled over to another qualified plan or IRA. See the
description above of "Eligible Rollover Distributions."
With respect to distributions that are not eligible rollover distributions,
Federal income tax must be withheld on the taxable portion of pension and
annuity payments, unless the recipient elects otherwise. The rate of withholding
will depend on the type of distribution and, in certain cases, the amount of the
distribution. Special rules may apply to foreign recipients, or United States
citizens residing outside the United States. If a recipient does not have
sufficient income tax withheld, or 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.
Requests not to withhold Federal income tax must be made in writing prior to
receiving payments and submitted in accordance with the terms of the employer
plan. No election out of withholding is valid unless the recipient provides the
recipient's correct taxpayer identification number and a U.S. residence address.
State Income Tax Withholding
Certain states have indicated that pension and annuity withholding will apply to
payments made to residents of such states. In some states a recipient may elect
out-of-state income tax withholding, even if Federal withholding applies. It is
not clear whether such states may require mandatory withholding with respect to
eligible rollover distributions that are not rolled over (as described above
under "Eligible Rollover Distributions"). Contact your tax adviser to see how
state withholding may apply to your payment.
Distribution Requirements and Limits
Distributions from qualified plans generally must commence no later than April 1
of the calendar year following the calendar year in which the participant
attains age 70 1/2 . Distributions can generally be made (1) in a lump sum
payment, (2) over the life of the participant, (3) over the joint lives of the
participant and his or her designated beneficiary, (4) over a period not
extending beyond the life expectancy of the participant or (5) over a period not
extending beyond the joint life expectancies of the participant 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, Treasury Regulations and IRS
guidelines. If a designated beneficiary is other than a participant's spouse,
certain minimum incidental benefit requirements also apply.
If the participant dies after required distribution has begun, payment of the
remaining interest under the plan must be made at least as rapidly as under the
method used prior to the participant's death. If a participant dies before
required distribution has begun, payment of the entire interest year under the
plan must be completed within five years after death, unless payments to a
designated beneficiary begin within one year of the participant'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 date that the participant would have attained age 70 1/2.
Distributions received by a beneficiary are generally given the same tax
treatment the participant would have received if distribution had been made to
the participant.
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. Failure to have distributions made as the Code and
Treasury Regulations require may result in plan disqualification.
A 15% excise tax is imposed on a participant's aggregate excess distributions
from all tax-favored retirement plans. The excise tax is in addition to the
ordinary income tax due, but is reduced by the amount (if any) of the early
distribution penalty tax imposed by the Code. In addition, in certain cases the
estate tax imposed on a deceased participant's estate will be increased if the
accumulated value of the participant's interests in tax-favored retirement plans
is excessive. The aggregate distributions or accumulations in any year will be
subject to excise tax if they exceed applicable prescribed limits, ($155,000 in
1996).
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<PAGE>
Spousal Requirements
In the case of many corporate and Keogh plans, if a participant is married at
the time benefit payments become payable, unless the participant elects
otherwise with written consent of the spouse, the benefit 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 participant 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 participant during his or her lifetime. In addition, most plans require that
a married participant's beneficiary must be the spouse, unless the spouse
consents in writing to the designation of a different beneficiary.
CERTAIN RULES APPLICABLE TO PLAN LOANS
The following are Federal tax and ERISA rules that apply to loan provisions of
all employer plans. Employer plans may have additional restrictions. Employers
and participants should review these matters with their own tax advisers before
requesting a loan. There will not generally be any tax liability with respect to
properly made loans in accordance with an employer plan. A loan may be in
violation of applicable provisions unless it complies with the following
conditions.
o With respect to specific loans made by the plan to a plan participant, the
plan administrator determines the interest rate, the maximum term and all
other terms and conditions of the loan.
o In general, the term of the loan cannot exceed five years unless the loan is
used to acquire the participant's primary residence.
o All principal and interest must be amortized in substantially level payments
over the term of the loan, with payments being made at least quarterly.
o The amount of a loan to a participant, when aggregated with all other loans
to the participant from all qualified plans of the employer, cannot exceed
the greater of $10,000 or 50% of the participant's non-forfeitable accrued
benefits, and cannot exceed $50,000 in any event. This $50,000 limit is
reduced by the excess (if any) of the highest outstanding loan balance over
the previous twelve months over the outstanding balance of plan loans on the
date the loan was made.
o For loans made prior to January 1, 1987 and not renewed, modified,
renegotiated or extended after December 31, 1986, the $50,000 maximum
aggregate loan balance is not required to be reduced, the quarterly
amortization requirement does not apply, and the term of a loan may exceed
five years if used to purchase the principal residence of the participant or
a member of his or her family, as defined in the Code.
o Only 50% of the participant's vested account balance may serve as security
for a loan. To the extent that a participant borrows an amount which should
be secured by more than 50% of the participant's vested account balance, it
is the responsibility of the trustee or plan administrator to obtain the
additional security.
o Loans must be available to all plan participants, former participants who
still have account balances under the plan, beneficiaries and alternate
payees on a reasonably equivalent basis.
o Each new or renewed loan must bear a reasonable rate of interest commensurate
with the interest rates charged by persons in the business of lending money
for loans that would be made under similar circumstances.
o Many plans provide that the participant's spouse must consent in writing to
the loan.
o Except to the extent permitted in accordance with the terms of a prohibited
transaction exemption issued by DOL, loans are not available (i) in a Keogh
(non-corporate) plan to an owner-employee or a partner who owns more than 10%
of a partnership or (ii) to 5% shareholders in an S corporation.
o If the loan does not qualify under the conditions above, the participant
fails to repay the interest or principal when due, or in some instances, if
the participant separates from service or the plan is terminated, the amount
borrowed or not repaid may be treated as a distribution. The participant may
be required to include as ordinary income the unpaid amount due and a 10%
penalty tax on early distributions may apply. The plan should report the
amount of the unpaid loan balance to the IRS as a distribution. See "Tax
Aspects of Distributions From a Plan" above.
o The loan requirements and provisions of Momentum Plus shall apply regardless
of the plan administrator's guidelines.
IMPACT OF TAXES TO EQUITABLE LIFE
Under existing Federal income tax law, no taxes are payable on investment income
and capital gains of the Investment Funds that are applied to increase the
reserves under the Contracts. Accordingly, Equitable Life does not anticipate
that it will incur any Federal income tax liability attributable to income
allocated to the variable annuity contracts participating in the Investment
Funds and it does not currently impose a charge for Federal income tax on this
income when it computes Unit values for the Investment Funds. If changes in
Federal tax laws or interpretations thereof would result in us being taxed, then
we may impose a charge against the Investment Funds (on some or all Contracts)
to provide for payment of such taxes.
40
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CERTAIN RULES APPLICABLE TO 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.
Section 404(c) plans must provide, among other things, that a broad range of
investment choices are available to plan participants and beneficiaries and must
provide such plan participants and beneficiaries with enough information to make
informed investment decisions. Compliance with the Section 404(c) regulation is
completely voluntary by the plan sponsor, and the plan sponsor may choose not to
comply with Section 404(c).
The Momentum Plus Program provides employer plans with the broad range of
investment choices and information needed in order to meet the requirements of
the Section 404(c) regulation. If the plan is intended to be a Section 404(c)
plan, it is, however, the plan sponsor's responsibility to see that the
requirements of the DOL regulation are met. Equitable Life and its Agents shall
not be responsible if a plan fails to meet the requirements of Section 404(c).
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STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
PART 1: ADDITIONAL INFORMATION ABOUT THE MOMENTUM PLUS
PROGRAM Page 3
PART 2: AUTOMATIC MINIMUM WITHDRAWAL Page 4
PART 3: THE REORGANIZATION Page 4
PART 4: ACCUMULATION UNIT VALUES Page 5
PART 5: DESCRIPTION OF SOURCES Page 5
PART 6: HOW WE DEDUCT THE QUARTERLY ADMINISTRATIVE CHARGE Page 6
PART 7: CUSTODIAN AND INDEPENDENT ACCOUNTANTS Page 6
PART 8: DISTRIBUTION Page 6
PART 9: MONEY MARKET FUND YIELD INFORMATION Page 6
PART 10: OTHER YIELD INFORMATION Page 7
PART 11: LONG-TERM MARKET TRENDS Page 7
PART 12: FINANCIAL STATEMENTS Page 9
HOW TO OBTAIN THE STATEMENT OF
ADDITIONAL INFORMATION
Send this request form to:
Momentum Administrative Service
P. O. Box 2919
New York, N.Y. 10116
Please send me a Momentum Plus Statement of Additional Information
--------------------------------------------------------------------
Name
--------------------------------------------------------------------
Address
--------------------------------------------------------------------
City State Zip
42
<PAGE>
[EQUITABLE -- POWER OVER TOMORROW LOGO]
The Equitable Life Assurance Society of the United States
New York, NY 10019 (212) 554-1234
888-1111 (5/96) Cat. #126941
<PAGE>
MOMENTUM PLUS
STATEMENT OF ADDITIONAL INFORMATION
MAY 1, 1996
----------------------
GROUP VARIABLE ANNUITY CONTRACT
FUNDED THROUGH THE
INVESTMENT FUNDS OF SEPARATE ACCOUNT A
ISSUED BY:
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
- -------------------------------------------------------------------------------
Home Office: 787 Seventh Avenue, New York, NY 10019
Processing Office: Momentum Administrative Service
P. O. Box 2919
New York, N.Y. 10116
- -------------------------------------------------------------------------------
This statement of additional information (SAI) is not a prospectus. It should be
read in conjunction with the Separate Account A prospectus and any supplements
for the Momentum Plus Retirement Program, dated May 1, 1996, and any supplements
to that prospectus. The SAI also should be read in conjunction with the Separate
Account A prospectus for the Momentum Plus Retirement Program, dated May 1,
1995, as updated by the supplement, dated May 1, 1996, to that prospectus, and
any further supplements thereto. Definitions of special terms used in the SAI
are found in the respective prospectuses.
Copies of either of these prospectuses, including the May 1, 1996 Supplement to
the May 1, 1995 prospectus, are available free of charge by writing the
Processing Office, by calling 1-800-528-0204, toll-free, or by contacting your
Equitable Life Agent.
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Copyright 1996 The Equitable Life Assurance Society of the United States,
New York, New York 10019
All rights reserved.
888-1113
Cat. No. 126942
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
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PAGE
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Part 1 Additional Information About the Momentum Plus Program 3
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Part 2 Automatic Minimum Withdrawal Option 4
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Part 3 The Reorganization 4
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Part 4 Accumulation Unit Values 5
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Part 5 Description of Sources 5
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Part 6 How We Deduct the Quarterly Administrative Charge 6
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Part 7 Custodian and Independent Accountants 6
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Part 8 Distribution 6
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Part 9 Money Market Fund Yield Information 6
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Part 10 Other Yield Information 7
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Part 11 Long-Term Market Trends 7
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Part 12 Financial Statements 9
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2
<PAGE>
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PART 1 - ADDITIONAL INFORMATION ABOUT THE MOMENTUM PLUS PROGRAM
MASTER PLAN ELIGIBILITY REQUIREMENTS.
Under the Master Plan, the Employer specifies the eligibility requirements for
its plan in the participation agreement. The Employer may exclude any employee
who has not attained a specified age (not to exceed 21) and completed a
specified number of years (not to exceed two) in each of which he completed
1,000 hours of service. No more than one year of eligibility service may be
required for a 401(k) plan.
The Master Plan provides that a sole proprietor, partner or shareholder may
elect not to participate in the plan. However, due to provisions of the Code,
all employees may have to be covered under the plan even if they previously
elected not to participate.
VESTING UNDER THE MASTER PLAN.
Vesting refers to the nonforfeitable portion of a Participant's Retirement
Account Value and loans attributable to Employer contributions under the Master
Plan. The Participant's Retirement Account Value attributable to salary-deferral
contributions, post-tax employee contributions, prior plan contributions,
qualified non-elective and qualified matching contributions is nonforfeitable at
all times.
A Participant will become fully vested in all benefits if still employed at
death, disability, attainment of normal retirement age or upon termination of
the plan. If the Participant terminates employment before that time, any
benefits that have not yet become vested under the plan's vesting schedule will
be forfeited. The normal retirement age is 65 under the Master Plan.
Except as described below in the case of certain non-top heavy plans, benefits
must vest in accordance with any of the schedules below or one at least as
favorable to Participants as Schedule B or C:
Schedule A Schedule B Schedule C
Years of Vested Vested Vested
Service Percentage Percentage Percentage
- ------------ ----------- ------------ ------------
1 0% 0% 0%
2 100 20 0
3 100 40 100
4 100 60 100
5 100 80 100
6 100 100 100
If the plan requires more than one year of service for participation, it must
use Schedule A or one at least as favorable to Participants.
Provided the Employer plan is not "top- heavy" and does not require more than
one year of service for participation, an Employer may, in accordance with
provisions of the Master Plan, instead elect one of the following vesting
schedules or one at least as favorable to Participants:
Years Schedule F Schedule G
of Vested Vested
Service Percentage Percentage
-------- ------------ ------------
less than 3 0% 0%
3 20 0
4 40 0
5 60 100
6 80 100
7 100 100
BENEFIT DISTRIBUTIONS.
In order for you to begin receiving benefits (including annuity payments) under
a Master Plan, your Employer must send us your properly completed election of
benefits form and, if applicable, beneficiary designation form. If we receive
your properly completed forms on or before the 15th of the month, your benefits
will commence as of the close of business on the first Business Day of the next
month; if your forms arrive after the 15th, your benefits will commence as of
the close of business on the first Business Day of the second following month.
In order for you to begin receiving benefits (including annuity payments) under
an individually-designed or prototype defined contribution plan, your Employer
must send us a properly completed request for disbursement form. We will send
single sum payments to your Plan Trustee as of the close of business on the
Business Day we receive a properly completed form. If you wish to receive
annuity payments, your Plan Trustee may
3
<PAGE>
purchase an annuity contract from us. The annuity contract will be purchased on
the Business Day we receive a properly completed form, and payments will
commence on that Business Day.
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PART 2 - AUTOMATIC MINIMUM WITHDRAWAL OPTION
If you elect this feature designed for Participants age 70 1/2 or older,
described in Part 5 of the prospectus, each year we calculate your minimum
distribution amount by using the Retirement Account Value, as of December 31 of
the prior calendar year and then calculating the minimum distribution amount
based on the various choices you make.
You may choose whether the Automatic Minimum Withdrawal Option will be
calculated based on your life expectancy alone, or based on the joint life
expectancies of you and your spouse. You may also choose (1) to have us
recalculate your life expectancy (or joint life expectancy) each year, or (2)
not recalculate your life expectancy. If you have chosen a joint-life expectancy
method of calculation with your spouse, you may choose to either have both lives
recalculated or not recalculated.
When we recalculate life expectancy, that means that each calendar year we see
what each individual's life expectancy is under Treasury Regulations. If life
expectancy is not recalculated, it means that it is determined once, for the
initial year, and in every subsequent year that number is reduced by one more
year.
If you do not specify a method, we will base a calculation on your life
expectancy alone, recalculating it each year. If you do not specify that we
should recalculate life expectancy, you cannot later apply your Retirement
Account Value to an annuity payout.
The minimum distribution calculation takes into account partial withdrawals made
during the current calendar year but prior to the date we determine your minimum
distribution amount, except that when the Required Minimum Distribution is
elected in the year in which the Participant attains age 71 1/2, no adjustment
for partial withdrawals will be made for any withdrawals made between January 1
and April 1 of the year in which the election is made.
The Automatic Minimum Withdrawal Option should not be elected if the Participant
continues to work beyond age 70 1/2 and contributions continue to be made into
the Contract. To do so could result in an insufficient distribution. You must
request the amount to be separately calculated each year to ensure that you
withdraw the correct amount.
Note that the Automatic Minimum Withdrawal Option does not provide for all the
flexibility provided by Federal law. For example, Federal law permits you to
recalculate your life expectancy and not your spouse's and to choose the joint
life expectancy method with a beneficiary other than your spouse. See your tax
advisor.
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PART 3 - THE REORGANIZATION
Equitable Life established Separate Account A as a stock account on August 1,
1968. It was one of four separate investment accounts used to fund retirement
benefits under variable annuity certificates issued by us. Each of these
separate accounts, which included the predecessors to the Money Market Fund, the
Balanced Fund, the Common Stock Fund and the Aggressive Stock Fund, was
organized as an open-end management investment company, with its own investment
objectives and policies. Collectively these separate accounts, as well as two
other separate accounts which had been used to fund retirement benefits under
certain other annuity contracts, are called the predecessor separate accounts.
On December 18, 1987, the predecessor separate accounts were combined in part
and reorganized into the Money Market, Balanced, Common Stock and Aggressive
Stock Funds of the Separate Account. In connection with the Reorganization, all
of the assets and investment-related liabilities of the predecessor separate
accounts were transferred to a corresponding portfolio of The Equitable Trust in
exchange for shares of the portfolios of The Equitable Trust, which were issued
to these corresponding Funds of the Separate Account. As described in "Part 2:
Investment Performance" in the prospectus, on September 6, 1991, all of the
shares of The Equitable Trust held by these Funds were replaced by shares of
4
<PAGE>
Portfolios of The Hudson River Trust corresponding to these Funds of the
Separate Account.
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PART 4 - ACCUMULATION UNIT VALUES
An Accumulation Unit Value is determined at the end of each Valuation Period for
each of the Investment Funds. Other annuity contracts and certificates that
participate in the Separate Account also have their own accumulation unit values
for the Investment Funds which may be different from those for Momentum Plus.
The Accumulation Unit Value for an Investment Fund for any Valuation Period is
equal to the Accumulation Unit Value for the preceding Valuation Period
multiplied by the Net Investment Factor for that Investment Fund for that
Valuation Period. The NET INVESTMENT FACTOR for an Investment Fund for a
Valuation Period is
(a\b) - c where
(a) is the value of the Investment Fund's shares of the corresponding Portfolio
at the end of the Valuation Period before giving effect to any amounts
allocated to or withdrawn from the Investment Fund for the Valuation Period.
For this purpose, we use the share value reported to us by The Hudson River
Trust. This share value is after deduction for investment advisory fees and
direct expenses of The Hudson River Trust.
(b) is the value of the Investment Fund's shares of the corresponding Portfolio
at the end of the preceding Valuation Period (after any amounts allocated or
withdrawn for that Valuation Period).
(c) is the daily asset charge for expenses of the Separate Account multiplied by
the number of calendar days in the Valuation Period.
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PART 5 - DESCRIPTION OF SOURCES
There are six types of sources of contributions under qualified plans:
EMPLOYER CONTRIBUTIONS
These are contributions made to a plan for the benefit of Participants and
beneficiaries by the Employer not covered by the remaining sources.
MATCHING CONTRIBUTIONS
These are Employer Contributions which are allocated to a Participant's account
under a plan by reason of the Participant's post-tax contributions or elective
contributions to the plan.
POST-TAX CONTRIBUTIONS
These are after-tax contributions made by a Participant in accordance with the
terms of a plan.
SALARY-DEFERRAL CONTRIBUTIONS
These are contributions to a plan that are made pursuant to a cash or deferred
election (normally in accordance with the terms of a qualified cash or deferred
arrangement under Section 401(k) of the Code).
PRIOR PLAN CONTRIBUTIONS
These are contributions that are transferred or rolled over from another
qualified plan or a conduit IRA (as described in Section 408(d)(3)(A)(ii) of the
Code).
QUALIFIED NON-ELECTIVE AND QUALIFIED MATCHING CONTRIBUTIONS
These are employer contributions made pursuant to the terms of a plan subject to
either or both of the special nondiscrimination tests applicable to plans that
are subject to Section 401(k) (qualified cash or deferred arrangements) or
Section 401(m) (applicable to plans that accept matching contributions and/or
post-tax contributions) of the Code. Such qualified non-elective and qualified
matching contributions are made by an Employer in order to meet the requirements
of either or both of the nondiscrimination tests set forth in Section 401(k) and
401(m) of the Code. This Source is called the Employer 401(k) Account in the
Master Plan.
5
<PAGE>
- -------------------------------------------------------------------------------
PART 6 - HOW WE DEDUCT THE QUARTERLY ADMINISTRATIVE CHARGE
Unless a waiver applies or the charge is billed to your employer, each calendar
quarter we deduct an administrative charge of $7.50 or, if less, .50% of the
total of your Retirement Account Value plus the amount of any Active Loan from
your Retirement Account Value. We will deduct this charge in a specified order
of Sources and Investment Options. The order of Sources is: employer
contributions, matching contributions, qualified non-elective and qualified
matching contributions, prior plan contributions, elective contributions and
post-tax contributions. The order of Investment Options is: Guaranteed Interest
Account, Common Stock, Balanced, Aggressive Stock, Money Market, Intermediate
Government Securities, Growth Investors, Conservative Investors, High Yield,
Global, Growth & Income, Equity Index, Quality Bond and International Funds.
For example, on the last Business Day of a calendar quarter we will first
attempt to deduct the administrative charge from employer contributions within
the Guaranteed Interest Account. If there is no money in the Guaranteed Interest
Account, we will attempt to deduct the charge from the Common Stock Fund, then
Balanced etc. If there are no employer contributions in any of the Investment
Options, we will go to the next Source, employer matching contributions, and
attempt to deduct the charge from the Investment Options in the same order
described above.
- -------------------------------------------------------------------------------
PART 7 - CUSTODIAN AND INDEPENDENT ACCOUNTANTS
Equitable Life is the custodian for the shares of The Hudson River Trust owned
by the Separate Account.
The financial statements of the Separate Account and of Equitable Life included
in this SAI have been audited for the years-ended December 31, 1995, December
31, 1994 and December 31, 1993 by Price Waterhouse LLP, as stated in its
reports. The financial statements of the Separate Account and of Equitable Life
for the years ended December 31, 1995 and December 31, 1994 included in this SAI
have been so included in reliance on the reports of Price Waterhouse LLP,
independent accountants, given on the authority of such firm as experts in
accounting and auditing.
- -------------------------------------------------------------------------------
PART 8 - DISTRIBUTION
Equico Securities, Inc. (EQUICO), a wholly-owned subsidiary of Equitable Life,
on or about May 1, 1996 will change its name to EQ Financial Consultants, Inc.
Equico performs all sales functions for the Separate Account and may be deemed
to be its principal underwriter under the 1940 Act. Equico is also the principal
underwriter of The Hudson River Trust. Equico is registered with the SEC as a
broker-dealer under the Securities Exchange Act of 1934 (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. The
offering described in the prospectus will be made through Equitable Life Agents
who are registered representatives of Equico.
- -------------------------------------------------------------------------------
PART 9 - MONEY MARKET FUND YIELD INFORMATION
The Money Market Fund calculates yield information for seven-day periods. The
seven- day current yield calculation is based on a hypothetical Retirement
Account Value with one Accumulation Unit at the beginning of the period. To
determine the seven-day rate of return, the net change in the Accumulation Unit
Value is computed by subtracting the Accumulation Unit Value at the beginning of
the period from an Accumulation Unit Value, exclusive of capital changes, at the
end of the period.
The net change is then reduced by the average administrative charge factor
(explained below). This reduction is made to recognize the deduction of the
quarterly administrative charge, which is not reflected in the unit value. See
"Quarterly Administrative Charge" in Part 6 of the prospectus. Accumulation Unit
Values reflect all other accrued expenses of the Money Market Fund.
The adjusted net change is divided by the Accumulation Unit Value at the
beginning of the period to obtain the adjusted base period rate of return. This
seven-day adjusted base period return is then multiplied by 365/7 to produce an
annualized seven-day current yield figure carried to the nearest one-hundredth
of one percent.
6
<PAGE>
The actual dollar amount of the quarterly administrative charge that is deducted
from the Money Market Fund will vary for each Participant depending upon how the
Retirement Account Value is allocated among the Investment Options. To determine
the effect of the quarterly administrative charge on the yield, we start with
the total dollar amount of the charges deducted from the Fund on the last day of
the prior year divided by 4. This amount is multiplied by 7/91.25 to produce an
average administrative charge factor which is used in all weekly yield
computations for the ensuing quarter. The average administrative charge is then
divided by the number of Momentum Plus Money Market Fund Accumulation Units as
of the end of the prior calendar year, and the resulting quotient is deducted
from the net change in Accumulation Unit Value for the seven-day period.
The effective yield is obtained by modifying the current yield to give effect to
the compounding nature of the Money Market Fund's investments, as follows: the
unannualized adjusted base period return is compounded by adding one to the
adjusted base period return, raising the sum to a power equal to 365 divided by
7, and subtracting one from the result, i.e., effective yield = (base period
return +1)[begin superior] (365/7) [end superior] - 1.
The Money Market Fund yields will fluctuate daily. Accordingly, yields for any
given period are not necessarily representative of future results. In addition,
the value of Accumulation Units of the Money Market Fund will fluctuate and not
remain constant.
The Money Market Fund yields reflect charges that are not normally reflected in
the yields of other investments and therefore may be lower when compared with
yields of other investments. Money Market Fund yields should not be compared to
the return on fixed rate investments which guarantee rates of interest for
specified periods, such as the Guaranteed Interest Account or bank deposits.
The yield should not be compared to the yield of money market funds made
available to the general public because their yields usually are calculated on
the basis of a constant $1 price per share and they pay out earnings in
dividends which accrue on a daily basis.
The Money Market Fund's seven-day current yield for the Contract was 3.87% for
the period ended December 31, 1995. The effective yield for that period was
3.88%. Because these yields reflect the deduction of Separate Account expenses,
including the quarterly administrative charge, they are lower than the
corresponding yield figures for the Money Market Portfolio which reflect only
the deduction of Trust-level expenses.
- -------------------------------------------------------------------------------
PART 10 - OTHER YIELD INFORMATION
We calculate 30-day yield information for the Intermediate Government
Securities, Quality Bond and High Yield Funds. The 30-day rate of return is
derived from the actual change in the share value reported to us by the Trust,
exclusive of capital changes of the Investment Fund's shares of the
corresponding Portfolio during the period. The net change is reduced to reflect
a deduction for (a) the daily Separate Account asset charge for the expenses of
the Contract times the number of calendar days in the period, and (b) the annual
administrative charge.
The effective yield is obtained by giving effect to the compounding nature of
the Fund's investments, as follows: the sum of the 30-day adjusted return, plus
one, is raised to a power equal to 365 divided by 30, and subtracting one from
the result.
The 30-day yields for the period ended December 31, 1995 were 4.83% for the
Intermediate Government Securities Fund, 3.86% for the Quality Bond Fund and
9.04% for the High Yield Fund. Because these yields reflect the deduction of
Separate Account expenses, including the annual administrative charge, they are
lower than the yield figures for the corresponding Portfolios which reflect only
the deduction of Trust-level expenses.
- -------------------------------------------------------------------------------
PART 11 - 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 represent 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
perspective on the potential returns of different asset classes over different
periods of time. By combining
7
<PAGE>
this information with your knowledge of your own financial needs (e.g., the
length of time until you retire, your financial requirements at retirement), you
may be able to better determine how you wish to allocate plan contributions
among the Investment Options available under your plan.
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 Retirement Account Value to those
Investment Funds that invest in stocks.
GROWTH OF $1 INVESTED ON JANUARY 1, 1955
(VALUES AS OF THE LAST BUSINESS DAY)
GROWTH OF $1 INVESTED ON JANUARY 1, 1955
(VALUES AS OF THE LAST BUSINESS DAY)
[The following table of figures was represented by an area graph in the printed
version:]
Common Stocks Inflation
------------- ---------
1955 1.32 1.00
1956 1.40 1.03
1957 1.25 1.06
1958 1.79 1.08
1959 2.01 1.10
1960 2.02 1.11
1961 2.56 1.12
1962 2.34 1.14
1963 2.87 1.15
1964 3.34 1.17
1965 3.76 1.19
1966 3.38 1.23
1967 4.19 1.27
1968 4.65 1.33
1969 4.26 1.41
1970 4.43 1.49
1971 5.06 1.54
1972 6.02 1.59
1973 5.14 1.73
1974 3.78 1.94
1975 5.18 2.08
1976 6.42 2.18
1977 5.96 2.32
1978 6.35 2.53
1979 7.52 2.87
1980 9.96 3.23
1981 9.47 3.51
1982 11.50 3.65
1983 14.09 3.79
1984 14.97 3.94
1985 19.78 4.09
1986 23.44 4.13
1987 24.66 4.32
1988 28.81 4.51
1989 37.88 4.72
1990 36.68 5.00
1991 47.89 5.16
1992 51.56 5.31
1993 56.71 5.45
1994 57.45 5.60
1995 78.95 5.75
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 Retirement 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 1995.
GROWTH OF $1 INVESTED ON JANUARY 1, 1990
(VALUES AS OF THE LAST BUSINESS DAY)
[The following table of figures was represented by a line graph in the printed
version:]
Intermediate Term
Common Stocks Gov't. Bonds
------------- ------------
1/1/90 1.00 1.00
Jan 0.99 0.93
Feb 0.98 0.94
Mar 1.01 0.97
Apr 1.02 0.95
May 1.04 1.04
Jun 1.03 1.03
Jul 1.04 1.03
Aug 1.03 0.93
Sep 1.04 0.89
Oct 1.06 0.89
Nov 1.08 0.94
Dec 1.10 0.97
Source: Ibbotson Associates, Inc. See discussion and information preceding and
following chart on next page.
The following chart illustrates average annual rates of return over selected
time periods between December 31, 1926 and December 31, 1995 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 Separate
Account. 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 Hudson River Trust and Separate Account
charges), see "Investment Performance" in Part 2 of the prospectus.
8
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
MARKET TRENDS:
ILLUSTRATIVE ANNUAL RATES OF RETURN
LONG-TERM LONG-TERM INTERMEDIATE- CONSUMER
FOR THE FOLLOWING PERIODS COMMON GOVT. CORPORATE TERM U.S. TREASURY PRICE
ENDING 12/31/95: STOCKS BONDS BONDS GOVT. BONDS BILLS INDEX
- ---------------------------- ------ --------- --------- ------------- ------------- --------
<S> <C> <C> <C> <C> <C> <C>
1 Year ..................... 37.43% 31.67% 26.39% 16.80% 5.60% 2.74%
3 Years .................... 15.26 12.82 10.47 7.22 4.13 2.72
5 Years .................... 16.57 13.10 12.07 8.81 4.29 2.83
10 Years ................... 14.84 11.92 11.25 9.08 5.55 3.48
20 Years ................... 14.59 10.45 10.54 9.69 7.28 5.23
30 Years ................... 10.68 7.92 8.17 8.36 6.72 5.39
40 Years ................... 10.78 6.38 6.75 7.02 5.73 4.46
50 Years ................... 11.94 5.35 5.75 5.87 4.80 4.36
60 Years ................... 11.34 5.20 5.46 5.34 4.01 4.10
Since 1926 ... ............. 10.54 5.17 5.69 5.25 3.72 3.12
Inflation Adjusted
since 1926 ............ 7.20 1.99 2.49 2.07 0.58 0.00
<FN>
SOURCE: Stocks, Bonds, Bills and Inflation 1996 Yearbook(TM), Ibbotson Associates, Inc., Chicago (annually updates
work by Roger G. Ibbotson and Rex A. Sinquefield). All rights reserved.
</FN>
</TABLE>
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.
LONG-TERM CORPORATE BONDS--For the period 1969-1995, 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 1969-1995;
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.
- -------------------------------------------------------------------------------
PART 12 - FINANCIAL STATEMENTS
The financial statements of Equitable Life included herein should be considered
only as bearing upon the ability of Equitable Life to meet its obligations under
the Contract.
9
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
The Equitable Life Assurance Society of the United States
and Contractowners of Separate Account A
of The Equitable Life Assurance Society of the United States
In our opinion, the accompanying statements of assets and liabilities and the
related statements of operations and of changes in net assets present fairly, in
all material respects, the financial position of Common Stock Fund, Intermediate
Government Securities Fund, Money Market Fund, Balanced Fund, Aggressive Stock
Fund, Growth Investors Fund, Conservative Investors Fund, High Yield Fund,
Global Fund, Growth & Income Fund, Quality Bond Fund, Equity Index Fund and
International Fund, separate investment funds of The Equitable Life Assurance
Society of the United States ("Equitable Life") Separate Account A at December
31, 1995, the results of each of their operations and changes in each of their
net assets for the periods indicated in conformity with generally accepted
accounting principles. These financial statements are the responsibility of
Equitable Life's management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of shares in The Hudson River Trust at December 31, 1995 with the
transfer agent, provide a reasonable basis for the opinion expressed above. The
unit value information presented in Note 6 for each of the years prior to
December 31, 1993 were audited by other independent accountants whose report
dated February 10, 1993 expressed an unqualified opinion on the financial
statements containing such information.
PRICE WATERHOUSE LLP
New York, NY
February 7, 1996
FSA-1
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<CAPTION>
INTERMEDIATE
COMMON GOVERNMENT MONEY
STOCK SECURITIES MARKET BALANCED
FUND FUND FUND FUND
---------------- ------------ ------------ ---------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in shares of The Hudson River Trust,
at value (Note 2):
Cost: $2,730,574,741.......................... $3,178,176,762
22,292,402.......................... $22,705,464
79,144,981.......................... $78,776,275
1,000,920,237.......................... $1,042,706,057
1,907,367,665..........................
275,629,206..........................
66,943,785..........................
32,825,077..........................
292,617,275..........................
63,444,279..........................
16,440,543..........................
84,114,345..........................
14,965,497..........................
Receivable for The Hudson River Trust shares......... -- -- -- 45,138
Due from Equitable Life's General Account (Note 3)... 9,626,077 213,032 1,375,168 47,201
--------------- ----------- ----------- --------------
Total assets................................. 3,187,802,839 22,918,496 80,151,443 1,042,798,396
--------------- ----------- ----------- --------------
LIABILITIES:
Payable for The Hudson River Trust shares............ 9,392,501 212,486 1,370,908 --
Due to Equitable Life's General Account (Note 3)..... -- -- -- --
Net accumulated amount of (i) mortality risk,
death benefit, expense and expense risk charges
and (ii) mortality and other gains and losses
retained by Equitable Life (Note 3)................ 424,968 382,215 523,239 684,668
-------------- ----------- ----------- --------------
Total liabilities............................ 9,817,469 594,701 1,894,147 684,668
-------------- ------------ ----------- --------------
NET ASSETS (NOTE 5).................................. $3,177,985,370 $22,323,795 $78,257,296 $1,042,113,728
============== =========== =========== ==============
EQUI-VEST Contracts:
Units Value........................................ $ 162.42 $ 27.22 $ 30.92
============== =========== ==============
Units Outstanding.................................. 16,291,858 1,020,875 30,212,070
============== =========== ==============
Old Contracts:
Units Value........................................ $ 199.66 32.00
============== ===========
Units Outstanding.................................. 387,086 139,918
============== ===========
EQUIPLAN Contracts:
Units Value........................................ $ 216.27 $ 49.69
============== ===========
Units Outstanding.................................. 107,971 49,572
============== ===========
Momentum Contracts:
Units Value........................................ $ 162.42 $ 109.80 $ 27.22 $ 30.92
============== =========== =========== ==============
Units Outstanding.................................. 403,012 7,179 188,358 956,545
============== =========== =========== ==============
Momentum Plus Contracts:
Units Value........................................ $ 132.47 $ 105.94 $ 107.55 $ 108.95
============== =========== =========== ==============
Units Outstanding.................................. 706,304 87,681 299,468 335,596
============== =========== =========== ==============
EQUI-VEST PRP Contracts:
UnitsValue......................................... $ 126.78 $ 109.80 $ 107.04 $ 108.26
============== =========== =========== ==============
Units Outstanding.................................. 1,988,845 89,105 80,905 385,513
============== =========== =========== ==============
</TABLE>
See Notes to Financial Statements.
FSA-2
<PAGE>
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH CONSERVATIVE HIGH GROWTH & QUALITY EQUITY
STOCK INVESTORS INVESTORS YIELD GLOBAL INCOME BOND INDEX INTERNATIONAL
FUND FUND FUND FUND FUND FUND FUND FUND FUND
- ---------- ------------ ------------ ------------- ------------- ------------ ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$2,098,196,591
$307,104,188
$71,597,071
$33,348,092
$315,707,990
$70,969,558
$17,177,878
$88,408,584
$15,113,555
-- -- -- -- -- -- -- -- 208,092
6,231,567 3,694,931 406,113 314,989 2,151,580 862,816 250,726 1,610,118 --
- -------------- ------------ ----------- ----------- ------------ ----------- ----------- ----------- -----------
2,104,428,158 310,799,119 72,003,184 33,663,081 317,859,570 71,832,374 17,428,604 90,018,702 15,321,647
- -------------- ------------ ----------- ----------- ------------ ----------- ----------- ----------- -----------
6,155,114 3,694,935 406,116 314,990 2,151,576 862,800 250,727 1,610,128 --
-- -- -- -- -- -- -- -- 208,095
863,687 782,992 570,857 296,772 700,508 549,295 132,004 306,464 12,455
- -------------- ------------ ----------- ----------- ------------ ----------- ----------- ----------- -----------
7,018,801 4,477,927 976,973 611,762 2,852,084 1,412,095 382,731 1,916,592 220,550
- -------------- ------------ ----------- ----------- ------------ ----------- ----------- ----------- -----------
$2,097,409,357 $306,321,192 $71,026,211 $33,051,319 $315,007,486 $70,420,279 $17,045,873 $88,102,110 $15,101,097
============== ============ =========== =========== ============ =========== =========== =========== ===========
$ 68.73
==============
25,820,941
==============
$ 68.73 $ 120.08 $ 112.97 $ 113.44 $ 122.06 $ 121.02 $ 108.38 $ 135.94 $ 104.15
============== ============ =========== ============ =========== =========== =========== ============ ===========
969,400 57,291 10,581 7,224 62,309 16,744 4,134 12,423 480
============== ============ =========== =========== =========== =========== =========== ============ ===========
$ 130.50 $ 121.49 $ 110.81 $ 121.10 $ 124.30 $ 121.25 $ 114.38 $ 135.92 $ 104.15
============== ============ =========== =========== =========== =========== =========== ============ ===========
717,955 374,652 128,580 70,070 390,608 67,353 17,168 44,121 3,456
============== ============ =========== =========== =========== =========== =========== ============ ===========
$ 123.95 $ 120.08 $ 112.97 $ 113.44 $ 122.06 $ 121.02 $ 108.38 $ 135.94 $ 104.15
============== ============ =========== =========== =========== =========== =========== ============ ===========
1,309,946 2,112,814 491,320 209,146 2,120,553 497,651 135,029 591,520 140,674
============== ============ =========== =========== =========== =========== =========== ============ ===========
</TABLE>
FSA-3
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
---------------------------------------------------------------------
INTERMEDIATE
COMMON GOVERNMENT MONEY
STOCK SECURITIES MARKET BALANCED
FUND FUND FUND FUND
------------- --------------- ------------ ----------------
<S> <C> <C> <C> <C>
INCOME AND EXPENSES:
Income (Note 2):
Dividends from The Hudson River Trust................. $ 38,701,881 $1,062,712 $3,760,240 $ 32,315,135
------------ ---------- ---------- ------------
Expenses (Note 3):
Mortality risk, death benefit, expense and
expense risk charges.................................. 33,227,785 210,894 924,254 12,186,303
Financial accounting charges............................ 5,642,309 -- 72,631 2,179,967
------------ ---------- ---------- ------------
Total expenses........................................ 38,870,094 210,894 996,885 14,366,270
Less: Reduction for expense limitation.................. 2,950,317 8,379 59,226 1,211,018
------------ ---------- ---------- ------------
Net expenses.......................................... 35,919,777 202,515 937,659 13,155,252
------------ ---------- ---------- ------------
NET INCOME (LOSS)......................................... 2,782,104 860,197 2,822,581 19,159,883
------------ ---------- ---------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 2):
Realized gain (loss) from share transactions............ 30,693,506 (262,021) 111,769 7,912,630
Realized gain distribution from The Hudson River Trust.. 176,306,227 -- -- 28,456,582
------------ ---------- ---------- ------------
Net realized gain (loss).............................. 206,999,733 (262,021) 111,769 36,369,212
Change in unrealized appreciation / depreciation
of investments........................................ 498,084,127 1,263,426 244,984 107,611,597
------------ ---------- ---------- ------------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS.......................................... 705,083,860 1,001,405 356,753 143,980,809
------------ ---------- ---------- ------------
NET INCREASE IN NET ASSETS FROM OPERATIONS
(NOTE 2)................................................ $707,865,964 $1,861,602 $3,179,334 $163,140,692
============ ========== ========== ============
<FN>
- ----------
Commencement of Operations
</FN>
</TABLE>
See Notes to Financial Statements.
