THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SUPPLEMENT DATED JULY 20, 1998
TO
EQUI-VEST(R) PROSPECTUS
DATED MAY 1, 1998
ROTH ADVANTAGE(SM)
This Supplement modifies certain information contained in the prospectus dated
May 1, 1998 ("Prospectus") as it relates to EQUI-VEST Roth Advantage Contracts
(Series 500) offered by Equitable Life. Capitalized terms have the same meaning
as in the Prospectus.
EQUI-VEST ROTH ADVANTAGE CONTRACT (ROTH ADVANTAGE)
EQUI-VEST Roth Advantage is designed to qualify as a Roth individual retirement
annuity under Sections 408A and 408(b) of the Code. Your interest in the Roth
Advantage cannot be forfeited. You or your beneficiaries who survive you are the
only ones who can receive the benefits or payments.
EQUI-VEST Roth Advantage is offered on the same basis and under the same terms
and conditions described in the Prospectus as applicable to the EQUI-VEST Roth
IRA (Series 300 and 400), except that for EQUI-VEST Roth Advantage, the daily
charge applied to the investment funds, the circumstances under which the
Contingent Withdrawal Charge is waived or modified, and interest credited in the
Guaranteed Interest Account, are different. You may purchase an EQUI-VEST Roth
Advantage Contract or an EQUI-VEST Roth IRA Contract, as you decide. The
EQUI-VEST Roth IRA has lower total Separate Account annual expenses than the
EQUI-VEST Roth Advantage, but the EQUI-VEST Roth Advantage has a greater number
of exemptions to the contingent withdrawal charge. Also, except for the minimum
Contract guaranteed rate, for Roth Advantage Contracts, the interest credited
under the Guaranteed Interest Account generally will be .10% lower than the rate
applicable under other EQUI-VEST IRA and Roth IRA Contracts. You may consult
with your Equitable Life Representative for assistance in considering which form
of IRA Contract is most suitable for you. The charges and exceptions to the
contingent withdrawal charge applicable to EQUI-VEST Roth Advantage are as
follows:
THE FOLLOWING TABLE AND EXAMPLES APPLICABLE TO THE EQUI-VEST ROTH ADVANTAGE
CONTRACT ARE ADDED AFTER "EQUI-VEST: SERIES 300 AND 400 - ACCUMULATION UNIT
VALUES" ON PAGE 23 OF THE PROSPECTUS.
TABLE 4: EQUI-VEST SERIES 500
Description of Expenses
<TABLE>
<CAPTION>
CONTRACT OWNER TRANSACTION EXPENSES
<S> <C>
SALES LOAD ON PURCHASES .................................................... NONE
MAXIMUM CONTINGENT WITHDRAWAL CHARGE (1) ................................... 6%
MAXIMUM/CURRENT ANNUAL ADMINISTRATIVE CHARGE (2) ........................... $65/30
MAXIMUM/CURRENT THIRD PARTY TRANSFER OR EXCHANGE FEE (3) ................... $65/25 PER OCCURRENCE
SEPARATE ACCOUNT ANNUAL EXPENSES
Mortality and Expense Risk Fees (including Death Benefit Charges)........... 1.20%
Other Expenses ............................................................. .25%
=====
Total Separate Account Annual Expenses (4)............................... 1.45%
=====
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
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ALLIANCE
ALLIANCE INTERMEDIATE ALLIANCE ALLIANCE ALLIANCE ALLIANCE
MONEY GOVERNMENT QUALITY ALLIANCE GROWTH EQUITY COMMON
MARKET SECURITIES BOND HIGH YIELD & INCOME INDEX STOCK
----------------------------------------------------------------------------------------
HRT ANNUAL EXPENSES
<S> <C> <C> <C> <C> <C> <C> <C>
Investment Advisory Fees .35% .50% .53% .60% .55% .32% .37%
Other Expenses .04% .06% .05% .04% .04% .04% .03%
- -----------------------------------------------------------------------------------------------------------------------------------
Total HRT Annual Expenses (5)(6) .39% .56% .58% .64% .59% .36% .40%
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
ALLIANCE ALLIANCE ALLIANCE ALLIANCE
ALLIANCE ALLIANCE AGGRESSIVE SMALL CAP CONSERVATIVE ALLIANCE GROWTH
GLOBAL INTERNATIONAL STOCK GROWTH INVESTORS BALANCED INVESTORS
----------------------------------------------------------------------------------------
HRT ANNUAL EXPENSES
<S> <C> <C> <C> <C> <C> <C> <C>
Investment Advisory Fees .65% .90% .54% .90% .48% .42% .52%
Other Expenses .08% .18% .03% .05% .07% .05% .05%
- ------------------------------------------------------------------------------------------------------------------------------------
Total HRT Annual Expenses (5)(6) .73% 1.08% .57% .95% .55% .47% .57%
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM
T. ROWE PRICE T. ROWE PRICE GROWTH & EQ/ PUTNAM
INTERNATIONAL STOCK EQUITY INCOME INCOME VALUE BALANCED MFS RESEARCH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------------------------------------------------------------------------------------------
EQAT Annual Expenses
<S> <C> <C> <C> <C> <C>
Investment Management and
Advisory Fee .75% .55% .55% .55% .55%
Rule 12b-1 Fee(7) .25% .25% .25% .25% .25%
Other Expenses .20% .05% .05% .10% .05%
- ------------------------------------------------------------------------------------------------------------------------------------
Total EQAT Annual Expenses (8) 1.20% .85% .85% .90% .85%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
MORGAN STANLEY
MFS EMERGING EMERGING WARBURG PINCUS MERRILL LYNCH MERRILL LYNCH
GROWTH COM- MARKETS EQUITY SMALL COMPANY WORLD STRATEGY BASIC VALUE
PANIES PORTFOLIO PORTFOLIO VALUE PORTFOLIO PORTFOLIO EQUITY PORTFOLIO
--------------------------------------------------------------------------------------------
EQAT Annual Expenses
<S> <C> <C> <C> <C> <C>
Investment Management and
Advisory Fee .55% 1.15% .65% .70% .55%
Rule 12b-1 Fee(7) .25% .25% .25% .25% .25%
Other Expenses .05% .35% .10% .25% .05%
- ------------------------------------------------------------------------------------------------------------------------------------
Total EQAT Annual Expenses (8) .85% 1.75% 1.00% 1.20% .85%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- -------------------
Notes:
(1) The contingent withdrawal charge is a percentage of specified
contributions. See "Contingent Withdrawal Charge" in Part 7. As discussed
in the Prospectus and as set forth elsewhere in this Supplement, important
exceptions and limitations may eliminate or reduce the contingent
withdrawal charge.
(2) The Annual Administrative Charge is the lesser of $30 or 2% of the Annuity
Account Value (adjusted to include any withdrawals made during that year)
during the first two Contract Years; and $30 for each Contract Year
thereafter. See "Annual Administrative Charge" in Part 7. We reserve the
right to increase this fee in the future if our administrative costs
increase, but such fee may not exceed an annual maximum of $65, subject to
applicable law.
(3) There is a Third Party Transfer or Exchange Fee of $25 per occurrence. We
reserve the right to increase this fee in the future, but such fee may not
exceed a maximum of $65 per occurrence, subject to applicable law.
(4) The total charge for Separate Account annual expenses is subject to change,
but may not exceed 2.00%. See "Charges to Investment Funds" in the addition
to Part 7 of the Prospectus set forth below in this Supplement.
(5) Effective May 1, 1997, a new Investment Advisory Agreement was entered into
between HRT and Alliance Capital Management L.P., HRT's Investment Adviser,
which effected changes in HRT's management fee and expense structure. See
HRT's prospectus for more information.
The tables above reflecting HRT's expenses are based on average portfolio
net assets for the year ended December 31, 1997 and have been restated to
reflect (i) the fees that would have been paid to Alliance if the current
advisory agreement had been in effect as of January 1, 1997 and (ii)
estimated accounting expenses for the year ending December 31, 1997.
(6) 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 HRT. The maximum investment advisory fee, however, cannot be increased
without a vote of that Portfolio's shareholders. The other direct operating
expenses will also fluctuate from year to year depending on actual
ex-
2
<PAGE>
penses. HRT's expenses are shown as a percentage of each Portfolio's
average portfolio net assets. See "Charges to Portfolios" in Part 7.
(7) The Class IB shares of EQAT are subject to fees imposed under distribution
plans (herein, the "Rule 12b-1 Plans" ) adopted by EQAT pursuant to Rule
12b-1 under the Investment Company Act of 1940, as amended. The Rule 12b-1
Plans provide that EQAT, on behalf of each Portfolio, may charge annually
up to 0.25% of the average daily net assets of a Portfolio attributable to
its Class IB shares in respect of activities primarily intended to result
in the sale of the Class IB shares. The 12b-1 fee will not be increased for
the life of the Contracts.
(8) All EQAT Portfolios commenced operations on May 1, 1997 except the Morgan
Stanley Emerging Markets Equity Portfolio, which commenced operations on
August 20, 1997.
The maximum investment management and advisory fees for each EQAT Portfolio
cannot be increased without a vote of that Portfolio's shareholders. The
amounts shown as "Other Expenses" will fluctuate from year to year
depending on actual expenses; however, EQ Financial Consultants, Inc. ("EQ
Financial"), EQAT's manager, has entered into an expense limitation
agreement with respect to each Portfolio ("Expense Limitation Agreement"),
pursuant to which EQ Financial has agreed to waive or limit its fees and
assume other expenses. Under the Expense Limitation Agreement, total annual
operating expenses of each Portfolio (other than interest, taxes, brokerage
commissions, capitalized expenditures, extraordinary expenses and 12b-1
fees) are limited for the respective average daily net assets of each
Portfolio as follows: 0.60% for Merrill Lynch Basic Value Equity, MFS
Research, MFS Emerging Growth Companies, EQ/Putnam Growth & Income Value
and T. Rowe Price Equity Income; 0.65% for EQ/Putnam Balanced; 0.75% for
Warburg Pincus Small Company Value; 0.95% for Merrill Lynch World Strategy
and T. Rowe Price International Stock; and 1.50% for Morgan Stanley
Emerging Markets Equity.
Absent the expense limitation, "Other Expenses" for 1997 on an annualized
basis for each of the Portfolios would have been as follows: 0.80% for
Warburg Pincus Small Company Value; 0.94% for T. Rowe Price Equity Income;
0.95% for EQ/Putnam Growth & Income Value; 0.98% for MFS Research; 1.02%
for MFS Emerging Growth Companies; 1.09% for Merrill Lynch Basic Value
Equity; 1.21% for Morgan Stanley Emerging Markets Equity; 1.56% for T. Rowe
Price International Stock; 1.75% for EQ/Putnam Balanced; and 2.10% for
Merrill Lynch World Strategy.
Each Portfolio may at a later date make a reimbursement to EQ Financial for
any of the management fees waived or limited and other expenses assumed and
paid by EQ Financial pursuant to the Expense Limitation Agreement provided,
that among other things, such Portfolio has reached sufficient size to
permit such reimbursement to be made and provided that the Portfolio's
current annual operating expenses do not exceed the operating expense limit
determined for such Portfolio. See the EQAT prospectus for more
information.
EXAMPLES: EQUI-VEST SERIES 500
For the Series 500 Roth Advantage Contract, the examples which follow show the
expenses that a hypothetical Contract Owner would pay in the surrender and
nonsurrender situations noted below, assuming a single contribution of $1,000 on
the Contract Date invested in one of the Investment Funds listed, a 5% annual
return on assets and no waiver of the contingent withdrawal charge.(1) For
purposes of these examples, the annual administrative charge is computed by
reference to the actual aggregate annual administrative charges as a percentage
of the total average net assets held under all EQUI-VEST Contracts.
These examples should not be considered a representation of past or future
expenses for each Investment Fund or Portfolio. Actual expenses may be greater
or less than those shown. Similarly, the annual rate of return assumed in the
examples is not an estimate or guarantee of future investment performance.
IF YOU SURRENDER YOUR CONTRACT AT THE END OF EACH PERIOD SHOWN, THE EXPENSE
WOULD BE:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
INVESTMENT FUND 1 YEAR 3 YEARS
--------------- ----------------------------------------------
<S> <C> <C>
Alliance Money Market $75.63 $120.87
Alliance Intermediate Government Securities 77.32 125.96
Alliance Quality Bond 77.52 126.55
Alliance High Yield 78.12 128.34
Alliance Growth & Income 77.62 126.85
Alliance Equity Index 75.34 119.97
Alliance Common Stock 75.73 121.17
Alliance Global 79.01 131.03
Alliance International 82.48 141.41
Alliance Small Cap Growth 81.19 137.56
Alliance Aggressive Stock 77.42 126.25
Alliance Conservative Investors 77.22 125.66
Alliance Balanced 76.43 123.26
Alliance Growth Investors 77.42 126.25
T. Rowe Price International Stock Portfolio 83.67 144.95
T. Rowe Price Equity Income Portfolio 80.20 134.59
EQ/Putnam Growth & Income Value Portfolio 80.20 134.59
EQ/Putnam Balanced Portfolio 80.70 136.08
This Table continues on next page.
</TABLE>
3
<PAGE>
<TABLE>
<S> <C> <C>
MFS Research Portfolio 80.20 134.59
MFS Emerging Growth Companies Portfolio 80.20 134.59
Morgan Stanley Emerging Markets Equity Portfolio 89.13 161.07
Warburg Pincus Small Company Value Portfolio 81.69 139.04
Merrill Lynch World Strategy Portfolio 83.67 144.95
Merrill Lynch Basic Value Equity Portfolio 80.20 134.59
- ------------------------------------------------------------------------------------------------------------------------------------
IF YOU DO NOT SURRENDER YOUR CONTRACT AT THE END OF EACH PERIOD SHOWN, THE
EXPENSE WOULD BE:
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
INVESTMENT FUND 1 YEAR 3 YEARS
--------------- --------------------------------------------------------------
<S> <C> <C>
Alliance Money Market $20.01 $ 61.86
Alliance Intermediate Government Securities 21.80 67.26
Alliance Quality Bond 22.01 67.89
Alliance High Yield 22.64 69.79
Alliance Growth & Income 22.11 68.21
Alliance Equity Index 19.70 60.91
Alliance Common Stock 20.12 62.18
Alliance Global 23.58 72.63
Alliance International 27.25 83.64
Alliance Small Cap Growth 25.89 79.56
Alliance Aggressive Stock 21.90 67.57
Alliance Conservative Investors 21.69 66.94
Alliance Balanced 20.85 64.40
Alliance Growth Investors 21.90 67.57
T. Rowe Price International Stock Portfolio 28.51 87.39
T. Rowe Price Equity Income Portfolio 24.84 76.41
EQ/Putnam Growth & Income Value Portfolio 24.84 76.41
EQ/Putnam Balanced Portfolio 25.37 77.99
MFS Research Portfolio 24.84 76.41
MFS Emerging Growth Companies Portfolio 24.84 76.41
Morgan Stanley Emerging Markets Equity Portfolio 34.29 104.48
Warburg Pincus Small Company Value Portfolio 26.42 81.13
Merrill Lynch World Strategy Portfolio 28.51 87.39
Merrill Lynch Basic Value Equity Portfolio 24.84 76.41
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The amount accumulated, based on the assumptions, could not be paid in the
form of an annuity at the end of any of the periods shown in the examples.