FSA-4
<PAGE>
<TABLE>
<CAPTION>
SEPTEMBER 1,
1995* TO
DECEMBER 31,
YEAR ENDED DECEMBER 31, 1995 1995
- ------------------------------------------------------------------------------------------------------------ ---------------
AGGRESSIVE GROWTH CONSERVATIVE HIGH GROWTH & QUALITY EQUITY
STOCK INVESTORS INVESTORS YIELD GLOBAL INCOME BOND INDEX INTERNATIONAL
FUND FUND FUND FUND FUND FUND FUND FUND FUND
- ------------ ------------- ----------- ----------- ------------ ------------ ----------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 4,874,525 $ 7,361,114 $3,056,206 $2,579,699 $ 4,379,867 $1,382,201 $ 716,416 $ 820,315 $176,168
- ------------ ----------- ---------- ---------- ----------- ---------- ---------- ---------- --------
19,240,040 2,730,233 729,377 300,991 3,209,543 591,270 143,778 459,747 26,741
3,695,650 -- -- -- -- -- -- -- --
- ------------ ----------- ---------- ---------- ----------- ---------- ---------- ---------- --------
22,935,690 2,730,233 729,377 300,991 3,209,543 591,270 143,778 459,747 26,741
984,306 -- -- -- -- -- -- -- --
- ------------ ----------- ---------- ---------- ----------- ---------- ---------- ---------- --------
21,951,384 2,730,233 729,377 300,991 3,209,543 591,270 143,778 459,747 26,741
- ------------ ----------- ---------- ---------- ----------- ---------- ---------- ---------- --------
(17,076,859) 4,630,881 2,326,829 2,278,708 1,170,324 790,931 572,638 360,568 149,427
- ------------ ----------- ---------- ---------- ----------- ---------- ---------- ---------- --------
41,110,828 142,448 (38,006) (142,069) 1,612,501 135,257 (14,461) 3,548,584 21,647
233,380,462 4,048,003 440,266 -- 8,661,740 -- -- 650,158 63,342
- ------------ ----------- ---------- ---------- ----------- ---------- ---------- ---------- --------
274,491,290 4,190,451 402,260 (142,069) 10,274,241 135,257 (14,461) 4,198,742 84,989
201,133,502 35,365,665 6,622,303 1,530,565 29,094,331 7,973,647 952,860 4,368,831 148,058
- ------------ ----------- ---------- ---------- ----------- ---------- ---------- ---------- --------
475,624,792 39,556,116 7,024,563 1,388,496 39,368,572 8,108,904 938,399 8,567,573 233,047
- ------------ ----------- ---------- ---------- ----------- ---------- ---------- ---------- --------
$458,547,933 $44,186,997 $9,351,392 $3,667,204 $40,538,896 $8,899,835 $1,511,037 $8,928,141 $382,474
============ =========== ========== ========== =========== ========== ========== ========== ========
</TABLE>
FSA-5
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INTERMEDIATE
GOVERNMENT SECURITIES
COMMON STOCK FUND FUND
----------------------------------- ----------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
----------------------------------- ----------------------------------
1995 1994 1995 1994
-------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net income (loss).................................... $ 2,782,104 $ 3,678,514 $ 860,197 $ 614,654
Realized gain (loss) on investments.................. 206,999,733 128,544,779 (262,021) (176,964)
Change in unrealized appreciation / depreciation
of investments..................................... 498,084,127 (209,040,398) 1,263,426 (776,770)
-------------- -------------- ----------- -----------
Net increase (decrease) in net assets from operations 707,865,964 (76,817,105) 1,861,602 (339,080)
-------------- -------------- ----------- -----------
FROM CONTRACT OWNER TRANSACTIONS (NOTE 4):
Contributions and Transfers:
Contributions........................................ 323,872,865 330,675,155 7,369,681 5,109,894
Transfers from other Funds and
Guaranteed Interest Account........................ 563,350,890 522,732,281 6,382,251 7,212,276
-------------- -------------- ----------- -----------
Total............................................ 887,223,755 853,407,436 13,751,932 12,322,170
-------------- -------------- ----------- -----------
Payments, Transfers and Charges:
Annuity payments, withdrawals and
death benefits..................................... 159,386,173 104,381,857 1,010,469 1,493,169
Transfers to other Funds and
Guaranteed Interest Account........................ 467,919,413 367,123,429 3,875,451 1,630,955
Withdrawal and administrative charges................ 4,834,457 3,774,939 13,622 4,440
-------------- -------------- ----------- -----------
Total............................................ 632,140,043 475,280,225 4,899,542 3,128,564
-------------- -------------- ----------- -----------
Net increase (decrease) in net assets from
Contract Owner transactions........................ 255,083,712 378,127,211 8,852,390 9,193,606
-------------- -------------- ----------- -----------
Net (increase) decrease in accumulated amount
retained by Equitable Life in Separate Account A
(Note 3)........................................... (202,590) 787,237 (29,532) 2,789
-------------- -------------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS...................... 962,747,086 302,097,343 10,684,460 8,857,315
NET ASSETS--BEGINNING OF PERIOD........................ 2,215,238,284 1,913,140,941 11,639,335 2,782,020
-------------- -------------- ----------- -----------
NET ASSETS--END OF PERIOD (NOTE 1)..................... $3,177,985,370 $2,215,238,284 $22,323,795 $11,639,335
============== ============== =========== ===========
</TABLE>
See Notes to Financial Statements.
FSA-6
<PAGE>
<TABLE>
<CAPTION>
GROWTH
INVESTORS
MONEY MARKET FUND BALANCED FUND AGGRESSIVE STOCK FUND FUND
- ------------------------------ ------------------------------ -------------------------------- -----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
- ------------------------------ ------------------------------ -------------------------------- -----------------------------
1995 1994 1995 1994 1995 1994 1995 1994
- ------------- --------------- -------------- --------------- --------------- --------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 2,822,581 $ 1,714,266 $ 19,159,883 $ 15,921,598 $ (17,076,859) $ (14,797,576) $ 4,630,881 $ 1,645,820
111,769 (120,977) 36,369,212 1,905,805 274,491,290 15,356,337 4,190,451 (124,742)
244,984 (207,660) 107,611,597 (108,178,870) 201,133,502 (55,814,543) 35,365,665 (3,833,947)
- ------------ ------------ -------------- ------------ -------------- -------------- ------------ ------------
3,179,334 1,385,629 163,140,692 (90,351,467) 458,547,933 (55,255,782) 44,186,997 (2,312,869)
- ------------ ------------ -------------- ------------ -------------- -------------- ------------ ------------
96,460,995 130,877,596 100,845,169 155,491,871 255,277,523 263,528,472 88,478,478 84,714,487
11,693,688 7,538,773 72,926,145 121,755,406 937,308,527 778,065,845 96,710,983 44,017,404
- ------------ ------------ -------------- ------------ -------------- -------------- ------------ ------------
108,154,683 138,416,369 173,771,314 277,247,277 1,192,586,050 1,041,594,317 185,189,461 128,731,891
- ------------ ------------ -------------- ------------ -------------- -------------- ------------ ------------
9,756,910 7,109,016 70,581,767 53,580,642 101,140,511 67,484,290 8,656,331 2,106,986
112,024,444 83,270,336 140,405,721 125,123,498 890,032,461 686,083,129 31,783,310 7,685,641
141,480 159,791 2,326,794 2,093,655 4,012,965 3,084,680 329,796 40,176
- ------------ ------------ -------------- ------------ -------------- -------------- ------------ ------------
121,922,834 90,539,143 213,314,282 180,797,795 995,185,937 756,652,099 40,769,437 9,832,803
- ------------ ------------ -------------- ------------ -------------- -------------- ------------ ------------
(13,768,151) 47,877,226 (39,542,968) 96,449,482 197,400,113 284,942,218 144,420,024 118,899,088
- ------------ ------------ -------------- ------------ -------------- -------------- ------------ -------------
(60,821) (18,576) (639,644) 112,409 (703,992) (150,482) (69,190) (105,609)
- ------------ ------------ -------------- ------------ -------------- -------------- ------------ ------------
(10,649,638) 49,244,279 122,958,080 6,210,424 655,244,054 229,535,954 188,537,831 116,480,610
88,906,934 39,662,655 919,155,648 912,945,224 1,442,165,303 1,212,629,349 117,783,361 1,302,751
- ------------ ------------ -------------- ------------ -------------- -------------- ------------ ------------
$ 78,257,296 $ 88,906,934 $1,042,113,728 $919,155,648 $2,097,409,357 $1,442,165,303 $306,321,192 $117,783,361
============ ============ ============== ============ ============== ============== ============ ============
</TABLE>
FSA-7
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS (CONCLUDED)
<TABLE>
<CAPTION>
CONSERVATIVE
INVESTORS HIGH YIELD GLOBAL
FUND FUND FUND
------------------------- -------------------------- --------------------------
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
----------- ------------- ----------- ------------ -------------- -----------
1995 1994 1995 1994 1995 1994
---------- ------------- ----------- ------------ -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net income (loss) ...................... $ 2,326,829 $ 1,190,864 $ 2,278,708 $ 715,639 $ 1,170,324 $ 360,446
Realized gain (loss) on investments .... 402,260 (127,857) (142,069) (17,855) 10,274,241 3,321,287
Change in unrealized appreciation /
depreciation of investments ......... 6,622,303 (1,918,004) 1,530,565 (1,004,798) 29,094,331 (5,946,084)
----------- ----------- ----------- ----------- ------------ ------------
Net increase (decrease) in net assets
from operations ...................... 9,351,392 (854,997) 3,667,204 (307,014) 40,538,896 (2,264,351)
----------- ----------- ----------- ----------- ------------ ------------
FROM CONTRACT OWNER TRANSACTIONS
(NOTE 4):
Contributions and Transfers:
Contributions ........................ 17,614,456 35,648,124 10,927,641 10,298,407 81,368,082 88,843,233
Transfers from other Funds and
Guaranteed Interest Account ........ 12,235,331 10,060,907 10,118,081 4,822,949 137,660,677 106,878,648
----------- ----------- ----------- ----------- ------------ ------------
Total .............................. 29,849,787 45,709,031 21,045,722 15,121,356 219,028,759 195,721,881
----------- ----------- ----------- ----------- ------------ ------------
Payments, Transfers and Charges:
Annuity payments, withdrawals and
death benefits ........................ 2,534,266 1,237,649 1,942,685 250,952 11,743,890 2,236,973
Transfers to other Funds and
Guaranteed Interest Account .......... 5,239,849 4,836,017 3,213,615 1,175,948 93,494,152 30,832,215
Withdrawal and administrative charges .. 74,396 16,644 28,309 3,143 394,438 37,634
----------- ----------- ----------- ----------- ------------ ------------
Total .............................. 7,848,511 6,090,310 5,184,609 1,430,043 105,632,480 33,106,822
----------- ----------- ----------- ----------- ------------ ------------
Net increase in net assets from Contract
Owner transactions ................... 22,001,276 39,618,721 15,861,113 13,691,313 113,396,279 162,615,059
----------- ----------- ----------- ----------- ------------ ------------
Net (increase) decrease in accumulated
amount retained by Equitable Life in
Separate Account A (Note 3) ........ (75,714) (47,431) (11,837) (9,034) (136,682) 37,687
----------- ----------- ----------- ----------- ------------ -----------
INCREASE IN NET ASSETS ................... 31,276,954 38,716,293 19,516,480 13,375,265 153,798,493 160,388,395
NET ASSETS BEGINNING OF PERIOD .......... 39,749,257 1,032,964 13,534,839 159,574 161,208,993 820,598
----------- ----------- ----------- ----------- ------------ ------------
NET ASSETS END OF YEAR (NOTE 2) ......... $71,026,211 $39,749,257 $33,051,319 $13,534,839 $315,007,486 $161,208,993
=========== =========== =========== =========== ============ ============
<FN>
- ----------
*Commencement of operations.
</FN>
</TABLE>
See Notes to Financial Statements.
FSA-8
<PAGE>
<TABLE>
<CAPTION>
GROWTH & INCOME QUALITY BOND EQUITY INDEX INTERNATIONAL
FUND FUND FUND FUND
- -------------------------------- --------------------------------- ---------------------------- ----------------
JANUARY 3, JANUARY 3, JANUARY 3, SEPTEMBER 1,
YEAR ENDED 1994* TO YEAR ENDED 1994* TO YEAR ENDED 1994* TO 1995* TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
- ------------ ------------- ------------ -------------- ------------- ------------ ----------------
1995 1994 1995 1994 1995 1994 1995
- ------------ ------------- ------------ -------------- ------------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
$ 790,931 $ 171,084 $ 572,638 $ 162,195 $ 360,568 $ 29,737 $ 149,427
135,257 (20,837) (14,461) (39,448) 4,198,742 27,166 84,989
7,973,647 (448,368) 952,860 (215,525) 4,368,831 (74,592) 148,058
- ----------- ----------- ----------- ---------- ----------- ---------- -----------
8,899,835 (298,121) 1,511,037 (92,778) 8,928,141 (17,689) 382,474
- ----------- ----------- ----------- ---------- ----------- ---------- -----------
22,698,765 14,505,511 5,630,019 4,156,517 28,329,533 2,277,779 2,925,742
28,860,658 10,945,268 7,603,814 2,032,907 153,170,493 6,726,113 17,699,810
- ----------- ----------- ----------- ---------- ----------- ---------- -----------
51,559,423 25,450,779 13,233,833 6,189,424 181,500,026 9,003,892 20,625,552
- ----------- ----------- ----------- ---------- ----------- ---------- -----------
1,952,266 216,363 705,351 58,955 1,077,397 25,120 41,651
10,151,108 2,775,715 2,324,024 693,842 106,387,645 3,864,503 5,873,268
60,042 6,365 8,789 479 23,173 575 907
- ----------- ----------- ----------- ---------- ----------- ---------- -----------
12,163,416 2,998,443 3,038,164 753,276 107,488,215 3,890,198 5,915,826
- ----------- ----------- ----------- ---------- ----------- ---------- -----------
39,396,007 22,452,336 10,195,669 5,436,148 74,011,811 5,113,694 14,709,726
- ----------- ----------- ----------- ---------- ----------- ---------- -----------
(20,535) (9,243) (325) (3,878) 59,424 6,729 8,897
- ----------- ----------- ----------- ---------- ----------- ---------- -----------
48,275,307 22,144,972 11,706,381 5,339,492 82,999,376 5,102,734 15,101,097
22,144,972 -- 5,339,492 -- 5,102,734 -- --
- ----------- ----------- ----------- ---------- ----------- ---------- -----------
$70,420,279 $22,144,972 $17,045,873 $5,339,492 $88,102,110 $5,102,734 $15,101,097
=========== =========== =========== ========== =========== ========== ===========
</TABLE>
FSA-9
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
1. General
Separate Account A (the Account) of The Equitable Life Assurance Society of
the United States (Equitable Life) is used to fund benefits under certain
individual tax-favored variable annuity contracts (Old Contracts),
individual non-qualified variable annuity contracts (EQUIPLAN Contracts),
tax-favored and non-qualified certificates issued under group deferred
variable annuity contracts and certain related individual contracts
(EQUI-VEST Contracts), group deferred variable annuity contracts used to
fund tax-qualified defined contribution plans (Momentum Contracts) and group
variable annuity contracts used as a funding vehicle for employers who
sponsor qualified defined contribution plans (Momentum Plus) and group
deferred variable annuity contracts used as individual retirement annuities
(including those established from qualified plan distributions) or for
after-tax contributions to a non-qualified annuity (EQUI-VEST Personal
Retirement Programs). All of these contracts and certificates are
collectively referred to as the Contracts.
The net assets of the Account are not chargeable with liabilities arising
out of any other business Equitable Life may conduct. The excess of assets
over reserves and other contract liabilities, if any, in the Account may be
transferred to Equitable Life's General Account.
Separate Account A is organized as a unit investment trust, a type of
investment company, and is registered with the Securities and Exchange
Commission under the Investment Company Act of 1940. The Account consists of
thirteen investment funds (Funds): Common Stock, Intermediate Government
Securities, Money Market, Balanced, Aggressive Stock, Growth Investors,
Conservative Investors, High Yield, Global, Growth & Income, Quality Bond,
Equity Index and International Fund. The assets in each Fund are invested in
shares of a corresponding portfolio (Portfolio) of a mutual fund, The Hudson
River Trust (Trust). The Trust is an open-end, diversified, management
investment company that invests the assets of separate accounts of insurance
companies. Each Portfolio has separate investment objectives.
2. Significant Accounting Policies
The accompanying financial statements are prepared in conformity with
generally accepted accounting principles (GAAP). The preparation of
financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
Share Valuation--Investment in shares of the Trust are valued at the net
asset value per share of the respective Portfolio.
Share Transactions--Share transactions are recorded on the trade date at the
net asset value per share of the underlying Portfolios. Realized gains and
losses on investments include gains and losses on redemptions of the Trust's
shares (determined on the identified cost basis) and capital gain
distributions from the Trust. Dividends and realized gain distributions from
The Hudson River Trust are recorded on ex-date.
Federal Income Taxes--No Federal income tax based on net income or realized
and unrealized capital gains is currently applicable to Contracts
participating in the Account by reason of applicable provisions of the
Internal Revenue Code and no Federal income tax payable by Equitable Life is
expected to affect the accumulation unit values of Contracts participating
in the Account. Accordingly, no provision for income taxes is required.
FSA-10
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995
3. Asset Charges
Charges are made directly against the assets of the Account and are
reflected daily in the computation of the accumulation unit values of the
Contracts. The table below shows the currently effective annual rates of
charges:
<TABLE>
<CAPTION>
EQUI-VEST
EQUI-VEST/MOMENTUM MOMENTUM PLUS OLD EQUIPLAN PRP
CONTRACTS CONTRACTS CONTRACTS CONTRACTS CONTRACTS
--------------------------------- --------------- ------------- ----------------- --------------
Common Stock and
Intermediate
Common Stock, Money All Common Stock and Government
Market and Balanced Other Money Market Securities
Funds Funds All Funds Funds Funds All Funds
------------------- ---------- ----------- ---------------- ----------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Death Benefits........ 0.05 of 1% 0.05 of 1% -- 0.05 of 1% 0.05 of 1% --
Mortality Risks....... 0.30 of 1% 0.30 of 1% 0.50 of 1% 0.45 of 1% 0.45 of 1% 0.60 of 1%
Expenses.............. 0.60 of 1% 0.60 of 1% 0.25 of 1% 0.16 of 1% 0.16 of 1% 0.24/0.25 of 1%
Expense Risks......... 0.30 of 1% 0.15 of 1% 0.60 of 1% 0.08 of 1% 0.08 of 1% 0.50 of 1%
Financial Accounting.. 0.24 of 1% 0.24 of 1% -- -- -- --
</TABLE>
During 1995, Equitable Life charged EQUI-VEST PRP Contracts 0.24 of 1%
against the assets of the Intermediate Government Securities, Growth
Investors, Conservative Investors, High Yield, Global, Growth & Income,
Quality Bond, Equity Index and International Funds for expenses. This
voluntary expense limitation (discounted from 0.25 of 1% to 0.24 of 1%) may
be discontinued by Equitable Life at its discretion.
The above charges may be retained in the Account by Equitable Life and, to
the extent retained, participate in the net investment results of the Trust
ratably with assets attributable to the Contracts.
Since the Trust shares are valued at their net asset value, investment
advisory fees and direct operating expenses of the Trust are, in effect,
passed on to the Account and are reflected in the computation of the
accumulation unit values of the Contracts.
Under the terms of the Contracts, the aggregate of these asset charges and
the charges of the Trust for advisory fees and for direct operating expenses
may not exceed a total effective annual rate of 1.75% for EQUI-VEST and
Momentum Contracts for the Money Market, Balanced, Common Stock and
Aggressive Stock Funds and 1% for the Old Contracts and EQUIPLAN Contracts.
Under the Contracts, the total charges may be reallocated among the various
expense categories. Equitable Life, however, intends to limit any possible
reallocation to include only the expense risks, mortality risks and death
benefit charges.
4. Contributions, Payments, Transfers and Charges
Contributions represent participant contributions under EQUI-VEST, Momentum,
Momentum Plus and EQUI-VEST PRP Contracts (except amounts allocated to the
Guaranteed Interest Account, which are reflected in the General Account) and
participant contributions under other Contracts reduced by applicable
deductions, charges and state premium taxes. Contributions also include
amounts applied to purchase variable annuities. Transfers are amounts that
participants have directed to be moved among the Funds, including permitted
transfers to and from the Guaranteed Interest Account, which is part of
Equitable Life's General Account.
Variable annuity payments and death benefits are payments to participants
and beneficiaries made under the terms of the Contracts. Withdrawals are
amounts that participants have requested to be withdrawn and paid to them or
applied to purchase annuities. Withdrawal charges, if applicable, are the
deferred contingent withdrawal charges that apply to certain withdrawals
under EQUI-VEST, Momentum, Momentum Plus and EQUI-VEST PRP Contracts.
Administrative charges, if applicable, are deducted annually under
EQUI-VEST, EQUIPLAN and Old Contracts and quarterly under Momentum, Momentum
Plus and EQUI-VEST PRP Contracts.
FSA-11
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995
Accumulation units are purchased when amounts (except variable annuity
purchase amounts) are allocated to the Account and are redeemed when
payments, transfers or charges (except variable annuity payments) are made
or deducted from the Account.
Accumulation units issued and redeemed during the periods indicated were:
<TABLE>
<CAPTION>
Year Ended
December 31,
-----------------------------------------
1995 1994
-------------- --------------
<S> <C> <C>
COMMON STOCK FUND
- -----------------
Issued -- EQUI-VEST Contracts........................................ 4,339,470 5,361,543
Momentum Contracts......................................... 208,765 192,156
Momentum Plus Contracts.................................... 470,567 358,043
Old Contracts.............................................. 837 2,804
EQUIPLAN Contracts......................................... 268 300
EQUI-VEST PRP Contracts.................................... 1,432,603 1,024,286
Redeemed -- EQUI-VEST Contracts........................................ 3,797,103 3,529,063
Momentum Contracts......................................... 75,510 42,853
Momentum Plus Contracts.................................... 94,575 39,733
Old Contracts.............................................. 51,405 32,387
EQUIPLAN Contracts......................................... 11,184 5,676
EQUI-VEST PRP Contracts.................................... 391,658 76,386
INTERMEDIATE GOVERNMENT SECURITIES FUND
- ---------------------------------------
Issued -- Momentum Contracts......................................... 7,133 644
Momentum Plus Contracts.................................... 34,658 82,876
EQUIPLAN Contracts......................................... 68 93
EQUI-VEST PRP Contracts.................................... 90,918 42,557
Redeemed -- Momentum Contracts......................................... 598 --
Momentum Plus Contracts.................................... 11,347 19,508
EQUIPLAN Contracts......................................... 4,000 4,562
EQUI-VEST PRP Contracts.................................... 33,589 10,781
MONEY MARKET FUND
- -----------------
Issued -- EQUI-VEST Contracts........................................ 366,971 314,962
Momentum Contracts......................................... 447,257 182,577
Momentum Plus Contracts.................................... 676,808 1,102,121
Old Contracts.............................................. 2,235 7,743
EQUI-VEST PRP Contracts.................................... 144,021 128,664
Redeemed -- EQUI-VEST Contracts........................................ 345,636 380,840
Momentum Contracts......................................... 374,993 122,214
Momentum Plus Contracts.................................... 851,769 689,692
Old Contracts.............................................. 9,440 28,522
EQUI-VEST PRP Contracts.................................... 125,670 66,109
</TABLE>
FSA-12
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Year Ended
December 31,
------------------------------------------
1995 1994
-------------- ---------------
<S> <C> <C>
BALANCED FUND
- -------------
Issued -- EQUI-VEST Contracts........................................ 4,387,731 7,746,224
Momentum Contracts......................................... 395,854 559,478
Momentum Plus Contracts.................................... 204,147 208,551
EQUI-VEST PRP Contracts.................................... 183,034 322,182
Redeemed -- EQUI-VEST Contracts........................................ 6,839,622 6,341,428
Momentum Contracts......................................... 215,312 131,610
Momentum Plus Contracts.................................... 56,192 30,349
EQUI-VEST PRP Contracts.................................... 86,454 33,249
AGGRESSIVE STOCK FUND
- ---------------------
Issued -- EQUI-VEST Contracts........................................ 15,601,564 17,411,319
Momentum Contracts......................................... 583,570 458,121
Momentum Plus Contracts.................................... 465,017 373,205
EQUI-VEST PRP Contracts.................................... 1,591,822 763,109
Redeemed -- EQUI-VEST Contracts........................................ 14,567,533 14,120,182
Momentum Contracts......................................... 234,646 95,930
Momentum Plus Contracts.................................... 97,553 34,958
EQUI-VEST PRP Contracts.................................... 945,741 99,244
GROWTH INVESTORS FUND
- ---------------------
Issued -- Momentum Contracts......................................... 50,523 10,517
Momentum Plus Contracts.................................... 243,492 204,431
EQUI-VEST PRP Contracts.................................... 1,401,142 1,093,456
Redeemed -- Momentum Contracts......................................... 3,545 204
Momentum Plus Contracts.................................... 56,483 29,562
EQUI-VEST PRP Contracts.................................... 311,129 70,655
CONSERVATIVE INVESTORS FUND
- ---------------------------
Issued -- Momentum Contracts......................................... 8,347 2,696
Momentum Plus Contracts.................................... 54,650 104,525
EQUI-VEST PRP Contracts.................................... 223,974 366,054
Redeemed -- Momentum Contracts......................................... 450 12
Momentum Plus Contracts.................................... 18,295 22,776
EQUI-VEST PRP Contracts.................................... 57,483 41,224
HIGH YIELD FUND
- ---------------
Issued -- Momentum Contracts......................................... 6,324 1,446
Momentum Plus Contracts.................................... 44,314 41,025
EQUI-VEST PRP Contracts.................................... 145,638 109,000
Redeemed -- Momentum Contracts......................................... 395 151
Momentum Plus Contracts.................................... 12,085 4,679
EQUI-VEST PRP Contracts.................................... 35,957 9,535
</TABLE>
FSA-13
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Year Ended
December 31,
-------------------------------------------
1995 1994
--------------- ---------------
<S> <C> <C>
GLOBAL FUND
- -----------------
Issued -- Momentum Contracts......................................... 53,496 16,301
Momentum Plus Contracts.................................... 251,525 242,014
EQUI-VEST PRP Contracts.................................... 1,670,603 1,589,784
Redeemed -- Momentum Contracts......................................... 7,044 444
Momentum Plus Contracts.................................... 84,289 26,677
EQUI-VEST PRP Contracts.................................... 854,945 284,890
GROWTH & INCOME FUND
- --------------------
Issued -- Momentum Contracts......................................... 14,155 4,182
Momentum Plus Contracts.................................... 66,279 9,654
EQUI-VEST PRP Contracts.................................... 387,123 240,113
Redeemed -- Momentum Contracts......................................... 1,570 22
Momentum Plus Contracts.................................... 8,379 201
EQUI-VEST PRP Contracts.................................... 99,840 29,745
QUALITY BOND FUND
- -----------------
Issued -- Momentum Contracts......................................... 3,450 1,207
Momentum Plus Contracts.................................... 16,825 2,915
EQUI-VEST PRP Contracts.................................... 108,824 60,527
Redeemed -- Momentum Contracts......................................... 523 --
Momentum Plus Contracts.................................... 2,479 93
EQUI-VEST PRP Contracts.................................... 26,494 7,829
EQUITY INDEX FUND
- -----------------
Issued -- Momentum Contracts......................................... 13,555 664
Momentum Plus Contracts.................................... 46,112 3,032
EQUI-VEST PRP Contracts.................................... 1,413,313 85,072
Redeemed -- Momentum Contracts......................................... 1,679 117
Momentum Plus Contracts.................................... 5,016 7
EQUI-VEST PRP Contracts.................................... 868,769 38,096
INTERNATIONAL FUND
- ------------------
Issued -- Momentum Contracts......................................... 480 --
Momentum Plus Contracts.................................... 3,464 --
EQUI-VEST PRP Contracts.................................... 198,903 --
Redeemed -- Momentum Contracts......................................... 0 --
Momentum Plus Contracts.................................... 8 --
EQUI-VEST PRP Contracts.................................... 58,228 --
</TABLE>
FSA-14
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995
5. Net Assets
Net assets consist of: (i) net assets attributable to Contracts in the
accumulation period, which are represented by Contract accumulation units
outstanding and associated accumulation unit values and (ii) actuarial
reserves and other liabilities attributable to Contracts in the payout
period which are not represented by accumulation units or unit values.
Listed below are components of net assets.
<TABLE>
<CAPTION>
INTERMEDIATE
COMMON GOVERNMENT MONEY AGGRESSIVE GROWTH
STOCK SECURITIES MARKET BALANCED STOCK INVESTORS
FUND FUND FUND FUND FUND FUND
-------------- ------------ ------------ -------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net assets attributable
to EQUI-VEST
Contracts in
accumulation period...... $2,646,072,171 $ -- $27,784,711 $ 934,237,949 $1,774,667,393 $ --
Net assets attributable
to Momentum
Contracts in
accumulation period...... 65,455,997 788,207 5,126,458 29,578,934 66,626,661 6,879,601
Net assets attributable
to Momentum Plus
Contracts in
accumulation period...... 93,562,302 9,288,912 32,208,088 36,561,596 93,695,206 45,515,989
Net assets attributable
to Old Contracts in
accumulation period...... 77,284,324 -- 4,478,039 -- -- --
Net assets attributable
to EQUIPLAN
Contracts in
accumulation period...... 23,350,893 2,463,414 -- -- -- --
Net assets attributable
to EQUI-VEST PRP
Contracts in
accumulation period...... 252,150,274 9,783,262 8,660,000 41,735,249 162,372,587 253,709,591
------------- ----------- ----------- -------------- -------------- ------------
Actuarial reserves and
other contract
liabilities
attributable to
Contracts in payout...... 20,109,409 -- -- -- 47,510 216,011
-------------- ----------- ----------- -------------- -------------- ------------
$3,177,985,370 $22,323,795 $78,257,296 $1,042,113,728 $2,097,409,357 $306,321,192
============== =========== =========== ============== ============== ============
</TABLE>
<TABLE>
<CAPTION>
CONSERVATIVE HIGH GROWTH & QUALITY EQUITY
INVESTORS YIELD GLOBAL INCOME BOND INDEX INTERNATIONAL
FUND FUND FUND FUND FUND FUND FUND
------------ ------------- ------------- ------------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net assets attributable
to Momentum
Contracts in
accumulation period..... $ 1,195,370 $ 819,489 $ 7,605,705 $ 2,026,401 $ 448,047 $ 1,688,718 $ 50,032
Net assets attributable
to Momentum Plus
Contracts in
accumulation period..... 14,247,486 8,485,834 48,550,927 8,166,372 1,963,593 5,996,639 359,926
Net assets attributable
to EQUI-VEST PRP
Contracts in
accumulation period..... 55,505,387 23,726,544 258,843,710 60,227,506 14,634,233 80,409,441 14,651,853
----------- ----------- ------------ ----------- ----------- ----------- -----------
Actuarial reserves and
other contract
liabilities
attributable to
Contracts in payout..... 77,968 19,452 7,144 -- -- 7,312 39,286
----------- ----------- ------------ ----------- ----------- ----------- -----------
$71,026,211 $33,051,319 $315,007,486 $70,420,279 $17,045,873 $88,102,110 $15,101,097
=========== =========== ============ =========== =========== =========== ===========
</TABLE>
FSA-15
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995
6. Accumulation Unit Values
Shown below is accumulation unit value information for a unit outstanding
throughout the periods shown.
<TABLE>
<CAPTION>
COMMON STOCK FUND--OLD CONTRACTS
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
------- ------- ------- ------- ------- ------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period. $151.67 $155.96 $125.72 $122.56 $ 89.56 $97.97 $78.37 $63.99 $59.83 $51.41
======= ======= ======= ======= ======= ====== ====== ====== ====== ======
Unit value, end of period....... $199.66 $151.67 $155.96 $125.72 $122.56 $89.56 $97.97 $78.37 $63.99 $59.83
======= ======= ======= ======= ======= ====== ====== ====== ====== ======
Number of units outstanding,
end of period (000's)........... 387 438 467 525 598 694 780 895 1,079 1,282
======= ======= ======= ======= ======= ====== ====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
COMMON STOCK FUND--EQUI-VEST/MOMENTUM** CONTRACTS
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
------- ------- ------- ------- ------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period. $124.32 $128.81 $104.63 $102.76 $ 75.67 $83.40 $67.22 $55.30 $52.10 $45.11
======= ======= ======= ======= ======= ====== ====== ====== ====== ======
Unit value, end of period....... $162.42 $124.32 $128.81 $104.63 $102.76 $75.67 $83.40 $67.22 $55.30 $52.10
======= ======= ======= ======= ======= ====== ====== ====== ====== ======
Number of EQUI-VEST
units outstanding, end of
period (000's)............... 16,292 15,749 13,917 11,841 10,292 9,670 8,645 7,252 7,349 6,059
======= ======= ======= ======= ======= ====== ====== ====== ====== ======
Number of Momentum units
outstanding, end of
period (000's)............... 403 270 120
======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
COMMON STOCK FUND--EQUIPLAN CONTRACTS
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
------- ------- ------- ------- ------- ------- ------- ------ ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period. $164.29 $168.93 $136.10 $132.67 $ 96.95 $106.05 $ 84.83 $69.26 $65.62 $54.35
======= ======= ======= ======= ======= ======= ======= ====== ====== ======
Unit value, end of period....... $216.27 $164.29 $168.93 $136.10 $132.67 $ 96.95 $106.05 $84.83 $69.26 $65.62
======= ======= ======= ======= ======= ======= ======= ====== ====== ======
Number of units outstanding,
end of period (000's)........... 108 119 124 135 144 157 177 196 235 270
======= ======= ======= ======= ======= ======= ======= ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
COMMON STOCK FUND--MOMENTUM PLUS CONTRACTS
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, SEPTEMBER 9, 1993*
1995 1994 TO DECEMBER 31, 1993
------------ ------------ --------------------
<S> <C> <C> <C>
Unit value, beginning of period.................................. $101.38 $105.01 $100.00
======= ======= =======
Unit value, end of period........................................ $132.47 $101.38 $105.01
======= ======= =======
Number of units outstanding, end of period (000's)............... 706 330 12
======= ======= =======
</TABLE>
FSA-16
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995
<TABLE>
<CAPTION>
COMMON STOCK FUND--EQUI-VEST PRP CONTRACTS
YEAR ENDED
DECEMBER 13, JANUARY 3, 1994*
1995 TO DECEMBER 31, 1994
------------ --------------------
<S> <C> <C>
Unit value, beginning of period....................................... $ 97.03 $100.00
======= =======
Unit value, end of period............................................. $126.78 $ 97.03
======= =======
Number of units outstanding, end of period (000's).................... 1,989 948
======= =======
</TABLE>
<TABLE>
<CAPTION>
INTERMEDIATE GOVERNMENT SECURITIES FUND--EQUIPLAN CONTRACTS
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period. $44.04 $46.25 $42.04 $40.00 $35.17 $33.12 $28.89 $27.31 $26.81 $22.45
====== ======= ====== ====== ====== ====== ====== ====== ====== ======
Unit value, end of period....... $49.69 $44.04 $46.25 $42.04 $40.00 $35.17 $33.12 $28.89 $27.31 $26.81
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Number of units outstanding,
end of period (000's)......... 50 54 58 66 74 82 91 98 120 113
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
INTERMEDIATE GOVERNMENT SECURITIES FUND--MOMENTUM CONTRACTS
YEAR ENDED
DECEMBER 13, JUNE 1, 1994*
1995 TO DECEMBER 31, 1994
------------ --------------------
<S> <C> <C>
$ 98.19 $100.00
Unit value, beginning of period....................................... ======= =======
Unit value, end of period............................................. $109.80 $ 98.19
======= =======
7 1
Number of units outstanding, end of period (000's).................... ======= =======
</TABLE>
<TABLE>
<CAPTION>
INTERMEDIATE GOVERNMENT SECURITIES FUND--MOMENTUM PLUS CONTRACTS
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, SEPTEMBER 9, 1993*
1995 1994 TO DECEMBER 31, 1993
------------ ------------ --------------------
<S> <C> <C> <C>
Unit value, beginning of period................................. $ 94.76 $100.44 $100.00
======= ======= =======
Unit value, end of period....................................... $105.94 $ 94.76 $100.44
======= ======= =======
Number of units outstanding, end of period (000's).............. 88 64 1
======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
INTERMEDIATE GOVERNMENT SECURITIES FUND--EQUI-VEST PRP CONTRACTS
YEAR ENDED
DECEMBER 13, JUNE 1, 1994*
1995 TO DECEMBER 31, 1994
------------ --------------------
<S> <C> <C>
Unit value, beginning of period................................. $ 98.19 $100.00
======= =======
Unit value, end of period....................................... $109.80 $ 98.19
======= =======
Number of units outstanding, end of period (000's).............. 89 32
======= =======
</TABLE>
FSA-17
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995
<TABLE>
<CAPTION>
MONEY MARKET FUND--OLD CONTRACTS
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
------- ------- ------- ------- ------- ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period. $30.44 $29.43 $28.75 $27.92 $26.47 $24.59 $22.66 $21.23 $20.01 $18.87
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Unit value, end of period....... $32.00 $30.44 $29.43 $28.75 $27.92 $26.47 $24.59 $22.66 $21.23 $20.01
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Number of units outstanding,
end of period (000's)......... 140 147 168 204 246 289 310 339 419 432
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
MONEY MARKET FUND--EQUI-VEST / MOMENTUM** CONTRACTS
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
------- ------- ------- ------- ------- ------- ------- ------- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period. $26.08 $25.41 $25.01 $24.48 $23.38 $21.89 $20.32 $19.18 $18.22 $17.31
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Unit value, end of period....... $27.22 $26.08 $25.41 $25.01 $24.48 $23.38 $21.89 $20.32 $19.18 $18.22
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Number of EQUI-VEST
units outstanding, end of
period (000's)................ 1,021 1,000 1,065 1,201 1,325 1,307 1,045 656 581 609
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Number of Momentum units
outstanding, end of
period (000's)................ 188 116 56
====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
MONEY MARKET FUND--MOMENTUM PLUS CONTRACTS
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, SEPTEMBER 9, 1993*
1995 1994 TO DECEMBER 31, 1993
------------ ------------ --------------------
<S> <C> <C> <C>
Unit value, beginning of period..................................... $103.10 $100.47 $100.00
======= ======= =======
Unit value, end of period........................................... $107.55 $103.10 $100.47
======= ======= =======
Number of units outstanding, end of period (000's).................. 299 474 62
======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
MONEY MARKET FUND--EQUI-VEST PRP CONTRACTS
YEAR ENDED
DECEMBER 31, JANUARY 3, 1994*
1995 TO DECEMBER 31, 1994
------------ --------------------
<S> <C> <C>
Unit value, beginning of period........................................... $102.61 $100.00
======= =======
Unit value, end of period................................................. $107.04 $102.61
======= =======
Number of units outstanding, end of period (000's)........................ 81 63
======= =======
</TABLE>
FSA-18
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995
<TABLE>
<CAPTION>
BALANCED FUND--EQUI-VEST / MOMENTUM** CONTRACTS
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
------- ------- ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period. $26.18 $28.85 $26.04 $27.17 $19.40 $19.69 $15.80 $13.95 $14.69 $13.14
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Unit value, end of period....... $30.92 $26.18 $28.85 $26.04 $27.17 $19.40 $19.69 $15.80 $13.95 $14.69
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Number of EQUI-VEST
units outstanding, end of
period (000's)................ 30,212 32,664 31,259 25,975 21,100 19,423 16,810 15,335 17,370 11,988
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Number of Momentum units
outstanding, end of
period (000's)................ 957 776 348
====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
BALANCED FUND--MOMENTUM PLUS CONTRACTS
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, SEPTEMBER 9, 1993*
1995 1994 TO DECEMBER 31, 1993
-------------- -------------- --------------------
<S> <C> <C> <C>
Unit value, beginning of period..................................... $ 92.22 $101.63 $100.00
======= ======= =======
Unit value, end of period........................................... $108.95 $ 92.22 $101.63
======= ======= =======
Number of units outstanding, end of period (000's).................. 336 188 9
======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
BALANCED FUND--EQUI-VEST PRP CONTRACTS
YEAR ENDED
DECEMBER 31, JANUARY 3, 1994*
1995 TO DECEMBER 31, 1994
------------- --------------------
<S> <C> <C>
Unit value, beginning of period..................................... $ 91.64 $100.00
======= =======
Unit value, end of period........................................... $108.26 $ 91.64
======= =======
Number of units outstanding, end of period (000's).................. 386 289
======= =======
</TABLE>
<TABLE>
<CAPTION>
AGGRESSIVE STOCK FUND--EQUI-VEST / MOMENTUM** CONTRACTS
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period. $52.88 $55.68 $48.30 $50.51 $27.36 $25.86 $18.09 $18.15 $18.33 $15.03
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Unit value, end of period....... $68.73 $52.88 $55.68 $48.30 $50.51 $27.36 $25.86 $18.09 $18.15 $18.33
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Number of EQUI-VEST
units outstanding, end of
period (000's)................ 25,821 24,787 21,496 17,986 12,962 9,545 8,134 8,972 10,180 6,666
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Number of Momentum units
outstanding, end of
period (000's)................ 969 620 258
====== ====== ======
</TABLE>
FSA-19
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995
<TABLE>
<CAPTION>
AGGRESSIVE STOCK FUND--MOMENTUM PLUS CONTRACTS
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, SEPTEMBER 9, 1993*
1995 1994 TO DECEMBER 31, 1993
------------ ------------ --------------------
<S> <C> <C> <C>
Unit value, beginning of period.............................. $100.49 $105.90 $100.00
======= ======= =======
Unit value, end of period.................................... $130.50 $100.49 $105.90
======= ======= =======
Number of units outstanding, end of period (000's)........... 718 350 12
======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
AGGRESSIVE STOCK FUND--EQUI-VEST PRP CONTRACTS
YEAR ENDED
DECEMBER 31, JANUARY 3, 1994*
1995 TO DECEMBER 31, 1994
------------ --------------------
<S> <C> <C>
Unit value, beginning of period........................................... $ 95.45 $100.00
======= =======
Unit value, end of period................................................. $123.95 $ 95.45
======= =======
Number of units outstanding, end of period (000's)........................ 1,310 664
======= =======
</TABLE>
<TABLE>
<CAPTION>
GROWTH INVESTORS FUND--MOMENTUM CONTRACTS
YEAR ENDED
DECEMBER 31, JUNE 1, 1994*
1995 TO DECEMBER 31, 1994
------------ --------------------
<S> <C> <C>
Unit value, beginning of period........................................... $ 96.31 $100.00
======= =======
Unit value, end of period................................................. $120.08 $ 96.31
======= =======
Number of units outstanding, end of period (000's)........................ 57 10
======= =======
</TABLE>
<TABLE>
<CAPTION>
GROWTH INVESTORS FUND--MOMENTUM PLUS CONTRACTS
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, SEPTEMBER 9, 1993*
1995 1994 TO DECEMBER 31, 1993
------------ ------------ --------------------
<S> <C> <C> <C>
Unit value, beginning of period.............................. $ 97.45 $101.99 $100.00
======= ======= =======
Unit value, end of period.................................... $121.49 $ 97.45 $101.99
======= ======= =======
Number of units outstanding, end of period (000's)........... 375 188 13
======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
GROWTH INVESTORS FUND--EQUI-VEST PRP CONTRACTS
YEAR ENDED
DECEMBER 31, JANUARY 3, 1994*
1995 TO DECEMBER 31, 1994
------------ --------------------
<S> <C> <C>
Unit value, beginning of period........................................... $ 96.31 $100.00
======= =======
Unit value, end of period................................................. $120.08 $ 96.31
======= =======
Number of units outstanding, end of period (000's)........................ 2,113 1,023
======= =======
</TABLE>
FSA-20
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995
<TABLE>
<CAPTION>
CONSERVATIVE INVESTORS FUND--MOMENTUM CONTRACTS
YEAR ENDED
DECEMBER 31, JUNE 1, 1994*
1995 TO DECEMBER 31, 1994
------------ --------------------
<S> <C> <C>
Unit value, beginning of period............................................... $ 95.10 $100.00
======= =======
Unit value, end of period..................................................... $112.97 $ 95.10
======= =======
Number of units outstanding, end of period (000's)............................ 11 3
======= =======
</TABLE>
<TABLE>
<CAPTION>
CONSERVATIVE INVESTORS FUND--MOMENTUM PLUS CONTRACTS
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, SEPTEMBER 9, 1993*
1995 1994 TO DECEMBER 31, 1993
------------ ------------ --------------------
<S> <C> <C> <C>
Unit value, beginning of period.................................. $ 93.29 $98.60 $100.00
======= ====== =======
Unit value, end of period........................................ $110.81 $93.29 $ 98.60
======= ====== =======
Number of units outstanding, end of period (000's)............... 129 92 10
======= ====== =======
</TABLE>
<TABLE>
<CAPTION>
CONSERVATIVE INVESTORS FUND--EQUI-VEST PRP CONTRACTS
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1995 1994
-------------------- -------------------------
<S> <C> <C>
Unit value, beginning of period.................................. $ 95.10 $100.00
======= =======
Unit value, end of period........................................ $112.97 $ 95.10
======= =======
Number of units outstanding, end of period (000's)............... 491 325
======= =======
</TABLE>
<TABLE>
<CAPTION>
HIGH YIELD FUND--MOMENTUM CONTRACTS
YEAR ENDED
DECEMBER 31, JUNE 1, 1994*
1995 TO DECEMBER 31, 1994
---------------- -------------------------
<S> <C> <C>
Unit value, beginning of period.................................. $ 95.88 $100.00
======= =======
Unit value, end of period........................................ $113.44 $ 95.88
======= =======
Number of units outstanding, end of period (000's)............... 7 1
======= =======
</TABLE>
<TABLE>
<CAPTION>
HIGH YIELD FUND--MOMENTUM PLUS CONTRACTS
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, SEPTEMBER 9, 1993*
1995 1994 TO DECEMBER 31, 1993
-------------------- --------------- ----------------------
<S> <C> <C> <C>
Unit value, beginning of period.................................. $102.37 $106.74 $100.00
======= ======= =======
Unit value, end of period........................................ $121.10 $102.37 $106.74
======= ======= =======
Number of units outstanding, end of period (000's)............... 70 38 1
======= ======= =======
</TABLE>
FSA-21
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995
<TABLE>
<CAPTION>
HIGH YIELD FUND--EQUI-VEST PRP CONTRACTS
YEAR ENDED
DECEMBER 31, JANUARY 3, 1994*
1995 TO DECEMBER 31, 1994
------------- --------------------
<S> <C> <C>
Unit value, beginning of period...................................... $ 95.88 $100.00
======= =======
Unit value, end of period............................................ $113.44 $ 95.88
======= =======
Number of units outstanding, end of period (000's)................... 209 99
======= =======
</TABLE>
<TABLE>
<CAPTION>
GLOBAL FUND--MOMENTUM CONTRACTS
YEAR ENDED
DECEMBER 31, JUNE 1, 1994*
1995 TO DECEMBER 31, 1994
-------------- --------------------
<S> <C> <C>
Unit value, beginning of period...................................... $104.12 $100.00
======= =======
Unit value, end of period............................................ $122.06 $104.12
======= =======
Number of units outstanding, end of period (000's)................... 62 16
======= =======
</TABLE>
<TABLE>
<CAPTION>
GLOBAL FUND--MOMENTUM PLUS CONTRACTS
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, SEPTEMBER 9, 1993*
1995 1994 TO DECEMBER 31, 1993
-------------- -------------- --------------------
<S> <C> <C> <C>
Unit value, beginning of period..................................... $106.04 $102.14 $100.00
======= ======= =======
Unit value, end of period........................................... $124.30 $106.04 $102.14
======= ======= =======
Number of units outstanding, end of period (000's).................. 391 223 8
======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
GLOBAL FUND--EQUI-VEST PRP CONTRACTS
YEAR ENDED
DECEMBER 31, JANUARY 3, 1994*
1995 TO DECEMBER 31, 1994
---------------- --------------------
<S> <C> <C>
Unit value, beginning of period..................................... $104.12 $100.00
======= =======
Unit value, end of period........................................... $122.06 $104.12
======= =======
Number of units outstanding, end of period (000's).................. 2,121 1,305
======= =======
</TABLE>
<TABLE>
<CAPTION>
GROWTH & INCOME FUND--MOMENTUM CONTRACTS
YEAR ENDED
DECEMBER 31, JUNE 1, 1994*
1995 TO DECEMBER 31, 1994
-------------- ---------------------
<S> <C> <C>
Unit value, beginning of period...................................... $ 98.86 $100.00
======= =======
Unit value, end of period............................................ $121.02 $ 98.86
======= =======
Number of units outstanding, end of period (000's)................... 17 4
======= =======
</TABLE>
FSA-22
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995
<TABLE>
<CAPTION>
GROWTH & INCOME FUND--MOMENTUM PLUS CONTRACTS
YEAR ENDED
DECEMBER 31, JUNE 1, 1994*
1995 TO DECEMBER 31, 1994
---------------- ---------------------
<S> <C> <C>
Unit value, beginning of period...................................... $ 99.06 $100.00
======= =======
Unit value, end of period............................................ $121.25 $ 99.06
======= =======
Number of units outstanding, end of period (000's)................... 67 9
======= =======
</TABLE>
<TABLE>
<CAPTION>
GROWTH & INCOME FUND--EQUI-VEST PRP CONTRACTS
YEAR ENDED
DECEMBER 31, JANUARY 3, 1994*
1995 TO DECEMBER 31, 1994
--------------- -----------------------
<S> <C> <C>
Unit value, beginning of period...................................... $ 98.86 $100.00
======= =======
Unit value, end of period............................................ $121.02 $ 98.86
======= =======
Number of units outstanding, end of period (000's)................... 498 210
======= =======
</TABLE>
<TABLE>
<CAPTION>
QUALITY BOND FUND--MOMENTUM CONTRACTS
YEAR ENDED
DECEMBER 31, JUNE 1, 1994*
1995 TO DECEMBER 31, 1994
------------------ -----------------------
<S> <C> <C>
Unit value, beginning of period...................................... $ 93.87 $100.00
======= =======
Unit value, end of period............................................ $108.38 $ 93.87
======= =======
Number of units outstanding, end of period (000's)................... 4 1
======= =======
</TABLE>
<TABLE>
<CAPTION>
QUALITY BOND FUND--MOMENTUM PLUS CONTRACTS
YEAR ENDED
DECEMBER 31, JUNE 1, 1994*
1995 TO DECEMBER 31, 1994
------------------ ----------------------
<S> <C> <C>
Unit value, beginning of period...................................... $ 99.07 $100.00
======= =======
Unit value, end of period............................................ $114.38 $ 99.07
======= =======
Number of units outstanding, end of period (000's)................... 17 3
======= =======
</TABLE>
<TABLE>
<CAPTION>
QUALITY BOND FUND--EQUI-VEST PRP CONTRACTS
YEAR ENDED
DECEMBER 31, JANUARY 3, 1994*
1995 TO DECEMBER 31, 1994
----------------- ----------------------
<S> <C> <C>
Unit value, beginning of period...................................... $ 93.87 $100.00
======= =======
Unit value, end of period............................................ $108.38 $ 93.87
======= =======
Number of units outstanding, end of period (000's)................... 135 53
======= =======
</TABLE>
FSA-23
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995
<TABLE>
<CAPTION>
EQUITY INDEX FUND--MOMENTUM CONTRACTS
YEAR ENDED
DECEMBER 31, JUNE 1, 1994*
1995 TO DECEMBER 31, 1994
--------------- ------------------------
<S> <C> <C>
Unit value, beginning of period....................................... $100.95 $100.00
======= =======
Unit value, end of period............................................. $135.94 $100.95
======= =======
Number of units outstanding, end of period (000's).................... 12 1
======= =======
</TABLE>
<TABLE>
<CAPTION>
EQUITY INDEX FUND--MOMENTUM PLUS CONTRACTS
YEAR ENDED
DECEMBER 31, JUNE 1, 1994*
1995 TO DECEMBER 31, 1994
------------------ ------------------------
<S> <C> <C>
Unit value, beginning of period....................................... $100.94 $100.00
======= =======
Unit value, end of period............................................. $135.92 $100.94
======= =======
Number of units outstanding, end of period (000's).................... 44 3
======= =======
</TABLE>
<TABLE>
<CAPTION>
EQUITY INDEX FUND--EQUI-VEST PRP CONTRACTS
YEAR ENDED
DECEMBER 31, JUNE 1, 1994*
1995 TO DECEMBER 31, 1994
------------------ ------------------------
<S> <C> <C>
Unit value, beginning of period....................................... $100.95 $100.00
======= =======
Unit value, end of period............................................. $135.94 $100.95
======= =======
Number of units outstanding, end of period (000's).................... 592 47
======= =======
</TABLE>
FSA-24
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995
<TABLE>
<CAPTION>
INTERNATIONAL FUND--MOMENTUM CONTRACTS
SEPTEMBER 1, 1994* TO
DECEMBER 31, 1995
---------------------
<S> <C>
Unit value, beginning of period......................................................................... $ 0.00
=======
Unit value, end of period............................................................................... $104.15
=======
Number of units outstanding, end of period (000's)...................................................... 0
=======
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL FUND--MOMENTUM PLUS CONTRACTS
SEPTEMBER 1, 1994* TO
DECEMBER 31, 1995
---------------------
<S> <C>
Unit value, beginning of period......................................................................... $ 0.00
=======
Unit value, end of period............................................................................... $104.15
=======
Number of units outstanding, end of period (000's)...................................................... 3
=======
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL FUND--EQUI-VEST PRP CONTRACTS
SEPTEMBER 1, 1994* TO
DECEMBER 31, 1995
---------------------
<S> <C>
Unit value, beginning of period......................................................................... $ 0.00
=======
Unit value, end of period............................................................................... $104.15
=======
Number of units outstanding, end of period (000's)...................................................... 141
=======
<FN>
- -------------------
*Date on which units were made available for sale.
**The Momentum Contracts were first introduced for sale on February 15, 1993.
</FN>
</TABLE>
FSA-25
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholder of
The Equitable Life Assurance Society of the United States
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of earnings, of shareholder's equity and of cash flows
present fairly, in all material respects, the financial position of The
Equitable Life Assurance Society of the United States and its subsidiaries
("Equitable Life") at December 31, 1995 and 1994, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1995, in conformity with generally accepted accounting principles.
These financial statements are the responsibility of Equitable Life's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.
As discussed in Note 2 to the consolidated financial statements, Equitable Life
changed its methods of accounting for loan impairments in 1995, for
postemployment benefits in 1994 and for investment securities in 1993.
PRICE WATERHOUSE LLP
New York, New York
February 7, 1996
F-1
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
----------------- -----------------
(IN MILLIONS)
<S> <C> <C>
ASSETS
Investments:
Fixed maturities:
Available for sale, at estimated fair value............................. $ 15,899.9 $ 7,586.0
Held to maturity, at amortized cost..................................... - 5,223.0
Mortgage loans on real estate............................................. 3,638.3 4,018.0
Equity real estate........................................................ 3,916.2 4,446.4
Policy loans.............................................................. 1,976.4 1,731.2
Other equity investments.................................................. 621.1 678.5
Investment in and loans to affiliates..................................... 636.6 560.2
Other invested assets..................................................... 706.1 489.3
----------------- -----------------
Total investments..................................................... 27,394.6 24,732.6
Cash and cash equivalents................................................... 774.7 693.6
Deferred policy acquisition costs........................................... 3,083.3 3,221.1
Amounts due from discontinued GIC Segment................................... 2,097.1 2,108.6
Other assets................................................................ 2,713.1 2,078.6
Closed Block assets......................................................... 8,612.8 8,105.5
Separate Accounts assets.................................................... 24,566.6 20,469.5
----------------- -----------------
TOTAL ASSETS................................................................ $ 69,242.2 $ 61,409.5
================= =================
LIABILITIES
Policyholders' account balances............................................. $ 21,752.6 $ 21,238.0
Future policy benefits and other policyholders' liabilities................. 4,171.8 3,840.8
Short-term and long-term debt............................................... 1,899.3 1,337.4
Other liabilities........................................................... 3,379.5 2,300.1
Closed Block liabilities.................................................... 9,507.2 9,069.5
Separate Accounts liabilities............................................... 24,531.0 20,429.3
----------------- -----------------
Total liabilities..................................................... 65,241.4 58,215.1
----------------- -----------------
Commitments and contingencies (Notes 10, 12, 13, 14 and 15)
SHAREHOLDER'S EQUITY
Common stock, $1.25 par value 2.0 million shares authorized, issued
and outstanding........................................................... 2.5 2.5
Capital in excess of par value.............................................. 2,913.6 2,913.6
Retained earnings........................................................... 781.6 484.0
Net unrealized investment gains (losses).................................... 338.2 (203.0)
Minimum pension liability................................................... (35.1) (2.7)
----------------- -----------------
Total shareholder's equity............................................ 4,000.8 3,194.4
----------------- -----------------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY.................................. $ 69,242.2 $ 61,409.5
================= =================
</TABLE>
See Notes to Consolidated Financial Statements.
F-2
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF EARNINGS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
----------------- ----------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
REVENUES
Universal life and investment-type product policy fee
income...................................................... $ 771.0 $ 715.0 $ 644.5
Premiums...................................................... 606.8 625.6 599.1
Net investment income......................................... 2,127.7 2,030.9 2,599.3
Investment gains, net......................................... 5.3 91.8 533.4
Commissions, fees and other income............................ 886.8 845.4 1,717.2
Contribution from the Closed Block............................ 124.4 151.0 128.3
----------------- ----------------- -----------------
Total revenues.......................................... 4,522.0 4,459.7 6,221.8
----------------- ----------------- -----------------
BENEFITS AND OTHER DEDUCTIONS
Interest credited to policyholders' account balances.......... 1,244.2 1,201.3 1,330.0
Policyholders' benefits....................................... 1,011.3 920.6 1,003.9
Other operating costs and expenses............................ 1,856.5 1,943.1 3,584.2
----------------- ----------------- -----------------
Total benefits and other deductions..................... 4,112.0 4,065.0 5,918.1
----------------- ----------------- -----------------
Earnings before Federal income taxes and cumulative
effect of accounting change................................. 410.0 394.7 303.7
Federal income taxes.......................................... 112.4 101.2 91.3
----------------- ----------------- -----------------
Earnings before cumulative effect of accounting change........ 297.6 293.5 212.4
Cumulative effect of accounting change, net of Federal
income taxes................................................ - (27.1) -
----------------- ----------------- -----------------
Net Earnings.................................................. $ 297.6 $ 266.4 $ 212.4
================= ================= =================
</TABLE>
See Notes to Consolidated Financial Statements.
F-3
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
----------------- ----------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Common stock, at par value, beginning of year................. $ 2.5 $ 2.5 $ 2.0
Increase in par value......................................... - - .5
----------------- ----------------- -----------------
Common stock, at par value, end of year....................... 2.5 2.5 2.5
----------------- ----------------- -----------------
Capital in excess of par value, beginning of year............. 2,913.6 2,613.6 2,273.9
Additional capital in excess of par value..................... - 300.0 340.2
Increase in par value......................................... - - (.5)
----------------- ----------------- -----------------
Capital in excess of par value, end of year................... 2,913.6 2,913.6 2,613.6
----------------- ----------------- -----------------
Retained earnings, beginning of year.......................... 484.0 217.6 5.2
Net earnings.................................................. 297.6 266.4 212.4
----------------- ----------------- -----------------
Retained earnings, end of year................................ 781.6 484.0 217.6
----------------- ----------------- -----------------
Net unrealized investment (losses) gains, beginning of year... (203.0) 131.9 78.8
Change in unrealized investment gains (losses)................ 541.2 (334.9) (9.5)
Effect of adopting new accounting standard.................... - - 62.6
----------------- ----------------- -----------------
Net unrealized investment gains (losses), end of year......... 338.2 (203.0) 131.9
----------------- ----------------- -----------------
Minimum pension liability, beginning of year.................. (2.7) (15.0) -
Change in minimum pension liability........................... (32.4) 12.3 (15.0)
----------------- ----------------- -----------------
Minimum pension liability, end of year........................ (35.1) (2.7) (15.0)
----------------- ----------------- -----------------
TOTAL SHAREHOLDER'S EQUITY, END OF YEAR....................... $ 4,000.8 $ 3,194.4 $ 2,950.6
================= ================= =================
</TABLE>
See Notes to Consolidated Financial Statements.
F-4
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
----------------- ----------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Net earnings.................................................. $ 297.6 $ 266.4 $ 212.4
Adjustments to reconcile net earnings to net cash
provided (used) by operating activities:
Net change in trading activities and broker-dealer
related receivables/payables.............................. - - (4,177.8)
Increase in matched resale agreements....................... - - (2,900.5)
Increase in matched repurchase agreements................... - - 2,900.5
Investment gains, net of dealer and trading gains........... (5.3) (91.8) (160.8)
Change in amounts due from discontinued GIC Segment......... - 57.3 47.8
General Account policy charges.............................. (769.7) (711.9) (623.4)
Interest credited to policyholders' account balances........ 1,244.2 1,201.3 1,330.0
Changes in Closed Block assets and liabilities, net......... (69.6) (95.1) (73.3)
Other, net.................................................. 627.1 7.8 (416.1)
----------------- ----------------- -----------------
Net cash provided (used) by operating activities.............. 1,324.3 634.0 (3,861.2)
----------------- ----------------- -----------------
Cash flows from investing activities:
Maturities and repayments................................... 1,863.1 2,319.7 3,479.6
Sales....................................................... 8,901.4 5,661.9 7,399.2
Return of capital from joint ventures and limited
partnerships.............................................. 65.2 39.0 119.5
Purchases................................................... (11,675.5) (7,417.6) (11,184.2)
Decrease (increase) in loans to discontinued GIC Segment.... 1,226.9 (40.0) (880.0)
Cash received on sale of 61% interest in DLJ................ - - 346.7
Other, net.................................................. (625.5) (371.1) (317.0)
----------------- ----------------- -----------------
Net cash (used) provided by investing activities.............. (244.4) 191.9 (1,036.2)
----------------- ----------------- -----------------
Cash flows from financing activities:
Policyholders' account balances:
Deposits.................................................. 2,414.9 2,082.7 2,410.7
Withdrawals............................................... (2,692.7) (2,887.4) (2,433.5)
Net (decrease) increase in short-term financings............ (16.4) (173.0) 4,717.2
Additions to long-term debt................................. 599.7 51.8 97.7
Repayments of long-term debt................................ (40.7) (199.8) (64.4)
Proceeds from issuance of Alliance units.................... - 100.0 -
Payment of obligation to fund accumulated deficit of
discontinued GIC Segment.................................. (1,215.4) - -
Capital contribution from the Holding Company............... - 300.0 -
Other, net.................................................. (48.2) - -
----------------- ----------------- -----------------
Net cash (used) provided by financing activities.............. (998.8) (725.7) 4,727.7
----------------- ----------------- -----------------
Change in cash and cash equivalents........................... 81.1 100.2 (169.7)
Cash and cash equivalents, beginning of year.................. 693.6 593.4 763.1
----------------- ----------------- -----------------
Cash and Cash Equivalents, End of Year........................ $ 774.7 $ 693.6 $ 593.4
================= ================= =================
Supplemental cash flow information
Interest Paid............................................... $ 89.6 $ 34.9 $ 1,437.2
================= ================= =================
Income Taxes (Refunded) Paid................................ $ (82.7) $ 49.2 $ 41.0
================= ================= =================
</TABLE>
See Notes to Consolidated Financial Statements.
F-5
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1) ORGANIZATION
The Equitable Life Assurance Society of the United States ("Equitable
Life") converted to a stock life insurance company on July 22, 1992 and
became a wholly owned subsidiary of The Equitable Companies Incorporated
(the "Holding Company"). Equitable Life's insurance business, which is
comprised of an Individual Insurance and Annuities segment and a Group
Pension segment is conducted principally by Equitable Life and its
wholly owned life insurance subsidiary, Equitable Variable Life
Insurance Company ("EVLICO"). Equitable Life's investment management
business, which comprises the Investment Services segment, is conducted
principally by Alliance Capital Management L.P. ("Alliance"), Equitable
Real Estate Investment Management, Inc. ("EREIM") and Donaldson, Lufkin
and Jenrette, Inc. ("DLJ"), an investment banking and brokerage
affiliate. AXA, a French holding company for an international group of
insurance and related financial services companies is the Holding
Company's largest shareholder, owning approximately 60.6% at December
31, 1995 (63.5% assuming conversion of Series E Convertible Preferred
Stock held by AXA and 54.2% if all securities convertible into, or
options on, common stock were to be converted or exercised).
2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
-----------------------------------------------------
The accompanying consolidated financial statements are prepared in
conformity with generally accepted accounting principles ("GAAP").
The accompanying consolidated financial statements include the accounts
of Equitable Life and its wholly owned life insurance subsidiaries
(collectively, the "Insurance Group"); non-insurance subsidiaries,
principally Alliance, an investment advisory subsidiary and EREIM, a
real estate investment management subsidiary; and those partnerships and
joint ventures in which the Company has control and a majority economic
interest (collectively, including its consolidated subsidiaries, the
"Company"). The consolidated statement of earnings and cash flow for the
year ended December 31, 1993 include the results of operations and cash
flow of DLJ, an investment banking and brokerage affiliate, on a
consolidated basis through December 15, 1993 (see Note 20). Subsequent
to that date, DLJ is accounted for on the equity basis. The Closed Block
assets and liabilities and results of operations are presented in the
consolidated financial statements as single line items (see Note 6).
Unless specifically stated, all disclosures contained herein supporting
the consolidated financial statements exclude the Closed Block related
amounts.
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
All significant intercompany transactions and balances have been
eliminated in consolidation other than intercompany transactions and
balances with the Closed Block and the discontinued Guaranteed Interest
Contract ("GIC") Segment (see Note 7).
Certain reclassifications have been made in the amounts presented for
prior periods to conform these periods with the 1995 presentation.
F-6
<PAGE>
Closed Block
------------
As of July 22, 1992, Equitable Life established the Closed Block for the
benefit of certain classes of individual participating policies for
which Equitable Life had a dividend scale payable in 1991 and which were
in force on that date. Assets were allocated to the Closed Block in an
amount which, together with anticipated revenues from policies included
in the Closed Block, was reasonably expected to be sufficient to support
such business, including provision for payment of claims, certain
expenses and taxes, and for continuation of dividend scales payable in
1991, assuming the experience underlying such scales continues.
Assets allocated to the Closed Block inure solely to the benefit of the
holders of policies included in the Closed Block and will not revert to
the benefit of the Holding Company. The plan of demutualization
prohibits the reallocation, transfer, borrowing or lending of assets
between the Closed Block and other portions of Equitable Life's General
Account, any of its Separate Accounts or to any affiliate of Equitable
Life without the approval of the New York Superintendent of Insurance.
Closed Block assets and liabilities are carried on the same basis as
similar assets and liabilities held in the General Account.
The excess of Closed Block liabilities over Closed Block assets
represents the expected future post-tax contribution from the Closed
Block which would be recognized in income over the period the policies
and contracts in the Closed Block remain in force. If the actual
contribution from the Closed Block in any given period equals or exceeds
the expected contribution for such period as determined at the
establishment of the Closed Block, the expected contribution would be
recognized in income for that period. Any excess of the actual
contribution over the expected contribution would also be recognized in
income to the extent that the aggregate expected contribution for all
prior periods exceeded the aggregate actual contribution. Any remaining
excess of actual contribution over expected contributions would be
accrued in the Closed Block as a liability for future dividends to be
paid to the Closed Block policyholders. If, over the period the policies
and contracts in the Closed Block remain in force, the actual
contribution from the Closed Block is less than the expected
contribution from the Closed Block, only such actual contribution would
be recognized in income.
Discontinued Operations
-----------------------
In 1991, the Company's management adopted a plan to discontinue the
business operations of the GIC Segment, consisting of the Guaranteed
Interest Contract and Group Non-Participating Wind-Up Annuities lines of
business. The Company established a pre-tax provision for the estimated
future losses of the GIC line of business and a premium deficiency
reserve for the Group Non-Participating Wind-Up Annuities. Subsequent
losses incurred have been charged to the allowance for future losses and
the premium deficiency reserve. Total allowances are based upon
management's best judgment and there is no assurance that the ultimate
losses will not differ.
Accounting Changes
------------------
In the first quarter of 1995, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 114, "Accounting by Creditors for
Impairment of a Loan". This statement applies to all loans, including
loans restructured in a troubled debt restructuring involving a
modification of terms. This statement addresses the accounting for
impairment of a loan by specifying how allowances for credit losses
should be determined. Impaired loans within the scope of this statement
are measured based on the present value of expected future cash flows
discounted at the loan's effective interest rate, at the loan's
observable market price or the fair value of the collateral if the loan
is collateral dependent. The Company provides for impairment of loans
through an allowance for possible losses. The adoption of this statement
did not have a material effect on the level of these allowances or on
the Company's consolidated statements of earnings and shareholder's
equity.
F-7
<PAGE>
In the fourth quarter of 1994 (effective as of January 1, 1994), the
Company adopted SFAS No. 112, "Employers' Accounting for Postemployment
Benefits," which required employers to recognize the obligation to
provide postemployment benefits. Implementation of this statement
resulted in a charge for the cumulative effect of accounting change of
$27.1 million, net of a Federal income tax benefit of $14.6 million.
At December 31, 1993, the Company adopted SFAS No. 115, "Accounting for
Certain Investments in Debt and Equity Securities," which expanded the
use of fair value accounting for those securities that a company does
not have positive intent and ability to hold to maturity. Implementation
of this statement increased consolidated shareholder's equity by $62.6
million, net of deferred policy acquisition costs, amounts attributable
to participating group annuity contracts and deferred Federal income
tax. Beginning coincident with issuance of SFAS No. 115 implementation
guidance in November 1995, the Financial Accounting Standards Board
("FASB") permitted companies a one-time opportunity, through December
31, 1995, to reassess the appropriateness of the classification of all
securities held at that time. On December 1, 1995, the Company
transferred $4,794.9 million of securities classified as held to
maturity to the available for sale portfolio. As a result consolidated
shareholder's equity increased by $126.2 million, net of deferred policy
acquisition costs, amounts attributable to participating group annuity
contracts and deferred Federal income tax.
New Accounting Pronouncements
-----------------------------
In January 1995, the FASB issued SFAS No. 120, "Accounting and Reporting
by Mutual Life Insurance Enterprises and by Insurance Enterprises for
Certain Long-Duration Participating Contracts," which permits, but does
not require, stock life insurance companies with participating life
contracts to account for those contracts in accordance with Statement of
Position No. 95-1, "Accounting for Certain Insurance Activities of
Mutual Life Insurance Enterprises". The Company has decided to retain
the existing methodology to account for traditional participating
policies and, therefore, will not adopt this statement.
In March 1995, the FASB issued SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of," which requires that long-lived assets and certain identifiable
intangibles be reviewed for impairment whenever events or changes in
circumstances indicate the carrying amount of such assets may not be
recoverable. The Company will implement this statement as of January 1,
1996. The cumulative effect of this accounting change will be a charge
of $23.4 million, net of a Federal income tax benefit of $12.1 million,
due to the writedown to fair value of building improvements relating to
facilities being vacated beginning in 1996. The Company currently
provides allowances for possible losses for other assets under the scope
of this statement. Management has not yet determined the impact of this
statement on assets to be held and used.
In May 1995, the FASB issued SFAS No. 122, "Accounting for Mortgage
Servicing Rights," which requires a mortgage banking enterprise to
recognize rights to service mortgage loans for others as separate assets
however those servicing rights are acquired. It further requires
capitalized mortgage servicing rights be assessed for impairment based
on the fair value of those rights. The Company will implement this
statement as of January 1, 1996. Implementation of this statement will
not have a material effect on the Company's consolidated financial
statements.
In October 1995, the FASB issued SFAS No. 123, "Accounting for
Stock-Based Compensation". This statement defines a fair value based
method of accounting for stock-based employee compensation plans while
continuing to allow an entity to measure compensation cost for such
plans using the intrinsic value based method of accounting. Management
has decided to retain the current compensation cost methodology
prescribed by Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees".
F-8
<PAGE>
Valuation of Investments
------------------------
Fixed maturities, which the Company has both the ability and the intent
to hold to maturity, are stated principally at amortized cost. Fixed
maturities identified as available for sale are reported at estimated
fair value. The amortized cost of fixed maturities is adjusted for
impairments in value deemed to be other than temporary.
Mortgage loans on real estate are stated at unpaid principal balances,
net of unamortized discounts and valuation allowances. Effective with
the adoption of SFAS No. 114 on January 1, 1995, the valuation
allowances are based on the present value of expected future cash flows
discounted at the loan's original effective interest rate or the
collateral value if the loan is collateral dependent. However, if
foreclosure is or becomes probable, the measurement method used is
collateral value. Prior to the adoption of SFAS No. 114, the valuation
allowances were based on losses expected by management to be realized on
transfers of mortgage loans to real estate (upon foreclosure or
in-substance foreclosure), on the disposition or settlement of mortgage
loans and on mortgage loans management believed may not be collectible
in full. In establishing valuation allowances, management previously
considered, among other things the estimated fair value of the
underlying collateral.
Real estate, including real estate acquired in satisfaction of debt, is
stated at depreciated cost less valuation allowances. At the date of
foreclosure (including in-substance foreclosure), real estate acquired
in satisfaction of debt is valued at estimated fair value. Valuation
allowances on real estate held for the production of income are computed
using the forecasted cash flows of the respective properties discounted
at a rate equal to the Company's cost of funds; valuation allowances on
real estate available for sale are computed using the lower of current
estimated fair value, net of disposition costs, or depreciated cost.