If the amount applied to purchase an annuity is less than $2,000, or the
initial annuity payment is less than $20, we may pay the amount to the payee
in a single sum instead of as payments under an annuity form. See
"Distribution Options" in Part 6. In some cases, charges for state premium
or other taxes will be deducted from the amount applied, if applicable.
Accumulation Unit Values
No Accumulation Unit Values for any of the Investment Funds offered under the
Series 500 Roth Advantage Contract are included herein, as the Contracts were
not offered prior to the date of this Supplement.
The following Investment Fund performance information relates to the Roth
Advantage and is separate from the Investment Fund performance data shown under
"Part 8. Investment Performance" beginning on page 80 of the Prospectus.
INVESTMENT FUND PERFORMANCE - ROTH ADVANTAGE
In order to help show how the performance of Investment Funds affects Annuity
Account Values, the following tables provide a historical view of investment
performance for each of the Funds included. The performance shown has been
calculated under two methods, as explained under "How Performance Data Are
Presented" below. The information presented includes performance results along
with data representing unmanaged market indices and similarly managed funds.
Except as noted below, performance data for the Investment Funds reflect (i) the
actual historical investment results of the corresponding Portfolios of HRT or
EQAT from the date of inception of those Portfolios or certain predecessor
Portfolios or accounts, and (ii) the actual investment advisory fee, Rule 12b-1
fee, if any, and direct operating expenses of the relevant Portfolios. In
addition, for all periods, the performance data reflects the Separate Account
asset charges assessed under the Roth Advantage Contract, as if it had been
available during the periods shown.
Performance for the Alliance Money Market, Alliance Balanced, Alliance Common
Stock and Alliance Aggressive Stock Funds for the period before those Funds were
operated as a unit investment trust has been adjusted to reflect the investment
advisory fee and expense structure that became applicable to the unit investment
trust. See "The Reorganization" in the SAI for additional information.
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.
4
<PAGE>
HOW PERFORMANCE DATA ARE PRESENTED
Tables 1 and 2 compare annualized rates of return for each Investment Fund along
with appropriate benchmarks. Table 3 shows the year-by-year rates of return for
each Investment Fund. These performance results are based on the change in the
Accumulation Unit value for each Investment Fund for the periods shown.
Investment results in Tables 1, 2, and 3 are net of all charges and expenses
assessed against the Investment Funds (including fees and expenses of the
Trusts) but exclude the annual administrative charge and any withdrawal charges
which would also reduce the actual return. Tables 4 and 5 show performance
results after giving effect to all charges and expenses including the annual
administrative charge and the contingent withdrawal charge. Since charges under
the Contracts may vary, we have assumed, for each charge, the highest that might
apply.
Certain of the Investment Funds began operations on a date after the inception
date of the corresponding Portfolio. When we advertise the performance of an
Investment Fund we will separately set forth the performance of that Fund since
its inception date, to the extent required by regulatory authorities.
BENCHMARKS
Market indices are not subject to any charges for investment advisory fees
typically associated with a managed portfolio. Comparisons with these
benchmarks, therefore, are of limited use. We include them because they are
widely known and may help you to understand the universe of securities from
which each Portfolio manager is likely to make selections.
INCEPTION DATES AND COMPARATIVE BENCHMARKS
ALLIANCE MONEY MARKET: May 11, 1982; Salomon Brothers Three-Month T-Bill Index
(3-Month T-Bill).
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES: April 1, 1991; Lehman Intermediate
Government Bond Index (Lehman Intermediate Government).
ALLIANCE QUALITY BOND: October 1, 1993; Lehman Aggregate Bond Index (Lehman
Aggregate).
ALLIANCE HIGH YIELD: January 2, 1987; Merrill Lynch High Yield Master Index
(Master High Yield).
ALLIANCE GROWTH & INCOME: October 1, 1993; 75% Standard & Poor's 500 Index (S&P
500) and 25% Value Line Convertibles Index (75% S&P 500/25% Value Line Conv.).
ALLIANCE EQUITY INDEX: March 1, 1994; Standard & Poor's 500 Index (S&P 500).
ALLIANCE COMMON STOCK: August 1, 1968; Standard & Poor's 500 Index (S&P 500).
ALLIANCE GLOBAL: August 27, 1987; Morgan Stanley Capital International World
Index (MSCI World).
ALLIANCE INTERNATIONAL: April 3, 1995; Morgan Stanley Capital International
Europe, Australia, Far East Index (MSCI EAFE).
ALLIANCE AGGRESSIVE STOCK: May 1, 1984; 50% Russell 2000 Small Stock Index and
50% S&P MidCap Total Return (50% Russell 2000/50% S&P MidCap).
ALLIANCE SMALL CAP GROWTH: May 1, 1997; Russell 2000 Growth Index (Russell 2000
Gr).
ALLIANCE CONSERVATIVE INVESTORS: October 2, 1989; 70% Lehman Treasury Bond
Composite Index and 30% S&P 500 Index (70% Lehman Treas./30% S&P 500).
ALLIANCE BALANCED: May 1, 1984; 50% S&P 500 and 50% Lehman Government/Corporate
Bond Index (50% S&P 500/50% Lehman Corp.).
ALLIANCE GROWTH INVESTORS: October 2, 1989; 30% Lehman Government/Corporate Bond
Index and 70% S&P 500 Index (30% Lehman Treas./70% S&P 500).
T. ROWE PRICE INTERNATIONAL STOCK: May 1, 1997; Morgan Stanley Capital
International Europe, Australia, Far East Index (MSCI EAFE).
T. ROWE PRICE EQUITY INCOME: May 1, 1997; Standard & Poor's 500 Index (S&P 500).
EQ/PUTNAM GROWTH & INCOME VALUE: May 1, 1997; Standard & Poor's 500 Index (S&P
500).
EQ/PUTNAM BALANCED: May 1, 1997; 60% Standard & Poor's 500 Index and 40% Lehman
Government/Corporate Bond Index (60% S&P500/40% Lehman Corp.)
MFS RESEARCH: May 1, 1997; Standard & Poor's 500 Index (S&P 500).
MFS EMERGING GROWTH COMPANIES: May 1, 1997; Russell 2000 Index (Russell 2000).
5
<PAGE>
MORGAN STANLEY EMERGING MARKETS EQUITY: August 20, 1997; Morgan Stanley Capital
International Emerging Markets Free Price Return Index (MSCI Emerging Markets).
WARBURG PINCUS SMALL COMPANY VALUE: May 1, 1997; Russell 2000 Index (Russell
2000).
MERRILL LYNCH WORLD STRATEGY: May 1, 1997; 36% S&P 500/24% MSCI EAFE/21% Salomon
Brothers US Treasury Bond 1 Year+/14% Salomon Brothers World Government Bond Ex
US/5% 3-Month U.S. T-bill-(Market Composite).
MERRILL LYNCH BASIC VALUE EQUITY: May 1, 1997; Standard & Poor's 500 Index (S&P
500).
The Lipper Variable Insurance Products Performance Analysis Survey (Lipper)
records the performance of a large group of variable annuity and variable life
products, including managed separate accounts of insurance companies. According
to Lipper Analytical Services, Inc., the data are presented net of investment
management fees, direct operating and asset-based charges applicable under
variable insurance policies or variable annuity contracts. Lipper data provide a
more accurate picture than market indices of EQUI-VEST performance relative to
other annuity products.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends. Cumulative rates of return
reflect performance over a stated period of time. Annualized rates of return
represent the annual rate of growth that would have produced the same cumulative
return, if performance had been constant over the entire period.
6
<PAGE>
TABLE 1:
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1997:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PORTFOLIO
SINCE INCEPTION
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION DATE
-----------------------------------------------------------------------------------
FIXED-INCOME SERIES:
Domestic Fixed Income
<S> <C> <C> <C> <C> <C> <C> <C>
ALLIANCE MONEY MARKET 3.88% 3.96% 3.16% 4.26% -- 5.29% 5/11/82
Lipper Money Market 3.95 4.05 3.29 4.41 -- 5.77
3-Month T-Bill 5.23 5.41 4.71 5.61 -- 6.49
ALLIANCE INTERMEDIATE
GOVERNMENT SECURITIES 5.74 6.49 4.40 -- -- 5.45 4/1/91
Lipper U.S. Government 7.60 8.03 5.65 -- -- 6.95
Lehman Intermediate Government 7.72 8.65 6.39 -- -- 7.47
ALLIANCE QUALITY BOND 7.56 8.80 -- -- -- 4.26 10/1/93
Lipper Corporate Bond A-Rated 8.04 8.77 -- -- -- 4.60
Lehman Aggregate 9.65 10.42 -- -- -- 6.51
Aggressive Fixed Income
ALLIANCE HIGH YIELD 16.75 18.66 14.20 11.16 -- 10.41 1/2/87
Lipper High Yield 12.87 14.23 10.68 10.33 -- 9.46
Master High Yield 12.83 14.54 11.72 12.09 -- 11.39
EQUITY SERIES:
Domestic Equity
T. ROWE PRICE EQUITY INCOME -- -- -- -- -- 20.92+ 5/1/97
Lipper Equity Income -- -- -- -- -- 20.91+
S&P 500 -- -- -- -- -- 22.55+
EQ/PUTNAM
GROWTH & INCOME VALUE -- -- -- -- -- 15.07+ 5/1/97
Lipper Growth & Income -- -- -- -- -- 20.28+
S&P 500 -- -- -- -- -- 22.55+
ALLIANCE GROWTH & INCOME 24.92 21.81 -- -- -- 14.23 10/1/93
Lipper Growth 25.47 25.18 -- -- -- 17.47
25% Value Line Conv./75% S&P 500 29.54 28.62 -- -- -- 20.14
ALLIANCE EQUITY INDEX 30.65 28.45 -- -- -- 21.59 3/1/94
Lipper S&P 500 Index Funds 31.06 29.07 -- -- -- 21.96
S&P 500 33.36 31.15 -- -- -- 23.84
MERRILL LYNCH
BASIC VALUE EQUITY -- -- -- -- -- 15.86+ 5/1/97
Lipper Growth & Income -- -- -- -- -- 20.28+
S&P 500 -- -- -- -- -- 22.55+
ALLIANCE COMMON STOCK 27.33 26.72 19.27 16.38 16.04 11.44 8/1/68
Lipper Growth 24.35 24.72 16.01 15.40 15.20 N/A
S&P 500 33.36 31.15 20.27 18.05 16.66 12.25
MFS RESEARCH -- -- -- -- -- 14.91+ 5/1/97
Lipper Growth -- -- -- -- -- 21.89+
S&P 500 -- -- -- -- -- 22.55+
International Equity
ALLIANCE GLOBAL 9.93 13.28 14.44 12.08 -- 10.08 8/27/87
Lipper Global 12.99 14.18 13.94 7.21 -- 3.84
MSCI World 15.76 16.62 15.34 10.57 -- 8.22
ALLIANCE INTERNATIONAL -4.46 -- -- -- -- 4.62 4/3/95
Lipper International 5.47 -- -- -- -- 11.42
MSCI EAFE 1.78 -- -- -- -- 6.15
T. ROWE PRICE
INTERNATIONAL STOCK -- -- -- -- -- -2.45+ 5/1/97
Lipper International -- -- -- -- -- 3.41+
MSCI EAFE -- -- -- -- -- 2.85+
MORGAN STANLEY EMERGING
MARKETS EQUITY -- -- -- -- -- -20.59* 8/20/97
Lipper Emerging Markets -- -- -- -- -- N/A
MSCI Emerging Markets -- -- -- -- -- -21.43*
- -------------------------------------------------------------------------------------------------------------------------------
This table continues on next page
</TABLE>
+ Return for this Fund is unannualized and represents 8 months of performance.
* Return for this Fund is unannualized and represents 5 months of performance.
7
<PAGE>
TABLE 1:
ANNUALIZED RATES OF RETURN (CONTINUED):
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO
SINCE INCEPTION
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION DATE
-----------------------------------------------------------------------------------
EQUITY SERIES (CONTINUED):
Aggressive Equity
<S> <C> <C> <C> <C> <C> <C> <C>
ALLIANCE AGGRESSIVE STOCK 9.19% 19.48% 13.21% 17.24% -- 17.26% 5/1/84
Lipper Mid-Cap Growth 12.11 15.54 9.27 14.32 -- 15.87
50% Russell 2000/50% S&P Mid-Cap 27.31 24.88 17.11 17.74 -- 16.11
WARBURG PINCUS
SMALL COMPANY VALUE -- -- -- -- -- 17.95+ 5/1/97
Lipper Small-Cap -- -- -- -- -- 26.66+
Russell 2000 Growth -- -- -- -- -- 28.68+
ALLIANCE SMALL CAP GROWTH -- -- -- -- -- 25.46+ 5/1/97
Lipper Small-Cap -- -- -- -- -- 26.66+
Russell 2000 Growth -- -- -- -- -- 27.66+
MFS EMERGING GROWTH
COMPANIES -- -- -- -- -- 21.22+ 5/1/97
Lipper Mid-Cap -- -- -- -- -- 20.88+
Russell 2000 -- -- -- -- -- 28.68+
ASSET ALLOCATION SERIES:
ALLIANCE CONSERVATIVE INVESTORS 11.59 11.14 7.21 -- -- 7.95 10/2/89
Lipper Income 15.51 15.54 11.61 -- -- 10.57
70% Lehman Treas./30% S&P 500 16.71 17.18 11.87 -- -- 11.39
EQ/PUTNAM BALANCED -- -- -- -- -- 13.35+ 5/1/97
Lipper Balanced -- -- -- -- -- 14.79+
40% Lehman Gov't./Corp./60% S&P 500 -- -- -- -- -- 17.17+
ALLIANCE BALANCED 13.31 13.74 8.10 10.65 -- 10.29 5/1/84
Lipper Flexible Portfolio 18.23 17.09 11.52 11.93 -- 10.94
50% Lehman Gov't./Corp./70% S&P 500 21.56 21.68 14.63 21.19 -- 14.84
ALLIANCE GROWTH INVESTORS 15.08 16.73 11.51 -- -- 14.05 10/2/89
Lipper Flexible Portfolio 18.23 17.09 11.52 -- -- 11.10
30% Lehman Gov't./Corp./70% S&P 500 26.28 25.64 17.02 -- -- 14.48
MERRILL LYNCH WORLD STRATEGY -- -- -- -- -- 3.69+ 5/1/97
Lipper Global Flexible Portfolio -- -- -- -- -- 8.52+
Market Composite -- -- -- -- -- 10.81+
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Return for this Fund is unannualized and represents 8 months of performance.