Policy loans are stated at unpaid principal balances.
Partnerships and joint venture interests in which the Company does not
have control and a majority economic interest are reported on the equity
basis of accounting and are included either with equity real estate or
other equity investments, as appropriate.
Common stocks are carried at estimated fair value and are included in
other equity investments.
Short-term investments are stated at amortized cost which approximates
fair value and are included with other invested assets.
Cash and cash equivalents includes cash on hand, amounts due from banks
and highly liquid debt instruments purchased with an original maturity
of three months or less.
All securities are recorded in the consolidated financial statements on
a trade date basis.
Investment Results and Unrealized Investment Gains (Losses)
-----------------------------------------------------------
Net investment income and realized investment gains and losses
(collectively, "investment results") related to certain participating
group annuity contracts are passed through to the contractholders as
interest credited to policyholders' account balances.
Realized investment gains and losses are determined by specific
identification and are presented as a component of revenue. Valuation
allowances are netted against the asset categories to which they apply
and changes in the valuation allowances are included in investment gains
or losses.
Unrealized investment gains and losses on fixed maturities available for
sale and equity securities held by the Company are accounted for as a
separate component of shareholder's equity, net of related deferred
Federal income taxes, amounts attributable to the discontinued GIC
Segment, Closed Block, participating group annuity contracts and
deferred policy acquisition costs related to universal life and
investment-type products.
F-9
<PAGE>
Recognition of Insurance Income and Related Expenses
----------------------------------------------------
Premiums from universal life and investment-type contracts are reported
as deposits to policyholders' account balances. Revenues from these
contracts consist of amounts assessed during the period against
policyholders' account balances for mortality charges, policy
administration charges and surrender charges. Policy benefits and claims
that are charged to expense include benefit claims incurred in the
period in excess of related policyholders' account balances.
Premiums from traditional life and annuity policies with life
contingencies generally are recognized as income when due. Benefits and
expenses are matched with such income so as to result in the recognition
of profits over the life of the contracts. This match is accomplished by
means of the provision for liabilities for future policy benefits and
the deferral and subsequent amortization of policy acquisition costs.
For contracts with a single premium or a limited number of premium
payments due over a significantly shorter period than the total period
over which benefits are provided, premiums are recorded as income when
due with any excess profit deferred and recognized in income in a
constant relationship to insurance in force or, for annuities, the
amount of expected future benefit payments.
Premiums from individual health contracts are recognized as income over
the period to which the premiums relate in proportion to the amount of
insurance protection provided.
Deferred Policy Acquisition Costs
---------------------------------
The costs of acquiring new business, principally commissions,
underwriting, agency and policy issue expenses, all of which vary with
and are primarily related to the production of new business, are
deferred. Deferred policy acquisition costs are subject to
recoverability testing at the time of policy issue and loss recognition
testing at the end of each accounting period.
For universal life products and investment-type products, deferred
policy acquisition costs are amortized over the expected average life of
the contracts (periods ranging from 15 to 35 years and 5 to 17 years,
respectively) as a constant percentage of estimated gross profits
arising principally from investment results, mortality and expense
margins and surrender charges based on historical and anticipated future
experience, updated at the end of each accounting period. The effect on
the amortization of deferred policy acquisition costs of revisions to
estimated gross profits is reflected in earnings in the period such
estimated gross profits are revised. The effect on the deferred policy
acquisition cost asset that would result from realization of unrealized
gains (losses) is recognized with an offset to unrealized gains (losses)
in consolidated shareholder's equity as of the balance sheet date.
For traditional life and annuity policies with life contingencies,
deferred policy acquisition costs are amortized in proportion to
anticipated premiums. Assumptions as to anticipated premiums are
estimated at the date of policy issue and are consistently applied
during the life of the contracts. Deviations from estimated experience
are reflected in earnings in the period such deviations occur. For these
contracts, the amortization periods generally are for the estimated life
of the policy.
For individual health benefit insurance, deferred policy acquisition
costs are amortized over the expected average life of the contracts (10
years for major medical policies and 20 years for disability income
products) in proportion to anticipated premium revenue at time of issue.
Policyholders' Account Balances and Future Policy Benefits
----------------------------------------------------------
Policyholders' account balances for universal life and investment-type
contracts are equal to the policy account values. The policy account
values represent an accumulation of gross premium payments plus credited
interest less expense and mortality charges and withdrawals.
F-10
<PAGE>
For traditional life insurance policies, future policy benefit and
dividend liabilities are estimated using a net level premium method on
the basis of actuarial assumptions as to mortality, persistency and
interest established at policy issue. Assumptions established at policy
issue as to mortality and persistency are based on the Insurance Group's
experience which, together with interest and expense assumptions,
provide a margin for adverse deviation. When the liabilities for future
policy benefits plus the present value of expected future gross premiums
for a product are insufficient to provide for expected future policy
benefits and expenses for that product, deferred policy acquisition
costs are written off and thereafter, if required, a premium deficiency
reserve is established by a charge to earnings. Benefit liabilities for
traditional annuities during the accumulation period are equal to
accumulated contractholders' fund balances and after annuitization are
equal to the present value of expected future payments. Interest rates
used in establishing such liabilities range from 2.25% to 11.5% for life
insurance liabilities and from 2.25% to 13.5% for annuity liabilities.
Individual health benefit liabilities for active lives are estimated
using the net level premium method, and assumptions as to future
morbidity, withdrawals and interest which provide a margin for adverse
deviation. Benefit liabilities for disabled lives are estimated using
the present value of benefits method and experience assumptions as to
claim terminations, expenses and interest.
Claim reserves and associated liabilities for individual disability
income and major medical policies were $639.6 million, $570.6 million at
December 31, 1995 and 1994, respectively. Incurred benefits (benefits
paid plus changes in claim reserves) and benefits paid for individual
disability income and major medical policies are summarized as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Incurred benefits related to current year.......... $ 176.0 $ 188.6 $ 193.1
Incurred benefits related to prior years........... 67.8 28.7 106.1
----------------- ---------------- -----------------
Total Incurred Benefits............................ $ 243.8 $ 217.3 $ 299.2
================= ================ =================
Benefits paid related to current year.............. $ 37.0 $ 43.7 $ 48.9
Benefits paid related to prior years............... 137.8 132.3 123.1
----------------- ---------------- -----------------
Total Benefits Paid................................ $ 174.8 $ 176.0 $ 172.0
================= ================ =================
</TABLE>
The amount of policyholders' dividends to be paid (including those on
policies included in the Closed Block) is determined annually by
Equitable Life's Board of Directors. The aggregate amount of
policyholders' dividends is related to actual interest, mortality,
morbidity and expense experience for the year and judgment as to the
appropriate level of statutory surplus to be retained by Equitable Life.
Equitable Life is subject to limitations on the amount of statutory
profits which can be retained with respect to certain classes of
individual participating policies that were in force on July 22, 1992
which are not included in the Closed Block and with respect to
participating policies issued subsequent to July 22, 1992. Excess
statutory profits, if any, will be distributed over time to such
policyholders and will not be available to Equitable Life's shareholder.
Earnings in excess of limitations are accrued as policyholders'
dividends.
At December 31, 1995, participating policies including those in the
Closed Block represent approximately 27.2% ($58.4 billion) of directly
written life insurance in force, net of amounts ceded. Participating
policies represent primarily all of the premium income as reflected in
the consolidated statements of earnings and in the results of the Closed
Block.
F-11
<PAGE>
Federal Income Taxes
--------------------
Equitable Life and its life insurance and non-life insurance
subsidiaries file a consolidated Federal income tax return with the
Holding Company and its non-life insurance subsidiaries. Current Federal
income taxes are charged or credited to operations based upon amounts
estimated to be payable or recoverable as a result of taxable operations
for the current year. Deferred income tax assets and liabilities are
recognized based on the difference between financial statement carrying
amounts and income tax bases of assets and liabilities using enacted
income tax rates and laws.
Separate Accounts
-----------------
Separate Accounts are established in conformity with the New York State
Insurance Law and generally are not chargeable with liabilities that
arise from any other business of the Insurance Group. Separate Accounts
assets are subject to General Account claims only to the extent the
value of such assets exceeds the Separate Accounts liabilities.
Assets and liabilities of the Separate Accounts, representing net
deposits and accumulated net investment earnings less fees, held
primarily for the benefit of contractholders, and for which the
Insurance Group does not bear the investment risk, are shown as separate
captions in the consolidated balance sheets. The Insurance Group bears
the investment risk on assets held in one Separate Account, therefore,
such assets are carried on the same basis as similar assets held in the
General Account portfolio. Assets held in the other Separate Accounts
are carried at quoted market values or, where quoted values are not
available, at estimated fair values as determined by the Insurance
Group.
The investment results of Separate Accounts on which the Insurance Group
does not bear the investment risk are reflected directly in Separate
Accounts liabilities. For the years ended December 31, 1995, 1994 and
1993, investment results of such Separate Accounts were $1,956.3
million, $676.3 million and $1,676.5 million, respectively.
Deposits to all Separate Accounts are reported as increases in Separate
Accounts liabilities and are not reported in revenues. Mortality, policy
administration and surrender charges on all Separate Accounts are
included in revenues.
F-12
<PAGE>
3) INVESTMENTS
The following tables provide additional information relating to fixed
maturities and equity securities:
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED ESTIMATED
COST GAINS LOSSES FAIR VALUE
----------------- ----------------- ---------------- ---------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
DECEMBER 31, 1995
Fixed Maturities:
Available for Sale:
Corporate.......................... $ 10,910.7 $ 617.6 $ 118.1 $ 11,410.2
Mortgage-backed.................... 1,838.0 31.2 1.2 1,868.0
U.S. Treasury securities and
U.S. government and
agency securities................ 2,257.0 77.8 4.1 2,330.7
States and political subdivisions.. 45.7 5.2 - 50.9
Foreign governments................ 124.5 11.0 .2 135.3
Redeemable preferred stock......... 108.1 5.3 8.6 104.8
----------------- ----------------- ---------------- ---------------
Total Available for Sale............... $ 15,284.0 $ 748.1 $ 132.2 $ 15,899.9
================= ================= ================ ===============
Equity Securities:
Common stock......................... $ 97.3 $ 49.1 $ 18.0 $ 128.4
================= ================= ================ ===============
December 31, 1994
Fixed Maturities:
Available for Sale:
Corporate.......................... $ 5,663.4 $ 34.6 $ 368.0 $ 5,330.0
Mortgage-backed.................... 686.0 2.9 44.8 644.1
U.S. Treasury securities and
U.S. government and
agency securities................ 1,519.3 6.7 71.9 1,454.1
States and political subdivisions.. 23.4 .1 .7 22.8
Foreign governments................ 43.8 .3 4.2 39.9
Redeemable preferred stock......... 108.4 .4 13.7 95.1
----------------- ----------------- ---------------- ---------------
Total Available for Sale............... $ 8,044.3 $ 45.0 $ 503.3 $ 7,586.0
================= ================= ================ ===============
Held to Maturity:
Corporate.......................... $ 4,661.0 $ 67.9 $ 233.8 $ 4,495.1
U.S. Treasury securities and
U.S. government and
agency securities................ 428.9 4.6 44.2 389.3
States and political subdivisions.. 63.4 .9 3.7 60.6
Foreign governments................ 69.7 4.2 2.0 71.9
================= ================= ================ ===============
Total Held to Maturity................. $ 5,223.0 $ 77.6 $ 283.7 $ 5,016.9
================= ================= ================ ===============
Equity Securities:
Common stock......................... $ 126.4 $ 31.2 $ 23.5 $ 134.1
================= ================= ================ ===============
</TABLE>
F-13
<PAGE>
For publicly traded fixed maturities and equity securities, estimated
fair value is determined using quoted market prices. For fixed
maturities without a readily ascertainable market value, the Company has
determined an estimated fair value using a discounted cash flow
approach, including provisions for credit risk, generally based upon the
assumption that such securities will be held to maturity. Estimated fair
value for equity securities, substantially all of which do not have a
readily ascertainable market value, has been determined by the Company.
Such estimated fair values do not necessarily represent the values for
which these securities could have been sold at the dates of the
consolidated balance sheets. At December 31, 1995 and 1994, securities
without a readily ascertainable market value having an amortized cost of
$3,748.9 million and $3,980.4 million, respectively, had estimated fair
values of $3,981.8 million and $3,858.7 million, respectively.
The contractual maturity of bonds at December 31, 1995 is shown below:
<TABLE>
<CAPTION>
AVAILABLE FOR SALE
------------------------------------
AMORTIZED ESTIMATED
COST FAIR VALUE
---------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Due in one year or less................................................ $ 357.9 $ 360.0
Due in years two through five.......................................... 3,773.1 3,847.1
Due in years six through ten........................................... 4,709.8 4,821.8
Due after ten years.................................................... 4,497.1 4,898.2
Mortgage-backed securities............................................. 1,838.0 1,868.0
---------------- -----------------
Total.................................................................. $ 15,175.9 $ 15,795.1
================ =================
</TABLE>
Bonds not due at a single maturity date have been included in the above
table in the year of final maturity. Actual maturities will differ from
contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties.
Investment valuation allowances and changes thereto are shown below:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Balances, beginning of year........................ $ 284.9 $ 355.6 $ 512.0
Additions charged to income........................ 136.0 51.0 92.8
Deductions for writedowns and asset dispositions... (95.6) (121.7) (249.2)
----------------- ---------------- -----------------
Balances, End of Year.............................. $ 325.3 $ 284.9 $ 355.6
================= ================ =================
Balances, end of year comprise:
Mortgage loans on real estate.................... $ 65.5 $ 64.2 $ 144.4
Equity real estate............................... 259.8 220.7 211.2
----------------- ---------------- -----------------
Total.............................................. $ 325.3 $ 284.9 $ 355.6
================= ================ =================
</TABLE>
Deductions for writedowns and asset dispositions for 1993 include an
$87.1 million writedown of fixed maturity investments at December 31,
1993 as a result of adopting a new accounting statement for the
valuation of these investments that requires specific writedowns instead
of valuation allowances.
At December 31, 1995, the carrying values of investments held for the
production of income which were non-income producing for the twelve
months preceding the consolidated balance sheet date were $37.2 million
of fixed maturities and $84.7 million of mortgage loans on real estate.
F-14
<PAGE>
The Insurance Group's fixed maturity investment portfolio includes
corporate high yield securities consisting of public high yield bonds,
redeemable preferred stocks and directly negotiated debt in leveraged
buyout transactions. The Insurance Group seeks to minimize the higher
than normal credit risks associated with such securities by monitoring
the total investments in any single issuer or total investment in a
particular industry group. Certain of these corporate high yield
securities are classified as other than investment grade by the various
rating agencies, i.e., a rating below Baa or National Association of
Insurance Commissioners ("NAIC") designation of 3 (medium grade), 4 or 5
(below investment grade) or 6 (in or near default). At December 31,
1995, approximately 15.57% of the $15,139.9 million aggregate amortized
cost of bonds held by the Insurance Group were considered to be other
than investment grade.
In addition to its holdings of corporate high yield securities, the
Insurance Group is an equity investor in limited partnership interests
which primarily invest in securities considered to be other than
investment grade.
The Company has restructured or modified the terms of certain fixed
maturity investments. The fixed maturity portfolio, based on amortized
cost, includes $15.9 million and $30.5 million at December 31, 1995 and
1994, respectively, of such restructured securities. These amounts
include fixed maturities which are in default as to principal and/or
interest payments, are to be restructured pursuant to commenced
negotiations or where the borrowers went into bankruptcy subsequent to
acquisition (collectively, "problem fixed maturities") of $1.6 million
and $9.7 million as of December 31, 1995 and 1994, respectively. Gross
interest income that would have been recorded in accordance with the
original terms of restructured fixed maturities amounted to $3.0
million, $7.5 million and $11.7 million in 1995, 1994 and 1993,
respectively. Gross interest income on these fixed maturities included
in net investment income aggregated $2.9 million, $6.8 million and $9.7
million in 1995, 1994 and 1993, respectively.
At December 31, 1995 and 1994, mortgage loans on real estate with
scheduled payments 60 days (90 days for agricultural mortgages) or more
past due or in foreclosure (collectively, "problem mortgage loans on
real estate") had an amortized cost of $87.7 million (2.4% of total
mortgage loans on real estate) and $96.9 million (2.3% of total mortgage
loans on real estate), respectively.
The payment terms of mortgage loans on real estate may from time to time
be restructured or modified. The investment in restructured mortgage
loans on real estate, based on amortized cost, amounted to $531.5
million and $447.9 million at December 31, 1995 and 1994, respectively.
These amounts include $3.8 million and $1.0 million of problem mortgage
loans on real estate at December 31, 1995 and 1994, respectively. Gross
interest income on restructured mortgage loans on real estate that would
have been recorded in accordance with the original terms of such loans
amounted to $52.1 million, $44.9 million and $51.8 million in 1995, 1994
and 1993, respectively. Gross interest income on these loans included in
net investment income aggregated $37.4 million, $32.8 million and $46.0
million in 1995, 1994 and 1993, respectively.
Impaired mortgage loans (as defined under SFAS No. 114) along with the
related provision for losses were as follows:
<TABLE>
<CAPTION>
December 31, 1995
-------------------
(IN MILLIONS)
<S> <C>
Impaired mortgage loans with provision for losses....................................... $ 310.1
Impaired mortgage loans with no provision for losses.................................... 160.8
-------------------
Recorded investment in impaired mortgage loans.......................................... 470.9
Provision for losses.................................................................... 62.7
-------------------
Net Impaired Mortgage Loans............................................................. $ 408.2
===================
</TABLE>
F-15
<PAGE>
Impaired mortgage loans with no provision for losses are loans where the
fair value of the collateral or the net present value of the loan equals
or exceeds the recorded investment. Interest income earned on loans
where the collateral value is used to measure impairment is recorded on
a cash basis. Interest income on loans where the present value method is
used to measure impairment is accrued on the net carrying value amount
of the loan at the interest rate used to discount the cash flows.
Changes in the present value attributable to changes in the amount or
timing of expected cash flows are reported as investment gains or
losses.
During the year ended December 31, 1995, the Company's average recorded
investment in impaired mortgage loans was $429.0 million. Interest
income recognized on these impaired mortgage loans totaled $27.9 million
for the year ended December 31, 1995, including $13.4 million recognized
on a cash basis.
At December 31, 1995, investments owned of any one issuer, including its
affiliates, for which the aggregate carrying values are 10% or more of
total shareholders' equity, were $508.3 million relating to Trammell
Crow and affiliates (including holdings of the Closed Block and the
discontinued GIC Segment). The amount includes restructured mortgage
loans on real estate with an amortized cost of $152.4 million. A $294.0
million commercial loan package which was in bankruptcy at the beginning
of the year was resolved in 1995, with part of the package reclassified
as restructured and the remainder reclassified as equity real estate.
The Insurance Group's investment in equity real estate is through direct
ownership and through investments in real estate joint ventures. At
December 31, 1995 and 1994, the carrying value of equity real estate
available for sale amounted to $255.5 million and $447.8 million,
respectively. For the years ended December 31, 1995, 1994 and 1993,
respectively, real estate of $35.3 million, $189.8 million and $261.8
million was acquired in satisfaction of debt. At December 31, 1995 and
1994, the Company owned $862.7 million and $1,086.9 million,
respectively, of real estate acquired in satisfaction of debt.
Depreciation of real estate is computed using the straight-line method
over the estimated useful lives of the properties, which generally range
from 40 to 50 years. Accumulated depreciation on real estate was $662.4
million and $703.1 million at December 31, 1995 and 1994, respectively.
Depreciation expense on real estate totaled $121.7 million, $117.0
million and $115.3 million for the years ended December 31, 1995, 1994
and 1993, respectively.
F-16
<PAGE>
4) JOINT VENTURES AND PARTNERSHIPS
Summarized combined financial information of real estate joint ventures
(38 and 47 individual ventures as of December 31, 1995 and 1994,
respectively) and of limited partnership interests accounted for under
the equity method, in which the Company has an investment of $10.0
million or greater and an equity interest of 10% or greater is as
follows:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------
1995 1994
---------------- -----------------
(IN MILLIONS)
<S> <C> <C>
FINANCIAL POSITION
Investments in real estate, at depreciated cost........................ $ 2,684.1 $ 2,786.7
Investments in securities, generally at estimated fair value........... 2,459.8 3,071.2
Cash and cash equivalents.............................................. 489.1 359.8
Other assets........................................................... 270.8 398.7
---------------- -----------------
Total assets........................................................... 5,903.8 6,616.4
---------------- -----------------
Borrowed funds - third party........................................... 1,782.3 1,759.6
Borrowed funds - the Company........................................... 220.5 238.0
Other liabilities...................................................... 593.9 987.7
---------------- -----------------
Total liabilities...................................................... 2,596.7 2,985.3
---------------- -----------------
Partners' Capital...................................................... $ 3,307.1 $ 3,631.1
================ =================
Equity in partners' capital included above............................. $ 902.2 $ 964.2
Equity in limited partnership interests not included above............. 212.8 224.6
Excess (deficit) of equity in partners' capital over investment cost
and equity earnings.................................................. 3.6 (1.8)
Notes receivable from joint venture.................................... 5.3 6.1
---------------- -----------------
Carrying Value......................................................... $ 1,123.9 $ 1,193.1
================ =================
</TABLE>
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
STATEMENTS OF EARNINGS
Revenues of real estate joint ventures............. $ 463.5 $ 537.7 $ 602.7
Revenues of other limited partnership interests.... 242.3 103.4 319.1
Interest expense - third party..................... (135.3) (114.9) (118.8)
Interest expense - the Company..................... (41.0) (36.9) (52.1)
Other expenses..................................... (397.7) (430.9) (531.7)
----------------- ---------------- -----------------
Net Earnings....................................... $ 131.8 $ 58.4 $ 219.2
================= ================ =================
Equity in net earnings included above.............. $ 49.1 $ 18.9 $ 71.6
Equity in net earnings of limited partnerships
interests not included above..................... 44.8 25.3 46.3
Excess of earnings in joint ventures over equity
ownership percentage and amortization of
differences in bases............................. .9 1.8 9.2
Interest on notes receivable....................... .1 - .5
----------------- ---------------- -----------------
Total Equity in Net Earnings....................... $ 94.9 $ 46.0 $ 127.6
================= ================ =================
</TABLE>
F-17
<PAGE>
5) NET INVESTMENT INCOME AND INVESTMENT GAINS (LOSSES)
The sources of net investment income are summarized as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Fixed maturities................................... $ 1,151.0 $ 1,024.5 $ 981.7
Trading account securities......................... - - 709.3
Securities purchased under resale agreements....... - - 533.8
Mortgage loans on real estate...................... 329.0 384.3 457.4
Equity real estate................................. 560.4 561.8 539.1
Other equity investments........................... 76.9 35.7 110.4
Policy loans....................................... 144.4 122.7 117.0
Broker-dealer related receivables.................. - - 292.2
Other investment income............................ 279.7 336.3 304.9
----------------- ---------------- -----------------
Gross investment income.......................... 2,541.4 2,465.3 4,045.8
----------------- ---------------- -----------------
Interest expense to finance short-term trading
instruments...................................... - - 983.4
Other investment expenses.......................... 413.7 434.4 463.1
----------------- ---------------- -----------------
Investment expenses.............................. 413.7 434.4 1,446.5
----------------- ---------------- -----------------
Net Investment Income.............................. $ 2,127.7 $ 2,030.9 $ 2,599.3
================= ================ =================
</TABLE>
Investment gains (losses), net, including changes in the valuation
allowances, are summarized as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Fixed maturities................................... $ 119.9 $ (14.1) $ 123.1
Mortgage loans on real estate...................... (40.2) (43.1) (65.1)
Equity real estate................................. (86.6) 20.6 (18.5)
Other equity investments........................... 12.8 76.0 119.5
Dealer and trading gains........................... - - 372.5
Sales of newly issued Alliance Units............... - 52.4 -
Other.............................................. (.6) - 1.9
----------------- ---------------- -----------------
Investment Gains, Net.............................. $ 5.3 $ 91.8 $ 533.4
================= ================ =================
</TABLE>
Writedowns of fixed maturities amounted to $46.7 million, $30.8 million
and $5.4 million for the years ended December 31, 1995, 1994 and 1993,
respectively.
For the years ended December 31, 1995 and 1994, respectively, proceeds
received on sales of fixed maturities classified as available for sale
amounted to $8,206.0 million and $5,253.9 million. Gross gains of $211.4
million and $65.2 million and gross losses of $64.2 million and $50.8
million, respectively, were realized on these sales. The change in
unrealized investment gains (losses) related to fixed maturities
classified as available for sale for the years ended December 31, 1995
and 1994 amounted to $1,077.2 million and $(742.2) million,
respectively.
Gross gains of $188.5 million and gross losses of $145.0 million were
realized on sales of investments in fixed maturities held for investment
and available for sale for the year ended December 31, 1993.
F-18
<PAGE>
During each of the years ended December 31, 1995 and 1994, one security
classified as held to maturity was sold and during the eleven months
ended November 30, 1995 and the year ended December 31, 1994,
respectively, twelve and six securities so classified were transferred
to the available for sale portfolio. All actions were taken as a result
of a significant deterioration in creditworthiness. The aggregate
amortized cost of the securities sold were $1.0 million and $19.9
million with a related investment gain of $-0- million and $.8 million
recognized in 1995 and 1994, respectively; the aggregate amortized cost
of the securities transferred was $116.0 million and $42.8 million with
gross unrealized investment losses of $3.2 million and $3.1 million
charged to consolidated shareholders' equity for the eleven months ended
November 30, 1995 and the year ended December 31, 1994, respectively. On
December 1, 1995, the Company transferred $4,794.9 million of securities
classified as held to maturity to the available for sale portfolio. As a
result, unrealized gains on fixed maturities increased $307.0 million,
offset by deferred policy acquisition costs of $73.7 million, amounts
attributable to participating group annuity contracts of $39.2 million
and deferred Federal income tax of $67.9 million.
Investment gains from other equity investments for the year ended
December 31, 1993, included $79.9 million generated by DLJ's involvement
in long-term corporate development investments.
For the years ended December 31, 1995, 1994 and 1993, investment results
passed through to certain participating group annuity contracts as
interest credited to policyholders' account balances amounted to $131.2
million, $175.8 million and $243.2 million, respectively.
During 1995, Alliance entered into an agreement to acquire the business
of Cursitor-Eaton Asset Management Company and Cursitor Holdings Limited
(collectively, "Cursitor") for approximately $141.5 million consisting
of $84.9 million in cash, 1,764,115 of Alliance's publicly traded units
("Alliance Units"), 6% notes aggregating $21.5 million payable ratably
over four years, and substantial additional consideration which will be
determined at a later date. The transaction, which is expected to be
completed during the first quarter of 1996, is subject to the receipt of
consents, regulatory approvals, and certain other closing conditions,
including client approval of the transfer of Cursitor accounts. Upon
completion of this transaction, the Company's ownership percentage of
Alliance will be reduced.
In 1994, Alliance sold 4.96 million newly issued Alliance Units to third
parties at prevailing market prices. The sales decreased the Company's
ownership of Alliance's Units from 63.2% to 59.2%. In addition, the
Company continues to hold its 1% general partnership interest in
Alliance. The Company recognized an investment gain of $52.4 million as
a result of these transactions.
The Company's ownership interest in Alliance will be further reduced
upon the exercise of options granted to certain Alliance employees. At
December 31, 1995, Alliance had options outstanding to purchase an
aggregate of 4.8 million Alliance Units at a price ranging from $6.0625
to $22.25 per unit. Options are exercisable at a rate of 20% on each of
the first five anniversary dates from the date of grant.
Net unrealized investment gains (losses), included in the consolidated
balance sheets as a component of equity and the changes for the
corresponding years, are summarized as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Balance, beginning of year......................... $ (203.0) $ 131.9 $ 78.8
Changes in unrealized investment (losses) gains.... 1,117.7 (823.8) (14.1)
Effect of adopting SFAS No. 115.................... - - 283.9
Changes in unrealized investment (gains)
losses attributable to:
Participating group annuity contracts.......... (78.1) 40.8 (36.2)
Deferred policy acquisition costs.............. (208.4) 269.5 (150.5)
Deferred Federal income taxes.................. (290.0) 178.6 (30.0)
----------------- ---------------- -----------------
Balance, End of Year............................... $ 338.2 $ (203.0) $ 131.9
================= ================ =================
</TABLE>
F-19
<PAGE>
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Balance, end of year comprises:
Unrealized investment (losses) gains on:
Fixed maturities............................... $ 615.9 $ (461.3) $ 283.9
Other equity investments....................... 31.1 7.7 75.8
Other.......................................... 31.6 14.5 25.0
----------------- ---------------- -----------------
Total........................................ 678.6 (439.1) 384.7
Amounts of unrealized investment (gains)
losses attributable to:
Participating group annuity contracts........ (72.2) 5.9 (34.9)
Deferred policy acquisition costs............ (89.4) 119.0 (150.5)
Deferred Federal income taxes................ (178.8) 111.2 (67.4)
----------------- ---------------- -----------------
Total.............................................. $ 338.2 $ (203.0) $ 131.9
================= ================ =================
</TABLE>
6) CLOSED BLOCK
Summarized financial information of the Closed Block follows:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------
1995 1994
----------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Assets
Fixed Maturities:
Available for sale, at estimated fair value (amortized cost,
$3,662.8 and $1,270.3)........................................... $ 3,896.2 $ 1,197.0
Held to maturity, at amortized cost (estimated fair value of
$1,785.0 in 1994)................................................ - 1,927.8
Mortgage loans on real estate........................................ 1,368.8 1,543.7
Policy loans......................................................... 1,797.2 1,827.9
Cash and other invested assets....................................... 440.9 442.5
Deferred policy acquisition costs.................................... 823.6 878.1
Other assets......................................................... 286.1 288.5
----------------- -----------------
Total Assets......................................................... $ 8,612.8 $ 8,105.5
================= =================
Liabilities
Future policy benefits and policyholders' account balances........... $ 9,346.7 $ 8,965.3
Other liabilities.................................................... 160.5 104.2
----------------- -----------------
Total Liabilities.................................................... $ 9,507.2 $ 9,069.5
================= =================
</TABLE>
F-20
<PAGE>
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Revenues
Premiums and other revenue......................... $ 753.4 $ 798.1 $ 860.2
Investment income (net of investment
expenses of $26.7, $19.0 and $17.3).............. 538.9 523.0 526.5
Investment losses, net............................. (20.2) (24.0) (15.0)
----------------- ---------------- -----------------
Total revenues............................... 1,272.1 1,297.1 1,371.7
----------------- ---------------- -----------------
Benefits and Other Deductions
Policyholders' benefits and dividends.............. 1,085.1 1,075.6 1,141.4
Other operating costs and expenses................. 62.6 70.5 102.0
----------------- ---------------- -----------------
Total benefits and other deductions.......... 1,147.7 1,146.1 1,243.4
----------------- ---------------- -----------------
Contribution from the Closed Block................. $ 124.4 $ 151.0 $ 128.3
================= ================ =================
</TABLE>
The fixed maturity portfolio, based on amortized cost, includes $4.3
million and $23.8 million at December 31, 1995 and 1994, respectively,
of restructured securities which includes problem fixed maturities of
$1.9 million and $6.4 million, respectively.
During the eleven months ended November 30, 1995, one security
classified as held to maturity was sold and ten securities classified as
held to maturity were transferred to the available for sale portfolio.
All actions resulted from a significant deterioration in
creditworthiness. The amortized cost of the security sold was $4.2
million. The aggregate amortized cost of the securities transferred was
$81.3 million with gross unrealized investment losses of $.1 million
transferred to equity. At December 1, 1995, $1,750.7 million of
securities classified as held to maturity were transferred to the
available for sale portfolio. As a result, unrealized gains of $88.5
million on fixed maturities were recognized and offset by an increase to
the deferred dividend liability. Implementation of SFAS No. 115 for the
valuation of fixed maturities at December 31, 1993 resulted in the
recognition of a deferred dividend liability of $49.6 million.
At December 31, 1995 and 1994, problem mortgage loans on real estate had
an amortized cost of $36.5 million and $27.6 million, respectively, and
mortgage loans on real estate for which the payment terms have been
restructured had an amortized cost of $137.7 million and $179.2 million,
respectively. At December 31, 1995 and 1994, the restructured mortgage
loans on real estate amount included $8.8 million and $.7 million,
respectively, of problem mortgage loans on real estate.
Valuation allowances amounted to $18.4 million and $46.2 million on
mortgage loans on real estate and $4.3 million and $2.6 million on
equity real estate at December 31, 1995 and 1994, respectively.
Writedowns of fixed maturities amounted to $16.8 million and $15.9
million and $1.7 million for the years ended December 31, 1995, 1994 and
1993, respectively.
Many expenses related to Closed Block operations are charged to
operations outside of the Closed Block; accordingly, the contribution
from the Closed Block does not represent the actual profitability of the
Closed Block operations. Operating costs and expenses outside of the
Closed Block are, therefore, disproportionate to the business outside of
the Closed Block.
F-21
<PAGE>
7) DISCONTINUED OPERATIONS
Summarized financial information of the GIC Segment follows:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------
1995 1994
----------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Assets
Mortgage loans on real estate........................................ $ 1,485.8 $ 1,730.5
Equity real estate................................................... 1,122.1 1,194.8
Other invested assets................................................ 665.2 978.8
Other assets......................................................... 579.3 529.5
----------------- -----------------
Total Assets......................................................... $ 3,852.4 $ 4,433.6
================= =================
Liabilities
Policyholders' liabilities........................................... $ 1,399.8 $ 1,924.0
Allowance for future losses.......................................... 164.2 185.6
Amounts due to continuing operations................................. 2,097.1 2,108.6
Other liabilities.................................................... 191.3 215.4
----------------- -----------------
Total Liabilities.................................................... $ 3,852.4 $ 4,433.6
================= =================
</TABLE>
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Revenues
Investment income (net of investment expenses
of $143.8, $174.0 and $175.8).................... $ 325.1 $ 395.0 $ 535.1
Investment (losses) gains, net..................... (22.9) 26.8 (22.6)
Policy fees, premiums and other income............. .7 .3 8.7
----------------- ---------------- -----------------
Total revenues..................................... 302.9 422.1 521.2
Benefits and other deductions...................... 328.0 443.8 545.9
----------------- ---------------- -----------------
Losses Charged to Allowance for Future Losses...... $ (25.1) $ (21.7) $ (24.7)
================= ================ =================
</TABLE>
In 1991, the Company established a pre-tax provision of $396.7 million
for the estimated future losses of the GIC Segment. At December 31,
1993, implementation of SFAS No. 115 for the valuation of fixed
maturities resulted in a benefit of $13.1 million, offset by a
corresponding addition to the allowance for future losses.
The amounts due to continuing operations at December 31, 1994 consisted
of $3,324.0 million borrowed by the GIC Segment from continuing
operations, offset by $1,215.4 million representing an obligation of
continuing operations to provide assets to fund the accumulated deficit
of the GIC Segment. In January 1995, continuing operations transferred
$1,215.4 million in cash to the GIC Segment in settlement of its
obligation. Subsequently, the GIC Segment remitted $1,155.4 million in
cash to continuing operations in partial repayment of borrowings by the
GIC Segment. No gains or losses were recognized on these transactions.
Amounts due to continuing operations at December 31, 1995, consisted of
$2,097.1 million borrowed by the discontinued GIC Segment.
F-22
<PAGE>
Investment income included $88.2 million and $97.7 million of interest
income for the years ended December 31, 1994 and 1993, respectively, on
amounts due from continuing operations. Benefits and other deductions
includes $154.6 million, $219.7 million and $197.1 million of interest
expense related to amounts borrowed from continuing operations in 1995,
1994 and 1993, respectively.
Valuation allowances amounted to $19.2 million and $50.2 million on
mortgage loans on real estate and $77.9 million and $74.7 million on
equity real estate at December 31, 1995 and 1994, respectively.
Writedowns of fixed maturities amounted to $8.1 million, $17.8 million
and $1.1 million for the years ended December 31, 1995, 1994 and 1993,
respectively.
The fixed maturity portfolio, based on amortized cost, includes $15.1
million and $43.3 million at December 31, 1995 and 1994, respectively,
of restructured securities. These amounts include problem fixed
maturities of $6.1 million and $9.7 million at December 31, 1995 and
1994, respectively.
At December 31, 1995 and 1994, problem mortgage loans on real estate had
amortized costs of $35.4 million and $14.9 million, respectively, and
mortgage loans on real estate for which the payment terms have been
restructured had amortized costs of $289.3 million and $371.2 million,
respectively.
At December 31, 1995 and 1994, the GIC Segment had $310.9 million and
$312.2 million, respectively, of real estate acquired in satisfaction of
debt.
8) SHORT-TERM AND LONG-TERM DEBT
Short-term and long-term debt consists of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------
1995 1994
----------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Short-term debt...................................................... $ - $ 20.0
----------------- -----------------
Long-term debt:
Equitable Life:
Surplus notes, 6.95%, scheduled to mature 2005..................... 399.3 -
Surplus notes, 7.70%, scheduled to mature 2015..................... 199.6 -
Eurodollar notes, 10.375% due 1995................................. - 34.6
Eurodollar notes, 10.5% due 1997................................... 76.2 76.2
Zero coupon note, 11.25% due 1997.................................. 120.1 107.8
Other.............................................................. 16.3 14.3
----------------- -----------------
Total Equitable Life........................................... 811.5 232.9
----------------- -----------------
Wholly Owned and Joint Venture Real Estate:
Mortgage notes, 4.98% - 12.75% due through 2019.................... 1,084.4 1,080.6
----------------- -----------------
Alliance:
Other.............................................................. 3.4 3.9
----------------- -----------------
Total long-term debt................................................. 1,899.3 1,317.4
----------------- -----------------
Total Short-term and Long-term Debt.................................. $ 1,899.3 $ 1,337.4
================= =================
</TABLE>
Short-term Debt
---------------
Equitable Life has a $350.0 million bank credit facility available to
fund short-term working capital needs and to facilitate the securities
settlement process. The credit facility consists of two types of
borrowing options with varying interest rates. The interest rates are
based on external indices dependent on the type of borrowing and at
December 31, 1995 range from 5.8% (the London Interbank Offering Rate
plus 22.5 basis points) to 8.5% (the prime rate). There were no
borrowings outstanding under this bank credit facility at December 31,
1995.