* Return for this Fund is unannualized and represents 5 months of performance.
8
<PAGE>
TABLE 2:
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1997:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO
SINCE INCEPTION
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION DATE
-----------------------------------------------------------------------------------
FIXED-INCOME SERIES:
Domestic Fixed Income
<S> <C> <C> <C> <C> <C> <C> <C>
ALLIANCE MONEY MARKET 3.88% 12.34% 16.84% 51.81% -- 124.04 5/11/82
Lipper Money Market 3.95 12.64 17.61 54.00 -- 151.25
3-Month T-Bill 5.23 17.13 25.87 72.64 -- 199.34
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES 5.74 20.77 24.03 -- -- 43.08 4/1/91
Lipper U.S. Government 7.60 26.12 31.70 -- -- 57.40
Lehman Intermediate Government 7.72 28.25 36.31 -- -- 62.74
ALLIANCE QUALITY BOND 7.56 28.79 -- -- -- 19.41 10/1/93
Lipper Corporate Bond A-Rated 8.04 28.70 34.61 108.54 -- 21.09
Lehman Aggregate 9.65 34.63 -- -- -- 30.78
Aggressive Fixed Income
ALLIANCE HIGH YIELD 16.75 67.08 94.27 188.03 -- 197.15 1/2/87
Lipper High Yield 12.87 49.17 66.26 169.15 -- 173.12
Master High Yield 12.83 50.26 74.04 213.08 -- 227.68
EQUITY SERIES:
Domestic Equity
T. ROWE PRICE EQUITY INCOME -- -- -- -- -- 20.92 5/1/97
Lipper Equity Income -- -- -- -- -- 20.91
S&P 500 -- -- -- -- -- 22.55
EQ/PUTNAM
GROWTH & INCOME VALUE -- -- -- -- -- 15.07 5/1/97
Lipper Growth & Income -- -- -- -- -- 28.28
S&P 500 -- -- -- -- -- 22.55
ALLIANCE GROWTH & INCOME 24.92 80.76 -- -- -- 76.03 10/1/93
Lipper Growth & Income 25.47 96.46 -- -- -- 98.58
25% Value Line Conv./75% S&P 500 29.54 112.80 -- -- -- 118.17
ALLIANCE EQUITY INDEX 30.65 111.93 -- -- -- 111.64 3/1/94
Lipper S&P 500 Index Funds 31.06 115.03 -- -- -- 114.07
S&P 500 33.36 125.60 -- -- -- 127.24
MERRILL LYNCH BASIC VALUE EQUITY -- -- -- -- -- 15.86 5/1/97
Lipper Growth & Income -- -- -- -- -- 20.28
S&P 500 -- -- -- -- -- 22.55
ALLIANCE COMMON STOCK 27.33 103.51 141.40 355.99 1,858.66 2,319.51 8/1/68
Lipper Growth 24.35 94.70 111.15 321.71 1,602.96 1,659.17
S&P 500 33.36 125.60 151.62 425.67 2,080.13 2,248.74
MFS RESEARCH -- -- -- -- -- 14.91 5/1/97
Lipper Growth -- -- -- -- -- 21.89
S&P 500 -- -- -- -- -- 22.55
International Equity
ALLIANCE GLOBAL 9.93 45.37 96.31 212.88 -- 169.98 8/27/87
Lipper Global 12.99 49.53 93.26 100.58 -- 47.66
MSCI World 15.76 58.59 104.13 173.03 -- 126.45
ALLIANCE INTERNATIONAL -4.46 -- -- -- -- 13.22 4/3/95
Lipper International 5.47 -- -- -- -- 35.07
MSCI EAFE 1.78 -- -- -- -- 17.83
T. ROWE PRICE
INTERNATIONAL STOCK -- -- -- -- -- -2.45 5/1/97
Lipper International -- -- -- -- -- 3.41
MSCI EAFE -- -- -- -- -- 2.85
MORGAN STANLEY EMERGING MARKETS EQUITY -- -- -- -- -- -20.62* 8/20/97
Lipper Emerging Markets -- -- -- -- -- N/A
MSCI Emerging Market -- -- -- -- -- -21.43
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
TABLE 2: CUMULATIVE RATES OF RETURN (CONTINUED):
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO
SINCE INCEPTION
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION DATE
-----------------------------------------------------------------------------------
EQUITY SERIES (CONTINUED):
Aggressive Equity
<S> <C> <C> <C> <C> <C> <C> <C>
ALLIANCE AGGRESSIVE STOCK 9.19% 70.55% 85.98% 390.65% -- 781.75% 5/1/84
Lipper Mid-Cap Growth 12.11 56.12 59.26 311.80 -- 478.26
50% Russell 2000/50% S&P Mid-Cap 27.31 94.76 120.25 412.08 -- 436.52
WARBURG PINCUS
SMALL COMPANY VALUE -- -- -- -- -- 17.95 5/1/97
Lipper Small-Cap -- -- -- -- -- 26.66
Russell 2000 -- -- -- -- -- 28.68
ALLIANCE SMALL CAP GROWTH -- -- -- -- -- 25.46 5/1/97
Lipper Small-Cap -- -- -- -- -- 26.66
Russell 2000 Growth -- -- -- -- -- 27.66
MFS EMERGING GROWTH COMPANIES -- -- -- -- -- 21.22 5/1/97
Lipper Mid-Cap -- -- -- -- -- 20.88
Russell 2000 -- -- -- -- -- 28.68
ASSET ALLOCATION SERIES:
ALLIANCE CONSERVATIVE INVESTORS 11.59 37.28 41.63 -- -- 87.85 10/2/89
Lipper Income 15.51 54.60 73.34 -- -- 129.83
70% Lehman Treas./30% S&P 500 16.71 60.91 75.18 -- -- 143.55
EQ/PUTNAM BALANCED -- -- -- -- -- 13.35 5/1/97
Lipper Balanced -- -- -- -- -- 14.79
40% Lehman Gov't./Corp./60% S&P 500 -- -- -- -- -- 17.17
ALLIANCE BALANCED 13.31 47.14 47.61 175.07 -- 281.42 5/1/84
Lipper Flexible Portfolio 18.23 61.05 73.02 209.82 -- 246.50
50% Lehman Gov't./Corp./70% S&P 500 21.56 80.14 97.96 583.14 -- 376.27
ALLIANCE GROWTH INVESTORS 15.08 59.04 72.45 -- -- 195.62 10/2/89
Lipper Flexible Portfolio 18.23 61.05 73.02 -- -- 140.59
30% Lehman Gov't./Corp./70% S&P 500 26.28 98.32 119.42 -- -- 205.24
MERRILL LYNCH WORLD STRATEGY -- -- -- -- -- 3.69 5/1/97
Lipper Global Flexible Portfolio -- -- -- -- -- 8.52
Market Composite -- -- -- -- -- 10.81
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
TABLE 3:
YEAR-BY-YEAR RATES OF RETURN
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ALLIANCE MONEY MARKET 5.83% 7.66% 6.77% 4.66% 2.05% 1.46% 2.51% 4.20% 3.78% 3.88%
ALLIANCE INTERMEDIATE GOVERNMENT
SECURITIES -- -- -- 10.85* 4.06 8.98 -5.76 11.69 2.26 5.74
ALLIANCE QUALITY BOND -- -- -- -- -- -0.87* -6.47 15.33 3.82 7.56
ALLIANCE HIGH YIELD 8.14 3.61 -2.53 22.66 10.68 21.36 -4.19 18.18 21.09 16.75
ALLIANCE GROWTH & INCOME -- -- -- -- -- -0.62* -2.01 22.28 18.34 24.92
ALLIANCE EQUITY INDEX -- -- -- -- -- -- -0.14* 34.51 20.60 30.65
ALLIANCE COMMON STOCK 21.50 24.06 -9.28 35.80 1.71 23.00 -3.56 30.52 22.45 27.33
ALLIANCE GLOBAL 9.27 24.90 -7.42 28.66 -1.96 30.21 3.71 17.10 12.93 9.93
ALLIANCE INTERNATIONAL -- -- -- -- -- -- -- 9.51* 8.21 -4.46
ALLIANCE AGGRESSIVE STOCK -0.50 42.71 5.61 84.36 -4.58 15.05 -5.21 29.72 20.40 9.19
ALLIANCE SMALL CAP
GROWTH -- -- -- -- -- -- -- -- -- 25.46*
ALLIANCE CONSERVATIVE
INVESTORS -- 2.72* 4.86 18.11 4.26 9.16 -5.49 18.66 3.67 11.59
ALLIANCE BALANCED 13.22 24.58 -1.44 40.01 -4.26 10.67 -9.36 18.01 10.04 13.31
ALLIANCE GROWTH
INVESTORS -- 3.62* 9.01 46.75 3.41 13.59 -4.55 24.54 10.96 15.08
T. ROWE PRICE
INTERNATIONAL STOCK
PORTFOLIO -- -- -- -- -- -- -- -- -- -2.45*
T. ROWE PRICE EQUITY
INCOME PORTFOLIO -- -- -- -- -- -- -- -- -- 20.92*
EQ/PUTNAM GROWTH &
INCOME VALUE PORTFOLIO -- -- -- -- -- -- -- -- -- 15.07*
EQ/PUTNAM BALANCED
PORTFOLIO -- -- -- -- -- -- -- -- -- 13.35*
MFS RESEARCH PORTFOLIO -- -- -- -- -- -- -- -- -- 14.91*
MFS EMERGING GROWTH COMPANIES
PORTFOLIO -- -- -- -- -- -- -- -- -- 21.22*
MORGAN STANLEY EMERGING MARKETS
EQUITY PORTFOLIO -- -- -- -- -- -- -- -- -- -20.62*
WARBURG PINCUS SMALL COMPANY VALUE
PORTFOLIO -- -- -- -- -- -- -- -- -- 17.95*
MERRILL LYNCH WORLD STRATEGY
PORTFOLIO -- -- -- -- -- -- -- -- -- 3.69*
MERRILL LYNCH BASIC VALUE
EQUITY PORTFOLIO -- -- -- -- -- -- -- -- -- 15.86*
</TABLE>
- -------------------
* Unannualized
- --------------------------------------------------------------------------------
11
<PAGE>
The performance data in Tables 4 and 5 illustrate the growth of an investment,
and the average annual total return of the Investment Funds, respectively, over
the periods shown assuming a single initial contribution of $1,000 and
termination of the Roth Advantage Contract at the end of each period on December
31, 1997, under circumstances in which the contingent withdrawal charge applies.
The values shown are also net of all other charges and expenses assessed against
the Investment Funds. An Investment Fund's average annual total return is the
annual rate of growth of the Investment Fund that would be necessary to achieve
the ending value of a contribution kept in the Investment Fund for the period
specified.
Each calculation further assumes that the $1,000 contribution was allocated to
only one Investment Fund, no transfers or additional contributions were made, no
loans, and no amounts were allocated to any other Investment Fund under the
Contract.
In order to calculate the performance information, we divide the termination
value (defined below) of a Contract which is terminated on December 31, 1997 by
the $1,000 investment made at the beginning of each period illustrated. The
result of that calculation is the total growth rate for the period. Then we
annualize that growth rate to obtain the average annual percentage increase
(decrease) during the period shown. When we "annualize," we assume that a single
rate of return applied each year during the period will produce the ending
value, taking into account the effect of compounding. "Termination value" means
the Annuity Account Value less the contingent withdrawal charge, the annual
administrative charge and all other charges and expenses which are applied
against an Investment Fund. See "Part 7: Deductions and Charges" in the
Prospectus.
12
<PAGE>
TABLE 4:
GROWTH OF $1,000 FOR CONTRACTS TERMINATED ON DECEMBER 31, 1997:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
LENGTH OF INVESTMENT PERIOD
--------------------------------------------------------------------------------------
ONE THREE FIVE TEN SINCE PORTFOLIO
INVESTMENT FUND YEAR YEARS YEARS YEARS INCEPTION*
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alliance Money Market 963.04 992.30 973.10 1,187.95 --
Alliance Intermediate Government
Securities 980.26 1,069.88 1,037.72 -- 1,216.25
Alliance Quality Bond 997.16 1,146.98 -- -- 1,017.41
Alliance High Yield 1,084.16 1,514.74 1,698.31 2,357.62 --
Alliance Growth & Income 1,164.22 1,646.11 -- -- 1,552.72
Alliance Equity Index 1,220.38 1,947.89 -- -- 1,911.03
Alliance Common Stock 1,187.85 1,866.17 2,143.45 3,898.31 --
Alliance Global 1,019.13 1,306.18 1,725.08 2,623.61 --
Alliance International 885.73 -- -- -- 1,007.38
Alliance Aggressive Stock 1,012.29 1,548.59 1,623.95 4,303.12 --
Alliance Small Cap Growth -- -- -- -- 1,115.61
Alliance Conservative Investors 1,034.51 1,228.45 1,201.97 -- 1,572.62
Alliance Balanced 1,050.51 1,323.12 1,256.23 2,310.16 --
Alliance Growth Investors 1,067.81 1,437.53 1,493.30 -- 2,579.05
T. Rowe Price International Stock
Portfolio -- -- -- -- 939.33
T. Rowe Price Equity Income Portfolio -- -- -- -- 1,087.01
E/Q Putnam Growth &
Income Value Portfolio -- -- -- -- 1,049.71
E/Q Putnam Balanced Portfolio -- -- -- -- 1,038.65
MFS Research Portfolio -- -- -- -- 1,048.68
MFS Emerging Growth Companies Portfolio -- -- -- -- 1,088.92
Morgan Stanley Emerging Markets Equity
Portfolio -- -- -- -- 897.83
Warburg Pincus Small Company Value
Portfolio -- -- -- -- 1,068.15
Merrill Lynch World Strategy Portfolio -- -- -- -- 978.48
Merrill Lynch Basic Value Equity
Portfolio -- -- -- -- 1,054.83
</TABLE>
- --------------------------------------------------------------------------------
* Portfolio inception dates are shown in Tables 1 and 2.
13
<PAGE>
TABLE 5:
AVERAGE ANNUAL TOTAL RETURN UNDER CONTRACTS TERMINATED ON DECEMBER 31, 1997:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LENGTH OF INVESTMENT PERIOD
--------------------------------------------------------------------------------------
SINCE
ONE THREE FIVE TEN SINCE FUND PORTFOLIO
INVESTMENT FUND YEAR YEARS YEARS YEARS INCEPTION* INCEPTION**
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Alliance Money Market -3.70% -0.26% -0.54% 1.74% -- --
Alliance Intermediate Government
Securities -1.97% 2.28% 0.74% -- 0.86% 2.94%
Alliance Quality Bond -0.28% 4.68% -- -- 0.74% 0.41%
Alliance High Yield 8.42% 14.85% 11.17% 8.96% 8.81% --
Alliance Growth & Income 16.42% 18.07% -- -- 12.05% 10.91%
Alliance Equity Index 22.04% 24.89% -- -- 20.36% 18.39%
Alliance Common Stock 18.79% 23.12% 16.47% -- -- --
Alliance Global 1.91% 9.31% 11.52% 10.13% -- --
Alliance International -11.43% -- -- -- -1.58% 0.27%
Alliance Aggressive Stock 1.23% 15.69% 10.18% 15.71% -- --
Alliance Small Cap Growth -- -- -- -- 5.94% 17.79%
Alliance Conservative Investors 3.45% 7.10% 3.75% -- -- 5.64%
Alliance Balanced 5.05% 9.78% 4.67% 8.73% -- --
Alliance Growth Investors 6.78% 12.86% 8.35% -- 7.57% 12.17%
T. Rowe Price International Stock
Portfolio -- -- -- -- -12.04% -8.94%
T. Rowe Price Equity Income Portfolio -- -- -- -- 8.07% 13.30%
E/Q Putnam Growth &
Income Value Portfolio -- -- -- -- 1.04% 8.32%
E/Q Putnam Balanced Portfolio -- -- -- -- 2.23% 5.84%
MFS Research Portfolio -- -- -- -- 0.96% 7.37%
MFS Emerging Growth Companies Portfolio -- -- -- -- 4.34% 13.60%
Morgan Stanley Emerging Markets Equity
Portfolio -- -- -- -- -25.46% -25.45%
Warburg Pincus Small Company Value
Portfolio -- -- -- -- 3.45% 10.37%
Merrill Lynch World Strategy Portfolio -- -- -- -- -7.73% -3.20%
Merrill Lynch Basic Value Equity
Portfolio -- -- -- -- 1.04% 8.32%
</TABLE>
- -------------------
* Fund inception dates are: Alliance Money Market (5/11/82), Alliance
Intermediate Government Securities (6/1/94), Alliance Quality Bond (1/4/94),
Alliance High Yield (1/4/94), Alliance Growth & Income (1/4/94), Alliance
Equity Index (6/1/94), Alliance Common Stock (8/27/81), Alliance Global
(1/4/94), Alliance International (9/1/95), Alliance Growth Investors
(1/4/94), Alliance Aggressive Stock (5/1/84), Alliance Small Cap Growth
(6/2/97), Alliance Conservative Investors (1/4/94), Alliance Balanced
(5/1/84), T. Rowe Price International Stock (6/2/97), T. Rowe Price Equity
Income (6/2/97), EQ/Putnam Growth & Income Value (6/2/97), EQ/Putnam Balanced
(6/2/97), MFS Research (6/2/97), MFS Emerging Growth Companies (6/2/97),
Morgan Stanley Emerging Markets Equity (8/20/97), Warburg Pincus Small
Company Value (6/2/97), Merrill Lynch World Strategy (6/2/97), Merrill Lynch
Basic Value Equity (6/2/97).
** Portfolio inception dates are shown in Tables 1 and 2.
- --------------------------------------------------------------------------------
14
<PAGE>
COMMUNICATING PERFORMANCE DATA
In reports or other communications or in advertising material, we may describe
general economic and market conditions affecting the Separate Account and HRT or
EQAT and may present the performance of the Investment Funds or compare it 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 elsewhere in this prospectus, 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
charges. VARDS is a monthly reporting service that monitors over 2,500 variable
life and variable annuity funds on performance and account information.
Advertisements or other communications furnished to present or prospective
Contract Owners may also include evaluations of an Investment Fund or Portfolio
by financial publications that are nationally recognized such as Barron's,
Morningstar's Variable Annuity Sourcebook, Business Week, Chicago Tribune,
Forbes, Fortune, Institutional Investor, Investment Adviser, Investment Dealer's
Digest, Investment Management Weekly, Los Angeles Times, Money, Money Management
Letter, Kiplinger's Personal Finance, Financial Planning, National Underwriter,
Pension & Investments, USA Today, Investor's Daily, The New York Times and The
Wall Street Journal.
WITH RESPECT TO EQUI-VEST ROTH ADVANTAGE, THE FOLLOWING DISCUSSION REPLACES THE
DISCUSSION UNDER "CHARGES TO INVESTMENT FUNDS" ON PAGE 56 OF THE PROSPECTUS:
We make a daily charge at the effective annual rate of 1.45% against
the assets held in each of the Investment Funds. This charge is
reflected in the Accumulation Unit Values for the particular
Investment Fund and covers mortality and expense risk charges of
1.20% and expenses of 0.25%.
The mortality and expense risk and death benefit charge is comprised
of 0.65% for mortality risk, including guaranteed death benefits,
and 0.55% for expense risk, although the allocation of these charges
may vary. We assume a mortality risk by (a) our obligation to pay a
death benefit that will not be less than the total value of all
contributions made (less any applicable taxes) adjusted for total
withdrawals, (b) our obligation to make annuity payments for the
life of the Annuitant under guaranteed fixed annuity options,
regardless of the Annuitant's longevity, (c) our guarantees relating
to annuity purchase rates, the actuarial basis for which can be
changed only for new contributions and only on the fifth anniversary
of the Contract Date and every five years thereafter, and (d) our
obligation to waive the contingent withdrawal charge upon the
payment of a death benefit.
The expense risk we assume is the risk that, over time, our actual
expense of administering the Contracts, including financial
accounting, may exceed the amounts realized from the expense charge
and the annual administrative expense charge. Part of the mortality
and expense risk charge may be considered to be an indirect
reimbursement for certain sales and promotional expenses relating to
the Contracts to the extent that the charge is not needed to meet
the actual expenses incurred.
The charge for expenses, together with the annual administrative
charge described below, is designed to reimburse us for our costs in
providing administrative services in connection with the Contracts.
Maximum Total Separate Account Charges
We may change the annual rate of the daily asset charge imposed on
the amounts held in the Investment Funds comprising the Separate
Account. We may increase or decrease the 1.45% total Separate
Account charge currently applicable, but may not increase the total
charge above a maximum annual rate of 2.00%. Any increase would only
be made upon advance notice to you and would apply only to
contributions made after the date of the change. Changes, if any,
would reflect differences in costs and anticipated expenses, and
would not be unfairly discriminatory.
15
<PAGE>
THE FOLLOWING SENTENCE REPLACES THE FIRST SENTENCE OF THE THIRD PARAGRAPH OF THE
DISCUSSION UNDER "CONTINGENT WITHDRAWAL CHARGE" ON PAGE 57 OF THE PROSPECTUS:
We reserve the right to change the amount of the contingent
withdrawal charge for future contributions, but it will never exceed
8% of the amount withdrawn attributable to contributions made during
the current and eleven Contract Years prior to the withdrawal.
THE FOLLOWING IS ADDED AT THE END OF THE DISCUSSION UNDER "CONTINGENT WITHDRAWAL
CHARGE" ON PAGE 57 OF THE PROSPECTUS:
Subject to regulatory approval, Equitable Life may allow certain
owners of EQUI-VEST Roth IRA Contracts purchased prior to July 20,
1998 to exchange their Contracts for a Roth Advantage Contract. Any
contingent withdrawal charge otherwise applicable to the EQUI-VEST
Roth IRA Contract surrendered in exchange for a Roth Advantage
Contract would be waived. The proposed exchange offer would be
limited to persons holding EQUI-VEST Roth IRA Contracts purchased
prior to July 20, 1998 with either (1) non-rollover contributions or
(2) rollover contributions from any source other than an Equitable
Life variable annuity contract. If you purchase an EQUI-VEST Roth
IRA Contract, rather than a Roth Advantage Contract, after July 20,
1998, you will not be eligible to participate in the proposed
exchange offer.
THE FOLLOWING REPLACES THE LAST TWO "BULLETS" AND THE LEAD-IN SENTENCE AT THE
END OF PAGE 57 OF THE PROSPECTUS UNDER "CONTINGENT WITHDRAWAL CHARGE -
EXCEPTIONS TO THE CONTINGENT WITHDRAWAL CHARGE":
Additionally, a withdrawal charge will not apply to a Roth Advantage
Contract upon any of the following events:
o the Annuitant has completed at least five Contract Years and has
attained age 59 1/2;
o during any Contract Year in which the amount withdrawn is less
than or equal to 25% of the Annuity Account Value at the time
the withdrawal is requested minus any amount previously
withdrawn during that Contract Year, provided that the
withdrawal is used to pay specified higher education expenses as
defined in the Code and subject to receipt of evidence
satisfactory to us that such withdrawal is in fact for such
purpose;
o the Annuitant has completed at least five Contract Years, and
the withdrawal, up to a $10,000 maximum, is a "qualified
first-time homebuyer distribution" (as defined in the Code),
subject to receipt of evidence satisfactory to us that such
withdrawal is in fact for such purpose; or
o a request is made for a refund of a contribution in excess of
amounts allowed to be contributed under the Code within one
month of the date on which the contribution is made.
16
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SUPPLEMENT DATED JULY 20, 1998
TO
EQUI-VEST(R) PROSPECTUS
DATED MAY 1, 1998
TSA ADVANTAGE(SM)
This Supplement adds to and modifies certain information contained in the
prospectus dated May 1, 1998 ("Prospectus") for EQUI-VEST group and individual
deferred variable annuity contracts offered by Equitable Life. Equitable Life
will offer its EQUI-VEST Series 600 TSA Advantage(SM) contracts ("Series 600" or
"TSA Advantage Contract") to all participants in plans that meet the
requirements of Internal Revenue Service Code ("Code") Section 403(b) (referred
to as "Section 403(b) Plans"), except that the TSA Advantage Contract will not
be offered to participants in a Section 403(b) Plan sponsored by a primary or
secondary school, regardless of whether the employer is a tax exempt entity or a
public education institution described in Section 403(b)(1)(A)(i) or (ii) of the
Code, respectively, or to participants in a Section 403(b) Plan sponsored by a
post-secondary public education institution described in Section
403(b)(1)(A)(ii) of the Code. For participants in a Section 403(b) Plan
sponsored by an employer which is a hospital or other health care organization
qualified under Section 501(c)(3) of the Code, the TSA Advantage Contract will
be available only when the employer makes contributions to the plan (whether in
addition to, or instead of, employee salary-reduction or elective deferral
contributions). Under the TSA Advantage Contract, contributions, including
rollover contributions and direct transfer contributions from existing Section
403(b) Plans (programs or arrangements) will be accepted only if the
contributions are fully vested under the existing TSA plan. The TSA Advantage
Contract may not currently be available in your state. Your Equitable Life
Representative can provide information about state availability.
The EQUI-VEST TSA Advantage Contract is offered to purchasers on the same basis
and under the same terms and conditions described in the Prospectus as
applicable to the EQUI-VEST TSA Series 100 and 200 contracts, except for certain
material differences described in this Supplement. Capitalized terms in this
Supplement not otherwise defined have the same meaning as in the Prospectus.
Material differences between the TSA Advantage Contract and the provisions of
the EQUI-VEST TSA Series 100 and 200 contracts described in the EQUI-VEST
Prospectus include the following:
THE FOLLOWING PARAGRAPH IS ADDED AFTER "EQUI-VEST EMPLOYER-SPONSORED RETIREMENT
PROGRAMS - UNIVERSITY TSA" ON PAGE 8 OF THE PROSPECTUS:
o TSA ADVANTAGE
A TSA for certain educational organizations, churches, hospitals and other
non-profit entities described in Code Section 501(c)(3). Contributions are made
by the employer either directly or through a salary reduction agreement entered
into with the employee. For Section 403(b) Plans offered for hospital and health
care facility employees, non-salary reduction (employer contributions) must be
made. Each employee is the Contract Owner and must also be the Annuitant. TSA
Advantage is available only to employees of employers described above
maintaining Section 403(b) Plans that currently have, or within the first
Contract Year are expected to have, at least 50 participants. Employees in
Section 403(b) Plans that do not meet these underwriting criteria are only
eligible for EQUI-VEST TSA Series 100 and 200 Contracts. Unless otherwise noted,
references to TSA Contracts include TSA Advantage Contracts.
THE FOLLOWING TWO SENTENCES REPLACE THE SECOND SENTENCE OF THE FIRST PARAGRAPH
UNDER "INVESTMENT OPTIONS" ON PAGE 9 OF THE PROSPECTUS:
Each Investment Fund invests in shares of a corresponding Portfolio of either
HRT (Class IA or Class IB) or EQAT (Class IB), respectively. The Class IA shares
and Class IB shares of HRT are identical, except for the 12b-1 distribution plan
and related fees applicable to the Class IB shares. Under the TSA Advantage
contracts, the Investment Funds purchase Class IB shares of HRT and EQAT.