F-23
<PAGE>
Equitable Life has a commercial paper program with an issue limit of
$500.0 million. This program is available for general corporate purposes
used to support Equitable Life's liquidity needs and is supported by
Equitable Life's existing $350.0 million five-year bank credit facility.
There were no borrowings outstanding under this program at December 31,
1995.
In 1994, Alliance established a $100.0 million revolving credit facility
with several banks. On March 31, 1997, the revolving credit facility
converts into a term loan payable in quarterly installments through
March 31, 1999. Outstanding borrowings generally bear interest at the
Eurodollar rate plus .875% per annum through March 31, 1997 and at the
Eurodollar rate plus 1.125% per annum after conversion through March 31,
1999. In addition, a quarterly commitment fee of .25% per annum is paid
on the average daily unused amount. At December 31, 1995, there were no
amounts outstanding under the facility.
In 1994, Alliance also established a $100.0 million commercial paper
program and entered into a three-year $100.0 million revolving credit
facility with a group of commercial banks to support commercial paper to
be issued under the program and for general corporate purposes. Amounts
outstanding under the facility bear interest at an annual rate ranging
from the Eurodollar rate plus .225% to the Eurodollar rate plus .2875%.
A fee of .125% per annum is paid quarterly on the entire facility. At
December 31, 1995, Alliance had not issued any commercial paper and
there were no amounts outstanding under the revolving credit facility.
During 1994, EREIM established two bank lines of credit totaling $30.0
million of which $20.0 million was outstanding at December 31, 1994.
Long-term Debt
--------------
Several of the long-term debt agreements have restrictive covenants
related to the total amount of debt, net tangible assets and other
matters. The Company is in compliance with all debt covenants.
On December 18, 1995, Equitable Life issued, in accordance with Section
1307 of the New York Insurance Law, $400.0 million of surplus notes
having an interest rate of 6.95% scheduled to mature in 2005 and $200.0
million of surplus notes having an interest rate of 7.70% scheduled to
mature in 2015. Proceeds from the issuance of the surplus notes were
$596.6 million, net of related issuance costs. The unamortized discount
on the surplus notes was $1.1 million at December 31, 1995. Payments of
interest on or principal of the surplus notes are subject to prior
approval by the New York Insurance Department.
The Company has pledged real estate, mortgage loans, cash and securities
amounting to $1,629.7 million and $1,744.4 million at December 31, 1995
and 1994, respectively, as collateral for certain long-term debt.
At December 31, 1995, aggregate maturities of the long-term debt based
on required principal payments at maturity for 1996 and the succeeding
four years are $124.0 million, $466.6 million, $309.5 million, $15.8
million, respectively, and $1,015.0 million thereafter.
9) FEDERAL INCOME TAXES
A summary of the Federal income tax expense (benefit) in the
consolidated statements of earnings is shown below:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Federal income tax expense (benefit):
Current.......................................... $ (11.7) $ 4.0 $ 115.8
Deferred......................................... 124.1 97.2 (24.5)
----------------- ---------------- -----------------
Total.............................................. $ 112.4 $ 101.2 $ 91.3
================= ================ =================
</TABLE>
F-24
<PAGE>
The Federal income taxes attributable to consolidated operations are
different from the amounts determined by multiplying the earnings before
Federal income taxes and cumulative effect of accounting change by the
expected Federal income tax rate of 35%. The sources of the difference
and the tax effects of each are as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Expected Federal income tax expense................ $ 143.5 $ 138.1 $ 106.3
Differential earnings amount....................... - (16.8) (23.2)
Adjustment of tax audit reserves................... 4.1 (4.6) 22.9
Tax rate adjustment................................ - - (5.0)
Other.............................................. (35.2) (15.5) (9.7)
----------------- --------------- -----------------
Federal Income Tax Expense......................... $ 112.4 $ 101.2 $ 91.3
================= ================ =================
</TABLE>
Prior to the date of demutualization, Equitable Life reduced its
deduction for policyholder dividends by the differential earnings
amount. This amount was computed, for each tax year, by multiplying
Equitable Life's average equity base, as determined for tax purposes, by
an estimate of the excess of an imputed earnings rate for stock life
insurance companies over the average mutual life insurance companies'
earnings rate. The differential earnings amount for each tax year was
subsequently recomputed when actual earnings rates were published by the
Internal Revenue Service. As a stock life insurance company, Equitable
Life is no longer required to reduce its policyholder dividend deduction
by the differential earnings amount, but differential earnings amounts
for pre-demutualization years were still being recomputed in 1994 and
1993.
The components of the net deferred Federal income tax asset are as
follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1995 December 31, 1994
--------------------------------- ---------------------------------
ASSETS LIABILITIES Assets Liabilities
--------------- ---------------- --------------- ---------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Deferred policy acquisition costs,
reserves and reinsurance............. $ - $ 303.2 $ - $ 220.3
Investments............................ - 326.9 - 18.7
Compensation and related benefits...... 293.0 - 307.3 -
Other.................................. - 32.3 - 5.8
--------------- ---------------- --------------- ---------------
Total.................................. $ 293.0 $ 662.4 $ 307.3 $ 244.8
=============== ================ =============== ===============
</TABLE>
The deferred Federal income tax expense (benefit) impacting operations
reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. The sources of
these temporary differences and the tax effects of each are as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Deferred policy acquisition costs, reserves
and reinsurance.................................. $ 55.1 $ 13.0 $ (46.7)
Investments........................................ 13.0 89.3 60.4
Compensation and related benefits.................. 30.8 10.0 (50.1)
Other.............................................. 25.2 (15.1) 11.9
----------------- ---------------- -----------------
Deferred Federal Income Tax Expense (Benefit)...... $ 124.1 $ 97.2 $ (24.5)
================= ================ =================
</TABLE>
F-25
<PAGE>
The Internal Revenue Service completed its audit of the Company's
Federal income tax returns for the years 1984 through 1988. There was no
material effect on the Company's consolidated results of operations.
10) REINSURANCE AGREEMENTS
The Insurance Group assumes and cedes reinsurance with other insurance
companies. The Insurance Group evaluates the financial condition of its
reinsurers to minimize its exposure to significant losses from reinsurer
insolvencies. The effect of reinsurance (excluding group life and
health) is summarized as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Direct premiums.................................... $ 474.2 $ 476.7 $ 458.8
Reinsurance assumed................................ 171.3 180.5 169.9
Reinsurance ceded.................................. (38.7) (31.6) (29.6)
----------------- ---------------- -----------------
Premiums........................................... $ 606.8 $ 625.6 $ 599.1
================= ================ =================
Universal Life and Investment-type Product
Policy Fee Income Ceded.......................... $ 38.9 $ 27.5 $ 33.7
================= ================ =================
Policyholders' Benefits Ceded...................... $ 48.2 $ 20.7 $ 72.3
================= ================ =================
Interest Credited to Policyholders' Account
Balances Ceded................................... $ 28.5 $ 25.4 $ 24.1
================= ================ =================
</TABLE>
In February 1993, management established a practice limiting the risk
retention on new policies issued by the Insurance Group to a maximum of
$5.0 million. In addition, effective January 1, 1994, all in force
business above $5.0 million was reinsured. The Insurance Group also
reinsures the entire risk on certain substandard underwriting risks as
well as in certain other cases.
The Insurance Group cedes 100% of its group life and health business to
a third party insurance company. Premiums ceded totaled $260.6 million,
$241.0 million and $895.1 million for the years ended December 31, 1995,
1994 and 1993, respectively. Ceded death and disability benefits totaled
$188.1 million, $235.5 million and $787.8 million for the years ended
December 31, 1995, 1994 and 1993, respectively. Insurance liabilities
ceded totaled $724.2 million and $833.4 million at December 31, 1995 and
1994, respectively.
11) EMPLOYEE BENEFIT PLANS
The Company sponsors qualified and non-qualified defined benefit plans
covering substantially all employees (including certain qualified
part-time employees), managers and certain agents. The pension plans are
non-contributory and benefits are based on a cash balance formula or
years of service and final average earnings, if greater, under certain
grandfathering rules in the plans. The Company's funding policy is to
make the minimum contribution required by the Employee Retirement Income
Security Act of 1974.
Components of net periodic pension (credit) cost for the qualified and
non-qualified plans are as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Service cost....................................... $ 30.0 $ 30.3 $ 29.8
Interest cost on projected benefit obligations..... 122.0 111.0 108.0
Actual return on assets............................ (309.2) 24.4 (178.6)
Net amortization and deferrals..................... 155.6 (142.5) 55.3
----------------- ---------------- -----------------
Net Periodic Pension (Credit) Cost................. $ (1.6) $ 23.2 $ 14.5
================= ================ =================
</TABLE>
F-26
<PAGE>
The funded status of the qualified and non-qualified pension plans is as
follows:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------
1995 1994
---------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Actuarial present value of obligations:
Vested............................................................... $ 1,642.4 $ 1,295.5
Non-vested........................................................... 10.9 8.7
--------------- -----------------
Accumulated Benefit Obligation......................................... $ 1,653.3 $ 1,304.2
================ =================
Plan assets at fair value.............................................. $ 1,503.8 $ 1,193.5
Projected benefit obligation........................................... 1,743.0 1,403.4
---------------- -----------------
Projected benefit obligation in excess of plan assets.................. (239.2) (209.9)
Unrecognized prior service cost........................................ (25.5) (33.2)
Unrecognized net loss from past experience different from that
assumed.............................................................. 368.2 298.9
Unrecognized net asset at transition................................... (7.3) (20.8)
Additional minimum liability........................................... (51.9) (37.8)
---------------- -----------------
Prepaid (Accrued) Pension Cost......................................... $ 44.3 $ (2.8)
================ =================
</TABLE>
The discount rate and rate of increase in future compensation levels
used in determining the actuarial present value of projected benefit
obligations were 7.25% and 4.50%, respectively, at December 31, 1995 and
8.75% and 4.88%, respectively, at December 31, 1994. As of January 1,
1995 and 1994, the expected long-term rate of return on assets for the
retirement plan was 11% and 10%, respectively.
The Company recorded, as a reduction of shareholder's equity, an
additional minimum pension liability of $35.1 million and $2.7 million,
net of Federal income taxes, at December 31, 1995 and 1994,
respectively, representing the excess of the accumulated benefit
obligation over the fair value of plan assets and accrued pension
liability.
The pension plan's assets include corporate and government debt
securities, equity securities, equity real estate and shares of Group
Trusts managed by Alliance.
As of December 31, 1993, the Company changed the method of determining
the market-related value of plan assets from fair value to a calculated
value. This change in estimate had no material effect on the Company's
consolidated statements of earnings.
Prior to 1987, the qualified plan funded participants' benefits through
the purchase of non-participating annuity contracts from Equitable Life.
Benefit payments under these contracts were approximately $36.4 million,
$38.1 million and $39.9 million for the years ended December 31, 1995,
1994 and 1993, respectively.
The Company provides certain medical and life insurance benefits
(collectively, "postretirement benefits") for qualifying employees,
managers and agents retiring from the Company on or after attaining age
55 who have at least 10 years of service. The life insurance benefits
are related to age and salary at retirement. The costs of postretirement
benefits are recognized in accordance with the provisions of SFAS No.
106. The Company continues to fund postretirement benefits costs on a
pay-as-you-go basis and, for the years ended December 31, 1995, 1994 and
1993, the Company made estimated postretirement benefits payments of
$31.1 million, $29.8 million and $29.7 million, respectively.
F-27
<PAGE>
The following table sets forth the postretirement benefits plan's
status, reconciled to amounts recognized in the Company's consolidated
financial statements:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Service cost....................................... $ 4.0 $ 3.9 $ 5.3
Interest cost on accumulated postretirement
benefits obligation.............................. 34.7 28.6 29.2
Unrecognized prior service cost.................... (2.3) (3.9) (6.9)
Net amortization and deferrals..................... - - 1.5
----------------- ---------------- -----------------
Net Periodic Postretirement Benefits Costs......... $ 36.4 $ 28.6 $ 29.1
================= ================ =================
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------
1995 1994
---------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Accumulated postretirement benefits obligation:
Retirees............................................................. $ 391.8 $ 300.4
Fully eligible active plan participants.............................. 50.4 33.0
Other active plan participants....................................... 64.2 44.0
---------------- -----------------
506.4 377.4
Unrecognized benefit of plan amendments................................ - 3.2
Unrecognized prior service cost........................................ 56.3 61.9
Unrecognized net loss from past experience different from that
assumed and from changes in assumptions.............................. (181.3) (64.7)
---------------- -----------------
Accrued Postretirement Benefits Cost................................... $ 381.4 $ 377.8
================ =================
</TABLE>
In 1993, the Company amended the cost sharing provisions of
postretirement medical benefits. At January 1, 1994, medical benefits
available to retirees under age 65 are the same as those offered to
active employees and medical benefits will be limited to 200% of 1993
costs for all participants.
The assumed health care cost trend rate used in measuring the
accumulated postretirement benefits obligation was 10% in 1995,
gradually declining to 3.5% in the year 2008 and in 1994 was 10%,
gradually declining to 5% in the year 2004. The discount rate used in
determining the accumulated postretirement benefits obligation was 7.25%
and 8.75% at December 31, 1995 and 1994, respectively.
If the health care cost trend rate assumptions were increased by 1%, the
accumulated postretirement benefits obligation as of December 31, 1995
would be increased 6.5%. The effect of this change on the sum of the
service cost and interest cost would be an increase of 6.7%.
12) DERIVATIVES AND FAIR VALUE OF FINANCIAL INSTRUMENTS
Derivatives
-----------
The Insurance Group primarily uses derivatives for asset/liability risk
management and for hedging individual securities. Derivatives mainly are
utilized to reduce the Insurance Group's exposure to interest rate
fluctuations. Accounting for interest rate swap transactions is on an
accrual basis. Gains and losses related to interest rate swap
transactions are amortized as yield adjustments over the remaining life
of the underlying hedged security. Income and expense resulting from
interest rate swap activities are reflected in net investment income
except for hedging transactions related to insurance liabilities. The
notional amount of matched interest rate swaps outstanding at December
31, 1995 was $1,120.8 million. The average unexpired terms at December
31, 1995 range from 2.5 to 3.0 years. At December 31, 1995, the cost of
terminating outstanding matched swaps in a loss position was $15.9
million and the unrealized gain on
F-28
<PAGE>
outstanding matched swaps in a gain position was $19.0 million. The
Company has no intention of terminating these contracts prior to
maturity. During 1995, 1994 and 1993, net gains (losses) of $1.4
million, $(.2) million and $-0- million, respectively, were recorded in
connection with interest rate swap activity. Equitable Life has
implemented an interest rate cap program designed to hedge crediting
rates on interest-sensitive individual annuities contracts. The
outstanding notional amounts at December 31, 1995 of contracts purchased
and sold were $2,625.0 million and $300.0 million, respectively. The net
premium paid by Equitable Life on these contracts was $12.5 million and
is being amortized ratably over the contract periods ranging from 3 to 5
years. Income and expense resulting from this program are reflected as
an adjustment to interest credited to policyholders' account balances.
Substantially all of DLJ's business related derivatives is by its nature
trading activities which are primarily for the purpose of customer
accommodations. DLJ's derivative activities consist of option writing
and trading in forward and futures contracts. Derivative financial
instruments have both on-and-off balance sheet implications depending on
the nature of the contracts. DLJ's involvement in swap contracts is not
significant.
Fair Value of Financial Instruments
-----------------------------------
The Company defines fair value as the quoted market prices for those
instruments that are actively traded in financial markets. In cases
where quoted market prices are not available, fair values are estimated
using present value or other valuation techniques. The fair value
estimates are made at a specific point in time, based on available
market information and judgments about the financial instrument,
including estimates of timing, amount of expected future cash flows and
the credit standing of counterparties. Such estimates do not reflect any
premium or discount that could result from offering for sale at one time
the Company's entire holdings of a particular financial instrument, nor
do they consider the tax impact of the realization of unrealized gains
or losses. In many cases, the fair value estimates cannot be
substantiated by comparison to independent markets, nor can the
disclosed value be realized in immediate settlement of the instrument.
Certain financial instruments are excluded, particularly insurance
liabilities other than financial guarantees and investment contracts.
Fair market value of off-balance-sheet financial instruments of the
Insurance Group was not material at December 31, 1995 and 1994.
Fair value for mortgage loans on real estate are estimated by
discounting future contractual cash flows using interest rates at which
loans with similar characteristics and credit quality would be made.
Fair values for foreclosed mortgage loans and problem mortgage loans are
limited to the estimated fair value of the underlying collateral if
lower.
The estimated fair values for the Company's liabilities under GIC and
association plan contracts are estimated using contractual cash flows
discounted based on the T. Rowe Price GIC Index Rate for the appropriate
duration. For durations in excess of the published index rate, the
appropriate Treasury rate is used plus a spread equal to the longest
duration GIC rate spread published.
The estimated fair values for those group annuity contracts which are
classified as investment contracts are measured at the estimated fair
value of the underlying assets. Deposit administration contracts
(included with group annuity contracts) classified as insurance
contracts are measured at estimated fair value of the underlying assets.
The estimated fair values for single premium deferred annuities ("SPDA")
are estimated using projected cash flows discounted at current offering
rates. The estimated fair values for supplementary contracts not
involving life contingencies ("SCNILC") and annuities certain are
derived using discounted cash flows based upon the estimated current
offering rate.
Fair value for long-term debt is determined using published market
values, where available, or contractual cash flows discounted at market
interest rates. The estimated fair values for non-recourse mortgage debt
are determined by discounting contractual cash flows at a rate which
takes into account the level of current market interest rates and
collateral risk. The estimated fair values for recourse mortgage debt
are determined by discounting contractual cash flows at a rate based
upon current interest rates of other companies with credit ratings
similar to the Company. The Company's fair value of short-term
borrowings approximates their carrying value.
F-29
<PAGE>
The following table discloses carrying value and estimated fair value
for financial instruments not otherwise disclosed in Notes 3, 6 and 7:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------------------------------------
1995 1994
--------------------------------- ---------------------------------
CARRYING ESTIMATED Carrying Estimated
VALUE FAIR VALUE Value Fair Value
--------------- ---------------- --------------- ---------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Consolidated Financial Instruments:
-----------------------------------
Mortgage loans on real estate.......... $ 3,638.3 $ 3,973.6 $ 4,018.0 $ 3,919.4
Other joint ventures................... 492.7 492.7 544.4 544.4
Policy loans........................... 1,976.4 2,057.5 1,731.2 1,676.6
Policyholders' account balances:
Association plans.................... 101.0 100.0 141.0 141.0
Group annuity contracts.............. 2,335.0 2,395.0 2,450.0 2,469.0
SPDA................................. 1,265.8 1,272.0 1,744.3 1,732.7
Annuities certain and SCNILC......... 649.1 680.7 599.1 624.7
Long-term debt......................... 1,899.3 1,962.9 1,317.4 1,249.2
Closed Block Financial Instruments:
-----------------------------------
Mortgage loans on real estate.......... 1,368.8 1,461.4 1,543.7 1,477.8
Other equity investments............... 151.6 151.6 179.5 179.5
Policy loans........................... 1,797.2 1,891.4 1,827.9 1,721.9
SCNILC liability....................... 34.8 34.5 39.5 37.0
GIC Segment Financial Instruments:
----------------------------------
Mortgage loans on real estate.......... 1,485.8 1,666.1 1,730.5 1,743.7
Fixed maturities....................... 107.4 107.4 219.3 219.3
Other equity investments............... 455.9 455.9 591.8 591.8
Guaranteed interest contracts.......... 329.0 352.0 835.0 855.0
Long-term debt......................... 135.1 136.0 134.8 127.9
</TABLE>
13) COMMITMENTS AND CONTINGENT LIABILITIES
The Company has provided, from time to time, certain guarantees or
commitments to affiliates, investors and others. These arrangements
include commitments by the Company, under certain conditions: to make
liquidity advances to cover delinquent principal and interest and
property protection expenses with respect to loan servicing agreements
for securitized mortgage loans which at December 31, 1995 totaled $2.8
billion (as of December 31, 1995, $4.0 million have been advanced under
these commitments); to make capital contributions of up to $246.7
million to affiliated real estate joint ventures; to provide equity
financing to certain limited partnerships of $129.4 million at December
31, 1995, under existing loan or loan commitment agreements; and to
provide short-term financing loans which at December 31, 1995 totaled
$45.8 million. Management believes the Company will not incur any
material losses as a result of these commitments.
Equitable Life is the obligor under certain structured settlement
agreements which it had entered into with unaffiliated insurance
companies and beneficiaries. To satisfy its obligations under these
agreements, Equitable Life owns single premium annuities issued by
previously wholly owned life insurance subsidiaries. Equitable Life has
directed payment under these annuities to be made directly to the
beneficiaries under the structured settlement agreements. A contingent
liability exists with respect to these agreements should the previously
wholly owned subsidiaries be unable to meet their obligations.
Management believes the satisfaction of those obligations by Equitable
Life is remote.
At December 31, 1995, the Insurance Group had $29.0 million of letters
of credit outstanding.
F-30
<PAGE>
14) LITIGATION
A number of lawsuits have been filed against life and health insurers in
the jurisdictions in which Equitable Life and its subsidiaries do
business involving insurers' sales practices, alleged agent misconduct,
failure to properly supervise agents, and other matters. Some of the
lawsuits have resulted in the award of substantial judgments against
other insurers, including material amounts of punitive damages, or in
substantial settlements. In some states juries have substantial
discretion in awarding punitive damages. Equitable Life and its
insurance subsidiaries, like other life and health insurers, from time
to time are involved in such litigation. To date, no such lawsuit has
resulted in an award or settlement of any material amount against the
Company. Among litigations pending against Equitable Life and its
insurance subsidiaries of the type referred to in this paragraph are the
litigations described in the following two paragraphs.
An action entitled Golomb et al. v. The Equitable Life Assurance Society
of the United States was filed on January 20, 1995 in New York County
Supreme Court. The action purports to be brought on behalf of a class of
persons insured after 1983 under Lifetime Guaranteed Renewable Major
Medical Insurance Policies issued by Equitable Life (the "policies").
The complaint alleges that premium increases for these policies after
1983, all of which were filed with and approved by the New York State
Insurance Department and certain other state insurance departments,
breached the terms of the insurance policies, and that statements in the
policies and elsewhere concerning premium increases constituted
fraudulent concealment, misrepresentations in violation of New York
Insurance Law Section 4226 and deceptive practices under New York
General Business Law Section 349. The complaint seeks a declaratory
judgment, injunctive relief restricting the methods by which Equitable
Life increases premiums on the policies in the future, a refund of
premiums, and punitive damages. Plaintiffs also have indicated that they
will seek damages in an unspecified amount. Equitable Life has moved to
dismiss the complaint in its entirety on the grounds that it fails to
state a claim and that uncontroverted documentary evidence establishes a
complete defense to the claims. That motion is awaiting decision by the
court. In January 1996, separate actions were filed in Pennsylvania and
Texas state courts (entitled, respectively, Malvin et al. v. The
Equitable Life Assurance Society of the United States and Bowler et al.
v. The Equitable Life Assurance Society of the United States), making
claims similar to those in the New York action described above. These
new actions are asserted on behalf of proposed classes of Pennsylvania
issued or renewed policyholders and Texas issued or renewed
policyholders, insured under the policies. The Pennsylvania and Texas
actions seek compensatory and punitive damages and injunctive relief
restricting the methods by which Equitable Life increases premiums in
the future based on the common law and statutes of those states.
Although the outcome of any litigation cannot be predicted with
certainty, particularly in the early stages of an action, Equitable
Life's management believes that the ultimate resolution of those
litigations should not have a material adverse effect on the financial
position of the Company. Due to the early stage of such litigation,
Equitable Life's management cannot make an estimate of loss, if any, or
predict whether or not such litigation will have a material adverse
effect on the Company's results of operations in any particular period.
An action was instituted on April 6, 1995 against Equitable Life and its
wholly owned subsidiary, The Equitable of Colorado, Inc. ("EOC"), in New
York State Court, entitled Sidney C. Cole et al. v. The Equitable Life
Assurance Society of the United States and The Equitable of Colorado,
Inc., No. 95/108611 (N.Y. County). The action is brought by the holders
of a joint survivorship whole life policy issued by EOC. The action
purports to be on behalf of a class consisting of all persons who from
January 1, 1984 purchased life insurance policies sold by Equitable Life
and EOC based upon their allegedly uniform sales presentations and
policy illustrations. The complaint puts in issue various alleged sales
practices that plaintiffs assert, among other things, misrepresented the
stated number of years that the annual premium would need to be paid.
Plaintiffs seek damages in an unspecified amount, imposition of a
constructive trust, and seek to enjoin Equitable Life and EOC from
engaging in the challenged sales practices. Equitable Life and EOC
intend to defend vigorously and believe that they have meritorious
defenses which, if successful, would dispose of the action completely.
Equitable Life and EOC further do not believe that this case is an
appropriate class action. Although the outcome of any litigation cannot
be predicted with certainty, particularly in the early stages of an
action, Equitable Life's management believes that the ultimate
F-31
<PAGE>
resolution of this litigation should not have a material adverse effect
on the financial position of the Company. Due to the early stage of such
litigation, the Company's management cannot make an estimate of loss, if
any, or predict whether or not such litigation will have a material
adverse effect on the Company's results of operations in any particular
period.
Equitable Casualty Insurance Company ("Casualty"), a captive property
and casualty insurance company organized under the laws of Vermont,
which is an indirect wholly owned subsidiary of Equitable Life, is a
party to an arbitration proceeding that commenced in August 1995 with
the selection of three arbitrators. The arbitration will resolve a
dispute among Casualty, Houston General Insurance Company ("Houston
General"), and GEICO General Insurance Company ("GEICO General")
regarding the interpretation of a reinsurance agreement that was entered
into as part of a 1980 transaction whereby Equitable General Insurance
Company ("Equitable General"), formerly an indirect subsidiary of
Equitable Life and the predecessor of GEICO General, sold its commercial
lines business along with the stock of Houston General to subsidiaries
of Tokio Marine & Fire Insurance Company, Ltd. ("Tokio Marine").
Casualty and GEICO General maintain that, under the reinsurance
agreement, Houston General assumed liability for all losses insured
under commercial lines policies written by Equitable General and its
predecessors in order to effect the transfer of that business to Tokio
Marine's subsidiaries. Houston General contends that it did not assume
reinsurance liability for losses insured under certain of those
commercial lines policies. The arbitration panel determined to begin
hearing evidence in the arbitration in June 1996. The result of the
arbitration is expected to resolve two litigations that were commenced
by Houston General and that have been stayed by the presiding courts
pending the completion of the arbitration (in one case, Houston General
named as a defendant only GEICO General but Casualty intervened as a
defendant with GEICO General, and in the other case, Houston General
named GEICO General and Equitable Life). The arbitration is expected to
be completed during the second half of 1996. While the ultimate outcome
of the arbitration cannot be predicted with certainty, the Company's
management believes that the arbitrators will recognize that Houston
General's position is without merit and contrary to the way in which the
reinsurance industry operates and therefore the ultimate resolution of
this matter should not have a material adverse effect on the Company's
financial position or results of operations.
On July 25, 1995, a Consolidated and Supplemental Class Action Complaint
("Complaint") was filed against the Alliance North American Government
Income Trust, Inc. (the "Fund"), Alliance and certain other defendants
affiliated with Alliance, including the Holding Company, alleging
violations of Federal securities laws, fraud and breach of fiduciary
duty in connection with the Fund's investments in Mexican and Argentine
securities. A similar complaint was filed on November 7, 1995 and was
subsequently consolidated with the Complaint. The Complaint, which seeks
certification of a plaintiff class of persons who purchased or owned
Class A, B or C shares of the Fund from March 27, 1992 through December
23, 1994, seeks an unspecified amount of damages, costs, attorneys' fees
and punitive damages. The principal allegations of the Complaint are
that the Fund purchased debt securities issued by the Mexican and
Argentine governments in amounts that were not permitted by the Funds'
investment objective, and that there was no shareholder vote to change
the investment objective to permit purchases in such amounts. The
Complaint further alleges that the decline in the value of the Mexican
and Argentine securities held by the Fund caused the Fund's net asset
value to decline to the detriment of the Fund's shareholders. On
September 26, 1995, the defendants jointly filed a motion to dismiss the
Complaint which has not yet been decided by the Court. Alliance believes
that the allegations in the Complaint are without merit and intends to
vigorously defend against these claims. While the ultimate results of
this action cannot be determined, management of Alliance does not expect
that this action will have a material adverse effect on Alliance's
business.
On January 26, 1996, a purported purchaser of certain notes and warrants
to purchase shares of common stock of Rickel Home Centers, Inc.
("Rickel") filed a class action complaint against Donaldson, Lufkin &
Jenrette Securities Corporation ("DLJSC"), a wholly owned subsidiary of
DLJ, and certain other defendants for unspecified compensatory and
punitive damages in the United States District Court for the Southern
District of New York. The suit was brought on behalf of the purchasers
of 126,457 units consisting of $126,457,000 aggregate principal amount
of 13 1/2% senior notes due 2001 and 126,457 warrants to purchase shares
of common stock of Rickel (the "Units") issued by Rickel in October
1994. The complaint alleges violations of Federal securities laws and
common law fraud against DLJSC, as the underwriter of
F-32
<PAGE>
the Units and as an owner of 7.3% of the common stock of Rickel, Eos
Partners, L.P., and General Electric Capital Corporation, each as owners
of 44.2% of the common stock of Rickel, and members of the Board of
Directors of Rickel, including a DLJSC Managing Director. The complaint
seeks to hold DLJSC liable for alleged misstatements and omissions
contained in the prospectus and registration statement filed in
connection with the offering of the Units, alleging that the defendants
knew of financial losses and a decline in value of Rickel in the months
prior to the offering and did not disclose such information. The
complaint also alleges that Rickel failed to pay its semi-annual
interest payment due on the Units on December 15, 1995 and that Rickel
filed a voluntary petition for reorganization pursuant to Chapter 11 of
the United States Bankruptcy Code on January 10, 1996. DLJSC intends to
defend itself vigorously against all of the allegations contained in the
complaint. Although there can be no assurance, DLJ does not believe the
outcome of this litigation will have a material adverse effect on its
financial condition. Due to the early stage of this litigation, based on
the information currently available to it, DLJ's management cannot make
an estimate of loss or predict whether or not such litigation will have
a material adverse effect on DLJ's results of operations in any
particular period.
On June 12, 1995, a purported purchaser of certain securities issued by
Spectravision, Inc. ("Spectravision") filed a class action complaint
against DLJSC and certain other defendants for unspecified damages in
the U.S. District Court for the Northern District of Texas. The suit was
brought on behalf of the purchasers of $260,795,000 of securities issued
by Spectravision in November 1992, and alleges violations of the Federal
securities laws and the Texas Securities Act, common law fraud and
negligent misrepresentation. The securities were issued by Spectravision
pursuant to a prepackaged bankruptcy reorganization plan. DLJSC served
as financial advisor to Spectravision in its reorganization and as
Dealer Manager for Spectravision's 1992 issuance of the securities.
DLJSC is also being sued as a seller of certain notes of Spectravision
acquired and resold by DLJSC. The complaint seeks to hold DLJSC liable
for various alleged misstatements and omissions contained in
prospectuses and other materials issued between July 1992 and June 1994.
DLJSC intends to defend itself vigorously against all of the allegations
contained in the complaint. On June 8, 1995, Spectravision filed a
Chapter 11 petition in the United States Bankruptcy Court for the
District of Delaware. On January 5, 1996, the district court in the
litigation involving DLJSC ordered a partial stay of discovery until
Spectravision has emerged from bankruptcy or six months from the date of
the stipulated stay (whichever comes first). Accordingly, discovery of
DLJSC has not yet occurred. Although there can be no assurance, DLJ does
not believe that the ultimate outcome of this litigation will have a
material adverse effect on its financial condition. Due to the early
stage of such litigation, based upon information currently available to
it, DLJ's management cannot make an estimate of loss or predict whether
or not such litigation will have a material adverse effect on DLJ's
results of operations in any particular period. Plaintiff's counsel in
the class action against DLJSC described above has also filed another
securities class action based on similar factual allegations. Such suit
names as defendants Spectravision and its directors, and was brought on
behalf of a class of purchasers of $209.0 million of stock and $77.0
million of notes issued by Spectravision in October 1993. DLJSC served
as the managing underwriter for both of these issuances. DLJSC has not
been named as a defendant in this suit, although it has been reported to
DLJSC that plaintiff's counsel is contemplating seeking to amend the
complaint to add DLJSC as a defendant in that action.
In October 1995, DLJSC was named as a defendant in a purported class
action filed in a Texas State Court on behalf of the holders of $550.0
million principal amount of subordinated redeemable discount debentures
of National Gypsum Corporation ("NGC") canceled in connection with a
Chapter 11 plan of reorganization for NGC consummated in July 1993. The
named plaintiff in the State Court action also filed an adversary
proceeding in the Bankruptcy Court for the Northern District of Texas
seeking a declaratory judgment that the confirmed NGC plan of
reorganization does not bar the class action claims. Subsequent to the
consummation of NGC's plan of reorganization, NGC's shares traded for
values substantially in excess of, and in 1995 NGC was acquired for a
value substantially in excess of, the values upon which NGC's plan of
reorganization was based. The two actions arise out of DLJSC's
activities as financial advisor to NGC in the course of NGC's Chapter 11
reorganization proceedings. The class action complaint alleges that the
plan of reorganization submitted by NGC was based upon projections by
NGC and DLJSC which intentionally understated forecasts, and provided
misleading and incorrect information in order to hide NGC's true value
and that defendants breached their fiduciary duties by, among other
things, providing false, misleading or incomplete information to
deliberately understate the value of NGC. The class action complaint
seeks compensatory and punitive damages purportedly sustained by the
class. The Texas State
F-33
<PAGE>
Court action has subsequently been removed to the Bankruptcy Court,
which removal is being opposed by the plaintiff. DLJSC intends to defend
itself vigorously against all of the allegations contained in the
complaint. Although there can be no assurance, DLJ does not believe that
the ultimate outcome of this litigation will have a material adverse
effect on its financial condition. Due to the early stage of such
litigation, based upon the information currently available to it, DLJ's
management cannot make an estimate of loss or predict whether or not
such litigation will have a material adverse effect on DLJ's results of
operations in any particular period.
In November and December 1995, DLJSC, along with various other parties,
was named as a defendant in a number of purported class actions filed in
the U.S. District Court for the Eastern District of Louisiana. The
complaints allege violations of the Federal securities laws arising out
of a public offering in 1994 of $435.0 million of first mortgage notes
of Harrah's Jazz Company and Harrah's Jazz Finance Corp. The complaints
seek to hold DLJSC liable for various alleged misstatements and
omissions contained in the prospectus dated November 9, 1994. DLJSC
intends to defend itself vigorously against all of the allegations
contained in the complaints. Although there can be no assurance, DLJ
does not believe that the ultimate outcome of this litigation will have
a material adverse effect on its financial condition. Due to the early
stage of this litigation, based upon the information currently available
to it, DLJ's management cannot make an estimate of loss or predict
whether or not such litigation will have a material adverse effect on
DLJ's results of operations in any particular period.
In addition to the matters described above, Equitable Life and its
subsidiaries and DLJ and its subsidiaries are involved in various legal
actions and proceedings in connection with their businesses. Some of the
actions and proceedings have been brought on behalf of various alleged
classes of claimants and certain of these claimants seek damages of
unspecified amounts. While the ultimate outcome of such matters cannot
be predicted with certainty, in the opinion of management no such matter
is likely to have a material adverse effect on the Company's
consolidated financial position or results of operations.
15) LEASES
The Company has entered into operating leases for office space and
certain other assets, principally data processing equipment and office
furniture and equipment. Future minimum payments under noncancelable
leases for 1996 and the succeeding four years are $114.8 million, $101.8
million, $90.0 million, $73.6 million, $57.7 million and $487.0 million
thereafter. Minimum future sublease rental income on these noncancelable
leases for 1996 and the succeeding four years are $11.0 million, $8.7
million, $6.9 million, $4.6 million, $2.9 million and $1.1 million
thereafter.
At December 31, 1995, the minimum future rental income on noncancelable
operating leases for wholly owned investments in real estate for 1996
and the succeeding four years are $292.9 million, $271.2 million, $248.1
million, $226.4 million, $195.5 million and $1,018.8 million thereafter.
F-34
<PAGE>
16) OTHER OPERATING COSTS AND EXPENSES
Other operating costs and expenses consisted of the following:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Compensation costs................................. $ 595.9 $ 690.0 $ 1,452.3
Commissions........................................ 314.3 313.0 551.1
Short-term debt interest expense................... 11.4 19.0 317.1
Long-term debt interest expense.................... 108.1 98.3 86.0
Amortization of policy acquisition costs........... 320.4 318.1 275.9
Capitalization of policy acquisition costs......... (391.0) (410.9) (397.8)
Rent expense, net of sub-lease income.............. 124.8 128.9 159.5
Other.............................................. 772.6 786.7 1,140.1
----------------- ---------------- -----------------
Total.............................................. $ 1,856.5 $ 1,943.1 $ 3,584.2
================= ================ =================
</TABLE>
During the years ended December 31, 1995, 1994 and 1993, the Company
restructured certain operations in connection with cost reduction
programs and recorded pre-tax provisions of $32.0 million, $20.4 million
and $96.4 million, respectively. The amounts paid during 1995,
associated with the 1995 and 1994 cost reduction programs, totaled $24.0
million. At December 31, 1995, the liabilities associated with the 1995
and 1994 cost reduction programs amounted to $37.8 million. The 1995
cost reduction program included relocation expenses, including the
accelerated amortization of building improvements associated with the
relocation of the home office. The 1994 cost reduction program included
costs associated with the termination of operating leases and employee
severance benefits in connection with the consolidation of 16 insurance
agencies. The 1993 cost reduction program primarily reflected severance
benefits of terminated employees in connection with the combination of a
wholly owned subsidiary of the Company with Alliance.