1
<PAGE>
THE FOLLOWING TABLE AND EXAMPLES ARE ADDED AFTER "TABLE 3: EQUI-VEST: SERIES 300
AND 400 -- ACCUMULATION UNIT VALUES" ON PAGE 23 OF THE PROSPECTUS (TABLE 4
APPEARS IN ANOTHER SUPPLEMENT TO THE PROSPECTUS):
TABLE 5: EQUI-VEST SERIES 600
The following Tables apply to the Series 600 TSA Advantage Contracts. These
Tables, and the related Examples, will assist you in understanding the various
costs and expenses under the Series 600 Contract so that you may compare them
with other products. Except as described in Notes 5 and 7 below, the Tables
reflect expenses of the applicable Trust for the year ended December 31, 1997.
A charge for applicable state or local taxes may be deducted from contributions
in some states. See "Charges for State Premium and Other Applicable Taxes" in
Part 7.
As explained in Parts 4 and 5, the Guaranteed Interest Account is not a part of
the Separate Account and is not covered by the following Tables and Examples.
The only expenses shown in the Tables which apply to the Guaranteed Interest
Account are the contingent withdrawal charge, the annual administrative charge
and, if imposed at a later date, the Third Party Transfer or Exchange Fee. Also
see "Income Annuity Distribution Options" in Part 6 for the description of an
administrative charge which may apply when you annuitize.
Description of Expenses
- -----------------------
<TABLE>
<S> <C>
CONTRACT OWNER TRANSACTION EXPENSES
SALES LOAD ON PURCHASES ................................................................ NONE
MAXIMUM CONTINGENT WITHDRAWAL CHARGE (1) ............................................... 6%
MAXIMUM/CURRENT ANNUAL ADMINISTRATIVE CHARGE (2) ....................................... $65/30
THIRD PARTY TRANSFER OR EXCHANGE FEE (3) ............................................... NONE
SEPARATE ACCOUNT ANNUAL EXPENSES (4)
Mortality and Expense Risk Fees (including Death Benefit Charges)....................... .95%
Other Expenses ......................................................................... .25%
========
Total Separate Account Annual Expenses ............................................... 1.20%
========
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
ALLIANCE
ALLIANCE INTERMEDIATE ALLIANCE ALLIANCE ALLIANCE ALLIANCE
MONEY GOVERNMENT QUALITY ALLIANCE GROWTH EQUITY COMMON
MARKET SECURITIES BOND HIGH YIELD & INCOME INDEX STOCK
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
HRT ANNUAL EXPENSES
Investment Advisory Fees .35% .50% .53% .60% .55% .32% .37%
Rule 12b-1 fee (7) .25% .25% .25% .25% .25% .25% .25%
Other Expenses .04% .06% .05% .04% .04% .04% .03%
- -------------------------------------------------------------------------------------------------------------------------------
Total HRT Annual Expenses (5)(6) .64% .81% .83% .89% .84% .61% .65%
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
ALLIANCE ALLIANCE ALLIANCE ALLIANCE
ALLIANCE ALLIANCE AGGRESSIVE SMALL CAP CONSERVATIVE ALLIANCE GROWTH
GLOBAL INTERNATIONAL STOCK GROWTH INVESTORS BALANCED INVESTORS
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
HRT ANNUAL EXPENSES
Investment Advisory Fees .65% .90% .54% .90% .48% .42% .52%
Rule 12b-1 fee (7) .25% .25% .25% .25% .25% .25% .25%
Other Expenses .08% .18% .03% .05% .07% .05% .05%
- -------------------------------------------------------------------------------------------------------------------------------
Total HRT Annual Expenses (5)(6) .98% 1.33% .82% 1.20% .80% .72% .82%
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
EQ/PUTNAM GROWTH
T. ROWE PRICE T. ROWE PRICE & EQ/ PUTNAM
INTERNATIONAL EQUITY INCOME INCOME VALUE BALANCED MFS RESEARCH
STOCK PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
EQAT Annual Expenses
Investment Management and
Advisory Fee .75% .55% .55% .55% .55%
Rule 12b-1 fee (7) .25% .25% .25% .25% .25%
Other Expenses .20% .05% .05% .10% .05%
- -------------------------------------------------------------------------------------------------------------------------------
Total EQAT Annual Expenses (8) 1.20% .85% .85% .90% .85%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
MORGAN STANLEY
MFS EMERGING EMERGING WARBURG PINCUS MERRILL LYNCH MERRILL LYNCH
GROWTH COM- MARKETS EQUITY SMALL COMPANY WORLD STRATEGY BASIC VALUE
PANIES PORTFOLIO PORTFOLIO VALUE PORTFOLIO PORTFOLIO EQUITY PORTFOLIO
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
EQAT Annual Expenses
Investment Management and
Advisory Fee .55% 1.15% .65% .70% .55%
Rule 12b-1 Fee (7) .25% .25% .25% .25% .25%
Other Expenses .05% .35% .10% .25% .05%
- -------------------------------------------------------------------------------------------------------------------------------
Total EQAT Annual Expenses (8) .85% 1.75% 1.00% 1.20% .85%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- -------------------
Notes:
(1) The contingent withdrawal charge is a percentage of amounts withdrawn from
the Contract or defaulted loan amounts. See "Contingent Withdrawal Charge"
in the addition to Part 7 of the Prospectus set forth below in this
Supplement. Important exceptions and limitations may eliminate or reduce the
contingent withdrawal charge.
(2) The annual administrative charge is the lesser of $30 or 2% of the Annuity
Account Value (adjusted to include any withdrawals made during that year).
See "Annual Administrative Charge" in the addition to Part 7 of the
Prospectus set forth below in this Supplement. We reserve the right to
increase this fee in the future if our administrative costs increase, but
such fee may not exceed an annual maximum of $65, subject to applicable law.
(3) There currently is no Third Party Transfer or Exchange Fee. However, we
reserve the right to impose this fee in the future, but the fee may not
exceed a maximum of $65 per occurrence, subject to applicable law.
(4) The total charge for Separate Account annual expenses is subject to change,
but may not exceed the effective annual rate of 2.00%. See "Charges to
Investment Funds" in the addition to Part 7 of the Prospectus set forth
below in this Supplement.
(5) Effective May 1, 1997, a new Investment Advisory Agreement was entered into
between HRT and Alliance Capital Management L.P., HRT's Investment Adviser,
which effected changes in HRT's management fee and expense structure. See
HRT's prospectus for more information.
The tables above reflecting HRT's expenses are based on average portfolio
net assets for the year ended December 31, 1997 and have been restated to
reflect (i) the fees that would have been paid to Alliance if the current
advisory agreement had been in effect as of January 1, 1997 and (ii)
estimated accounting expenses for the year ending December 31, 1997.
(6) 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
HRT. The maximum investment advisory fees, however, cannot be increased
without a vote of that Portfolio's shareholders. The other direct operating
expenses will also fluctuate from year to year depending on actual expenses.
HRT's expenses are shown as a percentage of each Portfolio's average
portfolio net assets. See "Charges to Portfolios" in Part 7.
(7) The Class IB shares of HRT and EQAT are subject to fees imposed under
distribution plans (herein, the "Rule 12b-1 Plans" ) adopted by HRT and EQAT
pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended.
The Rule 12b-1 Plans provide that HRT and EQAT, on behalf of each Portfolio,
may charge annually up to 0.25% of the average daily net assets of a
Portfolio attributable to its Class IB shares in respect of activities
primarily intended to result in the sale of the Class IB shares. The 12b-1
fee will not be increased for the life of the Contracts.
(8) All EQAT Portfolios commenced operations on May 1, 1997 except the Morgan
Stanley Emerging Markets Equity Portfolio, which commenced operations on
August 20, 1997.
The maximum investment management and advisory fees for each EQAT Portfolio
cannot be increased without a vote of that Portfolio's shareholders. The
amounts shown as "Other Expenses" will fluctuate from year to year depending
on actual expenses; however, EQ Financial Consultants, Inc. ("EQ
Financial"), EQAT's manager, has entered into an expense limitation
agreement with respect to each Portfolio ("Expense Limitation Agreement"),
pursuant to which EQ Financial has agreed to waive or limit its fees and
assume other expenses. Under the Expense Limitation Agreement, total annual
operating expenses of each Portfolio (other than interest, taxes, brokerage
commissions, capitalized expenditures, extraordinary expenses and 12b-1
fees) are limited for the respective average daily net assets of each
Portfolio as follows: 0.60% for Merrill Lynch Basic Value Equity, MFS
Research, MFS Emerging Growth Companies, EQ/Putnam Growth & Income Value and
T. Rowe Price Equity Income; 0.65% for EQ/Putnam Balanced; 0.75% for Warburg
Pincus Small Company Value; 0.95% for Merrill Lynch World Strategy and T.
Rowe Price International Stock; and 1.50% for Morgan Stanley Emerging
Markets Equity.
Absent the expense limitation, "Other Expenses" for 1997 on an annualized
basis for each of the Portfolios would have been as follows: 0.80% for
Warburg Pincus Small Company Value; 0.94% for T. Rowe Price Equity Income;
0.95% for EQ/Putnam Growth & Income Value; 0.98% for MFS Research; 1.02% for
MFS Emerging Growth Companies; 1.09% for Merrill Lynch Basic Value Equity;
1.21% for Morgan Stanley Emerging Markets Equity; 1.56% for T. Rowe Price
International Stock; 1.75% for EQ/Putnam Balanced; and 2.10% for Merrill
Lynch World Strategy.
Each Portfolio may at a later date make a reimbursement to EQ Financial for
any of the management fees waived or limited and other expenses assumed and
paid by EQ Financial pursuant to the Expense Limitation Agreement provided,
that among other things, such Portfolio has reached sufficient size to
permit such reimbursement to be made and provided that the Portfolio's
current annual operating expenses do not exceed the operating expense limit
determined for such Portfolio. See the EQAT prospectus for more information.
3
<PAGE>
EXAMPLES: EQUI-VEST SERIES 600
The examples which follow show the expenses that a hypothetical Contract Owner
of a Series 600 TSA Advantage Contract would pay in the surrender and
nonsurrender situations noted below, assuming a single contribution of $1,000 on
the Contract Date invested in one of the Investment Funds listed and a 5% annual
return on assets and no waiver of the contingent withdrawal charge.(1) For
purposes of these examples, the annual administrative charge is computed by
reference to the actual aggregate annual administrative charges as a percentage
of the total average net assets held under all EQUI-VEST Contracts.
These examples should not be considered a representation of past or future
expenses for each Investment Fund or Portfolio. Actual expenses may be greater
or less than those shown. Similarly, the annual rate of return assumed in the
examples is not an estimate or guarantee of future investment performance.
IF YOU SURRENDER YOUR CONTRACT AT THE END OF EACH PERIOD SHOWN, THE EXPENSE
WOULD BE:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
INVESTMENT FUND 1 YEAR 3 YEARS
--------------- -------------------------------------------------
<S> <C> <C>
Alliance Money Market $75.63 $120.87
Alliance Intermediate Government Securities 77.32 125.96
Alliance Quality Bond 77.52 125.55
Alliance High Yield 78.12 128.34
Alliance Growth & Income 77.62 126.85
Alliance Equity Index 75.34 119.97
Alliance Common Stock 75.73 121.17
Alliance Global 79.01 131.03
Alliance International 82.48 141.41
Alliance Aggressive Stock 77.42 126.25
Alliance Small Cap Growth 81.19 137.56
Alliance Conservative Investors 77.22 125.66
Alliance Balanced 78.43 123.26
Alliance Growth Investors 77.42 126.25
T. Rowe Price International Stock Portfolio 81.19 137.56
T. Rowe Price Equity Income Portfolio 77.72 127.15
EQ/Putnam Growth & Income Value Portfolio 77.72 127.15
EQ/Putnam Balanced Portfolio 78.21 128.64
MFS Research Portfolio 77.72 127.15
MFS Emerging Growth Companies Portfolio 77.72 127.15
Morgan Stanley Emerging Markets Equity Portfolio 86.65 153.76
Warburg Pincus Small Company Value Portfolio 79.21 131.62
Merrill Lynch World Strategy Portfolio 81.19 137.56
Merrill Lynch Basic Value Equity Portfolio 77.72 127.15
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
IF YOU DO NOT SURRENDER YOUR CONTRACT AT THE END OF EACH PERIOD SHOWN, THE
EXPENSE WOULD BE:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
INVESTMENT FUND 1 YEAR 3 YEARS
--------------- -------------------------------------------------
<S> <C> <C>
Alliance Money Market $20.01 $61.86
Alliance Intermediate Government Securities 21.80 67.26
Alliance Quality Bond 22.01 67.89
Alliance High Yield 22.64 69.79
Alliance Growth & Income 22.11 58.21
Alliance Equity Index 19.70 60.91
Alliance Common Stock 20.12 62.18
Alliance Global 23.68 72.63
Alliance International 27.25 83.64
Alliance Aggressive Stock 21.90 67.57
Alliance Small Cap Growth 25.89 79.58
Alliance Conservative Investors 21.69 66.94
Alliance Balanced 20.85 64.40
Alliance Growth Investors 21.90 67.57
T. Rowe Price International Stock Portfolio 25.89 79.56
T. Rowe Price Equity Income Portfolio 22.22 68.52
EQ/Putnam Growth & Income Value Portfolio 22.22 68.52
EQ/Putnam Balanced Portfolio 22.74 70.11
MFS Research Portfolio 22.22 68.52
MFS Emerging Growth Companies Portfolio 22.22 68.52
Morgan Stanley Emerging Markets Equity Portfolio 31.66 96.74
Warburg Pincus Small Company Value Portfolio 23.79 73.26
Merrill Lynch World Strategy Portfolio 25.89 79.56
Merrill Lynch Basic Value Equity Portfolio 22.22 68.52
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1)The amount accumulated, based on the assumptions, could not be paid in the
form of an annuity at the end of any of the periods shown in the examples. If
the amount applied to purchase an annuity is less than $2,000, or the initial
annuity payment is less than $20, we may pay the amount to the payee in a
single sum instead of as payments under an annuity form. See "Distribution
Options" in Part 6. In some cases, charges for state premium or other taxes
will be deducted from the amount applied, if applicable.