17) INSURANCE GROUP STATUTORY FINANCIAL INFORMATION
Equitable Life is restricted as to the amounts it may pay as dividends
to the Holding Company. Under the New York Insurance Law, the New York
Superintendent has broad discretion to determine whether the financia1
condition of a stock life insurance company would support the payment of
dividends to its shareholders. For the years ended December 31, 1995,
1994 and 1993, statutory (loss) earnings totaled $(352.4) million, $67.5
million and $324.0 million, respectively. No amounts are expected to be
available for dividends from Equitable Life to the Holding Company in
1996.
At December 31, 1995, the Insurance Group, in accordance with various
government and state regulations, had $18.9 million of securities
deposited with such government or state agencies.
F-35
<PAGE>
Accounting practices used to prepare statutory financial statements for
regulatory filings of stock life insurance companies differ in certain
instances from GAAP. The following reconciles the Company's statutory
change in surplus and capital stock and statutory surplus and capital
stock determined in accordance with accounting practices prescribed by
the New York Insurance Department with net earnings and equity on a GAAP
basis.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Net change in statutory surplus and capital stock.. $ 78.1 $ 292.4 $ 190.8
Change in asset valuation reserves................. 365.7 (285.2) 639.1
----------------- ---------------- -----------------
Net change in statutory surplus, capital stock
and asset valuation reserves..................... 443.8 7.2 829.9
Adjustments:
Future policy benefits and policyholders'
account balances............................... (67.9) (11.0) (171.0)
Deferred policy acquisition costs................ 70.6 92.8 121.8
Deferred Federal income taxes.................... (150.0) (59.7) (57.5)
Valuation of investments......................... 189.1 45.2 202.3
Valuation of investment subsidiary............... (188.6) 396.6 (464.9)
Limited risk reinsurance......................... 416.9 74.9 85.2
Issuance of surplus notes........................ (538.9) - -
Sale of subsidiary and joint venture............. - - (366.5)
Contribution from the Holding Company............ - (300.0) -
Postretirement benefits.......................... (26.7) 17.1 23.8
Other, net....................................... 115.1 (44.0) 60.3
GAAP adjustments of Closed Block................. (3.1) 4.5 (16.0)
GAAP adjustments of discontinued GIC
Segment........................................ 37.3 42.8 (35.0)
----------------- ---------------- -----------------
Net Earnings....................................... $ 297.6 $ 266.4 $ 212.4
================= ================ =================
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Statutory surplus and capital stock................ $ 2,202.9 $ 2,124.8 $ 1,832.4
Asset valuation reserves........................... 1,345.9 980.2 1,265.4
----------------- ---------------- -----------------
Statutory surplus, capital stock and asset
valuation reserves............................... 3,548.8 3,105.0 3,097.8
Adjustments:
Future policy benefits and policyholders'
account balances............................... (1,017.4) (949.5) (938.5)
Deferred policy acquisition costs................ 3,083.3 3,221.1 2,858.8
Deferred Federal income taxes.................... (450.8) (26.8) (137.8)
Valuation of investments......................... 417.7 (794.1) (29.8)
Valuation of investment subsidiary............... (665.1) (476.5) (873.1)
Limited risk reinsurance......................... (429.0) (845.9) (920.8)
Issuance of surplus notes........................ (538.9) - -
Postretirement benefits.......................... (343.3) (316.6) (333.7)
Other, net....................................... 4.4 (79.2) (81.9)
GAAP adjustments of Closed Block................. 575.7 578.8 574.2
GAAP adjustments of discontinued GIC
Segment........................................ (184.6) (221.9) (264.6)
----------------- ---------------- -----------------
Total Shareholder's Equity......................... $ 4,000.8 $ 3,194.4 $ 2,950.6
================= ================ =================
</TABLE>
F-36
<PAGE>
18) BUSINESS SEGMENT INFORMATION
The Company has three major business segments: Individual Insurance and
Annuities; Investment Services and Group Pension.
Consolidation/elimination principally includes debt not specific to any
business segment. Attributed Insurance Capital represents net assets and
related revenues and earnings of the Insurance Group not assigned to the
insurance segments. Interest expense related to debt not specific to any
business segment is presented within Corporate interest expense.
Information for all periods is presented on a comparable basis.
The Individual Insurance and Annuities segment offers a variety of
traditional, variable and interest-sensitive life insurance products,
disability income, annuity products and mutual fund and other investment
products to individuals and small groups. This segment includes Separate
Accounts for certain individual insurance and annuity products.
The Investment Services segment provides investment fund management,
primarily to institutional clients. This segment includes Separate
Accounts which provide various investment options for group clients
through pooled or single group accounts.
Intersegment investment advisory and other fees of approximately $124.1
million, $135.3 million and $128.6 million for 1995, 1994 and 1993,
respectively, are included in total revenues of the Investment Services
segment. These fees, excluding amounts related to the discontinued GIC
Segment of $14.7 million, $27.4 million and $17.0 million for 1995, 1994
and 1993, respectively, are eliminated in consolidation.
The Group Pension segment administers traditional participating group
annuity contracts with conversion features, generally for corporate
qualified pension plans, and association plans which provide full
service retirement programs for individuals affiliated with professional
and trade associations.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1994 1993
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Revenues
Individual insurance and annuities................. $ 3,254.6 $ 3,110.7 $ 2,981.5
Group pension...................................... 292.0 359.1 426.6
Attributed insurance capital....................... 61.2 79.4 61.6
----------------- ---------------- -----------------
Insurance operations............................. 3,607.8 3,549.2 3,469.7
Investment services................................ 949.1 935.2 2,792.6
Consolidation/elimination.......................... (34.9) (24.7) (40.5)
----------------- ---------------- -----------------
Total.............................................. $ 4,522.0 $ 4,459.7 $ 6,221.8
================= ================ =================
Earnings (loss) before Federal income taxes
and cumulative effect of accounting change
Individual insurance and annuities................. $ 274.4 $ 245.5 $ 76.2
Group pension...................................... (13.3) 15.8 2.0
Attributed insurance capital....................... 18.7 69.8 49.0
----------------- ---------------- -----------------
Insurance operations............................. 279.8 331.1 127.2
Investment services................................ 161.2 177.5 302.1
Consolidation/elimination.......................... (3.1) .3 .5
----------------- ---------------- -----------------
Subtotal..................................... 437.9 508.9 429.8
Corporate interest expense......................... (27.9) (114.2) (126.1)
----------------- ---------------- -----------------
Total.............................................. $ 410.0 $ 394.7 $ 303.7
================= ================ =================
</TABLE>
F-37
<PAGE>
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------
1995 1994
---------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Assets
Individual insurance and annuities..................................... $ 50,328.8 $ 44,063.4
Group pension.......................................................... 4,033.3 4,222.8
Attributed insurance capital........................................... 2,391.6 2,609.8
---------------- -----------------
Insurance operations................................................. 56,753.7 50,896.0
Investment services.................................................... 12,842.9 12,127.9
Consolidation/elimination.............................................. (354.4) (1,614.4)
---------------- -----------------
Total.................................................................. $ 69,242.2 $ 61,409.5
================ =================
</TABLE>
19) QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The quarterly results of operations for the years ended December 31,
1995, 1994 and 1993, are summarized below:
<TABLE>
<CAPTION>
THREE MONTHS ENDED,
------------------------------------------------------------------------------
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
----------------- ----------------- ------------------ ------------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
1995
----
Total Revenues................ $ 1,074.7 $ 1,158.4 $ 1,127.1 $ 1,161.8
================= ================= ================== ==================
Net Earnings.................. $ 59.0 $ 94.3 $ 91.2 $ 53.1
================= ================= ================== ==================
1994
----
Total Revenues................ $ 1,107.4 $ 1,075.0 $ 1,153.8 $ 1,123.5
================= ================= ================== ==================
Earnings before Cumulative
Effect of Accounting
Change...................... $ 64.0 $ 68.4 $ 89.1 $ 72.0
================= ================= ================== ==================
Net Earnings.................. $ 36.9 $ 68.4 $ 89.1 $ 72.0
================= ================= ================== ==================
1993
----
Total Revenues................ $ 1,502.2 $ 1,539.7 $ 1,679.4 $ 1,500.5
================= ================= ================== ==================
Net Earnings.................. $ 32.3 $ 47.1 $ 68.8 $ 64.2
================= ================= ================== ==================
</TABLE>
20) INVESTMENT IN DLJ
On December 15, 1993, the Company sold a 61% interest in DLJ to the
Holding Company for $800.0 million in cash and securities. The excess of
the proceeds over the book value in DLJ at the date of sale of $340.2
million has been reflected as a capital contribution. In 1995, DLJ
completed the initial public offering ("IPO") of 10.58 million shares of
its common stock, which included 7.28 million of the Holding Company's
shares in DLJ, priced at $27 per share. Concurrent with the IPO, the
Company contributed equity securities to DLJ having a market value of
$21.2 million. Upon completion of the IPO, the Company's ownership
percentage was reduced to 36.1%. The Company's ownership interest will
be further reduced upon the issuance of common stock after the vesting
of forfeitable restricted stock units acquired by and/or the exercise of
options granted to certain DLJ employees. At December 31, 1995, DLJ had
options
F-38
<PAGE>
outstanding to purchase approximately 9.2 million shares of DLJ common
stock at $27.00 per share. Options are exercisable over a period of up
to ten years. DLJ restricted stock units represents forfeitable rights
to receive approximately 5.2 million shares of DLJ common stock through
February 2000.
The results of operations and cash flows of DLJ through the date of sale
are included in the consolidated statements of earnings and cash flow
for the year ended December 31, 1993. For the period subsequent to the
date of sale, the results of operations of DLJ are accounted for on the
equity basis and are included in commissions, fees and other income in
the consolidated statements of earnings. The Company's carrying value of
DLJ is included in investment in and loans to affiliates in the
consolidated balance sheets.
Summarized balance sheets information for DLJ, reconciled to the
Company's carrying value of DLJ, are as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------
1995 1994
---------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Assets:
Trading account securities, at market value............................ $ 10,911.4 $ 8,970.0
Securities purchased under resale agreements........................... 18,748.2 10,476.4
Broker-dealer related receivables...................................... 13,023.7 11,784.8
Other assets........................................................... 1,893.2 2,030.4
---------------- -----------------
Total Assets........................................................... $ 44,576.5 $ 33,261.6
================ =================
Liabilities:
Securities sold under repurchase agreements............................ $ 26,744.8 $ 18,356.7
Broker-dealer related payables......................................... 12,915.5 10,618.0
Short-term and long-term debt.......................................... 1,717.5 1,956.5
Other liabilities...................................................... 1,775.0 1,285.1
---------------- -----------------
Total liabilities...................................................... 43,152.8 32,216.3
Cumulative exchangeable preferred stock................................ 225.0 225.0
Total shareholders' equity............................................. 1,198.7 820.3
---------------- -----------------
Total Liabilities, Cumulative Exchangeable Preferred Stock and
Shareholders' Equity................................................. $ 44,576.5 $ 33,261.6
================ =================
DLJ's equity as reported............................................... $ 1,198.7 $ 820.3
Unamortized cost in excess of net assets acquired in 1985
and other adjustments................................................ 40.5 50.8
The Holding Company's equity ownership in DLJ.......................... (499.0) (532.1)
Minority interest in DLJ............................................... (324.3) -
---------------- -----------------
The Company's Carrying Value of DLJ.................................... $ 415.9 $ 339.0
================ =================
</TABLE>
F-39
<PAGE>
Summarized statements of earnings information for DLJ reconciled to the
Company's equity in earnings of DLJ is as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------
1995 1994
---------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Commission, fees and other income...................................... $ 1,325.9 $ 953.5
Net investment income.................................................. 904.1 791.9
Dealer, trading and investment gains, net.............................. 528.6 263.3
---------------- -----------------
Total Revenues......................................................... 2,758.6 2,008.7
Total expenses including income taxes.................................. 2,579.5 1,885.7
---------------- -----------------
Net earnings........................................................... 179.1 123.0
Dividends on preferred stock........................................... 19.9 20.9
---------------- -----------------
Earnings Applicable to Common Shares................................... $ 159.2 $ 102.1
================ =================
DLJ's earnings applicable to common shares as reported................. $ 159.2 $ 102.1
Amortization of cost in excess of net assets acquired in 1985.......... (3.9) (3.1)
The Holding Company's equity in DLJ's earnings......................... (90.4) (60.9)
Minority interest in DLJ............................................... (6.5) -
---------------- -----------------
The Company's Equity in DLJ's Earnings................................. $ 58.4 $ 38.1
================ =================
</TABLE>
21) RELATED PARTY TRANSACTIONS
On August 31, 1993, the Company sold $661.0 million of primarily
privately placed below investment grade fixed maturities to EQ Asset
Trust 1993, a limited purpose business trust, wholly owned by the
Holding Company. The Company recognized a $4.1 million gain net of
related deferred policy acquisition costs, deferred Federal income tax
and amounts attributable to participating group annuity contracts. In
conjunction with this transaction, the Company received $200.0 million
of Class B Notes issued by EQ Asset Trust 1993. These notes have
interest rates ranging from 6.85% to 9.45%. The Class B Notes are
reflected in investments in and loans to affiliates on the consolidated
balance sheets.
F-40
<PAGE>
[EQUITABLE LOGO -- JUST THE CIRCLE, NO TYPE]
<PAGE>
PART C
OTHER INFORMATION
-----------------
Item 24. Financial Statements and Exhibits
---------------------------------
(a) Financial Statements included in Part B.
1. Separate Account A:
------------------
- Report of Independent Accountants - Price Waterhouse;
- Statements of Assets and Liabilities for the Year Ended December
31, 1995;
- Statements of Operations for the Year Ended December 31, 1995;
- Statements of Changes in Net Assets for the Years Ended December
31, 1995 and 1994;
- Notes to Financial Statements;
2. The Equitable Life Assurance Society of the United States:
---------------------------------------------------------
- Report of Independent Accountants - Price Waterhouse;
- Consolidated Balance Sheets as of December 31, 1995 and 1994;
- Consolidated Statements of Earnings for Years Ended December 31,
1995, 1994 and 1993;
- Consolidated Statements of Equity for Years Ended December 31,
1995, 1994 and 1993;
- Consolidated Statements of Cash Flows for Years Ended December
31, 1995, 1994 and 1993; and
- Notes to Consolidated Financial Statements
(b) Exhibits.
The following exhibits are filed herewith:
1. (a) Resolutions of the Board of Directors of The
Equitable Life Assurance Society of the United
States ("Equitable") authorizing the establishment
of the Registrant, previously filed with this
Registration Statement No. 33-58950 on April 29,
1996.
(b) Resolutions of the Board of Directors of Equitable
dated October 16, 1986 authorizing the
reorganization of Separate Accounts A, C, D, E, J
and K into one continuing separate account,
previously filed with this Registration Statement
No. 33-58950 on April 29, 1996.
2. Not applicable.
3. (a) Sales Agreement among Equitable, Separate Account A
and Equitable Variable Insurance Company as
principal underwriter for The Hudson River Trust,
previously filed with this Registration Statement
No. 33-58950 on March 2, 1993.
C-1
<PAGE>
(b) Distribution and Servicing Agreement among Equico
Securities, Inc., ("Equico") Equitable and
Equitable Variable dated as of May 1, 1994,
previously filed with this Registration Statement
No. 33-58950 on March 24, 1995.
(c) Distribution Agreement by and between The Hudson
River Trust and Equico dated as of January 1, 1995,
previously filed with this Registration Statement
No. 33-58950 on April 14, 1995.
(d) Sales Agreement among Equico, Equitable and
Equitable's Separate Account A, Separate Account 301
and Separate Account No. 51 dated as of January 1,
1995, previously filed with this Registration
Statement No. 33-58950 on April 14, 1995.
4. (a) Form of group annuity contract for IRC Section
401(a) Plans, previously filed with this
Registration Statement No. 33-58950 on March 2,
1993.
(b) Form of Group Annuity Contract between Equitable and
Aurora Health Care, Inc. with respect to adding
403(b) Plans, previously filed with this
Registration Statement No. 33-58950 on March 24,
1995.
(c) Form of Momentum Plus 457 group annuity contract.
5. Form of application, previously filed with this
Registration Statement No. 33-58950 on March 2, 1993.
6. (a) Copy of the Restated Charter of Equitable, adopted
August 6, 1992, previously filed with this
Registration Statement No. 33-58950 on March 2,
1993.
(b) By-Laws of Equitable, as amended through July 22,
1992, previously filed with this Registration
Statement No. 33-58950 on March 2, 1993.
(c) Copy of the Certificate of Amendment to the Restated
Charter of Equitable, adopted November 18, 1993,
previously filed with this Registration Statement
No. 33-58950 on April 29, 1996.
7. Not applicable.
8. Not applicable.
9. Opinion and Consent of Jonathan E. Gaines, Vice President
and Associate General Counsel as to the legality of the
securities being registered, previously filed with this
Registration Statement No. 33-58950 on August 12, 1993.
10. (a) Consent of Price Waterhouse.
(b) Powers of Attorney, previously filed with this
Registration Statement No. 33-58950 on April 29,
1996.
11. Not applicable.
C-2
<PAGE>
12. Not applicable.
13. (a) Schedule for computation of Money Market Fund Yield
quotations, previously filed with this Registration
Statement No. 33-58950 on April 28, 1994.
(b) Separate Account A Performance Values Worksheets
One-Year Standardized Performance for the Year
Ending December 31, 1993, previously filed with this
Registration Statement No. 33-58950 on April 28,
1994.
C-3
<PAGE>
Item 25. Directors and Officers of Equitable.
-----------------------------------
Set forth below is information regarding the directors and principal officers of
Equitable. Equitable's address is 787 Seventh Avenue, New York, New York 10019.
The business address of the persons whose names are preceded by an asterisk is
that of Equitable.
POSITIONS AND
NAME AND PRINCIPAL OFFICES WITH
BUSINESS ADDRESS EQUITABLE
------------------ -------------
DIRECTORS
Claude Bebear Director
AXA S.A.
23, Avenue Matignon
75008 Paris, France
Christopher J. Brocksom Director
AXA Equity & Law
Amersham Road
High Wycombe
Bucks HP 13 5 AL
England
Francoise Colloc'h Director
AXA S.A.
23, Avenue Matignon
75008 Paris, France
Henri de Castries Director
AXA S.A.
23, Avenue Matignon
75008 Paris, France
Joseph L. Dionne Director
The McGraw-Hill Companies
1221 Avenue of the Americas
New York, NY 10020
William T. Esrey Director
Sprint Corporation
P.O. Box 11315
Kansas City, MO 64112
Jean-Rene Fourtou Director
Rhone-Poulenc S.A.
25 Quai Paul Doumer
92408 Courbevoie Cedex,
France
Norman C. Francis Director
Xavier University of Louisiana
7325 Palmetto Street
New Orleans, LA 70125
Donald J. Greene Director
LeBoeuf, Lamb, Greene & MacRae
125 West 55th Street
New York, NY 10019-4513
C-4
<PAGE>
POSITIONS AND
NAME AND PRINCIPAL OFFICES WITH
BUSINESS ADDRESS EQUITABLE
---------------- -------------
John T. Hartley Director
Harris Corporation
1025 NASA Boulevard
Melbourne, FL 32919
John H. F. Haskell, Jr. Director
Dillon, Read & Co., Inc.
535 Madison Avenue
New York, NY 10028
W. Edwin Jarmain Director
Jarmain Group Inc.
95 Wellington Street West
Suite 805
Toronto, Ontario M5J 2N7,
Canada
G. Donald Johnston, Jr. Director
184-400 Ocean Road
John's Island
Vero Beach, FL 32963
Winthrop Knowlton Director
Knowlton Brothers, Inc.
530 Fifth Avenue
New York, NY 10036
Arthur L. Liman Director
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, NY 10019
George T. Lowy Director
Cravath, Swaine & Moore
825 Eighth Avenue
New York, NY 10019
Didier Pineau-Valencienne Director
Schneider S.A.
64-70 Avenue Jean-Baptiste Clament
96646 Boulogne-Billancourt Cedex
France
George J. Sella, Jr. Director
P.O. Box 397
Newton, NJ 07860
Dave H. Williams Director
Alliance Capital Management Corporation
1345 Avenue of the Americas
New York, NY 10105
C-5
<PAGE>
POSITIONS AND
NAME AND PRINCIPAL OFFICES WITH
BUSINESS ADDRESS EQUITABLE
---------------- -------------
Officers-Directors
------------------
*James M. Benson President, Chief
Executive Officer
and Director
*William T. McCaffrey Senior Executive
Vice President,
Chief Operating
Officer and
Director
*Joseph J. Melone Chairman of the
Board and Director
OTHER OFFICERS
--------------
*Harvey Blitz Senior Vice
President and
Deputy Chief
Financial Officer
*Kevin R. Byrne Vice President and
Treasurer
*Jerry M. de St. Paer Executive Vice
President
*Gordon G. Dinsmore Senior Vice
President
*Alvin H. Fenichel Senior Vice
President and
Controller
*Paul J. Flora Senior Vice
President and
Auditor
*Robert E. Garber Executive Vice
President and
General Counsel
*J. Thomas Liddle, Jr. Senior Vice
President and
Chief Valuation
Actuary
*Michael S. Martin Senior Vice
President
*Peter D. Noris Executive Vice
President and
Chief Investment
Officer
*Anthony C. Pasquale Senior Vice
President
C-6
<PAGE>
POSITIONS AND
NAME AND PRINCIPAL OFFICES WITH
BUSINESS ADDRESS EQUITABLE
---------------- -------------
*Pauline Sherman Vice President,
Secretary and
Associate General
Counsel
*Richard V. Silver Senior Vice
President and
Associate General
Counsel
*Jose Suquet Executive Vice
President and
Chief Agency
Officer
*Stanley B. Tulin Senior Executive
Vice President and
Chief Financial
Officer
C-7
<PAGE>
Item 26. Persons Controlled by or Under Common Control with Equitable
------------------------------------------------------------
or Registrant
-------------
Separate Account A of The Equitable Life Assurance Society of the United States
(the "Separate Account") is a separate account of Equitable. Equitable, a New
York stock life insurance company, is a wholly owned subsidiary of The Equitable
Companies Incorporated (the "Holding Company"), a publicly traded company.
The largest stockholder of the Holding Company is AXA S.A. At 12/31/95 AXA S.A.
beneficially owned approximately 60.6% of the Holding Company's outstanding
common stock plus convertible preferred stock. AXA S.A. is able to exercise
significant influence over the operations and capital structure of the Holding
Company and its subsidiaries, including Equitable. AXA, a French company, is the
holding company for an international group of insurance and related financial
services companies.
C-8
<PAGE>
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
The Equitable Companies Incorporated (l991) (Delaware)
- ------------------------------------
Donaldson, Lufkin & Jenrette, Inc. (1993) (Delaware) (44.1%) (See
----------------------------------
Addendum for subsidiaries)
The Equitable Life Assurance Society of the United States (1859)
---------------------------------------------------------
(New York) (a)(b)
The Equitable of Colorado, Inc. (l983) (Colorado)
-------------------------------
Equitable Variable Life Insurance Company (l972) (New York)
-----------------------------------------
(a)
FHJV Holdings, Inc. (1990) (Delaware)
-------------------
EVLICO, INC. (1995) (Delaware)
------------
EVLICO East Ridge, Inc. (1995) (Delaware)
-----------------------
GP/EQ Southwest, Inc. (1995) (Texas) (5.86%)
---------------------
Franocom, Inc. (1985) (Pennsylvania)
--------------
Frontier Trust Company (1987) (North Dakota)
----------------------
Gateway Center Buildings, Garage, and Apartment Hotel, Inc.
-----------------------------------------------------------
(inactive) (pre-l970) (Pennsylvania)
Equitable Deal Flow Fund, L.P.
------------------------------
Equitable Managed Assets (Delaware)
------------------------
EREIM LP Associates (99%)
-------------------------
EML Associates, L.P. (19.8%)
----------------------------
ACMC, Inc. (1991) (Delaware)
----------
Alliance Capital Management L.P. (1988) (Delaware)
--------------------------------
(46.7% limited partnership interests)
EVCO, Inc. (1991) (New Jersey)
----------
EVSA, Inc. (1992) (Pennsylvania)
----------
Prime Property Funding, Inc. (1993) (Delaware)
----------------------------
Wil Gro, Inc. (1992) (Pennsylvania)
-------------
Equitable BJVS, Inc. (1992) (California)
--------------------
Equitable Rowes Wharf, Inc. (1995) (Massachusetts)
---------------------------
GP/EQ Southwest, Inc. (1995) (Texas) (94.132%)
---------------------
Fox Run, Inc. (1994) (Massachusetts)
-------------
Equitable Underwriting and Sales Agency (Bahamas) Limited
---------------------------------------------------------
(1993) (Bahamas)
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-9
<PAGE>
The Equitable Companies Incorporated (cont.)
- ------------------------------------
The Equitable Life Assurance Society of the United States (cont.)
---------------------------------------------------------
CCMI Corporation (1994) (Maryland)
----------------
FTM Corporation (1994) (Maryland)
---------------
HVM Corporation (1994) (Maryland)
---------------
STCS, Inc. (1992) (Delaware)
----------
Equitable BJVS, Inc. (1992) (Delaware)
--------------------
Camelback JVS, Inc. (1995) (Arizona)
-------------------
Equico Securities, Inc. (l97l) (Delaware) (a) (b)
-----------------------
ELAS Securities Acquisition Corp. (l980) (Delaware)
---------------------------------
Equitable Realty Assets Corporation (l983) (Delaware)
-----------------------------------
100 Federal Street Funding Corporation (Massachusetts)
--------------------------------------
100 Federal Street Realty Corporation (Massachusetts)
-------------------------------------
Equitable Holding Corporation (1985) (Delaware)
-----------------------------
EquiSource of New York, Inc. (formerly Traditional Equinet
----------------------------
Business Corporation of New York) (1986) (New York) (See
Addendum for subsidiaries)
Equitable Casualty Insurance Company (l986) (Vermont)
------------------------------------
EREIM LP Corp. (1986) (Delaware)
--------------
EREIM LP Associates (1%)
------------------------
EML Associates (.02%)
---------------------
Six-Pac G.P., Inc. (1990) (Georgia)
------------------
Equitable Distributors, Inc. (1988) (Delaware) (a)
----------------------------
Equitable JVS, Inc. (1988) (Delaware)
-------------------
Astor/Broadway Acquisition Corp. (1990) (New York)
--------------------------------
Astor Times Square Corp. (1990) (New York)
------------------------
PC Landmark, Inc. (1990) (Texas)
-----------------
Equitable JVS II, Inc. (1994) Maryland
--------------------------------------
EJSVS, Inc. (1995) (New Jersey)
-----------
Donaldson, Lufkin & Jenrette, Inc. (1985 by EIC; 1993
----------------------------------
by EHC) (Delaware) (36.1%) (See Addendum for subsidiaries)
JMR Realty Services, Inc. (1994) (Delaware)
-------------------------
Equitable Investment Corporation (l97l) (New York)
--------------------------------
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-10
<PAGE>
The Equitable Companies Incorporated (cont.)
- ------------------------------------
The Equitable Life Assurance Society of the United States (cont.)
---------------------------------------------------------
Equitable Holding Corporation (cont.)
-----------------------------
Equitable Investment Corporation (cont.)
--------------------------------
Equitable Capital Management Corporation (cont.)
----------------------------------------
Stelas North Carolina Limited Partnership (50% limited
-----------------------------------------
partnership interest) (l984)
EQ Services, Inc. (1992) (Delaware)
-----------------
Equitable Agri-Business, Inc. (1984) Delaware
-----------------------------
Alliance Capital Management Corporation (l991) (Delaware)
---------------------------------------
(b) (See Addendum for subsidiaries)
Equitable Capital Management Corporation (l985) (Delaware)
----------------------------------------
(limited partnership interests) (b)
Alliance Capital Management L.P. (1988) (Delaware)
--------------------------------
(16.6% limited partnership interests)
Equitable JV Holding Corporation (1989) (Delaware)
--------------------------------
Equitable Real Estate Investment Management, Inc. (l984)
-------------------------------------------------
(Delaware) (b)
Equitable Realty Portfolio Management, Inc. (1984)
-------------------------------------------
(Delaware)
EQK Partners (100% general partnership interest)
------------
Compass Management and Leasing Co. (formerly known as
EREIM, Inc. (l984) (Colorado)
-----------
Equitable Real Estate Capital Markets, Inc. (1987)
-------------------------------------------
(Delaware) (a)
EQ Realty Associates-V, Inc. (1987) (Delaware)
----------------------------
EPPNLP Corp. (1987) (Delaware)
------------
Equitable Pacific Partners Corp. (1987) (Delaware)
--------------------------------
Equitable Pacific Partners Limited Partnership
----------------------------------------------
EREIM Managers Corp. (1986) (Delaware)
--------------------
ML/EQ Real Estate Portfolio, L.P.
---------------------------------
EML Associates, L.P. (80%)
--------------------------
Compass Retail, Inc. (1990) (Delaware)
--------------------
Compass Management and Leasing, Inc. (1991) (Delaware)
------------------------------------
Compass Cayman (1996) (Cayman Islands)
--------------
Column Financial, Inc. (1993) (Delaware) (50%)
----------------------
Buckhead Strategic Corp. (1994) (Delaware)
------------------------
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-11
<PAGE>
The Equitable Companies Incorporated (cont.)
- ------------------------------------
The Equitable Life Assurance Society of the United States (cont.)
- ---------------------------------------------------------
Equitable Holding Corporation (cont.)
-----------------------------
Equitable Investment Corporation (cont.)
--------------------------------
Equitable Real Estate Investment Management, Inc.
-------------------------------------------------
(cont.)
Buckhead Strategic Corp. (cont.)
------------------------
Buckhead Strategic Fund, L.P.
-----------------------------
BH Strategic Co. I, L.P.
------------------------
Buckhead Strategic Co. II, L.P.
-------------------------------
Buckhead Strategic Co. III, L.P.
--------------------------------
Buckhead Strategic Co. IV, L.P.
-------------------------------
CJVS, Inc. (1994) (California)
----------
ERE European Corp. I, L.P. (1994) (Delaware)
--------------------------
A/E European Associates I Limited Partnership
---------------------------------------------
Community Funding, Inc. (1994) (Delaware)
-----------------------
Community Mortgage Fund, L.P. (1994) (Delaware)
-----------------------------
Buckhead Strategic Corp., II (1995) (California)
----------------------------
Buckhead Strategic Fund L.P.II
------------------------------
Buckhead Co. III. L.P.
----------------------
HYDOC, L.L.C.
-------------
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-12
<PAGE>
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
ADDENDUM - NON-REAL ESTATE SUBSIDIARY
OF EQUITABLE HOLDING CORPORATION
HAVING MORE THAN FIVE SUBSIDIARIES
------------------------------------------------------
EquiSource of New York, Inc. (formerly Traditional Equinet Business Corporation
of New York) has the following subsidiaries that are brokerage companies to make
available to Equitable Agents within each state traditional (non-equity)
products and services not produced by Equitable:
EquiSource of Delaware, Inc. (1986) (Delaware)
EquiSource of Alabama, Inc. (1986) (Alabama)
EquiSource of Arizona, Inc. (1986) (Arizona)
EquiSource of Arkansas, Inc. (1987) (Arkansas)
EquiSource Insurance Agency of California, Inc. (1987) (California)
EquiSource of Colorado, Inc. (1986) (Colorado)
EquiSource of Hawaii, Inc. (1987) (Hawaii)
EquiSource of Maine, Inc. (1987) (Maine)
EquiSource Insurance Agency of Massachusetts, Inc. (1988)
(Massachusetts)
EquiSource of Montana, Inc. (1986) (Montana)
EquiSource of Nevada, Inc. (1986) (Nevada)
EquiSource of New Mexico, Inc. (1987) (New Mexico)
EquiSource of Pennsylvania, Inc. (1986) (Pennsylvania)
EquiSource Insurance Agency of Utah, Inc. (1986) (Utah)
EquiSource of Washington, Inc. (1987) (Washington)
EquiSource of Wyoming, Inc. (1986) (Wyoming)
C-13
<PAGE>
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
ADDENDUM - OTHER NON-REAL ESTATE SUBSIDIARIES
HAVING MORE THAN FIVE SUBSIDIARIES
-------------------------------------------------------
Donaldson, Lufkin & Jenrette, Inc. has the following subsidiaries, and
- ----------------------------------
approximately 60 other subsidiaries, most of which are special purpose
subsidiaries (the number fluctuates according to business needs):
Donaldson, Lufkin & Jenrette, Inc. (1985) (Delaware)
----------------------------------
Donaldson, Lufkin & Jenrette Securities Corporation (1985)
---------------------------------------------------
(Delaware) (a) (b)
Wood, Struthers & Winthrop Management Corporation (1985)
-------------------------------------------------
(Delaware) (b)
Autranet, Inc. (1985) (Delaware) (a)
--------------
DLJ Real Estate, Inc.
---------------------
DLJ Capital Corporation (b)
-----------------------
DLJ Mortgage Capital, Inc. (1988) (Delaware)
--------------------------
Column Financial, Inc. (1993) (Delaware) (50%)
----------------------
Alliance Capital Management Corporation has the following subsidiaries:
- ---------------------------------------
Alliance Capital Management Corporation (1991) (Delaware) (b)
---------------------------------------
Alliance Capital Management L.P. (1988) (Delaware) (b)
--------------------------------
Alliance Capital Management Corporation of Delaware,
-----------------------------------------------------
Inc. (Delaware)
----
Alliance Fund Services, Inc. (Delaware) (a)
----------------------------
Alliance Capital Management (Japan), Inc. (formerly
-----------------------------------------
Alliance Capital Mgmt. Intl.)
Alliance Fund Distributors, Inc. (Delaware) (a)
--------------------------------
Alliance Oceanic Corp. (Delaware) (formerly Alliance
----------------------
Capital, Ltd.)
Alliance Capital Management Australia Pty. Ltd.
-----------------------------------------------
(Australia)
Meiji - Alliance Capital Corp. (Delaware) (50%)
------------------------------
Alliance Capital (Luxembourg) S.A. (99.98%)
----------------------------------
Alliance Southern Europe Corp. (Delaware) (inactive)
------------------------------
Alliance Barra Research Institute, Inc. (Delaware)
---------------------------------------
(50%)
Alliance Capital Management Canada, Inc. (Canada)
----------------------------------------
(99.99%)
Alliance Capital Management Limited (United Kingdom)
-----------------------------------
Pastor Alliance Gestora de Fondas de Pensiones,
-----------------------------------------------
S.A. (Spain) (50%)
----
Dementional Asset Management, Ltd. (United
----------------------------------
Kingdom)
Dementional Trust Management, Ltd. (United
----------------------------------
Kingdom)
Alliance Capital Global Derivatives Corp.
-----------------------------------------
(Delaware)
Alliance Corporate Finance Group, Inc. (Delaware)
--------------------------------------
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-14
<PAGE>
AXA GROUP CHART
The information listed below is dated as of January 1, 1996; percentages
shown represent voting power. The name of the owner is noted when AXA
indirectly controls the company.
AXA INSURANCE AND REINSURANCE BUSINESS HOLDING
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Axa Assurances Iard France 96.9%
Axa Assurances Vie France 100% by Axa and Uni Europe
Vie
Uni Europe Assurance France 100% by Axa and Axa
Assurances Iard
Uni Europe Vie France 99.3% by Axa and Axa
Assurances Iard
Alpha Assurances Vie France 100%
Axa Direct France 100%
Direct Assurances Iard France 100% by Axa Direct
Direct Assurance Vie France 100% by Axa Direct
Axa Direkt Versicherung A.G. Germany 100% owned by Axa Direct
Axiva France 90.3%
Defense Civile France 95%
Societe Francaise d'Assistance France 51.2% by Axa Assurances Iard
Monvoisin Assurances France 99.92% by different companies
and Mutuals
Societe Beaujon France 100%
Lor Finance France 99.9%
Jour Finance France 100% by different companies
Compagnie Auxiliaire pour le France 100% by Societe Beaujon
Commerce et l'Industrie
C.F.G.A. France 99.96% owned by the mutuals
and Finaxa
Saint Bernard Diffusion France 89.9%
Sogarep France 95%, (100% with the mutuals)
Argovie France 100% by Axiva and SCA Argos
Finargos France 66.4% owned by Axiva
Astral France 100% by Uni Europe Assurance
Argos France N.S.
Finaxa Belgium Belgium 100%
C-15
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Axa Belgium Belgium 18.5% by Axa(SA) and 72.5% by
Finaxa Belgium
De Kortrijske Verzekering Belgium 99.8%
Juris Belgium 100%
Finaxa Luxembourg Luxembourg 100%
Axa Assurance IARD Luxembourg Luxembourg 99.4%
Axa Assurance Vie Luxembourg Luxembourg 99.4%
Axa Aurora Spain 50%
Aurora Polar SA de Seguros y Spain 99.8% owned by Axa Aurora
Reaseguros
Axa Vida SA de Seguros y Spain 99.8% owned by Axa Aurora
Reaseguros
Axa Gestion de Seguros y Spain 100% owned by Axa Aurora
Reaseguros
Axa Assicurazioni Italy 100%
Eurovita Italy 30% owned by Axa
Assicurazioni
Axa Equity & Law plc U.K. 99.9%
Axa Equity & Law Life U.K. 100% by Axa Equity & Law plc
Assurance Society
Axa Equity & Law International U.K. 100% owned by Axa Equity &
Law plc
Axa Equity & Law Netherlands 100% by Axa Equity & Law plc
Levensverzekeringen
Axa Insurance U.K 100%
Axa Global Risks U.K 100% by Axa and Uni Europe
Assurance
Axa U.K. U.K. 100%
Axa Canada Canada 100%
Boreal Insurance Canada 100% owned by AXA Canada
Axa Assurances Inc Canada 100% owned by Axa Canada
Axa Insurance Inc Canada 100% owned by Axa Canada
Anglo Canada General Insurance Canada 100% owned by Axa Canada
Cy
Axa Pacific Insurance Canada 100% by Boreal Insurance
Boreal Assurances Agricoles Canada 100% by Boreal Insurance
C-16
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Sime Axa Berhad Malaysia 30%
Axa Sime Investment Holdings Singapore 50%
Pte Ltd
Axa Sime Assurance Hong Kong 100% owned by Axa Sime Invt.
Holdings Pte Ltd
Axa Sime Assurance Singapore 100% owned by Axa Sime Invt
Holdings Pte Ltd
Axa Life Insurance Hong Kong 100%
PT Asuransi Axa Indonesia Indonesia 80%
Equitable Cies Incorp. U.S.A. 60.6% owned by Axa, 44.4%
Financiere 45, 3.8%,
Lorfinance 7.6% and Axa
Equity & Law Life Association
Society 4.8%
Equitable Life Assurance of U.S.A. 100% owned by Equitable Cies
the USA Inc
National Mutual Holdings Ltd Australia 51%
The National Mutual Life Australia 100% owned by National Mutual
Association of Australasia Ltd Holdings Ltd
National Mutual International 74% owned by National Mutual
Pty Ltd Holdings Ltd and 26% by The
National Mutual Life
Association of Australasia
National Mutual (Bermuda) Ltd Australia 100% owned by National Mutual
International Pty Ltd
National Mutual Asia Ltd Bermudas 54% owned by National Mutual
(Bermuda) Ltd and 20% by
Delta Ltd
National Mutual Funds Australia 100% owned by National Mutual
Management (Global) Ltd Holdings Ltd
National Mutual Funds USA 100% owned by National Mutual
Management North America Funds Management (Global) Ltd
Holdings Inc
Australian Casualty & Life Ltd Australia 100% owned by National
Mutual Holdings Ltd
National Mutual Health Australia 100% owned by National Mutual
Insurance Pty Ltd Holdings Ltd
Axa Reassurance France 100%
Axa Re Finance France 100% owned by Axa Reassurance
Axa Re Vie France 100% owned by Axa Reassurance
Axa Cessions France 100%
C-17
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Abeille Reassurances France 100% owned by Axa Reassurance
Axa Re Mexico Mexico 100% owned by Axa Reassurance
Axa Re Asia Singapore 100% owned by Axa Reassurance
Axa Re U.K. Plc U.K. 100% owned by Axa Re U.K.
Holding
Axa Re U.K. Holding U.K 100% owned by Axa Reassurance
Axa Re U.S.A. U.S.A 100% owned by Axa America
Axa America U.S.A. 100% owned by Axa Reassurance
International Technology U.S.A. 80% owned by Axa America
Underwriters Inc (INTEC)
Axa Re Life U.S.A. 100% owned by Axa Re Vie
C.G.R.M. Monaco 100% by Axa Reassurance
Axa Life Insurance Japan 100% owned by Axa
Dongbu Axa Life Insurance Co Ltd Korea 50%
Axa Oyak Hayat Sigota Turkey 60%
Oyak Hayat Sigorta Turkey 11%
C-18
<PAGE>
AXA FINANCIAL BUSINESS
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Compagnie Financiere de Paris France 96.9%, (100% with the
(C.F.P.) Mutuals)
Axa Banque France 98.7% owned by C.F.P.
Financiere 78 France 100% owned by C.F.P.
Axa Credit France 65% owned by C.F.P.
Axa Gestion Interessement France 100% owned by C.F.P.
Compagnie Europeenne de Credit France 100% owned by C.F.P.
(C.E.C.)
Fidei France 20.7% owned by C.F.P. and
10.8% by Axamur
Meeschaert Rousselle France 100% owned by Financiere 78
M R Futures SNC France 59% by Meeschaert Rousselle
Opale Derivee Bourse France 89.4% by M.R. Futures and
Meeschaert Rousselle
Anjou Courtage France 70% owned by Meeschaert
Rousselle
Axiva Gestion France 100% owned by Axiva
Juri Creances France 100% by different companies
Societe de Placements France 99.3% with the Mutuals
Selectionnes S.P.S.
Presence et Initiative France 73% with the Mutuals
Vamopar France 100% owned by Societe Beaujon
Financiere Mermoz France 100%
Axa Asset Management Europe France 100%
Axa Asset Management France 100% owned by Axa Asset
Partenaires Management Europe
Axa Asset Management Conseils France 100% owned by Axa Asset
Management Europe
Axa Asset Management France 100% owned by Axa Asset
Distribution Management Europe
Axa Equity & Law Home Loans U.K. 100% owned by Axa Equity &
Law
Axa Equity & Law Commercial U.K. 100% owned by Axa Equity &
Loans Law
C-19
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Alliance Capital Management U.S.A. 59% held by ELAS
Donaldson Lufkin & Jenrette U.S.A. 36.1% owned by ELAS and 44.1%
by Equitable Cies Inc
Cogefin Luxembourg 100% owned by Axa Belgium
Soflinter Belgium 100% owned by Axa Belgium
Financiere 45 France 99.6%
Mofipar France 99.76% owned by Societe Beaujon
ORIA France 100% owned by Axa Millesimes
Axa Oeuvres d'Art France 100% by the Mutuals
Axa Cantenac Brown France 100%
Colisee Acti Finance 1 France 100% owned by Societe Beaujon
Colisee Acti Finance 2 France 100% owned by Axa Assurances
Iard Mutuelle
Participations 2001 France 100% owned by Societe Beaujon
Finalor France 100% owned by Societe Beaujon
C-20
<PAGE>
AXA REAL ESTATE BUSINESS
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
C.I.P.M. France 97.6% with the Mutuals
Fincosa France 100% owned by C.I.P.M.
Prebail France 100% owned by Societe Beaujon
and C.F.P.
Axamur France 100% by different companies
and mutuals
Parigest France 100% by the Mutuals, C.I.P.M.
and Fincosa
Parimmo France 100% by the insurance
companies and the mutuals
S.G.C.I. France 100% with the Mutuals
Transaxim France 99.4% owned by S.G.C.I.
Compagnie Parisienne de France 100% owned by S.G.C.I.
Participations
Monte Scopeto France 100% owned by C.P.P.
Matipierre France 100% by different companies
Securimmo France 87% by different companies
and mutuals
Paris Orleans France 99.9% by different companies
Colisee Bureaux France 99.4% by different companies
Colisee Premiere France 99.9% by different companies
Colisee Laffitte France 99.8% by Colisee Bureaux
Carnot Laforge France 100% by Colisee Premiere
Parc Camoin France 100% by Colisee Premiere
Delta Point du Jour France 100% owned by Matipierre
Paroi Nord de l'Arche France 100% owned by Matipierre
Falival France 100% owned by Axa Reassurance
Compagnie du Gaz d'Avignon France 99% owned by Axa Assurances
Iard
Ahorro Familiar France 40.1% owned by Axa Assurances
Iard
Fonciere du Val d'Oise France 100% owned by C.P.P.
Sodarec France 99.9% owned by C.P.P.
Centrexpo France 99.9% owned by C.P.P.
4272/3AO_1
C-21
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Fonciere de la Vile du Bois France 99.6% owned by Centrexpo
Colisee Seine France 97.4% by different companies
Translot France 99.9% by SGCI
S.N.C. Dumont d'Urville France 100% owned by Colisee
Premiere
Colisee Participations France 100% by SGCI
Colisee Federation France 100% by SGCI
Colisee Saint Georges France 100% by SGCI
Drouot Industrie France 50% by SGCI
Colisee Vauban France 99.7% by Matipierre
Fonciere Colisee France 98.9% by Matipierre
Axa Pierre S.C.I. France 97.6% owned by different
companies and Mutuals
Axa Millesimes France 77.8% owned by AXA and the
Mutuals
Chateau Suduirault France 100% owned by Axa Millesimes
Diznoko Hongrie 100% owned by Axa Millesimes
Compagnie Fonciere Matignon France 100% by different companies
and Mutuals
Equitable Real Estate U.S.A. 100% owned by ELAS
Investment
Quinta do Noval Vinhos S.A. Portugal 99.9% owned by Axa Millesimes
4272/3AO_1
C-22
<PAGE>
OTHER AXA BUSINESS
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
A.N.F. France 95.4% owned by Finaxa
SCOR France 10.1% owned by Axa
Reassurance
Campagnie du Cambodge France 23% owned by A.N.F.
Lucia France 20.6% owned by Axa Assurance
Iard and 8.6% by the mutuals
Rubis et Cie France 12.7% owned by Uni Europe
Assurance
Schneider S.A. France 10%
Eurofin France 31.6% owned by Compagnie
Financiere de Paris
39519-1.DOC
4272/3AO_1
C-23
<PAGE>
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
NOTES
-----
1. The year of formation or acquisition and state or country of incorporation of
each affiliate is shown.
2. The chart omits certain relatively inactive special purpose real estate
subsidiaries, partnerships, and joint ventures formed to operate or develop a
single real estate property or a group of related properties, and certain
inactive name-holding corporations.
3. All ownership interests on the chart are 100% common stock ownership
except for (a) as noted for certain partnership interests, (b) ACMC, Inc.'s
and Equitable Distributors, Inc.'s limited partnership interests in Alliance
Capital Management L.P., (c) as noted for certain subsidiaries of Alliance
Capital Management Corp. of Delaware, Inc., (d) Treasurer Robert L. Bennett's
20% interest in Compass Management and Leasing Co. (formerly known as EREIM,
Inc.,) (e) as noted for certain subsidiaries of AXA, (f) The Equitable
Companies Incorporated's 44.1% interest in DLJ and Equitable Holding Corp's
36.1% interest in same and (g) DLJ Mortgage Capital, Inc.'s and Equitable Real
Estate Management, Inc.'s ownership (50% each) in Column Financial, Inc.
4. The operational status of the entities shown as having been formed or
authorized but "not yet fully operational" should be checked with the
appropriate operating areas, especially for those that are start-up situations.
5. The following entities are not included in this chart because, while they
have an affiliation with The Equitable, their relationship is not the ongoing
equity-based form of control and ownership that is characteristic of the
affiliations on the chart, and, in the case of the first two entities, they
are under the direction of at least a majority of "outside" trustees:
The Equitable Funds
The Hudson River Trust
Separate Accounts.
6. This chart was last revised March 25, 1996.
4273/3AP_1
C-24
<PAGE>
Item 27. Number of Contractowners
------------------------
As of May 31, 1996, there were 58,708 certificates in force
under the Momentum Plus Contract offered by the registrant.
Item 28. Indemnification
---------------
(a) Indemnification of Principal Underwriter
----------------------------------------
To the extent permitted by law of the State of New York and
subject to all applicable requirements thereof, Equitable
undertook to indemnify each of its directors and officers who
is made or threatened to be made a party to any action or
proceeding, whether civil or criminal, by reason of the fact
that he or she, is or was a director or officer of Equico.
(b) Undertaking
-----------
Insofar as indemnification for liability arising under the
Securities Act of 1933 ("Act") may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.
Item 29. Principal Underwriters
----------------------
(a) Equico, a wholly-owned subsidiary of Equitable, is the
principal underwriter and depositor for its Separate Account A
and Separate Account No. 301, and for Separate Account I and
Separate Account FP of Equitable Variable Life Insurance
Company. On or about May 1, 1996 Equico will change its name
to EQ Financial Consultants, Inc. Equico's principal business
address is 1755 Broadway, NY, NY 10019.
(b) See Item 25.
(c) Not applicable.
Item 30. Location of Accounts and Records
--------------------------------
The records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and Rules 31a-1 to 31a-3 thereunder
are maintained by Equitable at Two Penn Plaza, New York, New York
10121.
4273/3AP_1
C-25
<PAGE>
Item 31. Management Services
-------------------
Not applicable.
Item 32. Undertakings
------------
The Registrant hereby undertakes:
(a) to file a post-effective amendment to this registration
statement as frequently as is necessary to ensure that the
audited financial statements in the registration statement are
never more than 16 months old for so long as payments under the
variable annuity contracts may be accepted;
(b) to include either (1) as part of any application to purchase a
contract offered by the prospectus, a space that an applicant
can check to request a Statement of Additional Information, or
(2) a postcard or similar written communication affixed to or
included in the prospectus that the applicant can remove to
send for a Statement of Additional Information; and
(c) to deliver any Statement of Additional Information and any
financial statements required to be made available under this
Form promptly upon written or oral request.
The Registrant hereby represents that it is relying on the November
28, 1988 no-action letter (Ref. No. IP-6-88) relating to variable annuity
contracts offered as funding vehicles for retirement plans meeting the
requirements of Section 403(b) of the Internal Revenue Code. Registrant
further represents that it complies with the provisions of paragraph (1)-(4)
of that letter.
4273/3AP_1
C-26
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act
of 1940, the Registrant has duly caused this amendment to the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City and State of New York, on this 11th day of July, 1996.
SEPARATE ACCOUNT A OF THE EQUITABLE LIFE
ASSURANCE SOCIETY OF THE UNITED STATES
(Registrant)
By: The Equitable Life Assurance Society
of the United States
By: /s/ Gordon G. Dinsmore
-----------------------
Gordon G. Dinsmore
Senior Vice President
4273/3AO_1
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act
of 1940, the Registrant has duly caused this amendment to the registration
statement to be signed on it behalf by the undersigned, thereunto duly
authorized, in the City and State of New York, on this 11th day of July, 1996.
THE EQUITABLE LIFE ASSURANCE SOCIETY
OF THE UNITED STATES
(Depositor)
By: /s/ Gordon G. Dinsmore
-----------------------
Gordon G. Dinsmore
Senior Vice President
As required by the Securities Act of 1933 and the Investment Company Act
of 1940, this amendment to the registration statement has been signed by the
following persons in the capacities and on the date indicated:
PRINCIPAL EXECUTIVE OFFICERS:
Joseph J. Melone Chairman of the Board and Director
James M. Benson President, Chief Executive Officer
and Director
William T. McCaffrey Senior Executive Vice President,
Chief Operating Officer and Director
Jerry M. de St. Paer Executive Vice President
PRINCIPAL FINANCIAL OFFICER:
Stanley B. Tulin Senior Executive Vice President and
Chief Financial Officer
PRINCIPAL ACCOUNTING OFFICER:
/s/ Alvin H. Fenichel Senior Vice President and Controller
- ---------------------
Alvin H. Fenichel
July 11, 1996
DIRECTORS:
Claude Bebear Jean-Rene Foutou Winthrop Knowlton
James M. Benson Norman C. Francis Arthur L. Liman
Christopher Brocksom Donald J. Greene George T. Lowy
Francoise Colloc'h John T. Hartley. William T. McCaffrey
Henri de Castries John H.F. Haskell, Jr. Joseph J. Melone
Joseph L. Dionne W. Edwin Jarmain Didier Pineau-Valencienne
William T. Esrey G. Donald Johnston, Jr. George J. Sella, Jr.
Dave H. Williams
By: /s/ Gordon G. Dinsmore
-----------------------
Gordon G. Dinsmore
Attorney-in-Fact
July 11, 1996
4273/3AO_1
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
EXHIBIT NO. TAG VALUE
- ----------- ---------
<C> <C> <C>
4(c) Form of Momentum Plus 457 group annuity contract. EX-99.4c CONTRACT
10(a) Consent of Price Waterhouse LLP. EX-99.10a CONSENT
</TABLE>
4273/3AO_1
CONTRACT Group Annuity Contract No. AC _____
CONTRACT HOLDER The Memorial Hospital of Sweetwater County
------------------------------------------
EMPLOYER The Memorial Hospital of Sweetwater County
------------------------------------------
REGISTER DATE , 1996
-------------------------
This Contract is issued pursuant to the application submitted and accepted by
Equitable (a copy of which is attached to and made part of this Contract) and in
consideration of the payment to Equitable of the Contributions made hereunder.
ASSETS HELD IN CONNECTION WITH THIS CONTRACT MAY BE HELD IN THE SEPARATE ACCOUNT
MAINTAINED BY EQUITABLE AND MAY INCREASE OR DECREASE IN VALUE AS DESCRIBED IN
THIS CONTRACT.
The provisions of this Contract, which include the following pages, are agreed
to by the Contract Holder and Equitable.
FOR THE EQUITABLE
By /s/ James M. Benson
-------------------------------------------------------
President and Chief Executive Officer
By /s/ Pauline Sherman
-------------------------------------------------------
Vice President, Secretary and Associate General Counsel
By
-------------------------------------------------------
Assistant Registrar
INTEREST RATE GUARANTEE - FIXED ANNUITY
BENEFITS - NON-PARTICIPATING
No. 1033-96-EDC Page 1
<PAGE>
TABLE OF CONTENTS
PART I -DEFINITIONS
Section 1.01 - Accumulation Unit 4
Section 1.02 - Accumulation Unit Value 4
Section 1.03 - Annuity Benefit 4
Section 1.04 - Annuity Commencement Date 4
Section 1.05 - Benefit Distribution 4
Section 1.06 - Business Day 4
Section 1.07 - Calculation Date 5
Section 1.08 - Cash Value 5
Section 1.09 - Class of Employers 5
Section 1.10 - Code 5
Section 1.11 - Contingent Withdrawal Charge 5
Section 1.12 - Contract Date 5
Section 1.13 - Contract Holder 5
Section 1.14 - Contract Year 6
Section 1.15 - Contribution 6
Section 1.16 - Disability 6
Section 1.17 - Divisions 6
Section 1.18 - Employer 6
Section 1.19 - Employer Plan 6
Section 1.20 - Forfeiture Account 6
Section 1.21 - Guaranteed Interest Rate 7
Section 1.22 - Investment Divisions 7
Section 1.23 - Market Value Adjustment 7
Section 1.24 - Minimum Guaranteed Rate 9
Section 1.25 - Net Investment Factor 9
Section 1.26 - Participant 10
Section 1.27 - Processing Office 10
Section 1.28 - Retirement Account Value 10
Section 1.29 - Separate Account 10
Section 1.30 - Source 10
Section 1.31 - Terminated Plan Notice 10
Section 1.32 - Terminated Plan Participant 11
Section 1.33 - Transaction Date 11
Section 1.34 - Valuation Period 11
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TABLE OF CONTENTS - CONT'D
PART II - RETIREMENT ACCOUNT VALUE
Section 2.01 - Contributions 12
Section 2.02 - Transfers of Unallocated Amounts 12
Section 2.03 - Separate Account 12
Section 2.04 - Guaranteed Interest Division 13
Section 2.05 - Allocation of Contributions to Divisions 14
Section 2.06 - Transfers among Divisions 15
Section 2.07 - Withdrawal and Termination 16
Section 2.08 - Death Benefits 19
Section 2.09 - Fees and Charges 20
Section 2.10 - Forfeitures 22
PART III - ANNUITY BENEFITS
Section 3.01 - Form of Annuity Benefit 23
Section 3.02 - Report for Annuity Benefit 23
Section 3.03 - Application to Provide Annuity Benefit 23
Section 3.04 - Payment of Annuity Benefit 24
Section 3.05 - Required Distributions 24
PART IV - GENERAL PROVISIONS
Section 4.01 - Contract 27
Section 4.02 - Statutory Compliance 27
Section 4.03 - Assignments and Nontransferability 27
Section 4.04 - Manner of Payment 27
Section 4.05 - Right to Change 28
Section 4.06 - Beneficiary 29
Section 4.07 - Deferment 29
Section 4.08 - Contract Holder's Responsibility 30
Section 4.09 - Disqualification of Plan 30
Section 4.10 - Ownership Right of Employer 30
APPENDIX A - Table of Guaranteed Annuity Payments 31
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PART I - DEFINITIONS
SECTION 1.01 ACCUMULATION UNIT. The term "Accumulation Unit" means a unit which
is purchased in an Investment Division of the Separate Account when an amount is
allocated or transferred thereto and which is a measure used by Equitable in
determining the amount held with respect to a Participant in an Investment
Division of the Separate Account.
SECTION 1.02 ACCUMULATION UNIT VALUE. The term "Accumulation Unit Value" means
the dollar value of each Accumulation Unit in a given Investment Division on a
given date. Such value, for a given Valuation Period, is equal to the
Accumulation Unit Value for the immediately preceding Valuation Period
multiplied by the Net Investment Factor for the given period.
SECTION 1.03 ANNUITY BENEFIT. The term "Annuity Benefit" means a benefit payable
by Equitable pursuant to Part III of this Contract.
SECTION 1.04 ANNUITY COMMENCEMENT DATE. The term "Annuity Commencement Date"
means a date, determined by the Employer and reported in writing to Equitable
pursuant to Section 3.02, as of which payments under an Annuity Benefit are to
begin.
SECTION 1.05 BENEFIT DISTRIBUTION. The term "Benefit Distribution" means
payments with respect to a Participant under the terms of the Employer Plan as
distributions therefrom in any of the following circumstances:
(a) as a result of the Participant' s retirement, death, or Disability;
(b) as a result of the Participant's separation from service with the Employer,
provided such separation from service would qualify as such under the
principles of Section 402(d)(4)(A) of the Code as in effect under the Tax
Reform Act of 1986;
(c) in connection with a minimum distribution made on or after the Participant's
Required Beginning Date, as defined in Section 401(a)(9)(C) of the Code and
as further described in Section 3.05;
(d) pursuant to Code Section 457(d)(A)(iii) when the Participant is faced with
an unforeseen emergency.
SECTION 1.06 BUSINESS DAY. The term "Business Day" means generally any day on
which Equitable is open and the New York Stock Exchange is open for trading. For
purposes of determining the Transaction Date, Equitable's Business Day ends at
4:00 P.M. Eastern Time.
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SECTION 1.07 CALCULATION DATE. The term "Calculation Date" means the Business
Day, occurring no more than five Business Days before the date of a payment, as
of which Equitable determines a Market Value Adjustment with respect to the
Employer Plan in the event that Equitable has received a Plan Termination
Notice.
SECTION 1.08 CASH VALUE. The term "Cash Value" means an amount equal to the
Retirement Account Value with respect to a Participant, minus any Contingent
Withdrawal Charge and/or, in the event that Equitable has received a Plan
Termination Notice, any Market Value Adjustment applicable pursuant to Section
2.09.
SECTION 1.09 CLASS OF EMPLOYERS. The term "Class of Employers" means the
category to which Equitable assigns the Employer Plan upon such Employer's
adoption of this Contract as a funding vehicle of the Employer Plan. All
employer plans for which a contract, which Equitable determines is the same type
as this Contract, is issued and whose Contract Dates occur within a given
calendar year will belong to the same Class of Employers, except that Equitable
may at any time (a) close a Class of Employers and begin a new Class of
Employers, or (b) combine two or more Classes of Employers.
SECTION 1.10 CODE. The term "Code" means the Internal Revenue Code, as now or
hereafter amended, or any corresponding provisions of prior or subsequent United
States revenue laws.
SECTION 1.11 CONTINGENT WITHDRAWAL CHARGE. The term "Contingent Withdrawal
Charge" means an amount equal to the lesser of the amounts defined in (a) or (b)
as follows:
(a) An amount equal to 6% of the amount to be withdrawn (including such
Contingent Withdrawal Charge);
(b) An amount equal to (i) minus (ii) as follows:
(i) an amount equal to 8.5% of all Contributions received for each Source
with respect to the Participant under this Contract;
(ii) the sum of any prior Contingent Withdrawal Charges made with respect to
the Participant under this Contract.
SECTION 1.12 CONTRACT DATE. The term "Contract Date" means the date as of which
the first Contribution was received under this Contract with respect to the
Employer Plan.
SECTION 1.13 CONTRACT HOLDER. The term "Contract Holder" means the entity or
person(s) named on the cover page of this Contract. The Employer may notify
Equitable that a successor Contract Holder is to be appointed, subject to
Equitable's consent. Any successor Contract Holder will have the rights and
obligations described in this Contract of the Contract Holder.
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SECTION 1.14 CONTRACT YEAR. The term "Contract Year" means the twelve month
period beginning on (a) the Contract Date and (b) each anniversary of such Date,
unless otherwise agreed to in writing by Equitable.
SECTION 1.15 CONTRIBUTION. The term "Contribution" means any amount remitted by
the Employer pursuant to Section 2.01 with respect to a Participant.
SECTION 1.16 DISABILITY. The term "Disability" means, with respect to a
Participant, the inability to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or to be of long, continued and indefinite duration,
presumably for life, as determined by the Employer on the basis of either (a) a
written determination by the Social Security Administration that disability
payments under the Social Security Act have been approved, or (b) other evidence
satisfactory to Equitable of such condition.
SECTION 1.17 DIVISIONS. The terms "Division" or "Divisions" mean one or more, as
the case may be, of the following investment options which the Employer has
elected to be applicable under this Contract to the Employer Plan:
(a) the Guaranteed Interest Division, and
(b) the respective Investment Divisions of the Separate Account.
Such election must be on Equitable's form, subject to Equitable's rules then in
effect, and may be changed from time to time with respect to subsequent
transactions. Any such election which does not include any Type B Investment
Divisions must include election of the Guaranteed Interest Division.
SECTION 1.18 EMPLOYER. The term "Employer" means an employer who has adopted an
Employer Plan. An Employer hereunder will be one of the following types of
entity: (a) a State, a political subdivision of a State, or an agency or
instrumentality of a State or political subdivision of a State, or (b) any other
organization exempt from tax under the Code which has adopted and maintains a
plan for a select group of management or highly compensated employees within the
meaning of the Employee Retirement Income Security Act of 1974, as amended.
SECTION 1.19 EMPLOYER PLAN. The term "Employer Plan" means the plan established
by the Employer that is intended to meet the requirements of an eligible
deferred compensation plan under Section 457 of the Code and applicable Treasury
regulations and which is maintained by the Employer for the benefit of
individuals performing services for the Employer and such individual's
beneficiaries.
SECTION 1.20 FORFEITURE ACCOUNT. The term "Forfeiture Account" means an
unallocated account maintained by Equitable under this Contract in conjunction
with the operation of Section 2.10. Amounts arising from reductions in
Retirement Account Values
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pursuant to Section 2.10 will be allocated to the Forfeiture Account, pending
disposition of such amounts (and interest thereon) as determined by the
Employer. Such account will be maintained exclusively in either (a) the Money
Market Division, if such Division is then applicable under this Contract to the
Employer Plan, or (b) the Guaranteed Interest Division in any other case.
SECTION 1.21 GUARANTEED INTEREST RATE. The term "Guaranteed Interest Rate" means
the effective annualized rates Equitable establishes from time to time at which
interest is credited on amounts in the Guaranteed Interest Division. Before each
calendar year, Equitable will establish a guaranteed minimum interest rate for
each Class of Employers for such year. Such rate will not be less than the
Minimum Guaranteed Rate. Equitable guarantees that the amount of interest it
credits during a calendar year will not be less than the amount calculated at
the annual guaranteed minimum rate in effect during such calendar year.
SECTION 1.22 INVESTMENT DIVISIONS. The terms "Investment Division" or
"Investment Divisions" means any one or more, as the case may be, of those
Investment Divisions of the Separate Account then available under this Contract
which the Employer has elected to be applicable under this Contract to the
Employer Plan.
The Investment Divisions of the Separate Account are classed as Type A
Investment Divisions and Type B Investment Divisions:
TYPE A TYPE B
INVESTMENT DIVISIONS INVESTMENT DIVISIONS
-------------------- --------------------
[o The Stock Division o The Conservative Investors Division
o The Balanced Division o The High Yield Division
o The Aggressive Stock Division o The Intermediate Government
o The Global Division Securities Division
o The Growth Investors Division o The Money Market Division
o The Growth and Income Division o The Quality Bond Division]
o The Equity Index Division
o The International Division
An election, if any, of one or more of the Type B Investment Divisions by the
Contract Holder must include, at minimum, the Money Market Division.
SECTION 1.23 MARKET VALUE ADJUSTMENT
(1) The term "Market Value Adjustment" means the greater of (a) zero, and (b) a
percentage representing the amount described in (i) divided by the amount
described in (ii) as follows:
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(i) the sum of all market value adjustments for quarterly generations in
the Guaranteed Interest Division, as determined pursuant to Paragraph
(2) of this Section, with respect to the Employer Plan as of the
effective date of the withdrawal;
(ii) the amount held in the Guaranteed Interest Division with respect to the
Employer Plan as of the effective date of the withdrawal.
(2) For purposes of such calculation, the Guaranteed Interest Division will be
deemed to consist of a series of quarterly generations, one for each
calendar quarter in which the Employer Plan participated in the Guaranteed
Interest Division.
The market value adjustment for each such quarterly generation is the
product of (a), (b) and (c) as follows:
(a) the amount of the Employer Plan's net cash flow in the given quarterly
generation as of the effective date of the withdrawal;
(b) the rate equal to (i) minus (ii) as follows:
(i) the interest rate, as of the applicable Calculation Date, for a
five-year Treasury bond;
(ii) the average interest rate, during the calendar quarter in which
such quarterly generation was first established, for five-year
Treasury bonds, subject to the following provisions of this
Section;
(c) the fraction equal to the number of calendar days from the effective
date of the withdrawal which occasioned this calculation to the maturity
date for the given quarterly generation over 365. Such maturity date
will be the quinquennial anniversary of the first Business Day of the
given quarterly generation.
(3) The average interest rate to be used for purposes of Paragraph (2)(b)(ii)
above with respect to a given quarterly generation whose first Business Day
was more than five years before the Calculation Date will be determined as
follows: such rate will be the average interest rate for the most recent
calendar quarter whose first Business Day was a quinquennial anniversary of
the first Business Day of the given quarterly generation.
(4) The Employer Plan's net cash flow in a given quarterly generation is the
sum of all allocations and transfers to, minus all withdrawals, deductions
and transfers from the Guaranteed Interest Division with respect to such
quarterly generation. Equitable may, to the extent that any such data is
unavailable on the Calculation Date, estimate the applicable amount on the
basis of appropriate historical data.
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(5) The interest rate on a five-year Treasury bond will be determined by using
the applicable rate of interest (on an annual effective yield basis)
specified in the United States Treasury Department's Constant Maturity
Series for that date. If the interest rate associated with a five-year
Treasury bond is not available in that series, the rate will be determined
by linear interpolation between the next lower and next higher available
maturities. The source for the United States Treasury Department's Constant
Maturity Series will be the Federal Reserve Statistical Release F.15
Bulletin. If for any reason this series is not available, the interest rate
will be based on a comparable series.
(6) Equitable may at any time substitute a bond of different maturity for the
five-year Treasury bond referred to in this Section 1.23, provided that (a)
any such change will apply only to Employer Plans who begin participation
under this Contract after such change, and (b) such change will be made by
advance written notice to the applicable Employers. In such event, the
references in this Section 1.23 to "five years" and "quinquennial
anniversary" will be deemed to have been correspondingly changed.
SECTION 1.24 MINIMUM GUARANTEED RATE. The term "Minimum Guaranteed Rate" means,
with respect to the Guaranteed Interest Division, an effective annual minimum
rate of interest equal to 3%.
SECTION 1.25 NET INVESTMENT FACTOR. The term "Net Investment Factor" means, with
respect to each Investment Division of the Separate Account for a Valuation
Period, the amount described in the following Clause (a) divided by the amount
described in the following Clause (b), minus the amount described in the
following Clause (c), where:
(a) is the net asset value of the shares of the designated trust or investment
company that belong to the Investment Division at the end of the Valuation
Period (including the per share amount of any dividend or capital gain
distribution paid to the Investment Division in the current Valuation
Period), before giving effect to any amounts allocated to or withdrawn from
the Investment Division for the Valuation Period, but after any amounts
charged against the Investment Division in the Valuation Period for taxes;
(b) is the net asset value of the shares of the designated trust or investment
company that belonged to the Investment Division at the end of the preceding
Valuation Period, after giving effect to any amounts allocated to or
withdrawn from the Investment Division for that Valuation Period; and
(c) is the daily asset charge for expenses of the Investment Division in
accordance with Section 2.09, Paragraph (2), times the number of calendar
days in the Valuation Period.
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The net asset value of the shares of a designated trust or investment company
held by an Investment Division will be the value reported to Equitable by the
trust or investment company. Such net asset value is after deduction for
investment advisory fees and direct operating expenses of the designated trust
or investment company.
SECTION 1.26 PARTICIPANT. The term "Participant" means an individual whom the
Contract Holder has reported to Equitable as a participant under the Employer
Plan.
SECTION 1.27 PROCESSING OFFICE. The term "Processing Office" means Momentum
Administrative Services, P.O. Box 2919, New York, NY 10116, or such other
location as Equitable shall designate by at least 90 days' advance written
notice to the Contract Holder.
SECTION 1.28 RETIREMENT ACCOUNT VALUE. The term "Retirement Account Value" means
the sum of the amounts held with respect to a Participant in the Guaranteed
Interest Division and in the Investment Divisions.
SECTION 1.29 SEPARATE ACCOUNT. The term "Separate Account" means pooled Separate
Account A, as described in Section 2.03, which is (a) maintained by Equitable in
accordance with the laws of New York State and (b) registered with the
Securities and Exchange Commission under the Investment Company Act of 1940 as a
unit investment trust, a type of investment company.
SECTION 1.30 SOURCE. The term "Source" means any of the following sources of
Contributions under the Employer Plan, as determined by the Contract Holder and
reported to Equitable in conjunction with Contributions remitted pursuant to
Section 2.01:
(a) Employer Contributions: Contributions made by the Employer for the benefit
of Participants and beneficiaries, other than those Contributions described
in Clause (b) below.
(b) Matching Contributions: Employer Contributions allocated to a Participant's
account under the Employer Plan by reason of the Participant's elective
Contributions made to the Employer Plan.
(c) Salary Deferral Contributions: Contributions made pursuant to a deferral
election made by the Participant in accordance with the terms of the
Employer Plan.
(d) Prior Plan Contributions: Contributions transferred to the Employer Plan
from another eligible deferred compensation plan meeting the requirements of
Section 457 of the Code.
SECTION 1.31 TERMINATED PLAN NOTICE. The term "Terminated Plan Notice" means an
advance written notice which the Contract Holder has, in accordance with Section
4.09, provided to Equitable that the Employer Plan is being terminated, in whole
or in part, in accordance with applicable law.
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SECTION 1.32 TERMINATED PLAN PARTICIPANT. The term "Terminated Plan Participant"
means a Participant who, as reported to Equitable by the Contract Holder in
accordance with Section 4.09, is included in a termination or partial
termination of the Employer Plan.
SECTION 1.33 TRANSACTION DATE. The term "Transaction Date" means (a) the
Business Day on which Equitable receives a Contribution or an acceptable written
or telephone request for a transaction at its Processing Office, or (b) the
Business Day coinciding with or next following the date specified in the
request, if later; provided, however, that if such Contribution or request
reaches the Processing Office on other than a Business Day, or after the close
of the Business Day, the Transaction Date will be the next following Business
Day.
SECTION 1.34 VALUATION PERIOD. The term "Valuation Period" means, with respect
to each Investment Division of the Separate Account, each Business Day together
with any consecutive non-Business Days immediately preceding such Business Day.
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PART II - RETIREMENT ACCOUNT VALUE
SECTION 2.01 CONTRIBUTIONS. The Contract Holder will remit Contributions from
time to time on such dates and in such amounts as it will determine in
accordance with the Employer Plan.
The Contract Holder will specify the Participant with respect to whom each such
Contribution is being remitted, the Source to which such Contribution relates,
and the allocation by Source of such Contribution among the Divisions.
Equitable reserves the right to discontinue acceptance of Contributions under
this Contract with respect to the Employer Plan by giving 120 days' advance
written notice to the Contract Holder.
SECTION 2.02 TRANSFERS OF UNALLOCATED AMOUNTS. Anything in this Contract to the
contrary notwithstanding, if assets are being transferred with respect to the
Employer Plan on or after the Contract Date from another funding vehicle, and if
the Contract Holder advises Equitable that it cannot provide Equitable on or
before the date of such transfer with the corresponding Participant-level
information normally required pursuant to this Contract, such transferred assets
may be remitted as Contributions hereunder on an unallocated basis to the
Divisions, subject to Equitable's rules. While such assets remain unallocated,
Equitable will (a) treat such amounts as one Retirement Account Value, with the
Contract Holder as sole Participant, and (b) rely fully upon the advice of the
Contract Holder for any Participant-level information required to process
transactions hereunder.
If the Contract Holder transfers assets on an unallocated basis to this
Contract, it will provide Participant-level information as soon thereafter as is
practicable. If such information is not received within such period as Equitable
deems reasonable under its rules, Equitable will have the right to pay to the
Contract Holder the applicable Cash Value.
SECTION 2.03 THE SEPARATE ACCOUNT. Realized and unrealized gains and losses from
the assets of the Separate Account are credited or charged against it without
regard to Equitable's other income, gains or losses. Assets are allocated to the
Separate Account to support this Contract and other contracts.
The assets of the Separate Account are the property of Equitable. The portion of
its assets equal to the reserves and other contract liabilities with respect to
the Separate Account will not be chargeable with liabilities arising out of any
other business Equitable conducts. Equitable may transfer assets of an
Investment Division in excess of the reserves and other liabilities with respect
to such Investment Division to another Investment Division or to Equitable's
General Account.
The Separate Account consists of the Investment Divisions. Each Investment
Division may invest its assets in a separate class (or series) of shares of a
designated trust or
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investment company where each class (or series) represents a separate portfolio
in the trust or investment company.
Equitable will value the assets of each Investment Division on each Business
Day. Equitable may, at its discretion, invest the assets of any Investment
Division in any investment permitted by applicable law. Equitable may rely
conclusively on the opinion of counsel (including attorneys in its employ) as to
what investments it is permitted by law to make.
On any date when an amount is allocated to or withdrawn, deducted, or
transferred from an Investment Division with respect to a Participant, the
Retirement Account Value will be credited or charged, as the case may be, with
the number of Accumulation Units determined by dividing said amount by the
Accumulation Unit Value for the appropriate Investment Division for the
Valuation Period which includes that date. The number of Accumulation Units with
respect to a Participant in an Investment Division on any date is equal to (a)
the sum of all Accumulation Units that have been allocated to that Division with
respect to that Participant, minus (b) the sum of all Accumulation Units that
have been withdrawn, deducted, or transferred from that Investment Division with
respect to that Participant. The amount with respect to a Participant in an
Investment Division on any date is equal to (a) the number of Accumulation Units
with respect to that Participant in the Investment Division on that date,
multiplied by (b) the Accumulation Unit Value for the Investment Division for
the Valuation Period which includes that date.
SECTION 2.04 GUARANTEED INTEREST DIVISION. Any amount allocated to the
Guaranteed Interest Division becomes part of the general assets of Equitable,
which support the guarantees of this Contract and other contracts.