4
<PAGE>
Accumulation Unit Values
No Accumulation Unit Values for any of the Investment Funds offered under the
Series 600 TSA Advantage Contract are included herein, as the Contracts were not
offered prior to the date of this Supplement.
THE FOLLOWING INVESTMENT FUND PERFORMANCE INFORMATION RELATES TO THE TSA
ADVANTAGE AND IS SEPARATE FROM THE INVESTMENT FUND PERFORMANCE DATA SHOWN UNDER
"PART 3. INVESTMENT PERFORMANCE" BEGINNING ON PAGE 30 OF THE PROSPECTUS.
INVESTMENT FUND PERFORMANCE - TSA ADVANTAGE
In order to help show how the performance of Investment Funds affects Annuity
Account Values, the following tables provide a historical view of investment
performance for each of the Funds included. The performance shown has been
calculated under two methods, as explained under "How Performance Data Are
Presented" below. The information presented includes performance results along
with data representing unmanaged market indices and similarly managed funds.
Except as noted below, performance data for the Investment Funds reflect (i) the
actual historical investment results of the corresponding Portfolios of HRT or
EQAT from the date of inception of those Portfolios or certain predecessor
Portfolios or accounts, and (ii) the actual investment advisory fee, Rule 12b-1
fee and direct operating expenses of the relevant Portfolios. Investment results
for periods prior to October 1996, when HRT Class IB shares were not available,
have been adjusted to reflect 12b-1 fees. In addition, for all periods, the
performance data reflects the Separate Account asset charges assessed under the
TSA Advantage Contract, as if it had been available during the periods shown.
Performance for the Alliance Money Market, Alliance Balanced, Alliance Common
Stock and Alliance Aggressive Stock Funds for the period before those Funds were
operated as a unit investment trust has been adjusted to reflect the investment
advisory fee and expense structure that became applicable to the unit investment
trust. See "The Reorganization" in the SAI for additional information.
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.
HOW PERFORMANCE DATA ARE PRESENTED
Tables 1 and 2 compare annualized and cumulative rates of return for each
Investment Fund along with appropriate benchmarks. Table 3 shows the
year-by-year rates of return for each Investment Fund. These performance results
are based on the change in the Accumulation Unit value for each Investment Fund
for the periods shown.
Investment results in Tables 1, 2, and 3 are net of all charges and expenses
assessed against the Investment Funds (including fees and expenses of the
Trusts) but exclude the annual administrative charge and any withdrawal charges
which would also reduce the actual return. Tables 4 and 5 show performance
results after giving effect to all charges and expenses including the annual
administrative charge and the contingent withdrawal charge. Since charges under
the Contracts may vary, we have assumed, for each charge, the highest that might
apply.
Certain of the Investment Funds began operations on a date after the inception
date of the corresponding Portfolio. When we advertise the performance of an
Investment Fund we will separately set forth the performance of that Fund since
its inception date, to the extent required by regulatory authorities.
BENCHMARKS
Market indices are not subject to any charges for investment advisory fees
typically associated with a managed portfolio. Comparisons with these
benchmarks, therefore, are of limited use. We include them because they are
widely known and may help you to understand the universe of securities from
which each Portfolio manager is likely to make selections.
INCEPTION DATES AND COMPARATIVE BENCHMARKS
ALLIANCE MONEY MARKET: May 11, 1982; Salomon Brothers Three-Month T-Bill Index
(3-Month T-Bill).
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES: April 1, 1991; Lehman Intermediate
Government Bond Index (Lehman Intermediate Government).
ALLIANCE QUALITY BOND: October 1, 1993; Lehman Aggregate Bond Index (Lehman
Aggregate).
ALLIANCE HIGH YIELD: January 2, 1987; Merrill Lynch High Yield Master Index
(Master High Yield).
5
<PAGE>
ALLIANCE GROWTH & INCOME: October 1, 1993; 75% Standard & Poor's 500 Index (S&P
500) and 25% Value Line Convertibles Index (75% S&P 500/25% Value Line Conv.).
ALLIANCE EQUITY INDEX: March 1, 1994; Standard & Poor's 500 Index (S&P 500).
ALLIANCE COMMON STOCK: August 1, 1968; Standard & Poor's 500 Index (S&P 500).
ALLIANCE GLOBAL: August 27, 1987; Morgan Stanley Capital International World
Index (MSCI World).
ALLIANCE INTERNATIONAL: April 3, 1995; Morgan Stanley Capital International
Europe, Australia, Far East Index (MSCI EAFE).
ALLIANCE AGGRESSIVE STOCK: May 1, 1984; 50% Russell 2000 Small Stock Index and
50% S&P MidCap Total Return (50% Russell 2000/50% S&P MidCap).
ALLIANCE SMALL CAP GROWTH: May 1, 1997; Russell 2000 Growth Index (Russell 2000
Gr).
ALLIANCE CONSERVATIVE INVESTORS: October 2, 1989; 70% Lehman Treasury Bond
Composite Index and 30% S&P 500 Index (70% Lehman Treas./30% S&P 500).
ALLIANCE BALANCED: May 1, 1984; 50% S&P 500 and 50% Lehman Government/Corporate
Bond Index (50% S&P 500/50% Lehman Corp.).
ALLIANCE GROWTH INVESTORS: October 2, 1989; 30% Lehman Government/Corporate Bond
Index and 70% S&P 500 Index (30% Lehman Treas./70% S&P 500).
T. ROWE PRICE INTERNATIONAL STOCK: May 1, 1997; Morgan Stanley Capital
International Europe, Australia, Far East Index (MSCI EAFE).
T. ROWE PRICE EQUITY INCOME: May 1, 1997; Standard & Poor's 500 Index (S&P 500).
EQ/PUTNAM GROWTH & INCOME VALUE: May 1, 1997; Standard & Poor's 500 Index (S&P
500).
EQ/PUTNAM BALANCED: May 1, 1997; 60% Standard & Poor's 500 Index and 40% Lehman
Government/Corporate Bond Index (60% S&P500/40% Lehman Corp.)
MFS RESEARCH: May 1, 1997; Standard & Poor's 500 Index (S&P 500).
MFS EMERGING GROWTH COMPANIES: May 1, 1997; Russell 2000 Index (Russell 2000).
MORGAN STANLEY EMERGING MARKETS EQUITY: August 20, 1997; Morgan Stanley Capital
International Emerging Markets Free Price Return Index (MSCI Emerging Markets).
WARBURG PINCUS SMALL COMPANY VALUE: May 1, 1997; Russell 2000 Index (Russell
2000).
MERRILL LYNCH WORLD STRATEGY: May 1, 1997; 36% S&P 500/24% MSCI EAFE/21% Salomon
Brothers US Treasury Bond 1 Year+/14% Salomon Brothers World Government Bond Ex
US/5% 3-Month U.S. T-bill-(Market Composite).
MERRILL LYNCH BASIC VALUE EQUITY: May 1, 1997; Standard & Poor's 500 Index (S&P
500).
The Lipper Variable Insurance Products Performance Analysis Survey (Lipper)
records the performance of a large group of variable annuity and variable life
products, including managed separate accounts of insurance companies. According
to Lipper Analytical Services, Inc., the data are presented net of investment
management fees, direct operating and asset-based charges applicable under
variable insurance policies or variable annuity contracts. Lipper data provide a
more accurate picture than market indices of EQUI-VEST performance relative to
other annuity products.
All rates of return presented are time-weighted and include reinvestment of
investment income, including interest and dividends. Cumulative rates of return
reflect performance over a stated period of time. Annualized rates of return
represent the annual rate of growth that would have produced the same cumulative
return, if performance had been constant over the entire period.
6
<PAGE>
TABLE 1:
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1997:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO
SINCE INCEPTION
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION DATE
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
FIXED-INCOME SERIES:
Domestic Fixed Income
ALLIANCE MONEY MARKET 3.88% 3.96% 3.16% 4.26% -- 5.29% 5/11/82
Lipper Money Market 3.95 4.05 3.29 4.41 -- 5.77
3-Month T-Bill 5.23 5.41 4.71 5.61 -- 6.49
ALLIANCE INTERMEDIATE
GOVERNMENT SECURITIES 5.74 6.49 4.40 -- -- 5.45 4/1/91
Lipper U.S. Government 7.60 8.03 5.65 -- -- 6.95
Lehman Intermediate Government 7.72 8.65 6.39 -- -- 7.47
ALLIANCE QUALITY BOND 7.56 8.80 -- -- -- 4.26 10/1/93
Lipper Corporate Bond A-Rated 8.04 8.77 -- -- -- 4.60
Lehman Aggregate 9.65 10.42 -- -- -- 6.51
Aggressive Fixed Income
ALLIANCE HIGH YIELD 16.75 18.66 14.20 11.16 -- 10.41 1/2/87
Lipper High Yield 12.87 14.23 10.68 10.33 -- 9.46
Master High Yield 12.83 14.54 11.72 12.09 -- 11.39
EQUITY SERIES:
Domestic Equity
T. ROWE PRICE EQUITY INCOME -- -- -- -- -- 21.11+ 5/1/97
Lipper Equity Income -- -- -- -- -- 20.91+
S&P 500 -- -- -- -- -- 22.55+
EQ/PUTNAM
GROWTH & INCOME VALUE -- -- -- -- -- 15.25+ 5/1/97
Lipper Growth & Income -- -- -- -- -- 20.28+
S&P 500 -- -- -- -- -- 22.55+
ALLIANCE GROWTH & INCOME 24.92 21.81 -- -- -- 14.23 10/1/93
Lipper Growth 25.47 25.18 -- -- -- 17.47
25% Value Line Conv./75% S&P 500 29.54 28.62 -- -- -- 20.14
ALLIANCE EQUITY INDEX 30.65 28.45 -- -- -- 21.59 3/1/94
Lipper S&P 500 Index Funds 31.06 29.07 -- -- -- 21.96
S&P 500 33.36 31.15 -- -- -- 23.84
MERRILL LYNCH
BASIC VALUE EQUITY -- -- -- -- -- 16.05+ 5/1/97
Lipper Growth & Income -- -- -- -- -- 20.28+
S&P 500 -- -- -- -- -- 22.55+
ALLIANCE COMMON STOCK 27.33 26.72 19.27 16.38 16.04 11.44 8/1/68
Lipper Growth 24.35 24.72 16.01 15.40 15.20 N/A
S&P 500 33.36 31.15 20.27 18.05 16.66 12.25
MFS RESEARCH -- -- -- -- -- 15.09+ 5/1/97
Lipper Growth -- -- -- -- -- 21.89+
S&P 500 -- -- -- -- -- 22.55+
International Equity
ALLIANCE GLOBAL 9.93 13.28 14.44 12.08 -- 10.08 8/27/87
Lipper Global 12.99 14.18 13.94 7.21 -- 3.84
MSCI World 15.76 16.62 15.34 10.57 -- 8.22
ALLIANCE INTERNATIONAL -4.46 -- -- -- -- 4.62 4/3/95
Lipper International 5.47 -- -- -- -- 11.42
MSCI EAFE 1.78 -- -- -- -- 6.15
T. ROWE PRICE
INTERNATIONAL STOCK -- -- -- -- -- -2.29+ 5/1/97
Lipper International -- -- -- -- -- 3.41+
MSCI EAFE -- -- -- -- -- 2.85+
MORGAN STANLEY EMERGING MARKETS EQUITY -- -- -- -- -- -20.55* 8/20/97
Lipper Emerging Markets -- -- -- -- -- N/A
MSCI Emerging Markets -- -- -- -- -- -21.43*
- -------------------------------------------------------------------------------------------------------------------------------
<FN>
+ Return for this Fund is unannualized and represents 8 months of performance. This table continues on next page
* Return for this Fund is unannualized and represents 5 months of performance.
</FN>
</TABLE>
7
<PAGE>
TABLE 1:
ANNUALIZED RATES OF RETURN (CONTINUED):
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO
SINCE INCEPTION
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION DATE
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
EQUITY SERIES (CONTINUED):
Aggressive Equity
ALLIANCE AGGRESSIVE STOCK 9.19% 19.48% 13.21% 17.24% -- 17.26% 5/1/84
Lipper Mid-Cap Growth 12.11 15.54 9.27 14.32 -- 15.87
50% Russell 2000/50% S&P Mid-Cap 27.31 24.88 17.11 17.74 -- 16.11
WARBURG PINCUS
SMALL COMPANY VALUE -- -- -- -- -- 18.14+ 5/1/97
Lipper Small-Cap -- -- -- -- -- 26.66+
Russell 2000 Growth -- -- -- -- -- 28.68+
ALLIANCE SMALL CAP GROWTH -- -- -- -- -- 25.46+ 5/1/97
Lipper Small-Cap -- -- -- -- -- 26.66+
Russell 2000 Growth -- -- -- -- -- 27.66+
MFS EMERGING GROWTH
COMPANIES -- -- -- -- -- 21.42+ 5/1/97
Lipper Mid-Cap -- -- -- -- -- 20.88+
Russell 2000 -- -- -- -- -- 28.68+
ASSET ALLOCATION SERIES:
ALLIANCE CONSERVATIVE INVESTORS 11.59 11.14 7.21 -- -- 7.95 10/2/89
Lipper Income 15.51 15.54 11.61 -- -- 10.57
70% Lehman Treas./30% S&P 500 16.71 17.18 11.87 -- -- 11.39
EQ/PUTNAM BALANCED -- -- -- -- -- 13.54+ 5/1/97
Lipper Balanced -- -- -- -- -- 14.79+
40% Lehman Gov't./Corp./60% S&P 500 -- -- -- -- -- 17.17+
ALLIANCE BALANCED 13.31 13.74 8.10 10.65 -- 10.29 5/1/84
Lipper Flexible Portfolio 18.23 17.09 11.52 11.93 -- 10.94
50% Lehman Gov't./Corp./70% S&P 500 21.56 21.68 14.63 21.19 -- 14.84
ALLIANCE GROWTH INVESTORS 15.08 16.73 11.51 -- -- 14.05 10/2/89
Lipper Flexible Portfolio 18.23 17.09 11.52 -- -- 11.10
30% Lehman Gov't./Corp./70% S&P 500 26.28 25.64 17.02 -- -- 14.48
MERRILL LYNCH WORLD STRATEGY -- -- -- -- -- 3.86+ 5/1/97
Lipper Global Flexible Portfolio -- -- -- -- -- 8.52+
Market Composite -- -- -- -- -- 10.81+
- -------------------------------------------------------------------------------------------------------------------------------
<FN>
+ Return for this Fund is unannualized and represents 8 months of performance.
* Return for this Fund is unannualized and represents 5 months of performance.
</FN>
</TABLE>
8
<PAGE>
TABLE 2:
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1997:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO
SINCE INCEPTION
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION DATE
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
FIXED-INCOME SERIES:
Domestic Fixed Income
ALLIANCE MONEY MARKET 3.88% 12.34% 16.84% 51.81% -- 124.04% 5/11/82
Lipper Money Market 3.95 12.64 17.61 54.00 -- 151.25
3-Month T-Bill 5.23 17.13 25.87 72.64 -- 199.34
ALLIANCE INTERMEDIATE
GOVERNMENT SECURITIES 5.74 20.77 24.03 -- -- 43.08 4/1/91
Lipper U.S. Government 7.60 26.12 31.70 -- -- 57.40
Lehman Intermediate Government 7.72 28.25 36.31 -- -- 62.74
ALLIANCE QUALITY BOND 7.56 28.79 -- -- -- 19.41 10/1/93
Lipper Corporate Bond A-Rated 8.04 28.70 34.61 108.54 -- 21.09
Lehman Aggregate 9.65 34.63 -- -- -- 30.78
Aggressive Fixed Income
ALLIANCE HIGH YIELD 16.75 67.08 94.27 188.03 -- 197.15 1/2/87
Lipper High Yield 12.87 49.17 66.26 169.15 -- 173.12
Master High Yield 12.83 50.26 74.04 213.08 -- 227.68
EQUITY SERIES:
Domestic Equity
T. ROWE PRICE EQUITY INCOME -- -- -- -- -- 21.11 5/1/97
Lipper Equity Income -- -- -- -- -- 20.91
S&P 500 -- -- -- -- -- 22.55
EQ/PUTNAM
GROWTH & INCOME VALUE -- -- -- -- -- 15.25 5/1/97
Lipper Growth & Income -- -- -- -- -- 28.28
S&P 500 -- -- -- -- -- 22.55
ALLIANCE GROWTH & INCOME 24.92 80.76 -- -- -- 76.03 10/1/93
Lipper Growth & Income 25.47 96.46 -- -- -- 98.58
25% Value Line Conv./75% S&P 500 29.54 112.80 -- -- -- 118.17
ALLIANCE EQUITY INDEX 30.65 111.93 -- -- -- 111.64 3/1/94
Lipper S&P 500 Index Funds 31.06 115.03 -- -- -- 114.07
S&P 500 33.36 125.60 -- -- -- 127.24
MERRILL LYNCH BASIC VALUE EQUITY -- -- -- -- -- 16.05 5/1/97
Lipper Growth & Income -- -- -- -- -- 20.28
S&P 500 -- -- -- -- -- 22.55
ALLIANCE COMMON STOCK 27.33 103.51 141.40 355.99 1,858.66 2,319.51 8/1/68
Lipper Growth 24.35 94.70 111.15 321.71 1,602.96 1,659.17
S&P 500 33.36 125.60 151.62 425.67 2,080.13 2,248.74
MFS RESEARCH -- -- -- -- -- 15.09 5/1/97
Lipper Growth -- -- -- -- -- 21.89
S&P 500 -- -- -- -- -- 22.55
International Equity
ALLIANCE GLOBAL 9.93 45.37 96.31 212.88 -- 169.98 8/27/87
Lipper Global 12.99 49.53 93.26 100.58 -- 47.66
MSCI World 15.76 58.59 104.13 173.03 -- 126.45
ALLIANCE INTERNATIONAL -4.46 -- -- -- -- 13.22 4/3/95
Lipper International 5.47 -- -- -- -- 35.07
MSCI EAFE 1.78 -- -- -- -- 17.83
T. ROWE PRICE -- -- -- -- -- -2.29 5/1/97
INTERNATIONAL STOCK
Lipper International -- -- -- -- -- 3.41
MSCI EAFE -- -- -- -- -- 2.85
MORGAN STANLEY EMERGING MARKETS EQUITY -- -- -- -- -- -20.55* 8/20/97
Lipper Emerging Markets -- -- -- -- -- N/A
MSCI Emerging Market -- -- -- -- -- -21.43
- -------------------------------------------------------------------------------------------------------------------------------
<FN>
This table continues on next page
</FN>
</TABLE>
9
<PAGE>
TABLE 2: CUMULATIVE RATES OF RETURN (CONTINUED):
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO
SINCE INCEPTION
1 YEAR 3 YEARS 5 YEARS 10 YEARS 20 YEARS INCEPTION DATE
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
EQUITY SERIES (CONTINUED):
Aggressive Equity
ALLIANCE AGGRESSIVE STOCK 9.19% 70.55% 85.98% 390.65% -- 781.75% 5/1/84
Lipper Mid-Cap Growth 12.11 56.12 59.26 311.80 -- 478.26
50% Russell 2000/50% S&P Mid-Cap 27.31 94.76 120.25 412.08 -- 436.52
WARBURG PINCUS
SMALL COMPANY VALUE -- -- -- -- -- 18.14 5/1/97
Lipper Small-Cap -- -- -- -- -- 26.66
Russell 2000 -- -- -- -- -- 28.68
ALLIANCE SMALL CAP GROWTH -- -- -- -- -- 25.46 5/1/97
Lipper Small-Cap -- -- -- -- -- 26.66
Russell 2000 Growth -- -- -- -- -- 27.66
MFS EMERGING GROWTH COMPANIES -- -- -- -- -- 21.42 5/1/97
Lipper Mid-Cap -- -- -- -- -- 20.88
Russell 2000 -- -- -- -- -- 28.68
ASSET ALLOCATION SERIES:
ALLIANCE CONSERVATIVE INVESTORS 11.59 37.28 41.63 -- -- 87.85 10/2/89
Lipper Income 15.51 54.60 73.34 -- -- 129.83
70% Lehman Treas./30% S&P 500 16.71 60.91 75.18 -- -- 143.55
EQ/PUTNAM BALANCED -- -- -- -- -- 13.54 5/1/97
Lipper Balanced -- -- -- -- -- 14.79
40% Lehman Gov't./Corp./60% S&P 500 -- -- -- -- -- 17.17
ALLIANCE BALANCED 13.31 47.14 47.61 175.07 -- 281.42 5/1/84
Lipper Flexible Portfolio 18.23 61.05 73.02 209.82 -- 246.50
50% Lehman Gov't./Corp./70% S&P 500 21.56 80.14 97.96 583.14 -- 376.27
ALLIANCE GROWTH INVESTORS 15.08 59.04 72.45 -- -- 195.62 10/2/89
Lipper Flexible Portfolio 18.23 61.05 73.02 -- -- 140.59
30% Lehman Gov't./Corp./70% S&P 500 26.28 98.32 119.42 -- -- 205.24
MERRILL LYNCH WORLD STRATEGY -- -- -- -- -- 3.86 5/1/97
Lipper Global Flexible Portfolio -- -- -- -- -- 8.52
Market Composite -- -- -- -- -- 10.81
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
TABLE 3:
YEAR-BY-YEAR RATES OF RETURN
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ALLIANCE MONEY MARKET 5.83% 7.66% 6.77% 4.66% 2.05% 1.46% 2.51% 4.20% 3.78% 3.88%
ALLIANCE INTERMEDIATE GOVERNMENT
SECURITIES -- -- -- 10.85* 4.06 8.98 -5.76 11.69 2.26 5.74
ALLIANCE QUALITY BOND -- -- -- -- -- -0.87* -6.47 15.33 3.82 7.56
ALLIANCE HIGH YIELD 8.14 3.61 -2.53 22.66 10.68 21.36 -4.19 18.18 21.09 16.75
ALLIANCE GROWTH & INCOME -- -- -- -- -- -0.62* -2.01 22.28 18.34 24.92
ALLIANCE EQUITY INDEX -- -- -- -- -- -- -0.14* 34.51 20.60 30.65
ALLIANCE COMMON STOCK 21.50 24.06 -9.28 35.80 1.71 23.00 -3.56 30.52 22.45 27.33
ALLIANCE GLOBAL 9.27 24.90 -7.42 28.66 -1.96 30.21 3.71 17.10 12.93 9.93
ALLIANCE INTERNATIONAL -- -- -- -- -- -- -- 9.51* 8.21 -4.46
ALLIANCE AGGRESSIVE STOCK -0.50 42.71 5.61 84.36 -4.58 15.05 -5.21 29.72 20.40 9.19
ALLIANCE SMALL CAP GROWTH
-- -- -- -- -- -- -- -- -- 25.46*
ALLIANCE CONSERVATIVE
INVESTORS -- 2.72* 4.86 18.11 4.26 9.16 -5.49 18.66 3.67 11.59
ALLIANCE BALANCED 13.22 24.58 -1.44 40.01 -4.26 10.67 -9.36 18.01 10.04 13.31
ALLIANCE GROWTH INVESTORS -- 3.62* 9.01 46.75 3.41 13.59 -4.55 24.54 10.96 15.08
T. ROWE PRICE INTERNATIONAL STOCK
PORTFOLIO -- -- -- -- -- -- -- -- -- -2.29*
T. ROWE PRICE EQUITY
INCOME PORTFOLIO -- -- -- -- -- -- -- -- -- 21.11*
EQ/PUTNAM GROWTH & INCOME VALUE
PORTFOLIO -- -- -- -- -- -- -- -- -- 15.25*
EQ/PUTNAM BALANCED
PORTFOLIO -- -- -- -- -- -- -- -- -- 13.54*
MFS RESEARCH PORTFOLIO -- -- -- -- -- -- -- -- -- 15.09*
MFS EMERGING GROWTH
COMPANIES PORTFOLIO -- -- -- -- -- -- -- -- -- 21.42*
MORGAN STANLEY EMERGING MARKETS
EQUITY PORTFOLIO -- -- -- -- -- -- -- -- -- -20.55*
WARBURG PINCUS SMALL
COMPANY VALUE PORTFOLIO -- -- -- -- -- -- -- -- -- 18.14*
MERRILL LYNCH WORLD
STRATEGY PORTFOLIO -- -- -- -- -- -- -- -- -- 3.86*
MERRILL LYNCH BASIC VALUE
EQUITY PORTFOLIO -- -- -- -- -- -- -- -- -- 16.05*
<FN>
- -------------------
* Unannualized
</FN>
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The performance data in Tables 4 and 5, illustrate the growth of an investment,
and the average annual total return of the Investment Funds, respectively, over
the periods shown assuming a single initial contribution of $1,000 and
termination of the TSA Advantage Contract at the end of each period on December
31, 1997, under circumstances in which the contingent withdrawal charge applies.
The values shown are also net of all other charges and expenses assessed against
the Investment Funds. An Investment Fund's average annual total return is the
annual rate of growth of the Investment Fund that would be necessary to achieve
the ending value of a contribution kept in the Investment Fund for the period
specified.
11
<PAGE>
Each calculation further assumes that the $1,000 contribution was allocated to
only one Investment Fund, no transfers or additional contributions were made, no
loans, and no amounts were allocated to any other Investment Fund under the
Contract.
In order to calculate the performance information, we divide the termination
value (defined below) of a Contract which is terminated on December 31, 1997 by
the $1,000 investment made at the beginning of each period illustrated. The
result of that calculation is the total growth rate for the period. Then we
annualize that growth rate to obtain the average annual percentage increase
(decrease) during the period shown. When we "annualize," we assume that a single
rate of return applied each year during the period will produce the ending
value, taking into account the effect of compounding. "Termination value" means
the Annuity Account Value less the contingent withdrawal charge, the annual
administrative charge and all other charges and expenses which are applied
against an Investment Fund. See "Part 7: Deductions and Charges" in the
Prospectus.
12
<PAGE>
TABLE 4:
GROWTH OF $1,000 FOR CONTRACTS TERMINATED ON DECEMBER 31, 1997:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
LENGTH OF INVESTMENT PERIOD
--------------------------------------------------------------------------------------
INVESTMENT ONE THREE FIVE TEN SINCE PORTFOLIO
FUND YEAR YEARS YEARS YEARS INCEPTION*
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alliance Money Market 963.04 1,000.26 999.13 1,240.39 --
Alliance Intermediate Government
Securities 980.26 1,075.26 1,060.59 -- 1,248.02
Alliance Quality Bond 997.16 1,146.74 -- -- 1,036.76
Alliance High Yield 1,082.36 1,494.65 1,683.43 2,398.02 --
Alliance Growth & Income 1,158.09 1,626.00 -- -- 1,539.54
Alliance Equity Index 1,211.21 1,927.72 -- -- 1,890.80
Alliance Common Stock 1,180.47 1,846.17 2,123.86 3,910.75 --
Alliance Global 1,019.12 1,294.31 1,705.10 2,640.24 --
Alliance International 885.74 -- -- -- 1,013.26
Alliance Aggressive Stock 1,012.29 1,528.59 1,607.67 4,307.04 --
Alliance Small Cap Growth -- -- -- -- 1,111.19
Alliance Conservative Investors 1,034.51 1,222.26 1,211.07 -- 1,592.43
Alliance Balanced 1,050.51 1,310.07 1,262.21 2,316.68 --
Alliance Growth Investors 1,066.90 1,417.45 1,480.58 -- 2,579.12
T. Rowe Price International Stock
Portfolio -- -- -- -- 939.21
T. Rowe Price Equity Income Portfolio -- -- -- -- 1,084.34
E/Q Putnam Growth &
Income Value Portfolio -- -- -- -- 1,048.97
E/Q Putnam Balanced Portfolio -- -- -- -- 1,038.49
MFS Research Portfolio -- -- -- -- 1,048.00
MFS Emerging Growth Companies Portfolio -- -- -- -- 1,086.15
Morgan Stanley Emerging Markets Equity
Portfolio -- -- -- -- 897.82
Warburg Pincus Small Company Value
Portfolio -- -- -- -- 1,066.45
Merrill Lynch World Strategy Portfolio -- -- -- -- 978.42
Merrill Lynch Basic Value Equity
Portfolio -- -- -- -- 1,053.82
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Portfolio inception dates are shown in Tables 1 and 2.