The amount with respect to a Participant in the Guaranteed Interest Division at
any time is equal to (a) the sum of all amounts that have been allocated to the
Guaranteed Interest Division with respect to that Participant, minus (b) the sum
of all amounts that have been withdrawn, deducted, or transferred from the
Guaranteed Interest Division with respect to that Participant.
Interest, on the basis of the applicable Guaranteed Interest Rate, accrues with
respect to the Guaranteed Interest Division daily.
The Guaranteed Interest Division is maintained under this Contract for the
Employer Plan subject to the following conditions:
(a) With respect to the investment option of the Employer Plan that is funded
under the Guaranteed Interest Division, to the extent that the Employer Plan
provides that allocations to, and transfers to and from, such option are to
be made solely at the discretion of the individuals covered by the Employer
Plan, such allocations and transfers will be made without any direction or
influence from the Contract Holder or Employer. Equitable is to be given at
least 60 days advance written notice by the Contract Holder of any
noncompliance with this condition.
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(b) The Contract Holder is to provide Equitable with any amendment to the
Employer Plan or its investment policy, any communication by the Contract
Holder or Employer to the individuals covered by the Employer Plan
concerning the Guaranteed Interest Division or the investment option of the
Employer Plan to which it relates, or any change in the manner in which the
Employer Plan is administered with respect thereto. Any such document is to
be provided to Equitable at least 60 days before its effective date and the
Contract Holder will not use such document or make such change if Equitable
objects in a written notice to the Contract Holder before such effective
date. Equitable may also request, and the Contract Holder will thereupon
provide, any other information that Equitable reasonably determines would
bear upon the flow of funds to and from the Guaranteed Interest Division.
If any of the foregoing conditions are not complied with, if the Contract Holder
fails to remit Contributions in accordance with Section 2.01, or if Equitable
determines that an amendment to the Employer Plan, its investment policy, or any
change in the manner in which the Employer Plan is administered would materially
and adversely affect the flow of funds to or from the Guaranteed Interest
Division, then Equitable will have the right to:
(a) decline further requests for transfers to or from the Guaranteed Interest
Division; and/or
(b) deem the Contract Holder to have terminated the Employer Plan's
participation under this Contract and requested Equitable to make payment in
accordance with Section 2.07, Paragraph (4).
SECTION 2.05 ALLOCATION OF CONTRIBUTIONS TO DIVISIONS. Each Contribution
remitted with respect to a Participant will, after deduction of any applicable
charge for taxes, be allocated by Source to one or more of the Divisions as of
the Transaction Date. With respect to each Source the percentage to be allocated
to each Division is to be a whole number and the aggregate percentage is to be
100%.
Allocation instructions will be determined pursuant to the Employer Plan and
reported to the Equitable in writing by the Contract Holder, subject to the
following paragraph. Each initial Contribution with respect to a Participant is
to be preceded or accompanied by such allocation instructions. Such instructions
will be retained on file by Equitable unless and until duly changed. Each
subsequent Contribution with respect to the Participant will be allocated in
accordance with the most recent allocation instructions received with respect to
the Participant. The Contract Holder may file revised allocation instructions at
any time with respect to a Participant and such revised instructions will apply
to all transactions occurring on or after the date the revised instructions are
received in the Processing Office.
The Contract Holder may, if the Employer Plan permits, arrange with Equitable to
have Participants provide such instructions directly to Equitable.
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SECTION 2.06 TRANSFERS AMONG DIVISIONS. The Contract Holder, upon request to
Equitable in accordance with the Employer Plan, may transfer, with respect to
any Source, amounts held for the Participant in a Division to one or more of the
other Divisions in accordance with the following rules:
(a) Amounts in the Investment Divisions and, subject to the Clause (b) below, in
the Guaranteed Interest Division, may be transferred among such Divisions.
(b) If the Investment Divisions applicable with respect to the Employer Plan
include any of the Type B Investment Divisions, then the maximum amount that
may be transferred to any or all Investment Divisions with respect to a
Participant from the Guaranteed Interest Division in any period consisting
of the current and three immediately preceding calendar quarters ("Transfer
Period") will be the amount defined in (i) below or, if both (i) and (ii)
below are applicable to such Participant, the greater of the amount defined
in (i) or (ii) below:
(i) In the case of a Participant for whom either (A) a balance was held in
the Guaranteed Interest Division under this Contract as of the last day
of the calendar year immediately preceding the current calendar
quarter, or (B) amounts were transferred with respect to the
Participant from the Guaranteed Interest Division under this Contract
to any or all of the Investment Divisions in such preceding calendar
year, such maximum for the applicable Transfer Period will be an amount
equal to the greater of 25% of such year end balance, or the aggregate
amount so transferred;
(ii) In the case of a Participant for whom an amount was allocated to the
Guaranteed Interest Division in consequence of a mass transfer of
Employer Plan funds from another funding vehicle, such maximum for the
Transfer Period in which such allocation occurred will be an amount
equal to 25% of the balance held in the Guaranteed Interest Division
with respect to the Participant as of the date of such allocation.
(c) No transfers may be made with respect to the Participant between the
Guaranteed Interest Division and the Investment Divisions:
(i) on and after the date as of which Equitable receives a request for
withdrawal from the Guaranteed Interest Division pursuant to Section
2.07, Paragraph (4) in connection with a termination of the Employer
Plan's participation under this Contract;
(ii) in the case of a Terminated Plan Participant, on and after the date as
of which the Terminated Plan Notice is received by Equitable and before
a period of 90 days has elapsed, except that transfers already being
made under any automatic transfer option available from Equitable will
be continued during such period.
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(d) After the end of the 90-day period described in Clause (c)(ii) of this
Section, if the Type B Investment Divisions had not been elected with
respect to the Employer Plan, the maximum amount that may be transferred to
any or all Investment Divisions with respect to a Participant from the
Guaranteed Interest Division in any period consisting of the current and
three immediately preceding calendar quarters will be an amount equal to 25%
of the balance, if any, that was held in the Guaranteed Interest Division
under this Contract as of the last day of the aforementioned 90-day period.
Interest transferred from the Guaranteed Interest Division under any automatic
transfer option available from Equitable that transfers only interest will not
be counted in Equitable's determination of either the 25% maximum or the
preceding year's aggregate transfer, as referred to in this Section 2.06.
Transfers will be made as of the applicable Transaction Date, and will be
subject to Equitable's rules in effect at the time of transfer. Requests for
transfer must specify as to Source and must be in writing, unless otherwise
permitted under Equitable's rules.
The Contract Holder may, if the Employer Plan permits, arrange with Equitable to
have Participants make such transfer requests directly to Equitable.
SECTION 2.07 WITHDRAWAL AND TERMINATION
(1) If the Contract Holder requests with respect to a Participant who has
elected, pursuant to the terms of the Employer Plan, to make a partial
withdrawal from the Divisions, Equitable will, as of the applicable
Transaction Date, pay the lesser of (a) the Retirement Account Value or (b)
the amount of partial withdrawal requested. The amount to be paid plus any
Contingent Withdrawal Charge applicable pursuant to Section 2.09 will be
withdrawn from the amounts held with respect to the Participant in the
Divisions.
(2) If the Contract Holder requests a full withdrawal with respect to a
Participant, Equitable will, subject to Paragraph (3) of this Section,
withdraw the amount held in the Divisions with respect to the Participant
and pay an amount equal to the Retirement Account Value minus any Contingent
Withdrawal Charge as of the applicable Transaction Date.
(3) If a Terminated Plan Notice has been received, any withdrawal from the
Guaranteed Interest Division that is requested by the Contract Holder on
behalf of a Terminated Plan Participant or beneficiary of such Participant,
other than one that is in connection with a Benefit Distribution described
in Section 1.05, will be made in accordance with this Paragraph (3) in lieu
of the preceding provisions of this Section 2.07. Equitable will accept
requests for such withdrawals only after 90 days has elapsed since
Equitable's receipt of the Terminated Plan Notice. In accordance with
whichever of the following provisions applies, payment of the requested
withdrawal will commence, or will be made, within 30 days of the later of
(a)
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receipt of such request at Equitable's Processing Office, or (b) the end of
the aforementioned 90-day period.
Equitable will, subject to the following provisions, pay such withdrawal in
annual installments over a period not to exceed 59 months, as described in
Paragraph (7) of this Section, and without a Market Value Adjustment or
Contingent Withdrawal Charge.
If, during such installment period, the Contract Holder reports to Equitable
that all or part of the balance of such installments are to be paid in
connection with a Benefit Distribution described in Section 1.05, Equitable
will pay in a single sum the amount requested.
Equitable reserves the right to pay such withdrawal in a single sum in lieu
of such annual installments. Such single sum will be equal to the lesser of
(a) the Cash Value, or (b) the amount of withdrawal requested; provided,
however, if a Market Value Adjustment is applicable to such withdrawal in
accordance with Paragraph (5) of Section 2.09, that such Market Value
Adjustment will not exceed 7% and will not result in such single sum payment
being less than the sum of (a) all amounts, other than interest, allocated
or transferred to the Guaranteed Interest Division with respect to the
Participant and not subsequently withdrawn, transferred or deducted
therefrom, and (b) interest on such amounts, accrued at the Minimum
Guaranteed Rate.
Any amount to be paid pursuant to this Paragraph (3) plus, if applicable,
any Contingent Withdrawal Charge or Market Value Adjustment will be
withdrawn from the amounts held with respect to the Participant in the
Guaranteed Interest Division.
(4) If the Contract Holder terminates the Employer Plan's participation under
this Contract in whole or in part, Equitable (a) will, if the Contract
Holder so requests, pay the aggregate of all amounts then held in the
Investment Divisions with respect to the Employer Plan, minus any applicable
Contingent Withdrawal Charges, and (b) may, unless Paragraph (5) of this
Section is applicable, pay in accordance with the following rules, the
aggregate of all amounts then held in the Guaranteed Interest Division with
respect to the Employer Plan:
(i) The amounts in the Guaranteed Interest Division will be paid in annual
installments over a period not to exceed 59 months, as described in
Paragraph (7) of this Section.
(ii) No Contingent Withdrawal Charge or Market Value Adjustment will be
applicable with respect to the installments so paid.
(iii) Equitable will have the right to discontinue maintenance of
Participant-level Retirement Account Values under this Contract and,
in lieu thereof, to (A)
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treat all amounts remaining in the Divisions as a single Retirement
Account Value, with the Contract Holder as sole Participant and (B)
rely fully upon the advice of the Contract Holder for any
Participant-level information required to process transactions
hereunder, including but not limited to the payment of death benefits.
(iv) On and after Equitable's receipt of the Contract Holder's request for
payment, no other withdrawals from, and no transfers to or from the
Guaranteed Interest Division will be made except in conjunction with
Benefit Distributions described in Section 1.05, subject to Clause
(vi) following.
(v) The amount of any withdrawal for a Benefit Distribution while such
installments are in progress will be the amount required therefor,
minus any amount then held in another funding vehicle with respect to
the Employer Plan.
(vi) On and after the Contract Holder's request for termination of the
Employer Plan's participation under this Contract, no further
Contributions may be made to the Guaranteed Interest Division with
respect to the Employer Plan.
(vii) Any amount that, pursuant to the provisions of this Contract, would be
allocated to the Guaranteed Interest Division pursuant to Section 2.08
but for the foregoing limitations will, instead, be allocated to the
Money Market Division unless the Contract Holder instructs Equitable,
by advance written notice and subject to such limitations, to do
otherwise.
(5) If the aggregate amount held in the Guaranteed Interest Division with
respect to the Employer Plan would be payable in annual installments
pursuant to Paragraph (4) of this Section, Equitable will, at the option of
the Employer and in lieu of such installments, pay such amount in a single
sum, minus any applicable Contingent Withdrawal Charge or Market Value
Adjustment, provided such Market Value Adjustment will not exceed 7% and
will not result in such single sum payment being less than the sum of (a)
all amounts, other than interest, allocated or transferred to the Guaranteed
Interest Division with respect to the Participant and not subsequently
withdrawn, transferred or deducted therefrom, and (b) interest on such
amounts, accrued at the Minimum Guaranteed Rate.
(6) If the Employer Plan is disqualified and Equitable exercises its right to
terminate the Employer Plan's participation under this Contract pursuant to
of Section 4.09, Equitable will pay the amounts held in the Divisions with
respect to the Employer Plan as if the Contract Holder had terminated the
Employer Plan's participation under this Contract in accordance with
Paragraph (4) of this Section 2.07.
(7) Any installments to be paid pursuant to Paragraphs (3) or (4) of this
Section will be made in accordance with the following:
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(a) The first such installment will be paid on a Business Day that is not
more than a maximum number of days after receipt at Equitable's
Processing Office of the applicable request for payment. Such maximum
will be 30 days with respect to Paragraph (3), and 7 days with respect
to Paragraph (4).
(b) Each of the next four annual installments will be paid, respectively, on
the first Business Day on or after each anniversary of the first
installment.
(c) The final installment will be paid on the first Business Day of the 59th
calendar month following the month in which the first installment was
paid.
(d) Each such installment will be equal to the amount then in the Guaranteed
Interest Division divided by the number of remaining installments,
including the one then due.
(8) Any amount payable pursuant to the preceding paragraphs of this Section will
be paid to the Participants or otherwise paid as may be agreed upon in
writing between the Contract Holder and Equitable. Any payment by Equitable
pursuant to this Section 2.07 will fully discharge Equitable from all
liability with respect to the amount paid.
SECTION 2.08 DEATH BENEFITS. Upon Equitable's receipt of evidence satisfactory
to it of the death of a Participant, a death benefit will be payable to the
beneficiary designated in accordance with Section 4.06. Such death benefit will
be equal to the Retirement Account Value as of the applicable Transaction Date.
The beneficiary or beneficiaries with respect to such death benefit may elect
any of the following methods of disposition, subject to the requirements of law
and Equitable's rules then in effect:
(a) to receive the death benefit in a single sum;
(b) to apply the death benefit to the purchase of an Annuity Benefit in a form
then offered by Equitable;
(c) to apply the death benefit to provide any other form of benefit then offered
by Equitable; or
(d) to apply the death benefit to an account or accounts under this Contract
maintained for the benefit of such beneficiary or beneficiaries.
Unless Equitable receives suitable written instructions to the contrary from the
Contract Holder or such beneficiary or beneficiaries on the date on which it
receives due proof of the death of the Participant, any amounts then held with
respect to the Participant in the Investment Divisions will be transferred to
one Division as described below, and the entire
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Retirement Account Value will be held therein pending disposition of the death
benefit in accordance with the immediately preceding paragraph.
Such transfer will be (a) of any amounts not then in the Money Market Division
to such Division if such Division is then applicable under this Contract to the
Employer Plan, and (b) in any other case, of any amounts not then in the
Guaranteed Interest Division to the Guaranteed Interest Division.
Equitable will pay or apply a death benefit in accordance with the election
described in the second paragraph of this Section. Upon such disposition in
accordance with Clauses (a), (b), or (c) of such paragraph, the amount held in
the Divisions with respect to the Participant and the Retirement Account Value
will be zero. Equitable will thereupon be released from any and all liability
for payment with respect to the Contributions from which the Retirement Account
Value arose.
Any beneficiary who elects to dispose of the death benefit by having it applied
to an account in accordance with Clause (d) of the second paragraph of this
Section, will be subject to the following:
(a) The beneficiary will be entitled to defer distribution of the account to the
extent permitted by the Employer Plan and applicable law.
(b) The value of the account will be determined at the time of distribution to
the beneficiary and, depending upon investment gains or losses, may be worth
more or less than the initial value of the account.
(c) If the beneficiary dies before taking full distribution of the account, a
minimum death benefit will be determined with respect to the account as
though such beneficiary were a Participant and the initial value of such
account will be deemed a Contribution for this purpose.
(d) Such account may be allocated to, and transferred among, the Divisions in
accordance with the provisions of this Contract as applicable to Retirement
Account Values with respect to Participants.
(e) Such beneficiary's account will be subject to all fees and charges other
than withdrawal charges applicable to Retirement Account Values under this
Contract.
SECTION 2.09 FEES AND CHARGES.
(1) As of the last Business Day of each calendar quarter, an administrative fee
equal to the lesser of $7.50 and .50% of the Retirement Account Value will
be deducted by Equitable from the amounts held in the Divisions with respect
to the Participant. With respect to individuals who become Participants
hereunder on or before the Contract Date, however, such administrative fee
will be appropriately prorated for
No. 1033-96-EDC Page 20
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the calendar quarter in which such Contract Date occurred. Any amount
remitted by the Contract Holder toward such fee will correspondingly reduce
such deduction.
(2) The assets of the Investment Divisions attributable to this Contract will be
subject to a daily asset charge for mortality risk, expenses and expense
risk. Such charge will be applied after any deductions to provide for taxes
and will be at a rate not to exceed a guaranteed maximum annual rate of
1.35%. Equitable reserves the right to charge less on a current basis. The
charge will be made in accordance with Clause (c) of the definition of Net
Investment Factor in Section 1.25.
(3) Any withdrawal pursuant to Section 2.07 during the first five Contract Years
with respect to the Employer Plan will, except as otherwise provided in
Paragraphs (5) and (6) of this Section 2.09, be subject to a Contingent
Withdrawal Charge.
(4) Any withdrawal from the Guaranteed Interest Division pursuant to Paragraph
(3) or (5) of Section 2.07 with respect to a Terminated Plan Participant
will, except as otherwise provided in Paragraph (6) of this Section 2.09, be
subject to a Market Value Adjustment if either
(a) no Contingent Withdrawal Charge is applicable to such withdrawal; or
(b) the Contingent Withdrawal Charge that is applicable is less than the
Market Value Adjustment. In such event the Market Value Adjustment will
apply in lieu of the Contingent Withdrawal Charge.
(5) No Contingent Withdrawal Charge or Market Value Adjustment will be applied
in connection with the following:
(a) withdrawals paid in annual installments pursuant to Paragraphs (3) or
(4) of Section 2.07;
(b) amounts withdrawn or applied with respect to a Participant for purposes
of a Benefit Distribution, or for purposes of compliance with any
qualified domestic relations order, as defined in Section 414(p) of the
Code;
(c) amounts which are in excess of the amount which may be contributed under
Section 457 of the Code including income thereon, and which are refunded
to the Contract Holder within one month of the date such amounts are
remitted as Contributions.
Equitable also reserves the right to waive the Contingent Withdrawal Charge
in connection with such other transactions under this Contract as it shall
determine, provided that any such waiver will be applied on a uniform and
nondiscriminatory basis.
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(6) If the Contract Holder requests that the amount representing a forfeiture
and the interest thereon be withdrawn during the first five Contract Years
from the Forfeiture Account for any purpose other than reallocation of such
amount among the Participants under this Contract, such withdrawal will be
subject to a Contingent Withdrawal Charge. The Contingent Withdrawal Charge
will be deducted by Equitable at the time of such withdrawal.
(7) Any charge for taxes which Equitable pays in conjunction with a withdrawal
pursuant to Section 2.07 will be deducted as of the applicable Transaction
Date from the amounts held in the Divisions with respect to the Participant.
If Equitable has deducted such charge from the Contributions being withdrawn
before they were allocated to the Divisions pursuant to Section 2.05,
Equitable will not again deduct charges from such Contributions for the same
taxes. If, however, taxes are later imposed upon Equitable when such a
withdrawal is made, Equitable reserves the right to make an additional
deduction for such taxes.
SECTION 2.10 FORFEITURES. If the Contract Holder reports to Equitable that a
Retirement Account Value is to be reduced as a result of a forfeiture pursuant
to the Employer Plan, Equitable will reduce the Retirement Account Value by the
amount of the reduction so reported as representing the unvested portion of the
Participant's Employer Plan benefit.
Equitable will apply the amount of any such reduction to the Forfeiture Account,
pending subsequent disposition. Such amount (and any interest thereon) will be
disposed of in a manner to be reported in writing to Equitable by the Contract
Holder.
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PART III - ANNUITY BENEFITS
SECTION 3.01 FORM OF ANNUITY BENEFIT. Any Annuity Benefit provided under this
Contract will be payable on the Life Annuity form described in the following
paragraph or, as determined by the Contract Holder in accordance with the terms
of the Employer Plan, on any other annuity form offered by Equitable, subject to
Equitable's rules then in effect and the requirements of applicable law.
The Life Annuity form provides monthly payments to the Participant beginning at
the Annuity Commencement Date and ending with the last monthly payment due
before the death of the Participant.
SECTION 3.02 REPORT FOR ANNUITY BENEFIT. The Contract Holder will report to
Equitable each Participant or other person with respect to whom an Annuity
Benefit is to be provided under this Contract if the amount to be applied to
provide such Annuity Benefit is at least $3,500. Any such report is to be made
before the first payment under such Annuity Benefit. Any such report will be in
the form prescribed by Equitable and will include all pertinent facts and
determinations requested by Equitable. Equitable will be fully protected in
relying on the reports and other information furnished by the Contract Holder
and need not inquire as to the accuracy or completeness thereof.
SECTION 3.03 APPLICATION TO PROVIDE ANNUITY BENEFIT. As of the date of the first
payment under each such Annuity Benefit to be provided hereunder, an application
will be made to provide such Annuity Benefit. The amount so applied will be
equal to the following, less any applicable tax on annuity considerations: (a)
the Retirement Account Value, if payments under the applicable annuity form are
contingent upon the survival of a person, or (b) the Cash Value, if payments
under the applicable annuity form are not contingent upon the survival of a
person; provided that the Contract Holder may report, in accordance with Section
3.02, that only a portion of the given amount is to be used for such Annuity
Benefit. If Equitable has deducted charges for applicable tax from the
Contributions being applied to provide an Annuity Benefit before they were
allocated to the Divisions pursuant to Section 2.05, Equitable will not again
deduct charges from such Contributions for the same taxes. If, however, taxes
are later imposed upon Equitable when such an application is made, Equitable
reserves the right to make an additional deduction from such taxes.
Application will be made on the basis of either (a) the Tables of Guaranteed
Annuity Payments included in Appendix A of this Contract, or (b) Equitable's
then-current individual annuity rates applicable at the time of application to
funds which derive from sources outside Equitable, whichever rates would provide
a larger benefit with respect to the payee.
After application to provide an Annuity Benefit pursuant to this Section, the
amounts with respect to the Participant in the Divisions and the Retirement
Account Value will be correspondingly reduced.
No. 1033-96-EDC Page 23
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SECTION 3.04 PAYMENT OF ANNUITY BENEFITS. Equitable will require satisfactory
evidence of the age of any person upon whose life continued payment under an
annuity form depends. Evidence of each payee's survival must be furnished to
Equitable either by personal endorsement of the check drawn for payment or by
other means satisfactory to Equitable.
If a benefit payment under the Contract was based on information that is
subsequently found to be incorrect, such benefit will not be invalidated, but an
adjustment on the basis of the correct information will be made in the amount of
the benefit payments, any amount used to provide the benefit, or any combination
thereof. The amount of the overpayments by Equitable will be charged against and
the amount of the underpayments will be added to any payments thereafter falling
due under the Contract with respect to the payee.
The liability of Equitable with respect to a payee is limited to the correct
information and the actual amounts used to provide the benefits then in force
with respect to the payee under the Contract.
If Equitable receives evidence satisfactory to it that (a) a payee entitled to
receive any payment under the Contract is physically or mentally incompetent to
receive such payment or is a minor, (b) another person or an institution is then
maintaining or has custody of such payee, and (c) no guardian, committee, or
other representative of the estate of such payee has been appointed, Equitable
may, unless the Plan provides to the contrary, make the payments to such other
person or institution, and will thereupon be fully discharged from all liability
with respect thereto.
If the amount to be applied hereunder is less than $3,500, Equitable may pay the
amount to the payee in a single sum instead of applying it to provide an Annuity
Benefit.
Equitable will notify the payee under a Variable Annuity Benefit of the number
of Annuity Units and the Average Annuity Unit Value used in determining the
amount of each variable payment.
Any election, change, revocation or designation shall be made, and will take
effect, in the same manner as a change of beneficiary.
SECTION 3.05 REQUIRED DISTRIBUTIONS. Pursuant to Sections 457(d) and 401(a)(9)
of the Code, and subject to the terms of the Employer Plan, the entire interest
of the Participant will be distributed or begin to be distributed, no later than
the first day of April following the calendar year in which the Participant
attains 70 1/2 ("Required Beginning Date"). The entire interest may be
distributed, as elected pursuant to the Employer Plan and this Contract, over
(a) the life the Participant or the lives of the Participant and a designated
beneficiary, or (b) a period certain not extending beyond the Participant's life
expectancy, or the joint and last survivor life expectancy of the Participant
and a designated beneficiary. Distributions must be made in periodic payments at
intervals of no longer than one year. In addition, payments must be either
nonincreasing or they
No. 1033-96-EDC Page 24
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may increase only as provided in Section 1.401(a)(9)-1 of the Treasury
Regulations, or any successor Regulation thereto. All distributions made
hereunder shall be made in accordance with the requirements of Section 401(a)(9)
of the Code, including the incidental death benefit requirements of Section
401(a)(9)(G) of the Code, and applicable Treasury Regulations, including the
minimum distribution incidental benefit requirement of Section 1.401(a)(9)-2 of
the Treasury Regulation or any successor Regulation thereto.
For purposes of determining the "period certain" referred to in the first
paragraph of this Section, life expectancy is computed by use of the expected
return multiples in Tables V and VI of Treasury Regulation Section 1.72-9.
Unless otherwise elected prior to the time distributions are required to begin,
those life expectancies will be recalculated annually. Such election will be
irrevocable and will apply to all subsequent years. The life expectancy of a
non-spouse beneficiary may not be recalculated. Instead, life expectancy will be
calculated using the attained age of such beneficiary during the calendar year
in which the Participant attains age 70 1/2, and payments for subsequent years
will be calculated based on such life expectancy reduced by one for each
calendar year which has elapsed since the calendar year life expectancy was
first calculated.
If the Participant dies after distribution of the interest described in the
first paragraph of this Section has begun, the remaining portion of such
interest will continue to be distributed at least as rapidly as under the method
of distribution being used prior to the Participant's death.
Notwithstanding the above paragraphs and the following paragraphs of this
Section 3.07, while any distribution will be subject to such requirements of the
Code and regulations, any distribution will also be subject to the terms of this
Contract. That is, the forms of distribution will be those which are made
available by us at the time of your election.
If the Participant dies before distribution of the interest described in the
first paragraph of this Section begins, distribution of the entire interest will
be completed no later than December 31 of the calendar year containing the fifth
anniversary of the Participant's death, except to the extent that an election is
made to receive death benefit distributions in accordance with (a) and (b)
below:
(a) If the Participant's interest is payable to a designated beneficiary, then
the entire interest may be distributed over a period certain not greater
than the life expectancy of the designated beneficiary. Such distributions
must commence on or before December 31 of the calendar year immediately
following the calendar year of the Participant's death. If the designated
beneficiary is not the Participant's surviving spouse, a period certain
Annuity Benefit cannot exceed 15 years (even if life expectancy is greater
than 15 years).
(b) If the designated beneficiary is the Participant's surviving spouse, the
date distributions that are required to begin in accordance with (a) above
will not be earlier than the later of (i) December 31 of the calendar year
immediately following
No. 1033-96-EDC Page 25
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the calendar year of the Participant's death or (ii) December 31 of the
calendar year in which the Participant would have attained age 70 1/2.
For purposes of determining the "period certain" referred to in the immediately
preceding paragraph, life expectancy is computed by use of the expected return
multiples in Tables V and VI of Treasury Regulation Section 1.72-9. For purposes
of distributions beginning after the Participant's death, unless otherwise
elected by the surviving spouse by the time distributions are required to begin,
life expectancies will be recalculated annually. Such election will be
irrevocable by the surviving spouse and will apply to all subsequent years. In
the case of any other designated beneficiary, life expectancies will be
calculated using the attained age of such beneficiary during the calendar year
in which distributions are required to begin pursuant to this Section, and
payments for any subsequent calendar year will be calculated based on such life
expectancy reduced by one for each calendar year which has elapsed since the
calendar year life expectancy was first calculated.
Distributions under this Section are considered to have begun if distributions
are made because the Required Beginning Date was reached, or, if prior to the
Required Beginning Date, distributions irrevocably commence to an individual
over a period permitted and in an annuity form acceptable under Section
1.401(a)(9) of the Treasury Regulations of any successor Regulation thereto.
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PART IV - GENERAL PROVISIONS
SECTION 4.01 CONTRACT. This Contract and the application therefor constitutes
the entire contract between the Contract Holder and Equitable. The provisions of
the Contract alone will govern with respect to the rights and obligations of
Equitable. Nothing in the Employer Plan, nor in any modification, amendment, or
supplement to such Plan will in any way be construed to enlarge, change, vary or
in any other way affect the obligations of Equitable as expressly provided in
this Contract.
This Contract may not be modified as to Equitable, nor may any of Equitable's
rights or requirements be waived, except in writing and by an authorized officer
of Equitable. The Contract may be changed by amendment or replacement upon
agreement between the Contract Holder and Equitable without the consent of any
other person provided that such change does not reduce any Annuity Benefit
provided before such change and provided that no rights, privileges or benefits
which have accrued to the Contract Holder or to any Participant under the
Contract, may be reduced or forfeited except by the express consent thereof.
Upon Equitable's request, the Contract Holder will provide any information that
is reasonably required by Equitable with respect to transactions under this
Contract.
SECTION 4.02 STATUTORY COMPLIANCE. Equitable reserves the right to amend the
Contract without the consent of any other person in order to comply with
applicable laws and regulations. Such right will include, but not be limited to,
the right to conform the Contract to reflect changes in the Code, in Treasury
regulations or published rulings of the Internal Revenue Service, and in
Department of Labor regulations.
Any Annuity Benefit, Cash Value or death benefit available under the Contract
will not be less than the minimum benefits required by any applicable state law.
SECTION 4.03 ASSIGNMENTS AND NONTRANSFERABILITY. Neither the Contract Holder nor
Equitable may assign its rights or obligations hereunder without the other
party's prior written consent, except that an assignment by Equitable to a
corporation in which it has a direct or indirect ownership interest will not
require such consent provided that Equitable remains liable for the failure of
that corporation to perform its obligations under this Contract.
Subject to the requirements of applicable law, no amount payable to a
Participant or beneficiary under the Contract may be assigned, commuted or
encumbered by the payee and no such amount will in any way be subject to any
claim against such payee. Such prohibition will not apply to any assignment,
transfer, or attachment pursuant to a qualified domestic relations order, as
defined in Section 414(p) of the Code.
SECTION 4.04 MANNER OF PAYMENT. Equitable will pay all amounts becoming payable
under this Contract by check or, if so agreed upon by the Contract Holder and
Equitable, by wire transfer. All amounts payable by the Contract Holder under
this
No. 1033-96-EDC Page 27
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Contract will be paid by check payable to Equitable, or by any other method
acceptable to Equitable.
SECTION 4.05 RIGHT TO CHANGE. Equitable reserves the right at any time to
increase the fee described in Section 2.09, Clause (1) to reflect any increase
in Equitable's expenses related to the administrative functions covered by such
fee.
Equitable also reserves the right to decrease or waive the fee described in
Section 2.09, Clause (1), or the Contingent Withdrawal Charge, in recognition of
anticipated and sustained lower levels of sales and administrative expense
incurred by Equitable under this Contract with respect to the Employer Plan.
Such fee or charge adjustment will be determined by Equitable on the basis of
criteria applied in a uniform and nondiscriminatory manner including, but
without limitation, the number of Participants associated with the Employer
Plan, the level and frequency of Contributions, the average retention of such
Contributions under the Contract, the pattern of withdrawals, and the use of
cost-saving technology by the Contract Holder in transmitting Participant data
to Equitable.
Equitable reserves the right to change from time to time on and after the fifth
anniversary of the Register Date, at intervals of not less than five years, (a)
the minimum amount to be used to provide an Annuity Benefit hereunder as stated
in Section 3.02 and (b) the actuarial basis used in the Table of Guaranteed
Annuity Payments appearing in Appendix A.
Equitable may elect to make any change pursuant to the preceding paragraphs of
this Section either by written notice to the Contract Holder of by amendment to
this Contract, and will advise the Contract at least 90 days in advance of any
such change. No such change will apply to any Annuity Benefit provided hereunder
before such change.
Equitable reserves the right, subject to compliance with applicable law, to:
(a) add new Investment Divisions or subdivisions thereof to the Separate Account
or remove Investment Divisions or subdivisions thereof from the Separate
Account;
(b) combine any two or more Investment Divisions or subdivisions thereof;
(c) transfer the assets Equitable determines to be the proportionate share of
the class of contracts to which this Contract belongs from any of the
Investment Divisions to another Investment Division by withdrawing the same
percentage of each investment in the Investment Division, with appropriate
adjustment to avoid odd lots and fractions;
(d) operate the Separate Account or any Investment Division as a management
investment company under the Investment Company Act of 1940 (which company
may be directed by a committee which may be composed of a majority of
persons who are "interested persons" of Equitable under said Act, which
committee may be discharged by Equitable at any time) or in any other form
permitted by law, including a form that allows Equitable to make direct
investments;
No. 1033-96-EDC Page 28
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(e) deregister the Separate Account under said Act;
(f) cause one or more Investment Divisions to invest some or all of their assets
in one or more other trusts or investment companies;
(g) terminate any agreement with the Contract Holder in conjunction with this
Contract pursuant to the terms of such agreement; and
(h) restrict or eliminate any voting rights of Participants, the Contract Holder
or other persons who have voting rights that affect the Separate Account.
If the exercise of these results in a material change in the underlying
investments of an Investment Division, the Contract Holder will be notified by
Equitable of such exercise.
SECTION 4.06 BENEFICIARY. The Employer is entitled to receive any death benefit
payable under this Contract pursuant to Section 2.08. Upon the Participant's
death, the Employer may, at any time up to and including provision of due proof
of such death, change the beneficiary designation for such death benefit from
the Employer to another person or persons designated by the Participant under
the Employer Plan to receive death benefits payable under the Employer Plan. Any
designation or change will be by written notice filed at the Processing Office
by the Contract Holder and subject to Equitable's approval.
Subject to the terms of the Employer Plan, the person or persons, if so
designated by the Employer to be the beneficiary or beneficiaries under this
Contract pursuant to the terms of the immediately preceding paragraph, may elect
to receive the death benefit payable under Section 2.08 in the form of an
Annuity Benefit rather than as a single sum. Any such election must meet the
Required Distributions described in Section 3.05.
SECTION 4.07 DEFERMENT. Except as provided in this Section, payments by
Equitable pursuant to the provisions of Sections 2.07 and 2.08, from the amounts
held with respect to such Participant in the Investment Divisions will be made
within seven days after the applicable Transaction Date.
Payments or applications by Equitable of proceeds from the Investment Divisions
can be deferred during any period when (a) the sale of securities or the
determination of the Accumulation Unit Value is not reasonably practicable
because an emergency, defined by the Securities and Exchange Commission, exists,
or the New York Stock Exchange is closed, or trading on such Exchange is
restricted, or (b) the Securities and Exchange Commission by order permits
postponement for the protection of persons having interests in the Separate
Account. Payment or transfer by Equitable of any portion of a Participant's
Retirement Account Value in the Guaranteed Interest Division can be deferred,
while the Participant is living, for up to six months after receipt of a written
request for such payment or transfer.
No. 1033-96-EDC Page 29
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SECTION 4.08 CONTRACT HOLDER'S RESPONSIBILITY. Equitable will make no payment
hereunder without written instructions from the Contract Holder, and Equitable
will be fully discharged of any liability therefor to the extent such payments
are made pursuant to such instructions.
SECTION 4.09 DISQUALIFICATION OF PLAN. In the event that the Employer Plan fails
to qualify as an Eligible Deferred Compensation Plan under Section 457 of the
Code and applicable Treasury Regulations, Equitable reserves the right, upon
receiving notice of such fact, to transfer the Retirement Account Values under
this Contract to another annuity contract issued by us or one of our affiliated
or subsidiary life insurance companies or to terminate this Contract and pay the
Retirement Account Values less a deduction for applicable taxes, solely at
Equitable's option.
If the Employer Plan is to terminate, in whole or in part, without immediate
establishment of a successor plan, sponsored by the Employer, with respect to
the affected Participants, the Contract Holder will provide Equitable with (a)
90 days' advance written notice and evidence satisfactory to Equitable of such
termination, and (b) a listing of the Participants covered by such termination
if it is a partial plan termination.
SECTION 4.10 OWNERSHIP RIGHT OF EMPLOYER. Notwithstanding any other provision of
the terms of this Contract, until amounts under this Contract are distributed or
made available to the Participant or the Participant's beneficiary in accordance
with the terms of this Contract and the terms of the Employer Plan, amounts
under this Contract remain solely the property of the Employer subject only to
claims of the Employer's general creditors. This Section will be construed and
administered in accordance with Section 457(b)(6) of the Code and the
regulations thereunder.
No. 1033-96-EDC Page 30
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APPENDIX A
TABLE OF GUARANTEED ANNUITY PAYMENTS
Amount of Annuity Benefit payable monthly on the Life Annuity form provided by
an application of $1,000.
Age Amount
--- ------
55 $3.99
60 4.35
65 4.82
70 5.46
The amount of income provided under an Annuity Benefit payable on the Life
Annuity form is based on 3.00% interest and the 1983 Individual Annuity
Mortality Table "a" projected with modified Scale G, adjusted to a unisex basis,
reflecting a 20% - 80% split of males and females at pivotal age 55.
Amounts required for ages not shown in the Tables or for other annuity forms
will be calculated by Equitable on the same actuarial basis.
No. 1033-96-EDC Page 31
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 6 to the Registration
Statement No. 33-58950 on Form N-4 (the "Registration Statement") of our report
dated February 7, 1996, relating to the financial statements of The Equitable
Life Assurance Society of the United States Separate Account A, and our report
dated February 7, 1996, relating to the consolidated financial statements of The
Equitable Life Assurance Society of the United States, which reports appear in
such Statement of Additional Information, and to the incorporation by reference
of our reports into the Prospectus and Prospectus Supplement which constitute
part of this Registration Statement. We also consent to the references to us
under the heading "Custodian and Independent Accountants" in such Statement of
Additional Information.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
New York, New York
July 11, 1996