13
<PAGE>
TABLE 5:
AVERAGE ANNUAL TOTAL RETURN UNDER CONTRACTS TERMINATED ON DECEMBER 31, 1997:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
LENGTH OF INVESTMENT PERIOD
--------------------------------------------------------------------------------------
INVESTMENT SINCE
FUND ONE THREE FIVE TEN SINCE FUND PORTFOLIO
YEAR YEARS YEARS YEARS INCEPTION* INCEPTION**
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Alliance Money Market -3.70% 0.01% -0.02% 2.18% -- --
Alliance Intermediate Government -1.97% 2.45% 1.18% -- 1.18% 3.34%
Securities
Alliance Quality Bond -0.28% 4.67% -- -- 1.31% 0.85%
Alliance High Yield 8.24% 14.34% 10.98% 9.14% 8.68% --
Alliance Growth & Income 15.81% 17.59% -- -- 11.85% 10.69%
Alliance Equity Index 21.12% 24.46% -- -- 19.99% 18.07%
Alliance Common Stock 18.05% 22.68% 16.26% 14.61% -- --
Alliance Global 1.91% 8.98% 11.26% 10.20% 7.00% --
Alliance International -11.43% -- -- -- -1.24% 0.48%
Alliance Aggressive Stock 1.23% 15.19% 9.96% 15.72% -- --
Alliance Small Cap Growth -- -- -- -- 5.89% 17.10%
Alliance Conservative Investors 3.45% 6.92% 3.90% -- 3.26% 5.80%
Alliance Balanced 5.05% 9.42% 4.77% 8.76% -- --
Alliance Growth Investors 6.69% 12.33% 8.16% -- 7.49% 12.18%
T. Rowe Price International Stock -- -- -- -- -12.18% -8.96%
Portfolio
T. Rowe Price Equity Income Portfolio -- -- -- -- 7.72% 12.89%
E/Q Putnam Growth & -- -- -- -- 2.25% 7.42%
Income Value Portfolio
E/Q Putnam Balanced Portfolio -- -- -- -- 2.06% 5.82%
MFS Research Portfolio -- -- -- -- 0.80% 7.27%
MFS Emerging Growth Companies Portfolio -- -- -- -- 4.17% 13.17%
Morgan Stanley Emerging Markets Equity
Portfolio -- -- -- -- -25.54% -25.46%
Warburg Pincus Small Company Value -- -- -- -- 3.28% 10.11%
Portfolio
Merrill Lynch World Strategy Portfolio -- -- -- -- -7.88% -3.21%
Merrill Lynch Basic Value Equity -- -- -- -- 0.88% 8.16%
Portfolio
</TABLE>
- -------------------
* Fund inception dates are: Alliance Money Market (5/11/82), Alliance
Intermediate Government Securities (6/1/94), Alliance Quality Bond (1/4/94),
Alliance High Yield (1/4/94), Alliance Growth & Income (1/4/94), Alliance
Equity Index (6/1/94), Alliance Common Stock (8/27/81), Alliance Global
(1/4/94), Alliance International (9/1/95), Alliance Growth Investors
(1/4/94), Alliance Aggressive Stock (5/1/84), Alliance Small Cap Growth
(6/2/97), Alliance Conservative Investors (1/4/94), Alliance Balanced
(5/1/84), T. Rowe Price International Stock (6/2/97), T. Rowe Price Equity
Income (6/2/97), EQ/Putnam Growth & Income Value (6/2/97), EQ/Putnam Balanced
(6/2/97), MFS Research (6/2/97), MFS Emerging Growth Companies (6/2/97),
Morgan Stanley Emerging Markets Equity (8/20/97), Warburg Pincus Small
Company Value (6/2/97), Merrill Lynch World Strategy (6/2/97), Merrill Lynch
Basic Value Equity (6/2/97).
** Portfolio inception dates are shown in Tables 1 and 2.
- --------------------------------------------------------------------------------
14
<PAGE>
COMMUNICATING PERFORMANCE DATA
In reports or other communications or in advertising material, we may describe
general economic and market conditions affecting the Separate Account and HRT or
EQAT and may present the performance of the Investment Funds or compare it 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 elsewhere in this prospectus, 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
charges. VARDS is a monthly reporting service that monitors over 2,500 variable
life and variable annuity funds on performance and account information.
Advertisements or other communications furnished to present or prospective
Contract Owners may also include evaluations of an Investment Fund or Portfolio
by financial publications that are nationally recognized such as Barron's,
Morningstar's Variable Annuity Sourcebook, Business Week, Chicago Tribune,
Forbes, Fortune, Institutional Investor, Investment Adviser, Investment Dealer's
Digest, Investment Management Weekly, Los Angeles Times, Money, Money Management
Letter, Kiplinger's Personal Finance, Financial Planning, National Underwriter,
Pension & Investments, USA Today, Investor's Daily, The New York Times and The
Wall Street Journal.
THE FOLLOWING SENTENCE IS ADDED TO THE END OF THE THIRD PARAGRAPH UNDER "PART 4:
THE GUARANTEED INTEREST ACCOUNT" ON PAGE 41 OF THE PROSPECTUS:
Equitable reserves the right to declare yearly guaranteed interest rates and
current interest rates with respect to the TSA Advantage Contracts that are
different than such rates as declared and applicable to the other EQUI-VEST
Contracts.
THE FOLLOWING PARAGRAPH REPLACES THE FOURTH PARAGRAPH UNDER "CHARGES TO
PORTFOLIOS" ON PAGE 55 OF THE PROSPECTUS:
The Rule 12b-1 Plan provides that EQAT and HRT, on behalf of each of their
Portfolios, may charge annually up to 0.25% of the average daily net assets of a
Portfolio attributable to its Class IB shares in respect of activities primarily
intended to result in the sale of the Class IB shares. This fee will not be
increased for the life of the Contract. Fees and expenses are described more
fully in the EQAT and HRT prospectuses.
THE FOLLOWING IS ADDED TO THE END OF "PART 7 : CHARGES AND DEDUCTIONS" ON PAGE
62 OF THE PROSPECTUS:
- --------------------------------------------------------------------------------
EQUI-VEST TSA ADVANTAGE CONTRACTS (SERIES 600 ONLY)
- --------------------------------------------------------------------------------
CHARGES TO INVESTMENT FUNDS
We make a daily charge at the effective annual rate of 1.20% against the assets
held in each of the Investment Funds. This charge is reflected in the
Accumulation Unit Values for the particular Investment Fund and covers mortality
and expense risk and death benefit charges of .95% and expenses of 0.25%.
The mortality and expense risk and death benefit charge is comprised of 0.50%
for mortality risk, including guaranteed death benefits, and 0.45% for expense
risk, although the allocation of these charges may vary. We assume a mortality
risk by (a) our obligation to pay a death benefit that will not be less than the
total value of all contributions made (less any applicable taxes) adjusted for
total withdrawals, (b) our obligation to make annuity payments for the life of
the Annuitant under guaranteed fixed annuity options, regardless of the
Annuitant's longevity, (c) our guarantees relating to annuity purchase rates,
the actuarial basis for which can be changed only for new contributions and only
on the fifth anniversary of the Contract Date and every five years thereafter,
and (d) our obligation to waive the contingent withdrawal charge upon the
payment of a death benefit.
The expense risk we assume is the risk that, over time, our actual expense of
administering the Contracts, including financial accounting, may exceed the
amounts realized from the expense charge and the annual administrative
15
<PAGE>
expense charge. Part of the mortality and expense risk charge may be considered
to be an indirect reimbursement for certain sales and promotional expenses
relating to the Contracts to the extent that the charge is not needed to meet
the actual expenses incurred.
The charge for expenses, together with the annual administrative charge
described below, is designed to reimburse us for our costs in providing
administrative services in connection with the Contracts.
Maximum Total Separate Account Charges
We may change the annual rate of the daily asset charge imposed on the amounts
held in the Investment Funds comprising the Separate Account. We may increase or
decrease the 1.20% total Separate Account charge currently applicable, but may
not increase the total charge above a maximum annual rate of 2.00%. Any increase
would only be made upon advance notice to you and would apply only to
contributions made after the date of the change. Changes, if any, would reflect
differences in costs and anticipated expenses, and would not be unfairly
discriminatory.
CONTINGENT WITHDRAWAL CHARGE
No sales charges are deducted from contributions. However, to assist us in
defraying the various sales and promotional expenses incurred in connection with
selling the Contracts, we assess a charge on amounts withdrawn when you make a
partial withdrawal, default on a loan or terminate your Contract if the amount
withdrawn, or the defaulted loan amount, as the case may be, is in excess of the
free corridor amount (defined in this section) and no exception applies. The
amount of the withdrawal and the applicable contingent withdrawal charge are
deducted pro rata from the Investment Funds, and the Guaranteed Interest Account
should collection from the other Investment Options be insufficient. The amount
deducted to pay the contingent withdrawal charge is also subject to the
withdrawal charge.
The contingent withdrawal charge is equal to 6% of the amount withdrawn or the
defaulted loan amount during the first six Contract Years. In the case of a
termination, we will pay the greater of (i) the Annuity Account Value after the
withdrawal charge has been imposed, as described above, or (ii) the free
corridor amount plus 94% of the remaining Annuity Account Value.
We reserve the right to change the amount of the contingent withdrawal charge,
provided that it will not exceed 6% of the amount withdrawn or the defaulted
loan amount. Applicable regulations would not permit such a change if it would
be unfairly discriminatory to any person. The contingent withdrawal charge will
not exceed applicable regulatory limits, if any. Also, the total of all
withdrawal charges assessed will not exceed 8% of all contributions made in the
first six Contract Years. The tax consequences of withdrawals are discussed
under "Part 9: Federal Tax and ERISA Matters."
Free Withdrawal Amount (Free Corridor)
No withdrawal charge will be applied during any Contract Year in which the
amount withdrawn is less than or equal to 10% of the Annuity Account Value at
the time the withdrawal is requested minus any amount previously withdrawn
during that Contract Year. This 10% portion is called the FREE CORRIDOR AMOUNT.
Any withdrawal requested that exceeds the free corridor amount will be subject
to the contingent withdrawal charge, unless one of the following exceptions
applies.
Exceptions to the Contingent Withdrawal Charge
A contingent withdrawal charge will not apply upon any of the events listed
below:
o the Annuitant retires pursuant to terms of the TSA Plan, or separates from
service;
o the Annuitant reaches age 59 1/2 and completes at least five Contract
Years;
o the Annuitant dies and a death benefit is payable to the beneficiary;
o we receive a properly completed election form providing for the Annuity
Account Value to be used to buy a life annuity;
o the Annuitant attains age 55 and completes at least five Contract Years
and we receive a properly completed election form providing for the
Annuity Account Value to be used to buy a period certain annuity which
extends
16
<PAGE>
beyond the Annuitant's attainment of age 59 1/2 and does not permit any
prepayment of the unpaid principal prior to the Annuitant's attainment of
age 59 1/2;
o the Annuitant completes at least three Contract Years and we receive a
properly completed election form providing for the Annuity Account Value
to be used to buy a period certain annuity of at least 10 years which does
not permit any prepayment of the unpaid principal;
o a request is made for a refund of an excess Contribution within one month
of the date on which the Contribution is made;
o the Annuitant has qualified to receive Social Security disability benefits
as certified by the Social Security Administration;
o we receive proof satisfactory to us that the Annuitant's life expectancy
is six months or less (such proof must include, but is not limited to,
certification by a licensed physician);
o the Annuitant has been confined to a nursing home for more than a 90 day
period (or such other period, if required in your state) as verified by a
licensed physician. A nursing home for this purpose means one which is (a)
approved by Medicare as a provider of skilled nursing care service, or (b)
licensed as a skilled nursing home by the state or territory in which it
is located (it must be within the United States, Puerto Rico, U.S. Virgin
Islands, or Guam) and meets all of the following:
- its main function is to provide skilled, intermediate, or custodial
nursing care;
- it provides continuous room and board to three or more persons;
- it is supervised by a registered nurse or licensed practical nurse;
- it keeps daily medical records of each patient;
- it controls and records all medications dispensed; and
- its primary service is other than to provide housing for residents.
o the Annuitant elects a withdrawal that qualifies as a hardship withdrawal
under the Code.
ANNUAL ADMINISTRATIVE CHARGE
Except as discussed below, on the last Business Day of each Contract Year we
deduct from the Annuity Account Value an annual administrative charge equal to
the lesser of $30 or 2% of the Annuity Account Value on such Business Day
(adjusted to include any withdrawals made during the year). This charge is
deducted from each Investment Option on a pro rata basis. This charge will be
prorated for a fractional year if, before the end of the Contract Year, you
surrender your Contract, or the Annuity Account Value is applied to provide an
annuity benefit or death benefit. Accumulation Units will be redeemed in order
to pay any portion of the charge deducted from an Investment Fund. We reserve
the right to increase this charge in the future to a maximum of $65 if our
administrative costs increase.
Any portion of the charge deducted from the Guaranteed Interest Account is
withdrawn in dollars.
Exceptions to Annual Administrative Charge
For TSA Advantage Contracts, no charge will apply if the Annuity Account Value
is at least $25,000 at the end of the Contract Year. Also, we may reduce or
eliminate the annual administrative charge when a TSA Advantage Contract is used
by an employer and administrative services are performed by us at a modified or
minimum level. Any reduction or waiver shall not be unfairly discriminatory.
THIRD PARTY TRANSFER OR EXCHANGE FEE
There currently is no Third Party Transfer or Exchange Fee. However, we reserve
the right to impose this fee in the future, but it may not exceed a maximum of
$65 per occurrence, subject to applicable law.
ADDITIONAL INFORMATION
At some time in the future Equitable Life may, under certain circumstances and
subject to applicable law, allow a current owner of a Series 100 or Series 200
TSA contract to exchange it for a TSA Advantage Contract. An exchange for a TSA
Advantage Contract may or may not be advantageous to you, based on all the
circumstances, including a comparison of contractual terms and conditions, and
charges and deductions. Additional information will be available upon request
from Equitable Life at such time as exchanges may be permitted.
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